Filed pursuant to Rule 424(b)(5)
Registration Nos. 333-54504,
333-54504-01 and 333-54504-02
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY 9, 2001)
[PPL LOGO]
PPL CORPORATION
COMMON STOCK
____________________________
We have entered into a sales agency agreement with UBS Warburg LLC relating
to the shares of common stock offered by this prospectus supplement and the
accompanying prospectus. In accordance with the terms of the sales agency
agreement, we may offer and sell up to $100,000,000 of shares of our common
stock from time to time through UBS Warburg, as our exclusive sales agent. Sales
of the shares, if any, will be made by means of ordinary brokers' transactions
on the New York Stock Exchange. Our common stock is listed on the New York Stock
Exchange and the Philadelphia Stock Exchange under the symbol "PPL". On February
1, 2002, the last reported sales price of our common stock on the New York Stock
Exchange was $34.06 per share.
UBS Warburg will be entitled to a commission equal to 2.0% of the gross
sales price per share for any shares sold under the sales agency agreement.
____________________________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
____________________________
UBS WARBURG LLC
THIS PROSPECTUS SUPPLEMENT IS DATED FEBRUARY 4, 2002.
In making your investment decision, you should rely only on the information
incorporated by reference or provided in this prospectus supplement and the
accompanying prospectus. We have not authorized anyone else to provide you with
different information. If you receive any unauthorized information, you should
not rely on it. We are not making an offer of these securities in any
jurisdiction where the offer is not permitted. You should not assume that the
information in this prospectus supplement or the accompanying prospectus is
accurate as of any date other than the date on the front of these documents.
TABLE OF CONTENTS
Page
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PROSPECTUS SUPPLEMENT
The Company S-1
Use of Proceeds .......................................................................... S-1
Plan of Distribution ..................................................................... S-2
Validity of Common Stock ................................................................. S-3
Page
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PROSPECTUS
About this Prospectus .................................................................... 2
Where You Can Find More Information ...................................................... 3
PPL Corporation .......................................................................... 5
PPL Capital Funding ...................................................................... 7
PPL Capital Funding Trust I .............................................................. 7
Use of Proceeds .......................................................................... 7
Ratios of Earnings to Fixed Charges and Earning
To Fixed Charges and Preferred Dividends ............................................ 7
Description of PPL Corporation's Capital Stock ........................................... 8
Description of Stock Purchase Contracts and Stock Purchase Units ......................... 9
Description of the Debt Securities ....................................................... 10
Description of the Trust Securities ...................................................... 18
Description of the Preferred Securities Guarantee ........................................ 25
Description of the Subordinated Debt Securities .......................................... 27
Information Concerning the Trustees ...................................................... 39
Experts .................................................................................. 39
Validity of the Securities and the Securities Guarantees ................................. 39
Plan of Distribution ..................................................................... 40
i
THE COMPANY
PPL Corporation is a holding company with headquarters in Allentown,
Pennsylvania. Its subsidiaries include: PPL Electric Utilities Corporation,
which provides electricity delivery service in eastern and central Pennsylvania;
PPL Energy Supply, LLC, a holding company for PPL Corporation's unregulated
business; PPL EnergyPlus, LLC, which sells energy and energy services in
deregulated markets; PPL Generation, LLC, which owns and operates all of PPL
Corporation's U.S. generation facilities; PPL Montana Holdings, LLC, which
holds, through subsidiaries, investments in electricity generation and related
assets in Montana; PPL Montana, LLC, which generates electricity for wholesale
and retail customers in Montana and the Northwest; PPL Global, LLC, an
international independent power company which develops and acquires U.S. and
international energy projects and which owns international energy projects; PPL
Gas Utilities Corporation, which provides natural gas distribution, transmission
and storage services and sells propane; PPL Spectrum, Inc., which markets
energy-related products and services; PPL Energy Services Holdings, LLC, which
holds, through subsidiaries, mechanical contracting and engineering firms; PPL
Transition Bond Company, LLC, a special purpose subsidiary of PPL Electric
Utilities formed to issue transition bonds under the Pennsylvania Electricity
Generation Customer Choice and Competition Act; and PPL Services Corporation,
which provides shared services for PPL Corporation and its subsidiaries.
PPL Corporation's offices are located at Two North Ninth Street,
Allentown, Pennsylvania 18101-1179 and its telephone number is (610) 774-5151.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of common stock offered
by this prospectus supplement and the accompanying prospectus for general
corporate purposes, including investing in unregulated business activities and
reducing short-term debt to provide interim financing for such purpose.
S-1
PLAN OF DISTRIBUTION
We have entered into a sales agency agreement with UBS Warburg LLC
under which we may issue and sell up to $100,000,000 of shares of common stock
from time to time through UBS Warburg, as our exclusive sales agent. The sales,
if any, of common stock made under the sales agency agreement will be made only
by means of ordinary brokers' transactions on the New York Stock Exchange.
UBS Warburg will sell the shares of common stock subject to the sales
agency agreement on a daily basis or as otherwise agreed upon by us and UBS
Warburg. We will designate the maximum amount of shares of common stock to be
sold by UBS Warburg on a daily basis or otherwise as we and UBS Warburg agree.
Subject to the terms and conditions of the sales agency agreement, UBS Warburg
will use its reasonable efforts to sell all of the designated shares of common
stock. We may instruct UBS Warburg not to sell shares of common stock if the
sales cannot be effected at or above the price designated by us in any such
instruction. Our company or UBS Warburg may suspend the offering of shares of
common stock upon proper notice and subject to other conditions.
UBS Warburg will provide written confirmation to us following the close
of trading on the New York Stock Exchange each day in which shares of common
stock are sold under the sales agency agreement. Each confirmation will include
the number of shares sold on that day, the net proceeds to us and the
compensation payable by us to UBS Warburg in connection with the sales.
The compensation to UBS Warburg for sales of common stock will equal a
fixed commission rate of 2.0% of the gross sales price of any shares sold. The
remaining sales proceeds, after deducting any transaction fees imposed by any
governmental or self-regulatory organization in connection with the sales, will
equal our net proceeds for the sale of the shares.
Settlement for sales of common stock will occur on the third business
day following the date on which any sales are made in return for payment of the
net proceeds to us. There is no arrangement for funds to be received in an
escrow, trust or similar arrangement.
On or prior to the second business day after the end of each calendar
week during which sales of common stock were made by UBS Warburg, we will file a
prospectus supplement with the SEC under the applicable paragraph of Rule 424(b)
of the Securities Act of 1933. We will also deliver to the New York Stock
Exchange the number of copies of the prospectus supplements that are required by
the exchange. The prospectus supplements will include the dates covered, the
number of shares of common stock sold through UBS Warburg, the net proceeds to
us and the compensation payable by us to UBS Warburg in connection with the
sales of common stock. UBS Warburg will act as sales agent on a reasonable
efforts basis.
In connection with the sale of the common stock on our behalf, UBS
Warburg may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, and the compensation of UBS Warburg may be deemed to be
underwriting commissions or discounts. We have agreed to provide indemnification
and contribution to UBS Warburg against certain
S-2
civil liabilities, including liabilities under the Securities Act. UBS Warburg
may engage in transactions with, or perform other services for, us in the
ordinary course of business.
If either PPL or UBS Warburg has reason to believe that the exemptive
provisions set forth in Rule 101(c)(1) of Regulation M under the Securities
Exchange Act of 1934 are not satisfied, that party will promptly notify the
other and sales of common stock under the sales agency agreement will be
suspended until that or other exemptive provisions have been satisfied in the
judgment of PPL and UBS Warburg.
The offering of common stock pursuant to the sales agency agreement
will terminate upon the earlier of (1) the sale of all shares of common stock
subject to the agreement or (2) termination of the sales agency agreement. The
sales agency agreement may be terminated by either party in its sole discretion
at any time.
VALIDITY OF COMMON STOCK
Our legal counsel, Simpson Thacher & Bartlett, New York, New York, will
pass upon certain legal matters in connection with the offered common stock.
Simpson Thacher & Bartlett will rely on the opinion of Michael A. McGrail, Esq.,
Senior Counsel of PPL Services Corporation, a subsidiary of PPL Corporation, as
to matters involving the law of the Commonwealth of Pennsylvania. UBS Warburg
LLC is being represented by Sullivan & Cromwell, New York, New York.
S-3
PROSPECTUS
PPL CORPORATION
PPL CAPITAL FUNDING, INC.
PPL CAPITAL FUNDING TRUST I
Two North Ninth Street
Allentown, Pennsylvania 18101-1179
(610) 774-5151
$1,200,000.000
PPL CORPORATION
COMMON STOCK, PREFERRED STOCK,
STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
PPL CAPITAL FUNDING, INC.
DEBT SECURITIES AND SUBORDINATED DEBT SECURITIES
GUARANTEED AS TO PAYMENT AS DESCRIBED
IN THIS PROSPECTUS BY PPL CORPORATION
PPL CAPITAL FUNDING TRUST I
PREFERRED TRUST SECURITIES
GUARANTEED AS DESCRIBED
IN THIS PROSPECTUS BY PPL CORPORATION
We will provide the specific terms of these securities in supplements to
this prospectus. You should read this prospectus and the supplements carefully
before you invest. This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement.
We may offer the securities directly or through underwriters or agents. The
applicable prospectus supplement will describe the terms of any particular plan
of distribution.
THESE SECURITIES HAVE NOT BEEN 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
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is February 9, 2001.
TABLE OF CONTENTS
PAGE
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ABOUT THIS PROSPECTUS ..................................................... 2
WHERE YOU CAN FIND MORE INFORMATION ....................................... 3
PPL CORPORATION ........................................................... 5
PPL CAPITAL FUNDING ....................................................... 7
PPL CAPITAL FUNDING TRUST I ............................................... 7
USE OF PROCEEDS ........................................................... 7
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED
CHARGES AND PREFERRED DIVIDENDS ......................................... 7
DESCRIPTION OF PPL CORPORATION'S CAPITAL STOCK ............................ 8
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE
UNITS ................................................................... 9
DESCRIPTION OF THE DEBT SECURITIES ........................................ 10
DESCRIPTION OF THE TRUST SECURITIES ....................................... 18
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE ......................... 25
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES ........................... 27
INFORMATION CONCERNING THE TRUSTEES ....................................... 39
EXPERTS ................................................................... 39
VALIDITY OF THE SECURITIES AND THE SECURITIES GUARANTEES .................. 39
PLAN OF DISTRIBUTION ...................................................... 40
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that PPL Corporation,
PPL Capital Funding, Inc. ("PPL Capital Funding") and PPL Capital Funding Trust
I (the "Trust") filed with the Securities and Exchange Commission, or SEC, using
a "shelf" registration process. Under this shelf process, we may, from time to
time, sell combinations of the securities described in this prospectus in one or
more offerings up to a total dollar amount of $1,200,000,000. This amount
includes $398,084,506 of securities registered under an earlier registration
statement. This prospectus provides a general description of the securities we
may offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described under "Where You Can
Find More Information."
We may use this prospectus to offer from time to time:
(a) shares of PPL Corporation Common Stock, par value $.01 per share
("Common Stock");
(b) shares of PPL Corporation Preferred Stock, par value $.01 per
share ("Preferred Stock");
(c) contracts to purchase shares of PPL Corporation Common Stock
("Stock Purchase Contracts"); and
(d) stock purchase units, each representing either (1) a Stock
Purchase Contract or (2) a Stock Purchase Contract and debt securities or
preferred trust securities of third parties (such as Debt Securities or
Subordinated Debt Securities of PPL Capital Funding, Preferred Trust
Securities of the Trust or United States Treasury securities) that are
pledged to secure the stock purchase unit holders' obligations to purchase
Common Stock under the Stock Purchase Contracts ("Stock Purchase Units").
2
We may also use this prospectus to offer from time to time:
(a) PPL Capital Funding's unsecured and unsubordinated debt securities
("Debt Securities"); and
(b) PPL Capital Funding's unsecured subordinated debt securities
("Subordinated Debt Securities").
PPL Corporation will unconditionally guarantee the payment of principal,
premium and interest on the PPL Capital Funding Debt Securities and Subordinated
Debt Securities as described below in "Description of the Debt Securities--PPL
Corporation Guarantees" and "Description of the Subordinated Debt Securities--
Subordinated Guarantees."
We may also use this prospectus to offer from time to time the Trust's
preferred trust securities ("Preferred Trust Securities"). PPL Corporation will
guarantee the Trust's obligations under the Preferred Trust Securities as
described below under "Description of the Preferred Securities Guarantee."
We sometimes refer to the Common Stock, the Preferred Stock, the Stock
Purchase Contracts, the Stock Purchase Units, the Debt Securities, the
Subordinated Debt Securities and the Preferred Trust Securities collectively as
the "Securities." In addition, we sometimes refer to PPL Corporation's
guarantees of Debt Securities ("Guarantees"), guarantees of Subordinated Debt
Securities ("Subordinated Guarantees"), and the guarantee of Preferred Trust
Securities ("Preferred Securities Guarantee"), collectively as "Securities
Guarantees."
For more detailed information about the Securities and the Securities
Guarantees, you can read the exhibits to the registration statement. Those
exhibits have been either filed with the registration statement or incorporated
by reference to earlier SEC filings listed in the registration statement.
WHERE YOU CAN FIND MORE INFORMATION
AVAILABLE INFORMATION
PPL Corporation files reports, proxy statements and other information with
the SEC. Information filed with the SEC by PPL Corporation can be inspected and
copied at the Public Reference Room maintained by the SEC and at the following
Regional Offices of the SEC:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2551
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. Further information on the operation of the
SEC's Public Reference Room in Washington, D.C. can be obtained by calling the
SEC at 1-800-SEC-0330.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, such as PPL
Corporation, who file electronically with the Commission. The address of that
site is http://www.sec.gov.
PPL Corporation Common Stock is listed on the New York Stock Exchange
("NYSE") and the Philadelphia Stock Exchange (symbol: PPL), and reports, proxy
statements and other information concerning PPL Corporation can also be
inspected at the offices of the NYSE at 20 Broad Street, New York, New York
10005 and the Philadelphia Stock Exchange, 1900 Market Street, Philadelphia,
Pennsylvania 19103. In addition, reports, proxy statements and other information
concerning PPL Corporation can be inspected at its offices at Two North Ninth
Street, Allentown, Pennsylvania 18101-1179. PPL Corporation maintains an
Internet site at http://www.pplweb.com (which is not intended to be an active
hyperlink herein) which
3
contains information concerning PPL Corporation and its affiliates. The
information at PPL Corporation's Internet site is not incorporated in this
prospectus by reference, and you should not consider it a part of this
prospectus.
INCORPORATION BY REFERENCE
The rules of the SEC allow us to "incorporate by reference" information
into this prospectus, which means that we can disclose important information to
you by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus,
and later information that we file with the SEC will automatically update and
supersede that information. This prospectus incorporates by reference the
documents set forth below that have been previously filed with the SEC. These
documents contain important information about PPL Corporation.
SEC FILINGS (FILE NO. 1-11459) PERIOD/DATE
------------------------------ -----------
Annual Report on Form 10-K, as amended by Year ended December 31, 1999
Form 10-K/A, filed with the SEC on June 28,
2000
Quarterly Reports on Form 10-Q Quarters ended March 31,
June 30 and September 30, 2000
Current Reports on Form 8-K January 28, February 14,
May 26, June 2, June 15,
July 5, July 14, July 31,
August 1, August 23,
October 20, October 26 and
December 21, 2000 and January
26, 2001
PPL Corporation's Registration Statement on April 27, 1995
Form 8-B
We are also incorporating by reference additional documents that PPL
Corporation files with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), between
the date of this prospectus and the termination of the offering of the
Securities. In addition, we are also incorporating by reference any additional
documents that PPL Corporation files with the SEC pursuant to these sections of
the Exchange Act after the date of the filing of the registration statement
containing this prospectus, and prior to the effectiveness of the registration
statement.
