THE OFFERING
The Senior Notes
We are offering
$ aggregate principal amount of the Senior Notes. The Senior Notes will mature on April 1, 2030.
The Senior Notes will be represented by one or more global certificates that will be deposited with or held on behalf of and registered in the
name of The Depository Trust Company, New York, New York (DTC) or its nominee. This means that you will not receive a certificate for your Senior Notes but, instead, will hold your interest through DTC, Euroclear Bank, S.A./N.V. (Euroclear) or
Clearstream Banking, société anonyme (Clearstream), if you are a participant in any of these clearing systems, or indirectly through organizations which are participants in these systems. See BOOK-ENTRY PROCEDURES AND SETTLEMENT
beginning on page S-17.
Interest
The Senior Notes will bear interest at % per year.
Interest Payment Dates
Interest on the
Senior Notes will be payable semi-annually in arrears on April 1 and October 1, beginning October 1, 2020.
Record Dates
So long as the Senior Notes remain in book-entry only form, the record date for each Interest Payment Date will be the close of business on the
business day before the applicable Interest Payment Date.
If the Senior Notes are not in book-entry only form, the record date for each
Interest Payment Date will be the close of business on the fifteenth calendar day prior to the applicable Interest Payment Date (whether or not a business day).
Ranking
The Senior Notes will rank
equally with all of our other senior unsecured indebtedness, will be senior in right of payment to all our subordinated indebtedness and will be effectively subordinated to our secured debt, if any. The Senior Indenture contains no restrictions on
the amount of additional indebtedness that we may incur. Additionally, because we are a holding company that conducts all of our operations through our subsidiaries, holders of Senior Notes generally will have a junior position to claims of
creditors of our subsidiaries. See DESCRIPTION OF THE SENIOR NOTES—Ranking beginning on page S-14.
Optional Redemption
We may redeem, at our option, some or all of the Senior Notes at any time prior to January 1, 2030 (three months prior to the maturity
date), at the make-whole redemption price described in DESCRIPTION OF THE SENIOR NOTES—Optional Redemption, plus accrued and unpaid interest to the Redemption Date. We may redeem, at our option, some or all of the Senior Notes at any time on or
after January 1, 2030 (three months prior to the maturity date), at par, plus accrued and unpaid interest to the Redemption Date.
S-9
The Senior Notes are not redeemable at the option of the holder.
No Listing of the Senior Notes
No
application is being made or is intended to be made for the listing or trading of the Senior Notes on any securities exchange or trading facility or to include them in any automated quotation system.
Use of Proceeds
We intend to use the net
proceeds from this offering for general corporate purposes and to repay short-term debt, including commercial paper. See USE OF PROCEEDS on page S-11.
Conflicts of Interest
As described in
USE OF PROCEEDS on page S-11, some of the net proceeds of this offering may be used for the repayment of short-term debt, including commercial paper. If more than 5% of the net proceeds of this offering, not including underwriting compensation, will
be received by affiliates of certain underwriters in this offering, this offering will be conducted in compliance with FINRA Rule 5121, as administered by the Financial Industry Regulatory Authority. Pursuant to that rule, the appointment of a
qualified independent underwriter is not necessary in connection with this offering. See UNDERWRITING—Conflicts of Interest on page S-30.
S-10
RISK FACTORS
Your investment in the Senior Notes involves certain risks. Our business is influenced by many factors that are difficult to predict, involve
uncertainties that may materially affect actual results and are often beyond our control. We have identified a number of these factors under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31,
2019, which are incorporated by reference in this prospectus supplement. In consultation with your own financial and legal advisers, you should carefully consider, among other matters, the discussions of risks that we have incorporated by reference
before deciding whether an investment in the Senior Notes is suitable for you.
See WHERE YOU CAN FIND MORE INFORMATION on page S-4.
USE OF PROCEEDS
We intend to use the net proceeds from this offering for general corporate purposes and to repay short-term debt, which as of March 27,
2020 included $1.9 billion in outstanding commercial paper with a weighted average yield of 1.84% per year and a weighted average days to maturity of approximately 40 days. See CAPITALIZATION on page S-12.
S-11
CAPITALIZATION
The table below shows our unaudited capitalization on a consolidated basis as of December 31, 2019. The “As Adjusted for Other
Transactions” column reflects our capitalization after giving effect to (i) our offering of 2020 Series A 3.30% Senior Notes due 2025 and 2020 Series B 3.60% Senior Notes due 2027 which closed on March 19, 2020 and the use
of net proceeds from such offering and (ii) the Term Loan and the use of the funds from such term loan (collectively, the Other Transactions). The “As Fully Adjusted” column reflects our capitalization after giving effect to the Other
Transactions, this offering of Senior Notes and the intended use of the net proceeds from this offering.
You should read this table along
with our audited financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2019. See WHERE YOU CAN FIND MORE INFORMATION on page S-4 and USE OF PROCEEDS on page S-11.
