-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RLXdjmvRNGm9zFTPKKZ3jP9Aq3qkA9QdcfWZeoUYuwMLyW6ILzQbBT8PcLACXTEj RyTrSq3AyrzseLPgvM+1Pg== 0000950130-97-000311.txt : 19970129 0000950130-97-000311.hdr.sgml : 19970129 ACCESSION NUMBER: 0000950130-97-000311 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19970128 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VIRGINIA ELECTRIC & POWER CO CENTRAL INDEX KEY: 0000103682 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 540418825 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-20561 FILM NUMBER: 97512459 BUSINESS ADDRESS: STREET 1: ONE JAMES RIVER PLAZA CITY: RICHMOND STATE: VA ZIP: 23261 BUSINESS PHONE: 8047713000 S-3 1 PROSPECTUS AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1997 FILE NO. 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- VIRGINIA ELECTRIC AND POWER COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ---------------- VIRGINIA 54-0418825 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) ONE JAMES RIVER PLAZA, RICHMOND, VIRGINIA 23219-3932 (804) 771-3000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES) ---------------- J. KENNERLY DAVIS, JR., VICE PRESIDENT -- FINANCE AND ADMINISTRATIVE SERVICES, TREASURER AND CORPORATE SECRETARY PHILIP W. NICHOLS, COORDINATOR -- FINANCE ADMINISTRATION VIRGINIA ELECTRIC AND POWER COMPANY ONE JAMES RIVER PLAZA RICHMOND, VIRGINIA 23219-3932 (804) 771-3000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) COPIES TO: JOHN J. BEARDSWORTH, JR. ROBERT L. BURRUS, JR. HUNTON & WILLIAMS MCGUIRE, WOODS, BATTLE & BOOTHE, 951 EAST BYRD STREET L.L.P. RICHMOND, VIRGINIA 23219-4074 ONE JAMES CENTER RICHMOND, VIRGINIA 23219-4030 ---------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the Registration Statement becomes effective. If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED AGGREGATE MAXIMUM OFFERING AGGREGATE TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER OFFERING AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED SECURITY(1) PRICE(1) REGISTRATION FEE - ------------------------------------------------------------------------------------------ Junior Subordinated Debentures............ $400,000,000 100% $400,000,000 $121,212
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457. ---------------- 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 THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- PROSPECTUS $400,000,000 VIRGINIA ELECTRIC AND POWER COMPANY JUNIOR SUBORDINATED DEBENTURES ------------------ Virginia Electric and Power Company, a Virginia public service corporation (the Company), intends to offer, from time to time, in one or more transactions, up to $400,000,000 aggregate principal amount of junior subordinated debt securities (Junior Subordinated Debentures) in one or more series at prices and on terms to be determined at the time or times of sale. The aggregate principal amount, rate of interest, (which may be fixed or variable) or method of calculation thereof, interest payment dates, maturity, initial public offering price, provision of security, any terms for redemption, any sinking fund provisions, any subordination or interest deferral provisions, the names of underwriters or agents, the principal amounts to be purchased by the underwriters, the compensation of such underwriters or agents and other specific terms of each series of Junior Subordinated Debentures in respect of which this Prospectus is being delivered will be set forth, to the extent applicable, in an accompanying prospectus supplement (the Prospectus Supplement). If applicable, the Prospectus Supplement will also contain information concerning certain United States federal income tax considerations. The Junior Subordinated Debentures will be unsecured and subordinate and junior in right of payment to all Senior Indebtedness (as defined in "Description of Junior Subordinated Debentures-- Subordination") of the Company. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------ The Company intends to sell the Junior Subordinated Debentures through underwriters, dealers, agents or directly to a limited number of purchasers. The names of, and the principal amounts to be purchased by or through, underwriters, dealers or agents, if any, the compensation of such persons and other special terms in connection with the offering and sale of such Junior Subordinated Debentures will be set forth in the Prospectus Supplement. See "Plan of Distribution" herein. The Prospectus Supplement will state whether the Junior Subordinated Debentures will be listed on any national securities exchange or the Nasdaq National Market. There can be no assurance that a secondary market for the Junior Subordinated Debentures will develop. This Prospectus may not be used to consummate sales of Junior Subordinated Debentures unless accompanied by a Prospectus Supplement. ------------------ The Date of this Prospectus is , 1997 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act), and in accordance therewith, files periodic and current reports, and other information with the Securities and Exchange Commission (the Commission). Such reports and other information filed by the Company can be inspected and copied at the public reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and Citicorp Center, 14th Floor, 500 West Madison Street, Chicago, Illinois 60661. Copies of such material can also be obtained at prescribed rates by writing to the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a Worldwide Web site (address: http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. In addition, such reports and other information concerning the Company can be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. The Company has filed with the Commission a Registration Statement on Form S-3 (together with all amendments and exhibits thereto, the Registration Statement) under the Securities Act of 1933, as amended (the Securities Act) with respect to the securities offered hereby. This Prospectus does not contain all the information set forth in the Registration Statement, certain portions of which have been omitted as permitted by the rules and regulations of the Commission. For further information with respect to the Company and the securities offered hereby, reference is made to the Registration Statement and the exhibits and the financial statements, notes and schedules filed as a part thereof or incorporated by reference therein, which may be inspected at the public reference facilities of the Commission, at the addresses set forth above. Statements made in this Prospectus concerning the contents of any documents referred to herein are not necessarily complete, and in each instance are qualified in all respects by reference to the copy of such document filed as an exhibit to the Registration Statement. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission are incorporated into this Prospectus by reference: 1. the Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2. the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996; June 30, 1996 and September 30, 1996. Each document or report filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of any offering of securities made by this Prospectus shall be deemed to be incorporated by reference into this Prospectus and to be a part of this Prospectus from the date of filing of such document. Any statement contained herein, or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of the Registration Statement and this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the Registration Statement or this Prospectus. The Company will provide without charge to any person to whom this Prospectus is delivered, on the written or oral request, a copy of any or all of the foregoing documents incorporated by reference herein (other than exhibits not specifically incorporated by reference into the texts of such documents). Requests for such documents should be directed to: Virginia Electric and Power Company, One James River Plaza, Richmond, Virginia 23219- 3932, Attention: Corporate Secretary, Telephone: (804) 771-3000. 2 THE COMPANY The Company was incorporated in Virginia in 1909 and has its principal office at One James River Plaza, Richmond, Virginia 23219-3932, telephone (804) 771-3000. The Company is a wholly-owned subsidiary of Dominion Resources, Inc. The Company is a regulated public utility engaged in the generation, purchase, transmission, distribution and sale of electric energy within a 30,000 square mile service area in Virginia and in northeastern North Carolina. It transacts business under the name Virginia Power in Virginia and under the name North Carolina Power in North Carolina. Its Virginia service area comprises about 65% of Virginia's total land area but accounts for over 80% of its population. USE OF PROCEEDS As more specifically set forth in the applicable Prospectus Supplement, the Company proposes to apply the proceeds from the sale of the Junior Subordinated Debentures to redeem or repay, in accordance with their terms, certain securities previously issued by the Company, together with any costs related to the redemption or repayment thereof, or for corporate capital requirements. DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES The Junior Subordinated Debentures of each series are to be issued under an Indenture, as supplemented or amended from time to time (as so supplemented or amended, the Indenture), between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the Trustee). This summary of certain terms and provisions of the Junior Subordinated Debentures and the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Indenture, the form of which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part, and to the Trust Indenture Act of 1939, as amended (the Trust Indenture Act). The Indenture is qualified under the Trust Indenture Act. Whenever particular defined terms of the Indenture (as supplemented or amended from time to time) are referred to herein or in a Prospectus Supplement, such defined terms are incorporated herein or therein by reference. GENERAL The Junior Subordinated Debentures will rank pari passu with all other series of Junior Subordinated Debentures (including any Junior Subordinated Debentures issued to a trust) and will be unsecured and subordinate and junior in right of payment to the extent and in the manner set forth in the Indenture to all Senior Indebtedness of the Company. See "--Subordination." Except as otherwise provided in the applicable Prospectus Supplement, the Indenture does not limit the incurrence or issuance of other secured or unsecured debt of the Company, whether under the Indenture or any other indenture that the Company may enter into in the future or otherwise. See "-- Subordination" and the Prospectus Supplement relating to any offering of Junior Subordinated Debentures. THE INDENTURE DOES NOT CONTAIN PROVISIONS THAT AFFORD HOLDERS OF JUNIOR SUBORDINATED DEBENTURES PROTECTION IN THE EVENT OF A HIGHLY LEVERAGED TRANSACTION INVOLVING THE COMPANY. HOWEVER, ANY SUCH TRANSACTION WOULD REQUIRE REGULATORY APPROVAL, AND MANAGEMENT OF THE COMPANY BELIEVES SUCH APPROVAL WOULD BE UNLIKELY FOR A TRANSACTION THAT WOULD RESULT IN THE COMPANY HAVING A HIGHLY LEVERAGED CAPITAL STRUCTURE. The Indenture does not limit the aggregate amount of Junior Subordinated Debentures that may be issued thereunder and the Indenture provides that Junior Subordinated Debentures will be issuable in one or more series 3 pursuant to an indenture supplemental to such Indenture or a resolution of the Company's Board of Directors or a committee thereof. The applicable Prospectus Supplement or Prospectus Supplements will describe the following terms of the Junior Subordinated Debentures: (1) the title of the Junior Subordinated Debentures; (2) the aggregate principal amount of the Junior Subordinated Debentures; (3) the date or dates on which the principal of the Junior Subordinated Debentures is payable (the Stated Maturity) or the method of determination thereof, including any extension thereof; (4) the method, rate or rates, if any, at which the Junior Subordinated Debentures shall bear interest, the interest payment dates on which any such interest shall be payable, the right, if any, of the Company to defer or extend an interest payment date (any period during which the payment of interest is deferred or extended being referred to herein as an Extension Period) and the regular record date for any interest payable on any interest payment date or the method by which any of the foregoing shall be determined; (5) any period or periods within or date or dates on which, the price or prices at which and the terms and conditions upon which Junior Subordinated Debentures may be redeemed, in whole or in part, at the option of the Company or a holder thereof; (6) the obligation, if any, of the Company or a holder thereof to redeem, purchase or repay the Junior Subordinated Debentures and the period or periods within which the price or prices and the other terms and conditions upon which the Junior Subordinated Debentures shall be redeemed, repaid or purchased, in whole or in part, pursuant to such obligation; (7) the denominations in which any Junior Subordinated Debentures shall be issuable; (8) any additions, modifications or deletions in the Indenture Events of Default or covenants of the Company specified in the Indenture with respect to the Junior Subordinated Debentures; (9) whether the Junior Subordinated Debentures of the series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the depositary for such Global Securities, which depositary shall be a clearing agency registered under the Exchange Act; (10) any terms and conditions with respect to legal defeasance or covenant defeasance of the Junior Subordinated Debentures and (11) any other terms of the Junior Subordinated Debentures not inconsistent with the provisions of the Indenture. SUBORDINATION The Junior Subordinated Debentures will be subordinate and junior in right of payment to all Senior Indebtedness of the Company. No payment of principal of (including redemption and sinking fund payments), premium, if any, or interest on, the Junior Subordinated Debentures may be made if any Senior Indebtedness is not paid when due, or a default (other than a payment default) has occurred with respect to any Senior Indebtedness permitting the holders to accelerate the maturity thereof and such default has not been cured or waived or has not ceased to exist. If (i) any Senior Indebtedness is not paid when due, whether at the stated maturity of any such payment or by call for redemption, and any applicable grace period with respect to such default has ended with such default remaining uncured, and such default has not been waived or otherwise ceased to exist; (ii) the maturity of any Senior Indebtedness has been accelerated because of default; or (iii) notice has been given of the exercise of an option to require repayment, mandatory payment or prepayment or otherwise of any Senior Indebtedness, then no payment of any principal, including redemption payments, if any, or interest on the Junior Subordinated Debentures may be made. The rights of the holders of the Junior Subordinated Debentures will be subrogated to the rights of the holders of the Senior Indebtedness to receive payments or distributions applicable to Senior Indebtedness until all amounts owing on the Junior Subordinated Debentures are paid in full. The term "Senior Indebtedness" is defined in the Indenture to mean (i) any payment due in respect of (a) indebtedness of the Company for money borrowed (including any financial derivative, hedging or futures contract or similar instrument) and (b) indebtedness evidenced by securities, debentures, bonds, notes or other similar instruments issued by the Company which, 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, banker's 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 4 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 pari passu with the Junior Subordinated Debentures and (2) any unsecured indebtedness between or among the Company or its affiliates. The Indenture does not limit the aggregate amount of Senior Indebtedness that the Company may issue. As of September 30, 1996, outstanding Senior Indebtedness of the Company aggregated approximately $4.1 billion. REDEMPTION Any terms for the optional or mandatory redemption of Junior Subordinated Debentures will be set forth in the applicable Prospectus Supplement or a supplement thereto. Except as shall otherwise be provided in the applicable Prospectus Supplement with respect to Junior Subordinated Debentures that are redeemable at the option of the holder, Junior Subordinated Debentures will be redeemable only upon notice by mail not less than 30 nor more than 60 days prior to the date fixed for redemption, and, if less than all the Junior Subordinated Debentures of a series, or any tranche thereof, are to be redeemed, the particular Junior Subordinated Debentures to be redeemed will be selected by such method as shall be provided for any particular series, or in the absence of any such provision, by such method of random selection as the Registrar deems fair and appropriate. Any notice of redemption at the option of the Company may state that such redemption will be conditional upon receipt by the Paying Agent, on or prior to the date fixed for such redemption, of money sufficient to pay the principal of premium, if any, and interest, if any, on such Junior Subordinated Debentures and that if such money has not been so received, such notice will be of no force and effect and the Company will not be required to redeem such Junior Subordinated Debentures. CERTAIN COVENANTS OF THE COMPANY The Company will covenant in the Indenture that during any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Junior Subordinated Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, and (c) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans). The Indenture further provides that if there shall have occurred any event that would constitute an Event of Default (as defined below) then (a) the Company shall not declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or make a liquidation payment with respect to, any of its capital stock, and (b) the Company shall not make any payment of interest or principal on or repay, repurchase or redeem any debt securities issued by the Company which rank pari passu with or junior to the Junior Subordinated Debentures. EVENTS OF DEFAULT The Indenture provides that any one or more of the following described events with respect to any series of Junior Subordinated Debentures that has occurred and is continuing constitutes an "Event of Default" with respect to such Junior Subordinated Debentures: (i) failure for 60 days to pay any interest on such Junior Subordinated Debentures when due (subject to the deferral of any due date in the case of an Extension Period); or (ii) failure to pay any principal or premium, if any, on such Junior Subordinated Debentures when due, whether at maturity, upon redemption by declaration or otherwise, provided, however, that an extension of 5 the maturity of such Junior Subordinated Debentures in accordance with the terms of such Indenture shall not constitute an Event of Default; or (iii) failure to observe or perform in any material respect certain other covenants contained in such Indenture for 90 days after written notice to the Company from the Trustee or the holders of at least 25% in aggregate outstanding principal amount of such outstanding Junior Subordinated Debentures; or (iv) certain events in bankruptcy, insolvency or reorganization of the Company. The holders of a majority in aggregate outstanding principal amount of such Junior Subordinated Debentures have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee. The Trustee or the holders of not less than 25% in aggregate outstanding principal amount of such Junior Subordinated Debentures may declare the principal due and payable immediately upon an Event of Default. The holders of a majority in aggregate outstanding principal amount of such Junior Subordinated Debentures may annul such declaration and waive the default if the default (other than the non-payment of the principal of such series of Junior Subordinated Debentures which has become due solely by such acceleration) has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Trustee. The holders of a majority in aggregate outstanding principal amount of the Junior Subordinated Debentures affected thereby may, on behalf of the holders of all the Junior Subordinated Debentures, waive any past default, except a default in the payment of principal or interest (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Trustee) or a default in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Junior Subordinated Debenture. The Company is required to file annually with the Trustee a certificate as to whether or not the Company is in compliance with all the conditions and covenants applicable to it under the Indenture. CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS The Indenture provides that the Company shall not consolidate with or merge into any other Person (as defined in the Indenture) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and no Person shall consolidate with or merge into the Company or convey, transfer or lease its properties and assets substantially as an entirety to the Company, unless (i) the Company consolidates with or merges into another Person or conveys or transfers its properties and assets substantially as an entirety to any Person, the successor Person is organized under the laws of the United States or any state or the District of Columbia, and such successor Person expressly assumes the Company's obligations on the Junior Subordinated Debentures issued under the Indenture; (ii) immediately after giving effect thereto, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (iii) certain other conditions as prescribed in the Indenture are met. REGISTRATION AND TRANSFER Junior Subordinated Debentures of any series will be exchangeable for other Junior Subordinated Debentures of the same issue and series, of any authorized denominations, of a like aggregate principal amount, of the same Stated Maturity and bearing the same interest rate. Junior Subordinated Debentures may be presented for exchange as provided above, and may be presented for registration of transfer (with the form of transfer endorsed thereon, or a satisfactory written instrument of transfer, duly executed), at the office of the appropriate Registrar or at the office of any transfer agent designated by the Company for such purpose with respect to any series of Junior Subordinated Debentures and referred to in the applicable Prospectus Supplement, without service charge and upon payment of any taxes and other governmental charges as described in the Indenture. The Company will appoint the Trustee as Registrar under the Indenture (in such capacity, the Registrar). If the applicable Prospectus Supplement refers to any transfer 6 agents (in addition to the Registrar) initially designated by the Company with respect to any series of Junior Subordinated Debentures, the Company may at any time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent acts, provided that the Company maintains a transfer agent in each place of payment for such series. The Company may at any time designate additional transfer agents with respect to any series of Junior Subordinated Debentures. In the event of any redemption, neither the Company nor the Trustee shall be required to (i) issue, register the transfer of or exchange Junior Subordinated Debentures of any series during a period beginning at the opening of business 15 days before the day of selection for redemption of Junior Subordinated Debentures of that series and ending at the close of business on the day of mailing of the relevant notice of redemption or (ii) transfer or exchange any Junior Subordinated Debentures so selected for redemption, except, in the case of any Junior Subordinated Debentures being redeemed in part, any portion thereof not to be redeemed. MODIFICATION OF INDENTURE From time to time the Company and the Trustee may, without the consent of the holders of any series of Junior Subordinated Debentures, amend, waive or supplement the Indenture for specified purposes, including, among other things, curing ambiguities, defects or inconsistencies (provided that any such action does not materially adversely affect the interest of the holders of Junior Subordinated Debentures so long as they remain outstanding) and qualifying, or maintaining the qualification of, the Indenture under the Trust Indenture Act. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than a majority in principal amount of the Junior Subordinated Debentures affected, to modify the Indenture in a manner affecting the rights of the holders of the Junior Subordinated Debentures; provided, that no such modification may, without the consent of the holder of each outstanding Junior Subordinated Debenture so affected, (i) change the Stated Maturity of any series of Junior Subordinated Debentures, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon (except such extension as is contemplated hereby) or (ii) reduce the percentage of principal amount of such Junior Subordinated Debentures, the holders of which are required to consent to any such modification of the Indenture. In addition, the Company and the Trustee may execute, without the consent of any holder of Junior Subordinated Debentures, any supplemental Indenture for the purpose of creating any new series of Junior Subordinated Debentures. PAYMENT AND PAYING AGENCY Payments in respect of the Junior Subordinated Debentures shall be made to DTC (as defined herein), which shall credit the relevant accounts at DTC on the applicable Payment Dates or, if any Junior Subordinated Debentures are not held by DTC, such payments shall be made by check mailed to the address of the holder entitled thereto as such address shall appear on the securities register. Unless otherwise specified in the applicable Prospectus Supplement, the paying agent (the Paying Agent) shall initially be the Trustee and any co- paying agent chosen by the Trustee and acceptable to the Company. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Trustee and the Company. In the event that the Trustee shall no longer be the Paying Agent, the Company shall appoint a successor to act as Paying Agent. GOVERNING LAW Each Indenture and the Junior Subordinated Debentures will be governed by and construed in accordance with the laws of the State of New York. SATISFACTION AND DISCHARGE Under the terms of the Indenture, the Company will be discharged from any and all obligations in respect of the Junior Subordinated Debentures (except in each case to register the transfer or exchange of the Junior Subordinated Debentures, replace stolen, lost or mutilated Junior Subordinated Debentures, maintain paying 7 agencies and hold moneys for payment in trust) if the Company deposits with the Trustee, in trust, funds in an amount sufficient to pay all the principal of, and interest on, the Junior Subordinated Debentures on the dates such payments are due in accordance with the terms of the Junior Subordinated Debentures. INFORMATION CONCERNING THE TRUSTEE The Trustee shall have and be subject to all the duties and responsibilities specified with respect to an indenture trustee under the Trust Indenture Act. Subject to such provisions, the Trustee is under no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder of Junior Subordinated Debentures, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. The Trustee is not required to expend or risk its own funds or otherwise incur personal financial liability in the performance of its duties if the Trustee reasonably believes that repayment or adequate indemnity is not reasonably assured to it. BOOK-ENTRY ISSUANCE The Depository Trust Company (DTC) will act as securities depositary for all of the Junior Subordinated Debentures, unless otherwise referred to in the Prospectus Supplement relating to an offering of Junior Subordinated Debentures. The Junior Subordinated Debentures will be issued only as fully- registered securities registered in the name of Cede & Co. (DTC's nominee). One or more fully-registered global certificates (each, a Global Security) will be issued for the Junior Subordinated Debentures of each Indenture, representing in the aggregate the total aggregate principal balance of Junior Subordinated Debentures, and will be deposited with 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 Exchange Act. DTC holds securities that its Participants deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations (Direct Participants). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain custodial relationships with Direct Participants, either directly or indirectly (Indirect Participants). The rules applicable to DTC and its Participants are on file with the Commission. Purchases of Junior Subordinated Debentures within the DTC system must be made by or through Direct Participants, which will receive a credit for the Junior Subordinated Debentures on DTC's records. The ownership interest of each actual purchaser of each Junior Subordinated Debenture (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, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners purchased Junior Subordinated Debentures. Transfers of ownership interests in the Junior Subordinated Debentures are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Junior Subordinated Debentures, except in the event that use of the book-entry system for the Junior Subordinated Debentures is discontinued. DTC has no knowledge of the actual Beneficial Owners of the Junior Subordinated Debentures; DTC's records reflect only the identity of the Direct Participants to whose accounts such Junior Subordinated Debentures 8 are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. 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 and the voting rights of Direct Participants, Indirect Participants and 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 Cede & Co. as the registered holder of the Junior Subordinated Debentures. If less than all of a series of Junior Subordinated Debentures are being redeemed, DTC's current practice is to determine by lot the amount of the interest of each Direct Participant to be redeemed. Although voting with respect to the Junior Subordinated Debentures is limited to the holders of record of the Junior Subordinated Debentures, in those instances in which a vote is required, neither DTC nor Cede & Co. will itself consent or vote with respect to Junior Subordinated Debentures. Under its usual procedures, DTC would mail an omnibus proxy (the Omnibus Proxy) to the Trustee 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 such Junior Subordinated Debentures are credited on the record date (identified in a listing attached to the Omnibus Proxy). Interest payments on the Junior Subordinated Debentures will be made by the Trustee to DTC. DTC's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payments on such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices and will be the responsibility of such Participant and not of DTC, the Trustee or the Company, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment to DTC is the responsibility of the Trustee, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursements of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depositary with respect to any of the Junior Subordinated Debentures at any time by giving reasonable notice to the Trustee and the Company. In the event that a successor securities depositary is not obtained, definitive Junior Subordinated Debenture certificates representing such Junior Subordinated Debentures are required to be printed and delivered. The Company, at its option, may decide to discontinue use of the system of book-entry transfers through DTC (or a successor depository). After an Event of Default, the holders of a majority in aggregate principal amount of Junior Subordinated Debentures may determine to discontinue the system of book-entry transfers through DTC. In any such event, definitive certificates for such Junior Subordinated Debentures will be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Company believes to be accurate, but the Company assumes no responsibility for the accuracy thereof. The Company does not have any responsibility for the performance by DTC or its Participants of their respective obligations as described herein or under the rules and procedures governing their respective operations. PLAN OF DISTRIBUTION The Junior Subordinated Debentures may be sold in a public offering to or through underwriters or dealers designated from time to time. The Company may sell Junior Subordinated Debentures as soon as practicable after effectiveness of the Registration Statement of which this Prospectus is a part. The names of any underwriters or dealers involved in the sale of the Junior Subordinated Debentures in respect of which this Prospectus is delivered, the number of Junior Subordinated Debentures to be purchased by any such underwriters and any applicable commissions or discounts will be set forth in the Prospectus Supplement. 9 Underwriters may offer and sell Junior Subordinated Debentures at a fixed price or prices, which may be changed, or from time to time at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. In connection with the sale of Junior Subordinated Debentures, underwriters may be deemed to have received compensation from the Company in the form of underwriting discounts or commissions and may also receive commissions. Underwriters may sell Junior Subordinated Debentures to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters. Any underwriting compensation paid by the Company to underwriters in connection with the offering of Junior Subordinated Debentures, and any discounts, concessions or commissions allowed by such underwriters to participating dealers, will be described in a Prospectus Supplement. Underwriters and dealers participating in the distribution of Junior Subordinated Debentures may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of such Junior Subordinated Debentures may be deemed to be underwriting discounts and commissions, under the Securities Act. Underwriters and dealers may be entitled, under agreement with the Company, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act, and to reimbursement by the Company for certain expenses. In connection with the offering of the Junior Subordinated Debentures, the Company may grant to the underwriters an option to purchase additional Junior Subordinated Debentures to cover over-allotments, if any, at the initial public offering price (with an additional underwriting commission), as may be set forth in the accompanying Prospectus Supplement. If the Company grants any over-allotment option, the terms of such over-allotment option will be set forth in the Prospectus Supplement for such Junior Subordinated Debentures. Underwriters and dealers may engage in transactions with, or perform services for, the Company and/or any of its affiliates in the ordinary course of business. The Junior Subordinated Debentures will be new issues of securities and will have no established trading market. Any underwriters to whom Junior Subordinated Debentures are sold for public offering and sale may make a market in such Junior Subordinated Debentures, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. Such Junior Subordinated Debentures may or may not be listed on a national securities exchange or the Nasdaq National Market. No assurance can be given as to the liquidity of or the existence of trading markets for any Junior Subordinated Debentures. VALIDITY OF SECURITIES Unless otherwise indicated in the applicable Prospectus Supplement, certain legal matters will be passed upon for the Company by Hunton & Williams, Richmond, Virginia, counsel to the Company. The validity of the Junior Subordinated Debentures will be passed upon for the Underwriters by McGuire, Woods, Battle & Boothe, L.L.P., Richmond, Virginia, which also performs certain legal services for Dominion Resources, Inc. and its affiliates on other matters. EXPERTS The consolidated financial statements of the Company and subsidiaries appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1995, have been audited by Deloitte & Touche LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements and schedules are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 10 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The estimated expenses in connection with the issuance and distribution of the Securities covered by this Registration Statement, other than underwriting discounts and commissions, are as follows: SEC registration fee (actual)................................. $ 121,212 Printing fees and expenses.................................... 300,000 Legal fees and expenses....................................... 175,000 Accounting fees and expenses.................................. 50,000 New York Stock Exchange Listing Fee........................... 100,000 Rating Agency Fees............................................ 160,000 Trustees' Fees and Expenses................................... 60,000 Other......................................................... 48,288 ---------- Total....................................................... $1,014,500 ==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article VI of the Restated Articles of Incorporation, as amended, of the registrant provides that the registrant shall indemnify its directors and officers to the fullest extent permitted by law. Article 10, Chapter 9, Title 13.1 of the Code of Virginia of 1950, as amended, permits indemnification of directors and officers, but does not permit indemnification against willful misconduct or a knowing violation of the criminal law. The registrant maintains director and officer liability insurance protecting the registrant's directors and officers against certain claims resulting from their service in such capacities, and the registrant from the liability assumed by it in accordance with Article VI of its Restated Articles of Incorporation, as amended. The current policy covers all occurrences during the period ending September 1, 1999, and is expected to be renewed in the ordinary course of business. In general, the policy provides coverage for any misstatement, misleading statement, act, omission, neglect or breach of duty committed or attempted by a director or officer, but excludes, among other things, acts of deliberate dishonesty, and acts for personal profit or advantage to which the director or officer was not entitled. ITEM 16. EXHIBITS. 1 Form of Underwriting Agreement for Junior Subordinated Debentures. 4(a) Subordinated Note Indenture, dated as of August 1, 1995 between Virginia Electric and Power Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee, as supplemented to the date hereof. 4(b) Form of Supplemental Junior Subordinated Indenture (retail) between Virginia Electric and Power Company and The Chase Manhattan Bank, as Trustee. 4(c) Form of Supplemental Junior Subordinated Indenture (institutional) between Virginia Electric and Power Company and The Chase Manhattan Bank, as Trustee. 5 Opinion and Consent of Hunton & Williams. 8 Tax Opinion of Hunton & Williams. 12 Computation of Ratio of Earnings to Fixed Charges. 23(a) Consent of Deloitte & Touche LLP. 23(b) Consent of Hunton & Williams (contained in Exhibits 5 and 8). 24 Powers of Attorney with respect to the Company's officers and directors (included herein). 25 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee under the Subordinated Note Indenture. 99(a) Form of Prospectus Supplement (Retail) 99(b) Form of Prospectus Supplement (Institutional) II-1 ITEM 17. UNDERTAKINGS. (a) The undersigned Registrant hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended; (ii) to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post- effective amendment thereto) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in post-effective amendment by those paragraphs is contained in periodic reports filed by a 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. (2) that, for the purpose of determining any liability under the Securities Act of 1933, as amended, 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. (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. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, filing a 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 this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 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 director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by the controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-2 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, 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 RICHMOND, COMMONWEALTH OF VIRGINIA ON THE 28TH DAY OF JANUARY, 1997. Virginia Electric and Power Company John B. Adams, Jr. By: _________________________________ John B. Adams, Jr. Chairman of the Board of Directors POWER OF ATTORNEY PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON JANUARY 28, 1997 IN THE CAPACITIES INDICATED. EACH PERSON BELOW HEREBY CONSTITUTES AND APPOINTS EACH AGENT FOR SERVICE NAMED IN THIS REGISTRATION STATEMENT, HIS OR HER TRUE AND LAWFUL ATTORNEY AND AGENT, TO DO ANY AND ALL ACTS EXECUTE ANY AND ALL AND INSTRUMENTS FOR HIM OR HER AND IN HIS OR HER NAME IN THE CAPACITY INDICATED BELOW, WHICH SUCH ATTORNEYS AND AGENTS, OR ANY OF THEM, MAY DEEM NECESSARY OR ADVISABLE TO ENABLE VIRGINIA ELECTRIC AND POWER COMPANY TO COMPLY WITH THE SECURITIES ACT OF 1933, AND ANY RULES, REGULATIONS AND REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION, IN CONNECTION WITH THIS REGISTRATION STATEMENT, INCLUDING SPECIFICALLY, BUT WITHOUT LIMITATION, POWER AND AUTHORITY TO SIGN AMENDMENTS (INCLUDING POST EFFECTIVE AMENDMENTS) AND ANY RELATED REGISTRATION STATEMENT, OR AMENDMENT THERETO, FILED PURSUANT TO RULE 462(B) PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SIGNATURE TITLE John B. Adams, Jr. Chairman of the Board of Directors - ------------------------------------- and Director JOHN B. ADAMS, JR. J.T. Rhodes President (Chief Executive Officer) - ------------------------------------- and Director J.T. RHODES James F. Betts Director - ------------------------------------- JAMES F. BETTS Jean E. Clary Director - ------------------------------------- JEAN E. CLARY Benjamin J. Lambert, III Director - ------------------------------------- BENJAMIN J. LAMBERT, III II-3 SIGNATURE TITLE Richard L. Leatherwood Director - ------------------------------------- RICHARD L. LEATHERWOOD Harvey L. Lindsay, Jr. Director - ------------------------------------- HARVEY L. LINDSAY, JR. William T. Roos Director - ------------------------------------- WILLIAM T. ROOS Robert H. Spilman Director - ------------------------------------- ROBERT H. SPILMAN William G. Thomas Director - ------------------------------------- WILLIAM G. THOMAS E.M. Roach, Jr. Senior Vice President Finance, - ------------------------------------- Regulation and General Counsel E.M. ROACH, JR. (Chief Financial Officer) M.S. Bolton, Jr. Controller (Principal Accounting - ------------------------------------- Officer) M.S. BOLTON, JR. II-4 EX-1 2 FORM UNDERWRITING AGREEMENT EXHIBIT 1 VIRGINIA ELECTRIC AND POWER COMPANY Series __ Junior Subordinated Debentures Due 20__ FORM OF UNDERWRITING AGREEMENT ___________, 1997 Lehman Brothers Inc. 3 World Financial Center New York, New York 10285 Ladies and Gentlemen: Virginia Electric and Power Company, a Virginia public service corporation (the "Company"), confirms its agreement (the "Agreement") with you and each of the other Underwriters named in Schedule I hereto (collectively, the "Underwriters", which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom you are acting as representative (in such capacity, you shall hereinafter be referred to as the "Representative"), with respect to the sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of certain of the Company's Junior Subordinated Debentures ("Subordinated Debentures"), specifically the Company's Series __ Junior Subordinated Debentures Due 20__ to be issued in the amount specified in Schedule I hereto (the "Junior Subordinated Debentures"). The Junior Subordinated Debentures will be issued under the Company's Indenture, dated as of August 1, 1995, to The Chase Manhattan Bank (formerly known as Chemical Bank) (the "Trustee"), as supplemented and modified to the date hereof and as to be supplemented by a supplemental indenture substantially in the form of Exhibit __ to the Registration Statement referred to below (the "Supplemental Indenture"). The term "Indenture", as used herein, shall be deemed to refer to such Indenture as so supplemented and modified. SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and ------------------------------ warrants to each Underwriter as follows: (a) A registration statement, No. 333-__________, on Form S-3, as amended, for the registration of the Subordinated Debentures under the Securities Act of 1933, as amended (the "1933 Act"), heretofore filed with the Securities and Exchange Commission (the "Commission"), a copy of which as so filed has been delivered to you, has been declared effective (any preliminary prospectus included in such registration statement being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statement, including all exhibits thereto other than the Statement of Eligibility on Form T-1 of the Trustee under the Trust Indenture Act of 1939, as amended (the "1939 Act"), each as amended at the time such part became effective, being hereinafter collectively called the "Registration Statement;" the prospectus relating to the Subordinated Debentures included in the Registration Statement, which prospectus is now proposed to be supplemented by a supplement relating to the Junior Subordinated Debentures to be filed with the Commission pursuant to Rule 424(b) under the 1933 Act in the form in which it is first so filed, as so supplemented, and as may be supplemented pursuant to the following sentence, being hereinafter called the "Prospectus"). Whenever the term "Registration Statement", "prospectus", "Preliminary Prospectus" or "Prospectus" is used herein, it shall be deemed to include all documents or portions thereof incorporated therein by reference (the "Incorporated Documents") pursuant to the requirements of Form S-3 under the 1933 Act, and any reference to any amendment or supplement to any prospectus, Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such prospectus, Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and incorporated therein by reference. So long as the Underwriters are required pursuant to the 1933 Act to deliver a prospectus to purchasers of the Junior Subordinated Debentures, the Company will not file any amendment or supplement to the Registration Statement or the Prospectus unless the Representative shall have been advised of the proposed amendment or supplement and the same shall not have been disapproved as to substance by the Representative or as to form by McGuire, Woods, Battle & Boothe, L.L.P., who are acting as counsel for the Underwriters. (b) No order suspending the effectiveness of the Registration Statement or otherwise preventing or suspending the use of the Prospectus has been issued by the Commission and is in effect and no proceedings for that purpose are pending before or, to the knowledge of the Company, threatened by, the Commission. The Registration Statement and the Prospectus comply in all material respects, in form and in substance, with the provisions of the 1933 Act, 1934 Act, the Trust Indenture Act of 1939, as amended (the "1939 Act"), rules and regulations promulgated under the 1933 Act ("1933 Act Regulations"), the rules promulgated under the 1934 Act ("1934 Act Regulations"), and the rules and regulations under the 1939 Act (the "1939 Act Regulations"), and neither the Registration Statement nor the Prospectus contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, that the foregoing representations and warranties in this subsection (b) shall not apply to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon information furnished herein or in writing to the Company by the Underwriters or on the Underwriters' behalf for use in the Registration Statement or Prospectus; and provided, further, that the foregoing representations and warranties are given on the basis that any statement contained in an Incorporated Document shall be deemed to be modified or superseded for purposes of the Registration Statement or Prospectus to the extent that the statement has been modified or superseded by any statement in a subsequently filed Incorporated Document or in the Registration Statement or Prospectus. 