AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 24, 2003
REGISTRATION NO. 333-
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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RELIANT RESOURCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 76-0655566
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
1111 LOUISIANA STREET
HOUSTON, TEXAS 77002
(713) 497-3000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
MICHAEL L. JINES
SENIOR VICE PRESIDENT, GENERAL COUNSEL
AND CORPORATE SECRETARY
1111 LOUISIANA STREET
HOUSTON, TEXAS 77002
(713) 497-3000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
COPIES TO:
MICHAEL P. ROGAN RICHARD B. AFTANAS
C. KEVIN BARNETTE SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP FOUR TIMES SQUARE
1440 NEW YORK AVENUE, N.W. NEW YORK, NEW YORK 10036
WASHINGTON, D.C. 20005 (212) 735-3000
(202) 371-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1)(2)(3)(4) PER UNIT(1)(5) PRICE(1)(2)(3)(4)(6) REGISTRATION FEE
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Debt Securities, Preferred Stock,
Common Stock, Warrants............. $3,500,000,000 100% $3,500,000,000 $283,150
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(1) Not specified as to each class of securities to be registered pursuant to
General Instruction II(D) to Form S-3.
(2) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this registration statement exceed
$3,500,000,000 or the equivalent thereof in foreign currencies, foreign
currency units or composite currencies. If any debt securities are issued at
an original issue discount, then the offering price shall be in such greater
principal amount as shall result in an aggregate initial offering price of
up to $3,500,000,000 or the equivalent thereof in foreign currencies,
foreign currency units or composite currencies, less the dollar amount of
any other securities issued hereunder. Any securities registered hereunder
may be sold separately or as units with other securities registered
hereunder.
(3) There is being registered hereunder such indeterminate number or amount of
debt securities, common stock, preferred stock and warrants as may from time
to time be issued at indeterminate prices and as may be issuable upon
conversion, redemption, exchange, exercise or settlement of any securities
registered hereunder, including under any applicable antidilution
provisions.
(4) Each share of common stock includes one associated preferred stock purchase
right. No separate consideration is payable for the preferred stock purchase
rights. The registration fee for these securities is included in the fee for
the common stock.
(5) The proposed maximum offering price per unit will be determined from time to
time by the registrant in connection with, and at the time of, the issuance
by the registrant of the securities registered hereunder.
(6) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(o) under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES, AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 24, 2003
PROSPECTUS RELIANT RESOURCES, INC. LOGO
$3,500,000,000
RELIANT RESOURCES, INC.
SENIOR SECURED DEBT SECURITIES
SENIOR UNSECURED DEBT SECURITIES
SUBORDINATED DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS
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We, Reliant Resources, Inc., may offer, issue and sell from time to time,
together or separately, our:
- debt securities, which may be senior secured debt securities, senior
unsecured debt securities or subordinated debt securities;
- shares of our common stock;
- shares of our preferred stock; and
- warrants to purchase common stock, preferred stock or other securities.
This prospectus provides you with a general description of the securities
which may be offered. Each time we offer securities for sale, we will provide a
supplement to this prospectus that contains specific information about the
offering and the terms of the securities. A prospectus supplement may also add,
update or change information contained in this prospectus. You should carefully
read this prospectus and any accompanying prospectus supplement before you make
your investment decision.
THIS PROSPECTUS MAY NOT BE USED TO SELL SECURITIES, UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
Our common stock is listed on the New York Stock Exchange under the trading
symbol "RRI."
NEITHER THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This prospectus is dated , 2003.
TABLE OF CONTENTS
About This Prospectus....................................... i
Cautionary Statement Regarding Forward-Looking
Information............................................... i
Where You Can Find More Information......................... ii
Reliant Resources, Inc. .................................... 1
Ratio of Earnings to Fixed Charges.......................... 1
Use of Proceeds............................................. 1
Description of Securities................................... 2
Description of Debt Securities.............................. 2
Description of Capital Stock................................ 14
Description of Warrants..................................... 22
Plan of Distribution........................................ 23
Legal Matters............................................... 24
Experts..................................................... 24
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. By
using this shelf process, we may, from time to time, sell any combination of
debt securities, common stock, preferred stock and warrants, as described in
this prospectus, in one or more offerings up to a total dollar amount of
$3,500,000,000, or the equivalent thereof, on the date of issuance in one or
more currencies, currency units or composite currencies. This prospectus
provides you with a general description of the securities that we may offer.
Each time we use this prospectus to offer securities for sale, we will provide a
supplement to this prospectus that will describe the specific information about
the offering and the terms of the securities. A prospectus supplement may also
add to, update or change the information contained in this prospectus. You
should carefully read this prospectus, the applicable prospectus supplement and
the information contained in the documents we refer to under the heading "Where
You Can Find More Information" in this prospectus.
You should rely only on the information contained or incorporated by
reference in this prospectus and any accompanying prospectus supplement. We have
not authorized anyone else to provide you with any different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. We are not making an offer to sell our securities in any
jurisdiction where the offer or sale is not permitted.
You should assume that the information in this prospectus is accurate as of
the date of the prospectus. Our business, financial condition and results of
operations may have changed since that date.
In this prospectus, "Reliant Resources" and "RRI" refer to Reliant
Resources, Inc. and "the company," "we," "us" and "our" refer to Reliant
Resources, Inc. and its subsidiaries, unless we specify or the context clearly
indicates otherwise.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This prospectus and any accompanying prospectus supplement may contain or
incorporate by reference information that includes or is based upon
forward-looking statements. You can identify these statements by the fact that
they do not strictly relate to historical or current facts. These statements
include words such as "anticipate," "believe," "continue," "could," "estimate,"
"expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential,"
"projection," "should," "will" or other similar words in connection with a
discussion of future operations or financial performance.
We have based our forward-looking statements on our management's beliefs
and assumptions based on information available to our management at the time the
statements are made. We caution you that assumptions, beliefs, expectations,
intentions and projections about future events and risks may and often do vary
materially from actual results. Therefore, we cannot assure you that actual
results will not differ materially from those expressed or implied by our
forward-looking statements.
You should not place undue reliance on forward-looking statements. Each
forward-looking statement speaks only as of the date of the particular statement
and we undertake no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission, or SEC. You may read
and copy any document we file with the SEC at the SEC's Public Reference Room
located at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
further information regarding the operation of the SEC's Public Reference Room
by calling the SEC at 1-800-SEC-0330. Our filings are also available to the
public on the SEC's Internet site located at http://www.sec.gov. Our common
stock is listed and traded on the New York Stock Exchange under the symbol
"RRI." You may inspect our reports, proxy statements and other information at
the offices of the New York Stock Exchange at 20 Broad Street, New York, New
York 10005.
The SEC allows us to "incorporate by reference" into this prospectus
information that we file with the SEC. This means we can disclose important
information to you by referring you to the documents containing the information.
Any information we incorporate by reference is considered to be part of this
prospectus and any information filed by us with the SEC subsequent to the date
of this prospectus will be deemed to automatically update and supercede this
information. We are incorporating by reference into this prospectus the
following documents that we have filed with the SEC:
- Reliant Resources' Annual Report on Form 10-K/A filed on May 1, 2003 for
the fiscal year ended December 31, 2002;
- Reliant Resources' Proxy Statement on Schedule 14A, filed on April 30,
2003;
- Reliant Resources' Quarterly Report on Form 10-Q filed on May 14, 2003
for the quarter ended March 31, 2003;
- Reliant Resources' Current Report on Form 8-K filed on January 10, 2003;
- Reliant Resources' Current Report on Form 8-K filed on February 3, 2003;
- Reliant Resources' Current Report on Form 8-K filed on February 24, 2003;
- Reliant Resources' Current Report on Form 8-K filed on March 17, 2003;
- Reliant Resources' Current Report on Form 8-K filed on March 24, 2003;
- Reliant Resources' Current Report on Form 8-K filed on March 28, 2003;
- Reliant Resources' Current Report on Form 8-K filed on April 1, 2003 (to
the extent filed by Reliant Resources under the Securities Exchange Act
of 1934);
- Reliant Resources' Current Report on Form 8-K filed on April 16, 2003;
- Reliant Resources' Current Report on Form 8-K filed on May 12, 2003;
- Reliant Resources' Current Report on Form 8-K filed on May 16, 2003;
- Reliant Resources' Current Report on Form 8-K filed on June 5, 2003;
- Reliant Resources' Current Report on Form 8-K filed on June 18, 2003;
- Reliant Resources' Current Report on Form 8-K filed on June 24, 2003;
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- Reliant Resources' Current Report on Form 8-K filed on June 27, 2003;
- Reliant Resources' Current Report on Form 8-K filed on June 30, 2003;
- Reliant Resources' Current Report on Form 8-K filed on July 11, 2003;
- Reliant Resources' Current Report on Form 8-K filed on July 22, 2003;
- Reliant Resources' Current Report on Form 8-K filed on July 23, 2003; and
- the description of Reliant Resources' common stock, par value $.001 per
share, and associated rights to purchase Reliant Resources' Series A
preferred stock, par value $.001 per share, contained in Reliant
Resources' Registration Statement on Form 8-A, filed with the SEC on
April 27, 2001, as amended by Amendment No. 1 thereto on Form 8-A/A,
filed with the SEC on May 1, 2001.
For our most recent annual consolidated financial statements and notes, see
our Current Report on Form 8-K filed on June 30, 2003 and incorporated by
reference herein. For our most recent annual "Management's Discussion and
Analysis of Financial Condition and Results of Operations," see our Current
Report on Form 8-K filed on June 5, 2003 and incorporated by reference herein.
For our most recent interim consolidated financial statements and notes and
interim "Management's Discussion and Analysis of Financial Condition and Results
of Operations," see our Current Report on Form 8-K filed on July 23, 2003 and
incorporated by reference herein.