PPL Corporation will provide without charge to each person, including any
beneficial owner, to whom a copy of this prospectus has been delivered, a copy
of any and all of these filings. You may request a copy of these filings by
writing or telephoning us at:
PPL Corporation
Two North Ninth Street
Allentown, Pennsylvania 18101-1179
Attention: Investor Services Department
Telephone: 1-800-345-3085
We have not included or incorporated by reference any separate financial
statements of PPL Capital Funding herein. We do not consider those financial
statements to be material to holders of the Debt Securities or Subordinated Debt
Securities because (1) PPL Capital Funding was formed for the primary purpose of
providing financing for PPL Corporation and its subsidiaries, (2) PPL Capital
Funding does not currently engage in any independent operations and (3) PPL
Capital Funding does not currently plan to engage, in the future, in more than
minimal independent operations. See "PPL Capital Funding." PPL Capital Funding
has received a "no action" letter from the Staff of the SEC stating that the
Staff would not raise any objection if PPL Capital Funding does not file
periodic reports under Sections 13 and 15(d) of the Exchange Act. Accordingly,
we do not expect PPL Capital Funding to file those reports.
We have similarly not included or incorporated by reference any separate
financial statements of the Trust herein. We do not consider those financial
statements to be material to holders of the Preferred Trust
4
Securities because (1) the Trust is a newly formed special purpose entity and
has no operating history or independent operations, and (2) the Trust is not
engaged in and does not propose to engage in any activity other than holding as
trust assets the Subordinated Debt Securities of PPL Capital Funding and issuing
the Preferred Trust Securities and the Common Trust Securities. We do not expect
the Trust to file periodic reports under Sections 13 and 15(d) of the Exchange
Act.
PPL CORPORATION
PPL Corporation is a holding company with headquarters in Allentown,
Pennsylvania. Its principal subsidiaries include:
-- PPL Electric Utilities Corporation ("PPL Utilities"), which provides
electricity delivery service in eastern and central Pennsylvania;
-- PPL Energy Funding Corporation ("Energy Funding"), a holding company
for PPL Corporation's unregulated business;
-- PPL EnergyPlus, LLC ("EnergyPlus"), which sells energy and energy
services in deregulated markets;
-- PPL Generation, LLC ("PPL Generation"), which owns and operates all
of PPL Corporation's U.S. generation facilities, including those
generating facilities previously owned by PPL Utilities;
-- PPL Montana Holdings, LLC, which holds, through subsidiaries,
investments in electricity generation and related assets in Montana;
-- PPL Montana, LLC, which generates electricity for wholesale and
retail customers in Montana and the Northwest;
-- PPL Global, LLC ("PPL Global"), an international independent power
company which develops and acquires U.S. and international energy
projects and which owns international energy projects;
-- PPL Gas Utilities Corporation, which provides natural gas
distribution, transmission and storage services and sells propane;
-- PPL Spectrum, Inc., which markets energy-related products and
services;
-- PPL Capital Funding, which engages in financing for PPL Corporation
and its subsidiaries;
-- H.T. Lyons, Inc., McClure Company, McCarl's Inc., Burns Mechanical,
and Western Mass. Holdings, Inc., which are mechanical contracting
and engineering firms; and
-- PPL Transition Bond Company, LLC (a special purpose subsidiary of PPL
Utilities), formed to issue transition bonds under the Pennsylvania
Electricity Generation and Customer Choice and Competition Act
("Customer Choice Act").
CORPORATE REALIGNMENT
Prior to July 1, 2000, PPL Utilities had been an integrated public utility
which engaged in the generation, transmission and distribution of electricity in
its franchised territory in eastern and central Pennsylvania, and which also
engaged in wholesale energy marketing in the United States and Canada. PPL
Utilities also engaged in retail energy marketing in newly deregulated markets
through EnergyPlus, which had been a wholly-owned subsidiary of PPL Utilities.
As a result of federal and state legislation and regulatory initiatives,
the electric utility industry, including PPL Utilities, has experienced and will
continue to experience a significant increase in the level of competition in the
energy supply market. At the federal level, the Energy Policy Act of 1992
created a new class of independent power producers to promote competition in the
electric energy market for bulk power, and the Federal Power Act was amended to
provide open access to electric transmission systems for wholesale
5
transactions. In addition, the Customer Choice Act was enacted in Pennsylvania
to restructure the state's electric utility industry in order to create retail
access to a competitive market for generation of electricity.
On July 1, 2000, PPL Corporation and PPL Utilities completed a corporate
realignment in order to effectively separate PPL Utilities' regulated
transmission and distribution operations from its recently deregulated
generation operations and better position the companies and their affiliates in
the new competitive marketplace. As part of the corporate realignment, PPL
Utilities transferred its generating assets to PPL Generation. PPL Utilities
also transferred its wholesale energy marketing assets to EnergyPlus, and
subsequently transferred its interest in EnergyPlus to Energy Funding. PPL
Utilities retained its electric transmission and distribution businesses. PPL
Global also transferred its U.S. electric generating subsidiaries to PPL
Generation as part of the realignment; PPL Global retains its international
electric generation and distribution assets, and will continue to acquire and
develop power projects in the United States and internationally. The corporate
realignment followed receipt of various regulatory approvals, including
approvals of the Pennsylvania Public Utility Commission, the Federal Energy
Regulatory Commission and the Nuclear Regulatory Commission.
HOLDING COMPANY STRUCTURE
PPL Corporation conducts its operations primarily through PPL Utilities and
PPL Corporation's other wholly-owned subsidiaries, and substantially all of PPL
Corporation's consolidated assets are held by PPL Utilities and these other
subsidiaries. Accordingly, PPL Corporation's cash flow, its ability to pay
dividends on its capital stock and its ability to meet its obligations under the
Securities Guarantees are largely dependent upon the earnings of PPL Utilities
and the other subsidiaries and the distribution or other payment of such
earnings to PPL Corporation in the form of dividends, loans or advances or
repayment of loans and advances from PPL Corporation. The subsidiaries are
separate and distinct legal entities and have no obligation to pay any amounts
due on any Securities (except for the Securities issued by such subsidiaries) or
to make any funds available for such payment.
Because PPL Corporation is a holding company, its obligations under the
Securities Guarantees will be effectively subordinated to all existing and
future liabilities of its subsidiaries. Therefore, PPL Corporation's rights and
the rights of its shareholders and creditors, including rights of a holder of
any Security under a Securities Guarantee, to participate in the assets of any
subsidiary in the event that such a subsidiary is liquidated or reorganized,
will be subject to the prior claims of such subsidiary's creditors. To the
extent that PPL Corporation may itself be a creditor with recognized claims
against any such subsidiary, PPL Corporation's claims would still be effectively
subordinated to any security interest in, or mortgages or other liens on, the
assets of the subsidiary and would be subordinated to any indebtedness or other
liabilities of the subsidiary senior to that held by PPL Corporation. Although
certain agreements to which PPL Corporation and its subsidiaries are parties
limit the ability to incur additional indebtedness, PPL Corporation and its
subsidiaries retain the ability to incur substantial additional indebtedness and
other liabilities.
The information above concerning PPL Corporation and its subsidiaries is
only a summary and does not purport to be comprehensive. In addition, certain
statements regarding PPL Corporation and its affiliates contained or
incorporated by reference in this prospectus are "forward-looking statements"
within the meaning of the securities laws. Although PPL Corporation believes
that the expectations reflected in such statements are reasonable, it can give
no assurance that such expectations will prove to have been correct. For
additional information concerning PPL Corporation and its subsidiaries,
including certain assumptions, risks and uncertainties involved in the
forward-looking statements contained or incorporated by reference in this
prospectus, you should refer to the information described in "Where You Can Find
More Information."
PPL Corporation's offices are located at Two North Ninth Street, Allentown,
Pennsylvania 18101-1179 and its telephone number is (610) 774-5151.
6
PPL CAPITAL FUNDING
PPL Capital Funding is a Delaware corporation and a wholly-owned subsidiary
of PPL Corporation. PPL Capital Funding's primary business is to provide
financing for the operations of PPL Corporation and its subsidiaries.
PPL Capital Funding's offices are located at Two North Ninth Street,
Allentown, Pennsylvania 18101-1179 and its telephone number is (610) 774-5151.
PPL CAPITAL FUNDING TRUST I
The Trust is a statutory business trust created under Delaware law under a
trust agreement which is to be amended pursuant to an Amended and Restated Trust
Agreement (as so amended, the "Trust Agreement") among PPL Corporation, The
Chase Manhattan Bank as the Property Trustee, Chase Manhattan Bank USA, National
Association, as Delaware Trustee and two employees of PPL Corporation as
Administrative Trustees. The Trust exists only to issue and sell its Preferred
Trust Securities and Common Trust Securities, to acquire and hold the
Subordinated Debt Securities as trust assets and to engage in activities
incidental to the foregoing. All of the Common Trust Securities will be owned by
PPL Corporation. The Common Trust Securities will represent at least 3% of the
total capital of the Trust. Payments will be made on the Common Trust Securities
pro rata with the Preferred Trust Securities, except that the Common Trust
Securities' right to payment will be subordinated to the rights of the Preferred
Trust Securities if there is a default under the Trust Agreement resulting from
an event of default under the Subordinated Indenture (as defined herein). The
Trust has a term of approximately 40 years, but may dissolve earlier as provided
in the Trust Agreement. The Trust's business and affairs will be conducted by
its Administrative Trustees, as set forth in the Trust Agreement. The office of
the Delaware Trustee in the State of Delaware is 1201 Market Street, 9th Floor,
Wilmington, Delaware 19801. The Trust's offices are located at Two North Ninth
Street, Allentown, PA 18101-1179, and the telephone number is (610) 774-5151.
USE OF PROCEEDS
Unless we indicate differently in the applicable prospectus supplement, the
net proceeds from the sale of the Debt Securities, Subordinated Debt Securities
and/or the Preferred Trust Securities will be loaned to PPL Corporation and/or
its subsidiaries. PPL Corporation and/or its subsidiaries are expected to use
the proceeds of such loans, and the proceeds of any other Securities, for
general corporate purposes, including investing in unregulated business
activities and reducing short-term debt incurred to provide interim financing
for such purposes.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
The following table sets forth PPL Corporation's ratio of earnings to fixed
charges and ratio of earnings to fixed charges and preferred dividends for the
periods indicated:
TWELVE MONTHS ENDED YEAR ENDED DECEMBER 31,
--------------------- ------------------------------------------
SEPTEMBER 30, 2000(A) 1999(A) 1998(A) 1997 1996 1995
--------------------- ------- ------- ---- ---- ----
Ratio of earnings to fixed
charges......................... 2.98 2.98 3.48 3.33 3.43 3.47
Ratio of earnings to fixed charges
and preferred dividends (b)..... 2.76 2.72 3.12 2.94 2.88 2.92
____________
(a) 2000, 1999 and 1998 net income excludes extraordinary items. For purposes of
these ratios, earnings for the year ended December 31, 1998 exclude an
extraordinary charge of $948 million (after tax) associated with PPL
Utilities' restructuring proceedings before the Pennsylvania Public Utility
Commission and the Federal Energy Regulatory Commission. See PPL
Corporation's reports on file with the SEC pursuant to the Exchange Act as
described under "Where You Can Find More Information" for more information.
(b) Includes distributions on company-obligated mandatorily redeemable preferred
securities of subsidiary trusts holding solely company debentures.
7
DESCRIPTION OF PPL CORPORATION'S CAPITAL STOCK
The description below is a summary of certain provisions of PPL
Corporation's capital stock. The Pennsylvania Business Corporation Law and the
Restated Articles of Incorporation and By-laws of PPL Corporation determine the
rights and privileges of holders of PPL Corporation's capital stock. We
encourage you to read such documents, which have been filed with the SEC, and
the Pennsylvania law for more information regarding such capital stock.
AUTHORIZED CAPITAL
The authorized capital stock of PPL Corporation consists of 390,000,000
shares of Common Stock, par value $.01 per share and 10,000,000 shares of
Preferred Stock, par value $.01 per share.
COMMON STOCK
As of December 31, 2000, 145,041,342 shares of Common Stock were issued and
outstanding. The outstanding Common Stock is, and the Common Stock offered
hereby when issued and paid for will be, fully paid and non-assessable.
Dividends. Dividends on the Common Stock will be paid if, when and as
determined by the Board of Directors of PPL Corporation out of funds legally
available for this purpose. The rate and timing of future dividends will depend
upon the future earnings and financial condition of PPL Corporation and its
subsidiaries and upon other relevant factors affecting PPL Corporation's
dividend policy which PPL Corporation cannot presently determine. As a practical
matter, the ability of PPL Corporation to pay dividends will be governed by the
ability of PPL Corporation's operating subsidiaries to pay dividends to PPL
Corporation. To date, the funds required by PPL Corporation to enable it to pay
dividends on its Common Stock have been derived predominantly from dividends
paid by PPL Utilities to PPL Corporation. In the future, dividends from
subsidiaries other than PPL Utilities will also be a source of funds for
dividend payments by PPL Corporation. The subsidiaries' ability to pay dividends
to PPL Corporation will be subject to the prior rights of the holders of such
subsidiaries' outstanding debt and preferred securities, the availability of
earnings and the needs of their businesses. See "PPL Corporation--Holding
Company Structure." The restrictions on the payment of dividends contained in
PPL Utilities' Amended and Restated Articles of Incorporation and in its first
mortgage bond indenture do not currently limit the amount of regular quarterly
dividends PPL Utilities pays on its common stock.
Voting Rights. Holders of Common Stock are entitled to one vote for each
share held by them on all matters presented to shareowners. Pursuant to PPL
Corporation's Articles of Incorporation, the holders of Common Stock will not
have cumulative voting rights in the election of directors. PPL Corporation's
bylaws provide for a classified board of directors consisting of three classes
as nearly equal in number as may be. Each class holds office until the third
year following the election of such class, and no director may be removed except
for cause upon a two-thirds vote of all outstanding shares. PPL Corporation's
bylaws also provide for certain notice requirements for shareowner nominations
and proposals at annual meetings and preclude shareowners from bringing business
before any special meeting. PPL Corporation's Articles of Incorporation and
certain provisions of Pennsylvania law would require a supermajority vote of
holders or a majority vote of disinterested directors to approve certain
business combinations and other major transactions involving PPL Corporation.
Liquidation Rights. After satisfaction of the preferential liquidation
rights of any Preferred Stock, the holders of the Common Stock are entitled to
share, ratably, in the distribution of all remaining net assets.
Preemptive and Other Rights. The holders of Common Stock do not have
preemptive rights as to additional issues of Common Stock or conversion rights.
The shares of Common Stock are not subject to redemption or to any further calls
or assessments and are not entitled to the benefit of any sinking fund
provisions.
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PREFERRED STOCK
PPL Corporation's Board of Directors is authorized, without further
shareowner action, to divide the Preferred Stock into one or more classes or
series and to determine the designations, preferences, limitations and special
rights of any class or series including, but not limited to, the following:
(a) the rate of dividend, if any;
(b) the rights, if any, of the holders of shares of the series upon
voluntary or involuntary liquidation, dissolution or winding up of PPL
Corporation;
(c) the terms and conditions upon which shares may be converted into
shares of other series or other capital stock, if issued with the privilege
of conversion;
(d) the price at and the terms and conditions upon which shares may
be redeemed; and
(e) the voting rights, if any.
No shares of Preferred Stock have been issued. The applicable prospectus
supplement will describe the terms of any Preferred Stock.