2 (c) With respect to the Registration Statement, the conditions for use of Form S-3, as set forth in the General Instructions thereof, and Rule 415 under the 1933 Act Regulations have been satisfied. (d) To the best of the Company's knowledge, Deloitte & Touche LLP, the accountants who certified the financial statements and supporting schedules included in the Registration Statement, are independent public accountants as required by the 1933 Act and the 1933 Act Regulations. (e) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, there has been no material adverse change or, to the best of the Company's knowledge, any development involving a prospective material adverse change in the condition of the Company, financial or otherwise. The Company has no material contingent financial obligation that is not disclosed in the Registration Statement and Prospectus. (f) The Company has been duly incorporated and is validly existing as a public service corporation in good standing under the laws of the Commonwealth of Virginia with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, to enter into and perform its obligations under this Agreement and the Indenture; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character or location of its properties or the nature or the conduct of its business requires such qualification, except for any failures to be so qualified or in good standing which, taken as a whole, would not have a material adverse effect on the Company. (g) This Agreement has been duly authorized, executed and delivered by the Company. (h) The Indenture has been duly authorized by the Company and, on the Closing Date, will have been duly executed and delivered by the Company, and, assuming due authorization, execution and delivery of the Indenture by the Trustee, the Indenture will, on the Closing Date, constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally or by general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity) (the "Bankruptcy Exceptions"); the Indenture will conform to all statements relating thereto contained in the Prospectus; and, on the Closing Date, the Indenture will have been duly qualified under the 1939 Act. (i) The Junior Subordinated Debentures have been duly authorized by the Company and, on the Closing Date, will have been duly executed by the Company 3 and, when authenticated in the manner provided for in the Indenture and delivered against payment therefor as described in the Prospectus, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms except to the extent that enforcement thereof may be limited by the Bankruptcy Exceptions, will be in the form contemplated by, and entitled to the benefits of, the Indenture and will conform to all statements relating thereto in the Prospectus. (j) The Junior Subordinated Debentures are subordinated and junior in right of payment to all "senior indebtedness" (as defined in the Supplemental Indenture) of the Company. (k) The Junior Subordinated Debentures, upon issuance thereof, will conform in all material respects to the terms of the relevant order or orders of the State Corporation Commission of Virginia (the "Virginia Commission") now or hereafter in effect with respect thereto. (l) The execution, delivery and performance by the Company of this Agreement, the Junior Subordinated Debentures, and the Indenture, and the consummation by the Company of the transactions contemplated herein and therein and compliance by the Company with its obligations hereunder and thereunder do not and will not result in any violation of the Articles of Incorporation or Bylaws of the Company and do not and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company under (A) any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company is a party or by which the Company may be bound or to which any of its properties may be subject (except for conflicts, breaches or defaults which would not, individually or in the aggregate, be materially adverse to the Company or materially adverse to the transactions contemplated by this Agreement), or (B) any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, or any regulatory body or administrative agency or other governmental body having jurisdiction over the Company, or any of its properties. (m) No authorization, approval, consent or order of any court or governmental authority or agency is necessary in connection with the issuance and sale of the Junior Subordinated Debentures hereunder, except (A) such as may be required under the 1933 Act or the 1933 Act Regulations or state securities laws; (B) the qualification of the Indenture under the 1939 Act and (C) the approval of the Virginia Commission. 4 SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING. ------------------------------------------- Retail - [(a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at the price per security set forth in Schedule II, the number of Junior Subordinated Debentures set forth in Schedule I opposite the name of such Underwriter, plus any additional number of Junior Subordinated Debentures that such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof. The Underwriters agree to make a public offering of their respective Junior Subordinated Debentures specified in Schedule I at the initial public offering price specified in Schedule II hereto. The purchase price per security to be paid by the several Underwriters for the Junior Subordinated Debentures shall be an amount equal to the initial public offering price set forth on Schedule II, which is a fixed price determined by agreement between the Representative and the Company. The Company hereby agrees to pay on the Closing Date (as defined below) to the Representative, for the accounts of the several Underwriters, a commission per Junior Subordinated Debenture as set forth on Schedule II for the Junior Subordinated Debentures to be delivered by the Company hereunder on the Closing Date.] Institutional - [(a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at the price set forth in Schedule II, the principal amount of Junior Subordinated Debentures set forth in Schedule I opposite the name of such Underwriter, plus any additional principal amount of Junior Subordinated Debentures that such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof. The Underwriters agree to make a public offering of their respective Junior Subordinated Debentures specified in Schedule I at the initial price to public specified in Schedule II hereto. The purchase price per security to be paid by the several Underwriters for the Junior Subordinated Debentures shall be an amount equal to the initial public offering price set forth on Schedule II, which is a fixed price determined by agreement between the Representative and the Company.] (b) Payment of the purchase price for, and delivery of certificates for, the Junior Subordinated Debentures shall be made at the offices of Hunton & Williams, 200 Park Avenue, New York, New York or at such other place as shall be agreed upon by the Representative and the Company, at 10:00 A.M., New York City time, on the third business 5 day (unless postponed in accordance with the provisions of Section 10) after execution of this Agreement or such other time, place or date as shall be agreed upon by the Representative and the Company (such time and date of payment and delivery being herein called the "Closing Date"). Payment shall be made to the Company by wire transfer of immediately available funds, against delivery of the Junior Subordinated Debentures, in fully registered form, to you or upon your order. The Junior Subordinated Debentures shall be delivered in the form of a certificated global security in denominations equal to the aggregate principal amount of the Junior Subordinated Debentures upon original issuance and registered in the name of Cede & Co., as nominee for The Depository Trust Company. It is understood that each Underwriter has authorized the Representative, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Junior Subordinated Debentures which it has agreed to purchase. The Representative, individually and not as Representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Junior Subordinated Debentures to be purchased by any Underwriter whose check has not been received by the Closing Date, but such payment shall not relieve such Underwriter from its obligations hereunder. The certificate(s) for the Junior Subordinated Debentures will be made available for examination by the Representative not later than 12:00 Noon, New York City time, on the last business day prior to the Closing Date. Retail--[On the Closing Date, the Company will pay, or cause to be paid, the commission payable at such time to the Underwriters under Section 2(a) hereof by wire transfer to the Representative of immediately available funds.] SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each ------------------------ Underwriter as follows: (a) The Company, on or prior to the Closing Date, will deliver to the Underwriters conformed copies of the Registration Statement as originally filed and of all amendments thereto, heretofore or hereafter made, including any post-effective amendment (in each case including all exhibits filed therewith, and including unsigned copies of each consent and certificate included therein or filed as an exhibit thereto, except exhibits incorporated by reference unless specifically requested). As soon as the Company is advised thereof, it will advise the Representative orally of the issuance of any stop order under the 1933 Act with respect to the Registration Statement, or the institution of any proceedings therefor, of which the Company shall have received notice, and will use its best efforts to prevent the issuance of any such stop order and to secure the prompt removal thereof, if issued. The Company will deliver to the Underwriters sufficient conformed copies of the Registration Statement and Prospectus and of all amendments thereto (in each case without exhibits) for distribution of one to each Underwriter and, from time to time, as many copies of the Prospectus as the Underwriters may reasonably request for the purposes contemplated by the 1933 Act. 6 (b) The Company will furnish the Underwriters with copies of each further amendment and supplement to the Prospectus relating to the offering of the Junior Subordinated Debentures in such quantities as the Underwriters may from time to time reasonably request. If, during the period when the delivery of a prospectus shall be required by the 1933 Act in connection with the sale of any Junior Subordinated Debentures by an Underwriter or dealer, any event relating to or affecting the Company, or of which the Company shall be advised in writing by the Underwriters, shall occur, which in the opinion of the Company or of Underwriters' counsel should be set forth in a supplement to or an amendment of the Prospectus in order to make the Prospectus not misleading in the light of the circumstances when it is delivered, or if for any other reason it shall be necessary during such period to amend or supplement the Prospectus or to file under the 1934 Act any document incorporated by reference in the Prospectus in order to comply with the 1933 Act or the 1934 Act, the Company forthwith will (i) notify the Underwriters to suspend solicitation of purchases of the Junior Subordinated Debentures and (ii) at its expense, make any such filing or prepare and furnish to the Underwriters a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Prospectus which will supplement or amend the Prospectus so that, as supplemented or amended, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered, not misleading or which will effect any other necessary compliance. In case any Underwriter is required to deliver a prospectus in connection with the sale of any Junior Subordinated Debentures after the expiration of the period specified in the preceding sentence, the Company, upon the request of such Underwriter, will furnish to such Underwriter, at the expense of such Underwriter, a reasonable quantity of a supplemented or amended prospectus, or supplements or amendments to the Prospectus, complying with Section 10(a) of the 1933 Act. During the period specified in the second sentence of this subsection, the Company will continue to prepare and file with the Commission on a timely basis all documents or amendments required under the 1934 Act and the 1934 Act Regulations; provided, that the Company shall not file such documents or amendments without also furnishing copies thereof prior to such filing to the Underwriters and McGuire, Woods, Battle & Boothe, L.L.P. (c) The Company will endeavor, in cooperation with the Underwriters, to qualify the Junior Subordinated Debentures for offering and sale under the applicable securities laws of such states and the other jurisdictions of the United States as the Representative may designate; provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. (d) The Company will make generally available to its security holders as soon as practicable but not later than 45 days after the close of the period covered thereby, an earnings statement of the Company (in form complying with the provisions 7 of Rule 158 of the 1933 Act Regulations) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in Rule 158) of the Registration Statement. Retail--[(e) The Company will use best efforts to effect the listing of the Junior Subordinated Debentures on the New York Stock Exchange.] (f) During a period of 30 days from the date of this Agreement, the Company will not, without the Representative's prior written consent, directly or indirectly, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, any Junior Subordinated Debentures, any security convertible into or exchangeable into or exercisable for Junior Subordinated Debentures or securities substantially similar to the Junior Subordinated Debentures (except for the Junior Subordinated Debentures issued pursuant to this Agreement). SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses in ------------------- connection with (i) the printing and filing by it of the Registration Statement as originally filed and of each amendment thereto, (ii) the preparation, issuance and delivery of the certificate(s) for the Junior Subordinated Debentures to the Underwriters, (iii) the fees and disbursements of the Company's counsel and accountants, (iv) the qualification of the Junior Subordinated Debentures under securities laws in accordance with the provisions of Section 3(c) hereof, including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of any blue sky survey, (v) the printing and delivery to the Underwriters of copies of the Registration Statement as originally filed and of each amendment thereto, of each preliminary prospectus, and of the Prospectus and any amendments or supplements thereto, (vi) the printing and delivery to the Underwriters of copies of any blue sky survey, (vii) the fee of the National Association of Securities Dealers, Inc. in connection with its review of the offering contemplated by this Agreement, if applicable, (viii) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture, (ix) any fees payable in connection with the rating of the Junior Subordinated Debentures,[(x) the fees and expenses incurred in connection with the listing of the Junior Subordinated Debentures on the New York Stock Exchange,] and (xi) the cost and charges of any transfer agent or registrar and (xii) the cost of qualifying the Junior Subordinated Debentures with The Depository Trust Company. In addition, if this Agreement is terminated by the Representative in accordance with the provisions of Section 5 or Section 9 hereof, the Company shall reimburse the Underwriters for all of their reasonable out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters. SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of --------------------------------------- the Underwriters to purchase and pay for the Junior Subordinated Debentures are subject to the following conditions: 8 (a) No stop order suspending the effectiveness of the Registration Statement shall be in effect on the Closing Date and no proceedings for that purpose shall be pending before, or to the knowledge of the Company threatened by, the Commission on such date. If filing of the Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and any such supplement, shall have been filed in the manner and within the time period required by Rule 424(b). The Underwriters shall have received, prior to payment for the Junior Subordinated Debentures, a certificate dated the Closing Date and signed by the President or any Vice President of the Company to the effect that no such stop order is in effect and that no proceedings for such purpose are pending before, or to the knowledge of the Company threatened by, the Commission. (b) An order or orders of the Virginia Commission permitting the transactions contemplated hereby substantially in accordance with the terms and conditions hereof shall be in full force and effect and shall contain no provision unacceptable to the Underwriters or the Company (but all provisions of such order or orders heretofore entered, copies of which have heretofore been delivered to the Representative, are deemed acceptable to the Underwriters and the Company and all provisions of such order or orders hereafter entered shall be deemed acceptable to the Underwriters and the Company unless within 24 hours after receiving a copy of any such order any party to this Agreement shall give notice to the other parties to the effect that such order contains an unacceptable provision). (c) On the Closing Date the Representative shall have received: (1) The opinion, dated as of the Closing Date, of Hunton & Williams, counsel for the Company, substantially in the form attached hereto as Schedule III. (2) The opinion, dated as of the Closing Date, of Cravath, Swaine & Moore, counsel to the Trustee, substantially in the form attached hereto as Schedule IV. (3) The opinion, dated as of the Closing Date, of McGuire, Woods, Battle & Boothe, L.L.P., counsel for the Underwriters, substantially in the form attached hereto as Schedule V. (d) At the Closing Date, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement and the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company, whether or not arising in the ordinary course of business, and the Representative shall have received a certificate of the Chairman of the Board, the President or any Vice President of the Company and dated as of the Closing Date, to the effect that (i) there has been no 9 such material adverse change, (ii) the representations and warranties in Section 1 hereof are true and correct with the same force and effect as though expressly made at and as of the Closing Date and (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied on or prior to the Closing Date. (e) On the Closing Date, the Representative shall have received from Deloitte & Touche LLP a letter dated such date, in form and substance satisfactory to the Representative. (f) On the Closing Date, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Junior Subordinated Debentures as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company, in connection with the issuance and sale of the Junior Subordinated Debentures as herein contemplated shall be satisfactory in form and substance to the Representative and McGuire, Woods, Battle & Boothe, L.L.P., counsel for the Underwriters. (g) On the Closing Date, there shall not have occurred any decrease in the ratings of any of the debt securities of the Company or of the Junior Subordinated Debentures by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the 1933 Act). Retail--[(h) On the Closing Date, the Junior Subordinated Debentures shall have been approved for listing on the New York Stock Exchange upon notice of issuance.] If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representative by notice to the Company at any time prior to the Closing Date, and such termination shall be without liability of any party to any other party except as provided in Sections 4, 7 and 9(b) hereof. SECTION 6. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligations ------------------------------------------- of the Company shall be subject to the conditions set forth in the first sentence of Section 5(a) and in Section 5(b). In case such conditions shall not have been fulfilled, this Agreement may be terminated by the Company by mailing or delivering written notice thereof to the Underwriters. Any such termination shall be without liability of any party to any other party except as otherwise provided in Sections 4, 7 and 9(b) hereof. SECTION 7. INDEMNIFICATION. --------------- (a) The Company agrees to jointly and severally indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of 10 Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the 1933 Act, the 1934 Act or any other statute or common law and to reimburse each such Underwriter and controlling person for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities, or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or Prospectus, or in either such document as amended or supplemented (if any amendments or supplements thereto shall have been furnished), or any preliminary prospectus (if and when used prior to the effective date of the Registration Statement), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided that the foregoing agreement, insofar as it relates to any preliminary prospectus, shall not inure to the benefit of any Underwriter (or to the benefit of any person who controls such Underwriter) on account of any losses, claims, damages or liabilities arising out of the sale of any of the Junior Subordinated Debentures by such Underwriter to any person if a copy of the Prospectus (as supplemented or amended, if any supplements or amendments which have been furnished to the Underwriters), which Prospectus cures any omission or misstatement upon which such losses, claims, damages or liabilities are based, shall not have been sent or given by or on behalf of such Underwriter to such person at or prior to the written confirmation of the sale to such person; and provided, further, however, that the indemnity agreement contained in this Section shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of or based upon any such untrue statement or alleged untrue statement, or any such omission or alleged omission, if such statement or omission was made in reliance upon information furnished herein or otherwise in writing to the Company by or on behalf of any Underwriter for use in the Registration Statement or the Prospectus. The indemnity agreement of the Company contained in this Section and the representations and warranties of the Company contained in Section 1 hereof shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any such controlling person, and shall survive the delivery of the Junior Subordinated Debentures. (b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its officers and directors, each other Underwriter, and each person who controls any thereof within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the 1933 Act, the 1934 Act, or any other statute or common law and to reimburse each of them for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus, or in either such 11 document as amended or supplemented (if any amendments or supplements thereof shall have been furnished), or any preliminary prospectus (if and when used prior to the effective date of the Registration Statement), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished herein or in writing to the Company by or on behalf of such Underwriter for use in the Registration Statement or the Prospectus or any amendment or supplement to either thereof, or any preliminary prospectus. The indemnity agreement of the respective Underwriters contained in this Section shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Company, or any such other Underwriter or any such controlling person, and shall survive the delivery of the Junior Subordinated Debentures. Each Underwriter represents and warrants that its commitment to buy the Junior Subordinated Debentures will not result in a violation of the financial responsibility requirements of Rule 15c3-1 under the 1934 Act. (c) The Company and each of the Underwriters agree that, upon the receipt of notice of the commencement of any action against the Company or any of its officers or directors, or any person controlling the Company, or against such Underwriter or controlling person as aforesaid, in respect of which indemnity may be sought on account of any indemnity agreement contained herein, it will promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought hereunder, but the omission so to notify such indemnifying party or parties of any such action shall not relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given, such indemnifying party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume (in conjunction with any other indemnifying parties) the defense of such action, in which event such defense shall be conducted by counsel chosen by such indemnifying party (or parties) and satisfactory to the indemnified party or parties who shall be defendant or defendants in such action, and such defendant or defendants shall bear the fees and expenses of any additional counsel retained by them; provided that, if the defendants in any such action include both the indemnified party and the indemnifying party (or parties) and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party (or parties), the indemnified party shall have the right to select separate counsel to assert such legal defenses and to participate otherwise in the defense of such action on behalf of such indemnified party. The indemnifying party shall bear the reasonable fees and expenses of counsel retained by the indemnified party if (i) the indemnified party shall have retained such counsel in connection with the assertion of legal defenses in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to one local counsel, if necessary, reasonably satisfactory to all parties), representing the indemnified parties under (a), as the case may be, of this Section 7 who are parties to 12 such action), (ii) the indemnifying party shall have elected not to assume the defense of such action, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the commencement of the action, or (iv) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. (d) If the indemnification provided for in this Section 7 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Company, on the one hand, and of the Underwriters, on the other, in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations, including relative benefit. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading relates to information supplied by the Company on the one hand or by the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 7 are several in proportion to their respective underwriting percentages determined by the ratio which the original purchase obligation of any Underwriter (which is the number of Junior Subordinated Debentures set forth opposite their names in Schedule I hereto, or such amount increased as provided in Section 10 below) bears to the total number of Junior Subordinated Debentures. SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. --------------------------------------------------------------- All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company and shall survive delivery of the Junior Subordinated Debentures to the Underwriters. 13 SECTION 9. TERMINATION OF AGREEMENT. ------------------------ (a) The Representative may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Date (i) if there has been, since the date of this Agreement or since the respective dates as of which information is given in the Registration Statement, any material adverse change in the condition, financial or otherwise, of the Company, whether or not arising in the ordinary course of business, (ii) if there has occurred any material adverse change in the financial markets in the United States or elsewhere or any outbreak of hostilities or escalation thereof or other calamity or crisis the effect of which is such as to make it, in the judgment of the Representative, impracticable to market the Junior Subordinated Debentures or to enforce contracts for the sale of the Junior Subordinated Debentures, (iii) if trading in the securities of the Company or its affiliates or the Junior Subordinated Debentures has been suspended by the Commission, or if trading generally on the New York Stock Exchange has been suspended, limited or restricted or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by said exchange or by order of the Commission or any other governmental authority, or if a banking moratorium has been declared by either Federal or New York authorities or (iv) if there has been any decrease in the ratings of any of the debt securities of the Company or of the Junior Subordinated Debentures by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the 1933 Act). (b) If this Agreement shall be terminated by the Underwriters pursuant to subsection (a) above or because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, then in any such case, the Company will reimburse the Underwriters, severally, for all out-of-pocket expenses (in addition to the fees and disbursements of their counsel as provided in Section 4) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder and, upon such reimbursement, the Company shall be absolved from any further liability hereunder, except as provided in Sections 4 and 7. SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more ------------------------------------------ of the Underwriters shall fail on Closing Date to purchase the Junior Subordinated Debentures that it or they are obligated to purchase under this Agreement (the "Defaulted Securities"), the Representative shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non- defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representative shall not have completed such arrangements within such 24-hour period, then: (a) if the number of Defaulted Securities does not exceed 10% of the Junior Subordinated Debentures, each of the non-defaulting Underwriters shall be obligated, severally and to jointly, to purchase the full amount thereof in the proportions that 14 their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the number of Defaulted Securities exceeds 10% of the Junior Subordinated Debentures, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter. No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement, either the Representative or the Company shall have the right to postpone the Closing Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. SECTION 11. NOTICES. All notices and other communications hereunder ------- shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representative at 3 World Financial Center, New York, New York 10285, attention of Managing Director, Utilities Investment Banking; notices to the Company shall be directed to it at One James River Plaza, Richmond, Virginia 23219, attention of Treasurer. SECTION 12. PARTIES. This Agreement shall inure to the benefit of and ------- be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in Section 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Junior Subordinated Debentures from any Underwriter shall be deemed to be a successor by reason merely of such purchase. SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by ---------------------- and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State. Except as otherwise set forth herein, specified times of day refer to New York City time. SECTION 14. COUNTERPARTS. This Agreement may be executed by any one or ------------ more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 15 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriters and the Company in accordance with its terms. Very truly yours, VIRGINIA ELECTRIC AND POWER COMPANY By: ------------------------------- Title: ---------------------------- CONFIRMED AND ACCEPTED, as of the date first above written LEHMAN BROTHERS INC. By: ----------------------------------------- Authorized Signatory For itself and as Representative of the other Underwriters named in Schedule I hereto. 16 SCHEDULE I NAME OF UNDERWRITER PRINCIPAL AMOUNT OF JUNIOR SUBORDINATED DEBENTURES TO BE PURCHASED SCHEDULE II Retail--[Initial price per Security (and purchase price per security to be paid by the several Underwriters): Compensation per Security to be paid by the Company to the several Underwriters in respect of their commitments: $______ for any Junior Subordinated Debentures sold to certain institutions; $______ for Junior Subordinated Debentures sold to other purchasers] Institutional--[Title of Securities: Series __ Junior Subordinated Debentures Due 20__ Aggregate Principal Amount: $_______________ Initial Price to Public: % of the principal amount of the Junior Subordinated Debentures plus accrued interest, if any, from the date of the issuance Initial Purchase Price to be Paid by Underwriters: % of the principal amount of the Junior Subordinated Debentures] SCHEDULE III PROPOSED FORM OF OPINION OF HUNTON & WILLIAMS Riverfront Plaza, East Tower 951 East Byrd Street Richmond, Virginia 23219 RE: VIRGINIA ELECTRIC AND POWER COMPANY Series ___ Junior Subordinated Debentures Due 20__ (Closing Date) Lehman Brothers Inc., as Representative 3 World Financial Center New York, New York 10285 Virginia Electric and Power Company Series ___ Junior Subordinated Debentures Due 20__ --------------------------------------------------- Dear Sirs: We have acted as counsel to Virginia Electric and Power Company (the Company) in connection with its issuance and sale of its Series ___ Junior Subordinated Debentures Due 20__ (the Junior Subordinated Debentures). The Junior Subordinated Debentures are being sold to you today pursuant to the terms of an Underwriting Agreement dated __________, 1997, between the Company and you, as Representative of the Underwriters (the Underwriting Agreement). This Opinion is being delivered to you as Representative pursuant to Section 5(c)(1) thereof. In rendering the opinions expressed below, we have examined the following documents: 1. The registration statement on Form S-3 (No. 333- ) pertaining to the Junior Subordinated Debentures (the Registration Statement, which includes exhibits thereto and documents incorporated by reference), filed under the Securities Act of 1933, as amended (the Act), and the prospectus dated ____________, 1997 filed with the Securities and Exchange Commission on _______________, 1997 and prospectus supplement dated ___________, 1997 (collectively, the Prospectus), pursuant to which the Junior Subordinated Debentures were offered and sold; 2. the Subordinated Note Indenture by and between the Company and The Chase Manhattan Bank (formerly Chemical Bank) dated as of August 1, 1995, as heretofore supplemented and amended and as further supplemented by the ____________ Supplemental Indenture, dated as of ______ ___, 19__ (collectively, the Indenture); 3. the form of certificate evidencing the Junior Subordinated Debentures; and 4. the Underwriting Agreement. For purposes of the opinions expressed below, we have assumed (i) the authenticity of all documents submitted to us as originals, (ii) the conformity to the originals of all documents submitted as certified or photostatic copies and the authenticity of the originals of such copies, (iii) the genuineness of signatures not witnessed by us, (iv) the legal capacity of natural persons, and (v) the due authorization, execution and delivery of all documents by all parties and the validity and binding effect thereof (other than the authorization, execution and delivery of documents by the Company and the validity and binding effect upon the Company.) As to factual matters, we have relied upon representations included in the Agreements, in documents delivered at the closing, and upon certificates of officers of the Company, and upon certificates of public officials. Whenever the phrases "to our knowledge" or "known to us" are used herein, it refers to the actual knowledge of the attorneys of this firm involved in the representation of the Company. The enforceability of the documents and instruments is subject to the provisions of the bankruptcy, insolvency, reorganization, fraudulent conveyance or moratorium laws or laws relating to or affecting the rights of creditors generally and principles of equity, whether considered at law or in equity. I. Based upon, and subject to, the foregoing and such other documents and information as we have considered necessary for the purposes hereof, we are of the opinion that: 1. The Company is a corporation duly organized and existing under the laws of Virginia and is duly qualified as a foreign corporation in West Virginia and North Carolina. Neither the nature of the Company's business nor the properties it owns or holds under lease makes necessary qualification as a foreign corporation in any state where it is not now so qualified. 2. The Company has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and to enter into and perform its obligations under the Underwriting Agreement and the Indenture. 3. The execution, delivery and performance by the Company of the Underwriting Agreement have been duly authorized by all necessary corporate action, and the Underwriting Agreement has been duly executed and delivered by the Company. 4. No authorization, approval, consent or order of any court or governmental authority or agency is required in connection with the offering, issuance or sale of the Junior Subordinated Debentures, except (a) such as may be required under the Act, (b) the qualification of the Indenture under the Trust Indenture Act of 1939; (c) the approval of the State Corporation Commission of Virginia, which approval has been obtained and is sufficient to permit the Company to enter into the transactions contemplated by the Underwriting Agreement and the Indenture; and (d) such as may be required under state securities or "Blue Sky" laws. 5. The Indenture has been duly authorized, executed and delivered by the Company, and, assuming such agreement was, contrary to the intention stated therein, governed by Virginia law, would constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. 6. The Junior Subordinated Debentures have been duly authorized and executed by the Company and, when authenticated by the Trustee in the manner provided in the Indenture and delivered against payment therefor, and assuming the Junior Subordinated Debentures were, contrary to the intention stated therein, governed by Virginia law, would constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. 7. The Registration Statement is effective under the Act and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and not withdrawn, and no proceedings for that purpose have been instituted or are pending or contemplated under the Act. 8. The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended. 9. The statements and legal conclusions contained in the Prospectus under the caption "Certain Federal Income Tax Consequences" are correct in all material respects. II. We have participated in various conferences with the officers and directors of the Company and its independent certified public accountants. In some conferences you and your counsel also participated. At those conferences, the contents of the Registration Statement and Prospectus were discussed and revised. Since the dates of those conferences, we have inquired of certain officers whether there has been any material change in the affairs of the Company. Because of the inherent limitations in the independent verification of factual matters and the character of determinations involved in the preparation of registration statements under the Act, we are not passing upon, do not assume any responsibility for and make no representations that we have independently verified the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus, except as set forth in Paragraph 9 above. Also, we do not express any opinion or belief as to the financial statements or other financial or statistical information contained in the Registration Statement. However, subject to the foregoing, on the basis of our participation in the conferences referenced above and our examination of the documents referenced herein, we advise you that: (a) in our opinion, the Registration Statement, when it became effective, and the Prospectus, as of its date and as of the date hereof (other than the financial statements, schedules and other financial data included therein or excluded therefrom, as to which we express no opinion), comply as to form in all material respects with the requirements of the Act and the rules and regulations promulgated thereunder; (b) we do not know of any contracts or documents of a character required to be described in the Registration Statement or Prospectus or required to be filed as exhibits to the Registration Statement that are not described or filed as required; and (c) except as set forth in the Registration Statement, we do not know of any legal, administrative or judicial proceedings with respect to the Company that are required to be described therein. Further, nothing has come to our attention that leads us to believe that the Registration Statement, when it became effective, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading; or that the Prospectus, as of its date and as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein or necessary to make the statements, in light of the circumstances under which they were made, not misleading; except that we make no statement with respect to the financial statements or other financial or statistical data included therein or excluded therefrom. The foregoing assumes that any statement contained in a document incorporated by reference shall be deemed not to be contained in the Registration Statement or Prospectus if the statement has been modified or superseded by any statement in a subsequently filed document incorporated by reference or in the Registration Statement or Prospectus. We do not purport to express an opinion on any laws other than those of the Commonwealth of Virginia and the United States of America. This opinion letter may not be relied upon by, nor may copies be delivered to, any person without our prior written consent. Yours very truly, HUNTON & WILLIAMS SCHEDULE IV PROPOSED FORM OF OPINION OF CRAVATH, SWAINE & MOORE Worldwide Plaza 825 8th Avenue New York, New York 10019 RE: VIRGINIA ELECTRIC AND POWER COMPANY Series ___ Junior Subordinated Debentures Due 20__ (Closing Date) Lehman Brothers Inc., as Representative 3 World Trade Center New York, New York 10285 Ladies and Gentlemen: We have acted as counsel to The Chase Manhattan Bank (formerly known as Chemical Bank) (the "Bank") in connection with (a) the Subordinated Note Indenture, dated as of August 1, 1995 as heretofore supplemented and amended (the "Original Indenture"), between Virginia Electric and Power Company (the "Company") and the Bank, as Trustee and as further supplemented by (b) the ____________ Supplemental Indenture dated as of __________, 1997 (together with the Original Indenture, herein called the "Indenture"), between the Company and the Bank, as Trustee. In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, records and other instruments as we have deemed necessary or appropriate for the purpose of this opinion, including copies of the Indenture and certain resolutions adopted by the Board of Directors of the Bank. Based upon the foregoing, we are of the opinion that: 1) the Bank has been duly incorporated and is validly existing as a banking corporation in good standing under the laws of the State of New York; 2) the Bank has the corporate trust power and authority to execute, deliver and perform its duties under the Indenture, has duly executed and delivered the Indenture, and, insofar as the laws governing the trust powers of the Bank are concerned and assuming due authorization, execution and delivery thereof by the Company, the Indenture constitutes a legal, valid and binding agreement of the Bank, enforceable against the Bank in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and subject, as to enforceability, to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law). 3) the execution, delivery and performance by the Bank of the Indenture does not conflict with or constitute a breach of the charter or bylaws of the Bank. 4) no approval, authorization or other action by, or filing with, any governmental authority of the United States of America or the State of New York having jurisdiction over the trust powers of the Bank is required in connection with the execution and delivery by the Bank of the Indenture, or the performance by the Bank of its duties thereunder, except such as have been obtained, taken or made. We are admitted to practice in the State of New York, and we express no opinion as to matters governed by any laws other than the laws of the State of New York and the Federal law of the United States of America. We are furnishing this opinion to you solely for your benefit. This opinion is not to be used, circulated, quoted or otherwise referred to for any other purpose. Very truly yours, CRAVATH, SWAINE & MOORE SCHEDULE V PROPOSED FORM OF OPINION OF MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P. One James Center Richmond, Virginia 23219 RE: VIRGINIA ELECTRIC AND POWER COMPANY Series ___ Junior Subordinated Debentures Due 20__ (Closing Date) Lehman Brothers Inc., as Representative 3 World Financial Center New York, New York 10285-1600 Ladies and Gentlemen: We have acted as counsel for the several underwriters (the "Underwriters") named in the Underwriting Agreement dated ________, 1997 (the "Underwriting Agreement") with Virginia Electric and Power Company (the "Company") in connection with the purchase by the several Underwriters of the Company's Series ___ Junior Subordinated Debentures Due 20__ (the "Junior Subordinated Debentures"), which have been registered pursuant to the Company's registration statement on Form S-3 (No. 333- ). All terms not otherwise defined herein shall have the meanings set forth in the Underwriting Agreement. We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials, certificates of officers and representatives of the Company and other instruments as we deemed necessary or advisable for the purpose of rendering this opinion. As to various questions of fact material to such opinions, we have, when relevant facts were not independently established, relied upon certifications by officers of the Company and other appropriate persons and statements contained in the Registration Statement hereinafter mentioned. We have also participated in the preparation of the Company's registration statement on Form S-3 (No. 333- ) (other than the documents incorporated by reference in the prospectus included therein (the "Incorporated Documents")), filed by the Company with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "Act"). Although we did not participate in the preparation of the Incorporated Documents, we have reviewed such documents. In addition, we have reviewed the order of the Commission that declared the Registration Statement effective under the Act on _________, 1997. The registration statement (including the Incorporated Documents and the information deemed to be part of the registration statement at that time pursuant to Rule 430A of the Commission's rules and regulations under the Act), is hereinafter referred to as the "Registration Statement," and the final prospectus dated ________, 1997 in the form filed with the Commission pursuant to Rule 424(b) of its rules and regulations under the Act is hereinafter referred to as the "Prospectus." On the basis of the foregoing, we are of the opinion that: A. The Company is a corporation duly incorporated and existing under the laws of Virginia and is duly qualified as a foreign corporation in West Virginia and North Carolina, and has corporate power to transact its business as described in the Prospectus. B. The Underwriting Agreement has been duly authorized by all necessary corporate action and has been duly executed and delivered by the Company. C. The Indenture has been duly authorized, executed and delivered by, and, assuming such Indenture were, contrary to the intention stated therein, governed by Virginia law, would constitute a valid and binding obligation of, the Company and has been duly qualified under the 1939 Act, except that we express no opinion as to the validity or enforceability of any covenant to pay interest on defaulted interest and except that the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally from time to time in force and general principles of equity. D. The Junior Subordinated Debentures have been duly authorized by the Company and, when issued and delivered by the Company against payment of the consideration set forth in the Underwriting Agreement will have been duly issued. E. The Registration Statement has become effective and remains in effect at this date, and the Prospectus, including all Incorporated Documents constituting a part thereof, may lawfully be used for the purposes specified in the Securities Act in connection with the offer for sale and the sale of the Junior Subordinated Debentures in the manner therein specified. The Registration Statement and the Prospectus (except the financial statements incorporated by reference therein, as to which we express no opinion) appear on their face to be appropriately responsive in all material respects to the requirements of the Securities Act, and to the applicable rules and regulations of the Commission thereunder. We have participated in conferences with counsel for and representatives of the Company in connection with the preparation of the Registration Statement and the Prospectus, and we have reviewed all Incorporated Documents and such of the corporate records of the Company as we deemed advisable. As to the statistical statements in the Registration Statement (which includes the Incorporated Documents), we have relied solely on the officers of the Company. As to other matters, we have not undertaken to determine independently the accuracy or completeness of the statements contained or incorporated by reference in the Registration Statement or in the Prospectus. None of the foregoing disclosed to us any information which gives us reason to believe that the Registration Statement or the Prospectus contained (except the financial statements incorporated by reference therein, as to which we express no opinion) on the date the Registration Statement became effective or now contains any untrue statement of a material fact or omitted on said date or now omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The foregoing opinion is given on the basis that any statement contained in an Incorporated Document shall be deemed not to be contained in the Registration Statement or Prospectus if the statement has been modified or superseded by any statement in a subsequently filed Incorporated Document or in the Registration Statement or Prospectus. F. An appropriate order of the Virginia Commission with respect to the transactions contemplated by the Underwriting Agreement has been issued, and said order remains in effect at this date and constitutes valid and sufficient authorization for the sale of the Junior Subordinated Debentures as contemplated by the Underwriting Agreement. We are members of the Bar of the Commonwealth of Virginia only and we express no opinion as to any matters governed by any law other than the law of the Commonwealth of Virginia and the federal law of the United States of America. This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by or furnished to any other person without our prior written consent. Very truly yours, MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P. EX-4.A 3 SUBORDINATED NOTE INDENTURE Exhibit 4(a) ========================================================================== VIRGINIA ELECTRIC AND POWER COMPANY TO CHEMICAL BANK Trustee ------------------- SUBORDINATED NOTE INDENTURE Dated as of August 1, 1995 ------------------- ========================================================================== VIRGINIA ELECTRIC AND POWER COMPANY Reconciliation and tie between Trust Indenture Act of 1939 and Subordinated Note Indenture, dated as of August 1, 1995 Trust Indenture Act Section Indenture Section (S) 310(a)(1)............................................... 609 (a)(2)............................................... 609 (a)(3)............................................... Not Applicable (a)(4)............................................... Not Applicable (b).................................................. 608 610 (S) 311(b)(4)............................................... 613(a) (b)(6)............................................... 613(b) (S) 312(a).................................................. 701 702(a) (c).................................................. 702(b) (S) 313(a).................................................. 703(a) (b).................................................. 703(b) (c).................................................. 