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(unaudited)
December 31, 2019
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(in millions)
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Actual
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As Adjusted
for Other
Transactions
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As Fully
Adjusted
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Cash and cash equivalents
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$
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166
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$
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219
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$
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Short-term debt(1)
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$
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4,073
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3,383
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$
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Long-term debt:
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Senior Notes and other long-term debt
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30,313
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31,056
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Junior Subordinated Notes
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3,406
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3,406
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Finance Leases
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105
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105
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Total long-term debt(2)(3)
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33,824
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34,567
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Total equity
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34,033
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34,033
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Total capitalization
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$
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71,930
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$
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71,983
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$
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(1)
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Includes securities due within one year, which includes the effect of unamortized debt issuance costs
($(7.2) million) and unamortized discount ($(1.5) million) net of unamortized premium ($2.3 million). Also includes the Term Loan to the extent discussed above. As of March 30, 2020, there were no amounts outstanding under the Revolver,
which we entered into on March 19, 2020.
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(2)
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Includes a $3.6 million gain on fair value hedges.
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(3)
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Includes the effect of unamortized debt issuance costs ($(226.7) million), unamortized discount ($(69.2)
million) net of unamortized premium ($32.8 million) and foreign currency remeasurement adjustments ($0.8 million).
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S-12
DESCRIPTION OF THE SENIOR NOTES
Set forth below is a description of the specific terms of the Senior Notes. This description supplements, and should be read together with,
the description of the general terms and provisions of the Senior Debt Securities set forth in the accompanying base prospectus under the captions DESCRIPTION OF DEBT SECURITIES and ADDITIONAL TERMS OF THE SENIOR DEBT SECURITIES and, to the extent
it is inconsistent with the accompanying base prospectus, replaces the description in the accompanying base prospectus. The Senior Notes will be issued under our Senior Indenture dated as of June 1, 2015, as supplemented and amended from time to
time by supplemental indentures, including by the Twentieth Supplemental Indenture, dated as of April 1, 2020 (the Twentieth Supplemental Indenture). The following description is not complete in every detail and is subject to, and is qualified
in its entirety by reference to, the description of the Senior Debt Securities in the accompanying base prospectus, the Senior Indenture and the Twentieth Supplemental Indenture. Capitalized terms used in this DESCRIPTION OF THE SENIOR NOTES that
are not defined in this prospectus supplement have the meanings given to them in the accompanying base prospectus, the Senior Indenture or Twentieth Supplemental Indenture. In this DESCRIPTION OF THE SENIOR NOTES section, references to
“Dominion Energy,” “we,” “us” and “our” mean Dominion Energy, Inc., excluding any of its subsidiaries unless otherwise expressly stated or the context otherwise requires.
General
The Senior Notes will be an
unsecured senior obligation of Dominion Energy. The Senior Notes will be initially limited in aggregate principal amount to $ . We may, without the consent of the existing
holders of the Senior Notes, issue additional notes having the same ranking and the same interest rate, maturity and other terms as the Senior Notes. Any additional notes having such similar terms, together with any of the Senior Notes will
constitute a single series of notes under the Senior Indenture.
The entire principal amount of the Senior Notes will mature and become
due and payable, together with any accrued and unpaid interest thereon, on April 1, 2030. The Senior Notes are not subject to any sinking fund provision. The Senior Notes are available for purchase in denominations of $2,000 and any greater
integral multiple of $1,000.
Interest
The Senior Notes will bear interest at the rate of % per year from the date of original
issuance.
Interest is payable on the Senior Notes semi-annually in arrears on April 1 and October 1 of each year (each, an
Interest Payment Date). The initial Interest Payment Date for the Senior Notes is October 1, 2020.
The amount of interest payable
will be computed on the basis of a 360-day year of twelve 30-day months. If any date on which interest is payable on the Senior Notes is not a business day, then payment of the interest payable on that date will be made on the next succeeding day
which is a business day (and without any interest or other payment in respect of any delay), with the same force and effect as if made on such date.
So long as the Senior Notes remain in book-entry only form, the record date for each Interest Payment Date will be the close of business on
the business day before the applicable Interest Payment Date. If the Senior Notes are not in book-entry only form, the record date for each Interest Payment Date will be the close of business on the fifteenth calendar day before the applicable
Interest Payment Date (whether or not a business day); however, interest payable at maturity or upon redemption or repurchase will be paid to the person to whom principal is payable.
S-13
Ranking
The Senior Notes are our direct, unsecured and unsubordinated obligations, will rank equally with all of our other senior unsecured debt, will
be senior in right of payment to all of our subordinated indebtedness, and will be effectively subordinated to our secured debt, if any.
Because we are a holding company and conduct all of our operations through our subsidiaries, which include Virginia Power, Dominion Energy
Gas, Dominion Energy Questar, SCANA, East Ohio and other subsidiaries, our ability to meet our obligations under the Senior Notes is dependent on the earnings and cash flows of those subsidiaries and the ability of those subsidiaries to pay
dividends or to advance or repay funds to us. Certain of our regulated subsidiaries may, from time to time, be subject to certain restrictions imposed by regulators on their ability to pay dividends or to advance or repay funds to us. For a
discussion of any current or potential restrictions, please refer to the quarterly and annual reports that we file with the SEC. Holders of Senior Notes generally will have a junior position to claims of creditors of our subsidiaries, including
trade creditors, debtholders, secured creditors, taxing authorities, guarantee holders and any preferred stockholders. As of December 31, 2019, our subsidiaries had approximately $24.4 billion principal amount of outstanding long-term debt
(including securities due within one year).