Unless otherwise provided in the applicable prospectus supplement, holders
of Preferred Stock will not have any preemptive rights to subscribe for or
purchase any additional shares of the capital stock of PPL Corporation, or other
securities or other right or option to purchase shares of capital stock.
CERTAIN TAX MATTERS
In the opinion of counsel for PPL Corporation, the Common Stock and
Preferred Stock are exempt from existing personal property taxes in
Pennsylvania.
LISTING
The outstanding shares of Common Stock are, and the shares offered hereby
will be, listed on the New York and Philadelphia Stock Exchanges.
TRANSFER AGENTS AND REGISTRARS
The Transfer Agents and Registrars for the Common Stock are PPL Utilities
and Norwest Bank Minnesota, N.A., St. Paul, Minnesota.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
PPL Corporation may issue Stock Purchase Contracts representing contracts
obligating holders to purchase from PPL Corporation, and PPL Corporation to sell
to the holders, a specified number of shares of Common Stock at a future date or
dates. The price per share of Common Stock and number of shares of Common Stock
may be fixed at the time the Stock Purchase Contracts are issued or may be
determined by reference to a specific formula set forth in the Stock Purchase
Contracts. The Stock Purchase Contracts may be issued separately or as a part of
other Stock Purchase Units that consist of (a) a Stock Purchase Contract or (b)
a Stock Purchase Contract and debt securities or preferred trust securities of
third parties (including, but not limited to, Debt Securities, Subordinated Debt
Securities, Preferred Trust Securities or United States Treasury securities),
that would secure the holders' obligations to purchase the Common Stock under
the Stock Purchase Contracts. The Stock Purchase Contracts may require PPL
Corporation to make periodic payments to the holders of the Stock Purchase Units
or vice-versa. These payments may be unsecured or prefunded on some basis. The
Stock Purchase Contracts may require holders to secure their obligations
thereunder in a specified manner.
The applicable prospectus supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units.
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DESCRIPTION OF THE DEBT SECURITIES
The following description sets forth certain general terms and provisions
of PPL Capital Funding's unsecured debt securities, consisting of notes or
debentures, that we may offer by this prospectus ("Debt Securities"). We will
describe the particular terms of Debt Securities, and provisions that vary from
those described below, in one or more prospectus supplements.
We may issue the Debt Securities from time to time in the future in one or
more series. We will issue the Debt Securities and the guarantee or guarantees
of PPL Corporation relating thereto (the "Guarantee" or "Guarantees") under the
Indenture, dated as of November 1, 1997 (as such indenture has been and may be
supplemented, the "Indenture"), among PPL Capital Funding, PPL Corporation and
The Chase Manhattan Bank, as trustee (the "Trustee").
The Indenture is filed as an exhibit to the registration statement. The
Indenture and its associated documents contain the full legal text of the
matters described in this section. Because this section is a summary, it does
not describe every aspect of the Debt Securities or the Indenture. This summary
is subject to and qualified in its entirety by reference to all the provisions
of the Indenture, including definitions of certain terms used in the Indenture.
We also include references in parentheses to certain sections of the Indenture.
Whenever we refer to particular sections or defined terms of the Indenture in
this prospectus or in a prospectus supplement, such sections or defined terms
are incorporated by reference herein or in the prospectus supplement. This
summary also is subject to and qualified by reference to the description of the
particular terms of your securities described in the applicable prospectus
supplement or supplements. The Indenture has been qualified under the Trust
Indenture Act, and you should refer to the Trust Indenture Act for provisions
that apply to the Debt Securities.
GENERAL
We may issue an unlimited amount of Debt Securities or other securities
under the Indenture. The Debt Securities and all other debt securities issued
previously or hereafter under the Indenture are collectively referred to herein
as the "Indenture Securities."
The Debt Securities will be unsecured and unsubordinated obligations of PPL
Capital Funding, and by the Guarantees will be unconditionally guaranteed by PPL
Corporation as to payment of principal and any interest and premium. See "--PPL
Corporation Guarantees."
Prior to the issuance of each series, certain aspects of the particular
Debt Securities have to be specified in a supplemental indenture, in a board
resolution of PPL Capital Funding, or in one or more officer's certificates of
PPL Capital Funding pursuant to a supplemental indenture or a board resolution.
We refer you to the applicable prospectus supplement(s) for a description of the
following terms of the series of Debt Securities:
(a) the title of such Debt Securities;
(b) any limit upon the principal amount of such Debt Securities;
(c) the date or dates on which principal will be payable or how to
determine such dates;
(d) the rate or rates or method of determination of interest; the
date from which interest will accrue; the dates on which interest will be
payable ("Interest Payment Dates"); and any record dates for the interest
payable on such Interest Payment Dates;
(e) any obligation or option of PPL Capital Funding to redeem,
purchase or repay Debt Securities, or any option of the Holder to require
PPL Capital Funding to redeem or repurchase Debt Securities, and the terms
and conditions upon which such Debt Securities will be redeemed, purchased
or repaid;
(f) the denominations in which such Debt Securities will be issuable
(if other than denominations of $1,000 and any integral multiple thereof);
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(g) whether such Debt Securities are to be issued in whole or in part
in the form of one or more global Debt Securities and, if so, the identity
of the depositary for such global Debt Securities; and
(h) any other terms of such Debt Securities.
(See Section 301.)
PPL CORPORATION GUARANTEES
PPL Corporation will unconditionally guarantee the payment of principal of
and any interest and premium on the Debt Securities, when due and payable,
whether at the stated maturity date, by declaration of acceleration, call for
redemption or otherwise, in accordance with the terms of such Debt Securities
and the Indenture. The Guarantees will remain in effect until the entire
principal of and any premium and interest on the Debt Securities has been paid
in full or otherwise discharged in accordance with the provisions of the
Indenture. (See Article Fourteen.) The Guarantees will be unsecured debt of PPL
Corporation, not subordinated by their terms to any other obligations of PPL
Corporation. See "PPL Corporation--Holding Company Structure," above, however,
with regard to the effect of the holding company structure on the status of PPL
Corporation's obligations compared to obligations of its subsidiaries.
PAYMENT OF DEBT SECURITIES
INTEREST
Unless we indicate differently in a prospectus supplement, we will pay
interest on each Debt Security on each Interest Payment Date by check mailed to
the person in whose name such Debt Security is registered (the registered holder
of any Indenture Security being called a "Holder" in this prospectus) as of the
close of business on the regular record date relating to such Interest Payment
Date, except that interest payable at maturity (whether at stated maturity, upon
redemption or otherwise, "Maturity") will be paid to the person to whom
principal is paid.
However, if we default in paying interest on a Debt Security, we will pay
defaulted interest in either of the two following ways:
(a) We will first propose to the Trustee a payment date for such
defaulted interest. Next, the Trustee will choose a Special Record Date for
determining which Holders are entitled to the payment. The Special Record
Date will be between 10 and 15 days before the payment date we propose.
Finally, we will pay such defaulted interest on the payment date to the
Holder of the Debt Security as of the close of business on the Special
Record Date.
(b) Alternatively, we can propose to the Trustee any other lawful
manner of payment that is consistent with the requirements of any
securities exchange on which such Debt Securities are listed for trading.
If the Trustee thinks the proposal is practicable, payment will be made as
proposed.
(See Section 307.)
PRINCIPAL
Unless we indicate differently in a prospectus supplement, we will pay
principal of and any interest and premium on the Debt Securities at Maturity
upon presentation of the Debt Securities at the office of The Chase Manhattan
Bank in New York, New York, as our Paying Agent. Any other Paying Agent
initially designated for the Debt Securities of a particular series will be
named in the applicable prospectus supplement.
In our discretion, we may change the place of payment on the Debt
Securities, and may remove any Paying Agent and may appoint one or more
additional Paying Agents (including PPL Capital Funding, PPL Corporation or any
affiliate of either of them). (See Section 602.)
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FORM; TRANSFERS; EXCHANGES
Unless otherwise indicated in a prospectus supplement, the Debt Securities
will be issued:
(a) only in fully registered form;
(b) without interest coupons; and
(c) in denominations that are integral multiples of $1,000. (See
Section 302.)
You may have your Debt Securities divided into Debt Securities of smaller
denominations (of at least $1,000) or combined into Debt Securities of larger
denominations, as long as the total principal amount is not changed. This is
called an "exchange."
You may exchange or transfer Debt Securities at the office of the Trustee.
The Trustee acts as our agent for registering Debt Securities in the names of
holders and transferring debt securities. We may appoint another agent or act as
our own agent for this purpose. The entity performing the role of maintaining
the list of registered holders is called the "Security Registrar." It will also
perform transfers.
In our discretion, we may change the place for registration of transfer of
the Debt Securities and may remove and/or appoint one or more additional
Security Registrars (including PPL Capital Funding, PPL Corporation or any
affiliate of either of them). (See Sections 305 and 602.)
Except as otherwise provided in a prospectus supplement, there will be no
service charge for any transfer or exchange of the Debt Securities, but you may
be required to pay a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. We may block the transfer or exchange of
(a) Debt Securities during a period of 15 days prior to giving any notice of
redemption or (b) any Debt Security selected for redemption in whole or in part,
except the unredeemed portion of any Debt Security being redeemed in part. (See
Section 305.)
REDEMPTION
We will set forth any terms for the redemption of Debt Securities in a
prospectus supplement. Unless we indicate differently in a prospectus
supplement, and except with respect to Debt Securities redeemable at the option
of the Holder, Debt Securities will be redeemable upon notice by mail between 30
and 60 days prior to the redemption date. If less than all of the Debt
Securities of any series or any tranche thereof are to be redeemed, the Trustee
will select the Debt Securities to be redeemed. In the absence of any provision
for selection, the Trustee will choose a method of random selection as it deems
fair and appropriate. (See Sections 403 and 404.)
Debt Securities will cease to bear interest on the redemption date. PPL
Capital Funding will pay the redemption price and any accrued interest once you
surrender the Debt Security for redemption. (See Section 405.) If only part of a
Debt Security is redeemed, the Trustee will deliver to you a new Debt Security
of the same series for the remaining portion without charge. (Section 406.)
We may make any redemption at the option of PPL Capital Funding conditional
upon the receipt by the Paying Agent, on or prior to the date fixed for
redemption, of money sufficient to pay the redemption price. If the Paying Agent
has not received such money by the date fixed for redemption, PPL Capital
Funding will not be required to redeem such Debt Securities. (See Section 404.)
EVENTS OF DEFAULT
An "Event of Default" occurs with respect to Indenture Securities of any
series if
(a) we do not pay any interest on any Indenture Securities of the
applicable series within 30 days of the due date;
(b) we do not pay principal or premium on any Indenture Securities of
the applicable series on its due date;
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(c) we remain in breach of a covenant (excluding covenants solely
applicable to a specific series) or warranty of the Indenture for 90 days
after we receive a written notice of default stating we are in breach and
requiring remedy of the breach; the notice must be sent by either the
Trustee or Holders of 25% of the principal amount of Indenture Securities
of the affected series; the Trustee or such Holders can agree to extend the
90-day period and such an agreement to extend will be automatically deemed
to occur if we are diligently pursuing action to correct the default;
(d) the Guarantees on any Indenture Securities of the applicable
series
(1) cease to be effective (except in accordance with their
terms),
(2) are found in any judicial proceeding to be unenforceable or
invalid, or
(3) are denied or disaffirmed (except in accordance with their
terms);
(e) we file for bankruptcy or certain other events in bankruptcy,
insolvency, receivership or reorganization occur; or
(f) any other Event of Default specified in the prospectus supplement
occurs.
(See Section 801.)
No Event of Default with respect to the Debt Securities necessarily constitutes
an Event of Default with respect to the Indenture Securities of any other series
issued under the Indenture.
REMEDIES
ACCELERATION
Any One Series. If an Event of Default occurs and is continuing with
respect to any one series of Indenture Securities, then either the Trustee or
the Holders of 25% in principal amount of the outstanding Indenture Securities
of such series may declare the principal amount of all of the Indenture
Securities of such series to be due and payable immediately.
More Than One Series. If an Event of Default occurs and is continuing with
respect to more than one series of Indenture Securities, then either the Trustee
or the Holders of 25% in aggregate principal amount of the outstanding Indenture
Securities of all such series, considered as one class, may make such
declaration of acceleration. Thus, if there is more than one series affected,
the action by 25% in principal amount of the Indenture Securities of any
particular series will not, in itself, be sufficient to make a declaration of
acceleration.
(See Section 802.)
RESCISSION OF ACCELERATION
After the declaration of acceleration has been made and before the Trustee
has obtained a judgment or decree for payment of the money due, such declaration
and its consequences will be rescinded and annulled, if
(a) we pay or deposit with the Trustee a sum sufficient to pay
(1) all overdue interest;
(2) the principal of and any premium which have become due
otherwise than by such declaration of acceleration and overdue
interest thereon;
(3) interest on overdue interest to the extent lawful; and
(4) all amounts due to the Trustee under the Indenture; and
13
(b) all Events of Default, other than the nonpayment of the
principal which has become due solely by such declaration of acceleration,
have been cured or waived as provided in the Indenture.
(See Section 802.) For more information as to waiver of defaults, see "--Waiver
of Default and of Compliance" below.
CONTROL BY HOLDERS; LIMITATIONS
Subject to the Indenture, if an Event of Default with respect to the
Indenture Securities of any one series occurs and is continuing, the Holders of
a majority in principal amount of the outstanding Indenture Securities of that
series will have the right to
(a) direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or
(b) exercise any trust or power conferred on the Trustee with respect
to the Indenture Securities of such series.
If an Event of Default is continuing with respect to more than one series
of Indenture Securities, the Holders of a majority in aggregate principal amount
of the outstanding Indenture Securities of all such series, considered as one
class, will have the right to make such direction, and not the Holders of the
Indenture Securities of any one of such series. These rights of Holders to make
direction are subject to the following limitations:
(a) the Holders' directions may not conflict with any law or the
Indenture; and
(b) the Holders' directions may not involve the Trustee in personal
liability where the Trustee believes indemnity is not adequate.
The Trustee may also take any other action it deems proper which is consistent
with the Holders' direction. (See Sections 812 and 903.)
In addition, the Indenture provides that no Holder of any Indenture
Security will have any right to institute any proceeding, judicial or otherwise,
with respect to the Indenture for the appointment of a receiver or for any other
remedy thereunder unless
(a) that Holder has previously given the Trustee written notice of a
continuing Event of Default;
(b) the Holders of 25% in aggregate principal amount of the
outstanding Indenture Securities of all affected series, considered as one
class, have made written request to the Trustee to institute proceedings in
respect of that Event of Default and have offered the Trustee reasonable
indemnity against costs and liabilities incurred in complying with such
request; and
(c) for 60 days after receipt of such notice, the Trustee has failed
to institute any such proceeding and no direction inconsistent with such
request has been given to the Trustee during such 60-day period by the
Holders of a majority in aggregate principal amount of outstanding
Indenture Securities of all affected series, considered as one class.
Furthermore, no Holder will be entitled to institute any such action if and to
the extent that such action would disturb or prejudice the rights of other
Holders. (See Sections 807 and 903.)
However, each Holder has an absolute and unconditional right to receive
payment when due and to bring a suit to enforce that right. (See Sections 807
and 808.)
NOTICE OF DEFAULT
The Trustee is required to give the Holders of the Indenture Securities
notice of any default under the Indenture to the extent required by the Trust
Indenture Act, unless such default has been cured or waived; except that in the
case of an Event of Default of the character specified above in clause (c) under
"Events of Default," no such notice shall be given to such Holders until at
least 75 days after the occurrence thereof.