For Orion Power Holdings, Inc.'s most recent annual consolidated financial
statements and notes and annual "Management's Discussion and Analysis of
Financial Condition and Results of Operations," see our Current Report on Form
8-K filed on April 16, 2003 and incorporated by reference herein. For Orion
Power Holdings, Inc.'s most recent interim consolidated financial statements and
notes and interim "Management's Discussion and Analysis of Financial Condition
and Results of Operations," see our Current Report on Form 8-K filed on May 16,
2003 and incorporated by reference herein. For Reliant Energy Mid-Atlantic Power
Holdings, LLC's most recent annual consolidated financial statements and notes,
see our Current Report on Form 8-K filed on July 22, 2003 and incorporated by
reference herein. For Reliant Energy Retail Holdings, LLC's most recent annual
consolidated financial statements and notes, see our Current Report on Form 8-K
filed on June 27, 2003 and incorporated by reference herein.
We incorporate by reference any future filings made with the SEC in
accordance with Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934
until the termination of the offering made under this prospectus. We do not
incorporate by reference any information furnished pursuant to Items 9 or 12 of
Form 8-K in any future filings.
We will provide without charge upon written or oral request, a copy of any
or all of the documents which are incorporated by reference into this
prospectus, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference as an exhibit to this prospectus.
Requests should be directed to:
Reliant Resources, Inc.
P.O. Box 4567
Houston, Texas 77210-4567
Attention: Investor Relations
(713) 497-7000
Our web site address is www.reliant.com. The information on our web site is
not incorporated by reference into this prospectus.
iii
RELIANT RESOURCES, INC.
We provide electricity and energy services with a focus on the competitive
retail and wholesale segments of the electric power industry in the United
States. We provide a complete suite of energy products and services to
approximately 1.7 million electricity customers in Texas. These customers range
from residences and small businesses to large commercial, industrial and
institutional customers. We have built a portfolio of electric power generation
facilities, through a combination of acquisitions and development, that are not
subject to traditional cost-based regulation; therefore, we can generally sell
electricity at prices determined by the market, subject to regulatory
limitations. We market electric energy, capacity and ancillary services and
procure natural gas, coal, fuel oil, natural gas transportation capacity and
other energy-related commodities to optimize our physical assets and provide
risk management services for our asset portfolio. In March 2003, we decided to
exit our proprietary trading activities and liquidate, to the extent
practicable, our proprietary positions. Although we are exiting the proprietary
trading business, we have existing positions, which will be closed as
economically feasible or in accordance with their terms. We will continue to
engage in marketing and hedging activities related to our electric generating
facilities, pipeline transportation capacity positions, pipeline storage
positions and fuel positions, and fixed price retail load.
We are incorporated in Delaware. Our principal executive office is located
at 1111 Louisiana Street, Houston, Texas 77002. Our telephone number is (713)
497-3000.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings from continuing
operations to fixed charges for each of the periods indicated:
FOR THE
THREE MONTHS
ENDED
FOR THE YEAR ENDED DECEMBER 31, MARCH 31,
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1998 1999 2000 2001 2002 2002 2003(2)
----- ---- ---- ---- ---- ---- -------
Ratio of earnings from continuing
operations to fixed charges(1).... 19.31 1.28 1.83 7.54 1.66 3.36 --
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(1) For purposes of this calculation, earnings consist of income (loss) from
continuing operations before income taxes less (a)(1) income of equity
investments of unconsolidated subsidiaries and (2) capitalized interest plus
(b)(1) loss of equity investments of unconsolidated subsidiaries, (2) fixed
charges, (3) amortization of capitalized interest and (4) distributed income
of equity investees. Fixed charges consist of (a) interest expense, (b)
interest expense -- affiliated companies, net, (c) capitalized interest and
(d) interest within rent expense.
(2) For the three months ended March 31, 2003, our earnings were insufficient to
cover our fixed charges by $80 million as our earnings were $50 million and
our fixed charges were $130 million.
USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, we intend to use the
net proceeds from the sale of any offering of securities offered for general
corporate purposes. These purposes may include, but are not limited to:
- working capital;
- capital expenditures;
- acquisitions; and
- the repayment or refinancing of our indebtedness, including inter-company
indebtedness or indebtedness of our subsidiaries.
1
When a particular series of securities is offered, a prospectus supplement
related to that offering will set forth our intended use of the net proceeds
received from the sale of those securities. The net proceeds may be invested
temporarily in short-term marketable securities or applied to repay indebtedness
until they are used for their stated purpose.
DESCRIPTION OF SECURITIES
This prospectus contains summary descriptions of the debt securities,
common stock, preferred stock and warrants that we may sell from time to time.
The summary descriptions are not meant to be complete descriptions of each
security. The particular terms of any security will be described in the related
prospectus supplement.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The debt securities offered by this prospectus will be senior secured debt
securities, senior unsecured debt securities or subordinated debt securities. We
will issue the senior secured debt securities, the senior unsecured debt
securities or the subordinated debt securities under indentures that we will
enter into with Wilmington Trust Company, as trustee. We refer to the senior
secured indenture and the senior unsecured indenture in this prospectus
collectively as the "senior indentures" and the senior indentures and the
subordinated indenture in this prospectus collectively as the "indentures." We
will file forms of the indentures with the SEC as exhibits to the registration
statement of which this prospectus forms a part. We have summarized selected
provisions of the indentures and the debt securities below. This summary is not
complete and is qualified in its entirety by reference to the indentures. For
purposes of this "Description of Debt Securities" section of this prospectus,
references to the terms "Reliant Resources," "us" or "we" mean Reliant
Resources, Inc. only, unless we state otherwise or the context clearly indicates
otherwise.
We may issue debt securities from time to time in one or more series under
the indentures. We will describe the particular terms of each series of debt
securities we offer in a supplement to this prospectus. The terms of our debt
securities will include those set forth in the applicable indenture and those
made a part of the applicable indenture by the Trust Indenture Act of 1939. You
should carefully read the summary below, the applicable prospectus supplement
and the provisions of the applicable indenture before investing in our debt
securities.
The provisions of each of the indentures are substantially identical in
substance, except that Article Sixteen of the subordinated indenture provides
for the subordination of the subordinated debt securities and the senior
indentures have no counterpart for that Article. We have described the
subordination provisions of the subordinated indenture below under
"-- Subordination Under the Subordinated Indenture." The terms of the security
arrangements for each series of our senior secured debt securities will be
established in a supplemental indenture to the senior secured indenture and will
be described in the applicable prospectus supplement.
Subject to the exceptions, and subject to compliance with the applicable
requirements, set forth in the applicable indenture, we may discharge our
obligations under the indentures with respect to our debt securities as
described below under "-- Defeasance and Covenant Defeasance."
THE TERMS OF THE DEBT SECURITIES
We may issue debt securities in one or more series from time to time under
each of the indentures. The total principal amount of debt securities that may
be issued under the indentures is unlimited. We may limit the maximum total
principal amount for the debt securities of any series. However, any limit may
be increased by resolution of our board of directors. We will establish the
terms of each series of debt securities in a supplemental indenture, board
resolution or company order. Unless we inform you otherwise
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in a prospectus supplement, each series of our senior secured debt securities
will rank equally in right of payment with all of our other senior debt, except
that our senior secured debt will effectively rank senior to our senior
unsecured debt to the extent of the value of the collateral securing the senior
secured debt. The subordinated debt securities will rank junior in right of
payment and be subordinate to all of our senior debt as described below under
"-- Subordination Under the Subordinated Indenture."
We will describe the specific terms of the series of debt securities being
offered in a prospectus supplement. These terms will include some or all of the
following:
- the title of the debt securities;
- whether the debt securities are senior secured debt securities, senior
unsecured debt securities or subordinated debt securities;
- the specific indenture under which the debt securities will be issued;
- any limit on the total principal amount of the debt securities;
- the ability to issue additional debt securities of the same series;
- the price or prices at which we sell the debt securities;
- the date or dates on which the principal of the debt securities will be
payable, including the maturity date, or the method used to determine or
extend those dates;
- the interest rate or rates of the debt securities, if any, which may be
fixed or variable, or the method used to determine the rate or rates;
- the date or dates from which interest will accrue on the debt securities,
or the method used for determining those dates;
- the right, if any, to extend the interest payment periods and the
duration of any such deferral period, including the maximum period during
which the interest payment periods may be extended;
- the interest payment dates and the regular record dates for interest
payments, if any, or the method used to determine those dates;
- the basis for calculating interest if other than a 360-day year of twelve
30-day months;
- the place or places where:
- payments of principal, premium, if any, and interest on the debt
securities will be payable;
- the debt securities may be presented for registration of transfer,
conversion or exchange, as applicable; and
- notices and demands to or upon us relating to the debt securities may be
made;
- any provisions that would allow or obligate us to redeem or purchase the
debt securities, including any sinking fund or amortization provisions,
prior to their maturity and the prices at which we may, or are required
to do so;
- the denominations in which we will issue the debt securities, if other
than denominations of an integral multiple of $1,000;
- any provisions that would determine the amount of principal, premium, if
any, or interest on the debt securities by reference to an index or
pursuant to a formula;
- the currency, currencies or currency units in which the principal,
premium, if any, and interest on the debt securities will be payable, if
other than U.S. dollars, and the manner for determining the equivalent
principal amount in U.S. dollars;
3
- any provisions for the payment of principal, premium, if any, and
interest on the debt securities in one or more currencies or currency
units other than those in which the debt securities are stated to be
payable;
- the percentage of the principal amount at which the debt securities will
be issued and, if other than 100%, the portion of the principal amount of
the debt securities which will be payable if the maturity of the debt
securities is accelerated or the method for determining such portion;
- if the principal amount to be paid at the stated maturity of the debt
securities is not determinable as of one or more dates prior to the
stated maturity, the amount which will be deemed to be the principal
amount as of any such date for any purpose, including the principal
amount which will be due and payable upon any maturity other than the
stated maturity or which will be deemed to be outstanding as of any such
date, or, in any such case, the manner in which the deemed principal
amount is to be determined;
- to whom interest on any debt security shall be payable, if other than the
person in whose name the security is registered on the record date for
such interest, the extent to which, or the manner in which, any interest
payable on a temporary global debt security will be paid if other than
the manner provided in the applicable indenture;
- any variation of the defeasance and covenant defeasance sections of the
relevant indenture and the manner in which our election to defease the
debt securities will be evidenced, if other than by a board resolution;
- whether any of the debt securities will initially be issued in the form
of a temporary global security and the provisions for exchanging a
temporary global security for definitive debt securities;
- whether any of the debt securities will be issued in the form of one or
more global securities and, if so:
- the depositary for the global securities;
- the form of any additional legends to be borne by the global securities;
- the circumstances under which the global securities may be exchanged, in
whole or in part, for individual debt security certificates; and
- whether and under what circumstances a transfer of the global securities
may be registered in the names of persons other than the depositary for
the global securities or its nominee;
- whether the interest rate of the debt securities may be reset;
- whether the stated maturity of the debt securities may be extended;
- any additions to or changes in the events of default for the debt
securities and any change in the right of the trustee or the holders of
the debt securities to declare the principal amount of the debt
securities due and payable;
- any additions to or changes in the covenants and definitions in the
relevant indenture, including any restrictions on our ability to incur
debt, redeem our stock or sell our assets;
- any additions or changes to the relevant indenture necessary to issue the
debt securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons;
- the appointment of any paying agents, authenticating agents, transfer
agents, registrars or other agents for the debt securities, if other than
the trustee;
- the terms, if any, upon which holders may convert or exchange debt
securities into or for our common stock, preferred stock or other
securities or property;
- the terms and conditions, if any, securing the debt securities;
4
- any applicable subordination provisions for any subordinated debt
securities in addition to or in lieu of those described in this
prospectus;
- any restriction or condition on the transferability of the debt
securities;
- provisions, if any, granting special rights to holders of the debt
securities upon the occurrence of specified events; and
- any other terms of the debt securities.