The Senior Indenture contains no restrictions on the amount of additional indebtedness that
we or our subsidiaries may incur or the amount of preferred stock that our subsidiaries may issue. We and our subsidiaries expect to incur additional indebtedness from time to time.
Optional Redemption
The Senior Notes are
redeemable, in whole or in part, at any time and from time to time prior to January 1, 2030 (three months prior to the maturity date), at our option at a “make-whole” redemption price equal to the greater of:
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•
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100% of the principal amount of the Senior Notes then outstanding to be redeemed, or
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•
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the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes
to be redeemed that would be due if such Senior Notes matured on January 1, 2030 but for the redemption (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus basis points, as calculated by an Independent Investment Banker,
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plus accrued and unpaid interest to the Redemption Date.
In addition, the Senior Notes are redeemable, in whole or in part at any time and from time to time on or after January 1, 2030 (three
months prior to the maturity date), at our option at a redemption price equal to 100% of the principal amount of the Senior Notes then outstanding to be redeemed, plus accrued and unpaid interest thereon to the Redemption Date.
“Adjusted Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.
The Adjusted Treasury Rate will be calculated on the third business day preceding the Redemption Date.
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Senior Notes to be redeemed
S-14
(assuming, for this purpose, that the Senior Notes matured on January 1, 2030) that would be utilized, at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Senior Notes (Remaining Life).
“Comparable Treasury Price” for any Redemption Date means (1) the average of the Reference Treasury Dealer Quotations for the
Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker” means any of BofA Securities, Inc., RBC Capital Markets, LLC, Scotia Capital (USA) Inc., SMBC Nikko
Securities America, Inc., SunTrust Robinson Humphrey, Inc. and U.S. Bancorp Investments, Inc. and their respective successors or affiliates, as selected by us, or if any such firm is unwilling or unable to serve as such, an independent investment
and banking institution of national standing appointed by us.
“Reference Treasury Dealer” means BofA Securities, Inc., RBC
Capital Markets, LLC, Scotia Capital (USA) Inc., one primary U.S. Government securities dealer in the United States (Primary Treasury Dealer) selected by SMBC Nikko Securities America, Inc. and one Primary Treasury Dealer selected by SunTrust
Robinson Humphrey, Inc. and their respective successors or affiliates; provided that, if any such firm or its successors or affiliates ceases to be a Primary Treasury Dealer, we will substitute another Primary Treasury Dealer.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average,
as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue related to the Senior Notes being redeemed (expressed in each case as a percentage of its principal amount) quoted in writing to the
Independent Investment Banker at 3:30 p.m., New York City time, on the third business day preceding such Redemption Date.
S-15
We will mail a notice of redemption at least 20 days but not more than 60 days before the
Redemption Date to each holder of Senior Notes to be redeemed. If we elect to partially redeem the Senior Notes of a particular series, the trustee will select the Senior Notes to be redeemed in accordance with the procedures of DTC. The trustee
shall not be responsible for calculating the make-whole redemption price.
Unless we default in payment of the redemption price, on and
after the Redemption Date, interest will cease to accrue on the Senior Notes or portions thereof called for redemption.
The Trustee
The trustee under the Senior Indenture is Deutsche Bank Trust Company Americas. The trustee will administer its corporate trust business at 60
Wall Street, 24th Floor, New York, NY 10005. We and certain of our affiliates maintain banking relationships with Deutsche Bank Trust Company Americas or its affiliates. Deutsche Bank Trust Company Americas also serves as trustee or series trustee
under other indentures under which we and certain of our affiliates have issued securities. Deutsche Bank Trust Company Americas and its affiliates have purchased, and are likely to purchase in the future, our securities and securities of our
affiliates.
S-16
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Upon issuance, the Senior Notes will be represented by one or more fully registered global certificates. Each global certificate will be
deposited with the trustee on behalf of DTC as its custodian and will be registered in the name of DTC or a nominee of DTC. DTC is thus the only registered holder of these securities.
The following is based on information furnished to us by DTC:
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a
“banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency”
registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (Direct Participants) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and
other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct
Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository
Trust & Clearing Corporation (DTCC). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its
regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through
or maintain a custodial relationship with a Direct Participant, either directly or indirectly (Indirect Participants). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the
Securities and Exchange Commission. More information about DTC can be found at http://www.dtcc.com.
Purchases of the Senior Notes under
the DTC system must be made by or through Direct Participants, which will receive a credit for the Senior Notes on DTC’s records. The ownership interest of each actual purchaser of each Senior Note (Beneficial Owner) is in turn to be recorded
on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Senior Notes are to be accomplished by
entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Senior Notes, except in the event that use of the
book-entry system for the Senior Notes is discontinued.