14
(See Section 902.) The Trust Indenture Act currently permits the Trustee to
withhold notices of default (except for certain payment defaults) if the Trustee
in good faith determines the withholding of such notice to be in the interests
of the Holders.
We will furnish the Trustee with an annual statement as to the compliance
by PPL Capital Funding with the conditions and covenants in the Indenture. (See
Section 605.)
WAIVER OF DEFAULT AND OF COMPLIANCE
The Holders of a majority in aggregate principal amount of the outstanding
Indenture Securities of any series may waive, on behalf of the Holders of all
Indenture Securities of such series, any past default under the Indenture,
except a default in the payment of principal, premium or interest, or with
respect to compliance with certain provisions of the Indenture that cannot be
amended without the consent of the Holder of each outstanding Indenture
Security. (See Section 813.)
Compliance with certain covenants in the Indenture or otherwise provided
with respect to Indenture Securities may be waived by the Holders of a majority
in aggregate principal amount of the affected Indenture Securities, considered
as one class. (See Section 606.)
CONSOLIDATION, MERGER AND CONVEYANCE OF ASSETS AS AN ENTIRETY; NO FINANCIAL
COVENANTS
Subject to the provisions described in the next paragraph, each of PPL
Capital Funding and PPL Corporation will preserve its corporate existence. (See
Section 604.)
PPL Capital Funding and PPL Corporation have each agreed not to consolidate
with or merge into any other entity or convey, transfer or lease its properties
and assets substantially as an entirety to any entity unless
(a) the entity formed by such consolidation or into which PPL Capital
Funding or PPL Corporation, as the case may be, is merged or the entity
which acquires or which leases the property and assets of PPL Capital
Funding or PPL Corporation, as the case may be, substantially as an
entirety is an entity organized and existing under the laws of the United
States of America or any State thereof or the District of Columbia, and
expressly assumes, by supplemental indenture, the due and punctual payment
of the principal, premium and interest on all the outstanding Indenture
Securities (or the Guarantees endorsed thereon, as the case may be) and the
performance of all of the covenants of PPL Capital Funding or PPL
Corporation, as the case may be, under the Indenture, and
(b) 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, will have occurred and be continuing. (See
Section 1101.)
The Indenture does not prevent or restrict:
(a) any consolidation or merger after the consummation of which PPL
Capital Funding or PPL Corporation would be the surviving or resulting
entity; or
(b) any conveyance or other transfer, or lease, of any part of the
properties of PPL Capital Funding or PPL Corporation which does not
constitute the entirety, or substantially the entirety, thereof. (See
Section 1103.)
Neither the Indenture nor the Guarantee contains any financial or other
similar restrictive covenants.
15
MODIFICATION OF INDENTURE
Without Holder Consent. Without the consent of any Holders of Indenture
Securities, PPL Capital Funding, PPL Corporation and the Trustee may enter into
one or more supplemental indentures for any of the following purposes:
(a) to evidence the succession of another entity to PPL Capital
Funding or PPL Corporation; or
(b) to add one or more covenants of PPL Capital Funding or PPL
Corporation or other provisions for the benefit of the Holders of all or
any series or tranche of Indenture Securities, or to surrender any right or
power conferred upon PPL Capital Funding or PPL Corporation; or
(c) to add any additional Events of Default for all or any series of
Indenture Securities; or
(d) to change or eliminate any provision of the Indenture or to add
any new provision to the Indenture that does not adversely affect the
interests of the Holders; or
(e) to provide security for the Indenture Securities of any series;
or
(f) to establish the form or terms of Indenture Securities of any
series or tranche or any Guarantees as permitted by the Indenture; or
(g) to provide for the issuance of bearer securities; or
(h) to evidence and provide for the acceptance of appointment of a
separate or successor Trustee; or
(i) to provide for the procedures required to permit the utilization
of a noncertificated system of registration for any series or tranche of
Indenture Securities; or
(j) to change any place or places where
(1) we may pay principal, premium and interest,
(2) Indenture Securities may be surrendered for transfer or
exchange, and
(3) notices and demands to or upon PPL Capital Funding or PPL
Corporation may be served; or
(k) to cure any ambiguity, defect or inconsistency or to make any
other changes that do not adversely affect the interests of the Holders in
any material respect.
If the Trust Indenture Act is amended after the date of the Indenture so as
to require changes to the Indenture or so as to permit changes to, or the
elimination of, provisions which, at the date of the Indenture or at any time
thereafter, were required by the Trust Indenture Act to be contained in the
Indenture, the Indenture will be deemed to have been amended so as to conform to
such amendment or to effect such changes or elimination, and PPL Capital
Funding, PPL Corporation and the Trustee may, without the consent of any
Holders, enter into one or more supplemental indentures to effect or evidence
such amendment.
(See Section 1201.)
With Holder Consent. Except as provided above, the consent of the Holders
of at least a majority in aggregate principal amount of the Indenture Securities
of all outstanding series, considered as one class, is generally required for
the purpose of adding to, or changing or eliminating any of the provisions of,
the Indenture pursuant to a supplemental indenture. However, if less than all of
the series of outstanding Indenture Securities are directly affected by a
proposed supplemental indenture, then such proposal only requires the consent of
the Holders of a majority in aggregate principal amount of the outstanding
Indenture Securities of all directly affected series, considered as one class.
Moreover, if the Indenture Securities of any series have been issued in more
than one tranche and if the proposed supplemental indenture directly affects the
rights of the Holders of Indenture Securities of one or more, but less than all,
of such tranches, then such proposal only requires the consent of the Holders of
a majority in aggregate principal amount of the outstanding Indenture Securities
of all directly affected tranches, considered as one class.
16
However, no amendment or modification may, without the consent of the
Holder of each outstanding Indenture Security directly affected thereby,
(a) change the stated maturity of the principal or interest on any
Indenture Security (other than pursuant to the terms thereof), or reduce
the principal amount, interest or premium payable or change the currency in
which any Indenture Security is payable, or impair the right to bring suit
to enforce any payment;
(b) reduce the percentages of Holders whose consent is required for
any supplemental indenture or waiver or reduce the requirements for quorum
and voting under the Indenture; or
(c) modify certain of the provisions in the Indenture relating to
supplemental indentures and waivers of certain covenants and past defaults.
A supplemental indenture which changes or eliminates any provision of the
Indenture expressly included solely for the benefit of Holders of Indenture
Securities of one or more particular series or tranches will be deemed not to
affect the rights under the Indenture of the Holders of Indenture Securities of
any other series or tranche. (See Section 1202.)
MISCELLANEOUS PROVISIONS
The Indenture provides that certain Indenture Securities, including those
for which payment or redemption money has been deposited or set aside in trust
as described under "--Satisfaction and Discharge" below, will not be deemed to
be "outstanding" in determining whether the Holders of the requisite principal
amount of the outstanding Indenture Securities have given or taken any demand,
direction, consent or other action under the Indenture as of any date, or are
present at a meeting of Holders for quorum purposes. (See Section 101.)
PPL Capital Funding or PPL Corporation will be entitled to set any day as a
record date for the purpose of determining the Holders of outstanding Indenture
Securities of any series entitled to give or take any demand, direction, consent
or other action under the Indenture, in the manner and subject to the
limitations provided in the Indenture. In certain circumstances, the Trustee
also will be entitled to set a record date for action by Holders. If such a
record date is set for any action to be taken by Holders of particular Indenture
Securities, such action may be taken only by persons who are Holders of such
Indenture Securities on the record date. (See Section 104.)
SATISFACTION AND DISCHARGE
Any Indenture Securities or any portion will be deemed to have been paid
for purposes of the Indenture, and at PPL Capital Funding's election, our entire
indebtedness will be satisfied and discharged, if there shall have been
irrevocably deposited with the Trustee or any Paying Agent (other than PPL
Capital Funding or PPL Corporation), in trust:
(a) money sufficient, or
(b) in the case of a deposit made prior to the maturity of such
Indenture Securities, non-redeemable Government Obligations (as defined in
the Indenture) sufficient, or
(c) a combination of (a) and (b), which in total are sufficient,
to pay when due the principal of, and any premium, and interest due and to
become due on such Indenture Securities or portions thereof on and prior to the
maturity thereof.
(See Section 701.)
The Indenture will be deemed satisfied and discharged when no Indenture
Securities remain outstanding and when we have paid all other sums payable by us
under the Indenture. (See Section 702.)
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All moneys we pay to the Trustee or any Paying Agent on Debt Securities
which remain unclaimed at the end of two years after payments have become due
will be paid to or upon the order of PPL Capital Funding. Thereafter, the Holder
of such Debt Security may look only to us for payment thereof. (See Section
603.)
RESIGNATION AND REMOVAL OF THE TRUSTEE; DEEMED RESIGNATION
The Trustee may resign at any time by giving written notice thereof to us.
The Trustee may also be removed by act of the Holders of a majority in
principal amount of the then outstanding Indenture Securities of any series.
No resignation or removal of the Trustee and no appointment of a successor
trustee will become effective until the acceptance of appointment by a successor
trustee in accordance with the requirements of the Indenture.
Under certain circumstances, we may appoint a successor trustee and if the
successor accepts, the Trustee will be deemed to have resigned.
(See Section 910).
GOVERNING LAW
The Indenture, the Debt Securities and the Guarantees provide that they are
to be governed by and construed in accordance with the laws of the State of New
York.
DESCRIPTION OF THE TRUST SECURITIES
The Trust may issue Preferred Trust Securities and Common Trust Securities
under the Trust Agreement. These Trust securities will represent undivided
beneficial interests in the assets of the Trust. Selected provisions of the
Trust Agreement are summarized below. This summary is not complete. The form of
Trust Agreement was filed with the SEC and you should read the Trust Agreement
for provisions that may be important to you. The Trust Agreement will be
qualified as an indenture under the Trust Indenture Act. You should also refer
to the Trust Indenture Act for provisions that apply to the Preferred Trust
Securities. Wherever particular defined terms of the Trust Agreement are
referred to, such defined terms are incorporated herein by reference.
GENERAL
The Preferred Trust Securities and Common Trust Securities issued by the
Trust will be substantially the same except that, if there is an Event of
Default under the Trust Agreement, as described below, that results from an
Event of Default under the Subordinated Indenture, the rights of the holders of
the Common Trust Securities to payment of distributions and upon liquidation or
redemption will be subordinated to the rights of the holders of the Preferred
Trust Securities. All of the Common Trust Securities of the Trust will be owned
by PPL Corporation.
PPL Corporation will fully and unconditionally guarantee payments due on
the Preferred Trust Securities through a combination of the following:
(a) PPL Corporation's guarantee of PPL Capital Funding's obligations
under the Subordinated Debt Securities (the "Subordinated Guarantee");
(b) the rights of holders of Preferred Trust Securities to enforce
those obligations;
(c) PPL Corporation's agreement to pay the expenses of the Trust; and
(d) PPL Corporation's guarantee of payments due on the Preferred
Trust Securities to the extent of the Trust's assets (the "Preferred
Securities Guarantee").
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The Trust will use the proceeds from the sale of the Preferred Trust
Securities and Common Trust Securities to purchase Subordinated Debt Securities
from PPL Capital Funding. The Subordinated Debt Securities will be guaranteed by
PPL Corporation pursuant to the Subordinated Guarantee described below. The
Subordinated Debt Securities will be held in trust for the benefit of holders of
the Preferred Trust Securities and Common Trust Securities.
A prospectus supplement relating to the Preferred Trust Securities will
include specific terms of those securities and of the Subordinated Debt
Securities. For a description of some specific terms that will affect both the
Preferred Trust Securities and the Subordinated Debt Securities and your rights
under each, see "Description of the Subordinated Debt Securities" below.
DISTRIBUTIONS
The only income of the Trust available for distribution to the holders of
Preferred Trust Securities will be payments on the Subordinated Debt Securities.
If neither PPL Capital Funding nor PPL Corporation makes interest payments on
the Subordinated Debt Securities, the Trust will not have funds available to pay
distributions on Preferred Trust Securities. The payment of distributions, if
and to the extent the Trust has sufficient funds available for the payment of
such distributions, is guaranteed on a limited basis by PPL Corporation as
described under "Description of the Preferred Securities Guarantee."
So long as no Event of Default under the Subordinated Indenture has
occurred and is continuing, PPL Capital Funding may extend the interest payment
period from time to time on the Subordinated Debt Securities for one or more
periods. As a consequence, distributions on Preferred Trust Securities would be
deferred during any such period. Interest would, however, continue to accrue.
During any extended interest period, or for so long as an "Event of Default"
under the Subordinated Indenture resulting from a payment default or any payment
default under the Preferred Securities Guarantee has occurred and is continuing,
PPL Corporation may not:
(a) declare or pay any dividend or distribution on its capital stock,
other than dividends paid in shares of capital stock of PPL Corporation;
(b) redeem, purchase, acquire or make a liquidation payment with
respect to any of its capital stock;
(c) pay any principal, interest or premium on, or repay, repurchase
or redeem any debt securities that are equal or junior in right of payment
with the Subordinated Guarantees; or
(d) make any payments with respect to any guarantee of debt
securities by PPL Corporation if such guarantee is equal or junior in right
of payment to the Subordinated Guarantees.
Before an extension period ends, PPL Capital Funding may further extend the
interest payment period. No extension period as further extended may exceed 20
consecutive quarters. After any extension period and the payment of all amounts
then due, PPL Capital Funding may select a new extended interest payment period.
No interest period may be extended beyond the maturity of the Subordinated Debt
Securities.
REDEMPTION
Whenever Subordinated Debt Securities are repaid, whether at maturity or
earlier redemption, the Property Trustee will apply the proceeds to redeem a
like amount of Preferred Trust Securities and Common Trust Securities.
Preferred Trust Securities will be redeemed at the redemption price plus
accrued and unpaid distributions with the proceeds from the contemporaneous
redemption of Subordinated Debt Securities. Redemptions of the Preferred Trust
Securities will be made on a redemption date only if the Trust has funds
available for the payment of the redemption price plus accrued and unpaid
distributions.
Holders of Preferred Trust Securities will be given not less than 30 nor
more than 60 days' notice of any redemption. On or before the redemption date,
the Trust will irrevocably deposit with the paying agent for
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Preferred Trust Securities sufficient funds and will give the paying agent
irrevocable instructions and authority to pay the redemption price plus accrued
and unpaid distributions to the holders upon surrender of their Preferred Trust
Securities. Distributions payable on or before a redemption date will be payable
to the holders on the record date for the distribution payment. If notice is
given and funds are deposited as required, then on the redemption date all
rights of holders of the Preferred Trust Securities called for redemption will
cease, except the right of the holders to receive the redemption price plus
accrued and unpaid distributions, and the Preferred Trust Securities will cease
to be outstanding. No interest will accrue on amounts payable on the redemption
date. In the event that any date fixed for redemption of Preferred Trust
Securities is not a business day, then payment will be made on the next business
day, except that, if such business day falls in the next calendar year, then
payment will be made on the immediately preceding business day. No interest will
be payable because of any such delay. If payment of Preferred Trust Securities
called for redemption is improperly withheld or refused and not paid either by
the Trust or by PPL Corporation pursuant to the Preferred Securities Guarantee,
distributions on such Preferred Trust Securities will continue to accrue to the
date of payment. The actual payment date will be considered the date fixed for
redemption for purposes of calculating the redemption price plus accrued and
unpaid distributions.
Subject to applicable law, including United States federal securities law,
PPL Corporation or its affiliates may at any time and from time to time purchase
outstanding Preferred Trust Securities by tender, in the open market or by
private agreement.