We may sell the debt securities, including original issue discount
securities, at par or at a substantial discount below their stated principal
amount. Unless we inform you otherwise in a prospectus supplement, we may issue
additional debt securities of a particular series without the consent of the
holders of the debt securities of such series outstanding at the time of
issuance. Any such additional debt securities, together with all other
outstanding debt securities of that series, will constitute a single series of
securities under the applicable indenture. In addition, we will describe in a
prospectus supplement, material U.S. federal income tax considerations and any
other special considerations for any debt securities we sell which are
denominated in a currency or currency unit other than U.S. dollars.
STRUCTURAL SUBORDINATION
Reliant Resources is a holding company that conducts substantially all of
its operations through its subsidiaries. Its only significant assets are the
capital stock of its subsidiaries and its subsidiaries generate substantially
all of its operating income and cash flow. As a result, dividends or advances
from its subsidiaries are the principal source of funds necessary to meet its
debt service obligations. Contractual provisions or laws, as well as its
subsidiaries' financial condition and operating requirements, may limit Reliant
Resources' ability to obtain cash from its subsidiaries that it may require to
pay its debt service obligations, including payments on the debt securities. In
addition, holders of debt securities will be effectively subordinated to all of
the liabilities of Reliant Resources' subsidiaries with regard to the assets and
earnings of Reliant Resources' subsidiaries.
FORM, EXCHANGE AND TRANSFER OF THE DEBT SECURITIES
Unless we inform you otherwise in a prospectus supplement, we will issue
the debt securities in registered form, without coupons, in denominations of
integral multiples of $1,000.
Holders will generally be able to exchange debt securities for other debt
securities of the same series with the same total principal amount and the same
terms but in different authorized denominations.
Holders may present debt securities for exchange or for registration of
transfer at the office of the security registrar or at the office of any
transfer agent we designate for that purpose. The security registrar or
designated transfer agent will exchange or transfer the debt securities if it is
satisfied with the documents of title and identity of the person making the
request. We will not charge a service charge for any exchange or registration of
transfer of debt securities. However, we may require payment of a sum sufficient
to cover any tax or other governmental charge payable for the registration of
transfer or exchange. Unless we inform you otherwise in a prospectus supplement,
we will appoint the trustee as security registrar. We will identify any transfer
agent in addition to the security registrar in a prospectus supplement. At any
time, we may:
- designate additional transfer agents;
- rescind the designation of any transfer agent; or
- approve a change in the office of any transfer agent.
However, we are required to maintain a transfer agent in each place of payment
for the debt securities at all times.
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In the event we elect to redeem a series of debt securities, neither we nor
the applicable trustee will be required to register the transfer or exchange of
any debt security of that series:
- during the period beginning at the opening of business 15 days before the
day we mail the notice of redemption for the series and ending at the
close of business on the day the notice is mailed; or
- if we have selected the series for redemption, in whole or in part,
except for any unredeemed portion of the series.
GLOBAL SECURITIES
Unless we inform you otherwise in a prospectus supplement, some or all of
the debt securities of any series may be represented, in whole or in part, by
one or more registered global securities. The global securities will have a
total principal amount equal to the debt securities they represent. Unless we
inform you otherwise in a prospectus supplement, each global security
representing debt securities will be deposited with, or on behalf of, The
Depository Trust Company, referred to as "DTC," or any other successor
depositary we may appoint. In such case, each holder's beneficial interest in
global securities will be shown on the records of DTC and transfers and
beneficial interests will only be effected through DTC's records. We refer to
DTC or any other depositary in this prospectus as the "depositary." Each global
security will be registered in the name of the depositary or its nominee. Each
global security will bear a legend referring to the restrictions on exchange and
registration of transfer of global securities that we describe below and any
other matters required by the relevant indenture. Unless we inform you otherwise
in a prospectus supplement, we will not initially issue debt securities in
definitive form.
Global securities may not be exchanged, in whole or in part, for definitive
debt securities, and no transfer of a global security, in whole or in part, may
be registered in the name of any person other than the depositary for the global
security or any nominee of the depositary unless:
- the depositary has notified us that it is unwilling or unable to continue
as depositary for the global security or has ceased to be qualified to
act as depositary as required by the applicable indenture unless we have
approved a successor depositary within 90 days;
- we determine in our sole discretion that the global security will be so
exchangeable or transferable; or
- any other circumstances in addition to or in lieu of those described
above that we may describe in a prospectus supplement have occurred.
All debt securities issued in exchange for a global security or any portion
of a global security will be registered in the names directed by the depositary.
Any additional terms of the depositary agreement with respect to any series
of debt securities and the rights of and limitations on owners of beneficial
interests in a global security representing a series of debt securities may be
described in a related prospectus supplement.
PAYMENT AND PAYING AGENTS
Unless we inform you otherwise in a prospectus supplement, we will pay
interest on the debt securities to the persons in whose names the debt
securities are registered at the close of business on the regular record date
for each interest payment. However, unless we inform you otherwise in a
prospectus supplement, we will pay the interest payable on the debt securities
at their stated maturity to the persons to whom we pay the principal amount of
the debt securities. The initial payment of interest on any series of debt
securities issued between a regular record date and the related interest payment
date will be payable in the manner provided by the terms of the series, which we
will describe in a prospectus supplement.
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Unless we inform you otherwise in a prospectus supplement, we will pay
principal, premium, if any, and interest on the debt securities at the offices
of the paying agents we designate. However, except in the case of a global
security, we may pay interest by:
- check mailed to the address of the person entitled to the payment as it
appears in the security register; or
- wire transfer in immediately available funds to the place and account
designated in writing by the person entitled to the payment as specified
in the security register.
We will designate the trustee under the applicable indenture as the sole
paying agent for the debt securities unless we inform you otherwise in a
prospectus supplement. If we initially designate any other paying agents for a
series of debt securities, we will identify them in a prospectus supplement. At
any time, we may designate additional paying agents or rescind the designation
of any paying agents. However, we are required to maintain a paying agent in
each place of payment for the debt securities at all times.
Any money deposited with the applicable trustee or any paying agent for the
payment of principal, premium, if any, and interest on the debt securities that
remains unclaimed for two years after the date the payments became due, may be
repaid to us upon our request. After we have been repaid, holders entitled to
those payments may only look to us for payment as our unsecured general
creditors. The trustees and any paying agents will not be liable for those
payments after we have been repaid.
RESTRICTIVE COVENANTS
We will describe any restrictive covenants for any series of debt
securities in a prospectus supplement.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Unless we inform you otherwise in a prospectus supplement, Reliant
Resources may not consolidate with or merge into, or convey, transfer or lease
its properties and assets substantially as an entirety, to any person, other
than a direct or indirect wholly owned subsidiary, referred to as a "successor
person," unless:
- we are the surviving corporation or the successor person is a
corporation, partnership, trust or other entity organized and validly
existing under the laws of any domestic jurisdiction;
- the successor person assumes Reliant Resources' obligations with respect
to the debt securities and the relevant indenture;
- immediately after giving effect to the transaction, no event of default,
and no event which, after notice or lapse of time or both, would become
an event of default, would occur and be continuing; and
- we have delivered to the applicable trustee the certificates and opinions
required under the relevant indenture.
As used in the indentures, the term "corporation" means a corporation,
association, company, limited liability company, joint-stock company or business
trust.
EVENTS OF DEFAULT
Unless the context clearly indicates otherwise, we use the terms
"indenture" and "trustee" in this subsection to mean the relevant indenture and
trustee with respect to any series of debt securities we may offer.
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Unless we inform you otherwise in a prospectus supplement, each of the
following will be an event of default under the indenture for a series of debt
securities:
- our failure to pay any interest on that series for 30 days after the
interest becomes due and payable;
- our failure to pay principal or premium, if any, on that series when due,
regardless of whether such payment becomes due because of maturity,
redemption, acceleration or otherwise, or is required by any sinking fund
established with respect to such series;
- our failure to perform, or our breach in any material respect of, any
other covenant or warranty in the indenture, other than a covenant or
warranty included in the indenture solely for the benefit of another
series of debt securities issued under the indenture, for 90 days after
either the trustee or holders of at least 25% in principal amount of the
outstanding debt securities have given us written notice of the breach in
the manner required by the indenture;
- certain events involving bankruptcy, insolvency or reorganization; and
- any other event of default we may provide for that series.
If an event of default described in the first, second, third or fifth
bullet points above occurs and is continuing, either the trustee or the holders
of at least 25% in principal amount of the outstanding debt securities of a
series may declare the principal amount of the debt securities due and
immediately payable. In order to declare the principal amount of the debt
securities due and immediately payable, the trustee or the holders must deliver
a notice that satisfies the requirements of the indenture. Upon a declaration by
the trustee or the holders, we will be obligated to pay the principal amount of
the debt securities.