To facilitate subsequent transfers, all of the Senior Notes deposited by Direct
Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Senior Notes with DTC and their registration
in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Senior Notes; DTC’s records reflect only the identity of the Direct
Participants to whose accounts such Senior Notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
S-17
Redemption notices shall be sent to DTC. If less than all the Senior Notes of a series are being
redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in the Senior Notes to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Senior Notes unless authorized by a
Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Company as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or
voting rights to those Direct Participants to whose accounts the Senior Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds and principal and interest payments on the Senior Notes will be made to Cede & Co., or such other nominee as may
be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Company or its agent, on payable date in
accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers
in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Company or its agent, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment
of redemption proceeds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Company or its agent, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Senior Notes at any time by giving reasonable notice to the
Company or its agent. Under such circumstances, in the event that a successor depository is not obtained, Senior Note certificates are required to be printed and delivered. The Company may decide to discontinue use of the system of book-entry-only
transfers through DTC (or a successor securities depository). In that event, Senior Note certificates will be printed and delivered to DTC.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable,
but we take no responsibility for the accuracy thereof.
We have no responsibility for the performance by DTC or its Participants of their
respective obligations as described in this prospectus or under the rules and procedures governing their respective operations.
Global Clearance and
Settlement Procedures
The following is based on information made available by Clearstream and Euroclear or from sources that we
believe to be reliable, but we take no responsibility for the accuracy of this information. We have no responsibility for the performance by Clearstream and Euroclear or either of their Participants of their respective obligations as described in
this prospectus or under the rules and procedures governing their respective operations.
Investors may elect to hold interests in the
global notes through either DTC (in the United States) or through Clearstream or Euroclear, if they are participants in such systems, or indirectly through organizations that are participants in such systems. Clearstream and Euroclear will hold
interests on behalf of their participants through customers’ securities accounts in Clearstream’s and Euroclear’s names on the books of their respective depositaries, which in turn will hold such interests in customers’
securities accounts in the depositaries’ names on the books of DTC.
Clearstream is incorporated under the laws of Luxembourg as a
professional depositary. Clearstream holds securities for its participating organizations, or Clearstream Participants, and facilitates the clearance and settlement of securities transactions between Clearstream Participants through electronic
book-entry changes in
S-18
accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates. Clearstream, Luxembourg provides to Clearstream Participants, among other things,
services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic markets in several countries. As a professional depositary,
Clearstream is subject to regulation by the Luxembourg Commission for the Supervision of the Financial Sector (Commission de Surveillance du Secteur Financier). Clearstream Participants are recognized financial institutions around the world,
including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may include the underwriters. Indirect access to Clearstream is also available to others, such as banks,
brokers, dealers and trust companies, that clear through or maintain a custodial relationship with a Clearstream Participant, either directly or indirectly. Distributions with respect to the global notes held beneficially through Clearstream will be
credited to cash accounts of Clearstream Participants in accordance with its rules and procedures, to the extent received by the U.S. depositary for Clearstream.
Euroclear was created in 1968 to hold securities for participants of Euroclear, or Euroclear Participants, and to clear and settle
transactions between Euroclear Participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and
cash. Euroclear includes various other services, including securities lending and borrowing and interfaces with domestic markets in several countries.
Euroclear is operated by Euroclear Bank S.A./N.V., or the Euroclear Operator. All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator. Euroclear Participants include banks (including central banks), securities brokers and dealers and other professional financial
intermediaries and may include the underwriters. Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear Participant, either directly or indirectly.
The Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, or the Euroclear Terms and
Conditions, and applicable Belgian law govern securities clearance accounts and cash accounts with the Euroclear Operator. Specifically, these terms and conditions govern transfers of securities and cash within Euroclear, withdrawals of securities
and cash from Euroclear, and receipt of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear
Operator acts under the terms and conditions only on behalf of Euroclear Participants, and has no record of or relationship with persons holding securities through Euroclear Participants.
Distributions with respect to the global notes held beneficially through Euroclear will be credited to the cash accounts of Euroclear
Participants in accordance with the Euroclear Terms and Conditions, to the extent received by the U.S. depositary for Euroclear.
Secondary market trading between Clearstream Participants and/or Euroclear Participants will occur in the ordinary way in accordance with the
applicable rules and operating procedures of Clearstream and Euroclear and will be settled using the procedures applicable to conventional Eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly through DTC on the one hand, and directly or indirectly through
Clearstream or Euroclear Participants, on the other, will be effected in DTC in accordance with the DTC rules on behalf of the relevant European international clearing system by its U.S. depositary; however, such cross-market transactions will
require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures and within its established deadlines (European time). The relevant European
international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its U.S. depositary to take action to effect final settlement on its behalf by delivering interests in the Senior Notes to or receiving
interests in the Senior
S-19
Notes from DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream Participants and Euroclear Participants may not
deliver instructions directly to DTC.
Because of time-zone differences, credits of interests in the Senior Notes received in Clearstream
or Euroclear as a result of a transaction with a DTC Participant will be made during subsequent securities settlement processing and will be credited the business day following the DTC settlement date. Such credits or any transactions involving
interests in such Senior Notes settled during such processing will be reported to the relevant Euroclear or Clearstream Participants on such business day. Cash received in Clearstream or Euroclear as a result of sales of interests in the Senior
Notes by or through a Clearstream Participant or a Euroclear Participant to a DTC Participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or Euroclear cash account only as of the business
day following settlement in DTC.
DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers
of the Senior Notes among participants of DTC, Clearstream and Euroclear. However, they are under no obligation to perform or continue to perform those procedures, and they may discontinue those procedures at any time.