703(c) 704 (d).................................................. 703(c) (S) 314(a).................................................. 704, 1007 (b).................................................. Not Applicable (c)(1)............................................... 102 (c)(2)............................................... 102 (c)(3)............................................... Not Applicable (d).................................................. Not Applicable (e).................................................. 102 (S) 315(a).................................................. 601(a) (b).................................................. 602 (c).................................................. 601(b) (d).................................................. 601(c) (d)(1)............................................... 601(a)(1) (d)(2)............................................... 601(c)(2) (d)(3)............................................... 601(c)(3) (e).................................................. 514 (S) 316(a).................................................. 101 (a)(1)(A)............................................ 502 512 (a)(1)(B)............................................ 513 (a)(2)............................................... Not Applicable (b).................................................. 508 (S) 317(a)(1)............................................... 503 (a)(2)............................................... 504 (b).................................................. 1003 (S) 318(a).................................................. 107 TABLE OF CONTENTS ------------- Page Parties.......................................................................1 Recitals of the Company.......................................................1 ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101. Definitions..................................................... 2 Act........................................................... 2 Additional Interest........................................... 2 Affiliate..................................................... 2 Authenticating Agent.......................................... 3 Board of Directors............................................ 3 Board Resolution.............................................. 3 Business Day.................................................. 3 Certificate of a Firm of Independent Public Accountants....... 3 Commission.................................................... 3 Company....................................................... 3 Company Request or Company Order.............................. 3 Corporate Trust Office........................................ 3 Corporation................................................... 3 Defaulted Interest............................................ 3 Depositary.................................................... 3 Event of Default.............................................. 3 Global Securit................................................ 4 Guarantee..................................................... 4 Holder........................................................ 4 Indenture..................................................... 4 Interest Payment Date......................................... 4 Junior Subordinated Note...................................... 4 Maturity...................................................... 4 Officers' Certificate......................................... 4 Opinion of Counsel............................................ 4 Outstanding................................................... 4 Paying Agent.................................................. 5 Person........................................................ 5 Predecessor Security.......................................... 5 Property Trustee.............................................. 5 Redemption Date............................................... 5 Redemption Price.............................................. 5 Regular Record Date........................................... 5 Responsible Officer........................................... 6 Securities Trust.............................................. 6 Security Register and Security Registrar...................... 6 Senior Indebtedness........................................... 6 Special Record Date........................................... 6 Stated Maturity............................................... 6 Trust Agreement............................................... 6 Trust Indenture Act........................................... 6 Trust Securities.............................................. 6 Trustee....................................................... 7 Vice President................................................ 7 Section 102. Compliance Certificates and Opinions............................ 7 Section 103. Form of Documents Delivered to Trustee.......................... 7 Section 104. Acts of Holders................................................. 8 Section 105. Notices, Etc., to Trustee and Company........................... 9 Section 106. Notice to Holders of Junior Subordinated Notes; Waiver.......... 9 Section 107. Conflict with Trust Indenture Act............................... 9 Section 108. Effect of Headings and Table of Contents........................ 9 Section 109. Successors and Assigns.......................................... 9 Section 110. Separability Clause............................................. 9 Section 111. Benefits of Indenture......................................... 10 Section 112. Governing Law................................................. 10 Section 113. Legal Holidays................................................ 10 Section 114. Appointment of Agent for Service.............................. 10 ARTICLE TWO FORMS OF JUNIOR SUBORDINATED NOTES Section 201. Forms Generally............................................... 11 Section 202. Form of Trustee's Certificate of Authentication............... 11 Section 203. Junior Subordinated Notes Issuable in the Form of a Global Security...................................................... 11 ARTICLE THREE THE JUNIOR SUBORDINATED NOTES Section 301. Amount Unlimited; Issuable in Series.......................... 13 Section 302. Execution, Authentication, Delivery and Dating................ 14 Section 303. Registration, Registration of Transfer and Exchange........... 16 Section 304. Mutilated, Destroyed, Lost and Stolen Junior Subordinated Notes......................................................... 17 Section 305. Payment of Interest; Interest Rights Preserved................ 17 Section 306. Persons Deemed Owners......................................... 18 Section 307. Cancellation.................................................. 18 Section 308. Computation of Interest....................................... 19 ARTICLE FOUR SATISFACTION AND DISCHARGE Section 401. Satisfaction and Discharge of Indenture....................... 20 Section 402. Application of Trust Money.................................... 21 ARTICLE FIVE Page REMEDIES Section 501. Events of Default............................................. 22 Section 502. Acceleration of Maturity; Rescission and Annulment............ 23 Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee....................................................... 24 Section 504. Trustee May File Proofs of Claim.............................. 24 Section 505. Trustee May Enforce Claims Without Possession of Junior Subordinated Notes............................................ 25 Section 506. Application of Money Collected................................ 25 Section 507. Limitation on Suits........................................... 25 Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.................................................. 26 Section 509. Restoration of Rights and Remedies............................ 26 Section 510. Rights and Remedies Cumulative................................ 26 Section 511. Delay or Omission Not Waiver.................................. 27 Section 512. Control by Holders of Junior Subordinated Notes............... 27 Section 513. Waiver of Past Defaults....................................... 27 Section 514. Undertaking for Costs......................................... 28 Section 515. Waiver of Stay or Extension Laws.............................. 28 ARTICLE SIX THE TRUSTEE Section 601. Certain Duties and Responsibilities........................... 29 Section 602. Notice of Defaults............................................ 30 Section 603. Certain Rights of Trustee..................................... 30 Section 604. Not Responsible for Recitals of Issuance of Junior Subordinated Notes............................................ 31 Section 605. May Hold Junior Subordinated Notes............................ 31 Section 606. Money Held in Trust........................................... 31 Section 607. Compensation and Reimbursement................................ 31 Section 608. Disqualification; Conflicting Interests....................... 32 Section 609. Corporate Trustee Required; Eligibility....................... 32 Section 610. Resignation and Removal; Appointment of Successor............. 32 Section 611. Acceptance of Appointment by Successor........................ 34 Section 612. Merger, Conversion, Consolidation or Succession to Business... 34 Section 613. Preferential Collection of Claims Against Company............. 35 Section 614. Appointment of Authenticating Agent........................... 35 ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY Section 701. Company to Furnish Trustee Names and Addresses of Holders..... 37 Section 702. Preservation of Information; Communications to Holders........ 37 Section 703. Reports by Trustee............................................ 37 Section 704. Reports by Company............................................ 38 Page ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 801. Company May Consolidate, Etc., Only on Certain Terms.......... 39 Section 802. Successor Corporation Substituted............................. 39 ARTICLE NINE SUPPLEMENTAL INDENTURES Section 901. Supplemental Indentures Without Consent of Holders............ 40 Section 902. Supplemental Indentures with Consent of Holders............... 41 Section 903. General Provisions Regarding Supplemental Indenture.......... 41 Section 904. Execution of Supplemental Indentures.......................... 42 Section 905. Effect of Supplemental Indentures............................. 42 Section 906. Conformity with Trust Indenture Act........................... 42 Section 907. Reference in Junior Subordinated Notes to Supplemental Indentures.................................................... 42 ARTICLE TEN COVENANTS Section 1001.Payment of Principal and Interest............................. 43 Section 1002.Maintenance of Office or Agency............................... 43 Section 1003.Money for Junior Subordinated Notes Payments to Be Held in Trust......................................................... 43 Section 1004.Additional Interest........................................... 44 Section 1005.Corporate Existence........................................... 45 Section 1006.Limitations on Dividend and Certain Other Payments............ 45 Section 1007.Statement as to Compliance.................................... 45 Section 1008.Waiver of Certain Covenants................................... 46 ARTICLE ELEVEN REDEMPTION OF JUNIOR SUBORDINATED NOTES Section 1101.Applicability of Article...................................... 47 Section 1102.Election to Redeem; Notice to Trustee......................... 47 Section 1103.Selection by Trustee of Junior Subordinated Notes to Be Redeemed...................................................... 47 Section 1104.Notice of Redemption.......................................... 47 Section 1105.Deposit of Redemption Price................................... 48 Section 1106.Junior Subordinated Notes Payable on Redemption Date.......... 48 Section 1107.Junior Subordinated Notes Redeemed in Part.................... 49 Page ARTICLE TWELVE SINKING FUNDS Section 1201.Applicability of Article...................................... 50 Section 1202.Satisfaction of Sinking Fund Payments with Junior Subordinated Notes............................................ 50 Section 1203.Redemption of Junior Subordinated Notes for Sinking Fund...... 50 ARTICLE THIRTEEN SUBORDINATION Section 1301.Junior Subordinated Notes Subordinate to Senior Indebtedness.. 51 Section 1302.Payment of Proceeds Upon Dissolution, Etc..................... 51 Section 1303.No Payment When Senior Indebtedness In Default................ 52 Section 1304.Payment Permitted If No Default............................... 52 Section 1305.Subrogation To Rights of Holders of Senior Indebtedness....... 52 Section 1306.Provisions Solely To Define Relative Rights................... 53 Section 1307.Trustee To Effectuate Subordination........................... 53 Section 1308.No Waiver of Subordination Provisions......................... 53 Section 1309.Trust Moneys Not Subordinated................................. 54 Section 1310.Notice to the Trustee......................................... 54 Section 1311.Reliance On Judicial Order or Certificate of Liquidating Agent 54 Section 1312.Trustee Not Fiduciary For Holders of Senior Indebtedness...... 55 Section 1313.Rights of Trustee As Holder of Senior Indebtedness; Preservation Of Trustee's Rights.............................. 55 Section 1314.Article Applicable To Paying Agents........................... 55 Section 1315.Reliance by Holders of Senior Indebtedness on Subordination Provisions.................................................... 55 ARTICLE FOURTEEN MISCELLANEOUS PROVISIONS Section 1401.No Recourse Against Others.................................... 56 Section 1402.Set-Off....................................................... 56 Section 1403.Assignment; Binding Effect.................................... 56 Section 1404.Additional Interest........................................... 56 SUBORDINATED NOTE INDENTURE, dated as of August 1, 1995, between VIRGINIA ELECTRIC AND POWER COMPANY, a public service corporation duly organized and existing under the laws of the Commonwealth of Virginia (herein called the "Company"), having its principal office at One James River Plaza, Richmond, Virginia 23219, and CHEMICAL BANK, a banking corporation duly organized and existing under the laws of the State of New York, having its principal corporate trust office at 450 West 33rd Street, New York, New York 10001, as Trustee (herein called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Subordinated Note Indenture to provide for the issuance from time to time of its unsecured subordinated debentures, notes or other evidences of indebtedness (herein called the Junior Subordinated Notes), to be issued in one or more series as in this Subordinated Note Indenture provided. All things necessary to make this Subordinated Note Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW, THEREFORE, THIS SUBORDINATED NOTE INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Junior Subordinated Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Junior Subordinated Notes or of series thereof, as follows: 1 ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101. Definitions. For all purposes of this Subordinated Note Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States of America at the date of such computation; (4) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Subordinated Note Indenture as a whole and not to any particular Article, Section or other subdivision; and (5) Trust Securities related to a particular series of Junior Subordinated Notes means the series of Trust Securities the proceeds of the sale of which were loaned to the Company in exchange for such series of Junior Subordinated Notes, and the guarantee related to such series of Trust Securities means the guarantee pursuant to which the Company has guaranteed, to the extent stated therein, the payment of distributions and certain other amounts with respect to such series of Trust Securities. Certain terms, used principally in Article Six, are defined in that Article. "Act", when used with respect to any Holder of a Junior Subordinated Note, has the meaning specified in Section 104. "Additional Interest" means (i) such additional amounts as may be required so that the net amounts received and retained by the Holder (if the Holder is a Securities 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 thereon from such Interest Payment Date to the date of payment, compounded quarterly, on each Interest Payment Date. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. Notwithstanding the foregoing, any Securities Trust organized by the Company shall not be deemed to be an Affiliate of the Company. 2 "Authenticating Agent" means any Person or Persons authorized by the Trustee to act on behalf of the Trustee to authenticate one or more series of Junior Subordinated Notes. "Board of Directors" means either the board of directors of the Company or any duly authorized committee of the officers and/or directors of the Company appointed by that board. "Board Resolution" means a copy of a resolution certified by the Corporate Secretary or an Assistant Corporate Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means a day other than (i) a Saturday or a 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 Trustee's Corporate Trust Office or Property Trustee's principal corporate trust office is closed for business. "Certificate of a Firm of Independent Public Accountants" means a certificate signed by an independent public accountant or a firm of independent public accountants who may be the independent public accountants regularly retained by the Company or who may be other independent public accountants. Such accountant or firm shall be entitled to rely upon an Opinion of Counsel as to the interpretation of any legal matters relating to such certificate. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, as amended, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Subordinated Note Indenture, and thereafter "Company" shall mean such successor corporation. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller, an Assistant Controller, its Corporate Secretary or an Assistant Corporate Secretary, and delivered to the Trustee. "Corporate Trust Office" means the office of the Trustee in the Borough of Manhattan, New York City, at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Subordinated Note Indenture is located at 450 West 33rd Street, New York, New York 10001. "Corporation" includes corporations, associations, companies and business trusts. "Defaulted Interest" has the meaning specified in Section 305. "Depositary" means, unless otherwise specified by the Company pursuant to either Section 203 or 301, with respect to Junior Subordinated Notes of any series issuable or issued as a Global Security, The Depository Trust Company, New York, New York, or any successor thereto registered as a clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation. "Event of Default" has the meaning specified in Section 501. 3 "Global Security" means with respect to any series of Junior Subordinated Notes issued hereunder, a Junior Subordinated Note that is executed by the Company and authenticated and delivered by the Trustee to the Depositary or pursuant to the Depositary's instruction, all in accordance with Section 203 of this Indenture and any indenture supplemental hereto. "Guarantee" means a Guarantee Agreement, if any, executed and delivered by the Company for the benefit of the holders from time to time of all or a portion of the Trust Securities of a Securities Trust. "Holder", when used with respect to any Junior Subordinated Note, means the Person in whose name the Junior Subordinated Note is registered in the Security Register. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Junior Subordinated Notes established as contemplated by Section 301. "Interest Payment Date", when used with respect to any series of Junior Subordinated Notes, means the fixed dates established for the payment of interest thereon, as provided in the supplemental indenture for such series. "Junior Subordinated Note" has the meaning stated in the first recital of this Indenture and more particularly means any Junior Subordinated Notes authenticated and delivered under this Indenture. "Maturity", when used with respect to any Junior Subordinated Note, means the date on which the principal of such Junior Subordinated Note or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Officers' Certificate" means a certificate signed by the Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the Corporate Secretary or an Assistant Corporate Secretary, of the Company, and delivered to the Trustee. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company, and who shall be acceptable to the Trustee. "Outstanding", when used with respect to Junior Subordinated Notes, means, as of the date of determination, all Junior Subordinated Notes theretofore authenticated and delivered under this Indenture, except: (i) Junior Subordinated Notes theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (ii) Junior Subordinated Notes for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Junior Subordinated Notes; provided that if such Junior Subordinated Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; (iii) Junior Subordinated Notes that have been paid or in exchange for or in lieu of which other Junior Subordinated Notes have been authenticated and delivered pursuant to this Indenture, other than any such Junior Subordinated Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Junior Subordinated Notes are held by a bona fide purchaser in whose hands such Junior Subordinated Notes are valid obligations of the Company; and 4 (iv) Junior Subordinated Notes, or portions thereof, converted into or exchanged for another security if the terms of such Junior Subordinated Notes provide for such conversion or exchange; provided, however, that in determining, during any period in which any Junior Subordinated Notes of a series are owned by any Person other than the Company or any Affiliate thereof, whether the Holders of the requisite principal amount of Outstanding Junior Subordinated Notes of such series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Junior Subordinated Notes of such series owned by the Company or any Affiliate thereof shall be disregarded and deemed not to be Outstanding. In determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Junior Subordinated Notes that the Trustee knows to be so owned by the Company or an Affiliate of the Company in the above circumstances shall be so disregarded. Junior Subordinated Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Junior Subordinated Notes and that the pledgee is not the Company or any Affiliate of the Company. "Paying Agent" means any Person authorized by the Company to pay the principal of (and premium, if any) or interest on any Junior Subordinated Notes on behalf of the Company. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Predecessor Security" of any particular Junior Subordinated Note means every previous Junior Subordinated Note evidencing all or a portion of the same debt as that evidenced by such particular Junior Subordinated Note; and, for the purposes of this definition, any Junior Subordinated Note authenticated and delivered under Section 304 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Junior Subordinated Note shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Junior Subordinated Note. "Property Trustee", when used with respect to the Junior Subordinated Notes of any series, means the Person designated as such in the related Trust Agreement. "Redemption Date", when used with respect to any Junior Subordinated Note to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Junior Subordinated Note to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Regular Record Date" for the interest payable on any Interest Payment Date on the Junior Subordinated Notes of any series means the date specified for that purpose as contemplated by Section 301, whether or not a Business Day. "Responsible Officer", when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any vice-chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any senior trust officer, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Securities Trust" means any statutory business trust formed by the Company or an Affiliate to issue Trust Securities, the proceeds of which will be used to purchase Junior Subordinated Notes of one or more series. 5 "Security Register" and "Security Registrar" have the respective meanings specified in Section 304. "Senior Indebtedness" means, with respect to the Company, (i) any payment due in respect of (a) indebtedness of the Company for money borrowed (including any financial derivative, hedging or futures contract or similar instrument) and (b) indebtedness evidenced by securities, debentures, bonds, notes or other similar instruments issued by the Company which, 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, banker's 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 pari passu 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 entitled to the benefits of the subordination provisions contained in Article Thirteen irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness. "Special Record Date" for the payment of any Defaulted Interest on the Junior Subordinated Notes of any series means a date fixed by the Trustee pursuant to Section 305. "Stated Maturity", when used with respect to any Junior Subordinated Note or any installment of principal thereof or interest thereon, means the date specified in such Junior Subordinated Note as the fixed date on which the principal of such Junior Subordinated Note or such installment of principal or interest is due and payable. "Trust Agreement", when used with respect to a Securities Trust, means the agreement or instrument that governs the affairs of such Securities Trust. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, and any reference herein to the Trust Indenture Act or a particular provision thereof shall mean such Trust Indenture Act or provision, as the case may be, as amended or replaced from time to time. "Trust Securities" means the securities issued by a Securities Trust evidencing the entire beneficial interest therein. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such with respect to one or more series of Junior Subordinated Notes pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Junior Subordinated Notes of any series shall mean the Trustee with respect to Junior Subordinated Notes of that series. "Vice President", when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president". Section 102. Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of 6 Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include (i) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 103. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 104. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing 7 appointing any such agent, shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The principal amount and serial numbers of Junior Subordinated Notes held by any Person, and the date of holding the same, shall be proved by the Security Register. (d) Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of the Holder of any Junior Subordinated Note shall bind every future Holder of the same Junior Subordinated Note and the Holder of every Junior Subordinated Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Junior Subordinated Note. (e) The fact and date of execution of any such instrument or writing and the authority of the Person executing the same may also be proved in any other manner which the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section. (f) If the Company shall solicit from the Holders of Junior Subordinated Notes of any series any Act, the Company may, at its option, by Board Resolution, fix in advance a record date for the determination of Holders of Junior Subordinated Notes entitled to take such Act, but the Company shall have no obligation to do so. Any such record date shall be fixed at the Company's discretion. If such a record date is fixed, such Act may be sought or given before or after the record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders of Junior Subordinated Notes for the purpose of determining whether Holders of the requisite proportion of Junior Subordinated Notes of such series Outstanding have authorized or agreed or consented to such Act, and for that purpose the Junior Subordinated Notes of such series Outstanding shall be computed as of such record date. Section 105. Notices, Etc., to Trustee and Company. Any request, demand, authorization, direction, notice, consent, election, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder of a Junior Subordinated Note or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trustee Administration Department, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to the attention of its Corporate Secretary, at One James River Plaza, Richmond, Virginia 23219, or at any other address previously furnished in writing to the Trustee by the Company. Section 106. Notice to Holders of Junior Subordinated Notes; Waiver. Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of Junior Subordinated Notes of any event, such notice shall be sufficiently given if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such Notice. 8 In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders of Junior Subordinated Notes shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Section 107. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required to be a part of and govern this Indenture, such required provision shall control. Section 108. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 109. Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. Section 110. Separability Clause. In case any provision in this Indenture or the Junior Subordinated Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 111. Benefits of Indenture. Nothing in this Indenture or the Junior Subordinated Notes, express or implied, shall give to any Person, other than the parties hereto, their successors hereunder and the Holders of Junior Subordinated Notes and, to the extent provided in Section 1403, the holders of Senior Indebtedness or Trust Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 112. Governing Law. This Indenture and the Junior Subordinated Notes shall be governed by, and construed in accordance with, the internal laws of the State of New York. Section 113. Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Junior Subordinated Note shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Junior Subordinated Notes) payment of interest or principal (and premium, if any) need not be made on such date, but may be made on the next succeeding Business Day, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated 9 Maturity, provided that no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be. Section 114. Appointment of Agent for Service. By the execution and delivery of this Indenture, the Company hereby appoints the Trustee as its agent upon which process may be served in any legal action or proceeding which may be instituted in any Federal or State court in the Borough of Manhattan, New York City, arising out of or relating to the Junior Subordinated Notes or this Indenture. Service of process upon such agent at the office of such agent at 450 W. 33rd Street, New York, New York 10001, Attention: Corporate Trustee Administration Department (or such other address in the Borough of Manhattan, New York City, as may be the Corporate Trust Office of the Trustee), and written notice of such service to the Company by the Person serving the same addressed as provided in Section 105, shall be deemed in every respect effective service of process upon the Company in any such legal action or proceeding, and the Company hereby submits to the jurisdiction of any such court in which any such legal action or proceeding is so instituted. Such appointment shall be irrevocable so long as the Holders of Junior Subordinated Notes shall have any rights pursuant to the terms thereof or of this Indenture until the appointment of a successor by the Company with the consent of the Trustee and such successor's acceptance of such appointment. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of such agent or successor. By the execution and delivery of this Indenture, the Trustee hereby agrees to act as such agent and undertakes promptly to notify the Company of receipt by it of service of process in accordance with this Section. 10 ARTICLE TWO FORMS OF JUNIOR SUBORDINATED NOTES Section 201. Forms Generally. The Junior Subordinated Notes of each series shall be in substantially the form appended to the supplemental indenture authorizing such series, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Junior Subordinated Notes, as evidenced by their execution of the Junior Subordinated Notes. The Junior Subordinated Notes of each series shall be issuable in registered form without coupons. The definitive Junior Subordinated Notes may be printed, typewritten, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Junior Subordinated Notes, as evidenced by their execution of such Junior Subordinated Notes. Section 202. Form of Trustee's Certificate of Authentication. The form of the Trustee's Certificate of Authentication for a series of Junior Subordinated Notes shall be in substantially the form appended to the supplemental indenture authorizing such series. Section 203. Junior Subordinated Notes Issuable in the Form of a Global Security. (a) If the Company shall establish pursuant to Section 301 that the Junior Subordinated Notes of a particular series are to be issued in whole or in part in the form of one or more Global Securities, then the Company shall execute and the Trustee shall, in accordance with Section 302 and the Company Order delivered to the Trustee thereunder, authenticate and deliver such Global Security or Securities, which (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of the Outstanding Junior Subordinated Notes of such series to be represented by such Global Security or Securities, (ii) may provide that the aggregate amount of Outstanding Junior Subordinated Notes represented thereby may from time to time be increased or reduced to reflect exchanges, (iii) shall be registered in the name of the Depositary for such Global Security or Securities or its nominee, (iv) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instruction and (v) shall bear a legend in accordance with the requirements of the Depositary. (b) Notwithstanding any other provision of this Section 203 or of Section 303, subject to the provisions of paragraph (c) below, unless the terms of a Global Security expressly permit such Global Security to be exchanged in whole or in part for individual Junior Subordinated Notes, a Global Security may be transferred, in whole but not in part and in the manner provided in Section 303, only to a nominee of the Depositary for such Global Security, or to the Depositary, or to a successor Depositary for such Global Security selected or approved by the Company, or to a nominee of such successor Depositary. (c) (1) If at any time the Depositary for a Global Security notifies the Company that it is unwilling or unable to continue as Depositary for such Global Security or if at any time the Depositary for the Junior Subordinated Notes for such series shall no longer be eligible or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, the Company shall appoint a successor Depositary with respect to such Global Security. If a successor Depositary for such Global Security is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of individual Junior Subordinated Notes of such series in exchange for such Global Security, will authenticate and 11 deliver individual Junior Subordinated Notes of such series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of the Global Security in exchange for such Global Security. (2) The Company may at any time and in its sole discretion determine that the Junior Subordinated Notes of any series issued or issuable in the form of one or more Global Securities shall no longer be represented by such Global Security or Securities. In such event the Company will execute, and the Trustee, upon receipt of a Company Request for the authentication and delivery of individual Junior Subordinated Notes of such series in exchange in whole or in part for such Global Security, will authenticate and deliver individual Junior Subordinated Notes of such series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of such Global Security or Securities representing such series in exchange for such Global Security or Securities. (3) If specified by the Company pursuant to Section 301 with respect to Junior Subordinated Notes issued or issuable in the form of a Global Security, the Depositary for such Global Security may surrender such Global Security in exchange in whole or in part for individual Junior Subordinated Notes of such series of like tenor and terms in definitive form on such terms as are acceptable to the Company and such Depositary. Thereupon the Company shall execute, and the Trustee shall authenticate and deliver, without service charge, (A) to each Person specified by such Depositary a new Junior Subordinated Note or Notes of the same series or like tenor and terms and of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Global Security; and (B) to such Depositary a new Global Security of like tenor and terms and in an authorized denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Junior Subordinated Notes delivered to Holders thereof. (4) In any exchange provided for in any of the preceding three paragraphs, the Company will execute and the Trustee will authenticate and deliver individual Junior Subordinated Notes in definitive form in authorized denominations. Upon the exchange of the entire principal amount of a Global Security for individual Junior Subordinated Notes, such Global Security shall be canceled by the Trustee. Except as provided in the preceding subparagraph, Junior Subordinated Notes issued in exchange for a Global Security pursuant to this Section shall be registered in such names and in such authorized denominations as the Depositary for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. Provided that the Company and the Trustee have so agreed, the Trustee shall deliver such Junior Subordinated Notes to the persons in whose names the Junior Subordinated Notes are registered. (5) Any endorsement of a Global Security to reflect the amount, or any increase or decrease in the amount, or changes in the rights of Holders, of Outstanding Junior Subordinated Notes represented thereby shall be made in such manner and by such Person or Persons as shall be specified therein or in the Company Order to be delivered pursuant to Section 302 with respect thereto. Subject to the provisions of Section 302, the Trustee shall deliver and redeliver any such Global Security in the manner and upon instructions given by the Person or Persons specified therein or in the applicable Company Order. If a Company Order pursuant to Section 302 has been, or simultaneously is, delivered, any instructions by the Company with respect to such Global Security shall be in writing but need not be accompanied by or contained in an Officers' Certificate and need not be accompanied by an Opinion of Counsel. 12 ARTICLE THREE THE JUNIOR SUBORDINATED NOTES Section 301. Amount Unlimited; Issuable in Series. The aggregate principal amount of Junior Subordinated Notes which may be authenticated and delivered under this Indenture is unlimited. The Junior Subordinated Notes may be issued in one or more series. There may be established, pursuant to one or more indentures supplemental hereto, additional series of Junior Subordinated Notes of any series, (1) the title of the Junior Subordinated Notes of the series (which shall distinguish the Junior Subordinated Notes of the series from Junior Subordinated Notes of all other series); (2) any limit upon the aggregate principal amount of the Junior Subordinated Notes of the series which may be authenticated and delivered under this Indenture (except for Junior Subordinated Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Junior Subordinated Notes of the series pursuant to Sections 203, 303, 304, 907 or 1107); (3) the Person to whom interest on a Junior Subordinated Note of the series shall be payable if other than the Person in whose name that Junior Subordinated Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (4) the date or dates on which the principal of the Junior Subordinated Notes of the series is payable, and the right, if any, to extend the Stated Maturity of the Junior Subordinated Notes and the conditions to such extension; (5) the rate or rates at which the Junior Subordinated Notes of the series shall bear interest, if any, or any method by which such rate or rates shall be determined, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable, the Regular Record Date for the interest payable on Junior Subordinated Notes on any Interest Payment Date and the basis upon which interest shall be calculated if other than that of a 360-day year consisting of twelve 30-day months; (6) the place or places where the principal of (and premium, if any) and interest, if any, on Junior Subordinated Notes of the series shall be payable; (7) the period or periods within which, the price or prices at which and the terms and conditions upon which Junior Subordinated Notes of the series may be redeemed, in whole or in part, at the option of the Company; (8) the obligation, if any, of the Company to redeem or purchase Junior Subordinated Notes of the series pursuant to any sinking fund or analogous provision or at the option of a Holder thereof and the period or periods within which, the price or prices at which ,and the terms and conditions upon which, Junior Subordinated Notes of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (9) the denominations in which Junior Subordinated Notes of the series shall be issuable; 13 (10) if the amount of payments of principal of (and premium, if any) or interest (including Additional Interest) on the Junior Subordinated Notes of the series may be determined with reference to an index or formula, the manner in which such amounts shall be determined; (11) if other than the principal amount thereof, the portion of the principal amount of Junior Subordinated Notes of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502 ; (12) any deletions from, modifications of or additions to the Events of Default or covenants of the Company as provided herein pertaining to the Junior Subordinated Notes of the series, and any change in the rights of the Trustee or Holders of such series pursuant to Section 901 or 902; (13) any additions to the definitions currently set forth in this Indenture with respect to such series; (14) whether the Junior Subordinated Notes of the series shall be issued in whole or in part in the form of a Global Security or Securities; the terms and conditions, if any, upon which such Global Security or Securities may be exchanged in whole or in part for certificated Junior Subordinated Notes of such series and of like tenor of any authorized denomination and the circumstances under which such exchange may occur, if other than in the manner provided for in Section 203; the Depositary for such Global Security or Securities; and the form of any legend or legends to be borne by any such Global Security in addition to or in lieu of the legend referred to in Section 203; (15) the right, if any, of the Company to extend the interest payment periods of such series of Junior Subordinated Notes, including the maximum duration of any such extension or extensions, the Additional Interest, if any, payable on such Junior Subordinated Notes during any extension of the interest payment period and any notice (which shall include notice to the Trustee) that must be given upon the exercise of such right to extend interest payment periods; (16) any restriction or condition on the transferability of such Junior Subordinated Notes; and (17) any other terms of the series. All Junior Subordinated Notes of any one series shall be substantially identical except as to the date or dates from which interest, if any, shall accrue and denomination and except as may otherwise be provided in the terms of such Junior Subordinated Notes determined or established as provided above. All Junior Subordinated Notes of any one series need not be issued at the same time and, unless otherwise provided, a series may be reopened for issuances of additional Junior Subordinated Notes of such series. Section 302. Execution, Authentication, Delivery and Dating. The Junior Subordinated Notes shall be executed on behalf of the Company by its Chairman of the Board, its President or one of its Vice Presidents, under its corporate seal reproduced thereon attested by its Corporate Secretary or one of its Assistant Corporate Secretaries. The signature of any of these officers on the Junior Subordinated Notes may be manual or facsimile. Junior Subordinated Notes bearing the manual or facsimile signatures of individuals who were at the time relevant to the authorization thereof the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Junior Subordinated Notes or did not hold such offices at the date of such Junior Subordinated Notes. 14 At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Junior Subordinated Notes of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Junior Subordinated Notes, and the Trustee, in accordance with the Company Order, shall authenticate and deliver such Junior Subordinated Notes. If all of the Junior Subordinated Notes of any series are not to be issued at one time and if the supplemental indenture establishing such series shall so permit, such Company Order may set forth procedures acceptable to the Trustee for the issuance of such Junior Subordinated Notes and determining the terms of particular Junior Subordinated Notes of such series, such as interest rate, maturity date, date of issuance and date from which interest shall accrue. In authenticating Junior Subordinated Notes hereunder, and accepting the additional responsibilities under this Indenture in relation to such Junior Subordinated Notes, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon: (1) an Opinion of Counsel, to the effect that: (a) the form and terms of such Junior Subordinated Notes or the manner of determining such terms have been established in conformity with the provisions of this Indenture; and (b) such Junior Subordinated Notes, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles; and (2) an Officers' Certificate stating, to the best knowledge of each signer of such certificate, that no event which is, or after notice or lapse of time would become, an Event of Default with respect to any of the Junior Subordinated Notes shall have occurred and be continuing. The Trustee shall not be required to authenticate such Junior Subordinated Notes if the issue of such Junior Subordinated Notes pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Junior Subordinated Notes and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. If all the Junior Subordinated Notes of any series are not to be issued at one time, it shall not be necessary to deliver an Opinion of Counsel and Officers' Certificate at the time of issuance of each such Junior Subordinated Note, but such opinion and certificate shall be delivered at or before the time of issuance of the first Junior Subordinated Note of such series to be issued. Each Junior Subordinated Note shall be dated the date of its authentication. No Junior Subordinated Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Junior Subordinated Note a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Junior Subordinated Note shall be conclusive evidence, and the only evidence, that such Junior Subordinated Note has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Section 303. Registration, Registration of Transfer and Exchange. The Company shall cause to be kept at the office of the Security Registrar designated pursuant to this Section 303 or Section 1002 a register (referred to as the "Security Register") in which, subject to such reasonable 15 regulations as it may prescribe, the Company shall provide for the registration of Junior Subordinated Notes and of transfers of Junior Subordinated Notes. The Trustee is hereby initially appointed as Security Registrar for the purpose of registering Junior Subordinated Notes and transfers of Junior Subordinated Notes as herein provided. Subject to Section 203, upon surrender for registration of transfer of any Junior Subordinated Note of any series at the office or agency maintained for such purpose for such series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Junior Subordinated Notes of the same series, Stated Maturity and original issue date, of any authorized denominations and of like tenor and aggregate principal amount. Subject to Section 203, Junior Subordinated Notes of any series may be exchanged, at the option of the Holder, for Junior Subordinated Notes of the same series, Stated Maturity and original issue date, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Junior Subordinated Notes to be exchanged at any such office or agency. Whenever any Junior Subordinated Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Junior Subordinated Notes that the Holder making the exchange is entitled to receive. All Junior Subordinated Notes issued upon any registration of transfer or exchange of Junior Subordinated Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Junior Subordinated Notes surrendered upon such registration of transfer or exchange. Every Junior Subordinated Note presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Junior Subordinated Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Junior Subordinated Notes, other than exchanges pursuant to Section 304, 907 or 1107 not involving any transfer. The Company shall not be required (i) to issue, to register the transfer of or to exchange Junior Subordinated Notes of any series during a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Junior Subordinated Notes of that series called for redemption, or (ii) to issue, to register the transfer of or to 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. None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Section 304. Mutilated, Destroyed, Lost and Stolen Junior Subordinated Notes. If any mutilated Junior Subordinated Note is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Junior Subordinated Note of the same series, Stated Maturity and original issue date, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. 