If an event of default described in the fourth bullet point above occurs,
then the principal amount of the debt securities shall be immediately due and
payable without any declaration or any other action on the part of the trustee
or any holder.
An event of default will be deemed waived at any time after a declaration
of acceleration but before a judgment for payment of the money due has been
obtained if:
- we have paid or deposited with the trustee all overdue interest, the
principal and any premium due otherwise than by the declaration of
acceleration and any interest on such amounts, and any interest on
overdue interest, to the extent legally permitted, and all amounts due to
the trustee, and
- all events of default, other than the nonpayment of the principal which
became due solely by virtue of the declaration of acceleration, have been
cured or waived.
The trustee is under no obligation to exercise any of its rights or powers
at the request or direction of any holders of debt securities unless those
holders have offered the trustee security or indemnity satisfactory to the
trustee against the costs, expenses and liabilities which it might incur as a
result. The holders of a majority of the outstanding debt securities have, with
certain exceptions, the right to direct the time, method and place of conducting
any proceeding for any remedy available to the trustee or the exercise of any
trust or power of the trustee with respect to the debt securities.
The holder of any debt security will have an absolute and unconditional
right to receive payment of the principal, any premium and, within certain
limitations, any interest on that debt security on its maturity date or
redemption date and to institute suit to enforce those payments.
We are required to furnish each year to the trustee an officers'
certificate to the effect that we are not in default under the indenture or, if
there has been a default, specifying the default and its status.
MODIFICATION AND WAIVER
Unless the context clearly indicates otherwise, we use the terms
"indenture" and "trustee" in this subsection to mean the relevant indenture and
the applicable trustee with respect to any series of debt securities we may
offer.
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We may enter into one or more supplemental indentures with the trustee
without the consent of the holders of the debt securities in order to:
- evidence the succession of another person to us, or successive
successions and the assumption of our covenants, agreements and
obligations by a successor;
- add to our covenants for the benefit of the holders or to surrender any
of our rights or powers;
- add events of default for any series of debt securities;
- add or change any provisions of the indenture to the extent necessary to
issue debt securities in bearer form;
- add to, change or eliminate any provision of the indenture applying to
one or more series of debt securities, provided that if such action
adversely affects the interests of any holders of debt securities of any
series, the addition, change or elimination will become effective with
respect to that series only when no security of that series remains
outstanding;
- convey, transfer, assign, mortgage or pledge any property to or with the
trustee or to surrender any right or power conferred upon us by the
indenture;
- establish the form or terms of any series of debt securities;
- provide for uncertificated securities in addition to certificated
securities;
- evidence and provide for successor trustees or to add or change any
provisions to the extent necessary to appoint a separate trustee or
trustees for a specific series of debt securities;
- correct any ambiguity, defect or inconsistency under the indenture,
provided that such action does not adversely affect the interests of the
holders of debt securities of any series;
- supplement any provisions of the indenture necessary to defease and
discharge any series of debt securities, provided that such action does
not adversely affect the interests of the holders of any series of debt
securities;
- comply with the rules or regulations of any securities exchange or
automated quotation system on which any debt securities are listed or
traded; or
- add, change or eliminate any provisions of the indenture in accordance
with any amendments to the Trust Indenture Act of 1939, provided that the
action does not adversely affect the rights or interests of any holder of
debt securities.
We may enter into one or more supplemental indentures with the trustee in
order to add to, change or eliminate provisions of the indenture or to modify
the rights of the holders of one or more series of debt securities if we obtain
the consent of the holders of a majority in principal amount of the outstanding
debt securities of each series affected by the supplemental indenture, treated
as one class. However, without the consent of the holders of each outstanding
debt security affected by the supplemental indenture, we may not enter into a
supplemental indenture that:
- changes the stated maturity of the principal of, or any installment of
principal of or interest on, any debt security, except to the extent
permitted by the indenture;
- reduces the principal amount of, or any premium or interest on, any debt
security;
- reduces the amount of principal of an original issue discount security or
any other debt security payable upon acceleration of the maturity
thereof;
- changes the currency of payment of principal, premium, if any, or
interest;
- impairs the right to institute suit for the enforcement of any payment on
any debt security;
- reduces the percentage in principal amount of outstanding debt securities
of any series, the consent of whose holders is required for modification
or amendment of the indenture;
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- reduces the percentage in principal amount of outstanding debt securities
of any series necessary for waiver of compliance with certain provisions
of the indenture or for waiver of certain defaults;
- makes any change that adversely affects the right to convert or exchange
any debt security or decreases the conversion or exchange rate or
increases the conversion price of any convertible or exchangeable debt
security; or
- changes the terms and conditions pursuant to which any series of debt
securities are secured in a manner adverse to the holders of that series
of debt securities.
We may not amend the subordinated indenture to change the subordination of
any outstanding subordinated debt securities without the consent of each holder
of senior debt that the amendment would adversely affect.
Holders of a majority in principal amount of the outstanding debt
securities of any series may waive past defaults or compliance with restrictive
provisions of the indenture. However, the consent of holders of each outstanding
debt security of a series is required to:
- waive any default in the payment of principal, premium, if any, or
interest; or
- waive any covenants and provisions of the indenture that may not be
amended without the consent of the holder of each outstanding debt
security of the series affected.
In order to determine whether the holders of the requisite principal amount
of the outstanding debt securities have taken an action under the indenture as
of a specified date:
- the principal amount of an original issue discount security that will be
deemed to be outstanding will be the amount of the principal that would
be due and payable as of such date upon acceleration of the maturity to
such date;
- if, as of such date, the principal amount payable at the stated maturity
of a debt security is not determinable, for example, because it is based
on an index, the principal amount of such debt security deemed to be
outstanding as of such date will be an amount determined in the manner
prescribed for such debt security;
- the principal amount of a debt security denominated in one or more
foreign currencies or currency units that will be deemed to be
outstanding will be the U.S. dollar equivalent, determined as of such
date in the manner prescribed for such debt security, of the principal
amount of such debt security or, in the case of a debt security described
in the two preceding bullet points, of the amount described above; and
- debt securities owned by us or any other obligor upon the debt securities
or any of their affiliates will be disregarded and deemed not to be
outstanding.
Some debt securities, including those for which payment or redemption money
has been deposited or set aside in trust for the holders and those that have
been fully defeased, will not be deemed to be outstanding.
We will generally be entitled to set any day as a record date for
determining the holders of outstanding debt securities of any series entitled to
give or take any direction, notice, consent, waiver or other action under the
indenture. In limited circumstances, the trustee will be entitled to set a
record date for action by holders. If a record date is set for any action to be
taken by holders of a particular series, the action may be taken only by persons
who are holders of outstanding debt securities of that series on the record
date. To be effective, the action must be taken by holders of the requisite
principal amount of the debt securities within a specified period following the
record date. For any particular record date, this period will be 180 days or
such shorter period as we may specify, or the trustee may specify, if it set the
record date.
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SUBORDINATION UNDER THE SUBORDINATED INDENTURE
We have defined some of the terms we use in this subsection at the end of
this subsection. The subordinated debt securities issued under the subordinated
indenture will:
- be general unsecured obligations;
- be subordinate and rank junior in right of payment to all of our senior
debt to the extent provided in the subordinated indenture or in any
supplemental indenture;
- rank equally in right of payment with all of our other subordinated
indebtedness unless otherwise provided in a supplemental indenture; and
- with respect to the assets and earnings of our subsidiaries, effectively
rank below all of the liabilities of our subsidiaries.
This means we will not make any payment of principal, premium, if any, interest,
or any other amounts, if any, on the subordinated debt securities if:
- we have defaulted in the payment of principal, premium, if any, interest
or any other amounts due on any of our senior debt beyond any applicable
grace period; or
- the maturity of any of our senior debt has been accelerated because of a
default,
until such default is cured, waived in writing or ceases to exist or such senior
debt is discharged or paid in full. If the maturity of one or more series of our
subordinated debt securities is accelerated, then we will not make any payment
of principal, premium, if any, interest or any other amounts, if any, on the
subordinated debt securities until the holders of all of our senior debt
outstanding at the time of acceleration receive payment in full of the senior
debt (including any amounts due upon acceleration, if applicable).
If our assets are distributed to our creditors upon our dissolution,
winding-up, receivership, reorganization, assignment for the benefit of
creditors, marshaling of assets and liabilities or bankruptcy, insolvency or
similar proceedings, all amounts due or to become due on all of our senior debt
must be paid in full before we may make any payments on our subordinated debt
securities.
Under the subordinated indenture, the term "senior debt" means the
principal, premium, if any, interest, or other amounts due, if any, in
connection with all of our debt (unless otherwise provided in a supplemental
indenture), whether created, incurred or assumed before, on or after the date of
the subordinated indenture. However, senior debt does not include:
- our debt to any of our subsidiaries;
- any series of subordinated debt securities issued under the subordinated
indenture, unless otherwise specified by the terms of any such series;
- our debt that, when incurred and without respect to any election under
Section 1111(B) of Title 11, U.S. Code, was without recourse to us;
- any of our other debt which by the terms of the instrument creating or
evidencing it is specifically designated as being subordinated to or pari
passu with the subordinated debt securities; and
- any trade payables.
Under the subordinated indenture, the term "debt" means, with respect to
any person at any date of determination, without duplication:
- all indebtedness for borrowed money;
- all obligations evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses;
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- all obligations under letters of credit or bankers' acceptances or other
similar instruments, or related reimbursement obligations, issued on the
account of such person;
- all obligations to pay the deferred purchase price of property or
services, except trade payables;
- all obligations as lessee under capitalized leases;
- all debt of others secured by a lien on any asset of such person, whether
or not the debt is assumed by the person, provided that, for purposes of
determining the amount of any debt of the type described in this bullet
point, if recourse with respect to the debt is limited to the asset, the
amount of the debt will be limited to the lesser of the fair market value
of the asset or the amount of the debt;
- all debt of others guaranteed by such person to the extent the debt is
guaranteed by such person; and
- to the extent not otherwise included in this definition, all obligations
for claims in respect of derivative products, including interest rate,
foreign exchange rate and commodity prices, forward contracts, options,
swaps, collars and similar arrangements.