S-20
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of the material U.S. federal income tax considerations relating to the purchase, ownership and
disposition of the Senior Notes. This discussion is for general information only and does not address all of the potential U.S. federal income tax considerations that may be relevant to a holder with respect to the purchase, ownership and
disposition of the Senior Notes. Without limiting the generality of the foregoing, the discussion does not address the effect of any special rules applicable to certain types of holders, including, without limitation, dealers in securities or
currencies, insurance companies, financial institutions, thrifts, mutual funds, real estate investment trusts, regulated investment companies, tax-exempt entities, personal holding companies, controlled foreign corporations, passive foreign
investment companies, U.S. persons whose functional currency is not the U.S. dollar, U.S. expatriates (or former long-term residents of the United States), persons who hold Senior Notes as part of a straddle, hedge, conversion transaction, or other
risk reduction or integrated investment transaction, investors in securities that elect to use a mark-to-market method of accounting for their securities holdings, individual retirement accounts or qualified pension plans, investors in pass-through
entities, including partnerships and Subchapter S corporations that invest in the Senior Notes, or persons subject to special tax accounting rules as a result of any item of gross income with respect to the Senior Notes being taken into account in
an applicable financial statement. In addition, this discussion is limited to holders of the Senior Notes who purchase the Senior Notes in the initial offering at their “issue price” and hold the Senior Notes as “capital assets”
within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended (the Code). For this purpose only, the “issue price” of the Senior Notes is the first price at which a substantial amount of the Senior Notes are sold for
cash to persons other than bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers. For purposes of this discussion, “holder” means either a U.S. holder (as defined
below) or a non-U.S. holder (as defined below) or both, as the context may require.
The discussion is based upon provisions of the Code,
U.S. Treasury regulations promulgated thereunder (the Treasury Regulations), rulings, pronouncements, judicial decisions and administrative interpretations of the Internal Revenue Service (the IRS), all as in effect as of the date of this prospectus
supplement and all of which are subject to change, possibly on a retroactive basis, at any time.
If a partnership (including an entity or
arrangement treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of Senior Notes, the tax treatment of a partner generally will depend upon the status of the partner, the activities of the partnership and certain
determinations made at the partner level. Partners of partnerships that are beneficial owners of Senior Notes should consult their tax advisors.
This discussion does not address any aspect of non-income taxation or state, local or foreign taxation. No ruling has been or will be obtained
from the IRS with respect to the matters discussed below. As a result, no assurance can be given that the IRS will not assert, or that a court will not sustain, a position contrary to the conclusions set forth below.
THIS SUMMARY IS FOR GENERAL INFORMATION ONLY AND IS NOT A SUBSTITUTE FOR AN INDIVIDUAL ANALYSIS OF THE TAX CONSIDERATIONS RELATING TO THE
PURCHASE, OWNERSHIP OR DISPOSITION OF THE SENIOR NOTES. WE URGE YOU TO CONSULT A TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSIDERATIONS RELATING TO THE PURCHASE, OWNERSHIP OR DISPOSITION OF THE SENIOR NOTES IN
LIGHT OF YOUR OWN SITUATION.
Optional Redemption
In certain circumstances (see “DESCRIPTION OF THE SENIOR NOTES—Optional Redemption”), we may be obligated to pay amounts in
excess of the stated interest or principal on the Senior Notes and/or pay amounts in redemption of the Senior Notes prior to their stated maturity. We intend to take the position that the
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likelihood that we will be required to make such payments is remote as of the issue date of the Senior Notes and therefore that these provisions do not cause the Senior Notes to be treated as
“contingent payment debt instruments” within the meaning of the applicable Treasury Regulations. However, additional income will be recognized to a holder of Senior Notes if any such additional payment is made. Our position that the
contingencies described above are remote is binding on a holder, unless the holder discloses in the proper manner to the IRS that it is taking a different position. If the IRS successfully challenged our position, then the Senior Notes could be
treated as contingent payment debt instruments, in which case holders could be required to accrue interest income at a rate higher than the stated interest rate on the Senior Notes and to treat as ordinary income, rather than capital gain, any gain
recognized on a sale, exchange, redemption or other taxable disposition of a Senior Note. The remainder of this discussion assumes that the Senior Notes will not be treated as contingent payment debt instruments.
U.S. Holders
The following is a
discussion of the material U.S. federal income tax considerations relevant to U.S. holders of the Senior Notes. As used in this discussion, the term “U.S. holder” means a beneficial owner of a Senior Note who, for U.S. federal income tax
purposes, is:
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an individual U.S. citizen or resident alien;
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a corporation or other entity created or organized under U.S. law (federal or state, including the District of
Columbia) and treated as a corporation for U.S. federal income tax purposes;
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an estate whose income is subject to U.S. federal income tax regardless of its source; or
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a trust if (1) a U.S. court can exercise primary supervision over the trust’s administration and one or
more U.S. persons are authorized to control all substantial decisions of the trust or (2) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
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Payments of Interest on the Senior Notes
A U.S. holder generally will be required to include interest received on a Senior Note as ordinary income at the time it accrues or is received
in accordance with the holder’s regular method of accounting for U.S. federal income tax purposes. It is anticipated, and this discussion assumes, that the Senior Notes will not be treated as issued with original issue discount for U.S. federal
income tax purposes.