If Preferred Trust Securities are partially redeemed on a redemption date,
a corresponding percentage of the Common Trust Securities will be redeemed. The
particular Preferred Trust Securities to be redeemed will be selected not more
than 60 days prior to the redemption date by the Property Trustee by such method
as the Property Trustee shall deem fair, taking into account the denominations
in which they were issued. The Property Trustee will promptly notify the
Preferred Trust Security registrar in writing of the Preferred Trust Securities
selected for redemption and, where applicable, the partial amount to be
redeemed.
SUBORDINATION OF COMMON TRUST SECURITIES
Payment of distributions on, and the redemption price, plus accrued and
unpaid distributions, of, the Preferred Trust Securities and Common Trust
Securities shall be made pro rata based on the liquidation preference amount of
such securities. However, if on any distribution payment date or redemption date
an event of default under the Trust Agreement resulting from an event of default
under the Subordinated Indenture has occurred and is continuing, no payment on
any Common Trust Security shall be made until all payments due on the Preferred
Trust Securities have been made. In that case, funds available to the Property
Trustee shall first be applied to the payment in full of all distributions on,
or the redemption price plus accrued and unpaid distributions of, Preferred
Trust Securities then due and payable.
If an event of default under the Trust Agreement results from an event of
default under the Subordinated Indenture, the holder of Common Trust Securities
cannot take action with respect to the Trust Agreement default until the effect
of all defaults with respect to Preferred Trust Securities has been cured,
waived or otherwise eliminated. Until the event of default under the Trust
Agreement with respect to Preferred Trust Securities has been cured, waived or
otherwise eliminated, the Property Trustee shall, to the fullest extent
permitted by law, act solely on behalf of the holders of Preferred Trust
Securities and not the holders of the Common Trust Securities, and only holders
of Preferred Trust Securities will have the right to direct the Property Trustee
to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
The Trust shall dissolve and shall be liquidated by the Property Trustee on
the first to occur of:
(a) the expiration of the term of the Trust;
(b) the bankruptcy, dissolution or liquidation of PPL Corporation;
(c) the redemption of all of the Preferred Trust Securities;
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(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction; and
(e) the election of PPL Corporation at any time.
If a dissolution of the Trust occurs, the Trust will be liquidated by the
Property Trustee as expeditiously as the Property Trustee determines to be
appropriate. If a dissolution of the Trust occurs other than by redemption of
all the Preferred Trust Securities, the Property Trustee will provide for the
satisfaction of liabilities of creditors, if any, and distribute to each holder
of the Preferred Trust Securities and Common Trust Securities a proportionate
amount of Subordinated Debt Securities. If a distribution of Subordinated Debt
Securities is determined by the Property Trustee not to be practical, holders
will be entitled to receive, out of the assets of the Trust after adequate
provision for the satisfaction of liabilities of creditors, if any, an amount
equal to the aggregate liquidation preference of the Preferred Trust Securities
plus accrued and unpaid distributions thereon to the date of payment. If this
liquidation distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate liquidation
distribution, then the amounts payable by the Trust on the Preferred Trust
Securities shall be paid on a pro rata basis. PPL Corporation, as holder of the
Common Trust Securities, will be entitled to receive distributions upon any
dissolution pro rata with the holders of the Preferred Trust Securities, except
that if an Event of Default (or event that, with the lapse of time or giving of
notice, would become such an Event of Default) has occurred and is continuing
under the Subordinated Indenture, the Preferred Trust Securities will have a
preference over the Common Trust Securities.
EVENTS OF DEFAULT; NOTICE
Any one of the following events will be an event of default under the Trust
Agreement 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:
(a) the occurrence of an Event of Default as described in the
Subordinated Indenture;
(b) default by the Trust in the payment of any distribution when it
becomes due and payable, and continuation of that default for a period of
30 days;
(c) default by the Trust in the payment of any redemption price, plus
accrued and unpaid distributions, of any Preferred Trust Security or Common
Trust Security when it becomes due and payable;
(d) default in the performance, or breach, in any material respect,
of any covenant or warranty of the trustees under the Trust Agreement which
is not dealt with above, and the continuation of that default or breach for
a period of 90 days after written notice to the Trust and PPL Corporation
by the holders of Preferred Trust Securities having at least 25% of the
total liquidation preference amount of the outstanding Preferred Trust
Securities; or
(e) the occurrence of certain events of bankruptcy or insolvency with
respect to the Trust.
Within 90 days after the occurrence of any event of default actually known
to the Property Trustee, the Property Trustee shall transmit to the holders of
Preferred Trust Securities, PPL Capital Funding, PPL Corporation and the
Administrative Trustees notice of any such default, unless that default will
have been cured or waived.
A holder of Preferred Trust Securities may directly institute a proceeding
to enforce payment when due directly to the holder of the Preferred Trust
Securities of the principal of or interest on Subordinated Debt Securities
having a principal amount equal to the aggregate liquidation preference amount
of the holder's Preferred Trust Securities. The holders of Preferred Trust
Securities have no other rights to exercise directly any other remedies
available to the holder of the Subordinated Debt Securities unless the trustees
under the Trust Agreement fail to do so.
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REMOVAL OF TRUSTEES
Unless an event of default under the Subordinated Indenture has occurred
and is continuing, the holder of the Common Trust Securities may remove any
trustee under the Trust Agreement at any time. If an event of default under the
Subordinated Indenture has occurred and is continuing, the holders of a majority
of the total liquidation preference amount of the outstanding Preferred Trust
Securities may remove the Property Trustee or the Delaware Trustee, or both of
them. The holder of the Common Trust Securities may remove any Administrative
Trustee at any time. Any resignation or removal of a trustee under the Trust
Agreement will take effect only on the acceptance of appointment by the
successor trustee.
Holders of Preferred Trust Securities will have no right to appoint or
remove the Administrative Trustees of the Trust, who may be appointed, removed
or replaced solely by PPL Corporation as the holder of the Common Trust
Securities.
VOTING RIGHTS
Except as provided below and under "Description of the Preferred Securities
Guarantee--Amendments and Assignments," and as otherwise required by law or the
Trust Agreement, the holders of Preferred Trust Securities will have no voting
rights.
While Subordinated Debt Securities are held by the Property Trustee, the
Property Trustee will not:
(a) direct the time, method and place to conduct any proceeding for
any remedy available to the Subordinated Indenture Trustee, or execute any
trust or power conferred on the Subordinated Indenture Trustee with respect
to the Subordinated Debt Securities;
(b) waive any past default under the Subordinated Indenture;
(c) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debt Securities will be due and payable;
or
(d) consent to any amendment, modification or termination of the
Subordinated Indenture or the Subordinated Debt Securities, where that
consent will be required;
without, in each case, obtaining the prior approval of the holders of Preferred
Trust Securities having at least a majority of the liquidation preference amount
of all outstanding Preferred Trust Securities. Where a consent of each holder of
Subordinated Debt Securities affected is required, no consent shall be given by
the Property Trustee without the prior consent of each holder of the Preferred
Trust Securities affected. The Trustees shall not revoke any action previously
authorized or approved by a vote of the holders of Preferred Trust Securities,
except pursuant to the subsequent vote of the holders of Preferred Trust
Securities. If the Property Trustee fails to enforce its rights under the
Subordinated Debt Securities or the Trust Agreement, a holder of the Preferred
Trust Securities may institute a legal proceeding directly against PPL Capital
Funding or PPL Corporation, as the case may be, to enforce the Property
Trustee's rights under the Subordinated Debt Securities or the Trust Agreement
without first instituting any legal proceeding against the Property Trustee or
anyone else. The Property Trustee shall notify all holders of Preferred Trust
Securities of any notice of default received from the Subordinated Indenture
Trustee. The Property Trustee shall not take any action approved by the consent
of the holders without an opinion of counsel experienced in those matters to the
effect that the Trust will be classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes on account of that action.
Holders of Preferred Trust Securities may give any required approval at a
meeting convened for such purpose or by written consent without prior notice.
The Administrative Trustees will give notice of any meeting at which holders of
Preferred Trust Securities are entitled to vote.
No vote or consent of the holders of Preferred Trust Securities will be
required for the Trust to redeem and cancel Preferred Trust Securities in
accordance with the Trust Agreement.
Notwithstanding that holders of Preferred Trust Securities are entitled to
vote or consent under any of the circumstances described above, any Preferred
Trust Securities that are owned by PPL Capital Funding, PPL
22
Corporation or any affiliate of any of them, shall be treated as if they were
not outstanding for purposes of such vote or consent.
AMENDMENTS
The Trust Agreement may be amended from time to time by a majority of the
Administrative Trustees and PPL Corporation, without the consent of any holders
of Preferred Trust Securities:
(a) to cure any ambiguity, correct inconsistent provisions or make any
other provisions with respect to matters or questions arising under the
Trust Agreement; or
(b) to change the name of the Trust; or
(c) to modify, eliminate or add to any provisions of the Trust
Agreement to the extent necessary to ensure that the Trust will not be
classified for United States federal income tax purposes other than as a
grantor trust (and not an association taxable as a corporation) at all
times that any Preferred Trust Securities and Common Trust Securities are
outstanding or to ensure the Trust's exemption from the status of an
"investment company" under the Investment Company Act of 1940.
No amendment described above may materially adversely affect the interests
of any holder of Preferred Trust Securities and Common Trust Securities without
such holder's consent. Any of the amendments of the Trust Agreement described in
paragraph (a) above shall become effective when notice of the amendment is given
to the holders of Preferred Trust Securities and Common Trust Securities.
Except as provided below, any provision of the Trust Agreement may be
amended by the Administrative Trustees and PPL Corporation with:
(a) the consent of holders of Preferred Trust Securities and Common
Trust Securities representing not less than a majority in aggregate
liquidation preference amount of the Preferred Trust Securities and Common
Trust Securities then outstanding; and
(b) receipt by the trustees of an opinion of counsel to the effect
that such amendment or the exercise of any power granted to the trustees in
accordance with the amendment will not affect the Trust's status as a
grantor trust for federal income tax purposes or affect the Trust's
exemption from status of an "investment company" under the Investment
Company Act of 1940.
Each affected holder of Preferred Trust Securities or Common Trust
Securities must have consented to any amendment to the Trust Agreement that:
(a) adversely changes the amount or timing of any distribution with
respect to Preferred Trust Securities or Common Trust Securities or
otherwise adversely affects the amount of any distribution required to be
made in respect of Preferred Trust Securities and Common Trust Securities
as of a specified date; or
(b) restricts the right of a holder of Preferred Trust Securities or
Common Trust Securities to institute suit for the enforcement of any such
payment on or after that date.
FORM, EXCHANGE AND TRANSFER
Preferred Trust Securities may be exchanged for other Preferred Trust
Securities in any authorized denomination and of like tenor and aggregate
liquidation preference.
Subject to the terms of the Trust Agreement, Preferred Trust Securities may
be presented for exchange as provided above or for registration of transfer,
duly endorsed or accompanied by a duly executed instrument of transfer, at the
office of the Preferred Trust Security registrar. The Administrative Trustees
may designate PPL Corporation or PPL Capital Funding or any affiliate of either
of them as the Preferred Trust Security registrar. The Property Trustee will
initially act as the Preferred Trust Security registrar and transfer agent. No
service charge will be made for any registration of transfer or exchange of
Preferred Trust Securities, but the Preferred Trust Security registrar may
require payment of a sum sufficient to cover any tax or other
23
governmental charge payable in connection with the transfer or exchange. A
transfer or exchange will be made when the Preferred Trust Security registrar
and Administrative Trustees are satisfied with the documents of title and
identity of the person making the request. The Administrative Trustees may at
any time designate additional transfer agents or rescind the designation of any
transfer agent or approve a change in the office through which any transfer
agent acts, except that PPL Corporation will, or will cause the Preferred Trust
Security registrar to, maintain an office or agency in The City of New York
where Preferred Trust Securities may be transferred or exchanged.
The Trust will not be required to (1) issue, register the transfer of, or
exchange any Preferred Trust Securities during the 15 calendar days before the
mailing of a notice of redemption of any Preferred Trust Securities called for
redemption and ending at the close of business on the day the notice is mailed
or (2) register the transfer of or exchange any Preferred Trust Securities so
selected for redemption, in whole or in part, except the unredeemed portion of
any Preferred Trust Securities being redeemed in part.
PAYMENT OF PREFERRED TRUST SECURITIES AND PAYING AGENT
Unless we indicate differently in a prospectus supplement, payments in
respect of the Preferred Trust Securities will be made on the applicable
distribution dates by check mailed to the address of the holder entitled thereto
as such address appears on the Preferred Trust Security register. The paying
agent shall initially be the Property Trustee and any co-paying agent chosen by
the Property Trustee and acceptable to the Administrative Trustees, PPL Capital
Funding and PPL Corporation, which may be PPL Corporation or PPL Capital
Funding. The paying agent may resign upon 30 days' written notice to the
Administrative Trustees, the Property Trustee, PPL Capital Funding and PPL
Corporation. In the event that the Property Trustee shall no longer be the
paying agent, the Administrative Trustees shall appoint a successor, which shall
be a bank, trust company or affiliate of PPL Corporation acceptable to the
Property Trustee, PPL Capital Funding and PPL Corporation to act as paying
agent.
DUTIES OF THE TRUSTEES
The Delaware Trustee will act as the resident trustee in the State of
Delaware and will have no other significant duties. The Property Trustee will
hold the Subordinated Debt Securities on behalf of the Trust and will maintain a
payment account with respect to the Preferred Trust Securities and Common Trust
Securities, and will also act as trustee under the Trust Agreement for the
purposes of the Trust Indenture Act.
The Administrative Trustees of the Trust are authorized and directed to
conduct the affairs of the Trust and to operate the Trust so that (i) the Trust
will not be deemed to be an "investment company" required to be registered under
the Investment Company Act, (ii) the Trust will not be taxed as a corporation,
(iii) the Trust will not be classified as other than a grantor trust for United
States federal income tax purposes and (iv) the Subordinated Debt Securities
will be treated as indebtedness of PPL Capital Funding for United States federal
income tax purposes. In this regard, PPL Corporation and the Administrative
Trustees are authorized to take any action, not inconsistent with applicable
law, the certificate of trust or the Trust Agreement, that PPL Corporation and
the Administrative Trustees determine in their discretion to be necessary or
desirable for those purposes, as long as the action does not materially
adversely affect the interests of the holders of the Preferred Trust Securities.
MISCELLANEOUS
Holders of the Preferred Trust Securities have no preemptive or similar
rights.
GOVERNING LAW
The Trust Agreement, the Preferred Trust Securities and the Common Trust
Securities provide that they are to be governed by and construed in accordance
with the laws of the State of Delaware.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Selected provisions of the Preferred Securities Guarantee that PPL
Corporation will execute and deliver for the benefit of the holders of the
Preferred Trust Securities are summarized below. The summary is not complete.
The form of Preferred Securities Guarantee was filed with the SEC and you should
read the Preferred Securities Guarantee for provisions that may be important to
you. The Preferred Securities Guarantee will be qualified as an indenture under
the Trust Indenture Act. You should refer to the Trust Indenture Act for
provisions that apply to the Preferred Securities Guarantee. Whenever particular
defined terms of the Preferred Securities Guarantee are referred to, those
defined terms are incorporated herein by reference.
The Chase Manhattan Bank will act as Guarantee Trustee under the Preferred
Securities Guarantee. The Guarantee Trustee will hold the Preferred Securities
Guarantee for the benefit of the holders of the Preferred Trust Securities.