Under the subordinated indenture, the term "trade payables" means, with
respect to any person, any accounts payable or any other indebtedness or
monetary obligation to trade creditors created, assumed or guaranteed by such
person or any of its subsidiaries arising in the ordinary course of business in
connection with the acquisition of goods or services.
The subordinated indenture does not limit our ability to incur additional
indebtedness, including indebtedness that ranks senior in priority of payment to
the subordinated debt securities.
A prospectus supplement relating to each series of subordinated debt
securities will describe any subordination provisions applicable to such series
in addition to or different from those described above.
By reason of the subordination of the subordinated debt securities, in the
event we become insolvent, holders of our senior debt and holders of our other
obligations that are not subordinated to our senior debt may receive more,
ratably, than holders of the subordinated debt securities. However, this
subordination will not prevent the occurrence of an event of default or limit
the right of acceleration in respect of the subordinated debt securities.
DEFEASANCE AND COVENANT DEFEASANCE
Unless the context clearly indicates otherwise, we use the terms
"indenture" and "trustee" in this subsection to mean the relevant indenture and
the applicable trustee with respect to any series of debt securities we may
offer.
Unless we inform you otherwise in a prospectus supplement, the provisions
of the indenture relating to defeasance and discharge of indebtedness, or
defeasance of restrictive covenants, will apply to the debt securities of any
series.
Defeasance and Discharge. We will be discharged from all of our
obligations with respect to the debt securities, except for certain obligations
to exchange or register the transfer of debt securities, to replace stolen, lost
or mutilated debt securities, to maintain paying agencies and to hold money for
payment in trust, upon the deposit in trust for the benefit of the holders of
such debt securities of money or U.S. government obligations, or both, which,
through the payment of principal and interest in respect thereof in accordance
with their terms, will provide money in an amount sufficient to pay the
principal, premium, if any, and interest on the debt securities on the
respective stated maturities of the debt securities in accordance with the terms
of the indenture and the debt securities. Such defeasance or discharge may occur
only if, among other things, we have delivered to the trustee an opinion of
counsel to the effect that holders of the debt securities will be subject to
U.S. federal income tax on the same amount, in the same manner and at the same
times as would have been the case if such deposit, defeasance and discharge were
not to occur. Such opinion must be based on a ruling of the U.S. Internal
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Revenue Service or a change in U.S. federal income tax law occurring after the
date hereof, because this result would not occur under current U.S. federal
income tax law.
Defeasance of Certain Covenants. We may, in certain circumstances, omit to
comply with specified restrictive covenants, including those described under
"-- Consolidation, Merger and Sale of Assets" and any that we may describe in a
prospectus supplement, and that in those circumstances the occurrence of certain
events of default, which are described in the third bullet point, with respect
to such restrictive covenants, under "-- Events of Default" and any that may be
described in a prospectus supplement, will be deemed not to be or result in an
event of default, in each case with respect to the debt securities. We, in order
to exercise such covenant defeasance option, will be required to deposit, in
trust for the benefit of the holders of the debt securities, money or U.S.
government obligations, or both, which, through the payment of principal and
interest in respect thereof in accordance with their terms, will provide money
in an amount sufficient to pay the principal, premium, if any, and interest on
the debt securities on the respective stated maturities in accordance with the
terms of the indenture and the debt securities. We will also be required, among
other things, to deliver to the trustee an opinion of counsel to the effect that
holders of the debt securities will be subject to U.S. federal income tax on the
same amount, in the same manner and at the same times as would have been the
case if such deposit and defeasance were not to occur. In the event we exercise
this option with respect to any debt securities and the debt securities were
declared due and payable because of the occurrence of any event of default, the
amount of money and U.S. government obligations so deposited in trust would be
sufficient to pay amounts due on the debt securities at the time of their
respective stated maturities, but might not be sufficient to pay amounts due on
such debt securities upon any acceleration resulting from the event of default.
In such case, we would remain liable for those payments.
We may exercise our defeasance option with respect to such debt securities
notwithstanding our prior exercise of our covenant defeasance option.
NOTICES
Holders of our debt securities will receive notices by mail at their
addresses as they appear in the security register.
TITLE
We may treat the person in whose name a debt security is registered on the
applicable record date as the owner of the debt security for all purposes,
whether or not it is overdue.
GOVERNING LAW
New York law will govern the indentures and the debt securities, without
regard to its conflicts of law principles.
REGARDING THE TRUSTEE
If the trustee becomes one of our creditors, its rights to obtain payment
of claims in specified circumstances, or to realize for its own account on
certain property received in respect of any such claim as security or otherwise
will be limited under the terms of the indentures. The trustee may engage in
certain other transactions; however, if the trustee acquires any conflicting
interests within the meaning specified under the Trust Indenture Act, the
trustee will be required to eliminate the conflict or resign.
Pursuant to the Trust Indenture Act, should a default occur with respect to
either the senior debt securities or the subordinated debt securities,
Wilmington Trust Company would be required to resign as trustee under one of the
indentures within 90 days of the default unless it were cured, waived or
otherwise eliminated.
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CONVERSION OR EXCHANGE RIGHTS
A prospectus supplement will describe the terms, if any, on which a series
of debt securities may be convertible into or exchangeable for our common stock,
preferred stock or other securities. These terms will also include provisions as
to whether conversion or exchange is mandatory, at the option of the holder or
at our option. These provisions may allow or require the number of shares of our
common stock, preferred stock or other securities to be received by the holders
of such series of debt securities to be adjusted.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The following descriptions are summaries of material terms of our common
stock, preferred stock, certificate of incorporation and bylaws. This summary is
qualified by reference to our certificate of incorporation and bylaws, copies of
which have been filed as exhibits to the registration statement of which this
prospectus is a part, and by the provisions of applicable law.
Our authorized capital stock consists of 2,000,000,000 shares of common
stock, par value $0.001 per share, and 125,000,000 shares of preferred stock,
par value $0.001 per share. Of the 125,000,000 shares of preferred stock,
2,000,000 shares have been designated Series A preferred stock. Our common stock
is traded on the New York Stock Exchange under the trading symbol "RRI." As of
July 21, 2003, we had approximately 294,286,986 shares of common stock issued
and outstanding, 5,517,014 shares of common stock held in treasury and no shares
of preferred stock outstanding.
COMMON STOCK
Each share of common stock entitles the holder to one vote on all matters
submitted to a vote of stockholders, including the election of directors. There
are no cumulative voting rights. Accordingly, holders of a majority of the total
votes entitled to vote in an election of directors will be able to elect all of
the directors standing for election. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of our common stock
are entitled to dividends when, as and if declared by our board of directors out
of funds legally available for that purpose. If we are liquidated, dissolved or
wound up, the holders of our common stock will be entitled to a pro rata share
in any distribution to stockholders, but only after satisfaction of all of our
liabilities and of the prior rights of any outstanding series of our preferred
stock. The common stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of our common stock are
fully paid and nonassessable.
PREFERRED STOCK
The following description discusses the general terms of the preferred
stock that we may issue. A prospectus supplement relating to a particular series
of preferred stock will describe the specific terms of such series of preferred
stock.
Our board of directors has the authority, without stockholder approval, to
issue shares of preferred stock from time to time in one or more series, and to
fix the number of shares and terms of each such series. The board may determine
the designation and other terms of each series, including:
- dividend rates;
- redemption rights;
- liquidation rights;
- sinking fund provisions;
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- conversion rights;
- voting rights; and
- any other designations, powers, preferences, rights, qualifications,
limitations, or restrictions.
You should refer to the prospectus supplement relating to the series of
preferred stock being offered for the specific terms of that series, including:
- the title of the series and the number of shares in the series;
- the price at which the preferred stock will be offered;
- the dividend rate or rates or method of calculating the rates, the dates
on which the dividends will be payable, whether or not dividends will be
cumulative or noncumulative and, if cumulative, the dates from which
dividends on the preferred stock being offered will cumulate;
- the voting rights, if any, of the holders of shares of the preferred
stock being offered;
- the provisions for a sinking fund, if any, and the provisions for
redemption, if applicable, of the preferred stock being offered;
- the liquidation preference per share;
- the terms and conditions, if applicable, upon which the preferred stock
being offered will be convertible into our common stock or other
securities, including the conversion price, or the manner of calculating
the conversion price, and the conversion period;
- the terms and conditions, if applicable, upon which the preferred stock
being offered will be exchangeable for debt securities, including the
exchange price, or the manner of calculating the exchange price;
- any listing of the preferred stock being offered on any securities
exchange;
- a discussion of any material U.S. federal income tax considerations
applicable to the preferred stock being offered;
- the relative ranking and preferences of the preferred stock being offered
as to dividend rights and rights upon liquidation, dissolution or the
winding up of our affairs;
- any limitations on the issuance of any class or series of preferred stock
ranking senior or equal to the series of preferred stock being offered as
to dividend rights and rights upon liquidation, dissolution or the
winding up of our affairs; and
- any additional rights, preferences, qualifications, limitations and
restrictions of the series.
Upon issuance, the shares of preferred stock will be fully paid and
nonassessable, which means that its holders will have paid their purchase price
in full and we may not require them to pay additional funds.
The issuance of preferred stock could adversely affect the voting power of
holders of our common stock. It could also affect the likelihood that holders of
our common stock will receive dividend payments and payments upon liquidation.
The issuance of shares of preferred stock, or the issuance of rights to
purchase shares of preferred stock, could be used to discourage an attempt to
obtain control of our company. For example, if, in the exercise of its fiduciary
obligations, our board were to determine that a takeover proposal was not in our
best interest, the board could authorize the issuance of a series of preferred
stock containing class voting rights that would enable the holder or holders of
the series to prevent or make the change of control transaction more difficult.
Alternatively, a change of control transaction deemed by the board to be in our
best interest could be facilitated by issuing a series of preferred stock having
sufficient voting rights to provide a required percentage vote of the
stockholders.
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Holders of our common stock may purchase shares of our Series A preferred
stock if the rights associated with their common stock are exercisable and the
holders exercise the rights. Please read "-- Stockholder Rights Plan."