16 If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Junior Subordinated Note and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Junior Subordinated Note has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Junior Subordinated Note, a new Junior Subordinated Note of the same series, Stated Maturity and original issue date, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Junior Subordinated Note has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Junior Subordinated Note, pay such Junior Subordinated Note. Upon the issuance of any new Junior Subordinated Note under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Junior Subordinated Note of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Junior Subordinated Note shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Junior Subordinated Note shall be at any time enforceable by anyone, and any such new Junior Subordinated Note shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Junior Subordinated Notes of that series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Junior Subordinated Notes. Section 305. Payment of Interest; Interest Rights Preserved. Unless otherwise provided as contemplated by Section 301 with respect to any series of Junior Subordinated Notes, interest (including Additional Interest) on any Junior Subordinated Note that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Junior Subordinated Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Any interest (including Additional Interest) on any Junior Subordinated Note of any series that is payable, but is not punctually paid or duly provided for on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Junior Subordinated Notes of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Junior Subordinated Note of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the 17 proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Junior Subordinated Notes of such series at the address of such Holder as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Junior Subordinated Notes of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest (including Additional Interest, if any) on the Junior Subordinated Notes of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Junior Subordinated Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Junior Subordinated Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Junior Subordinated Note shall carry the rights to interest accrued (including Additional Interest, if any) and unpaid, and to accrue (including Additional Interest, if any), which were carried by such other Junior Subordinated Note. Section 306. Persons Deemed Owners. Prior to due presentment of a Junior Subordinated Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Junior Subordinated Note is registered as the absolute owner of such Junior Subordinated Note for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 305) interest (including Additional Interest, if any) on such Junior Subordinated Note and for all other purposes whatsoever, whether or not such Junior Subordinated Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. Section 307. Cancellation. All Junior Subordinated Notes surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by the Trustee. The Company may at any time deliver to the Trustee for cancellation any Junior Subordinated Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Junior Subordinated Notes so delivered shall be promptly canceled by the Trustee. No Junior Subordinated Notes shall be authenticated in lieu of or in exchange for any Junior Subordinated Notes canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Junior Subordinated Notes held by the Trustee shall be disposed of in accordance with a Company Order and the Trustee shall promptly deliver a certificate of disposition to the Company. Section 308. Computation of Interest. Except as otherwise specified as contemplated by Section 301 for Junior Subordinated Notes of any series, interest on the Junior Subordinated Notes of each series shall be computed on the basis of a 360-day year consisting of twelve 30-day months. 18 ARTICLE FOUR SATISFACTION AND DISCHARGE Section 401. Satisfaction and Discharge of Indenture. This Indenture shall, upon Company Request, cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Junior Subordinated Notes herein expressly provided for) and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Junior Subordinated Notes theretofore authenticated and delivered (other than (i) Junior Subordinated Notes that have been destroyed, lost or stolen and that have been replaced as provided for in Section 304 and (ii) Junior Subordinated Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (B) all such Junior Subordinated Notes not theretofore delivered to the Trustee for cancellation have become due and payable, or have been called for redemption, and the Company, in either case, has deposited or caused to be deposited with the Trustee as funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Junior Subordinated Notes not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of the Stated Maturity or Redemption Date, as the case may be, or if later, the date of payment; (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. In the event there are Junior Subordinated Notes of two or more series hereunder, the Trustee shall be required to execute an instrument acknowledging satisfaction and discharge of this Indenture only if requested to do so with respect to Junior Subordinated Notes of all series as to which it is Trustee and if the other conditions thereto are met. In the event there are two or more Trustees hereunder, then the effectiveness of any such instrument shall be conditioned upon receipt of such instruments from all Trustees hereunder. If, subsequent to the date a discharge is effected pursuant to this Section 401, Additional Interest (in excess of that established as of the date such discharge is effected) becomes payable in respect of the series of Junior Subordinated Notes discharged, in order to preserve the benefits of the discharge established hereunder, the Company shall irrevocably deposit or cause to be irrevocably deposited in accordance with the provisions of this Section 401, within ten Business Days prior to the date the first payment in respect of any portion of such excess Additional Interest becomes due, such additional funds as are necessary to satisfy the provisions of this Section 401 as if a discharge were being effected as of the date of such subsequent deposit. Failure to comply with the requirements of this paragraph shall result in the termination of the benefits of the discharge established by this Section 401. 19 Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive. Section 402. Application of Trust Money. Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Junior Subordinated Notes, and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee. 20 ARTICLE FIVE REMEDIES Section 501. Events of Default. "Event of Default", wherever used herein with respect to Junior Subordinated Notes of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body or occasioned by the operation of Article Thirteen): (1) default in the payment of any interest upon any Junior Subordinated Note of that series when it becomes due and payable on an Interest Payment Date other than at Maturity, including Additional Interest (as defined in clause (ii) of the definition thereof) in respect thereof, and the continuance of such default for 60 days, or default in the payment of Additional Interest (as defined in clause (ii) of the definition thereof); provided, however, that (i) a valid extension of the interest payment period pursuant to the terms of a supplemental indenture authorizing the Junior Subordinated Notes of that series shall not constitute a default in the payment of interest for this purpose, and (ii) no such default shall be deemed to exist if, on or prior to the date on which such interest became due, the Company shall have made a payment sufficient to pay such interest pursuant to the Guarantee related to the Trust Securities of the Securities Trust owning such series of Junior Subordinated Notes, and shall have delivered a notice to the Trustee to that effect; or (2) default in the payment of Additional Interest (as defined in clause (ii) of the definition thereof) and the continuance of such default for a period of 60 days; or (3) default in the payment of the principal of, (or premium, if any) or interest (including Additional Interest as defined in clause (ii) of the definition thereof) on any Junior Subordinated Note of that series at its Maturity; provided however, that no such default in the payment of principal (or premium, if any) or interest shall be deemed to exist if, on or prior to the date such principal (and premium, if any) or interest became due, the Company shall have made a payment sufficient to pay such principal (and premium, if any) or interest pursuant to the Guarantee related to the Trust Securities of the Securities Trust owning such series of Junior Subordinated Notes, and shall have delivered a notice to the Trustee to that effect; or (4) default in the deposit of any sinking fund payment, when and as due by the terms of a Junior Subordinated Note of that series and continuance of such default for a period of 3 Business Days; or (5) default in the performance or breach of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of one or more series of Junior Subordinated Notes other than that series), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Junior Subordinated Notes of that series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (6) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable federal or state 21 bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition by one or more Persons other than the Company seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official for the Company or for any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or (7) the commencement by the Company of a case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in a case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or (8) any other Event of Default provided with respect to Junior Subordinated Notes of that series in the supplemental indenture authorizing such series. Section 502. Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to Junior Subordinated Notes of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Junior Subordinated Notes of that series may declare the principal amount of all of the Junior Subordinated Notes of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. At any time after such a declaration of acceleration with respect to Junior Subordinated Notes of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Junior Subordinated Notes of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (1) the Company has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue interest (including any Additional Interest) on all Junior Subordinated Notes of that series, (B) the principal of (and premium, if any, on) any Junior Subordinated Notes of that series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Junior Subordinated Notes, (C) to the extent that payment of such interest is lawful, interest upon overdue interest (including any Additional Interest) at the rate or rates prescribed therefor in such Junior Subordinated Notes, and 22 (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 607; and (2) all Events of Default with respect to Junior Subordinated Notes of that series, other than the non-payment of the principal of Junior Subordinated Notes of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513. No such rescission shall affect any subsequent default or impair any right consequent thereon. Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if an Event of Default occurs under Section 501(1), (2) or (3) with respect to any Junior Subordinated Notes, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Junior Subordinated Notes, the whole amount then due and payable on such Junior Subordinated Notes for principal (and premium, if any) and interest (including Additional Interest, if any) and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest (including Additional Interest, if any), at the rate or rates prescribed therefor in such Junior Subordinated Notes, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 607. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Junior Subordinated Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Junior Subordinated Notes, wherever situated. If an Event of Default with respect to Junior Subordinated Notes of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Junior Subordinated Notes of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. Section 504. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Junior Subordinated Notes or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Junior Subordinated Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (1) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Junior Subordinated Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 607) and of the Holders of Junior Subordinated Notes allowed in such judicial proceeding, and 23 (2) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of Junior Subordinated Notes to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Junior Subordinated Notes, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Junior Subordinated Note any plan of reorganization, arrangement, adjustment or composition affecting the Junior Subordinated Notes or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder of a Junior Subordinated Note in any such proceeding. Section 505. Trustee May Enforce Claims Without Possession of Junior Subordinated Notes. All rights of action and claims under this Indenture or the Junior Subordinated Notes may be prosecuted and enforced by the Trustee without the possession of any of the Junior Subordinated Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Junior Subordinated Notes in respect of which such judgment has been recovered. Section 506. Application of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Junior Subordinated Notes, and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: First: To the payment of all amounts due the Trustee under Section 607; and Second: Subject to Article Thirteen, to the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest (including Additional Interest, if any) on the Junior Subordinated Notes in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Junior Subordinated Notes for principal (and premium, if any) and interest (including Additional Interest, if any), respectively; and Third: The balance, if any, to the Person or Persons entitled thereto. Section 507. Limitation on Suits. No Holder of any Junior Subordinated Note of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Junior Subordinated Notes of that series; 24 (2) the Holders of not less than a majority in principal amount of the Outstanding Junior Subordinated Notes of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Junior Subordinated Notes of that series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in this Indenture but subject to Article Thirteen, the Holder of any Junior Subordinated Notes shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 305) interest (including any Additional Interest) on such Junior Subordinated Note on the Stated Maturity or Maturities expressed in such Junior Subordinated Note (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. Section 509. Restoration of Rights and Remedies. If the Trustee or any Holder of a Junior Subordinated Note has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders of Junior Subordinated Notes shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. Section 510. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Junior Subordinated Notes in the last paragraph of Section 304, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Junior Subordinated Notes is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 511. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Junior Subordinated Note to exercise any right or remedy upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event 25 of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders of Junior Subordinated Notes may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of Junior Subordinated Notes. Section 512. Control by Holders of Junior Subordinated Notes. The Holders of a majority in principal amount of the Outstanding Junior Subordinated Notes of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Junior Subordinated Notes of such series, provided that (1) such direction shall not be in conflict with any rule of law or with this Indenture, and could not involve the Trustee in personal liability in circumstances where reasonable indemnity would not be adequate, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Section 513. Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstanding 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 hereunder with respect to such series and its consequences, except a default (1) in the payment of the principal of (or premium, if any) or interest on any Junior Subordinated Note of such series, or (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Junior Subordinated Note of such series affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 514. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Junior Subordinated Note by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Junior Subordinated Notes of any series, or to any suit instituted by any Holder of any Junior Subordinated Note for the enforcement of the payment of the principal of (or premium, if any) or interest (including Additional Interest) on any Junior Subordinated Note on or after the Stated Maturity or Maturities expressed in such Junior Subordinated Note (or, in the case of redemption, on or after the Redemption Date). Section 515. Waiver of Stay or Extension Laws. 26 The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 27 ARTICLE SIX THE TRUSTEE Section 601. Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default with respect to Junior Subordinated Notes of any series, (1) the Trustee undertakes to perform, with respect to Junior Subordinated Notes of such series, such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may, with respect to Junior Subordinated Notes of such series, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default with respect to Junior Subordinated Notes of any series has occurred and is continuing, the Trustee shall exercise, with respect to Junior Subordinated Notes of such series, such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that (1) this Subsection shall not be construed to limit the effect of Subsection (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Junior Subordinated Notes of any series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Junior Subordinated Notes of such series; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. 28 Section 602. Notice of Defaults. Within 90 days after the occurrence of any default hereunder with respect to the Junior Subordinated Notes of any series, the Trustee shall transmit by mail to all Holders of Junior Subordinated Notes of such series entitled to receive reports pursuant to Section 313(c) of the Trust Indenture Act, notice of all defaults hereunder known to the Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest (including Additional Interest) on any Junior Subordinated Note of such series or in the payment of any sinking fund installment with respect to Junior Subordinated Notes of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holders of Junior Subordinated Notes of such series; and provided, further, that in the case of any default of the character specified in Section 501(5) with respect to Junior Subordinated Notes of such series, no such notice to Holders shall be given until at least 45 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Junior Subordinated Notes of such series. Section 603. Certain Rights of Trustee. Subject to the provisions of Section 601: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer's Certificate; (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Junior Subordinated Notes of any series pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney. 29 (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (h) the Trustee shall not be charged with knowledge of any Event of Default with respect to the Junior Subordinated Notes of any series for which it is acting as Trustee unless either (1) a Responsible Officer of the Trustee assigned to the Corporate Trustee Administration Department and agency group of the Trustee (or any successor division or department of the Trustee) shall have actual knowledge of the Event of Default or (2) written notice of such Event of Default shall have been given to the Trustee by the Company, and other obligor on such Junior Subordinated Notes or by any Holder of such Junior Subordinated Notes. Section 604. Not Responsible for Recitals of Issuance of Junior Subordinated Notes. The recitals contained herein and in the Junior Subordinated Notes (except the Trustee's certificates of authentication) shall be taken as the statements of the Company, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Junior Subordinated Notes. The Trustee or any Authenticating Agent shall not be accountable for the use or application by the Company of Junior Subordinated Notes or the proceeds thereof. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Trust Securities and shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of a Trust Security to establish that such Person is such a holder. The Trustee may conclusively rely on an Officers' Certificate as evidence that the holders of the necessary percentage of liquidation preference of Trust Securities have taken any action contemplated hereunder and shall have no duty to investigate the truth or accuracy of any statement contained therein. Section 605. May Hold Junior Subordinated Notes. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Junior Subordinated Notes and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. Section 606. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company. Section 607. Compensation and Reimbursement. The Company agrees (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); 30 (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence, willful misconduct or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company under this Section the Trustee shall have a lien prior to the Junior Subordinated Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of, premium, if any, or interest, if any, on particular Junior Subordinated Notes. Section 608. Disqualification; Conflicting Interests. If the Trustee has or shall acquire any conflicting interest, within the meaning of the Trust Indenture Act, it shall, within 90 days after ascertaining that it has such conflicting interest, either eliminate such conflicting interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. Section 609. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by federal or state authority and qualified and eligible under this Article and otherwise permitted by the Trust Indenture Act to act as Trustee under an Indenture qualified under the Trust Indenture Act. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 610. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611. (b) The Trustee may resign at any time with respect to the Junior Subordinated Notes of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Junior Subordinated Notes of such series. (c) The Trustee may be removed at any time with respect to the Junior Subordinated Notes of any series by Act of the Holders of a majority in principal amount of the Outstanding Junior Subordinated Notes of such series delivered to the Trustee and to the Company. 31 (d) If at any time: (1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder of a Junior Subordinated Note who has been a Holder of a Junior Subordinated Note for at least six months, or (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company, by a Board Resolution, may remove the Trustee with respect to all Junior Subordinated Notes, or (ii) subject to Section 514, any Holder of a Junior Subordinated Note who has been a bona fide Holder of a Junior Subordinated Note for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Junior Subordinated Notes and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Junior Subordinated Notes of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Junior Subordinated Notes of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Junior Subordinated Notes of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Junior Subordinated Notes of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Junior Subordinated Notes of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Junior Subordinated Notes of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Junior Subordinated Notes of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Junior Subordinated Notes of any series shall have been so appointed by the Company or the Holders of Junior Subordinated Notes and accepted appointment in the manner required by Section 611, any Holder of a Junior Subordinated Note who has been a bona fide Holder of a Junior Subordinated Note of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Junior Subordinated Notes of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Junior Subordinated Notes of any series and each appointment of a successor Trustee with respect to the Junior Subordinated Notes of any series by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of such series of Junior Subordinated Notes as their names and addresses appear in the Security Register. 32 Section 611. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to all Junior Subordinated Notes, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor Trustee with respect to the Junior Subordinated Notes of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Junior Subordinated Notes of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Junior Subordinated Notes of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Junior Subordinated Notes, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Junior Subordinated Notes of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Junior Subordinated Notes of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Junior Subordinated Notes of that or those series to which the appointment of such successor Trustee relates. (c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. Section 612. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Junior Subordinated Notes shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication 33 and deliver the Junior Subordinated Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Junior Subordinated Notes. Section 613. Preferential Collection of Claims Against Company. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Junior Subordinated Notes), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). For purposes of Section 311(b)(4) and (6) of the Trust Indenture Act: (a) "cash transaction" means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and (b) "self-liquidating paper" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company (or any such obligor) for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company (or any such obligor) arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation. Section 614. Appointment of Authenticating Agent. At any time when any of the Junior Subordinated Notes remain Outstanding the Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Junior Subordinated Notes that shall be authorized to act on behalf of the Trustee to authenticate Junior Subordinated Notes of such series issued upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 304, and Junior Subordinated Notes so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Junior Subordinated Notes by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by federal or state authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. 34 An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Junior Subordinated Notes, if any, of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607. The provisions of Sections 306, 604 and 605 shall be applicable to each Authenticating Agent. If an appointment with respect to one or more series is made pursuant to this Section, the Junior Subordinated Notes of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternate certificate of authentication in the following form: This is one of the Junior Subordinated Notes of the series designated therein referred to in the within-mentioned Indenture. ______________________________ As Trustee By____________________________ As Authenticating Agent By____________________________ Authorized Signatory 35 ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY Section 701. Company to Furnish Trustee Names and Addresses of Holders. The Company will furnish or cause to be furnished to the Trustee (a) semi-annually, not later than June 1 and December 1, in each year, a list, in such form as the Trustee may reasonably require, containing all the information in the possession or control of the Company, or any of its Paying Agents other than the Trustee, as to the names and addresses of the Holders of Junior Subordinated Notes as of the preceding May 15 or November 15, as the case may be, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar. Section 702. Preservation of Information; Communications to Holders. (a) The Trustee shall comply with the obligations imposed on it pursuant to Section 312 of the Trust Indenture Act. (b) Every Holder of Junior Subordinated Notes, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders of Junior Subordinated Notes in accordance with Section 312(b) of the Trust Indenture Act, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of the Trust Indenture Act. Section 703. Reports by Trustee. (a) Within 60 days after May 15 of each year commencing with the first May 15 after the first issuance of Junior Subordinated Notes pursuant to this Indenture, if required by Section 313(a) of the Trust Indenture Act, the Trustee shall transmit a brief report dated as of such May 15 with respect to any of the events specified in such Section 313(a) that may have occurred since the later of the immediately preceding May 15 and the date of this Indenture. (b) The Trustee shall transmit the reports required by Section 313(b) of the Trust Indenture Act at the times specified therein. (c) Reports pursuant to this Section shall be transmitted in the manner and to the Persons required by Sections 313(c) and (d) of the Trust Indenture Act. 36 Section 704. Reports by Company. The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall: (1) file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended; or, if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934, as amended, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; (2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; (3) transmit, within 30 days after the filing thereof with the Trustee, to the Holders of Junior Subordinated Notes, in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of this Section 704 as may be required by rules and regulations prescribed from time to time by the Commission; and (4) notify the Trustee when and as the Junior Subordinated Notes of any series become admitted to trading on any national securities exchange. 37 ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 801. Company May Consolidate, Etc., Only on Certain Terms. 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) in case the Company shall consolidate with or merge into another corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual 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 this 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 Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease complies with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. Section 802. Successor Corporation Substituted. Upon any consolidation by the Company with or merger by the Company into any other corporation or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 801, the successor corporation formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Junior Subordinated Notes. 38 ARTICLE NINE SUPPLEMENTAL INDENTURES Section 901. Supplemental Indentures Without Consent of Holders. Without the consent of any Holders of Junior Subordinated Notes, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company herein and in the Junior Subordinated Notes; or (2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Junior Subordinated Notes (and if such covenants are to be for the benefit of less than all series of Junior Subordinated Notes, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or (3) to add any additional Events of Default; or (4) to add to or change any of the provisions of this Indenture, to change or eliminate any restrictions on the payment of principal (or premium, if any) on Junior Subordinated Notes or to permit the issuance of Junior Subordinated Notes in uncertificated form, provided any such action shall not adversely affect the interests of the Holders of Junior Subordinated Notes of any series in any material respect; or (5) to change or eliminate any of the provisions of this Indenture with respect to any series of Junior Subordinated Notes theretofore unissued; or (6) to secure the Junior Subordinated Notes; or (7) to establish the form or terms of Junior Subordinated Notes of any series as permitted by Sections 201 and 301; or (8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Junior Subordinated Notes of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b); or (9) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided such action shall not adversely affect the interests of the Holders of Junior Subordinated Notes of any series or holders of outstanding Trust Securities in any material respect; or (10) subject to Section 903(a), to make any change in Article Thirteen that would limit or terminate the benefits available to any holder of Senior Indebtedness under such Article; or 39 (11) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the Trust Indenture Act or under any similar federal statute hereafter enacted, and to add to this Indenture such other provisions as may be expressly required by the Trust Indenture Act. Section 902. Supplemental Indentures with Consent of Holders. 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 by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Junior Subordinated Notes of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Junior Subordinated Note affected thereby, (1) 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 thereof or the rate of interest (including Additional Interest) thereon or any premium payable upon the redemption thereof, or change the method of calculating the rate of interest thereon, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or (2) reduce the percentage in 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 this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or (3) modify any of the provisions of this Section 902, Section 513 or Section 1008, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Junior Subordinated Note affected thereby, provided, however, that this clause shall not be deemed to require the consent of any Holder of a Junior Subordinated Note with respect to changes in the references to "the Trustee" and concomitant changes in this Section and Section 1008, or the deletion of this proviso, in accordance with the requirements of Sections 611(b) and 901(8), or (4) modify the provisions of this Indenture with respect to the subordination of the Junior Subordinated Notes in a manner adverse to such Holder. Section 903. General Provisions Regarding Supplemental Indenture. (a) A supplemental indenture entered into pursuant to Section 901 or Section 902 may not make any change that adversely affects the rights under Article Thirteen of any holder of Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness (or any group or representative thereof authorized to give a consent) consent to such change. (b) A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Junior Subordinated Notes, or which modifies the rights of the Holders of Junior Subordinated Notes of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Junior Subordinated Notes of any other series. 40 (c) It shall not be necessary for any Act of Holders of Junior Subordinated Notes under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act or action shall approve the substance thereof. Section 904. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties, immunities or liabilities under this Indenture or otherwise. Section 905. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Junior Subordinated Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 906. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act. Section 907. Reference in Junior Subordinated Notes to Supplemental Indentures. Junior Subordinated Notes of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Junior Subordinated Notes of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Junior Subordinated Notes of such series. 41 ARTICLE TEN COVENANTS Section 1001. Payment of Principal and Interest. The Company covenants and agrees for the benefit of each series of Junior Subordinated Notes that it will duly and punctually pay the principal of (and premium, if any) and interest, including Additional Interest (subject to the right of the Company to extend an interest payment period pursuant to the terms of a supplemental indenture authorizing the Junior Subordinated Notes of that series), on the Junior Subordinated Notes of that series in accordance with the terms of the Junior Subordinated Notes and this Indenture. Section 1002. Maintenance of Office or Agency. The Company will maintain an office or agency where Junior Subordinated Notes of that series may be presented or surrendered for payment, where Junior Subordinated Notes of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Junior Subordinated Notes of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency in respect of any series of Junior Subordinated Notes or shall fail to furnish the Trustee with the address thereof, such presentations and surrenders of Junior Subordinated Notes of that series may be made and notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive such respective presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where the Junior Subordinated Notes of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. Section 1003. Money for Junior Subordinated Notes Payments to Be Held in Trust. If the Company shall at any time act as its own Paying Agent with respect to any series of Junior Subordinated Notes, it will, on or before each due date of the principal of (and premium, if any) or interest (including Additional Interest, if any) on any of the Junior Subordinated Notes of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest (including Additional Interest, if any) so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for any series of Junior Subordinated Notes, it will, prior to each due date of the principal of (and premium, if any) or interest (including Additional Interest, if any) on any Junior Subordinated Notes of that series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest (including Additional Interest, if any) so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest (including Additional Interest, if any), and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent for any series of Junior Subordinated Notes other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: 42 (1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest (including Additional Interest, if any) on Junior Subordinated Notes of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee notice of any default by the Company (or any other obligor upon the Junior Subordinated Notes of that series) in the making of any payment of principal of (and premium, if any) or interest (including Additional Interest, if any) on the Junior Subordinated Notes of that series; and (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge or defeasance of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest (including Additional Interest, if any) on any Junior Subordinated Note of any series and remaining unclaimed for two years after such principal (and premium, if any) or interest (including Additional Interest, if any) has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Junior Subordinated Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper of general circulation in New York City notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. Section 1004. Additional Interest. If the Junior Subordinated Notes of a series provide for the payment of Additional Interest (for purposes of this Section 1004, as defined in clause (i) of the definition thereof) to the Holders of such Junior Subordinated Notes, then the Company shall pay to each Holder of such Junior Subordinated Notes the Additional Interest as provided therein. Except as otherwise provided in or pursuant to this Indenture, if the Junior Subordinated Notes of a series provide for the payment of Additional Interest, at least 10 days prior to the first Interest Payment Date or other date with respect to that series of Junior Subordinated Notes upon which such Additional Interest shall be payable (or, if the Junior Subordinated Notes of that series shall not bear interest prior to Maturity, the first day on which a payment of principal and any premium is made), and at least 10 days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company will furnish the Trustee and the Company's Paying Agent or Paying Agents, if other than the Trustee or the Company, with an Officers' Certificate stating the amount of the Additional Interest payable per minimum authorized denomination of such Junior Subordinated Notes (and, if such Additional Interest is payable only with respect to particular Junior Subordinated Notes, then the names of the Holders of such Junior Subordinated Notes). 43 Section 1005. Corporate Existence. Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the rights (charter and statutory) and franchises of the Company; provided, however, that the Company shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company, and that the loss thereof is not disadvantageous in any material respect to the Holders. Section 1006. Limitations on Dividend and Certain Other Payments. The Company covenants, for the benefit of the Holders of each series of Junior Subordinated Notes, that, subject to the next succeeding sentence, (a) the Company shall not declare or pay any dividend or make any distributions with respect to, or redeem, purchase 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) issued by the Company which rank pari passu with or junior to the Junior Subordinated Notes, (a) 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, (b) 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 series of Trust Securities, if any, related to such series of Junior Subordinated Notes, or (c) if at such time an Event of Default hereunder with respect to such series of Junior Subordinated Notes shall have occurred and be continuing. The preceding sentence, however, shall not restrict (i) any of the actions described in the preceding sentence resulting from any reclassification of the Company's capital stock or the exchange or conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock, (ii) the declaration and payment of a dividend or distribution or similar share purchase rights in the future, or (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged. The Company covenants that it shall take all actions necessary to ensure the compliance of its Subsidiaries with this Section 1006. Section 1007. Statement as to Compliance. (a) The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year, a written statement, which need not comply with Section 102, signed by the principal executive officer, the principal financial officer or the principal accounting officer of the Company, as to his or her knowledge of the Company's compliance with all conditions and covenants under this Indenture. For purposes of this Section 1007, such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture. (b) The Company shall deliver to the Trustee, no later than the Business Day on which the event occurs, written notice of the liquidation, dissolution or winding-up of a Securities Trust if such liquidation, dissolution or winding-up would occur earlier than the Stated Maturity of the Junior Subordinated Notes owned by such Securities Trust. (c) The Company shall deliver to the Trustee, within five days after the occurrence thereof, written notice of any event which after notice or lapse of time or both would become an Event of Default pursuant to Section 501. 44 Section 1008. Waiver of Certain Covenants. The Company may omit in any particular instance to comply with any term, provision or condition set forth in Sections 1005 and 1006 with respect to the Junior Subordinated Notes of any series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Junior Subordinated Notes of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. 45 ARTICLE ELEVEN REDEMPTION OF JUNIOR SUBORDINATED NOTES Section 1101. Applicability of Article. Junior Subordinated Notes of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Junior Subordinated Notes of any series) in accordance with this Article. Section 1102. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Junior Subordinated Notes shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of all of the Junior Subordinated Notes of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee and the related Property Trustee), notify the Trustee and the related Property Trustee in writing of such Redemption Date. In case of any redemption at the election of the Company of less than all the Junior Subordinated Notes of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee and the related Property Trustee), notify the Trustee and the related Property Trustee in writing of such Redemption Date and of the principal amount of Junior Subordinated Notes of such series to be redeemed. In the case of any redemption of Junior Subordinated Notes (i) prior to the expiration of any restriction on such redemption provided in the terms of such Junior Subordinated Notes or elsewhere in this Indenture, or (ii) pursuant to an election of the Company which is subject to a condition specified in the terms of such Junior Subordinated Notes, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction or condition. Section 1103. Selection by Trustee of Junior Subordinated Notes to Be Redeemed. If the Junior Subordinated Notes are registered in the name of only one Holder, any partial redemptions shall be pro rata. If the Junior Subordinated Notes are held in definitive form by more than one Holder and if less than all the Junior Subordinated Notes of any series are to be redeemed, the particular Junior Subordinated Notes to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Junior Subordinated Notes of such series not previously called for redemption, by lot or other such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Junior Subordinated Notes of that series or any integral multiple thereof) of the principal amount of Junior Subordinated Notes of such series of a denomination larger than the minimum authorized denomination for Junior Subordinated Notes of that series. The Trustee shall promptly notify the Company in writing of the Junior Subordinated Notes selected for redemption and, in the case of any Junior Subordinated Notes selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Junior Subordinated Notes shall relate, in the case of any Junior Subordinated Notes redeemed or to be redeemed only in part, to the portion of the principal amount of such Junior Subordinated Notes which has been or is to be redeemed. Section 1104. Notice of Redemption. Notice of redemption shall be given in the manner provided in Section 106 to the Holders of Junior Subordinated Notes to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date. 46 All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all the Outstanding Junior Subordinated Notes of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Junior Subordinated Notes to be redeemed, (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Junior Subordinated Note to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (5) the place or places where such Junior Subordinated Notes, maturing after the Redemption Date, are to be surrendered for payment of the Redemption Price, and (6) that the redemption is for a sinking fund, if such is the case. Notice of redemption of Junior Subordinated Notes to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. Section 1105. Deposit of Redemption Price. Except as otherwise provided in a supplemental indenture pursuant to Section 301, prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of and accrued interest, if any, on all the Junior Subordinated Notes which are to be redeemed on that date. Section 1106. Junior Subordinated Notes Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Junior Subordinated Notes so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified together with any accrued interest (including any Additional Interest) thereon, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Junior Subordinated Notes shall cease to bear interest. Upon surrender of any such Junior Subordinated Note for redemption in accordance with such notice, such Junior Subordinated Note shall be paid by the Company at the Redemption Price, together with accrued interest, if any, and any Additional Interest to the Redemption Date; provided, however, that, except as otherwise provided in a supplemental indenture pursuant to Section 301, installments of interest on Junior Subordinated Notes whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Junior Subordinated Notes, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 305. If any Junior Subordinated Note called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Junior Subordinated Note. 47 Section 1107. Junior Subordinated Notes Redeemed in Part. Any Junior Subordinated Note that is to be redeemed only in part shall be surrendered at an office or agency of the Company therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Junior Subordinated Note without service charge, a new Junior Subordinated Notes of the same series, Stated Maturity and original issue date of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Junior Subordinated Note so surrendered. 48 ARTICLE TWELVE SINKING FUNDS Section 1201. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of Junior Subordinated Notes of a series except as otherwise specified as contemplated by Section 301 for Junior Subordinated Notes of such series. The minimum amount of any sinking fund payment provided for by the terms of Junior Subordinated Notes of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Junior Subordinated Notes of any series is herein referred to as an "optional sinking fund payment". If provided for by the terms of Junior Subordinated Notes of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Junior Subordinated Notes of any series as provided for by the terms of Junior Subordinated Notes of such series. Section 1202. Satisfaction of Sinking Fund Payments with Junior Subordinated Notes. The Company (1) may deliver Outstanding Junior Subordinated Notes of a series (other than any previously called for redemption), and (2) may apply as a credit Junior Subordinated Notes of a series which have been redeemed either at the election of the Company pursuant to the terms of such Junior Subordinated Notes or through the application of permitted optional sinking fund payments pursuant to the terms of such Junior Subordinated Notes, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Junior Subordinated Notes of such series required to be made pursuant to the terms of such Junior Subordinated Notes as provided for by the terms of such series; provided that such Junior Subordinated Notes have not been previously so credited. Such Junior Subordinated Notes shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Junior Subordinated Notes for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. Section 1203. Redemption of Junior Subordinated Notes for Sinking Fund. Not less than 60 days prior to each sinking fund payment date for any series of Junior Subordinated Notes, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Junior Subordinated Notes of that series pursuant to Section 1202 and stating the basis for such credit and that such Junior Subordinated Notes have not previously been so credited and will also deliver to the Trustee any Junior Subordinated Notes to be so delivered. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Junior Subordinated Notes to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Junior Subordinated Notes shall be made upon the terms and in the manner stated in Sections 1106 and 1107. 49 ARTICLE THIRTEEN SUBORDINATION Section 1301. Junior Subordinated Notes Subordinate to Senior Indebtedness. The Company covenants and agrees, and each Holder of a Junior Subordinated Note, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article (subject to Article Four), the payment of the principal of, premium, if any, and interest (including Additional Interest) on each and all of the Junior Subordinated Notes are hereby expressly made subordinate and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness. Section 1302. Payment of Proceeds Upon Dissolution, Etc. 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 (each such event, if any, referred to as a Proceeding), the holders of Senior Indebtedness shall be entitled to receive payment in full of all amounts due on or to become due on or in respect of all Senior Indebtedness (including any interest accruing thereon after the commencement of any such Proceeding, whether or not allowed as a claim against the Company in such Proceeding), before the Holders of the Junior Subordinated Notes are entitled to receive any payment or distribution (excluding any payment described in Section 1309) on account of the principal of, premium, if any, or interest (including Additional Interest, if any) on the Junior Subordinated Notes or on account of any purchase, redemption or other acquisition of Junior Subordinated Notes by the Company (all such payments, distributions, purchases, redemptions and acquisitions, whether or not in connection with a Proceeding, herein referred to, individually and collectively, as a "Payment"). In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, prohibited by the foregoing shall be received by the Trustee or the Holders of the Junior Subordinated Notes before all Senior Indebtedness is paid in full, or provision is made for such payment in money in accordance with its terms, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of Senior Indebtedness or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any such Senior Indebtedness may have been issued, as their respective interests may appear, as calculated by the Company, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Indebtedness. For purposes of this Article "assets of the Company" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article with respect to the Junior Subordinated Notes to the payment of all Senior Indebtedness that may at the time be outstanding, provided, however, that (i) the Senior Indebtedness is assumed by the new corporation, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of the Senior Indebtedness are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article Eight hereof shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 1302 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article Eight hereof. Nothing in Section 1303 or in this Section 1302 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 607. 50 Section 1303. No Payment When Senior Indebtedness In Default. No payment of any principal, including redemption payments if any (premium, if any), or interest on (including Additional Interest) the Junior Subordinated Notes shall be made if (i) any Senior Indebtedness is not paid when due whether at the stated maturity of any such payment or by call for redemption and any applicable grace period with respect to such default has ended, with such default remaining uncured and such default has not been waived or otherwise ceased to exist; (ii) the maturity of any Senior Indebtedness has been accelerated because of a default; or (iii) notice has been given of the exercise of an option to require repayment, mandatory payment or prepayment or otherwise. In the event that, notwithstanding the foregoing, the Company shall make any Payment to the Trustee or any Holder prohibited by the foregoing provisions of this Section, then in such event such Payment shall be held in trust and paid over and delivered forthwith to the holders of the Senior Indebtedness. The provisions of this Section shall not apply to any Payment with respect to which Section 1302 hereof would be applicable. Section 1304. Payment Permitted If No Default. Nothing contained in this Article or elsewhere in this Indenture or in any of the Junior Subordinated Notes shall prevent the Company, at any time except during the pendency of any Proceeding referred to in Section 1302 hereof or under the conditions described in Section 1303 hereof, from making Payments. Nothing in this Article shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of the Junior Subordinated Notes upon the occurrence of an Event of Default, but, in that event, no payment may be made in violation of the provisions of this Article with respect to the Junior Subordinated Notes. If payment of the Junior Subordinated Notes is accelerated because of an Event of Default, the Company shall promptly notify the holders of the Senior Indebtedness (or their representatives) of such acceleration. Section 1305. Subrogation To Rights of Holders of Senior Indebtedness. The rights of the Holders of the Junior Subordinated Notes shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness until the principal of, premium, if any, and interest (including Additional Interest) on the Junior Subordinated Notes shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the Holders of the Junior Subordinated Notes or the Trustee would be entitled except for the provisions of this Article, and no payments pursuant to the provisions of this Article to the holders of Senior Indebtedness by Holders of the Junior Subordinated Notes or the Trustee, shall, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Junior Subordinated Notes, be deemed to be a payment or distribution by the Company to or on account of the Senior Indebtedness. 51 Section 1306. Provisions Solely To Define Relative Rights. The provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Junior Subordinated Notes is intended to or shall (a) impair, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Junior Subordinated Notes, the obligation of the Company, which is absolute and unconditional (and which, subject to the rights under this Article of the holders of Senior Indebtedness, is intended to rank equally with all other general obligations of the Company), to pay to the Holders of the Junior Subordinated Notes the principal of, premium, if any, and interest (including Additional Interest) on the Junior Subordinated Notes as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against the Company of the Holders of the Junior Subordinated Notes and creditors of the Company other than the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Junior Subordinated Note from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness to receive cash, property and securities otherwise payable or deliverable to the Trustee or such Holder or, under the conditions specified in Section 1303, to prevent any payment prohibited by such Section or enforce their rights pursuant to the penultimate paragraph in Section 1303. Section 1307. Trustee To Effectuate Subordination. Each Holder of a Junior Subordinated Note by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes, including, in the event of any dissolution, winding-up, liquidation or reorganization of the Company, whether in bankruptcy, insolvency, receivership proceedings, or otherwise, the timely filing of a claim for the unpaid balance of the indebtedness of the Company owing to such Holder in the form required in such proceedings and the causing of such claim to be approved. Section 1308. No Waiver of Subordination Provisions. No right of any present or future holder of any Senior Indebtedness to enforce the subordination provisions provided herein shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or any failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Junior Subordinated Notes, without incurring responsibility to the Holders of the Junior Subordinated Notes and without impairing or releasing the subordination provided in this Article or the obligations hereunder of the Holders of the Junior Subordinated Notes to the holders of Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (ii) permit the Company to borrow, repay and then reborrow any or all of the Senior Indebtedness; (iii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iv) release any Person liable in any manner for the collection of Senior Indebtedness; (v) exercise or refrain from exercising any rights against the Company and any other Person; (vi) apply any sums received by them to Senior Indebtedness. 52 Section 1309. Trust Moneys Not Subordinated. Notwithstanding anything contained herein to the contrary, payments from money held in trust by the Trustee under Article Four for the payment of the principal of, premium, if any, and interest (including Additional Interest) on any series of Junior Subordinated Notes shall not be subordinated to the prior payment of any Senior Indebtedness or subject to the restrictions set forth in this Article and no Holder of such Junior Subordinated Notes nor the Trustee shall be obligated to pay over such amount to the Company, any holder of Senior Indebtedness (or a designated representative of such holder) or any other creditor of the Company. Section 1310. Notice to the Trustee. The Company shall give prompt written notice to a Responsible Officer of the Trustee of any fact known to the Company that would prohibit the making of any payment of monies to or by the Trustee in respect of the Junior Subordinated Notes pursuant to the provision of this Article. Notwithstanding the provisions of this Article or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of monies to or by the Trustee in respect of the Junior Subordinated Notes pursuant to the provisions of this Article unless and until a Responsible Officer of the Trustee shall have received written notice thereof at the Corporate Trust Office of the Trustee from the Company or a holder or holders of Senior Indebtedness or from any trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the provisions of Section 601, shall be entitled to all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section 1310 at least two Business Days prior to the date upon which, by the terms hereof, any money may become payable for any purpose (including, without limitation, the payment of the principal of (or premium, if any) or interest on any Junior Subordinated Note), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purposes for which they were received, and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to such date. The Trustee, subject to the provisions of Section 601, shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness or a trustee on behalf of any such holder or holders. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. Section 1311. Reliance On Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 601 hereof, and the Holders of the Junior Subordinated Notes shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of Junior Subordinated Notes, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article, provided that the foregoing shall apply only if such court has been apprised of the provisions of this Article. Section 1312. Trustee Not Fiduciary For Holders of Senior Indebtedness. 53 Subject to the provisions of Section 601, the Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Junior Subordinated Notes or to the Company or to any other Person cash, property or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Article or otherwise. Section 1313. Rights of Trustee As Holder of Senior Indebtedness; Preservation Of Trustee's Rights. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 607 hereof. Section 1314. Article Applicable To Paying Agents. In case at any time any Paying Agent other than the Trustee (or the Company or an Affiliate of the Company) shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intends and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee. Section 1315. Reliance by Holders of Senior Indebtedness on Subordination Provisions. Each Holder by accepting a Junior Subordinated Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the issuance of the Junior Subordinated Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or to continue to hold, such Senior Indebtedness. 54 ARTICLE FOURTEEN MISCELLANEOUS PROVISIONS Section 1401. No Recourse Against Others. An incorporator or any past, present or future director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Junior Subordinated Notes or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Junior Subordinated Note, each Holder shall waive and release all such liability. Such waiver and release shall be part of the consideration for the issue of the Junior Subordinated Notes. Section 1402. Set-Off. Notwithstanding anything to the contrary in this Indenture or in any Junior Subordinated Note of any series, prior to the dissolution of any Securities Trust that has issued Trust Securities related to a series of Junior Subordinated Notes, the Company shall have the right to set-off and apply against any payment it is otherwise required to make hereunder or thereunder with respect to the principal of or interest (including any Additional Interest) on the Junior Subordinated Notes of such series with and to the extent the Company has theretofore made, or is concurrently on the date of such payment making, a payment with respect to the Trust Securities of the series related to such series of Junior Subordinated Notes under the applicable Guarantee. Contemporaneously with, or as promptly as practicable after, any such payment under such Guarantee, the Company shall deliver to the Trustee an Officers' Certificate (upon which the Trustee shall be entitled to rely conclusively without any requirement to investigate the facts contained therein) to the effect that such payment has been made and that, as a result of such payment, the corresponding payment under the related series of Junior Subordinated Notes has been set-off in accordance with this Section 1402. Section 1403. Assignment; Binding Effect. The Company shall have the right at all times to assign any of its rights or obligations under this Indenture to a direct or indirect wholly-owned subsidiary of the Company, provided that, in the event of any such assignment, the Company shall remain primarily liable for the performance of all such obligations. This Indenture may also be assigned by the Company in connection with a transaction described in Article Eight. This Indenture shall be binding upon and inure to the benefit of the Company, the Trustee, the Holders, any Security Registrar, Paying Agent, and Authenticating Agent and, to the extent specifically set forth herein, the holders of Senior Indebtedness and their respective successors and assigns. The provisions of Section 1006 are for the benefit of the holders of the series of Trust Securities referred to therein and, prior to the dissolution of the related Securities Trust, may be enforced by such holders. A holder of a Trust Security shall not have the right, as such a holder, to enforce any other provision of this Indenture. Section 1404. Additional Interest. Whenever there is mentioned in this Indenture, in any context, the payment of the principal of, premium, if any, or interest on, or in respect of, any Junior Subordinated Note of any series, such mention shall be deemed to include mention of the payment of Additional Interest provided for by the terms of such series of Junior Subordinated Notes to the extent that, in such context, Additional Interest is, were or would be payable in respect thereof pursuant to such terms, and express mention of the payment of Additional Interest in any provisions hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made. -------------------- 55 This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. VIRGINIA ELECTRIC AND POWER COMPANY (SEAL) By /s/ J. Kennerly Davis, Jr. -------------------------------- J. Kennerly Davis, Jr. Vice President, Treasurer and Corporate Secretary Attest: /s/ James P. Carney - ------------------------------------- James P. Carney Assistant Corporate Secretary CHEMICAL BANK Trustee (SEAL) By /s/ Gregory McFarlane -------------------------------- Gregory McFarlane Vice President Attest: /s/ P. Kelly - ------------------------------------- P. Kelly Senior Trust Officer 56 ================================================================================ VIRGINIA ELECTRIC AND POWER COMPANY TO CHEMICAL BANK Trustee. ----------- First Supplemental Indenture Dated as of August 1, 1995 ----------- $139,175,250 Series A 8.05% Junior Subordinated Notes Due September 30, 2025 Subject to Extension ================================================================================ TABLE OF CONTENTS/1/ Page ---- ARTICLE 1 Series A Junior Subordinated Notes Section 101. Establishment............................................. 1 Section 102. Definitions............................................... 2 Section 103. Payment of Principal and Interest......................... 3 Section 104. Deferral of Maturity Date................................. 4 Section 105. Deferral of Interest Payments............................. 4 Section 106. Denominations............................................. 5 Section 107. Global Securities......................................... 5 Section 108. Transfer.................................................. 6 Section 109. Redemption................................................ 6 ARTICLE 2 Miscellaneous Provisions Section 201. Recitals by Company....................................... 7 Section 202. Ratification and Incorporation of Original Indenture...... 7 Section 203. Date of First Supplemental Indenture...................... 7 Section 204. Executed in Counterparts.................................. 7 - ---------------------------- /1/ This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions. FIRST SUPPLEMENTAL INDENTURE dated the 1st day of August, 1995, by and between VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia public service corporation, One James River Plaza, Richmond Virginia 23219 (the Company), and CHEMICAL BANK, a New York banking corporation, 450 West 33rd Street, New York, New York, 10001 (the Trustee). The Company has heretofore entered into a Subordinated Note Indenture dated August 1, 1995 (the Original Indenture) with Chemical Bank. The Original Indenture is incorporated herein by this reference and the Original Indenture as supplemented by this First Supplemental Indenture is herein called the Indenture. Under the Original Indenture, a new series of Junior Subordinated Notes may at any time be established by the Board of Directors of the Company in accordance with the provisions of the Original Indenture and the terms of such series may be described by a supplemental indenture executed by the Company and the Trustee. The Company proposes to create under the Indenture, a new series of Junior Subordinated Notes. Additional Junior Subordinated Notes of other series hereafter established, except as may be limited in the Subordinated Note Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified. All conditions necessary to authorize the execution, delivery and recording of this First Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed. NOW, THEREFORE, THIS INDENTURE WITNESSETH, ARTICLE 1 Series A Junior Subordinated Notes Section 101. Establishment. There is hereby established a new series of Junior Subordinated Notes to be issued under the Indenture, to be designated as the Company's Series A 8.05% Junior Subordinated Notes, due September 30, 2025, subject to extension (the Series A Notes). There are to be authenticated and delivered $139,175,250 principal amount of Series A Notes, and no further Series A Notes shall be authenticated and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture. The Series A Notes shall be issued in definitive fully registered form. The Series A Notes shall be in substantially the form set out in Exhibit A hereto. The entire principal amount of the Series A Notes shall initially be evidenced by one certificate issued to "Chemical Bank, as Property Trustee of Virginia Power Capital Trust I". The form of the Trustee's Certificate of Authentication for the Series A Notes shall be in substantially the form set forth in Exhibit B hereto. Each Series A Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for. Section 102. Definitions. "Deferred Interest" means each installment of interest not paid during any Extension Period, and interest thereon. Deferred installments of interest shall bear interest at the rate of 8.05% per annum from the applicable Interest Payment Date to the date of payment, compounded quarterly. "Extension Period" means any period during which the Company has elected to defer payments of interest, which deferral may be for a period of up to twenty consecutive quarters. "Interest Payment Dates" means March 31, June 30, September 30 and December 31, commencing September 30, 1995. "Investment Company Act Event" means that the Company shall have received an Opinion of Counsel to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Securities Trust is or will be considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended which change becomes effective on or after the Issue Date. "Original Issue Date" means August 31, 1995. "Regular Record Date" means, with respect to each Interest Payment Date, the close of business on the 15th calendar day preceding such Interest Payment Date. "Securities Trust" means Virginia Power Capital Trust I, a statutory business trust formed by the Company under Delaware law to issue Trust Securities, the proceeds of which will be used to purchase Series A Notes. "Special Event" means an Investment Company Act Event or Tax Event. "Stated Maturity" means September 30, 2025, subject to extension as provided herein. "Tax Event" means that the Company shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, laws (or any regulation thereunder) of the United States or any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of such laws or regulations, there is more than an insubstantial risk that (i) the Securities Trust would be subject to United States federal income tax with respect to income accrued or received on the Series A Notes, (ii) interest payable to the Securities Trust on the Series A Notes would not be deductible by the Company for United States federal income tax purposes or (iii) the Securities Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges, which change or amendment becomes effective on or after Issue Date. Section 103. Payment of Principal and Interest. The unpaid principal amount of the Series A Notes shall bear interest at the rate of 8.05% per annum until paid or duly provided for. Interest shall be paid quarterly in arrears on each Interest Payment Date to the Person in whose name the Series A Notes are registered on the Regular Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity of principal or on a Redemption Date as provided herein will be paid to the person to whom principal is payable. Any such interest that is not (i) so punctually paid or duly provided for, or (ii) subject to an Extension Period will forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Series A Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Series A Notes not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series A Notes shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture. Payments of interest on the Series A Notes will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for the Series A Notes shall be computed and paid 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 A Notes is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day that is a Business Day, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. Payment of the principal of and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of the Series A Notes shall be made upon surrender of the Series A Notes at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto. Section 104. Deferral of Maturity Date. The Company has the right to extend the Stated Maturity of the Series A Notes for an additional ten years, to September 30, 2035 upon providing notice to the Trustee and the Holders at least 30 calendar days prior to September 30, 2025; provided that (i) the Company shall not then be bankrupt or insolvent or otherwise in default with respect to the Series A Notes, (ii) the Company shall have timely paid all amounts due on the Series A Notes for the preceding six quarters, (iii) if the Securities Trust is the Holder of the Series A Notes, the Securities Trust has paid all distributions theretofore required to be paid on the Trust Securities; (iv) the Series A Notes are then rated (or if the Securities Trust is the beneficial owner of the Series A Notes, the Trust Preferred Securities are then rated) in one of the four highest rating categories by a nationally recognized statistical rating organization (as used in Rule 15c3-1(c)(2)(vi)(F) under the Securities Exchange Act of 1934, as amended); and (v) the Company shall have given the Trustee an Officers' Certificate and an Opinion of Counsel to the effect that all conditions precedent to such extension provided for herein have been complied with. Section 105. Deferral of Interest Payments. The Company has the right at any time and from time to time to extend the interest payment period of the Series A Notes for up to 20 consecutive quarters (each, an Extension Period), but not beyond the Stated Maturity. Notwithstanding the foregoing, the Company has no right to extend its obligation to pay such amounts as are defined in clause (i) of the definition of Additional Interest. Prior to the termination of any such Extension Period, the Company may further extend the interest payment period, provided that such Extension Period, together with all such previous and further extensions of that Extension Period, shall not exceed 20 consecutive quarters. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may select a new Extension Period, subject to the above limitations and requirements. Upon the termination of any Extension Period, which termination shall be on an Interest Payment Date, the Company shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person in whose name the Series A Notes are registered on the Regular Record Date for such Interest Payment Date, provided that Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. During any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, or make any guarantee payments with respect to the foregoing or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Series A Notes. The Company shall give the Holder or Holders of the Series A Notes and the Trustee notice, as provided in Sections 105 and 106, respectively, of the Original Indenture, of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Regular Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate, or (ii) the date the Company or Securities Trust is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization of the record date or the date such distributions are payable. The Company shall pay to the United States or other taxing authority, as additional interest on the Series A Notes, when the same shall be due to the United States or other taxing authority, the amount set forth in clause (i) of the definition of Additional Interest. At the time any of the foregoing notices are given to the Trustee, the Company shall give to the Paying Agent for the Series A Notes such information as said Paying Agent shall reasonably require in order to fulfill tax reporting obligations with respect to such Series A Notes. Section 106. Denominations. The Series A Notes may be issued in the denominations of $25, or any integral multiple thereof. Section 107. Global Securities. If the Series A Notes are distributed to holders of the Trust Securities of the Securities Trust in liquidation of such holders' interests therein, the Series A Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Series A Notes represented by the Global Security will not be exchangeable for, and will not otherwise be issuable as, Series A Notes in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee. Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Series A Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. The rights of Holders of such Global Security shall be exercised only through the Depositary. A Global Security shall be exchangeable for Series A Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable or (iii) there shall have occurred an Event of Default with respect to the Series A Notes. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series A Notes registered in such names as the Depositary shall direct. Section 108. Transfer. No service charge will be made for any transfer or exchange of Series A Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. The Company shall not be required (a) to issue, transfer or exchange any Series A Notes during a period beginning at the opening of business 15 days before the day of the mailing of a notice identifying the serial numbers of the Series A Notes to be called for redemption, and ending at the close of business on the day of the mailing, or (b) to transfer or exchange any Series A Notes theretofore selected for redemption in whole or in part, except the unredeemed portion of any Series A Note redeemed in part. Section 109. Redemption. The Series A Notes shall be subject to redemption at the option of the Company, in whole or in part, without premium or penalty, at any time or from time to time on or after September 30, 2000, at a Redemption Price equal to 100% of the principal amount to be redeemed plus accrued but unpaid interest, including Additional Interest, if any, to the Redemption Date; provided, however, that no redemption in part shall be permitted if it would result in the delisting of the Trust Preferred Securities. In addition, upon occurrence of a Special Event, the Company may, within 90 days following the occurrence thereof, elect to redeem the Series A Notes, in whole, at a price equal to 100% of the principal amount to be redeemed plus any accrued but unpaid interest (including Additional Interest) to the Redemption Date, within 90 days following the occurrence of a Special Event; provided, however, that if at the time of the occurrence of the Special Event, there is available to the Company or the Securities Trust the opportunity to eliminate, within such 90-day period, the Special Event by taking some ministerial action, such as filing a form or making an election, or pursuing some other similar reasonable measure, which would have no adverse effect on the Securities Trust, the Company or the holders of Trust Securities, the Company or the Securities Trust, as the case may be, will pursue such measure in lieu of redemption. In the event of redemption of the Series A Notes in part only, a new Series A Note or Notes for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof. The Series A Notes will not have a sinking fund. Notice of redemption shall be given as provided in Section 1104 of the Original Indenture. Any redemption of less than all of the Series A Notes shall, with respect to the principal thereof, be divisible by $25. ARTICLE 2 Miscellaneous Provisions Section 201. Recitals by Company. The recitals in this First Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Series A Notes and of this First Supplemental Indenture as fully and with like effect as if set forth herein in full. Section 202. Ratification and Incorporation of Original Indenture. As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture, as heretofore supplemented and modified, and this First Supplemental Indenture shall be read, taken and construed as one and the same instrument. Section 203. Date of First Supplemental Indenture. Although this First Supplemental Indenture is dated for convenience and for the purpose of reference August 1, 1995, the actual dates of execution by the Company and by the Trustee are indicated by their respective acknowledgements hereto annexed. Section 204. Executed in Counterparts. This First Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written. VIRGINIA ELECTRIC AND POWER COMPANY SEAL /s/ J. Kennerly Davis ----------------------------- Vice President Attest: /s/ James P. Carney ------------------------------------ Assistant Corporate Secretary CHEMICAL BANK SEAL /s/ Gregory McFarlane ----------------------------- Vice President Attest: /s/ P. Kelly ---------------------------- Senior Trust Officer Exhibit A --------- No. [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO VIRGINIA ELECTRIC AND POWER COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]/1/ THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS, AND THIS SECURITY IS ISSUED SUBJECT TO THE PROVISIONS OF THE INDENTURE WITH RESPECT THERETO. VIRGINIA ELECTRIC AND POWER COMPANY Series A [ %] Junior Subordinated Note Due September 30, 2025 Subject to Extension Principal Amount: Regular Record Date: 15th calendar day prior to Original Issue Date: Interest Payment Date Stated Maturity: September 30, 2025, Interest Payment Dates: March 31 subject to extension June 30 for up to ten years September 30 December 31 Interest Rate: Authorized Initial Redemption Date: September 30, 2000 Denomination: $25
- --------------------------- /1/The bracketed language would apply to and appear on only a Global Security. Exhibit A - Page 1 Virginia Electric and Power Company, a public service corporation duly organized and existing under the laws of the Commonwealth of Virginia (the Company, which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to or registered assigns, the principal sum of on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on each Interest Payment Date as specified above, commencing on the Interest Payment Date next succeeding the Original Issue Date shown above and on the Stated Maturity (or upon earlier redemption) at the rate per annum shown above until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Note (the Note) is registered at the close of business on the Regular Record Date as specified above next preceding such Interest Payment Date, provided that any interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture. Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Note shall be computed and paid 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 this Note is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. A "Business Day" shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee or the principal corporate trust office of the Property Trustee of the Securities Trust are closed for business. Exhibit A - Page 2 The Company has the right to extend the Stated Maturity of the Series A Notes for an additional ten years, to September 30, 2035, upon providing notice to the Trustee and the Holders at least 30 calendar days prior to September 30, 2025; provided that (i) the Company shall not then be bankrupt or insolvent or otherwise in default with respect to the Series A Notes, (ii) the Company shall have timely paid all amounts due on the Series A Notes for the preceding six quarters without deferral, (iii) if the Securities Trust is the beneficial owner of the Series A Notes, the Securities Trust has paid all distributions theretofore required to be paid on the Trust Securities; (iv) the Series A Notes are then rated (or if the Securities Trust is the beneficial owner of the Series A Notes, the Trust Preferred Securities are then rated) in one of the four highest rating categories by a nationally recognized statistical rating organization (as used in Rule 15c3-1(c)(2)(vi)(F) under the Securities Exchange Act of 1934, as amended); and (v) the Company shall have given the Trustee an Officers' Certificate and an Opinion of Counsel to the effect that all conditions precedent to such extension provided for herein have been complied with. The Company shall have the right at any time and from time to time during the term of this Note to extend the interest payment period of such Note for up to 20 consecutive quarters but not beyond the Stated Maturity of this Note (each, an Extension Period), during which periods unpaid interest (together with interest thereon) will compound quarterly at the Interest Rate (Deferred Interest). Upon the termination of each Extension Period, which shall be an Interest Payment Date, the Company shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person in whose name this Note is registered at the close of business on the Regular Record Date for such Interest Payment Date, provided that any Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Prior to the termination of any such Extension Period, the Company may further extend the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof shall not exceed 20 consecutive quarters. Upon the termination of any such Extension Period, and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may select a new Extension Period, subject to the above requirements. During any such Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, or make any guarantee payments with respect to the foregoing or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to this Note. The Company shall give the Holder of this Note and the Trustee notice of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Regular Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate or (ii) the date the Company or Securities Trust is required to give notice to the New York Stock Exchange or other applicable self- regulatory organization of the record date or the date distributions are payable. The Company also shall be obligated to pay to the United States or other taxing authority when due all additional amounts as may be required so that the net amount received and retained by the Holder (if the Holder is a Securities Trust) after paying taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United Exhibit A - Page 3 States or any other taxing authority will not be less than the amounts such Holder would have received had no such taxes, duties, assessments, or other governmental charges been imposed. Payment of the principal of and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of the Series A Notes shall be made upon surrender of the Series A Notes at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto. The indebtedness evidenced by this Note is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Indenture), and this Note is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. [REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.] Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. Exhibit A - Page 4 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: , 1995 --------- -- VIRGINIA ELECTRIC AND POWER COMPANY By: -------------------------------- [President/Vice President] Attest: By: -------------------------------- [Corporate Secretary/Assistant Corporate Secretary] [SEAL OF VIRGINIA ELECTRIC AND POWER COMPANY APPEARS HERE] Exhibit A - Page 5 [VIRGINIA ELECTRIC AND POWER COMPANY Series A [ %] Junior Subordinated Note Reverse of Note, if applicable] This Note is one of a duly authorized issue of Junior Subordinated Notes of the Company, issued and issuable in one or more series under a Subordinated Note Indenture, dated as of ___________ ___, 1995, as supplemented (the Indenture), between the Company and Chemical Bank, as Trustee (the Trustee, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes issued thereunder and of the terms upon which said Notes are, and are to be, authenticated and delivered. Capitalized terms used herein and not defined herein shall have the respective meanings assigned to them in the Indenture. This Note is one of the series designated [on the face hereof] as Series A [ %] Junior Subordinated Notes, due September 30, 2025, subject to extension (the Notes) in aggregate principal amount of up to $[ ]. The Company shall have the right, subject to the terms and conditions of the Indenture, to redeem this Note at any time on or after September 30, 2000 at the option of the Company, without premium or penalty, in whole or in part, at a Redemption Price equal to 100% of the principal amount to be redeemed plus accrued but unpaid interest, including any Additional Interest, if any, to the Redemption Date. Upon the occurrence of a Special Event (as defined below), the Company may, within 90 days following the occurrence thereof and subject to the terms and conditions of the Indenture, redeem this Note without premium or penalty, in whole, at a Redemption Price equal to 100% of the principal amount thereof plus accrued but unpaid interest, including any Additional Interest, if any, to the Redemption Date provided, however, that if at the time of the occurrence of the Special Event, there is available to the Company or the related Securities Trust the opportunity to eliminate, within such 90-day period, the Special Event by taking some ministerial action or some other similar reasonable measure which would have no adverse effect on the Securities Trust, the Company or the holders of Trust Securities, the Company or the Securities Trust, as the case may be, will pursue such measure in lieu of redemption. A Special Event may be a Tax Event or an Investment Company Act Event. "Tax Event" means that the Company shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, laws (or any regulation thereunder) of the United States or any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of such laws or regulations, there is more than an insubstantial risk that (i) the related Securities Trust would be subject to United States federal income tax with respect to income accrued or received on the Notes, (ii) interest payable to the related Securities Trust would not be deductible by the Company for United States federal income tax purposes or (iii) the related Securities Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges, which change or amendment becomes effective on or after the Original Issue Date. "Investment Company Act Event" means that the Company shall have received an Opinion of Counsel to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental Exhibit A - Page 6 agency or regulatory authority, there is more than an insubstantial risk that the related Securities Trust is or will be considered an "investment company" which is required to be registered under the Investment Company Act of 1940, as amended, which change becomes effective on or after the Original Issue Date. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof. The Notes will not have a sinking fund. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Notes at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Exhibit A - Page 7 Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Notes are issuable only in registered form without coupons in denominations of $25 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes are exchangeable for a like aggregate principal amount of Notes of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Note or Notes to be exchanged at the office or agency of the Company. This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York. Exhibit A - Page 8 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT--_________ TEN ENT -- as tenants by the entireties (Cust) JT TEN -- as joint tenants with rights of Custodian __________ survivorship and not as tenants (Minor) in common Under Uniform Gifts to Minors Act __________________________ (State)