GENERAL
PPL Corporation will irrevocably, fully and unconditionally agree to make
the guarantee payments listed below in full to the holders of the Preferred
Trust Securities if they are not made by the Trust, as and when due, regardless
of any defense, right of set-off or counterclaim that the Trust may have or
assert. The following payments will be subject to the Preferred Securities
Guarantee (without duplication):
(a) any accrued and unpaid distributions required to be paid on
Preferred Trust Securities, to the extent the Trust has funds available
therefor;
(b) the redemption price, plus all accrued and unpaid distributions,
for any Preferred Trust Securities called for redemption by the Trust, to
the extent the Trust has funds available therefor; and
(c) upon a voluntary or involuntary dissolution, winding-up or
termination of the Trust (except in connection with the distribution of
Subordinated Debt Securities to the holders in exchange for Preferred Trust
Securities as provided in the Trust Agreement or upon a redemption of all
of the Preferred Trust Securities upon maturity or redemption of the
Subordinated Debt Securities as provided in the Trust Agreement), the
lesser of:
(1) the aggregate of the liquidation preference and all accrued and
unpaid distributions on Preferred Trust Securities to the date of
payment, to the extent the Trust has funds available therefor; and
(2) the amount of assets of the Trust remaining available for
distribution to holders of Preferred Trust Securities in liquidation of
the Trust after satisfaction of liabilities to creditors of the Trust as
required by applicable law.
PPL Corporation's obligation to make a guarantee payment may be satisfied by
direct payment of the required amounts by PPL Corporation to the holders of
Preferred Trust Securities or by causing the Trust to pay such amounts to those
holders.
The Preferred Securities Guarantee will be a guarantee with respect to the
Preferred Trust Securities, but will not apply to any payment of distributions
if and to the extent that the Trust does not have funds available to make those
payments.
If neither PPL Capital Funding nor PPL Corporation makes interest payments
on the Subordinated Debt Securities held by the Trust, the Trust will not have
funds available to pay distributions on the Preferred Trust Securities. The
Preferred Securities Guarantee will rank subordinate and junior in right of
payment to all other liabilities of PPL Corporation (except those made pari
passu or subordinate by their terms). The Preferred Securities Guarantee does
not limit PPL Corporation from incurring or issuing additional debt, whether
secured or unsecured, senior to or equal in right of payment to the Preferred
Securities Guarantee in the future.
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PPL Corporation will agree to provide funds to the Trust as needed to pay
costs, expenses or liabilities of the Trust to parties other than holders of
Preferred Trust Securities or Common Trust Securities. The Subordinated Debt
Securities, the Subordinated Guarantees and the Preferred Securities Guarantee,
together with the obligations of PPL Corporation with respect to the Preferred
Trust Securities under the Subordinated Indenture, the Trust Agreement, the
Preferred Securities Guarantee, including the agreement by PPL Corporation to
pay expenses and obligations of the Trust to parties (other than holders of
Preferred Trust Securities or Common Trust Securities), constitute a full and
unconditional guarantee of the Preferred Trust Securities by PPL Corporation. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes that guarantee. It is only the combined
operation of these documents that has the effect of providing a full and
unconditional guarantee by PPL Corporation of the Preferred Trust Securities.
AMENDMENTS AND ASSIGNMENT
No consent of holders of Preferred Trust Securities is required for changes
to the Preferred Securities Guarantee that do not materially adversely affect
their rights. Other terms of the Preferred Securities Guarantee may be changed
only with the prior approval of the holders of the Preferred Trust Securities
having at least a majority of the liquidation preference amount of the
outstanding Preferred Trust Securities. All guarantees and agreements contained
in the Preferred Securities Guarantee will bind the successors, assigns,
receivers, trustees and representatives of PPL Corporation and will inure to the
benefit of the holders of the Preferred Trust Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Preferred Securities Guarantee will occur if
PPL Corporation fails to perform any of its payment or other obligations under
the Preferred Securities Guarantee and has not cured such failure within 90 days
of receipt of notice thereof. The holders of the Preferred Trust Securities
having a majority of the liquidation preference of the Preferred Trust
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee under the Preferred
Securities Guarantee or to direct the exercise of any trust or power conferred
upon the Guarantee Trustee under the Preferred Securities Guarantee.
Any holder of the Preferred Trust Securities may enforce the Preferred
Securities Guarantee, or institute a legal proceeding directly against PPL
Corporation to enforce the Guarantee Trustee's rights under the Preferred
Securities Guarantee without first instituting a legal proceeding against the
Trust, the Guarantee Trustee or anyone else.
PPL Corporation will be required to file an annual statement with the
Guarantee Trustee as to its compliance with the Preferred Securities Guarantee.
DUTIES OF THE GUARANTEE TRUSTEE
The Guarantee Trustee will undertake to perform only those duties
specifically set forth in the Preferred Securities Guarantee until a default
occurs. After a default under the Preferred Securities Guarantee, the Guarantee
Trustee must exercise the same degree of care in its duties as a prudent
individual would exercise in the conduct of his or her own affairs. The
Preferred Securities Guarantee Trustee is under no obligation to exercise any of
the powers vested in it by the Preferred Securities Guarantee at the request of
any holder of the Preferred Trust Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that it might incur.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will terminate and be of no further
force and effect upon:
(a) full payment of the redemption price, plus accrued and unpaid
distributions, for all the Preferred Trust Securities;
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(b) the distribution of Subordinated Debt Securities to holders of
the Preferred Trust Securities in exchange for all of the Preferred Trust
Securities; or
(c) full payment of the amounts payable upon liquidation of the
Trust.
The Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Preferred Trust
Securities must restore payment of any sums paid under the Preferred Trust
Securities or the Preferred Securities Guarantee.
STATUS OF THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will be an unsecured obligation of PPL
Corporation and will rank:
(a) subordinate and junior in right of payment to all other
liabilities of PPL Corporation, including the Subordinated Guarantees;
(b) equal in right of payment with the most senior preferred or
preference stock that may be issued by PPL Corporation and with any
guarantee that may be entered into by PPL Corporation in respect of any
preferred or preference stock of any affiliate of PPL Corporation; and
(c) senior to PPL Corporation common stock.
The Trust Agreement provides that by accepting Preferred Trust Securities,
a holder agrees to the subordination provisions and other terms of the Preferred
Securities Guarantee.
The Preferred Securities Guarantee will be a guarantee of payment and not
of collection, that is, the guaranteed party may institute a legal proceeding
directly against PPL Corporation to enforce its rights under the Preferred
Securities Guarantee without first instituting a legal proceeding against anyone
else.
Because PPL Corporation is a holding company that conducts all of its
operations through subsidiaries, obligations under the Preferred Securities
Guarantee, as obligations of a holding company, will generally have a position
junior to claims of creditors and preferred stockholders of the subsidiaries of
PPL Corporation. See "PPL Corporation--Holding Company Structure" above.
GOVERNING LAW
The Preferred Securities Guarantee provides that it is to be governed by
and construed in accordance with the laws of the State of New York.
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
The Subordinated Indenture and its associated documents contain the full
legal text of the matters described in this section. Because this section is a
summary, it does not describe every aspect of the Subordinated Debt Securities
or the Subordinated Indenture. The form of the Subordinated Indenture has been
filed with the SEC, and you should read the Subordinated Indenture for
provisions that may be important to you. The Subordinated Indenture will be
qualified under the Trust Indenture Act. You should refer to the Trust Indenture
Act for provisions that apply to the Subordinated Debt Securities.
This summary is subject to and qualified in its entirety by reference to
all the provisions of the Subordinated Indenture, including definitions of
certain terms used in the Subordinated Indenture. We also include references in
parentheses to certain sections of the Subordinated Indenture. Whenever we refer
to particular sections or defined terms of the Subordinated Indenture in this
prospectus or in a prospectus supplement, such sections or defined terms are
incorporated by reference herein or in the prospectus supplement. This summary
also is subject to and qualified by reference to the description of the
particular terms of your securities described in the applicable prospectus
supplement or supplements.
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GENERAL
The Subordinated Debt Securities, including any Subordinated Debt
Securities which the Property Trustee will hold on behalf of the Trust as trust
assets, will be issued under the Subordinated Indenture (the "Subordinated
Indenture") among PPL Capital Funding, PPL Corporation and The Chase Manhattan
Bank, as Trustee (the "Subordinated Indenture Trustee"). The Subordinated
Indenture provides for the issuance from time to time of subordinated debt in an
unlimited amount. The Subordinated Debt Securities and all other subordinated
debt issued previously or hereafter under the Subordinated Indenture are
collectively referred to as the "Subordinated Indenture Securities."
Subordinated Debt Securities issued to the Trust will constitute a separate
series under the Subordinated Indenture and will be limited in aggregate
principal amount to the sum of the aggregate liquidation preference amount of
the Preferred Trust Securities and the consideration paid by PPL Corporation for
the Common Trust Securities.
The Subordinated Debt Securities will be unsecured, subordinated
obligations of PPL Capital Funding which rank junior to all of PPL Capital
Funding's Senior Indebtedness (as defined herein). The Subordinated Debt
Securities will be unconditionally guaranteed by PPL Corporation as to payment
of principal, and any interest and premium pursuant to subordinated guarantees
("Subordinated Guarantees") of PPL Corporation which rank junior to all of PPL
Corporation's Senior Indebtedness (as defined herein). See "--Subordinated
Guarantees."
Prior to the issuance of each series, certain aspects of the particular
securities have to be specified in a supplemental indenture, in a board
resolution of PPL Capital Funding, or in one or more officer's certificates of
PPL Capital Funding pursuant to a supplemental indenture or a board resolution.
We refer you to the applicable prospectus supplement(s) for a description of the
following terms of the series of Subordinated Debt Securities:
(a) the title of such Subordinated Debt Securities;
(b) any limit upon the principal amount of such Subordinated Debt
Securities;
(c) the date or dates on which principal will be payable or how to
determine such dates;
(d) the rate or rates or method of determination of interest; the
date from which interest will accrue; the dates on which interest will be
payable ("Subordinated Debt Securities Interest Payment Dates"); and any
record dates for the interest payable on such Subordinated Debt Securities
Interest Payment Dates;
(e) any obligation or option of PPL Capital Funding to redeem,
purchase or repay Subordinated Debt Securities, or any option of the Holder
to require PPL Capital Funding to redeem or repurchase Subordinated Debt
Securities, and the terms and conditions upon which such Subordinated Debt
Securities will be redeemed, purchased or repaid;
(f) the denominations in which such Subordinated Debt Securities will
be issuable (if other than denominations of $25 and any integral multiple
thereof);
(g) whether such Subordinated Debt Securities are to be issued in
whole or in part in the form of one or more global Subordinated Debt
Securities and, if so, the identity of the depositary for such global
Subordinated Debt Securities; and
(h) any other terms of such Subordinated Debt Securities.
(See Section 301.)
SUBORDINATION
The Subordinated Debt Securities will be subordinate and junior in right of
payment to all Senior Indebtedness of PPL Capital Funding. (See Article
Fifteen.) No payment of the principal (including redemption and sinking fund
payments) of, or interest on, the Subordinated Debt Securities may be made by
28
PPL Capital Funding until all holders of Senior Indebtedness of PPL Capital
Funding have been paid, if any of the following occurs:
(a) certain events of bankruptcy, insolvency or reorganization of PPL
Capital Funding;
(b) any Senior Indebtedness of PPL Capital Funding is not paid when
due and that default continues without waiver;
(c) any other default has occurred and continues without waiver
pursuant to which the holders of Senior Indebtedness of PPL Capital Funding
are permitted to accelerate the maturity of such Senior Indebtedness; or
(d) the maturity of any other series of subordinated debentures under
the Subordinated Indenture has been accelerated, because of an event of
default which remains uncured.
Upon any distribution of assets of PPL Capital Funding to creditors in
connection with any insolvency, bankruptcy or similar proceeding, all principal
of, and premium, if any, and interest due or to become due on all Senior
Indebtedness of PPL Capital Funding must be paid in full before the holders of
the Subordinated Debt Securities are entitled to receive or retain any payment
from such distribution.
Senior Indebtedness, when used with respect to PPL Capital Funding or PPL
Corporation, is defined in the Subordinated Indenture to include all obligations
of PPL Capital Funding or PPL Corporation, as the case may be, for borrowed
money, or guarantees of the same, or for the payment of money pursuant to
capital leases, unless such obligation or guarantee expressly provides that it
is not superior to or equal in right of payment to the Subordinated Debt
Securities or the Subordinated Guarantees, as the case may be. The obligations
of PPL Corporation under the Preferred Securities Guarantee shall not be deemed
to be Senior Indebtedness. (See Section 101.)
The Subordinated Indenture does not limit the aggregate amount of Senior
Indebtedness that may be issued. As of December 31, 2000, PPL Capital Funding
had approximately $2.068 billion principal amount of indebtedness for borrowed
money constituting its Senior Indebtedness, and PPL Corporation had
approximately $2.439 billion principal amount of obligations constituting its
Senior Indebtedness (including guarantees of indebtedness of PPL Capital Funding
and certain of PPL Corporation's other subsidiaries).
SUBORDINATED GUARANTEES
PPL Corporation will unconditionally guarantee the payment of principal of
and any interest and premium on the Subordinated Debt Securities, when due and
payable, whether at the stated maturity date, by declaration of acceleration,
call for redemption or otherwise, in accordance with the terms of such
Subordinated Debt Securities and the Subordinated Indenture. The Subordinated
Guarantees will remain in effect until the entire principal of and any premium
and interest on the Subordinated Debt Securities has been paid in full or
otherwise discharged in accordance with the provisions of the Subordinated
Indenture. (See Article Fourteen.)
The Subordinated Guarantees will be subordinate and junior in right of
payment to all Senior Indebtedness of PPL Corporation. No payment of the
principal (including redemption and sinking fund payments) of, or interest on,
the Subordinated Debt Securities may be made by PPL Corporation under the
Subordinated Guarantees until all holders of Senior Indebtedness of PPL
Corporation have been paid, if any of the following occurs:
(a) certain events of bankruptcy, insolvency or reorganization of PPL
Corporation;
(b) any Senior Indebtedness of PPL Corporation is not paid when due
and that default continues without waiver;
(c) any other default has occurred and continues without waiver
pursuant to which the holders of Senior Indebtedness of PPL Corporation are
permitted to accelerate the maturity of such Senior Indebtedness; or
29
(d) the maturity of any other series of subordinated debentures under
the Subordinated Indenture which has been guaranteed by PPL Corporation and
has been accelerated, because of an event of default which remains uncured.
Upon any distribution of assets of PPL Corporation to creditors in
connection with any insolvency, bankruptcy or similar proceeding, all principal
of, and premium, if any, and interest due or to become due on all Senior
Indebtedness of PPL Corporation must be paid in full before the holders of the
Subordinated Debt Securities are entitled to receive or retain any payment from
such distribution.
PAYMENT OF SUBORDINATED DEBT SECURITIES
INTEREST
Unless we indicate differently in a prospectus supplement, we will pay
interest on each Subordinated Debt Security on each Subordinated Debt Securities
Interest Payment Date by check mailed to the Holder of the Subordinated Debt
Securities as of the close of business on the regular record date relating to
such Subordinated Debt Securities Interest Payment Date, except, that interest
payable at Maturity will be paid to the person to whom principal is paid.
However, if we default in paying interest on a Subordinated Debt Security,
we will pay defaulted interest in either of the two following ways:
(a) We will first propose to the Subordinated Indenture Trustee a
payment date for such defaulted interest. Next, the Subordinated Indenture
Trustee will choose a Special Record Date for determining which Holders are
entitled to the payment. The Special Record Date will be between 10 and 15
days before the payment date we propose. Finally, we will pay such
defaulted interest on the payment date to the Holder of the Subordinated
Debt Security as of the close of business on the Special Record Date.
(b) Alternatively, we can propose to the Subordinated Indenture
Trustee any other lawful manner of payment that is consistent with the
requirements of any securities exchange on which such Subordinated Debt
Securities are listed for trading. If the Subordinated Indenture Trustee
thinks the proposal is practicable, payment will be made as proposed.