Series A Preferred Stock. Our Series A preferred stock ranks junior to all
other series of our preferred stock, and senior to our common stock with respect
to dividend and liquidation rights. If we liquidate, dissolve or wind up, we may
not make any distributions to holders of our common stock unless we first pay
holders of our Series A preferred stock an amount equal to:
- $1,000 per share, plus
- accrued and unpaid dividends and distributions on our Series A preferred
stock, whether or not declared, to the date of such payment.
If the dividends or distributions payable on our Series A preferred stock are in
arrears, we may not:
- declare or pay dividends on;
- make any other distributions on;
- redeem;
- purchase; or
- otherwise acquire for consideration
any shares of our common stock, or
- redeem;
- purchase; or
- otherwise acquire for consideration
any shares of our Series A preferred stock, until we have paid all such unpaid
dividends or distributions, except in accordance with a purchase offer to all
holders of our Series A preferred stock upon terms that our board of directors
determines will be fair and equitable.
We may redeem shares of our Series A preferred stock at any time at a
redemption price determined in accordance with the provisions of our certificate
of incorporation.
Holders of shares of our Series A preferred stock are entitled to vote
together with holders of our common stock as one class on all matters submitted
to a vote of our stockholders. Each share of Series A preferred stock entitles
its holder to a number of votes equal to the "adjustment number" specified in
our certificate of incorporation. The adjustment number is initially equal to
1,000 and is subject to adjustment in the event we:
- declare any dividend on our common stock payable in shares of common
stock;
- subdivide our outstanding shares of common stock; or
- combine our outstanding shares of common stock into a smaller number of
shares.
For a complete description of the terms of our Series A preferred stock, we
encourage you to read our certificate of incorporation, which we have filed as
an exhibit to the registration statement of which this prospectus is a part.
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ANTI-TAKEOVER EFFECTS OF DELAWARE LAWS AND OUR CHARTER AND BYLAW PROVISIONS
Some provisions of Delaware law and our certificate of incorporation and
bylaws could make the following more difficult:
- acquisition of us by means of a tender offer;
- acquisition of control of us by means of a proxy contest or otherwise; or
- removal of our incumbent officers and directors.
These provisions, as well as our stockholder rights plan, are designed to
discourage coercive takeover practices and inadequate takeover bids. These
provisions are also designed to encourage persons seeking to acquire control of
us to first negotiate with our board of directors. We believe that the benefits
of increased protection give us the potential ability to negotiate with the
proponent of an unfriendly or unsolicited proposal to acquire or restructure us,
and that the benefits of this increased protection outweigh the disadvantages of
discouraging those proposals, because negotiation of those proposals could
result in an improvement of their terms.
CHARTER AND BYLAW PROVISIONS
Election and Removal of Directors. Our board of directors is comprised of
between one and fifteen directors, the exact number to be fixed from time to
time by resolution of our board of directors. Our board of directors is divided
into three classes. The directors in each class serve for a three-year term,
with only one class being elected each year by our stockholders. This system of
electing and removing directors may discourage a third party from making a
tender offer or otherwise attempting to obtain control of us, because it
generally makes it more difficult for stockholders to replace a majority of our
directors. In addition, no director may be removed except for cause, and
directors may be removed for cause by a majority of the shares then entitled to
vote at an election of directors. Any vacancy occurring on the board of
directors and any newly created directorship may only be filled by a majority of
the remaining directors in office.
Stockholder Meetings. Our bylaws provide that special meetings of our
stockholders may be called only by the chairman of our board of directors, our
chief executive officer, our president or a majority of the board of directors.
Our certificate of incorporation and bylaws specifically deny our stockholders
the ability to call a special meeting.
Elimination of Stockholder Action by Written Consent. Our certificate of
incorporation and our bylaws provide that holders of our common stock will not
be able to act by written consent without a meeting.
Amendment of Certificate of Incorporation. The provisions described above
under "-- Election and Removal of Directors," "-- Stockholder Meetings" and
"-- Elimination of Stockholder Action by Written Consent" may be amended only by
the affirmative vote of holders of at least 66 2/3% of the voting power of
outstanding shares of our capital stock entitled to vote in the election of
directors, voting together as a single class.
Amendment of Bylaws. Our board of directors has the power to alter, amend
or repeal our bylaws or adopt new bylaws by the affirmative vote of at least 80%
of all directors then in office at any regular or special meeting of the board
of directors called for that purpose. This right is subject to repeal or change
by the affirmative vote of holders of at least 80% of the voting power of all
outstanding shares of our capital stock entitled to vote in the election of
directors, voting together as a single class.
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OTHER LIMITATIONS ON STOCKHOLDER ACTIONS
Our bylaws also impose some procedural requirements on stockholders who
wish to:
- make nominations in the election of directors;
- propose that a director be removed;
- propose any repeal or change in our bylaws; or
- propose any other business to be brought before an annual or special
meeting of stockholders.
With respect to special meetings of stockholders, our bylaws provide that
only such business shall be conducted as shall have been stated in the notice of
the meeting or shall otherwise have been brought before the meeting by or at the
direction of the chairman of the meeting or the board of directors.
Under these procedural requirements, in order to bring a proposal or
nomination before an annual meeting of stockholders, or in order to bring a
nomination before a special meeting of stockholders, a stockholder must deliver
timely notice to our corporate secretary along with the following:
- a description of the business or nomination to be brought before the
meeting and the reasons for conducting such business at the meeting;
- the stockholder's name and address;
- the number of shares beneficially owned by the stockholder and evidence
of such ownership;
- the names and addresses of all persons with whom the stockholder is
acting in concert and a description of all arrangements and
understandings with such persons; and
- the number of shares such persons beneficially own.
To be timely, a stockholder must deliver notice:
- of a nomination or other business in connection with an annual meeting of
stockholders, not less than 90 nor more than 180 days prior to the date
on which the immediately preceding year's annual meeting of stockholders
was held; or
- of a nomination in connection with a special meeting of stockholders, not
less than 40 nor more than 60 days prior to the date of the special
meeting.
In order to submit a nomination for our board of directors, a stockholder
must also submit information with respect to the nominee that we would be
required to include in a proxy statement, as well as some other information. If
a stockholder fails to follow the required procedures, the stockholder's nominee
or proposal will be ineligible and will not be voted on by our stockholders.
Limitation on Liability of Directors. Our certificate of incorporation
provides that no director shall be personally liable to us or our stockholders
for monetary damages for breach of fiduciary duty as a director, except as
required by law, as in effect from time to time. Currently, Delaware law
requires that liability be imposed for the following:
- any breach of the director's duty of loyalty to our company or our
stockholders;
- any act or omission not in good faith or which involved intentional
misconduct or a knowing violation of law;
- unlawful payments of dividends or unlawful stock repurchases or
redemptions; and
- any transaction from which the director derived an improper personal
benefit.
Our bylaws provide that, to the fullest extent permitted by law, we will
indemnify any officer or director of our company against all damages, claims and
liabilities arising out of the fact that the person is or was our director or
officer, or served any other enterprise at our request as a director, officer,
employee, agent or fiduciary. We will reimburse the expenses, including
attorneys' fees, incurred by a person
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indemnified by this provision when we receive an undertaking to repay such
amounts if it is ultimately determined that the person is not entitled to be
indemnified by us. Amending this provision will not reduce our indemnification
obligations relating to actions taken before an amendment.
STOCKHOLDER RIGHTS PLAN
Each share of our common stock includes one right to purchase from us a
unit consisting of one one-thousandth of a share of our Series A preferred stock
at a purchase price of $150.00 per unit, subject to adjustment. The rights are
issued pursuant to a rights agreement between us and JPMorgan Chase Bank, the
successor to The Chase Manhattan Bank, as rights agent. We have summarized
selected portions of the rights agreement and the rights below. For a complete
description of the rights, we encourage you to read the summary below and the
rights agreement, which we have filed as an exhibit to the registration
statement of which this prospectus is a part.
Detachment of Rights; Exercisability. The rights are evidenced by the
certificates representing our currently outstanding common stock and all common
stock certificates we may issue prior to the "distribution date." That date will
occur, except in some cases, on the earlier of:
- ten days following a public announcement that a person or group of
affiliated or associated persons, who we refer to collectively as an
"acquiring person," has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of our
common stock; or
- ten business days following the start of a tender offer or exchange offer
that would result in a person becoming an acquiring person.
Our board of directors may defer the distribution date in some circumstances.
Also, some inadvertent acquisitions of our common stock will not result in a
person becoming an acquiring person if the person promptly divests itself of
sufficient common stock.
Until the distribution date:
- common stock certificates will evidence the rights;
- the rights will be transferable only with those certificates;
- new common stock certificates will contain a notation incorporating the
rights agreement by reference; and
- the surrender for transfer of any common stock certificate will also
constitute the transfer of the rights associated with the common stock
represented by the certificate.
The rights are not exercisable until the distribution date and will expire
at the close of business on January 15, 2011, unless we redeem or exchange them
at an earlier date as described below or we extend the expiration date prior to
January 15, 2011.
As soon as practicable after the distribution date, the rights agent will
mail certificates representing the rights to holders of record of common stock
as of the close of business on the distribution date. From that date on, only
separate rights certificates will represent the rights. We will issue rights
with all shares of common stock issued prior to the distribution date. We will
also issue rights with shares of common stock issued after the distribution date
in connection with some employee benefit plans or upon conversion of some
securities. Except as otherwise determined by our board of directors, we will
not issue rights with any other shares of common stock issued after the
distribution date.
Flip-In Event. A "flip-in event" will occur under the rights agreement
when a person becomes an acquiring person otherwise than pursuant to a
"permitted offer." The rights agreement defines "permitted offer" as a tender or
exchange offer for all outstanding shares of our common stock at a price and on
terms that a majority of the independent directors on our board of directors
determines to be fair to and otherwise in our best interests and the best
interest of our stockholders.
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If a flip-in event occurs, each right, other than any right that has become
null and void as described below, will become exercisable to receive the number
of shares of common stock, or in some specified circumstances, cash, property or
other securities, which has a "current market price" equal to two times the
exercise price of the right. Please refer to the rights agreement for the
definition of "current market price."