Additional abbreviations may also be used though not on the above list. ----------------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), and transfer(s) unto (Please insert social security or other identifying number of assignee) - ------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- the within Note and all rights thereunder, hereby irrevocably constituting and appointing - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- agent to transfer said Note on the books of the Company, with full power of substitution in the premises. Dated: ------------------------- ---------------------------------------- ------------------------------------------------- NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement, or any change whatever. Exhibit A - Page 9 Exhibit B This is one of the Junior Subordinated Notes of the series designated therein referred to in the within-mentioned Indenture. CHEMICAL BANK By ------------------- Authorized Officer Exhibit B - Page 1 EX-4.B 4 FORM OF SUPP. JR. SUB. IND.-RETAIL Exhibit 4(b) ================================================================================ VIRGINIA ELECTRIC AND POWER COMPANY TO THE CHASE MANHATTAN BANK Trustee. ------------------- _______________ Supplemental Indenture Dated as of __________ ___, 199_ ------------------- $________________________ ___% Quarterly Income Capital Securities (Series ___ Junior Subordinated Debentures Due __________ ___, 20___) ================================================================================ TABLE OF CONTENTS/(1)/ Page ---- ARTICLE 1 Series ___ Junior Subordinated Debentures Section 101. Establishment.............................................. 1 Section 102. Definitions................................................ 2 Section 103. Payment of Principal and Interest.......................... 2 Section 104. Deferral of Interest Payments.............................. 3 Section 105. Denominations.............................................. 4 Section 106. Global Securities.......................................... 4 Section 107. Transfer................................................... 5 Section 108. Redemption................................................. 5 ARTICLE 2 Miscellaneous Provisions Section 201. Recitals by Company........................................ 5 Section 202. Ratification and Incorporation of Original Indenture....... 6 Section 203. Executed in Counterparts................................... 6 ARTICLE 3 Amendments to Original Indenture Section 301. Amendments to Original Indenture........................... 6 - ------------------------ /1/ This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions. i ____________ SUPPLEMENTAL INDENTURE dated the ______ day of _________, 199_, by and between VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia public service corporation, One James River Plaza, Richmond Virginia 23219 (the Company), and THE CHASE MANHATTAN BANK, (formerly known as Chemical Bank), 450 West 33rd Street, New York, New York, 10001 (the Trustee). The Company has heretofore entered into a Subordinated Note Indenture dated August 1, 1995 (the Original Indenture) with the Trustee. The Original Indenture is incorporated herein by this reference and the Original Indenture as supplemented and amended by this _________ Supplemental Indenture is herein called the "Indenture." Under the Original Indenture, a new series of Debentures may at any time be established by the Board of Directors of the Company in accordance with the provisions of the Original Indenture and the terms of such series may be described by a supplemental indenture executed by the Company and the Trustee. The Company proposes to create under the Indenture, a new series of Debentures. Additional securities of other series hereafter established, except as may be limited in the Subordinated Note Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified. All conditions necessary to authorize the execution and delivery of this ______ Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed. NOW, THEREFORE, THIS INDENTURE WITNESSETH, ARTICLE 1 Series ___ Junior Subordinated Debentures Section 101. Establishment. There is hereby established a new series of securities to be issued under the Indenture, to be designated as the Company's Series ___ _____% Junior Subordinated Debentures due ____________ ___, 20__ (the Debentures). There are to be authenticated and delivered $___________ principal amount of Debentures, and no further Debentures shall be authenticated and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture. The Debentures shall be initially issued in the form of a fully registered Global Security. The Debentures shall be in substantially the form set out in Exhibit A --------- hereto. The form of the Trustee's Certificate of Authentication for the Debentures shall be in substantially the form set forth in Exhibit B hereto. --------- Each Debenture shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for. Section 102. Definitions. "Deferred Interest" means each installment of interest not paid during any Extension Period, and interest thereon. Deferred installments of interest shall bear interest at the rate of ____% per annum from the applicable Interest Payment Date to the date of payment, compounded quarterly on each Interest Payment Date. "Extension Period" means any period during which the Company has elected to defer payments of interest, which deferral may be for a period of up to twenty consecutive quarters. "Interest Payment Dates" means March 31, June 30, September 30 and December 31, commencing _______________ ___, 199_. "Junior Subordinated Debentures" means Junior Subordinated Notes, as defined in the Original Indenture. "Original Issue Date" means _______________ __, 199_. "Regular Record Date" means, with respect to each Interest Payment Date, the close of business on the Business Day immediately preceding such Interest Payment Date; provided, that if certificated Debentures are issued then the Regular Record Date shall mean, with respect to each Interest Payment Date, the close of business on the fifteenth calendar day preceding such Interest Payment Date. "Stated Maturity" means ________ ___, 20__. Section 103. Payment of Principal and Interest. The unpaid principal amount of the Debentures shall bear interest at the rate of ____% per annum until paid or duly provided for. Interest shall be paid quarterly in arrears on each Interest Payment Date to the Person in whose name the Debentures are registered on the Regular Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity of principal or on a Redemption Date as provided herein will be paid to the person to whom principal is payable. Any such interest that is not (i) so punctually paid or duly provided for, or (ii) subject to an Extension Period will forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Debentures are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the -2- the Trustee, notice whereof shall be given to Holders of the Debentures not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Debentures shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture. Payments of interest on the Debentures will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for the Debentures shall be computed and paid 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 Debentures is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day that is a Business Day, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. Payment of the principal of and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of the Debentures shall be made upon surrender of the Debentures at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto. Section 104. Deferral of Interest Payments. So long as no Event of Default has occurred and is continuing, the Company has the right at any time and from time to time to extend the interest payment period of the Debentures for up to 20 consecutive quarters (each, an Extension Period), but not beyond the Stated Maturity. Prior to the termination of any such Extension Period, the Company may further extend the interest payment period, provided that such Extension Period, together with all such previous and further extensions of that Extension Period, shall not exceed 20 consecutive quarters. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may select a new Extension Period, subject to the above limitations and requirements. Upon the termination of any Extension Period, which termination shall be on an Interest Payment Date, the Company shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person in whose name the Debentures are registered on the Regular Record Date for such Interest Payment Date, provided that Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. During any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any -3- of its capital stock or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, and (c) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans). The Company shall give the Holder or Holders of the Debentures and the Trustee notice, as provided in Sections 105 and 106, respectively, of the Original Indenture, of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Regular Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate, or (ii) the date the Company is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization of the record date or the date such payments are payable. At the time any of the foregoing notices are given to the Trustee, the Company shall give to the Paying Agent for the Debentures such information as said Paying Agent shall reasonably require in order to fulfill tax reporting obligations with respect to such Debentures. Section 105. Denominations. The Debentures may be issued in the denominations of $25, or integral multiples thereof. Section 106. Global Securities. The Debentures will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Debentures represented by the Global Securities will not be exchangeable for, and will not otherwise be issuable as, Debentures in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee. Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Debenture shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. The rights of Holders of such Global Security shall be exercised only through the Depositary. A Global Security shall be exchangeable for Debentures registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Company within 90 days of such notice, -4- or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Company within 90 days after it becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable or (iii) there shall have occurred an Event of Default with respect to the Debentures. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Debentures registered in such names as the Depositary shall direct. Section 107. Transfer. No service charge will be made for any transfer or exchange of Debentures, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. The Company shall not be required (a) to issue, transfer or exchange any Debentures during a period beginning at the opening of business 15 days before the day of the mailing of a notice identifying the serial numbers of the Debentures to be called for redemption, and ending at the close of business on the day of the mailing, or (b) to transfer or exchange any Debentures theretofore selected for redemption in whole or in part, except the unredeemed portion of any Debenture redeemed in part. Section 108. Redemption. The Debentures will be redeemable at the option of the Company, in whole or in part, at any time on or after ___________ __, 20__ and prior to maturity, at a Redemption Price in an amount equal to 100% of the principal amount to be redeemed together with accrued interest, including Additional Interest, to the Redemption Date. If a partial redemption would result in a delisting of the Debentures from any national securities exchange on which the Debentures are then listed, the Company may redeem the Debentures only in whole. In the event of redemption of the Debentures in part only, a new Debenture or Debentures for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof. The Debentures will not have a sinking fund. Notice of redemption shall be given as provided in Section 1104 of the Original Indenture. Any redemption of less than all of the Debentures shall, with respect to the principal thereof, be divisible by $25. -5- ARTICLE 2 Miscellaneous Provisions Section 201. Recitals by Company. The recitals in this _________ Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Debentures and of this ________ Supplemental Indenture as fully and with like effect as if set forth herein in full. Section 202. Ratification and Incorporation of Original Indenture. As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture, as heretofore supplemented and modified, and this _______ Supplemental Indenture shall be read, taken and construed as one and the same instrument. Section 203. Executed in Counterparts. This ______ Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. ARTICLE 3 Amendments to Original Indenture Section 301. Amendments to Original Indenture. The following amendments to the Original Indenture shall be in effect with respect to the Debentures only. (a) Article Four of the Original Indenture is hereby amended by the deletion of Section 402 in its entirety and the addition of the following Section 402 through Section 406, to read in their entirety as follows: Section 402. Legal Defeasance. In addition to discharge of this Indenture pursuant to Section 401, in the case of any Junior Subordinated Notes with respect to which the exact amount described in subparagraph (a) of Section 404 can be determined at the time of making the deposit referred to in such subparagraph (a), the Company shall be deemed to have paid and discharged the entire indebtedness on all such Junior Subordinated Notes as provided in this Section on and after the date the conditions set forth in Section 404 are satisfied, and the provisions of this Indenture with respect to such Junior Subordinated Notes shall no longer be in effect (except as to (i) rights of registration of transfer and exchange of Junior Subordinated Notes, (ii) substitution of mutilated, destroyed, lost or stolen Junior Subordinated Notes, (iii) rights of Holders of -6- Junior Subordinated Notes to receive, solely from the trust fund described in subparagraph (a) of Section 404, payments of principal thereof and interest, if any, thereon upon each date that such principal and interest, if any, is due and payable (but not upon acceleration), (iv) the rights, obligations, duties and immunities of the Trustee, (v) this Section 402 and (vi) the rights of the Holders of Junior Subordinated Notes as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them) (hereinafter called Legal Defeasance), and the Trustee at the cost and expense of the Company, shall execute proper instruments acknowledging the same. Section 403. Covenant Defeasance. In the case of any Junior Subordinated Notes with respect to which the exact amount described in subparagraph (a) of Section 404 can be determined at the time of making the deposit referred to in such subparagraph (a), (i) the Company shall be released from its obligations under any covenants specified in or pursuant to this Indenture (except as to (i) rights of registration of transfer and exchange of Junior Subordinated Notes, (ii) substitution of mutilated, destroyed, lost or stolen Junior Subordinated Notes, (iii) rights of Holders of Junior Subordinated Notes to receive, from the Company pursuant to Section 1001, payments of principal thereof and interest, if any, thereon upon each date that such principal and interest, if any, is due and payable (but not upon acceleration), (iv) the rights, obligations, duties and immunities of the Trustee hereunder and (v) the rights of the Holders of Junior Subordinated Notes as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them), and (ii) the occurrence of any event specified in Section 501(5) (with respect to any of the covenants specified in or pursuant to this Indenture (except as aforesaid)) shall be deemed not to be or result in an Event of Default, in each case with respect to the Outstanding Junior Subordinated Notes as provided in this Section on and after the date the conditions set forth in Section 404 are satisfied (hereinafter called Covenant Defeasance), and the Trustee, at the cost and expense of the Company, shall execute proper instruments acknowledging the same. For this purpose, such Covenant Defeasance means that the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant (to the extent so specified in the case of Section 501(5)), whether directly or indirectly by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant -7- to any other provision herein or in any other document, but the remainder of this Indenture and the Junior Subordinated Notes shall be unaffected thereby. Section 404. Conditions to Legal Defeasance or Covenant Defeasance. The following shall be the conditions to application of either Section 402 or 403 to the Outstanding Junior Subordinated Notes: (a) with reference to Section 402 or 403, the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee as funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of Junior Subordinated Notes (i) cash in an amount, (ii) direct obligations of the United States of America, backed by its full faith and credit (U.S. Government Obligations), maturing as to principal and interest, if any, at such times and in such amounts as will ensure the availability of cash, (iii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America (Agency Obligations), maturing as to principal and interest, if any, at such times and in such amounts as will ensure the availability of cash, or (iv) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the principal of and interest, if any, on all related Junior Subordinated Notes on each date that such principal or interest, if any, is due and payable; (b) in the case of Legal Defeasance under Section 402, the Company has delivered to the Trustee an Opinion of Counsel based on the fact that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y), since the date hereof, there has been a -8- change in the applicable United States federal income tax law, in either case to the effect that, and such opinion shall confirm that, the Holders of the Junior Subordinated Notes of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and Legal Defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and Legal Defeasance had not occurred; (c) in the case of Covenant Defeasance under Section 403, the Company has delivered to the Trustee an Opinion of Counsel to the effect that, and such opinion shall confirm that, the Holders of the Junior Subordinated Notes will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and Covenant Defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and Covenant Defeasance had not occurred; (d) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any agreement or instrument to which the Company is a party or by which it is bound; and (e) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent contemplated by this provision have been complied with. Section 405. Application of Trust Money. Subject to the provisions of the last paragraph of Section 1003, all money, U.S. Government Obligations and Agency Obligations deposited with the Trustee pursuant to Section 401 or 404 shall be held in trust and such money and all money from such U.S. Government Obligations and Agency Obligations shall be applied by it, in accordance with the provisions of the Junior Subordinated Notes and this Indenture, to the payment, either -9- directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money, U.S. Government Obligations and Agency Obligations has been deposited with the Trustee. Section 406. Indemnity for U.S. Government Obligations. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations and Agency Obligations deposited pursuant to Section 404 or the principal or interest received in respect of such obligations other than any such tax, fee or other charge that by law is for the account of the Holders of Outstanding Junior Subordinated Notes. (b) The Original Indenture is hereby amended by replacing all references therein to Section 4.02 with a reference to Section 4.05; provided that this Section 3.01(b) of this _______________ Supplemental Indenture shall not apply to Section 3.01(a) hereof. -10- IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written. VIRGINIA ELECTRIC AND POWER COMPANY SEAL --------------------------- Vice President Attest: -------------------------------- Assistant Corporate Secretary THE CHASE MANHATTAN BANK SEAL --------------------------- Vice President Attest: -------------------------------- Senior Trust Officer -11- Exhibit A --------- No. [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), TO VIRGINIA ELECTRIC AND POWER COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]/1/ THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS, AND THIS SECURITY IS ISSUED SUBJECT TO THE PROVISIONS OF THE INDENTURE WITH RESPECT THERETO. VIRGINIA ELECTRIC AND POWER COMPANY __% Quarterly Income Capital Securities (Series __ _____% Junior Subordinated Debentures Due __________ __, 20__) Principal Amount: Regular Record Date: Subject to the Original Issue Date: provisions of the Indenture Stated Maturity: _________ __, 20__, referred to herein, the Interest Rate: Business Day immediately prior to Interest Payment Date Authorized Denomination: $25 and integral Interest Payment Dates: March 31 multiples thereof June 30 September 30 December 31 Initial Redemption Date: ___________, 20__ - ----------------------------- /1/ The bracketed language would apply to and appear on only a Global Security. Exhibit A - Page 1 Virginia Electric and Power Company, a public service corporation duly organized and existing under the laws of the Commonwealth of Virginia (the Company, which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to or registered assigns, the principal sum of on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on each Interest Payment Date as specified above, commencing on the Interest Payment Date next succeeding the Original Issue Date shown above and on the Stated Maturity (or upon earlier redemption) at the rate per annum shown above until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Debenture (the Debenture) is registered at the close of business on the Regular Record Date as specified above next preceding such Interest Payment Date, provided that any interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Debenture is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Debentures of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Debentures of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture. Payments of interest on this Debenture will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Debenture shall be computed and paid 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 this Debenture is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. A "Business Day" shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee is closed for business. Exhibit A - Page 2 The Company shall have the right at any time and from time to time during the term of this Debenture to extend the interest payment period of such Debenture for up to 20 consecutive quarters but not beyond the Stated Maturity of this Debenture (each, an Extension Period), during which periods unpaid interest (together with interest thereon) will compound quarterly at the Interest Rate (Deferred Interest). Upon the termination of each Extension Period, which shall be an Interest Payment Date, the Company shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person in whose name this Debenture is registered at the close of business on the Regular Record Date for such Interest Payment Date, provided that any Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Prior to the termination of any such Extension Period, the Company may further extend the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof shall not exceed 20 consecutive quarters. Upon the termination of any such Extension Period, and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may select a new Extension Period, subject to the above requirements. During any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, and (c) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans). The Company shall give the Holder of this Debenture and the Trustee notice of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Regular Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate or (ii) the date the Company is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization of the record date or the date payments are payable. Payment of the principal of and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of the Debentures shall be made upon surrender of the Debentures at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto. The indebtedness evidenced by this Debenture is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Indenture), and this Debenture is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Debenture, by accepting the same, Exhibit A - Page 3 (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS DEBENTURE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Debenture shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. Exhibit A - Page 4 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: ______________ ___, 199_ VIRGINIA ELECTRIC AND POWER COMPANY By: ---------------------------------------- [President/Vice President] Attest: By: ---------------------------------------- [Corporate Secretary/Assistant Corporate Secretary] [Seal of VIRGINIA ELECTRIC AND POWER COMPANY appears here] Exhibit A - Page 5 VIRGINIA ELECTRIC AND POWER COMPANY Series __ __ % Junior Subordinated Debenture Due 20__ This Debenture is one of a duly authorized issue of Junior Subordinated Notes of the Company (the Junior Subordinated Notes), issued and issuable in one or more series under a Subordinated Note Indenture, dated as of August 1, 1995, as supplemented (the Indenture), between the Company The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (the Trustee, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debentures issued thereunder and of the terms upon which said Debentures are, and are to be, authenticated and delivered. Capitalized terms used herein and not defined herein shall have the respective meanings assigned to them in the Indenture. This Debenture is one of the series designated on the face hereof as Series __ __ % Junior Subordinated Debentures, due ____________ __, 20__, (the Debentures) in aggregate principal amount of $____________. The Debentures will be redeemable at the option of the Company, in whole or in part, at any time on or after ___________ __, 20__ and prior to maturity, at a Redemption Price in an amount equal to 100% of the principal amount to be redeemed together with accrued interest, including Additional Interest, to the Redemption Date. If a partial redemption would result in a delisting of the Debentures from any national securities exchange on which the Debentures are then listed, the Company may redeem the Debentures only in whole. The Debentures will not have a sinking fund. Notice of redemption shall be given as provided in Section 1104 of the Indenture. In the event of redemption of this Debenture in part only, a new Debenture or Debentures for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof. If an Event of Default with respect to the Debentures shall occur and be continuing, the principal of the Debentures may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Junior Subordinated Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Junior Subordinated Notes at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Junior Subordinated Notes of each series at the time Outstanding, on behalf of the Holders of all Junior Subordinated Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debenture shall be conclusive and binding upon such Holder and upon all future Holders of this Debenture and of any Debenture issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Debenture. Exhibit A - Page 6 No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Debenture at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Debenture is registrable in the Security Register, upon surrender of this Debenture for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Debentures, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Debenture for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Debenture is registered as the owner hereof for all purposes, whether or not this Debenture be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Debentures are issuable only in registered form without coupons in denominations of $25 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Debentures are exchangeable for a like aggregate principal amount of Debentures of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Debenture or Debentures to be exchanged at the office or agency of the Company. This Debenture shall be governed by, and construed in accordance with, the internal laws of the State of New York. Exhibit A - Page 7 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT--_________ TEN ENT -- as tenants by the entireties (Cust) JT TEN -- as joint tenants with rights of Custodian __________ survivorship and not as tenants (Minor) in common Under Uniform Gifts to Minors Act _________________________ (State) Additional abbreviations may also be used though not on the above list. _____________________________ FOR VALUE RECEIVED, the undersigned hereby sell(s), and transfer(s) unto (Please insert social security or other identifying number of assignee) ________________________________________________________________________________ PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE ________________________________________________________________________________ ________________________________________________________________________________ the within Debenture and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________________________________________________ ________________________________________________________________________________ agent to transfer said Debenture on the books of the Company, with full power of substitution in the premises. Dated:______________________ ________________________________________ ________________________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement, or any change whatever. Exhibit A - Page 8 Exhibit B This is one of the Junior Subordinated Notes of the series designated therein referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By -------------------------------- Authorized Officer Exhibit B - Page 1 EX-4.C 5 FORM OF SUPP. JR. SUB. IND. INSTITUTIONAL Exhibit 4(c) ================================================================================ VIRGINIA ELECTRIC AND POWER COMPANY TO THE CHASE MANHATTAN BANK Trustee. ------------------- _______________ Supplemental Indenture Dated as of __________ ___, 199_ ------------------- $________________________ ___% Subordinated Capital Income Securities (Series ___ Junior Subordinated Debentures Due __________ ___, 20___) ================================================================================ TABLE OF CONTENTS/1/ Page ---- ARTICLE 1 Series ___ Junior Subordinated Debentures Section 101. Establishment.......................................... 1 Section 102. Definitions............................................ 2 Section 103. Payment of Principal and Interest...................... 2 Section 104. Deferral of Interest Payments.......................... 3 Section 105. Denominations.......................................... 4 Section 106. Global Securities...................................... 4 Section 107. Transfer............................................... 5 Section 108. Redemption............................................. 5 ARTICLE 2 Miscellaneous Provisions Section 201. Recitals by Company.................................... 6 Section 202. Ratification and Incorporation of Original Indenture... 6 Section 203. Executed in Counterparts............................... 6 ARTICLE 3 Amendments to Original Indenture Section 301. Amendments to Original Indenture....................... 6 - -------------------------- /1/ This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions. -i- ____________ SUPPLEMENTAL INDENTURE dated the ______ day of _________, 199_, by and between VIRGINIA ELECTRIC AND POWER COMPANY, a Virginia public service corporation, One James River Plaza, Richmond Virginia 23219 (the Company), and THE CHASE MANHATTAN BANK (formerly known as Chemical Bank), 450 West 33rd Street, New York, New York, 10001 (the Trustee). The Company has heretofore entered into a Subordinated Note Indenture dated August 1, 1995 (the Original Indenture) with the Trustee. The Original Indenture is incorporated herein by this reference and the Original Indenture as supplemented and amended by this _________ Supplemental Indenture is herein called the "Indenture." Under the Original Indenture, a new series of Debentures may at any time be established by the Board of Directors of the Company in accordance with the provisions of the Original Indenture and the terms of such series may be described by a supplemental indenture executed by the Company and the Trustee. The Company proposes to create under the Indenture, a new series of Debentures. Additional securities of other series hereafter established, except as may be limited in the Subordinated Note Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified. All conditions necessary to authorize the execution and delivery of this ______ Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed. NOW, THEREFORE, THIS INDENTURE WITNESSETH, ARTICLE 1 Series ___ Junior Subordinated Debentures Section 101. Establishment. There is hereby established a new series of securities to be issued under the Indenture, to be designated as the Company's Series ___ _____% Junior Subordinated Debentures due ____________ ___, 20__ (the Debentures). There are to be authenticated and delivered $___________ principal amount of Debentures, and no further Debentures shall be authenticated and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture. The Debentures shall be initially issued in the form of a fully registered Global Security. The Debentures shall be in substantially the form set out in Exhibit A --------- hereto. The form of the Trustee's Certificate of Authentication for the Debentures shall be in substantially the form set forth in Exhibit B hereto. --------- Each Debenture shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for. Section 102. Definitions. "Deferred Interest" means each installment of interest not paid during any Extension Period, and interest thereon. Deferred installments of interest shall bear interest at the rate of ____% per annum from the applicable Interest Payment Date to the date of payment, compounded semi-annually on each Interest Payment Date. "Extension Period" means any period during which the Company has elected to defer payments of interest, which deferral may be for a period of up to ten consecutive semi-annual periods. "Interest Payment Dates" means June 30 and December 31, commencing _______________ ___, 199_. "Junior Subordinated Debentures" means Junior Subordinated Notes, as defined in the Original Indenture. "Original Issue Date" means _______________ __, 199_. "Regular Record Date" means, with respect to each Interest Payment Date, the close of business on the Business Day immediately preceding such Interest Payment Date; provided, that if certificated Debentures are issued then the Regular Record Date shall mean, with respect to each Interest Payment Date, the close of business on the fifteenth calendar day preceding such Interest Payment Date. "Stated Maturity" means ________ ___, 20__. Section 103. Payment of Principal and Interest. The unpaid principal amount of the Debentures shall bear interest at the rate of ____% per annum until paid or duly provided for. Interest shall be paid semi-annually in arrears on each Interest Payment Date to the Person in whose name the Debentures are registered on the Regular Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity of principal or on a Redemption Date as provided herein will be paid to the person to whom principal is payable. Any such interest that is not (i) so punctually paid or duly provided for, or (ii) subject to an Extension Period will forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Debentures are registered at the close of -2- business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Debentures not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Debentures shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture. Payments of interest on the Debentures will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for the Debentures shall be computed and paid 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 Debentures is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day that is a Business Day, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. Payment of the principal of and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of the Debentures shall be made upon surrender of the Debentures at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto. Section 104. Deferral of Interest Payments. So long as no Event of Default has occurred and is continuing, the Company has the right at any time and from time to time to extend the interest payment period of the Debentures for up to 10 consecutive semi-annual periods (each, an Extension Period), but not beyond the Stated Maturity. Prior to the termination of any such Extension Period, the Company may further extend the interest payment period, provided that such Extension Period, together with all such previous and further extensions of that Extension Period, shall not exceed 10 consecutive semi-annual periods. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may select a new Extension Period, subject to the above limitations and requirements. Upon the termination of any Extension Period, which termination shall be on an Interest Payment Date, the Company shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person in whose name the Debentures are registered on the Regular Record Date for such Interest Payment Date, provided that Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. -3- During any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, and (c) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans). The Company shall give the Holder or Holders of the Debentures and the Trustee notice, as provided in Sections 105 and 106, respectively, of the Original Indenture, of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Regular Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate, or (ii) the date the Company is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization of the record date or the date such payments are payable. At the time any of the foregoing notices are given to the Trustee, the Company shall give to the Paying Agent for the Debentures such information as said Paying Agent shall reasonably require in order to fulfill tax reporting obligations with respect to such Debentures. Section 105. Denominations. The Debentures may be issued in the denominations of $1,000, or integral multiples thereof. Section 106. Global Securities. The Debentures will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Debentures represented by the Global Securities will not be exchangeable for, and will not otherwise be issuable as, Debentures in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee. Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Debenture shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. The rights of Holders of such Global Security shall be exercised only through the Depositary. A Global Security shall be exchangeable for Debentures registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company -4- that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Company within 90 days of such notice, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Company within 90 days after it becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable or (iii) there shall have occurred an Event of Default with respect to the Debentures. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Debentures registered in such names as the Depositary shall direct. Section 107. Transfer. No service charge will be made for any transfer or exchange of Debentures, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. The Company shall not be required (a) to issue, transfer or exchange any Debentures during a period beginning at the opening of business 15 days before the day of the mailing of a notice identifying the serial numbers of the Debentures to be called for redemption, and ending at the close of business on the day of the mailing, or (b) to transfer or exchange any Debentures theretofore selected for redemption in whole or in part, except the unredeemed portion of any Debenture redeemed in part. Section 108. Redemption. The Debentures will not be redeemable prior to _______________ __, 20__. Thereafter, the Debentures will be redeemable at the option of the Company, in whole or in part, at any time on or after ________ __, 20__ at the following Redemption Prices (in each case expressed in percentages of principal amount):
If Redeemed During 12 Month Redemption Period Beginning _______ __, Prices ---------------------------- ---------- 20__.................................................. % 20__.................................................. % 20__.................................................. % 20__.................................................. % 20__.................................................. % 20__.................................................. % 20__.................................................. % 20__.................................................. % 20__.................................................. % 20__.................................................. % 20__ and thereafter................................... 100.000%
in each case, together with accrued interest, including Additional Interest, to the Redemption Date. -5- In the event of redemption of the Debentures in part only, a new Debenture or Debentures for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof. The Debentures will not have a sinking fund. Notice of redemption shall be given as provided in Section 1104 of the Original Indenture. Any redemption of less than all of the Debentures shall, with respect to the principal thereof, be divisible by $1,000. ARTICLE 2 Miscellaneous Provisions Section 201. Recitals by Company. The recitals in this _________ Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Debentures and of this ________ Supplemental Indenture as fully and with like effect as if set forth herein in full. Section 202. Ratification and Incorporation of Original Indenture. As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture, as heretofore supplemented and modified, and this _______ Supplemental Indenture shall be read, taken and construed as one and the same instrument. Section 203. Executed in Counterparts. This ______ Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. ARTICLE 3 Amendments to Original Indenture Section 301. Amendments to Original Indenture. The following amendments to the Original Indenture shall be in effect with respect to the Debentures only. (a) Article Four of the Original Indenture is hereby amended by the deletion of Section 402 in its entirety and the addition of the following Section 402 through Section 406, to read in their entirety as follows: Section 402. Legal Defeasance. -6- In addition to discharge of this Indenture pursuant to Section 401, in the case of any Junior Subordinated Notes with respect to which the exact amount described in subparagraph (a) of Section 404 can be determined at the time of making the deposit referred to in such subparagraph (a), the Company shall be deemed to have paid and discharged the entire indebtedness on all such Junior Subordinated Notes as provided in this Section on and after the date the conditions set forth in Section 404 are satisfied, and the provisions of this Indenture with respect to such Junior Subordinated Notes shall no longer be in effect (except as to (i) rights of registration of transfer and exchange of Junior Subordinated Notes, (ii) substitution of mutilated, destroyed, lost or stolen Junior Subordinated Notes, (iii) rights of Holders of Junior Subordinated Notes to receive, solely from the trust fund described in subparagraph (a) of Section 404, payments of principal thereof and interest, if any, thereon upon each date that such principal and interest, if any, is due and payable (but not upon acceleration), (iv) the rights, obligations, duties and immunities of the Trustee, (v) this Section 402 and (vi) the rights of the Holders of Junior Subordinated Notes as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them) (hereinafter called Legal Defeasance), and the Trustee at the cost and expense of the Company, shall execute proper instruments acknowledging the same. Section 403. Covenant Defeasance. In the case of any Junior Subordinated Notes with respect to which the exact amount described in subparagraph (a) of Section 404 can be determined at the time of making the deposit referred to in such subparagraph (a), (i) the Company shall be released from its obligations under any covenants specified in or pursuant to this Indenture (except as to (i) rights of registration of transfer and exchange of Junior Subordinated Notes, (ii) substitution of mutilated, destroyed, lost or stolen Junior Subordinated Notes, (iii) rights of Holders of Junior Subordinated Notes to receive, from the Company pursuant to Section 1001, payments of principal thereof and interest, if any, thereon upon each date that such principal and interest, if any, is due and payable (but not upon acceleration), (iv) the rights, obligations, duties and immunities of the Trustee hereunder and (v) the rights of the Holders of Junior Subordinated Notes as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them), and (ii) the occurrence of any event specified in Section 501(5) (with respect to any of the covenants specified in or -7- pursuant to this Indenture (except as aforesaid)) shall be deemed not to be or result in an Event of Default, in each case with respect to the Outstanding Junior Subordinated Notes as provided in this Section on and after the date the conditions set forth in Section 404 are satisfied (hereinafter called Covenant Defeasance), and the Trustee, at the cost and expense of the Company, shall execute proper instruments acknowledging the same. For this purpose, such Covenant Defeasance means that the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant (to the extent so specified in the case of Section 501(5)), whether directly or indirectly by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document, but the remainder of this Indenture and the Junior Subordinated Notes shall be unaffected thereby. Section 404. Conditions to Legal Defeasance or Covenant Defeasance. The following shall be the conditions to application of either Section 402 or 403 to the Outstanding Junior Subordinated Notes: (a) with reference to Section 402 or 403, the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee as funds in trust, for the purpose of making the following payments specifically pledged as security for, and dedicated solely to, the benefit of the Holders of Junior Subordinated Notes (i) cash in an amount, (ii) direct obligations of the United States of America, backed by its full faith and credit (U.S. Government Obligations), maturing as to principal and interest, if any, at such times and in such amounts as will ensure the availability of cash, (iii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America (Agency Obligations), maturing as to principal and interest, if any, at such times and in such amounts as will ensure the availability of cash, or (iv) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the principal of and interest, if any, on all -8- related Junior Subordinated Notes on each date that such principal or interest, if any, is due and payable; (b) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any agreement or instrument to which the Company is a party or by which it is bound; and (c) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent contemplated by this provision have been complied with. Section 405. Application of Trust Money. Subject to the provisions of the last paragraph of Section 1003, all money, U.S. Government Obligations and Agency Obligations deposited with the Trustee pursuant to Section 401 or 404 shall be held in trust and -9- such money and all money from such U.S. Government Obligations and Agency Obligations shall be applied by it, in accordance with the provisions of the Junior Subordinated Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money, U.S. Government Obligations and Agency Obligations has been deposited with the Trustee. Section 406. Indemnity for U.S. Government Obligations. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations and Agency Obligations deposited pursuant to Section 404 or the principal or interest received in respect of such obligations other than any such tax, fee or other charge that by law is for the account of the Holders of Outstanding Junior Subordinated Notes. (b) The Original Indenture is hereby amended by replacing all references therein to Section 4.02 with a reference to Section 4.05; provided that this Section 3.01(b) of this _________________ Supplemental Indenture shall not apply to Section 3.01(a) hereof. -10- IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written. VIRGINIA ELECTRIC AND POWER COMPANY SEAL _______________________________ Vice President Attest:________________________________ Assistant Corporate Secretary THE CHASE MANHATTAN BANK SEAL _____________________________ Vice President Attest:________________________________ Senior Trust Officer -11- Exhibit A --------- No. [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), TO VIRGINIA ELECTRIC AND POWER COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]/1/ THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS, AND THIS SECURITY IS ISSUED SUBJECT TO THE PROVISIONS OF THE INDENTURE WITH RESPECT THERETO. VIRGINIA ELECTRIC AND POWER COMPANY __% Subordinated Capital Income Securities (Series __ _____% Junior Subordinated Debentures Due __________ __, 20__) Principal Amount: Regular Record Date: Subject to the provisions of Original Issue Date: the Indenture referred to Stated Maturity: _________ __, 20__ herein, the Business Day Interest Rate: immediately prior to Interest Payment Date Authorized Interest Payment Dates: June 30 Denomination: $1,000 and integral December 31 multiples thereof Initial Redemption Date: ___________, 20__ - ------------------------ /1/ The bracketed language would apply to and appear on only a Global Security. Exhibit A - Page 1 Virginia Electric and Power Company, a public service corporation duly organized and existing under the laws of the Commonwealth of Virginia (the Company, which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to or registered assigns, the principal sum of on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on each Interest Payment Date as specified above, commencing on the Interest Payment Date next succeeding the Original Issue Date shown above and on the Stated Maturity (or upon earlier redemption) at the rate per annum shown above until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Debenture (the Debenture) is registered at the close of business on the Regular Record Date as specified above next preceding such Interest Payment Date, provided that any interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Debenture is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Debentures of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Debentures of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture. Payments of interest on this Debenture will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Debenture shall be computed and paid 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 this Debenture is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. A "Business Day" shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee is closed for business. Exhibit A - Page 2 The Company shall have the right at any time and from time to time during the term of this Debenture to extend the interest payment period of such Debenture for up to 10 consecutive semi-annual periods but not beyond the Stated Maturity of this Debenture (each, an Extension Period), during which periods unpaid interest (together with interest thereon) will compound quarterly at the Interest Rate (Deferred Interest). Upon the termination of each Extension Period, which shall be an Interest Payment Date, the Company shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person in whose name this Debenture is registered at the close of business on the Regular Record Date for such Interest Payment Date, provided that any Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Prior to the termination of any such Extension Period, the Company may further extend the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof shall not exceed 10 consecutive semi-annual periods. Upon the termination of any such Extension Period, and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may select a new Extension Period, subject to the above requirements. During any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, and (c) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans). The Company shall give the Holder of this Debenture and the Trustee notice of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Regular Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate or (ii) the date the Company is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization of the record date or the date payments are payable. Payment of the principal of and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of the Debentures shall be made upon surrender of the Debentures at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto. The indebtedness evidenced by this Debenture is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Indenture), and this Debenture is issued subject to the provisions Exhibit A - Page 3 of the Indenture with respect thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS DEBENTURE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Debenture shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. Exhibit A - Page 4 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: ______________ ___, 199_ VIRGINIA ELECTRIC AND POWER COMPANY By:________________________________ [President/Vice President] Attest: By:________________________________ [Corporate Secretary/Assistant Corporate Secretary] [Seal of VIRGINIA ELECTRIC AND POWER COMPANY appears here] Exhibit A - Page 5 VIRGINIA ELECTRIC AND POWER COMPANY Series __ __ % Junior Subordinated Debenture Due 20___ This Debenture is one of a duly authorized issue of Junior Subordinated Notes of the Company (the Junior Subordinated Notes), issued and issuable in one or more series under a Subordinated Note Indenture, dated as of August 1, 1995, as supplemented (the Indenture), between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (the Trustee, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Debentures issued thereunder and of the terms upon which said Debentures are, and are to be, authenticated and delivered. Capitalized terms used herein and not defined herein shall have the respective meanings assigned to them in the Indenture. This Debenture is one of the series designated on the face hereof as Series __ __ % Junior Subordinated Debentures, due ____________ __, 20__, (the Debentures) in aggregate principal amount of $____________. The Debentures are not redeemable prior to __________ __, 20__. Thereafter, the Debentures will be redeemable at the option of the Company, in whole or in part, at any time on or after ________ __, 20__ at the following Redemption Prices (in each case expressed in percentages of principal amount): If Redeemed During 12 Month Redemption Period Beginning ________ __, Prices ----------------------------- ---------- 20__................................................... % 20__................................................... % 20__................................................... % 20__................................................... % 20__................................................... % 20__................................................... % 20__................................................... % 20__................................................... % 20__................................................... % 20__................................................... % 20__ and thereafter................................. 