Sale, Exchange, Redemption or Other Taxable Disposition of the Senior Notes
Generally, the sale, exchange, redemption or other taxable disposition of a Senior Note will result in taxable gain or loss to a U.S. holder
equal to the difference between (1) the amount of cash plus the fair market value of any other property received by the holder in the sale, exchange, redemption or other taxable disposition (excluding amounts attributable to accrued but unpaid
interest, which will be taxed as described under “—Payments of Interest on the Senior Notes,” above) and (2) the holder’s adjusted tax basis in the Senior Note. A U.S. holder’s adjusted tax basis in a Senior Note
generally will equal the holder’s original purchase price for the Senior Note.
Gain or loss recognized on the sale, exchange,
redemption or other taxable disposition of a Senior Note generally will be treated as capital gain or loss and will be long-term capital gain or loss if the Senior Note is held for more than one year. A reduced tax rate on capital gain generally
will apply to long-term capital gain of a non-corporate U.S. holder. There are limitations on the deductibility of capital losses.
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Net Investment Income Tax
Certain U.S. holders that are individuals, estates or trusts will be subject to a 3.8% tax on all or a portion of their “net investment
income,” which may include all or a portion of their interest income and net gains from the disposition of Senior Notes. Each U.S. holder that is an individual, estate or trust is urged to consult its tax advisors regarding the applicability of
this tax to its income and gains in respect of its investment in the Senior Notes.
Information Reporting and Backup Withholding
Generally, interest on the Senior Notes paid to a U.S. holder is subject to information reporting with the IRS unless such holder is a
corporation or other exempt recipient and, when required, demonstrates this fact. Backup withholding generally will apply to interest payments subject to information reporting unless such holder provides a taxpayer identification number and
satisfies certain certification requirements. Information reporting requirements and backup withholding may also apply to proceeds of a sale, exchange, redemption or other taxable disposition of the Senior Notes (including a retirement of the Senior
Notes). U.S. holders should consult their tax advisor regarding their qualification for an exemption from backup withholding and the procedures for obtaining such exemption, if applicable.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit
against the U.S. holder’s U.S. federal income tax liability, provided that the U.S. holder timely furnishes the required information to the IRS.
Non-U.S. Holders
The following is a
discussion of the material U.S. federal income tax considerations relevant to non-U.S. holders of the Senior Notes. The term “non-U.S. holder” means a beneficial owner of the Senior Notes, other than a partnership or other entity or
arrangement treated as a partnership for U.S. federal income tax purposes, who is not a U.S. holder.
Payments of Interest on the Senior Notes
Subject to the discussions under “—Information Reporting and Backup Withholding” and “—Foreign Account Tax
Compliance,” below, payments of interest on a Senior Note to any non-U.S. holder generally will not be subject to U.S. federal income or withholding tax provided we or the person otherwise responsible for withholding U.S. federal income tax
from payments on the Senior Notes receives a required certification from the non-U.S. holder and the holder is not:
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an actual or constructive owner of 10% or more of the total combined voting power of all our voting stock;
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a controlled foreign corporation related, actually or constructively, to us through stock ownership;
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a bank whose receipt of interest on the Senior Notes is in connection with an extension of credit made pursuant
to a loan agreement entered into in the ordinary course of business; or
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receiving such interest payments as income effectively connected with the conduct by the non-U.S. holder of a
trade or business within the United States.
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In order to satisfy the certification requirement, the non-U.S. holder must
provide a properly completed IRS Form W-8BEN or Form W-8BEN-E, as appropriate (or substitute Form W-8BEN or Form W-8BEN-E or the appropriate successor form of either) under penalties of perjury that provides the non-U.S. holder’s name and
address and certifies that the non-U.S. holder is not a U.S. person. Alternatively, in the case where a security clearing organization, bank, or other financial institution holds the Senior Notes in the ordinary course of its trade
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or business on behalf of the non-U.S. holder, certification requires that we or the person who otherwise would be required to withhold U.S. federal income tax receive from the financial
institution a certification under penalties of perjury that a properly completed Form W-8BEN or Form W-8BEN-E, as appropriate (or substitute Form W-8BEN or Form W-8BEN-E or the appropriate successor form for either) has been received by it from the
non-U.S. holder, and a copy of such form is furnished to us or the person who otherwise would be required to withhold U.S. federal income tax.
A non-U.S. holder that does not qualify for exemption from withholding under the preceding paragraphs generally will be subject to withholding
of U.S. federal income tax, currently at the rate of 30%, or a lower applicable treaty rate, on payments of interest on the Senior Notes that are not effectively connected with the conduct by the non-U.S. holder of a trade or business in the United
States.
If the payments of interest on a Senior Note are effectively connected with the conduct by a non-U.S. holder of a trade or
business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or a fixed base maintained by the non-U.S. holder in the United States), such payments will be subject to U.S. federal
income tax on a net basis at the rates applicable to U.S. persons generally. If the non-U.S. holder is a corporation for U.S. federal income tax purposes, such payments also may be subject to a 30% branch profits tax. If payments are subject to U.S.
federal income tax on a net basis in accordance with the rules described in the preceding two sentences, such payments will not be subject to U.S. withholding tax so long as the non-U.S. holder provides us, or the person who otherwise would be
required to withhold U.S. federal income tax, with the appropriate certification.