(See Section 307.)
PRINCIPAL
Unless we indicate differently in a prospectus supplement, we will pay
principal of and any interest and premium on the Subordinated Debt Securities at
Maturity upon presentation of the Subordinated Debt Securities at the office of
The Chase Manhattan Bank in New York, New York, as our Paying Agent. Any other
Paying Agent initially designated for the Subordinated Debt Securities of a
particular series will be named in the applicable prospectus supplement.
In our discretion, we may change the place of payment on the Subordinated
Debt Securities, and may remove any Paying Agent and may appoint one or more
additional Paying Agents (including PPL Capital Funding, PPL Corporation or any
affiliate of either of them). (See Section 602.)
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Event of Default under the Subordinated Indenture has
occurred and is continuing, PPL Capital Funding may extend the interest payment
period from time to time on the Subordinated Debt Securities for one or more
periods. As a consequence, distributions on Preferred Trust Securities would be
deferred during any extension period. Interest would, however, continue to
accrue. During any extended interest period, or for so long as an "Event of
Default" under the Subordinated Indenture resulting from a
30
payment default or a payment default under the Preferred Securities Guarantee
has occurred and is continuing, PPL Corporation may not:
(a) declare or pay any dividend or distribution on its capital stock,
other than dividends paid in shares of capital stock of PPL Corporation;
(b) redeem, purchase, acquire or make a liquidation payment with
respect to any of its capital stock;
(c) pay any principal, interest or premium on, or repay, repurchase or
redeem any debt securities that are equal or junior in right of payment
with the Subordinated Guarantees; or
(d) make any payments with respect to any guarantee of debt securities
by PPL Corporation if such guarantee is equal or junior in right of payment
to the Subordinated Guarantees.
(See Section 312.)
Before an extension period ends, PPL Capital Funding may further extend the
interest payment period. No extension period as further extended may exceed 20
consecutive quarters. After any extension period and the payment of all amounts
then due, PPL Capital Funding may select a new extended interest payment period.
No interest period may be extended beyond the maturity of the Subordinated Debt
Securities. PPL Capital Funding will give the Trust and the Subordinated
Indenture Trustee notice of its election of an extension period prior to the
earlier of (i) one business day before the record date for the distribution
which would occur if PPL Capital Funding did not make the election to extend or
(ii) the date the Administrative Trustees are required to give notice to any
securities exchange or any other applicable self-regulatory organization of the
record date. The Property Trustee shall send notice of that election to the
holders of Preferred Trust Securities.
ADDITIONAL INTEREST
So long as any Preferred Trust Securities remain outstanding, if the Trust
is required to pay any taxes, duties, assessments or governmental charges
imposed by the United States or any other taxing authority on income derived
from the interest payments on the Subordinated Debt Securities, then PPL Capital
Funding will pay as interest on the Subordinated Debt Securities any additional
interest that may be necessary in order that the net amounts retained by the
Trust after the payment of those taxes, duties, assessments or governmental
charges will be the same as the Trust would have had in the absence of such
payment. (See Section 313.)
FORM; TRANSFERS; EXCHANGES
Unless we indicated differently in a prospectus supplement, the
Subordinated Debt Securities will be issued
(a) only in fully registered form;
(b) without interest coupons; and
(c) in denominations that are even multiples of $25. (See Section
302.)
Unless we indicate differently in a prospectus supplement, Subordinated
Debt Securities may be exchanged at the office of the Subordinated Indenture
Trustee. The Subordinated Indenture Trustee will also act as our agent for
registering Subordinated Debt Securities in the names of holders and
transferring debt securities. We may appoint another agent or act as our own
agent for this purpose. The entity performing the role of maintaining the list
of registered holders is called the "Subordinated Indenture Registrar." It will
also perform transfers.
In our discretion, we may change the place for registration of transfer of
the Subordinated Debt Securities and may remove and/or appoint one or more
additional Subordinated Indenture Registrars
31
(including PPL Capital Funding, PPL Corporation or any affiliate of either of
them). (See Sections 305 and 602.)
Except as otherwise provided in a prospectus supplement, there will be no
service charge for any transfer or exchange of the Debt Securities, but you may
be required to pay a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. We may block the transfer or exchange of
(a) Subordinated Debt Securities during a period of 15 days prior to giving any
notice of redemption or (b) any Subordinated Debt Security selected for
redemption in whole or in part, except the unredeemed portion of any
Subordinated Debt Security being redeemed in part. (See Section 305.)
Unless we indicate differently in a prospectus supplement, if Subordinated
Debt Securities are distributed to holders of Preferred Trust Securities in a
dissolution of the Trust, the Subordinated Debt Securities will be issued in
fully registered certificated form in the denominations and integral multiples
thereof in which the Preferred Trust Securities have been issued, and they may
be transferred or exchanged at the offices of the Subordinated Indenture
Trustee.
REDEMPTION
For so long as the Trust is the holder of all the Subordinated Debt
Securities, the proceeds of any redemption will be used by the Trust to redeem
Preferred Trust Securities and Common Trust Securities in accordance with their
terms.
We will set forth any terms for the redemption of Subordinated Debt
Securities in a prospectus supplement. Unless we indicate differently in a
prospectus supplement, and except with respect to Subordinated Debt Securities
redeemable at the option of the Holder, Subordinated Debt Securities will be
redeemable upon notice by mail between 30 and 60 days prior to the redemption
date. If less than all of the Subordinated Debt Securities of any series or any
tranche thereof are to be redeemed, the Subordinated Indenture Trustee will
select the Subordinated Debt Securities to be redeemed. In the absence of any
provision for selection, the Subordinated Indenture Trustee will choose a method
of random selection as it deems fair and appropriate. (See Sections 403 and
404.)
Subordinated Debt Securities will cease to bear interest on the redemption
date. PPL Capital Funding will pay the redemption price and any accrued interest
once the Subordinated Debt Securities are surrendered for redemption. (See
Section 405.) If only part of a Subordinated Debt Security is redeemed, the
Subordinated Indenture Trustee will deliver a new Subordinated Debt Security of
the same series for the remaining portion without charge. (See Section 406.)
We may make any redemption at the option of PPL Capital Funding conditional
upon the receipt by the paying agent, on or prior to the date fixed for
redemption, of money sufficient to pay the redemption price. If the paying agent
has not received such money by the date fixed for redemption, PPL Capital
Funding will not be required to redeem such Subordinated Debt Securities. (See
Section 404.)
EVENTS OF DEFAULT
An "Event of Default" occurs with respect to Subordinated Indenture
Securities of any series if
(a) we do not pay any interest on any Subordinated Indenture
Securities of the applicable series within 30 days of the due date;
provided, however, that a valid extension of the interest period by us will
not constitute an Event of Default;
(b) we do not pay principal or premium on any Subordinated Indenture
Securities of the applicable series on its due date;
(c) we remain in breach of a covenant (excluding covenants solely
applicable to a specific series) or warranty of the Subordinated Indenture
for 90 days after we receive a written notice of default stating we are in
breach and requiring remedy of the breach; the notice must be sent by
either the Subordinated Indenture Trustee or Holders of 25% of the
principal amount of Subordinated Indenture Securities of the affected
series; the Subordinated Indenture Trustee or such Holders can agree to
extend the 90-day
32
period and such an agreement to extend will be automatically deemed to
occur if we are diligently pursuing action to correct the default;
(d) the Subordinated Guarantees of PPL Corporation relating to any
Subordinated Indenture Securities of the applicable series
(1) cease to be effective (except in accordance with their terms),
(2) are found in any judicial proceeding to be unenforceable or
invalid, or
(3) are denied or disaffirmed (except in accordance with their
terms);
(e) we file for bankruptcy or certain other events in bankruptcy,
insolvency, receivership or reorganization occur; or
(f) any other Event of Default specified in the prospectus supplement
occurs.
(See Section 801.)
No Event of Default with respect to the Subordinated Debt Securities necessarily
constitutes an Event of Default with respect to the Subordinated Indenture
Securities of any other series issued under the Subordinated Indenture.
REMEDIES
ACCELERATION
Any One Series. If an Event of Default occurs and is continuing with
respect to any one series of Subordinated Indenture Securities, then either the
Subordinated Indenture Trustee or the Holders of 25% in principal amount of the
outstanding Subordinated Indenture Securities of such series may declare the
principal amount of all of the Subordinated Indenture Securities of such series
to be due and payable immediately.
More Than One Series. If an Event of Default occurs and is continuing with
respect to more than one series of Subordinated Indenture Securities, then
either the Subordinated Indenture Trustee or the Holders of 25% in aggregate
principal amount of the outstanding Subordinated Indenture Securities of all
such series, considered as one class, may make such declaration of acceleration.
Thus, if there is more than one series affected, the action by 25% in principal
amount of the Subordinated Indenture Securities of any particular series will
not, in itself, be sufficient to make a declaration of acceleration.
(See Section 802.)
RESCISSION OF ACCELERATION
After the declaration of acceleration has been made and before the
Subordinated Indenture Trustee has obtained a judgment or decree for payment of
the money due, such declaration and its consequences will be rescinded and
annulled, if
(a) we pay or deposit with the Subordinated Indenture Trustee a sum
sufficient to pay
(1) all overdue interest;
(2) the principal of and any premium which have become due
otherwise than by such declaration of acceleration and overdue interest
thereon;
(3) interest on overdue interest to the extent lawful; and
(4) all amounts due to the Subordinated Indenture Trustee under
the Subordinated Indenture; and
33
(b) all Events of Default, other than the nonpayment of the principal
which has become due solely by such declaration of acceleration, have been
cured or waived as provided in the Subordinated Indenture.
(See Section 802.) For more information as to waiver of defaults, see "--Waiver
of Default and of Compliance" below.
CONTROL BY HOLDERS; LIMITATIONS
Subject to the Subordinated Indenture, if an Event of Default with respect
to the Subordinated Indenture Securities of any one series occurs and is
continuing, the Holders of a majority in principal amount of the outstanding
Subordinated Indenture Securities of that series will have the right to
(a) direct the time, method and place of conducting any proceeding
for any remedy available to the Subordinated Indenture Trustee, or
(b) exercise any trust or power conferred on the Subordinated
Indenture Trustee with respect to the Subordinated Indenture Securities of
such series.
If an Event of Default is continuing with respect to more than one series
of Subordinated Indenture Securities, the Holders of a majority in aggregate
principal amount of the outstanding Subordinated Indenture Securities of all
such series, considered as one class, will have the right to make such
direction, and not the Holders of the Subordinated Indenture Securities of any
one of such series. These rights of Holders to make direction are subject to the
following limitations:
(a) the Holders' directions may not conflict with any law or the
Subordinated Indenture; and
(b) the Holders' directions may not involve the Subordinated
Indenture Trustee in personal liability where the Trustee believes
indemnity is not adequate.
The Subordinated Indenture Trustee may also take any other action it deems
proper which is consistent with the Holders' direction. (See Sections 812 and
903.)
In addition, the Subordinated Indenture provides that no Holder of any
Subordinated Indenture Security will have any right to institute any proceeding,
judicial or otherwise, with respect to the Subordinated Indenture for the
appointment of a receiver or for any other remedy thereunder unless
(a) that Holder has previously given the Subordinated Indenture
Trustee written notice of a continuing Event of Default;
(b) the Holders of 25% in aggregate principal amount of the
outstanding Subordinated Indenture Securities of all affected series,
considered as one class, have made written request to the Subordinated
Indenture Trustee to institute proceedings in respect of that Event of
Default and have offered the Subordinated Indenture Trustee reasonable
indemnity against costs and liabilities incurred in complying with such
request; and
(c) for 60 days after receipt of such notice, the Subordinated
Indenture Trustee has failed to institute any such proceeding and no
direction inconsistent with such request has been given to the Subordinated
Indenture Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of outstanding Subordinated Indenture Securities
of all affected series, considered as one class.
Furthermore, no Holder will be entitled to institute any such action if and to
the extent that such action would disturb or prejudice the rights of other
Holders. (See Sections 807 and 903.)
However, each Holder has an absolute and unconditional right to receive
payment when due and to bring a suit to enforce that right. (See Sections 807
and 808.)
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ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED TRUST SECURITIES
If there is an Event of Default with respect to Subordinated Debt
Securities held by the Trust, then the holders of Preferred Trust Securities
will rely on the Property Trustee or the Subordinated Indenture Trustee, acting
for the benefit of the Property Trustee, to enforce the Property Trustee's
rights against PPL Capital Funding and PPL Corporation as a holder of the
Subordinated Debt Securities. However, a holder of Preferred Trust Securities
may enforce the Subordinated Indenture directly against PPL Capital Funding and
PPL Corporation to the same extent as if the holder of Preferred Trust
Securities held a principal amount of Subordinated Debt Securities equal to the
aggregate liquidation amount of its Preferred Trust Securities. (See Section
609.)
Subject to their right to bring suit to enforce their right to payment, the
holders of Preferred Trust Securities would not be able to institute any
proceeding with respect to the Subordinated Indenture unless the Subordinated
Indenture Trustee has failed to do so for 60 days after a request of the holders
of 25% in liquidation amount of Preferred Trust Securities. Upon such failure,
the holders of a majority of the aggregate liquidation amount of the outstanding
Preferred Trust Securities would have the right to directly institute
proceedings for enforcement of all other rights of the Subordinated Indenture
Trustee against PPL Capital Funding to the fullest extent permitted by law. (See
Sections 807, 808 and 812.)
NOTICE OF DEFAULT
The Subordinated Indenture Trustee is required to give the Holders of the
Subordinated Indenture Securities notice of any default under the Subordinated
Indenture to the extent required by the Trust Indenture Act, unless such default
has been cured or waived; except that in the case of an Event of Default of the
character specified above in clause (c) under "--Events of Default," no such
notice shall be given to such Holders until at least 90 days after the
occurrence thereof. (See Section 902.) The Trust Indenture Act currently permits
the Subordinated Indenture Trustee to withhold notices of default (except for
certain payment defaults) if the Subordinated Indenture Trustee in good faith
determines the withholding of such notice to be in the interests of the Holders.
We will furnish the Subordinated Indenture Trustee with an annual statement
as to the compliance by PPL Capital Funding with the conditions and covenants in
the Subordinated Indenture. (See Section 605.)
WAIVER OF DEFAULT AND OF COMPLIANCE
The Holders of a majority in aggregate principal amount of the outstanding
Subordinated Indenture Securities of any series may waive, on behalf of the
Holders of all Subordinated Indenture Securities of such series, any past
default under the Subordinated Indenture, except a default in the payment of
principal, premium or interest, or with respect to compliance with certain
provisions of the Subordinated Indenture that cannot be amended without the
consent of the Holder of each outstanding Subordinated Indenture Security. (See
Section 813.)
Compliance with certain covenants in the Subordinated Indenture or
otherwise provided with respect to Subordinated Indenture Securities may be
waived by the Holders of a majority in aggregate principal amount of the
affected Subordinated Indenture Securities, considered as one class. (See
Section 606.)
CONSOLIDATION, MERGER AND CONVEYANCE OF ASSETS AS AN ENTIRETY
Subject to the provisions described in the next paragraph, each of PPL
Capital Funding and PPL Corporation will preserve its corporate existence. (See
Section 604.)
PPL Capital Funding and PPL Corporation have each agreed not to consolidate
with or merge into any other entity or convey, transfer or lease its properties
and assets substantially as an entirety to any entity unless
(a) the entity formed by such consolidation or into which PPL Capital
Funding or PPL Corporation, as the case may be, is merged or the entity
which acquires or which leases the property and assets of PPL Capital
Funding or PPL Corporation, as the case may be, substantially as an
entirety is an
35
entity organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia, and expressly
assumes, by supplemental indenture, the due and punctual payment of the
principal, premium and interest on all the outstanding Subordinated
Indenture Securities (or the Subordinated Guarantees endorsed thereon, as
the case may be) and the performance of all of the covenants of PPL Capital
Funding or PPL Corporation, as the case may be, under the Subordinated
Indenture, and
(b) 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, will have occurred and be continuing. (See
Section 1101.)