Flip-Over Event. A "flip-over event" will occur under the rights agreement
when, at any time from and after the time a person becomes an acquiring person:
- we are acquired by any person or we acquire any person in a merger or
other business combination transaction, other than specified mergers that
follow a permitted offer; or
- 50% or more of our assets, cash flow or earning power is sold, leased or
transferred.
If a flip-over event occurs, each holder of a right, except rights that are
voided as described below, will thereafter have the right to receive, on
exercise of the right, a number of shares of common stock of the acquiring
company that has a current market price equal to two times the exercise price of
the right.
When a flip-in event or a flip-over event occurs, all rights that then are,
or under the circumstances the rights agreement specifies previously were,
beneficially owned by an acquiring person or specified related parties will
become null and void in the circumstances the rights agreement specifies.
Series A Preferred Stock. After the distribution date, each right will
entitle the holder to purchase a fractional share of our Series A preferred
stock, which will be essentially the economic equivalent of one share of common
stock. Please read "-- Preferred Stock -- Series A Preferred Stock" for
additional information about our Series A preferred stock.
Antidilution. The number of rights associated with a share of outstanding
common stock, the number of fractional shares of Series A preferred stock
issuable upon exercise of a right and the exercise price of the right are
subject to adjustment in the event of a stock dividend on, or a subdivision,
combination or reclassification of, our common stock occurring prior to the
distribution date. The exercise price of the rights and the number of fractional
shares of Series A preferred stock or other securities or property issuable on
exercise of the rights are subject to adjustment from time to time to prevent
dilution in the event of some specified transactions affecting the Series A
preferred stock.
With some exceptions, we will not be required to adjust the exercise price
of the rights until cumulative adjustments amount to at least 1% of the exercise
price. The rights agreement also will not require us to issue fractional shares
of Series A preferred stock that are not integral multiples of the specified
fractional share and, in lieu thereof, we will make a cash payment based on the
market price of the Series A preferred stock on the last trading date prior to
the date of exercise. Pursuant to the rights agreement, we reserve the right to
require prior to the occurrence of any flip-in event or flip-over event that, on
any exercise of rights, a number of rights be exercised so that we will issue
only whole shares of Series A preferred stock.
Redemption of Rights. At any time until the time a person becomes an
acquiring person, we may redeem the rights in whole, but not in part, at a price
of $.005 per right, payable, at our option, in cash, shares of common stock or
such other consideration as our board of directors may determine. Upon such
redemption, the rights will terminate and the only right of the holders of
rights will be to receive the $.005 redemption price.
Exchange of Rights. At any time after the occurrence of a flip-in event
and prior to a person becoming the beneficial owner of 50% or more of our
outstanding common stock or the occurrence of a flip-over event, we may exchange
the rights, other than rights owned by an acquiring person or an affiliate or an
associate of an acquiring person, which will have become void, in whole or in
part, at an exchange ratio of one share of common stock, and/or other equity
securities deemed to have the same value as one share of common stock, per
right, subject to adjustment.
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Substitution. If we have an insufficient number of authorized but unissued
shares of common stock available to permit an exercise or exchange of rights
upon the occurrence of a flip-in event, we may substitute other specified types
of property for common stock so long as the total value received by the holder
of the rights is equivalent to the value of the common stock that the
stockholder would otherwise have received. We may substitute cash, property,
equity securities or debt, reduce the exercise price of the rights or use any
combination of the foregoing.
No Rights as a Stockholder; Taxes. Until a right is exercised, a holder of
rights will have no rights to vote or receive dividends or any other rights as a
stockholder of our common stock. Stockholders may, depending upon the
circumstances, recognize taxable income in the event that the rights become
exercisable for our common stock, or other consideration, or for the common
stock of the acquiring company or are exchanged as described above.
Amendment of Terms of Rights. Our board of directors may amend any of the
provisions of the rights agreement, other than some specified provisions
relating to the principal economic terms of the rights and the expiration date
of the rights, at any time prior to the time a person becomes an acquiring
person. Thereafter, our board of directors may only amend the rights agreement
in order to cure any ambiguity, defect or inconsistency or to make changes that
do not materially and adversely affect the interests of holders of the rights,
excluding the interests of any acquiring person.
Rights Agent. JPMorgan Chase Bank, successor to The Chase Manhattan Bank,
serves as rights agent with regard to the rights.
Antitakeover Effects. The rights will have anti-takeover effects. They
will cause substantial dilution to any person or group that attempts to acquire
us without the approval of our board of directors. As a result, the overall
effect of the rights may be to make more difficult or discourage any attempt to
acquire us even if such acquisition may be favorable to the interests of our
stockholders. Because our board of directors can redeem the rights or approve a
permitted offer, the rights should not interfere with a merger or other business
combination approved by our board of directors.
DELAWARE ANTITAKEOVER LAW
We are subject to Section 203 of the Delaware General Corporation Law.
Section 203 prohibits Delaware corporations from engaging in a wide range of
specified transactions with any interested stockholder. An interested
stockholder is any person, other than the corporation and any of its majority-
owned subsidiaries, who owns 15% or more of any class or series of stock
entitled to vote generally in the election of directors. Section 203 may tend to
deter any potential unfriendly offers or other efforts to obtain control of our
company that are not approved by our board. This may deprive the stockholders of
opportunities to sell shares of our common stock at prices higher than the
prevailing market price.
LISTING OF COMMON STOCK
Our common stock trades on the New York Stock Exchange under the trading
symbol "RRI."
TRANSFER AGENT AND REGISTRAR
We serve as the transfer agent and registrar of our common stock.
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DESCRIPTION OF WARRANTS
We may issue warrants to purchase any combination of our or any other
entity's debt securities, common stock, preferred stock or other securities. We
may issue warrants independently or together with any offered securities. The
warrants may be attached to or separate from the other offered securities. We
will issue the warrants under one or more warrant agreements between us and a
warrant agent that we will name in a prospectus supplement.
A prospectus supplement relating to any warrants that we may offer will
include specific terms relating to the terms of the warrants. We will file the
form of any warrant agreement with the SEC and you should carefully read the
warrant agreement. A prospectus supplement will include some or all of the
following terms:
- the title of the warrants;
- the aggregate number of warrants offered;
- the price or prices at which the warrants will be issued;
- the designation, number and terms of the debt securities, common stock,
preferred stock, rights or other securities purchasable upon exercise of
the warrants;
- the exercise price of the warrants;
- any provisions for adjustment of the number or amount of securities
receivable upon exercise of the warrants or the exercise price of the
warrants;
- the dates or periods during which the warrants are exercisable;
- the designation and terms of any securities with which the warrants are
issued;
- if the warrants are issued as a unit with another security, the date, if
any, on and after which the warrants and the other security will be
separately transferable;
- if applicable, a discussion of any material U.S. federal income tax
considerations applicable to the warrants;
- if the exercise price is not payable in U.S. dollars, the foreign
currency, currency unit or composite currency in which the exercise price
is denominated;
- any minimum or maximum amount of warrants that may be exercised at any
one time;
- any terms, procedures and limitations relating to the transferability,
exchange or exercise of the warrants; and
- information with respect to book-entry procedures, if any.
Each warrant will entitle the holder of warrants to purchase the amount of
debt or equity securities, at the exercise price stated or determinable in a
prospectus supplement for the warrants. Warrants may be exercised at any time up
to the close of business on the expiration date shown in the applicable
prospectus supplement, unless otherwise specified in such prospectus supplement.
After the close of business on the expiration date, unexercised warrants will
become void. Warrants may be exercised as described in the applicable prospectus
supplement. When the warrant holder makes the payment and properly completes and
signs the warrant certificate at the corporate trust office of the warrant agent
or any other office indicated in a prospectus supplement, we will, as soon as
possible, forward the debt or equity securities that the warrant holder has
purchased. If the warrant holder exercises the warrant for less than all of the
warrants represented by the warrant certificate, we will issue a new warrant
certificate for the remaining warrants.
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PLAN OF DISTRIBUTION
We may sell the common stock, preferred stock and any series of debt
securities and warrants being offered hereby in one or more of the following
ways from time to time:
- to underwriters or dealers for resale to the public or to institutional
investors;
- directly to institutional investors; or
- through agents to the public or to institutional investors.
A prospectus supplement with respect to each series of securities will
state the terms of the offering of the securities, including:
- the name or names of any underwriters or agents;
- the purchase price of the securities and the proceeds to be received by
us from the sale;
- any underwriting discounts or agency fees and other items constituting
underwriters' or agents' compensation;
- any initial public offering price;
- any discounts or concessions allowed or reallowed or paid to dealers; and
- any securities exchange on which the securities may be listed.
If we use underwriters in the sale, the securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including
- negotiated transactions;
- at a fixed public offering price or prices, which may be changed;
- at market prices prevailing at the time of sale;
- at prices related to prevailing market prices; or
- at negotiated prices.
The securities may also be offered and sold, if so indicated in a
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more remarketing firms, acting as principals for their own accounts or
as agents for us. A prospectus supplement will identify any remarketing firm and
will describe the terms of its agreement, if any, with us and its compensation.
Unless otherwise stated in a prospectus supplement, the obligations of the
underwriters to purchase any securities will be conditioned on customary closing
conditions and the underwriters will be obligated to purchase all of such series
of securities, if any are purchased.
Underwriters, dealers, agents and remarketing firms may be entitled under
agreements entered into with us to indemnification by us against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters, dealers, agents and remarketing
firms may be required to make. Underwriters, dealers, agents and remarketing
agents may be customers of, engage in transactions with, or perform services in
the ordinary course of business for us and/or our affiliates.
Each series of securities will be a new issue of securities and will have
no established trading market other than our common stock which is listed on the
New York Stock Exchange. Any common stock sold will be listed on the New York
Stock Exchange, upon official notice of issuance. The securities, other than the
common stock, may or may not be listed on a national securities exchange.
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Any underwriters to whom securities are sold by us 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.
LEGAL MATTERS
The validity of the securities has been passed upon for us by our counsel.