In order to claim a tax treaty benefit or exemption
from withholding with respect to income that is effectively connected with the conduct of a trade or business in the United States by a non-U.S. holder, the non-U.S. holder must provide a properly executed Form W-8BEN, Form W-8BEN-E or Form W-8ECI
(or a suitable substitute or successor form or such other form as the IRS may prescribe). Under Treasury Regulations, a non-U.S. holder may under certain circumstances be required to obtain a U.S. taxpayer identification number and make certain
certifications to us.
Non-U.S. holders should consult their tax advisors regarding any applicable income tax treaties, which may provide
for a lower rate of withholding tax, exemption from or reduction of branch profits tax or other rules different from those described above.
Sale,
Exchange, Redemption or Other Taxable Disposition of the Senior Notes
Subject to the discussions under “—Information
Reporting and Backup Withholding” and “—Foreign Account Tax Compliance,” below, a non-U.S. holder generally will not be subject to U.S. federal income or withholding tax on gain realized on the sale, exchange, redemption or other
taxable disposition of a Senior Note unless:
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the non-U.S. holder is an individual present in the United States for 183 days or more in the year of such sale,
exchange, redemption or other taxable disposition and certain other conditions are met, in which case such gain will be subject to U.S. federal income tax at a rate of 30% (or a lower rate under an applicable income tax treaty); or
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the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United
States (and, if a treaty applies, the income is attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States), in which case such gain generally will be subject to U.S. federal income tax at rates
generally applicable to U.S. persons, and, if the non-U.S. holder is a foreign corporation, such gain may also be subject to the branch profits tax at a rate of 30% (or a lower rate under an applicable income tax treaty).
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To the extent the amount realized on a sale, exchange, redemption or other taxable disposition of
the Senior Notes is attributable to accrued but unpaid interest on the Senior Notes, such amount generally will be subject to, or exempt from, tax to the same extent as described above under “—Non-U.S. Holders—Payments of Interest on
the Senior Notes.”
Information Reporting and Backup Withholding
Generally, we must report to the IRS and to the non-U.S. holder the amount of interest paid to such holder and the amount of tax, if any,
withheld with respect to those payments. Copies of the information returns reporting such interest payments and any withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the
provisions of an applicable income tax treaty.
A non-U.S. holder may be subject to backup withholding of tax on payments of interest and,
depending on the circumstances, the proceeds of a sale, exchange, redemption or other taxable disposition unless the non-U.S. holder complies with certain certification requirements to establish that it is not a U.S. person or it is otherwise
establishes an exemption from backup withholding. The certification procedures required to claim an exemption from withholding of tax on interest described above under “—Non-U.S. Holders—Payments of Interest on the Senior Notes”
generally will satisfy the certification requirements necessary to avoid backup withholding as well.
Backup withholding is not an
additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the non-U.S. holder’s U.S. federal income tax liability, provided that the holder timely furnishes the required information
to the IRS.
Foreign Account Tax Compliance
Under Sections 1471 through 1474 of the Code and related IRS guidance concerning foreign account tax compliance rules (commonly referred to as
FATCA), a 30% U.S. withholding tax is imposed on certain payments (which includes interest payments on the Senior Notes) paid to (i) a “foreign financial institution” (as specifically defined in the Code), whether such foreign financial
institution is the beneficial owner or an intermediary, unless such foreign financial institution agrees to verify, report and disclose its “United States account holders” (as specifically defined in the Code) and meets certain other
specified requirements or (ii) a “non-financial foreign entity” (as specifically defined in the Code), whether such non-financial foreign entity is the beneficial owner or an intermediary, unless such non-financial foreign entity provides
a certification that the beneficial owner of the payment does not have any substantial U.S. owners or provides the name, address and taxpayer identification number of each substantial U.S. owner and certain other specified requirements are met.
Although withholding under FATCA would have applied to payments of gross proceeds from the taxable disposition of the Senior Notes on or after January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments of gross
proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued. In certain cases, the relevant foreign financial institution or non-financial foreign entity may qualify
for an exemption from, or be deemed to be in compliance with, these rules. Foreign entities located in jurisdictions that have entered into an intergovernmental agreement with the United States governing FATCA may be subject to different rules. If
an interest payment is both subject to withholding under FATCA and subject to the withholding tax discussed above under “—Non-U.S. Holders—Payments of Interest on the Senior Notes,” the withholding under FATCA may be credited
against, and therefore reduce, such other withholding tax. Each investor is encouraged to consult with its tax advisor regarding the implications of FATCA on their investment in a Senior Note.
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UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting agreement, dated the date of this prospectus supplement
(Underwriting Agreement), the underwriters named below have severally and not jointly agreed to purchase, and we have agreed to sell to them, the principal amounts of the Senior Notes set forth opposite their names below:
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Name
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Principal
Amount of the
Senior Notes
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BofA Securities, Inc.
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$
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RBC Capital Markets, LLC
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Scotia Capital (USA) Inc.
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SMBC Nikko Securities America, Inc.
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SunTrust Robinson Humphrey, Inc.
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U.S. Bancorp Investments, Inc.