The Subordinated Indenture does not prevent or restrict:
(a) any consolidation or merger after the consummation of which PPL
Capital Funding or PPL Corporation would be the surviving or resulting
entity;
(b) any consolidation of PPL Capital Funding with PPL Corporation or
any other entity all of the outstanding voting securities of which are
owned, directly or indirectly, by PPL Corporation; or any merger of any
such entity into any other of such entities; or any conveyance or other
transfer, or lease, or properties by any thereof to any other thereof;
(c) any conveyance or other transfer, or lease, of any part of the
properties of PPL Capital Funding or PPL Corporation which does not
constitute the entirety, or substantially the entirety, thereof; or
(d) the approval by PPL Capital Funding or PPL Corporation of, or the
consent by PPL Capital Funding or PPL Corporation to, any consolidation or
merger to which any direct or indirect subsidiary or affiliate of PPL
Capital Funding or PPL Corporation, as the case requires, may be a party or
any conveyance, transfer or lease by any such subsidiary or affiliate of
any of its assets. (See Section 1103.)
MODIFICATION OF SUBORDINATED INDENTURE
Without Holder Consent. Without the consent of any Holders of Subordinated
Indenture Securities, PPL Capital Funding, PPL Corporation and the Subordinated
Indenture Trustee may enter into one or more supplemental indentures for any of
the following purposes:
(a) to evidence the succession of another entity to PPL Capital
Funding or PPL Corporation; or
(b) to add one or more covenants of PPL Capital Funding or PPL
Corporation or other provisions for the benefit of the Holders of all or
any series or tranche of Subordinated Indenture Securities, or to surrender
any right or power conferred upon PPL Capital Funding or PPL Corporation;
or
(c) to add any additional Events of Default for all or any series of
Subordinated Indenture Securities; or
(d) to change or eliminate any provision of the Subordinated
Indenture or to add any new provision to the Subordinated Indenture that
does not adversely affect the interests of the Holders; or
(e) to provide security for the Subordinated Indenture Securities of
any series; or
(f) to establish the form or terms of Subordinated Indenture
Securities of any series or tranche or any Subordinated Guarantees as
permitted by the Subordinated Indenture; or
(g) to provide for the issuance of bearer securities; or
(h) to evidence and provide for the acceptance of appointment of a
separate or successor Subordinated Indenture Trustee or co-trustee; or
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(i) to provide for the procedures required to permit the utilization
of a noncertificated system of registration for any series or tranche of
Subordinated Indenture Securities; or
(j) to change any place or places where
(1) we may pay principal, premium and interest,
(2) Subordinated Indenture Securities may be surrendered for
transfer or exchange, and
(3) notices and demands to or upon PPL Capital Funding or PPL
Corporation may be served; or
(k) to cure any ambiguity, defect or inconsistency or to make any
other changes that do not adversely affect the interests of the Holders in
any material respect.
If the Trust Indenture Act is amended after the date of the Subordinated
Indenture so as to require changes to the Subordinated Indenture or so as to
permit changes to, or the elimination of, provisions which, at the date of the
Subordinated Indenture or at any time thereafter, were required by the Trust
Indenture Act to be contained in the Subordinated Indenture, the Subordinated
Indenture will be deemed to have been amended so as to conform to such amendment
or to effect such changes or elimination, and PPL Capital Funding, PPL
Corporation and the Subordinated Indenture Trustee may, without the consent of
any Holders, enter into one or more supplemental indentures to effect or
evidence such amendment.
(See Section 1201.)
With Holder Consent. Except as provided above, the consent of the Holders
of at least a majority in aggregate principal amount of the Subordinated
Indenture Securities of all outstanding series, considered as one class, is
generally required for the purpose of adding to, or changing or eliminating any
of the provisions of, the Subordinated Indenture pursuant to a supplemental
indenture. However, if less than all of the series of outstanding Subordinated
Indenture Securities are directly affected by a proposed supplemental indenture,
then such proposal only requires the consent of the Holders of a majority in
aggregate principal amount of the outstanding Subordinated Indenture Securities
of all directly affected series, considered as one class. Moreover, if the
Subordinated Indenture Securities of any series have been issued in more than
one tranche and if the proposed supplemental indenture directly affects the
rights of the Holders of Subordinated Indenture Securities of one or more, but
less than all, of such tranches, then such proposal only requires the consent of
the Holders of a majority in aggregate principal amount of the outstanding
Subordinated Indenture Securities of all directly affected tranches, considered
as one class.
However, no amendment or modification may, without the consent of the
Holder of each outstanding Subordinated Indenture Security directly affected
thereby,
(a) change the stated maturity of the principal or (except as
described above under "--Option to Extend Interest Payment Period")
interest on any Subordinated Indenture Security (other than pursuant to the
terms thereof), or reduce the principal amount, interest or premium payable
or change the currency in which any Subordinated Indenture Security is
payable, or impair the right to bring suit to enforce any payment;
(b) reduce the percentages of Holders whose consent is required for
any supplemental indenture or waiver or reduce the requirements for quorum
and voting under the Subordinated Indenture; or
(c) modify certain of the provisions in the Subordinated Indenture
relating to supplemental indentures and waivers of certain covenants and
past defaults.
A supplemental indenture which changes or eliminates any provision of the
Subordinated Indenture expressly included solely for the benefit of Holders of
Subordinated Indenture Securities of one or more particular series or tranches
will be deemed not to affect the rights under the Subordinated Indenture of the
Holders of Subordinated Indenture Securities of any other series or tranche. So
long as any Preferred Trust Securities are outstanding, the Subordinated
Indenture Trustee may not consent to any supplemental indenture that would
ordinarily require Subordinated Indenture Security Holder consent without the
prior
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consent of the holders of a majority in aggregate liquidation preference of all
outstanding Preferred Trust Securities affected or, in the case of changes
described in clauses (a) through (c) immediately above, 100% in aggregate
liquidation preference of all such outstanding Preferred Trust Securities
affected. (See Section 1202.)
MISCELLANEOUS PROVISIONS
The Subordinated Indenture provides that certain Subordinated Indenture
Securities, including those for which payment or redemption money has been
deposited or set aside in trust as described under "--Satisfaction and
Discharge" below, will not be deemed to be "outstanding" in determining whether
the Holders of the requisite principal amount of the outstanding Subordinated
Indenture Securities have given or taken any demand, direction, consent or other
action under the Subordinated Indenture as of any date, or are present at a
meeting of Holders for quorum purposes. (See Section 101.)
PPL Capital Funding or PPL Corporation will be entitled to set any day as a
record date for the purpose of determining the Holders of outstanding
Subordinated Indenture Securities of any series entitled to give or take any
demand, direction, consent or other action under the Subordinated Indenture, in
the manner and subject to the limitations provided in the Subordinated
Indenture. In certain circumstances, the Subordinated Indenture Trustee also
will be entitled to set a record date for action by Holders. If such a record
date is set for any action to be taken by Holders of particular Subordinated
Indenture Securities, such action may be taken only by persons who are Holders
of such Subordinated Indenture Securities on the record date. (See Section 104.)
SATISFACTION AND DISCHARGE
Any Subordinated Indenture Securities or any portion will be deemed to have
been paid for purposes of the Subordinated Indenture, and at PPL Capital
Funding's election, the entire indebtedness of PPL Capital Funding and PPL
Corporation will be satisfied and discharged, if there shall have been
irrevocably deposited with the Subordinated Indenture Trustee or any paying
agent (other than PPL Capital Funding or PPL Corporation), in trust:
(a) money sufficient, or
(b) in the case of a deposit made prior to the maturity of such
Subordinated Indenture Securities, non-redeemable Eligible Obligations (as
defined in the Subordinated Indenture) sufficient, or
(c) a combination of (a) and (b), which in total are sufficient,
to pay when due the principal of, and any premium, and interest due and to
become due on such Subordinated Indenture Securities or portions thereof on and
prior to the maturity thereof.
(See Section 701.)
The Subordinated Indenture will be deemed satisfied and discharged when no
Subordinated Indenture Securities remain outstanding and when we have paid all
other sums payable by us under the Subordinated Indenture. (See Section 702.)
All moneys we pay to the Subordinated Indenture Trustee or any paying agent
on Subordinated Debt Securities which remain unclaimed at the end of two years
after payments have become due will be paid to or upon the order of PPL Capital
Funding. Thereafter, the Holder of such Subordinated Debt Security may look only
to us for payment thereof. (See Section 603.)
RESIGNATION AND REMOVAL OF THE SUBORDINATED INDENTURE TRUSTEE; DEEMED
RESIGNATION
The Subordinated Indenture Trustee may resign at any time by giving written
notice thereof to us.
The Subordinated Indenture Trustee may also be removed by act of the
Holders of a majority in principal amount of the then outstanding Subordinated
Indenture Securities of any series.
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No resignation or removal of the Subordinated Indenture Trustee and no
appointment of a successor trustee will become effective until the acceptance of
appointment by a successor trustee in accordance with the requirements of the
Subordinated Indenture.
Under certain circumstances, we may appoint a successor trustee and if the
successor accepts, the Subordinated Indenture Trustee will be deemed to have
resigned.
(Section 910).
GOVERNING LAW
The Subordinated Indenture and the Subordinated Indenture Securities
provide that they are to be governed by and construed in accordance with the
laws of the State of New York.
INFORMATION CONCERNING THE TRUSTEES
The Chase Manhattan Bank has at various times in the ordinary course of
business made loans to PPL Corporation and its subsidiaries and affiliates, and
acts as Administrative Agent with respect to one of our current revolving credit
facilities. In addition, The Chase Manhattan Bank acts as issuing and paying
agent for PPL Capital Funding's commercial paper notes, and acts as guarantee
trustee and property trustee for the trust originated preferred securities and
common securities of our affiliates, PPL Capital Trust and PPL Capital Trust I
and acts as trustee with respect to junior subordinated deferrable interest
debentures of our affiliate, PPL Utilities. Chase Manhattan Bank USA, National
Association, an affiliate of the Trustee, also acts as Delaware trustee for the
trust originated preferred securities and common securities of PPL Capital Trust
and PPL Capital Trust I.
EXPERTS
The consolidated financial statements of PPL Corporation incorporated in
this prospectus by reference to the Annual Report on Form 10-K of PPL
Corporation for the year ended December 31, 1999, as amended by Form 10-K/A
filed with the SEC on June 28, 2000, have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting. The audited
consolidated financial information of Hyder plc incorporated in this prospectus
by reference to the Current Report on Form 8-K of PPL Corporation filed with the
SEC on October 20, 2000 have been so incorporated in reliance on the report of
PricewaterhouseCoopers, Cardiff, United Kingdom, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
The financial statements and schedules of Southern Investments UK plc and
subsidiaries incorporated in this prospectus by reference to the Annual Report
on Form 10-K of PPL Corporation for the year ended December 31, 1999, as amended
by Form 10-K/A filed with the SEC on June 28, 2000, have been audited by Arthur
Andersen, independent accountants, as indicated in their report with respect
thereto, and are incorporated herein in reliance upon the authority of said firm
as experts in accounting and auditing.
Michael A. McGrail, Esq., Senior Counsel of PPL Services Corporation, has
reviewed the statements made herein and in the incorporated documents as to
matters of law and legal conclusions. Such statements have been made in reliance
upon his authority as an expert.
VALIDITY OF THE SECURITIES AND THE SECURITIES GUARANTEES
Thelen Reid & Priest LLP, New York, New York, counsel to PPL Corporation,
PPL Capital Funding and PPL Capital Funding Trust I, will pass upon the validity
of the Securities and the Securities Guarantees for PPL Corporation, PPL Capital
Funding and the Trust. Simpson Thacher & Bartlett, counsel to PPL Corporation,
will pass upon the validity of Common Stock and the Preferred Stock for PPL
Corporation. Michael A. McGrail, Esq., Senior Counsel of PPL Services
Corporation, will pass upon the validity of the
39
PPL Corporation Securities and the Securities Guarantees for PPL Corporation.
Sullivan & Cromwell, New York, New York, will pass upon the validity of the
Securities and the Securities Guarantees for any underwriters or agents. Certain
matters of Delaware law relating to the validity of the Preferred Trust
Securities, the enforceability of the Trust Agreement and the creation of the
Trust will be passed upon by Richards, Layton & Finger, P.A., special Delaware
counsel to PPL Corporation, PPL Capital Funding and the Trust. Thelen Reid &
Priest LLP, Simpson Thacher & Bartlett and Sullivan & Cromwell will rely on the
opinion of Mr. McGrail as to matters involving the law of the Commonwealth of
Pennsylvania, and on the opinion of Richards, Layton & Finger, P.A., as to
matters involving the law of the State of Delaware in connection with the
Preferred Trust Securities. As to matters involving the law of the State of New
York, Mr. McGrail will rely on the opinion of Thelen Reid & Priest LLP.
PLAN OF DISTRIBUTION
We may sell Securities (a) to purchasers directly; (b) to underwriters for
public offering and sale by them; or (c) through agents or dealers. We may
determine the price or other terms of the securities offered under this
prospectus by use of an electronic auction. We will describe how any auction
will determine the price or any other terms, how potential investors may
participate in the auction and the nature of the underwriters' obligations in
the related supplement to this prospectus.
DIRECT SALES
We may sell the Securities directly to institutional investors or others
who may be deemed to be underwriters within the meaning of the Securities Act
with respect to any resale of the Securities. A prospectus supplement will
describe the terms of any such sale.
TO UNDERWRITERS
The applicable prospectus supplement will name any underwriter involved in
a sale of Securities. Underwriters may offer and sell Securities at a fixed
price or prices, which may be changed, or from time to time at market prices or
at negotiated prices. Underwriters may be deemed to have received compensation
from us from sales of Securities in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Securities for
whom they may act as agent.
Underwriters may sell Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions (which may be changed from time to
time) from the purchasers for whom they may act as agent.
Unless otherwise provided in a prospectus supplement, the obligations of
any underwriters to purchase particular Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all
such Securities if any are purchased.
THROUGH AGENTS
We will name any agent or dealer involved in a sale of Securities, as well
as any commissions payable by us to such agent, in a prospectus supplement.
Unless we indicate differently in the prospectus supplement, any such agent will
be acting on a reasonable efforts basis for the period of its appointment.
GENERAL INFORMATION
Underwriters, dealers acting as principals and agents participating in a
sale of Securities may be deemed to be underwriters as defined in the Securities
Act, and any discounts and commissions received by them and any profit realized
by them on resale of the Securities may be deemed to be underwriting discounts
and commissions, under the Securities Act. We may have agreements with
underwriters, dealers and agents to indemnify them against certain civil
liabilities, including liabilities under the Securities Act, and to reimburse
them for certain expenses.
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Underwriters or agents and their associates may be customers of, engage in
transactions with or perform services for us or our affiliates in the ordinary
course of business.
Each series of Securities will be a new issue and, except for the Common
Stock, which is listed on the New York and Philadelphia Stock Exchanges, will
have no established trading market. We may elect to list any series of new
Securities on an exchange, or in the case of the Common Stock, on any additional
exchange, but unless we advise you differently in the prospectus supplement, we
have no obligation to cause any Securities to be so listed. Any underwriters
that purchase Securities for public offering and sale may make a market in the
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. We make no assurance
as to the liquidity of, or the trading markets for, any Securities.
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