The validity of the securities will be passed upon for any agents, dealers or
underwriters by their counsel named in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements and the related financial statement
schedules of Reliant Resources, Inc. as of December 31, 2001 and 2002 and for
each of the three years in the period ended December 31, 2002, incorporated in
this prospectus by reference from the Current Report on Form 8-K of Reliant
Resources, Inc. dated June 30, 2003, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report (which report expresses an
unqualified opinion and includes explanatory paragraphs relating to (i) the
change in method of accounting for derivatives and hedging activities in 2001,
(ii) the change in method of accounting for goodwill and other intangibles in
2002, (iii) the change in method of presenting trading and marketing activities
from a gross basis to net basis in 2002, (iv) the change in method of accounting
for early debt extinguishment, (v) accounting for European energy operations as
discontinued operations, and (vi) the restatement of the 2000 and 2001
consolidated financial statements) which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
The financial statements of El Dorado Energy, LLC as of December 31, 2002
and 2001 and for each of the three years in the period ended December 31, 2002,
incorporated in this prospectus by reference from the Current Report on Form 8-K
of Reliant Resources, Inc. dated June 30, 2003, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report (which report
expresses an unqualified opinion and includes an explanatory paragraph relating
to the change in method of accounting for derivatives and hedging activities in
2001) which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The combined and consolidated financial statements of Reliant Energy
Mid-Atlantic Power Holdings, LLC as of December 31, 2001 and 2002 and for the
periods from January 1, 2000 to May 11, 2000 and May 12, 2000 to December 31,
2000 and the years ended December 31, 2001 and 2002, incorporated in this
prospectus by reference from the Current Report on Form 8-K of Reliant
Resources, Inc. dated July 22, 2003, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report (which report expresses an
unqualified opinion and includes an explanatory paragraph relating to (i) the
change in method of accounting for derivatives and hedging activities in 2001
and (ii) the change in method of accounting for goodwill and other intangibles
in 2002) which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
The consolidated financial statements of Reliant Energy Retail Holdings,
LLC as of December 31, 2001 and 2002 and for each of the three years in the
period ended December 31, 2002, incorporated in this prospectus by reference
from the Current Report on Form 8-K of Reliant Resources, Inc. dated June 27,
2003, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report (which report expresses an unqualified opinion and
includes explanatory paragraphs relating to (i) the change in method of
accounting for goodwill and other intangibles in 2002 and (ii) the acquisition
of Reliant Energy Renewables, Inc.) incorporated herein by reference, and have
been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
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The consolidated financial statements and related financial statement
schedules of Orion Power Holdings, Inc. as of December 31, 2002 and for the
periods from January 1, 2002 to February 19, 2002 and February 20, 2002 to
December 31, 2002, incorporated in this prospectus by reference from the Current
Report on Form 8-K of Reliant Resources, Inc. dated April 16, 2003 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report (which report expresses an unqualified opinion and includes explanatory
paragraphs relating to (i) the change in method of accounting for goodwill and
other intangibles in 2002 and (ii) the application of procedures relating to
certain disclosures and reclassifications related to the 2000 and 2001 financial
statements that were audited by other auditors who have ceased operations and
for which Deloitte & Touche LLP have expressed no opinion or other form of
assurance other than with respect to such disclosures and reclassifications)
which is incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
The consolidated financial statements for Orion Power Holdings, Inc. as of
December 31, 2001 and for the years ended December 31, 2000 and 2001,
incorporated in this prospectus by reference have been audited by Arthur
Andersen LLP, independent public accountants, as stated in their report (which
report expresses an unqualified opinion and includes an explanatory paragraph
relating to the change in method of accounting for derivative financial
instruments in 2001) which is incorporated by reference.
We have been unable to obtain Arthur Andersen LLP's permission for the
incorporation by reference in this prospectus of their report on the financial
statements of Orion Power Holdings, Inc. Because Arthur Andersen LLP has not
granted us permission to incorporate their report in this registration
statement, you will not be able to recover against Arthur Andersen LLP for any
untrue statements of material fact contained in our financial statements audited
by Arthur Andersen LLP or for any omission to state a material fact required to
be stated in those financial statements.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The registrant estimates that expenses in connection with the offerings
described in this registration statement will be as follows:
SEC registration fee........................................ $283,150
Blue sky expenses........................................... *
Attorney's fees and expenses................................ *
Independent Auditor's fees and expenses..................... *
Printing and engraving expenses............................. *
Trustee's fees and expenses................................. *
Miscellaneous expenses...................................... *
--------
Total..................................................... $ *
========
---------------
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The registrant is incorporated under the laws of the State of Delaware.
Section 145 ("Section 145") of Title 8 of the Delaware Code gives a corporation
power to indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that the person is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding if the person acted in good
faith and in a manner the person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the person's conduct was
unlawful.
Section 102 of the General Corporation Law of the State of Delaware allows
a corporation to eliminate the personal liability of directors to a corporation
or its stockholders for monetary damages for a breach of a fiduciary duty as a
director, except where the director breached his duty of loyalty, failed to act
in good faith, engaged in intentional misconduct or knowingly violated a law,
authorized the payment of a dividend or approved a stock repurchase or
redemption in violation of Delaware corporate law or obtained an improper
personal benefit.
Section 145 also gives a corporation power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
the person in connection with the defense or settlement of such action or suit
if the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such
II-1
person is fairly and reasonably entitled to indemnity for such expenses which
the Delaware Court of Chancery or such other court shall deem proper. Section
145 further provides that, to the extent that a present or former director or
officer of a corporation has been successful on the merits or otherwise in
defense of any such action, suit or proceeding, or in defense of any claim,
issue or matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection therewith.
Section 145 also authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability asserted against
him and incurred by him in any such capacity, arising out of his status as such,
whether or not the corporation would otherwise have the power to indemnify him
under Section 145.
The registrant's Amended and Restated Bylaws provide for the
indemnification of officers and directors to the fullest extent permitted by the
Delaware General Corporation Law, and the registrant's Restated Certificate of
Incorporation provides that no director shall be personally liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director,
except as required by law.
All of the registrant's directors and officers are covered by insurance
policies maintained by the registrant against certain liabilities for actions
taken in their capacities as such, including liabilities under the Securities
Act of 1933, as amended.
Any of the agents, dealers or underwriters who execute any of the
agreements filed as Exhibit 1 to this registration statement will agree to
indemnify the registrant's directors and their officers who signed the
registration statement against certain liabilities that may arise under the
Securities Act with respect to information furnished to the registrant by or on
behalf of any such indemnifying party.
See "Item 17. Undertakings" for a description of the SEC's position
regarding such indemnification provisions.
ITEM 16. EXHIBITS.
See Index to Exhibits on page II-6.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
II-2
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
(e) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, the State of Texas, on July 24, 2003.
RELIANT RESOURCES, INC.
(Registrant)
By: /s/ JOEL V. STAFF
------------------------------------
Name: Joel V. Staff
Title: Chairman and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Stephen W. Naeve, Mark M. Jacobs, Michael L.
Jines and Joel V. Staff and each of them severally, his or her true and lawful
attorney or attorneys-in-fact and agents, with full power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his or her name, place and stead, in any and all capacities, any or all
amendments (including pre-effective and post-effective amendments) to this
registration statement and any registration statement for the same offering
filed pursuant to Rule 462 under the Securities Act of 1933, as amended, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents and each of them full power and authority, to do
and perform in the name and on behalf of the undersigned, in any and all
capacities, each and every act and thing necessary or desirable to be done in
and about the premises, to all intents and purposes and as fully as they might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitutes may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JOEL V. STAFF Chairman and Chief Executive July 24, 2003
-------------------------------------- Officer (Principal Executive
Joel V. Staff Officer)
/s/ MARK M. JACOBS Executive Vice President July 24, 2003
-------------------------------------- and Chief Financial Officer
Mark M. Jacobs (Principal Financial Officer)
/s/ THOMAS C. LIVENGOOD Vice President and Controller July 24, 2003
-------------------------------------- (Principal Accounting Officer)
Thomas C. Livengood
/s/ E. WILLIAM BARNETT Director July 24, 2003
--------------------------------------
E. William Barnett
/s/ DONALD J. BREEDING Director July 24, 2003
--------------------------------------
Donald J. Breeding
II-4
SIGNATURE TITLE DATE
--------- ----- ----
/s/ LAREE E. PEREZ Director July 24, 2003
--------------------------------------
Laree E. Perez
/s/ WILLIAM L. TRANSIER Director July 24, 2003
--------------------------------------
William L. Transier
II-5
INDEX TO EXHIBITS
SEC FILE
REPORT OR OR
EXHIBIT REGISTRATION REGISTRATION EXHIBIT
NUMBER DOCUMENT DESCRIPTION STATEMENT NUMBER REFERENCE
------- -------------------- ------------ ------------ ---------
**1 Form of Underwriting Agreement
4.1 Restated Certificate of Incorporation Registration Statement 333-48038 3.1
on Form S-1
4.2 Amended and Restated Bylaws Quarterly Report on 1-16455 3
Form 10-Q for the
Quarterly Period Ended
March 31, 2001
4.3 Specimen Stock Certificate Registration Statement 333-48038 4.1
on Form S-1, dated
October 16, 2000
4.4 Rights Agreement, effective as of January 15, Amendment No. 4 to 333-48038 4.2
2001, between Reliant Resources, Inc. and The Registration Statement
Chase Manhattan Bank, as Rights Agent, on Form S-1, dated
including a form of Rights Certificate January 18, 2001
**4.5 Form of Senior Secured Indenture
**4.6 Form of Senior Unsecured Indenture
**4.7 Form of Subordinated Indenture
**4.8 Form of Senior Secured Debt Security
**4.9 Form of Senior Unsecured Debt Security
**4.10 Form of Subordinated Debt Security
**4.11 Form of Warrants
**5 Opinion of Counsel, as to the legality of the
securities being registered.
*12 Ratio of Earnings to Fixed Charges
*23.1 Consent of Deloitte & Touche LLP
**23.2 Consent of Counsel (included in Exhibit 5)
*24 Power of Attorney (included on page II-4 of
this Registration Statement)
*25.1 Form T-1 Statement of Eligibility of Debenture
Trustee and Qualification under the Trust
Indenture Act of 1939, under the Senior
Secured Indenture, Senior Unsecured Indenture
and Subordinated Indenture
---------------
* Filed herewith.
** To be filed by amendment or in a Current Report on Form 8-K.