100.000% in each case, together with accrued interest, including Additional Interest, to the Redemption Date. In the event of redemption of the Debentures in part only, a new Debenture or Debentures for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof. The Debentures will not have a sinking fund. Notice of redemption shall be given as provided in Section 1104 of the Indenture. Any redemption of less than all of the Debentures shall, with respect to the principal thereof, be divisible by $1,000. If an Event of Default with respect to the Debentures shall occur and be continuing, the principal of the Debentures may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. Exhibit A - Page 6 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Junior Subordinated Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Junior Subordinated Notes at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Junior Subordinated Notes of each series at the time Outstanding, on behalf of the Holders of all Junior Subordinated Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Debenture shall be conclusive and binding upon such Holder and upon all future Holders of this Debenture and of any Debenture issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Debenture. No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Debenture at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Debenture is registrable in the Security Register, upon surrender of this Debenture for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Debentures, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Debenture for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Debenture is registered as the owner hereof for all purposes, whether or not this Debenture be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Debentures are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Debentures are exchangeable for a like aggregate principal amount of Debentures of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Debenture or Debentures to be exchanged at the office or agency of the Company. This Debenture shall be governed by, and construed in accordance with, the internal laws of the State of New York. Exhibit A - Page 7 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT--_________ TEN ENT -- as tenants by the entireties (Cust) JT TEN -- as joint tenants with rights of Custodian __________ survivorship and not as tenants (Minor) in common Under Uniform Gifts to Minors Act _________________________ (State) Additional abbreviations may also be used though not on the above list. ----------------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), and transfer(s) unto (Please insert social security or other identifying number of assignee) ________________________________________________________________________________ PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE ________________________________________________________________________________ ________________________________________________________________________________ the within Debenture and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________________________________________________ ________________________________________________________________________________ agent to transfer said Debenture on the books of the Company, with full power of substitution in the premises. Dated:______________________ ____________________________________________ ____________________________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement, or any change whatever. Exhibit A - Page 8 Exhibit B This is one of the Junior Subordinated Notes of the series designated therein referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By_____________________________ Authorized Officer Exhibit B - Page 1 EX-5 6 OPINION AND CONSENT OF HUNTON & WILLIAMS Exhibit 5 [LETTERHEAD OF HUNTON & WILLIAMS] January 28, 1997 Virginia Electric and Power Company One James River Plaza Richmond, Virginia 23219 Virginia Electric and Power Company Shelf-Registration Statement on Form S-3 ---------------------------------------- Ladies and Gentlemen: We have acted as counsel to Virginia Electric and Power Company (the "Company") in connection with the preparation of a Registration Statement on Form S-3 (the "Registration Statement"), which has been filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), for the registration under the Act of up to $400 million aggregate principal amount of Junior Subordinated Debentures (the "Junior Subordinated Debentures"), issuable by the Company from time to time in one or more series. The Junior Subordinated Debentures will be issued pursuant to an indenture between the Company and the trustee named therein. We are of the opinion that the Company is a corporation duly organized and existing under the laws of Virginia, is duly qualified as a foreign corporation in West Virginia and North Carolina, and has the corporate power to conduct its business and to issue the Junior Subordinated Debentures. Virginia Electric and Power Company January 28, 1997 Page 2 We are further of the opinion that when the steps mentioned in the next paragraph below shall have been taken, (a) all requisite corporate and governmental authorizations will have been given for the issuance and sale of the Junior Subordinated Debentures (except such governmental authorization as may be necessary under the Blue Sky Laws of the several States), and (b) the Junior Subordinated Debentures will be valid, legal and binding obligations of the Company (subject to applicable bankruptcy, moratorium and similar laws from time to time in force and to general principles of equity, whether considered in a proceeding at law or in equity). The steps to be taken as indicated in the preceding paragraph are: (1) Authorization by the Board of Directors and Executive Committee of the Company and by the State Corporation Commission of Virginia for the Company to issue and sell the Junior Subordinated Debentures; (2) Compliance with the Act; and (3) Issuance and sale of the Junior Subordinated Debentures. We hereby consent to the statements made in regard to our firm under the caption VALIDITY OF SECURITIES in the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under section 7 of the Act, or the rules and regulations promulgated thereunder by the Securities and Exchange Commission. The opinions expressed in this letter are solely for your information and use, and no other person may rely upon or otherwise use the opinions for any purpose without our express written consent. Very truly yours, HUNTON & WILLIAMS EX-8 7 TAX OPINION OF HUNTON & WILLIAMS [HUNTON & WILLIAMS LETTERHEAD] Exhibit 8 January 28, 1997 Virginia Electric and Power Company One James River Plaza Richmond, Virginia 23219-3932 Virginia Electric and Power Company Registration Statement on Form S-3 Certain Federal Income Tax Matters ---------------------------------- Ladies and Gentlemen: We have acted as counsel to Virginia Electric and Power Company (the Company) in connection with the preparation of a Registration Statement on Form S-3 (the Registration Statement), which has been filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the Act), for the registration under the Act of $400 million aggregate principal amount of Junior Subordinated Debentures. The Junior Subordinated Debentures will be issued pursuant to an indenture between the Company and the trustee named therein, as supplemented and amended from time to time. We have reviewed copies of (1) the Registration Statement and the prospectus and forms of prospectus supplement included therein and (2) such other documents as we have deemed necessary or appropriate as a basis for the opinion set forth below. We understand that the Company intends to sell the Junior Subordinated Debentures described in the forms of prospectus supplement at an issue price equal to their principal amount and with a maturity date not more than 40 years from the issue date. Accordingly, for purposes of this opinion, we have assumed that such Junior Subordinated Debentures will be sold at an issue price equal to their principal amount and will have a maturity date not more than 40 years from the issue date. Based on the foregoing, we are of the opinion that the statements and legal conclusions contained in the forms of prospectus supplement under the caption "Certain Virginia Electric and Power Company January 28, 1997 Page 2 Federal Income Tax Consequences" are correct and that the discussion thereunder does not omit any material provision with respect to the matters covered. We consent to the filing of this opinion as an exhibit to the Registration Statement. We also consent to the reference to Hunton & Williams under the captions "Certain Federal Income Tax Consequences" and "Legal Matters" in the forms of prospectus supplement. In giving this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Act or the rules and regulations promulgated thereunder by the Securities and Exchange Commission. Very truly yours, HUNTON & WILLIAMS EX-12 8 COMPUTATION OF RATIO OF EARNINGS Exhibit 12 VIRGINIA ELECTRIC AND POWER COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (thousands of dollars)
For the Twelve Months Ended For the Year Ended September 30, December 31, 1996 1995 1994 1993 1992 1991 ---------- ---------- ---------- ---------- ---------- ---------- Net Income $ 449,595 $ 432,844 $ 447,144 $ 509,051 $ 469,521 $ 487,379 Add: Income Taxes 244,951 228,785 225,647 257,217 211,295 233,323 --------------------------------------------------------------------------- Total Pretax Net Income $ 694,546 $ 661,629 $ 672,791 $ 766,268 $ 680,816 $ 720,702 =========================================================================== Fixed Charges: Interest on Long-Term Debt 292,564 302,618 291,864 300,152 300,857 335,651 Other Interest 20,853 19,998 7,551 19,121 29,534 27,805 Pfd Distribution of Affiliate-Net 7,064 2,374 Estimated Interest Factor of Rents Charged to Operating Expenses, Clearing & Other Accounts 6,683 6,475 7,132 5,660 6,231 9,999 --------------------------------------------------------------------------- Total Fixed Charges $ 327,164 $ 331,465 $ 306,547 $ 324,933 $ 336,622 $ 373,455 =========================================================================== --------------------------------------------------------------------------- Earnings as Defined $1,021,710 $ 993,094 $ 979,339 $1,091,201 $1,017,438 $1,094,157 =========================================================================== Ratio of Earnings to Fixed Charges 3.12 3.00 3.19 3.36 3.02 2.93 ===========================================================================
EX-23.A 9 CONSENT OF DELOITTE & TOUCHE LLP EXHIBIT 23(a) INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Virginia Electric and Power Company on Form S-3 of our report dated February 2, 1996, appearing in the Annual Report on Form 10-K of Virginia Electric and Power Company for the year ended December 31, 1995 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. Deloitte & Touche LLP Richmond, Virginia January 28, 1997 EX-25 10 FORM T-1 STATEMENT OF ELIGIBILITY Exhibit 25 ------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ---------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) _____________________________________________ VIRGINIA ELECTRIC AND POWER COMPANY (Exact name of obligor as specified in its charter) VIRGINIA 54-0418825 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) ONE JAMES RIVER PLAZA RICHMOND, VIRGINIA 23261-6666 (Address of principal executive offices) (Zip Code) ------------------------------------------- JUNIOR SUBORDINATED DEBENTURES (Title of the indenture securities) ------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 14TH DAY OF JANUARY, 1997. THE CHASE MANHATTAN BANK By /s/ P. Kelly ____________________________ P. Kelly Vice President - 3 - Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 1996, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin............................................... $ 11,095 Interest-bearing balances....................................... 4,998 Securities: Held to maturity securities............................................ 3,231 Available for sale securities.......................................... 38,078 Federal Funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's: Federal funds sold................................................ 8,018 Securities purchased under agreements to resell................... 731 Loans and lease financing receivables: Loans and leases, net of unearned income.......................... $130,513 Less: Allowance for loan and lease losses......................... 2,938 Less: Allocated transfer risk reserve............................. 27 -------- Loans and leases, net of unearned income, allowance, and reserve............................................ 127,548 Trading Assets......................................................... 48,576 Premises and fixed assets (including capitalized leases)......................................................... 2,850 Other real estate owned................................................ 300 Investments in unconsolidated subsidiaries and associated companies............................................ 92 Customer's liability to this bank on acceptances outstanding..................................................... 2,777 Intangible assets...................................................... 1,361 Other assets.......................................................... 12,204 -------- TOTAL ASSETS......................................................... $261,859 ========
LIABILITIES
Deposits In domestic offices...................................................... $ 80,163 Noninterest-bearing...................................................... $ 30,596 Interest-bearing......................................................... 49,567 -------- In foreign offices, Edge and Agreement subsidiaries, and IBF's........... 65,173 Noninterest-bearing ..................................................... $3,616 Interest-bearing......................................................... 61,557 Federal funds purchased and securities sold under agree- ments to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's Federal funds purchased.................................................. 14,594 Securities sold under agreements to repurchase........................... 14,110 Demand notes issued to the U.S. Treasury.................................... 2,200 Trading liabilities......................................................... 30,136 Other Borrowed money: With a remaining maturity of one year or less............................ 16,895 With a remaining maturity of more than one year.......................... 449 Mortgage indebtedness and obligations under capitalized leases................................................................... 49 Bank's liability on acceptances executed and outstanding.................... 2,764 Subordinated notes and debentures........................................... 5,471 Other liabilities........................................................... 13,997 TOTAL LIABILITIES........................................................... 246,001 -------- Limited-Life Preferred stock and related surplus............................ 550 EQUITY CAPITAL Common stock................................................................ 1,209 Surplus..................................................................... 10,176 Undivided profits and capital reserves...................................... 4,385 Net unrealized holding gains (Losses) on available-for-sale securities............................................ (481) Cumulative foreign currency translation adjustments......................... 19 TOTAL EQUITY CAPITAL........................................................ 15,308 -------- TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK AND EQUITY CAPITAL................................................. $261,859 ========
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the in-structions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in-structions issued by the appropriate Federal regulatory authority and is true and correct. WALTER V. SHIPLEY ) EDWARD D. MILLER ) DIRECTORS THOMAS G. LABRECQUE ) EX-99.A 11 FORM OF PROS. SUPP.-RETAIL EXHIBIT 99(A) ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subject to Completion, Dated , 19 PROSPECTUS SUPPLEMENT (To Prospectus, dated , 19 ) $ VIRGINIA ELECTRIC AND POWER COMPANY QUICS(SM) % QUARTERLY INCOME CAPITAL SECURITIES (SERIES JUNIOR SUBORDINATED DEBENTURES DUE 20 ) ------------ The % Quarterly Income Capital Securities (Series Junior Subordinated Debentures Due 20 ) (the Capital Securities) are unsecured debt securities of Virginia Electric and Power Company (the Company), which will mature on , 20 . Interest on the Capital Securities is payable quarterly in arrears, on March 31, June 30, September 30 and December 31 of each year, commencing , 19 , except under circumstances described herein during which payment of interest on the Capital Securities may be deferred. The Capital Securities will be redeemable at the option of the Company, in whole or in part, on or after , 20 at 100% of the principal amount to be redeemed together with accrued interest to the redemption date. The Capital Securities will be available for purchase in denominations of $25.00 and any integral multiple thereof. Each $25.00 principal amount of Capital Securities is referred to herein as a "Capital (continued on next page) SEE "RISK FACTORS" BEGINNING ON PAGE S- HEREOF FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE CAPITAL SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH INTEREST PAYMENTS ON THE CAPITAL SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL. Application will be made to list the Capital Securities on the New York Stock Exchange. If approved for listing, trading of the Capital Securities on the New York Stock Exchange is expected to commence within 30 days after the initial delivery of the Capital Securities. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Price to Underwriting Proceeds to Public(1) Commissions(2)(3) Company(4) - -------------------------------------------------------------------------------- Per Capital Security................... $ $ $ - -------------------------------------------------------------------------------- Total.................................. $ $ $
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Plus accrued interest, if any, from date of initial issuance. (2) The Company has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting." (3) The Company has agreed to pay to the Underwriters as compensation (the Underwriters' Compensation) $ per Capital Security, except for Capital Securities sold to certain institutions, for which the Underwriters' Compensation will be $ per Capital Security. Therefore, to the extent the Capital Securities are sold to such institutions, the actual amount of Underwriters' Compensation will be less than the aggregate amount specified above. See "Underwriting". (4) Expenses of the offering to be paid by the Company are estimated to be $ . ------------ The Capital Securities offered hereby are offered severally by the Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that delivery of the Capital Securities will be made in book-entry form only through the facilities of The Depository Trust Company on or about , 19 , against payment therefor in immediately available funds. ------------ LEHMAN BROTHERS , 19 (SM)QUICS is a service mark of Lehman Brothers Inc. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CAPITAL SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. ------------------ (continued from previous page) Security." The Capital Securities will be represented by a Global Security registered in the name of Cede & Co., as nominee of The Depository Trust Company (DTC), which has agreed to act as securities depositary for the Capital Securities. Except under the circumstances described herein, beneficial interests in Capital Securities will be shown only on records maintained by, transfers of Capital Securities will be effected only through, and payments of principal of and interest on Capital Securities will be made only through, DTC or a successor depositary. See "Description of Capital Securities". The obligations of the Company under the Capital Securities are subordinate and junior in right of payment to Senior Indebtedness (as defined in the accompanying Prospectus) of the Company. As of , 19 , outstanding Senior Indebtedness of the Company aggregated approximately $ . . billion. See "Description of Capital Securities--Subordination". THE COMPANY HAS THE RIGHT TO DEFER PAYMENT OF INTEREST ON THE CAPITAL SECURITIES AT ANY TIME OR FROM TIME TO TIME FOR A PERIOD NOT EXCEEDING 20 CONSECUTIVE QUARTERS WITH RESPECT TO EACH DEFERRAL PERIOD (EACH, AN EXTENSION PERIOD), PROVIDED THAT NO EXTENSION PERIOD MAY EXTEND BEYOND THE STATED MATURITY (AS DEFINED HEREIN) OF THE CAPITAL SECURITIES. Upon the termination of any such Extension Period and the payment of all amounts then due on any Interest Payment Date (as defined herein), the Company may elect to begin new Extension Periods subject to the requirements set forth herein. Accordingly, there could be multiple Extension Periods of varying lengths throughout the term of the Capital Securities. During an Extension Period, interest on the Capital Securities will continue to accrue at the rate of % per annum, compounded quarterly (to the extent permitted by applicable law), and holders of the Capital Securities will be required to include interest in their gross income for federal income tax purposes as original issue discount (OID) even though cash payments attributable thereto have not been made. See "Description of Capital Securities--Option to Extend Interest Payment Period" and "Certain Federal Income Tax Consequences--Interest Income and Original Issue Discount." The information in this Prospectus Supplement supplements and should be read in conjunction with the information contained in the accompanying Prospectus. S-2 PROSPECTUS SUPPLEMENT SUMMARY This summary is qualified by the more detailed information and financial statements appearing elsewhere, or incorporated by reference, in this Prospectus Supplement and the accompanying Prospectus. The Company............. The Company was incorporated in Virginia in 1909 and has its principal office at One James River Plaza, Richmond, Virginia 23219-3932, telephone (804) 771- 3000. The Company is a wholly-owned subsidiary of Dominion Resources, Inc. The Company is a regulated public utility engaged in the generation, purchase, transmission, distribution and sale of electric energy within a 30,000 square mile service area in Virginia and in northeastern North Carolina. It transacts business under the name Virginia Power in Virginia and under the name North Carolina Power in North Carolina. Its Virginia service area comprises about 65% of Virginia's total land area but accounts for over 80% of its population. The Trustee............. The Chase Manhattan Bank (formerly known as Chemical Bank) will act as trustee (the Trustee) under the Indenture pursuant to which the Capital Securities will be issued. Securities Offered...... % Quarterly Income Capital Securities (Series Junior Subordinated Debentures Due 20 ), $ , , aggregate principal amount. The Capital Securities will mature on , 20 . The Capital Securities will rank subordinate and junior in right of payment to all Senior Indebtedness of the Company. See "Risk Factors--Ranking of Subordinate Obligations" and "Description of Capital Securities-- Subordination." The Capital Securities will be available for purchase in denominations of $25.00 and integral multiples thereof. Interest................ Holders of the Capital Securities will be entitled to receive interest at the rate of % per annum, accruing from the date of original issuance and payable quarterly in arrears on the last day of March, June, September and December of each year commencing on , 19 (each, an Interest Payment Date). See "Description of Capital Securities". Record Date............. With respect to each Interest Payment Date, the Business Day immediately preceding such Interest Payment Date. Right to Defer Interest................ The Company has the right to defer payment of interest on the Capital Securities by extending the interest payment period on the Capital Securities, from time to time, for up to 20 consecutive quarters. There could be multiple Extension Periods of varying lengths throughout the term of the Capital Securities. During an Extension Period, interest on the Capital Securities will continue to accrue at the rate of % per annum, compounded quarterly, to the extent permitted by applicable law. During an Extension Period, holders of Capital Securities will be required to include interest in their gross income for federal income tax purposes as original issue discount (OID) even though the cash payments attributable thereto have not been made. See "Description of Capital Securities-- S-3 Option to Extend Interest Payments Period" and "Certain Federal Income Tax Consequences--Interest Income and Original Issue Discount." Redemption.............. The Capital Securities will not be redeemable prior to , 20 ; thereafter, the Capital Securities are redeemable at the option of the Company, in whole or in part, at any time on or after , 20 and prior to maturity upon not less than 30 nor more than 60 days' notice at the redemption prices set forth herein together with accrued interest to the redemption date. See "Description of the Capital Securities--Redemption." Global Securities....... The Capital Securities will be represented by a global security (a Global Security) that will be deposited with, or on behalf of, DTC. Beneficial interests in the Capital Securities will be shown on, and transfers thereof will be effected only through, records maintained by Participants (as defined in the Prospectus) in DTC. Capital Securities in certificated form will not be issued in exchange for interests in the Global Security. See "Book-Entry Issuance" in the Prospectus. S-4 RISK FACTORS Prospective purchasers of the Capital Securities should carefully review the information contained elsewhere in this Prospectus Supplement and in the accompanying Prospectus and should particularly consider the following matters. RANKING OF SUBORDINATED OBLIGATIONS The obligations of the Company under the Capital Securities are unsecured and rank subordinate and junior in right of payment to all Senior Indebtedness of the Company. At , 19 , the Senior Indebtedness of the Company aggregated approximately $ . THE INDENTURE DOES NOT PLACE ANY LIMITATION ON THE AMOUNT OF SECURED OR UNSECURED SENIOR INDEBTEDNESS THAT MAY BE INCURRED BY THE COMPANY. THE INDENTURE DOES NOT CONTAIN PROVISIONS THAT AFFORD HOLDERS OF CAPITAL SECURITIES PROTECTION IN THE EVENT OF A HIGHLY LEVERAGED TRANSACTION INVOLVING THE COMPANY. ANY SUCH TRANSACTION, HOWEVER, WOULD REQUIRE REGULATORY APPROVAL, AND MANAGEMENT OF THE COMPANY BELIEVES SUCH APPROVAL WOULD BE UNLIKELY FOR A TRANSACTION THAT WOULD RESULT IN THE COMPANY HAVING A HIGHLY LEVERAGED CAPITAL STRUCTURE. See "Description of Capital Securities-- Subordination." OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES The Company has the right under the Indenture to defer the payment of interest on the Capital Securities at any time or from time to time for a period not exceeding 20 consecutive quarters with respect to each Extension Period, provided that no Extension Period may extend beyond the Stated Maturity of the Capital Securities. The Company will covenant in the Indenture that during any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Capital Securities (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, and (c) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans). Prior to the termination of any such Extension Period, the Company may further extend the Extension Period, provided that no Extension Period may exceed 20 consecutive quarters or extend beyond the Stated Maturity of the Capital Securities. Upon the termination of any Extension Period and the payment of all amounts then due on any Interest Payment Date, the Company may elect to begin a new Extension Period subject to the above requirements. See "Description of Capital Securities--General" and "--Option to Extend Interest Payment Period." Should the Company defer payment of interest on the Capital Securities, a holder will continue to accrue income (in the form of OID) for federal income tax purposes in respect of its Capital Securities. As a result, a holder of Capital Securities will include such interest income in gross income for federal income tax purposes in advance of the receipt of cash attributable to such interest income, and will not receive the cash related to such income if the holder disposes of the Capital Securities prior to the record date for interest payments with respect to such Extension Period. See "Certain Federal Income Tax Consequences--Interest Income and Original Issue Discount" and "-- Sales or Redemption of Capital Securities." The Company has no current intention of exercising its right to defer payments of interest on the Capital Securities. However, should the Company elect to exercise such right in the future, the market price of the Capital Securities is likely to be adversely affected. A holder that disposes of its Capital Securities during an Extension Period, therefore, might not receive the same return on its investment as a holder that continues to hold its Capital Securities. In addition, as a result of the Company's right to defer interest payments, the market price of the Capital Securities may be more volatile than the market prices of other similar securities where the issuer does not have a right to defer interest payments. S-5 TRADING CHARACTERISTICS OF CAPITAL SECURITIES The Capital Securities are expected to trade as other securities on the equity floor of the New York Stock Exchange. Consequently, purchasers will not pay and sellers will not receive any accrued and unpaid interest on the Capital Securities that is not included in the trading price. USE OF PROCEEDS All of the proceeds from the sale of Capital Securities will be applied to redeem or repay, in accordance with their terms, certain securities previously issued by the Company, together with any costs related to the redemption or repayment thereof, or for corporate capital requirements. RATIO OF EARNINGS TO FIXED CHARGES The Company's consolidated ratios of earnings to fixed charges for each of the periods indicated are set forth below:
12 MONTHS YEAR ENDED DECEMBER 31, ENDED ------------------------ 19 19 19 19 19 19 ------ ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges:
For purposes of computing the ratios of earnings to fixed charges, earnings represent net income plus applicable income taxes and fixed charges. Fixed charges, excluding interest on deposits, represent interest expense, capitalized interest, and the interest factor included in rents. CAPITALIZATION The following table sets forth the consolidated capitalization of the Company as of , 19 , and as adjusted to give effect to the consummation of the offering of the Capital Securities. (UNAUDITED) (MILLIONS)
AS OF PRO ACTUAL FORMA* ------ ------- Long Term Debt................................................ Company Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust.......................................... Preferred Stock Not Subject to Mandatory Redemption......................... Subject to Mandatory Redemption............................. --- --- Total Preferred Stock..................................... Common Stock Equity........................................... --- --- Total Capitalization...................................... === ===
- -------- * Reflects the following pro forma adjustments: (i) Issuance of Capital Securities. (ii) The retirement of certain of the Company's outstanding securities with the proceeds of this offering. S-6 DESCRIPTION OF CAPITAL SECURITIES The following summary of certain terms and provisions of the Capital Securities supplements the description of the terms and provisions of the Capital Securities set forth in the accompanying Prospectus under the heading "Description of Junior Subordinated Debentures" to which description reference is hereby made. This summary of certain terms and provisions of the Capital Securities and the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Indenture, the form of which is filed as an exhibit to the Registration Statement of which this Prospectus Supplement forms a part, and to the Trust Indenture Act. Whenever particular defined terms of the Indenture are referred to herein, such defined terms are incorporated herein by reference. GENERAL The Capital Securities are to be issued under an Indenture (the Indenture), between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the Trustee). The Capital Securities will be in the aggregate principal amount equal to $ . The Capital Securities will bear interest at the annual rate of % of the principal amount thereof, payable quarterly in arrears on the last day of March, June, September and December of each year (each, an Interest Payment Date), commencing , 19 , to the person in whose name each Capital Security is registered, subject to certain exceptions, at the close of business on the Business Day immediately preceding the relevant Interest Payment Date. The amount of interest payable for any period 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 Capital Securities is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), in each case with the same force and effect as if made on the date such payment was originally payable. A "Business Day" shall mean any day other than a Saturday or a Sunday, or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the corporate trust office of the Trustee is closed for business. Accrued interest that is not paid on the applicable Interest Payment Date will bear additional interest on the amount thereof at the rate per annum of % thereof, compounded quarterly (to the extent permitted by applicable law) . The term "interest" as used herein shall include quarterly interest payments and interest on quarterly interest payments not paid on the applicable Interest Payment Date, as applicable. The Capital Securities will mature on , 20 (such date, the Stated Maturity). The Capital Securities will be unsecured and will rank junior and be subordinate in right of payment to all Senior Indebtedness (as defined below) of the Company. See "--Subordination." The Indenture does not limit the incurrence or issuance of other secured or unsecured debt of the Company, whether under the Indenture or any existing or other indenture that the Company may enter into in the future or otherwise. See "--Subordination." THE INDENTURE DOES NOT CONTAIN PROVISIONS THAT AFFORD HOLDERS OF CAPITAL SECURITIES PROTECTION IN THE EVENT OF A HIGHLY LEVERAGED TRANSACTION INVOLVING THE COMPANY. ANY SUCH TRANSACTION, HOWEVER, WOULD REQUIRE REGULATORY APPROVAL, AND MANAGEMENT OF THE COMPANY BELIEVES SUCH APPROVAL WOULD BE UNLIKELY FOR A TRANSACTION THAT WOULD RESULT IN THE COMPANY HAVING A HIGHLY LEVERAGED CAPITAL STRUCTURE. OPTION TO EXTEND INTEREST PAYMENT PERIOD So long as no Event of Default has occurred and is continuing, the Company has the right under the Indenture to defer the payment of interest at any time or from time to time for a period not exceeding 20 consecutive quarters with respect to each Extension Period, provided that no Extension Period may extend beyond the Stated Maturity of the Capital Securities. At the end of such Extension Period, the Company must pay all interest then accrued and unpaid (together with interest thereon at the annual rate of %, compounded quarterly, to the extent permitted by applicable law). During an Extension Period, interest will continue to accrue S-7 and holders of Capital Securities will be required to include interest in their gross income for federal income tax purposes as original issue discount (OID) even though cash payments attributable thereto have not been made. See "Certain Federal Income Tax Consequences--Interest Income and Original Issue Discount." The Company will covenant in the Indenture that during any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Capital Securities (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, and (c) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans). Prior to the termination of any such Extension Period, the Company may further extend the Extension Period, provided that no Extension Period may exceed 20 consecutive quarters or extend beyond the Stated Maturity of the Capital Securities. Upon the termination of any such Extension Period and the payment of all amounts then due on any Interest Payment Date, the Company may elect to begin a new Extension Period subject to the above requirements. No interest shall be due and payable during an Extension Period, except at the end thereof. Upon the termination of any Extension Period, which termination shall be on an Interest Payment Date, the Company shall pay all deferred interest on the next succeeding Interest Payment Date to the persons in whose name the Capital Securities are registered on the Record Date for such Interest Payment Date; provided that deferred interest payable at Stated Maturity or on any redemption date will be paid to the persons to whom principal is payable. The Company must give the Trustee notice of its election of such Extension Period not less than one Business Day prior to the earlier of (i) the Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate or (ii) the date the Company is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization or to holders of such Capital Securities of the record date or the date such interest payments are payable, but in any event not less than one Business Day prior to such record date. REDEMPTION The Capital Securities will be redeemable at the option of the Company, in whole or in part, at any time on or after , 20 and prior to maturity, upon not less than 30 nor more than 60 days' notice, at 100% of the principal amount to be redeemed together with accrued interest to the redemption date. If a partial redemption would result in a delisting of the Capital Securities from any national securities exchange on which the Capital Securities are then listed, the Company may redeem such Capital Securities only in whole. SUBORDINATION In the Indenture, the Company has covenanted and agreed that any Capital Securities issued thereunder will be subordinated and junior in right of payment to all Senior Indebtedness to the extent provided in the Indenture. Upon any payment or distribution of assets of the Company upon any liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors, marshaling of assets or any bankruptcy, insolvency, debt restructuring or similar proceedings in connection with any insolvency or bankruptcy proceeding of the Company, the holders of Senior Indebtedness will first be entitled to receive payment in full of principal of and premium, if any, and interest, if any, on such Senior Indebtedness before the holders of Capital Securities will be entitled to receive or retain any payment in respect of the principal of and premium, if any, or interest, if any, on the Capital Securities; provided, however, that holders of Senior Indebtedness shall not be entitled to receive payment of any such amounts to the extent that such holders would be required by the subordination provisions of such Senior Indebtedness to pay such amounts over to the obligees on trade accounts payable or other liabilities arising in the ordinary course of the Company's business. S-8 In the event of the acceleration of the maturity of any Capital Securities, the holders of all Senior Indebtedness outstanding at the time of such acceleration will first be entitled to receive payment in full of all amounts due thereon (including any amounts due upon acceleration) before the holders of Capital Securities will be entitled to receive or retain any payment in respect of the principal of or premium, if any, or interest, if any, on the Capital Securities; provided, however, that holders of Senior Indebtedness shall not be entitled to receive payment of any such amounts to the extent that such holders would be required by the subordination provisions of such Senior Indebtedness to pay such amounts over to the obligees on trade accounts payable or other liabilities arising in the ordinary course of the Company's business. No payments on account of principal (or premium, if any) or interest, if any, in respect of the Capital Securities may be made if there shall have occurred and be continuing a default in any payment with respect to Senior Indebtedness, or an event of default with respect to any Senior Indebtedness resulting in the acceleration of the maturity thereof, or if any judicial proceeding shall be pending with respect to any such default. The Indenture places no limitation on the amount of additional Senior Indebtedness that may be incurred by the Company. As of , 19 , Senior Indebtedness of the Company aggregated approximately $ , and the Company's consolidated subsidiaries had indebtedness and other liabilities of approximately $ to which the Capital Securities would be effectively subordinated. DEFEASANCE AND DISCHARGE The Indenture provides that the Company, at the Company's option: (a) will be discharged from any and all obligations in respect of the Capital Securities (except for certain obligations to register the transfer or exchange of Capital Securities, replace stolen, lost or mutilated Capital Securities, maintain paying agencies and hold moneys for payment in trust) or (b) need not comply with certain restrictive covenants of the Indenture, in each case if the Company deposits, in trust with the Trustee, cash or U.S. Government Obligations or Agency Obligations (each, as defined in the Indenture) which through the payment of interest thereon and principal thereof in accordance with their terms will provide funds in an amount sufficient to pay all the principal of, and interest and premium, if any, on, the Capital Securities on the dates such payments are due in accordance with the terms of such Capital Securities. To exercise such option, the Company is required to deliver to the Trustee an opinion of counsel to the effect that the deposit and related defeasance would not cause the holders of the Capital Securities to recognize income, gain or loss for federal income tax purposes and, in the case of a discharge pursuant to clause (a), such opinion shall be accompanied by either (x) a private letter ruling to that effect received by the Company from the United States Internal Revenue Service or a revenue ruling pertaining to a comparable form of transaction to that effect published by the United States Internal Revenue Service, or (y) a statement to the effect that a change or changes to applicable federal income tax law since the date of the Indenture warrant such opinion of counsel. DENOMINATIONS The Capital Securities will be issuable only in registered form without coupons in denominations of $25 and integral multiples thereof. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a summary of the principal United States federal income tax consequences of the purchase, ownership and disposition of Capital Securities. The statements of law and legal conclusions set forth in this summary regarding the tax consequences to the beneficial owners of Capital Securities (the Holders) represent the opinion of Hunton & Williams, counsel to the Company. This summary does not address all tax consequences that may be applicable to a Holder, nor does it address the tax consequences to (i) persons that may be subject to special treatment under federal income tax law, such as banks, insurance companies, thrift institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations and dealers in securities or currencies, (ii) persons that will hold Capital Securities as part of a position in a "straddle" or as part of a "hedging," "conversion" or other integrated investment transaction for federal income tax purposes, (iii) except S-9 with respect to the discussion under the caption "United States Alien Holders," persons whose functional currency is not the United States dollar or (iv) persons that do not hold Capital Securities as capital assets. This summary is based upon the Internal Revenue Code of 1986, as amended, Treasury Regulations, Internal Revenue Service (IRS) rulings and pronouncements, and judicial decisions now in effect, all of which are subject to change at any time. Such changes may be applied retroactively in a manner that could cause the tax consequences to vary substantially from the consequences described below, possibly adversely affecting Holders. The authorities on which this summary is based (including authorities distinguishing debt from equity) are subject to various interpretations, and it is therefore possible that the federal income tax treatment of the Capital Securities may differ from the treatment described below. No ruling has been received from the IRS regarding the tax consequences of the Capital Securities. Counsel's opinion regarding such tax consequences represents only counsel's best legal judgment based on current authorities and is not binding on the IRS or the courts. PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS. INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT The Capital Securities are debt instruments for federal income tax purposes. Under recently issued Treasury Regulations (the Regulations), a "remote" contingency that stated interest will not be timely paid will be ignored in determining whether a debt instrument is issued with original issue discount (OID). The Company believes that the likelihood of its exercising its option to defer payments of interest on the Capital Securities is remote. Consequently, the Capital Securities should not be considered to be issued with OID at the time of their original issuance, and a Holder should include in gross income interest on Capital Securities in accordance with such Holder's method of tax accounting. Under the Regulations, if the Company should actually exercise its option to defer any payment of interest, the Capital Securities would at that time be treated as issued with OID, and all stated interest on the Capital Securities would thereafter be treated as OID so long as the Capital Securities remained outstanding. In such event, all of a Holder's taxable interest income with respect to Capital Securities would be accounted for as OID on an economic accrual basis regardless of the Holder's method of tax accounting, and actual payments of stated interest would not be reported as taxable income. Consequently, a Holder would be required to include in gross income OID even though the Company would not make any cash payments during an Extension Period. The Regulations have not been addressed in any rulings or other interpretations by the IRS, and it is possible that the IRS could take a position contrary to the interpretation herein. SALES OR REDEMPTION OF CAPITAL SECURITIES Upon a sale (including redemption) of a Capital Security, a Holder will recognize gain or loss equal to the difference between its adjusted tax basis in such Capital Security and the amount realized on the sale (excluding any amount attributable to any accrued interest not previously included in income, which will be taxable as ordinary income). Provided that the Company does not exercise its option to defer payment of interest on the Capital Securities, and the Capital Securities are not considered to be issued with OID, a Holder's adjusted tax basis in a Capital Security generally will be the Holder's purchase price, increased by any market discount included in income and reduced by any amortized Section 171 premium for such Capital Security (see Market Discount and Amortizable Premium below). If the Capital Securities are deemed to be issued with OID as a result of the Company's deferral of any interest payment, a Holder's tax basis in a Capital Security will be increased by OID previously includable in such Holder's gross income to the date of disposition and decreased by payments received on the Capital Security since and including the commencement date of the first Extension Period. Such gain or loss, except to the extent of any accrued market discount, generally will be a capital gain or loss and generally will be a long-term capital gain or loss if the Capital Security has been held for more than one year. S-10 Should the Company exercise its option to defer any payment of interest, the Capital Securities may trade at a price that does not accurately reflect the value of accrued but unpaid interest. As a result, and because a Holder would be required to include in income accrued but unpaid interest on Capital Securities and to add such amount to its adjusted tax basis, such Holder might recognize a capital loss on a sale of Capital Securities during an Extension Period. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income. MARKET DISCOUNT A secondary market purchaser of a Capital Security at a discount from the adjusted issue price (that is, the principal amount plus any accrued but unpaid OID of the Capital Security) acquires such Capital Security with "market discount." However, market discount will be considered to be zero if such market discount is minimal, i.e., less than the product of (A) 0.25% of the adjusted issue price of such Capital Security multiplied by (B) the number of complete years to maturity of the Capital Security after the date of purchase. The purchaser of a Capital Security with more than a minimal amount of market discount generally will be required to treat any gain on the sale, redemption or other disposition of all or part of the Capital Security as ordinary income to the extent of accrued (but not previously taxable) market discount. Market discount generally will accrue ratably during the period from the date of purchase to the maturity date of the Capital Security, unless the Holder irrevocably elects to accrue such market discount on the basis of a constant interest rate. A Holder who has acquired a Capital Security at a market discount generally will be required to defer any interest deductions attributable to any indebtedness incurred or continued to purchase or carry the Capital Security, to the extent such deductions exceed interest and OID income on the Capital Security. Any such deferred interest expense generally will be allowable as a deduction not later than the year in which the related market discount is recognized. As an alternative to the inclusion of market discount in income upon disposition of a Capital Security, a Holder may make an election to include market discount in income as it accrues on all market discount instruments acquired by the Holder during or after the taxable year for which the election is made. In that case, the preceding deferral rule for interest expense will not apply. AMORTIZABLE PREMIUM A secondary market purchaser of a Capital Security at a premium over the stated principal amount of the Capital Security (plus accrued interest) generally may elect to amortize such premium (Section 171 premium) from the purchase date to the maturity date, under a constant yield method that reflects quarterly compounding. Amortized Section 171 premium generally will be treated as an offset to interest income on a Capital Security and not as a separate deduction. If a Capital Security is deemed to be issued with OID and is acquired at a premium over its adjusted issue price, the premium will not be Section 171 premium but will be amortized as a reduction in the amount of OID includable in the Holder's income. BACKUP WITHHOLDING TAX AND INFORMATION REPORTING The amount of interest paid and any OID accrued on the Capital Securities to Holders (other than corporations and other exempt Holders) will be reported to the IRS. Such income is to be reported to non-exempt Holders by January 31 following each calendar year. "Backup" withholding at a rate of 31% will apply to payments of interest and payments of disposition (including redemption) proceeds to a non-exempt Holder unless the Holder furnishes to the payor its taxpayer identification number, certifies that such number is correct, and meets certain other conditions. Any amounts withheld from a Holder under the backup withholding rules will be allowable as a refund or a credit against such Holder's United States federal income tax liability. UNITED STATES ALIEN HOLDERS For purposes of this discussion, a United States Alien Holder is any corporation, individual, partnership, estate or trust that for United States federal income tax purposes is a foreign corporation, a non-resident alien individual, a foreign partnership or a non-resident fiduciary of a foreign estate or trust. This discussion assumes S-11 that income with respect to the Capital Securities is not effectively connected with a trade or business in the United States in which the United States Alien Holder is engaged. Under current United States federal income tax law: (i) payments by the Company or any of its paying agents to any holder of Capital Securities that is a United States Alien Holder generally will not be subject to withholding or other United States federal income tax, provided that, in the case of payments with respect to interest (including OID), (a) the beneficial owner of the Capital Securities does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (b) the beneficial owner of the Capital Securities is not a controlled foreign corporation that is related to the Company through stock ownership, and (c) either (A) the beneficial owner of the Capital Securities certifies to the payor, under penalties of perjury, that it is a United States Alien Holder and provides its name and address or (B) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a Financial Institution) and holds the Capital Securities in such capacity certifies under penalties of perjury that such statement has been received from the beneficial owner by it or by a Financial Institution between it and the beneficial owner and furnishes the payor with a copy thereof; and (ii) a United States Alien Holder of Capital Securities generally will not be subject to withholding or other United States federal income tax on any gain realized upon the sale or other disposition of Capital Securities. UNDERWRITING Subject to the terms and conditions set forth in the Underwriting Agreement, the Company has agreed to sell to the Underwriters named below, and such Underwriters, for whom Lehman Brothers Inc. is acting as representative (the Representative), has agreed to purchase from the Company the principal amount of Capital Securities set forth opposite its name below:
UNDERWRITER PRINCIPAL AMOUNT ----------- ---------------- Lehman Brothers Inc...................................... --- Total.................................................. ===
Under the terms and conditions set forth in the Underwriting Agreement, the Underwriters are committed to take and pay for all such Capital Securities offered hereby, if any are taken. The Underwriters propose to offer the Capital Securities in part directly to the public initially at the price to public set forth on the cover page of this Prospectus Supplement and in part to certain securities dealers at such price less a concession of $ per Capital Security. The Underwriters may allow, and such dealers may reallow, a concession not to exceed $ per Capital Security to certain brokers and dealers. After the Capital Securities are released for sale to the public, the offering price and other selling terms may from time to time be varied by the Representative. The Company has agreed that, during the period beginning from the date of the Underwriting Agreement and continuing to and including the earlier of (i) the termination of trading restrictions on the Capital Securities, as communicated to the Company by the Representative, and (ii) 30 days following the Closing Date, they will not offer, sell, contract to sell or otherwise dispose of any additional securities of the Company substantially similar to the Capital Securities or any securities convertible into or exchangeable for or that represent the right to receive any such similar securities, without the consent of the Representative. Prior to this offering, there has been no public market for the Capital Securities. In order to meet one of the requirements for listing the Capital Securities on the New York Stock Exchange (the NYSE), the Underwriters will undertake to sell lots of 100 or more Capital Securities to a minimum of 400 beneficial holders. Trading of S-12 the Capital Securities on the NYSE is expected to commence within 30 days after the initial delivery of the Capital Securities. The Representative has advised the Company that it intends to make a market in the Capital Securities prior to commencement of trading on the NYSE, but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of or the existence of the trading market for the Capital Securities. The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Representative or its affiliates have provided from time to time, and expect to provide in the future, investment or commercial banking services to the Company and its affiliates, for which the Representative or its affiliates have received or will receive customary fees and commissions. LEGAL MATTERS Certain United States federal income taxation matters will be passed upon for the Company by Hunton & Williams. EXPERTS The consolidated financial statements incorporated herein by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 19 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. S-13 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR IN- CORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUP- PLEMENT IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND THE ACCOMPA- NYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRE- SENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS AND THE ACCOMPA- NYING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS AND THE AC- COMPANYING PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHO- RIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALI- FIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLIC- ITATION. ------------------ PROSPECTUS SUPPLEMENT
Page ---- Prospectus Supplement Summary.............................................. S- Risk Factors............................................................... S- Use of Proceeds............................................................ S- Ratio of Earnings to Fixed Charges......................................... S- Capitalization............................................................. S- Description of Capital Securities.......................................... S- Certain Federal Income Tax Consequences.................................... S- Underwriting............................................................... S- Legal Matters.............................................................. S- Experts.................................................................... S- PROSPECTUS Available Information...................................................... 2 Incorporation of Certain Documents by Reference............................ 2 The Company................................................................ 3 Use of Proceeds............................................................ 3 Description of Junior Subordinated Debentures.............................. 3 Book-Entry Issuance........................................................ 8 Plan of Distribution....................................................... 9 Validity of Securities..................................................... 10 Experts.................................................................... 10
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- $ VIRGINIA ELECTRIC AND POWER COMPANY QUICS (SM) % QUARTERLY INCOME CAPITAL SECURITIES (SERIES JUNIOR SUBORDINATED DEBENTURES DUE 20 ) ------------------ PROSPECTUS SUPPLEMENT , 19 ------------------ LEHMAN BROTHERS - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- EX-99.B 12 FORM OF PROS. SUPP.-INSTITUTIONAL EXHIBIT 99(B) ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ + Information contained herein is subject to completion or amendment. A + + registration statement relating to these securities has been filed + + with the Securities and Exchange Commission. These securities may not + + be sold nor may offers to buy be accepted prior to the time the + + registration statement becomes effective. This prospectus shall not + + constitute an offer to sell or the solicitation of an offer to buy nor + + shall there be any sale of these securities in any state in which such + + offer, solicitation or sale would be unlawful prior to registration or + + qualification under the securities laws of any such state. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED _________ ___, 19__ PROSPECTUS SUPPLEMENT (To Prospectus, dated _________ ___, 19__) $________ Virginia Electric and Power Company SKIS(SM) ____% Subordinated Capital Income Securities (Series ___ Junior Subordinated Debentures Due 20__) The __% Subordinated Capital Income Securities (Series __ Junior Subordinated Debentures Due 20__) (the Debentures) are unsecured debt securities of Virginia Electric and Power Company (the Company), which will mature on _______ __, 20__. Interest on the Debentures is payable semi-annually on the last day of June and December in each year, commencing ________ __, 19__, except under circumstances described herein during which payment of interest on the Debentures may be deferred. The Debentures will not be redeemable prior to _____________ __, 20__; thereafter, the Debentures will be redeemable at the option of the Company, in whole or in part, on or after _________ __, 20__ at the redemption prices set forth herein together with accrued interest to the redemption date. The Debentures will be represented by a Global Security that will be deposited with, or on behalf of, The Depository Trust Company (DTC) and will be available for purchase in denominations of $1,000 and any integral multiple thereof. See "Book-Entry Issuance" in the Prospectus. Each $1,000 principal amount of Debentures is referred to herein as a "Debenture." See "Description of Debentures". The obligations of the Company under the Debentures are subordinate and junior in right of payment to Senior Indebtedness (as defined in the accompanying Prospectus) of the Company. As of _____________ ___, 19__, outstanding Senior Indebtedness of the Company aggregated approximately $__.__ billion. See "Description of Debentures - Subordination." The information in this Prospectus Supplement supplements and should be read in conjunction with the information contained in the accompanying Prospectus. SEE "RISK FACTORS" BEGINNING ON PAGE S- HEREOF FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE DEBENTURES, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH INTEREST PAYMENTS ON THE DEBENTURES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ----------------
Price to Underwriting Proceeds to Public (1) Discount (2) Company (3) ---------------- ---------------- --------------- Per Debenture............... % % % Total....................... $ $ $
(1) Plus accrued interest, if any, from date of initial issuance. (2) The Company has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting." (3) Expenses of the offering to be paid by the Company are estimated to be $________. The Debentures offered hereby are offered severally by the Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that delivery of the Debentures will be made in book-entry form only through the facilities of The Depository Trust Company on or about , 19 , against payment therefor in immediately available funds. LEHMAN BROTHERS ____________ ___, 19__ (SM) Lehman Brothers Inc. has applied to register SKIS as a service mark. PROSPECTUS SUPPLEMENT SUMMARY This summary is qualified by the more detailed information and financial statements appearing elsewhere, or incorporated by reference, in this Prospectus Supplement and the accompanying Prospectus. The Company........................... The Company was incorporated in Virginia in 1909 and has its principal office at One James River Plaza, Richmond, Virginia 23219-3932, telephone (804) 771-3000. The Company is a wholly-owned subsidiary of Dominion Resources, Inc. The Company is a regulated public utility engaged in the generation, purchase, transmission, distribution and sale of electric energy within a 30,000 square mile service area in Virginia and in northeastern North Carolina. It transacts business under the name Virginia Power in Virginia and under the name North Carolina Power in North Carolina. Its Virginia service area comprises about 65% of Virginia's total land area but accounts for over 80% of its population. The Trustee........................... The Chase Manhattan Bank (formerly known as Chemical Bank) will act as trustee (the Trustee) under the Indenture pursuant to which the Debentures will be issued. Securities Offered.................... __% Subordinated Capital Income Securities (Series __ Junior Subordinated Debentures Due 20__), $___,___,___ aggregate principal amount. The Debentures will mature on __________ ___, 20___. The Debentures will rank subordinate and junior in right of payment to all Senior Indebtedness of the Company. See "Risk Factors - Ranking of Subordinate Obligations" and "Description of Debentures - Subordination." The Debentures will be available for purchase in denominations of $1,000.00 and integral multiples thereof. Interest.............................. Holders of the Debentures will be entitled to receive interest at the rate of % per annum, accruing from the date of original issuance and payable semi-annually in arrears on the last day of June and December of each year commencing on ________, 19__ (each, an Interest Payment Date). See "Description of Debentures." Record Date........................... With respect to each Interest Payment Date, the Business Day immediately preceding such Interest Payment Date. Right to Defer Interest............... The Company has the right to defer payment of interest on the Debentures by extending the interest payment period on the Debentures, from time to time, for up to 10 consecutive semi-annual periods. There could be multiple Extension Periods of varying lengths throughout the term of the Debentures. During an Extension Period, interest on the Debentures will continue to accrue at the rate of % per annum, compounded semi-annually, to the extent permitted by applicable law. During an Extension Period, holders of Debentures will be required to include interest in their gross income for federal income tax purposes as original issue discount (OID) even though the cash payments attributable thereto S-2 have not been made. See "Description of Debentures - Option to Extend Interest Payments Period" and "Certain Federal Income Tax Consequences - Interest Income and Original Issue Discount." Redemption............................ The Debentures will not be redeemable prior to __________________ __, 20___; thereafter, the Debentures are redeemable at the option of the Company, in whole or in part, at any time on or after _________________ __, 20___ and prior to maturity upon not less than 30 nor more than 60 days' notice at the redemption prices set forth herein together with accrued interest to the redemption date. See "Description of the Debentures - Redemption." Ratings............................... It is expected that the Debentures will be rated "____" by Standard & Poor's Ratings Services (S&P), "____" by Moody's Investors Service, Inc. (Moody's), "____" by Fitch Investors Service, L.P. (Fitch) and "____" by Duff and Phelps Credit Rating Co. (DCR). A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organization. S-3 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. --------------------- RISK FACTORS Prospective purchasers of the Debentures should carefully review the information contained elsewhere in this Prospectus Supplement and in the accompanying Prospectus and should particularly consider the following matters. Ranking of Subordinated Obligations The obligations of the Company under the Debentures are unsecured and rank subordinate and junior in right of payment to all Senior Indebtedness of the Company. At ______, 19__, the Senior Indebtedness of the Company aggregated approximately $__________. The Indenture does not place any limitation on the amount of secured or unsecured Senior Indebtedness that may be incurred by the Company. The Indenture does not contain provisions that afford holders of Debentures protection in the event of a highly leveraged transaction involving the Company. Any such transaction, however, would require regulatory approval, and management of the Company believes such approval would be unlikely for a transaction that would result in the Company having a highly leveraged capital structure. See "Description of Debentures - Subordination." Option to Extend Interest Payment Period; Tax Consequences The Company has the right under the Indenture to defer the payment of interest on the Debentures at any time or from time to time for a period not exceeding 10 consecutive semi-annual periods with respect to each Extension Period, provided that no Extension Period may extend beyond the Stated Maturity of the Junior Subordinated Debentures. The Company will covenant in the Indenture that during any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, and (c) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans). Prior to the termination of any such Extension Period, the Company may further extend the Extension Period, provided that no Extension Period may exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity of the Debentures. Upon the termination of any Extension Period and the payment of all amounts then due on any Interest Payment Date, the Company may elect to begin a new Extension Period subject to the above requirements. See "Description of Debentures - General" and "- Option to Extend Interest Payment Period." Should the Company defer payment of interest on the Debentures, a holder of Debentures will continue to accrue income (in the form of OID) for federal income tax purposes in respect of its Debentures. As a result, a holder of Debentures will include such interest income in gross income for federal income tax purposes in advance of the receipt of cash attributable to such interest income, and will not receive the cash related to such income if the holder disposes of the Debentures prior to the record date for interest payments with respect to such Extension Period. See "Certain Federal Income Tax Consequences - Interest Income and Original Issue Discount" and "-Sales or Redemption of Debentures." The Company has no current intention of exercising its right to defer payments of interest on the Debentures. However, should the Company elect to exercise such right in the future, the market price of the Debentures is likely to be adversely affected. A holder that disposes of its Debentures during an Extension Period, therefore, might not receive the same return on its investment as a holder that continues to hold its Debentures. In addition, as a result of the Company's S-4 right to defer interest payments, the market price of the Debentures may be more volatile than the market prices of other similar securities where the issuer does not have a right to defer interest payments. USE OF PROCEEDS All of the proceeds from the sale of Debentures will be applied to redeem or repay, in accordance with their terms, certain securities previously issued by the Company, together with any costs related to the redemption or repayment thereof, or for corporate capital requirements. RATIO OF EARNINGS TO FIXED CHARGES The Company's consolidated ratios of earnings to fixed charges for each of the periods indicated are set forth below:
12 Months Ended Year Ended December 31, ---------, ----------------------------------------- 19 19 19 19 19 19 ---- ------ ------ ------ ------ -------- Ratio of Earnings to Fixed Charges:
For purposes of computing the ratios of earnings to fixed charges, earnings represent net income plus applicable income taxes and fixed charges. Fixed charges, excluding interest on deposits, represent interest expense (except interest on deposits), capitalized interest, and the interest factor included in rents. CAPITALIZATION The following table sets forth the consolidated capitalization of the Company as of ______, 19__, and as adjusted to give effect to the consummation of the offering of the Debentures.
(Unaudited) (Millions) As of --------- Actual Pro Forma* ------ --------- Long Term Debt................................ Company Obligated Mandatorily Redeemable...... Preferred Securities of Subsidiary Trust.... Preferred Stock Not Subject to Mandatory Redemption......... Subject to Mandatory Redemption............. _________ _________ Total Preferred Stock..................... Common Stock Equity........................... _________ _________ Total Capitalization...................... ========= =========
__________________ * Reflects the following pro forma adjustments: (i) Issuance of Debentures. (ii) The retirement of certain of the Company's outstanding securities with the proceeds of this offering. S-5 DESCRIPTION OF DEBENTURES The following summary of certain terms and provisions of the Debentures supplements the description of the terms and provisions of the Debentures set forth in the accompanying Prospectus under the heading "Description of Junior Subordinated Debentures" to which description reference is hereby made. This summary of certain terms and provisions of the Debentures and the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Indenture, the form of which is filed as an exhibit to the Registration Statement of which this Prospectus Supplement forms a part, and to the Trust Indenture Act. Whenever particular defined terms of the Indenture are referred to herein, such defined terms are incorporated herein by reference. General The Debentures are to be issued under an Indenture (the Indenture), between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the Trustee). The Debentures will be in the aggregate principal amount equal to $______________. The Debentures will bear interest at the annual rate of % of the principal amount thereof, payable semi-annually in arrears on the last day of June and December of each year (each, an Interest Payment Date), commencing ________ ___, ____, to the person in whose name each Debenture is registered, subject to certain exceptions, at the close of business on the Business Day immediately preceding the relevant Interest Payment Date. The amount of interest payable for any period 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 Debentures is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), in each case with the same force and effect as if made on the date such payment was originally payable. A "Business Day" shall mean any day other than a Saturday or a Sunday, or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the corporate trust office of the Trustee is closed for business. Accrued interest that is not paid on the applicable Interest Payment Date will bear additional interest on the amount thereof at the rate per annum of % thereof, compounded semi-annually (to the extent permitted by applicable law). The term "interest" as used herein shall include semi-annual interest payments and interest on semi-annual interest payments not paid on the applicable Interest Payment Date, as applicable. The Debentures will mature on ___________, 20___ (such date, the Stated Maturity). The Debentures will be unsecured and will rank junior and be subordinate in right of payment to all Senior Indebtedness (as defined below) of the Company. See "- Subordination." The Indenture does not limit the incurrence or issuance of other secured or unsecured debt of the Company, whether under the Indenture or any existing or other indenture that the Company may enter into in the future or otherwise. See " - Subordination." The Indenture does not contain provisions that afford holders of Debentures protection in the event of a highly leveraged transaction involving the Company. Any such transaction, however, would require regulatory approval, and management of the Company believes such approval would be unlikely for a transaction that would result in the Company having a highly leveraged capital structure. Option to Extend Interest Payment Period So long as no Event of Default has occurred and is continuing, the Company has the right under the Indenture to defer the payment of interest at any time or from time to time for a period not exceeding 10 consecutive semi- annual periods with respect to each Extension Period, provided that no Extension Period may extend beyond the Stated Maturity of the Debentures. At the end of such Extension Period, the Company must pay all interest then accrued and unpaid (together with interest thereon at the annual rate of %, compounded semi- annually, to the extent permitted by applicable law). During an Extension Period, interest will continue to accrue and holders of Debentures will be required to include interest in their gross income for federal income tax purposes as original issue discount (OID) S-6 even though cash payments attributable thereto have not been made. See "Certain Federal Income Tax Consequences - Interest Income and Original Issue Discount." The Company will covenant in the Indenture that during any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, and (c) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans). Prior to the termination of any such Extension Period, the Company may further extend the Extension Period, provided that no Extension Period may exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity of the Debentures. Upon the termination of any such Extension Period and the payment of all amounts then due on any Interest Payment Date, the Company may elect to begin a new Extension Period subject to the above requirements. No interest shall be due and payable during an Extension Period, except at the end thereof. Upon the termination of any Extension Period, which termination shall be on an Interest Payment Date, the Company shall pay all deferred interest on the next succeeding Interest Payment Date to the persons in whose name the Debentures are registered on the Record Date for such Interest Payment Date, provided that deferred interest payable at Stated Maturity or on any redemption date will be paid to the persons to whom principal is payable. The Company must give the Trustee notice of its election of such Extension Period not less than one Business Day prior to the earlier of (i) the Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate, or (ii) the date Company is required to give notice to the New York Stock Exchange or other applicable self- regulatory organization or to holders of such Debentures of the record date or the date such interest payments are payable, but in any event not less than one Business Day prior to such record date. Redemption The Debentures will not be redeemable prior to _______________ __, 20__. Thereafter, the Debentures will be redeemable at the option of the Company, in whole or in part, at any time on or after ________ __, 20__ at the following redemption prices (in each case expressed in percentages of principal amount):
If Redeemed During 12 Month Redemption Period Beginning Price - --------------------------- ---------- 20__........................................................ % 20__........................................................ % 20__........................................................ % 20__........................................................ % 20__........................................................ % 20__........................................................ % 20__........................................................ % 20__........................................................ % 20__........................................................ % 20__........................................................ % 20__ and thereafter......................................... 100.000%
in each case, upon not less than 30 nor more than 60 days' notice and together with accrued interest to the redemption date. S-7 Subordination In the Indenture, the Company has covenanted and agreed that any Debentures issued thereunder will be subordinated and junior in right of payment to all Senior Indebtedness to the extent provided in the Indenture. Upon any payment or distribution of assets of the Company upon any liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors, marshaling of assets or any bankruptcy, insolvency, debt restructuring or similar proceedings in connection with any insolvency or bankruptcy proceeding of the Company, the holders of Senior Indebtedness will first be entitled to receive payment in full of principal of and premium, if any, and interest, if any, on such Senior Indebtedness before the holders of Debentures will be entitled to receive or retain any payment in respect of the principal of and premium, if any, or interest, if any, on the Subordinated Debentures; provided, however, that holders of Senior Indebtedness shall not be entitled to receive payment of any such amounts to the extent that such holders would be required by the subordination provisions of such Senior Indebtedness to pay such amounts over to the obligees on trade accounts payable or other liabilities arising in the ordinary course of the Company's business. In the event of the acceleration of the maturity of any Debentures, the holders of all Senior Indebtedness outstanding at the time of such acceleration will first be entitled to receive payment in full of all amounts due thereon (including any amounts due upon acceleration) before the holders of Debentures will be entitled to receive or retain any payment in respect of the principal of or premium, if any, or interest, if any, on the Debentures; provided, however, that holders of Senior Indebtedness shall not be entitled to receive payment of any such amounts to the extent that such holders would be required by the subordination provisions of such Senior Indebtedness to pay such amounts over to the obligees on trade accounts payable or other liabilities arising in the ordinary course of the Company's business. No payments on account of principal (or premium, if any) or interest, if any, in respect of the Debentures may be made if there shall have occurred and be continuing a default in any payment with respect to Senior Indebtedness, or an event of default with respect to any Senior Indebtedness resulting in the acceleration of the maturity thereof, or if any judicial proceeding shall be pending with respect to any such default. The Indenture places no limitation on the amount of additional Senior Indebtedness that may be incurred by the Company. As of ________ ___, 19__, Senior Indebtedness of the Company aggregated approximately $__________, and the Company's consolidated subsidiaries had indebtedness and other liabilities of approximately $__________ to which the Debentures would be effectively subordinated. Defeasance and Discharge The Indenture provides that the Company, at the Company's option: (a) will be discharged from any and all obligations in respect of Debentures (except for certain obligations to register the transfer or exchange of the Debentures, replace stolen, lost or mutilated Debentures, maintain paying agencies and hold moneys for payment in trust) or (b) need not comply with certain restrictive covenants of the Indenture, in each case if the Company deposits, in trust with the Trustee, cash or U.S. Government Obligations or Agency Obligations (each, as defined in the Indenture) which through the payment of interest thereon and principal thereof in accordance with their terms will provide funds in an amount sufficient to pay all the principal of, and interest and premium, if any, on, the Debentures on the dates such payments are due in accordance with the terms of the Debentures. Under current federal income tax law, the defeasance contemplated in the clause (a) would be treated as a taxable exchange of the Debentures in which holders of the Debentures would recognize gain or loss. In addition, thereafter, the amount, timing and character of amounts that holders would be required to include in income might be different from that which would be includible in the absence of such defeasance. Prospective investors are urged to consult their own tax advisors as to the specific consequences of a defeasance, including the applicability and effect of tax laws other than the federal income tax law. Under current federal income tax law, unless accompanied by other changes in the terms of the Debentures, the defeasance contemplated in clause (b) should not be treated as a taxable exchange. Denominations The Debentures will be issuable only in registered form without coupons in denominations of $1,000 and integral multiples thereof. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a summary of the principal United States federal income tax consequences of the purchase, ownership and disposition of Debentures. The statements of law and legal conclusions set forth in this summary regarding the tax consequences to the beneficial owners of Debentures (the Holders) represent the opinion of Hunton & Williams, counsel to the Company. This summary does not address all tax consequences that may be applicable to a Holder, nor does it address the tax consequences to (i) persons that may be subject to special treatment under federal income tax law, such as banks, insurance companies, thrift institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations and dealers in securities or currencies, (ii) persons that will hold Debentures as part of a position in a "straddle" or as part of a "hedging," "conversion" or other integrated investment transaction for federal income tax purposes, (iii) except with respect to the discussion under the caption "United States Alien Holders," persons whose functional currency is not the United States dollar or (iv) persons that do not hold Debentures as capital assets. S-8 This summary is based upon the Internal Revenue Code of 1986, as amended Treasury Regulations, Internal Revenue Service (IRS) rulings and pronouncements, and judicial decisions now in effect, all of which are subject to change at any time. Such changes may be applied retroactively in a manner that could cause the tax consequences to vary substantially from the consequences described below, possibly adversely affecting Holders. The authorities on which this summary is based (including authorities distinguishing debt from equity) are subject to various interpretations, and it is therefore possible that the federal income tax treatment of the Debentures may differ from the treatment described below. No ruling has been received from the IRS regarding the tax consequences of the Debentures. Counsel's opinion regarding such tax consequences represents only counsel's best legal judgment based on current authorities and is not binding on the IRS or the courts. PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF DEBENTURES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS. Interest Income and Original Issue Discount The Debentures are debt instruments for federal income tax purposes. Under recently issued Treasury Regulations (the Regulations), a "remote" contingency that stated interest will not be timely paid will be ignored in determining whether a debt instrument is issued with original issue discount (OID). The Company believes that the likelihood of its exercising its option to defer payments of interest on the Debentures is remote. Consequently, the Debentures should not be considered to be issued with OID at the time of their original issuance, and a Holder should include in gross income interest on Debentures in accordance with such Holder's method of tax accounting. Under the Regulations, if the Company should actually exercise its option to defer any payment of interest, the Debentures would at that time be treated as issued with OID, and all stated interest on the Debentures would thereafter be treated as OID so long as the Debentures remained outstanding. In such event, all of a Holder's taxable interest income with respect to Debentures would be accounted for as OID on an economic accrual basis regardless of the Holder's method of tax accounting, and actual payments of stated interest would not be reported as taxable income. Consequently, a Holder would be required to include in gross income OID even though the Company would not make any cash payments during an Extension Period. The Regulations have not been addressed in any rulings or other interpretations by the IRS, and it is possible that the IRS could take a position contrary to the interpretation herein. Sales or Redemption of Debentures Upon a sale (including redemption) of a Debenture, a Holder will recognize gain or loss equal to the difference between its adjusted tax basis in such Debenture and the amount realized on the sale (excluding any amount attributable to any accrued interest not previously included in income, which will be taxable as ordinary income). Provided that the Company does not exercise its option to defer payment of interest on the Debentures, and the Debentures are not considered to be issued with OID, a Holder's adjusted tax basis in a Debenture generally will be the Holder's purchase price, increased by any market discount included in income and reduced by any amortized Section 171 premium for such Debenture (see Market Discount and Amortizable Premium below). If the Debentures are deemed to be issued with OID as a result of the Company's deferral of any interest payment, a Holder's tax basis in a Debenture will be increased by OID previously includable in such Holder's gross income to the date of disposition and decreased by payments received on the Debenture since and including the commencement date of the first Extension Period. Such gain or loss, except to the extent of any accrued market discount, generally will be a capital gain or loss and generally will be a long-term capital gain or loss if the Debenture has been held for more than one year. Should the Company exercise its option to defer any payment of interest, the Debentures may trade at a price that does not accurately reflect the value of accrued but unpaid interest. As a result, and because a Holder S-9 would be required to include in income accrued but unpaid interest on Debentures and to add such amount to its adjusted tax basis, such Holder might recognize a capital loss on a sale of Debentures during an Extension Period. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income. For a summary of federal income tax consequences upon a potential defeasance of the Debentures, see "Description of Debentures--Defeasance and Discharge." Market Discount A secondary market purchaser of a Debenture at a discount from the adjusted issue price (that is, the principal amount plus any accrued but unpaid OID of the Debenture) acquires such Debenture with "market discount." However, market discount will be considered to be zero if such market discount is minimal, i.e., less than the product of (A) 0.25% of the adjusted issue price of such Debenture multiplied by (B) the number of complete years to maturity of the Debenture after the date of purchase. The purchaser of a Debenture with more than a minimal amount of market discount generally will be required to treat any gain on the sale, redemption or other disposition of all or part of the Debenture as ordinary income to the extent of accrued (but not previously taxable) market discount. Market discount generally will accrue ratably during the period from the date of purchase to the maturity date of the Debenture, unless the Holder irrevocably elects to accrue such market discount on the basis of a constant interest rate. A Holder who has acquired a Debenture at a market discount generally will be required to defer any interest deductions attributable to any indebtedness incurred or continued to purchase or carry the Debenture, to the extent such deductions exceed interest and OID income on the Debenture. Any such deferred interest expense generally will be allowable as a deduction not later than the year in which the related market discount is recognized. As an alternative to the inclusion of market discount in income upon disposition of a Debenture, a Holder may make an election to include market discount in income as it accrues on all market discount instruments acquired by the Holder during or after the taxable year for which the election is made. In that case, the preceding deferral rule for interest expense will not apply. Amortizable Premium A secondary market purchaser of a Debenture at a premium over the stated principal amount of the Debenture (plus accrued interest) generally may elect to amortize such premium (Section 171 premium) from the purchase date to the maturity date, under a constant yield method that reflects semi-annual compounding. Amortized Section 171 premium generally will be treated as an offset to interest income on a Debenture and not as a separate deduction. If a Debenture is deemed to be issued with OID and is acquired at a premium over its adjusted issue price, the premium will not be Section 171 premium but will be amortized as a reduction in the amount of OID includable in the Holder's income. Backup Withholding Tax and Information Reporting The amount of interest paid and any OID accrued on the Debentures to Holders (other than corporations and other exempt Holders) will be reported to the IRS. Such income is to be reported to non-exempt Holders by January 31 following each calendar year. "Backup" withholding at a rate of 31% will apply to payments of interest and payments of disposition (including redemption) proceeds to a non-exempt Holder unless the Holder furnishes to the payor its taxpayer identification number, certifies that such number is correct, and meets certain other conditions. Any amounts withheld from a Holder under the backup withholding rules will be allowable as a refund or a credit against such Holder's United States federal income tax liability. United States Alien Holders For purposes of this discussion, a United States Alien Holder is any corporation, individual, partnership, estate or trust that for United States federal income tax purposes is a foreign corporation, a non-resident alien individual, a foreign partnership or a non-resident fiduciary of a foreign estate or trust. This discussion assumes that income with respect to the Debentures is not effectively connected with a trade or business in the United States in which the United States Alien Holder is engaged. S-10 Under current United States federal income tax law: (i) payments by the Company or any of its paying agents to any holder of Debentures that is a United States Alien Holder generally will not be subject to withholding or other United States federal income tax, provided that, in the case of payments with respect to interest (including OID), (a) the beneficial owner of the Debentures does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (b) the beneficial owner of the Debentures is not a controlled foreign corporation that is related to the Company through stock ownership, and (c) either (A) the beneficial owner of the Debentures certifies to the payor, under penalties of perjury, that it is a United States Alien Holder and provides its name and address or (B) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a Financial Institution) and holds the Debentures in such capacity certifies under penalties of perjury that such statement has been received from the beneficial owner by it or by a Financial Institution between it and the beneficial owner and furnishes the payor with a copy thereof; and (ii) a United States Alien Holder of Debentures generally will not be subject to withholding or other United States federal income tax on any gain realized upon the sale or other disposition of Debentures. UNDERWRITING Subject to the terms and conditions set forth in the Underwriting Agreement, the Company has agreed to sell to the Underwriters named below, and such Underwriters, for whom Lehman Brothers Inc. is acting as representative (the Representative), has agreed to purchase from the Company the principal amount of Debentures set forth opposite its name below:
Principal Amount --------------- Underwriter --------------- Lehman Brothers Inc..................... Total................................. =========
Under the terms and conditions set forth in the Underwriting Agreement, the Underwriters are committed to take and pay for all such Debentures offered hereby, if any are taken. The Underwriters propose to offer the Debentures in part directly to the public initially at the price to public set forth on the cover page of this Prospectus Supplement and in part to certain securities dealers at such price less a concession of % per Debenture. The Underwriters may allow, and such dealers may reallow, a concession not to exceed % per Debenture to certain brokers and dealers. After the Debentures are released for sale to the public, the offering price and other selling terms may from time to time be varied by the Representative. The Company has agreed that, during the period beginning from the date of the Underwriting Agreement and continuing to and including the earlier of (i) the termination of trading restrictions on the Debentures, as communicated to the Company by the Representative, and (ii) 30 days following the Closing Date, they will not offer, sell, contract to sell or otherwise dispose of any additional securities of the Company substantially similar to the Debentures or any securities convertible into or exchangeable for or that represent the right to receive any such similar securities, without the consent of the Representative. S-11 The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Representative or its affiliates have provided from time to time, and expect to provide in the future, investment or commercial banking services to the Company and its affiliates, for which the Representative or its affiliates have received or will receive customary fees and commissions. LEGAL MATTERS Certain United States federal income taxation matters will be passed upon for the Company by Hunton & Williams, Richmond, Virginia. EXPERTS The consolidated financial statements incorporated herein by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 19___ have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. S-12 ================================================================================ No dealer, salesperson or other individual has been authorized to give any information or to make any representations other than those contained or incorporated by reference in this Prospectus or the accompanying Prospectus Supplement in connection with the offer made by this Prospectus and the accompanying Prospectus Supplement and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or by the Underwriters. Neither the delivery of this Prospectus and the accompanying Prospectus Supplement nor any sale made hereunder and thereunder shall under any circumstance create an implication that there has been no change in the affairs of the Company since the date hereof. This Prospectus and the accompanying Prospectus Supplement do not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. ------------------------ Prospectus Supplement Page ---- Prospectus Supplement Summary............................................. S_ Risk Factors.............................................................. S_ Use of Proceeds........................................................... S_ Ratio of Earnings to Fixed Charges........................................ S_ Capitalization............................................................ S_ Description of Debentures................................................. S_ Certain Federal Income Tax Consequences................................... S_ Underwriting.............................................................. S_ Legal Matters............................................................. S_ Experts................................................................... S_ Prospectus Page ---- Available Information..................................................... __ Incorporation of Certain Documents by Reference........................... __ The Company............................................................... __ Use of Proceeds........................................................... __ Description of Junior Subordinated Debentures............................. __ Book-Entry Issuance....................................................... __ Plan of Distribution...................................................... __ Validity of Securities.................................................... __ Experts................................................................... __ ================================================================================ $________ Virginia Electric and Power Company SKIS(SM) __% Subordinated Capital Income Securities (Series __ Junior Subordinated Debentures Due 20__) PROSPECTUS SUPPLEMENT __________ __, 19__ LEHMAN BROTHERS ================================================================================ -----END PRIVACY-ENHANCED MESSAGE-----