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Total
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$
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BofA Securities, Inc., RBC Capital Markets, LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America,
Inc., SunTrust Robinson Humphrey, Inc. and U.S. Bancorp Investments, Inc. are acting as joint book-running managers in connection with the offering of the Senior Notes.
The Underwriting Agreement provides that the obligation of the several underwriters to purchase and pay for the Senior Notes is subject to,
among other things, the approval of certain legal matters by their counsel and certain other conditions. The underwriters are obligated to take and pay for all of the Senior Notes if any are taken.
The underwriters initially propose to offer the Senior Notes directly to the public at the public offering price set forth on the cover page
of this prospectus supplement. The underwriters may also offer part of the Senior Notes to certain dealers at a price that represents a concession not in excess of % of the principal amount of the
Senior Notes. The underwriters may allow, and any such dealers may reallow, a concession to certain other dealers not to exceed % of the principal amount of the Senior Notes. After the initial offering
of the Senior Notes, the offering price and other selling terms may from time to time be varied by the underwriters. The offering of the Senior Notes by the underwriters is subject to receipt and acceptance and subject to the underwriters’
right to reject any order in whole or in part.
We estimate that the total expenses of the offering of the Senior Notes, not including the
underwriting discount, will be approximately $1.5 million.
We have agreed to indemnify each of the underwriters and their controlling
persons against certain liabilities, including liabilities under the Securities Act of 1933, as amended.
No application is being made or
is intended to be made for the listing or trading of the Senior Notes on any securities exchange or trading facility or to include them in any automated quotation system, but we have been advised by the underwriters that they intend to make a market
in the Senior Notes. The underwriters are not obligated, however, to do so and may discontinue their market making at any time without notice. No assurance can be given as to the development, maintenance or liquidity of the trading market, if any,
for the Senior Notes.
In order to facilitate the offering of the Senior Notes, the underwriters may engage in transactions that
stabilize, maintain or otherwise affect the price of the Senior Notes. Specifically, the underwriters may overallot in connection with the offering, creating a short position in the Senior Notes for the underwriters. In addition, to cover
overallotments or to stabilize the price of the Senior Notes, the underwriters may bid for, and purchase, the
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Senior Notes in the open market. Finally, the underwriters may reclaim selling concessions allowed to a dealer for distributing the Senior Notes in the offering, if they repurchase previously
distributed Senior Notes in transactions to cover short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price for the Senior Notes above independent market levels. The underwriters
are not required to engage in these activities and may end any of these activities at any time.
The underwriters and their affiliates
have, from time to time, performed, and currently perform and may in the future perform various investment or commercial banking, lending, trust and financial advisory services for us and our affiliates in the ordinary course of business.
In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of
investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities
may involve securities and/or instruments of ours or our affiliates. If any of the underwriters or their affiliates has a lending relationship with us, certain of those underwriters or their affiliates routinely hedge and certain other of those
underwriters or their affiliates may hedge their credit exposure to us consistent with their customary risk management policies. Typically, these underwriters and their affiliates would hedge such exposure by entering into transactions which consist
of either the purchase of credit default swaps or the creation of short positions in our securities, including potentially the Senior Notes offered hereby. Any such credit default swaps or short positions could adversely affect future trading prices
of the Senior Notes offered hereby. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or
recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Selling Restrictions
Prohibition of Sale to European Economic Area and United Kingdom Retail Investors
The Senior Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made
available to any retail investor in the European Economic Area (“EEA”) or the United Kingdom (“UK”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of
Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or (ii) a customer within the meaning of Directive 2002/92/EC (as amended, the “Insurance Mediation Directive”), where that customer would not qualify as a
professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Directive 2003/71/EC (as amended, the “Prospectus Directive”). Consequently no key information document required by
Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the Senior Notes or otherwise making them available to retail investors in the EEA or the UK has been prepared and therefore offering or selling the
Senior Notes or otherwise making them available to any retail investor in the EEA or the UK may be unlawful under the PRIIPS Regulation.
United
Kingdom
Each underwriter has represented and agreed that it has only communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) received by it in connection with the issue or sale of the
Senior Notes in circumstances in which Section 21(1) of such act does not apply to us and it has complied and will comply with all applicable provisions of such act with respect to anything done by it in relation to the Senior Notes in, from or
otherwise involving the United Kingdom.
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Switzerland
This prospectus supplement and the accompanying prospectus are not intended to constitute an offer or solicitation to purchase or invest in the
Senior Notes. The Senior Notes may not be publicly offered, directly or indirectly, in Switzerland within the meaning of the Swiss Financial Services Act (“FinSA”) and no application has or will be made to admit the Senior Notes to trading
on any trading venue (exchange or multilateral trading facility) in Switzerland. Neither this prospectus supplement, the accompanying prospectus nor any other offering or marketing material relating to the Senior Notes constitutes a prospectus
pursuant to the FinSA, and neither this prospectus supplement, the accompanying prospectus nor any other offering or marketing material relating to the Senior Notes may be publicly distributed or otherwise made publicly available in Switzerland.
Hong Kong
The Senior Notes may not
be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional
investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus”
within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), and no advertisement, invitation or document relating to the Senior Notes may be issued or may be in the possession of any person for the purpose of issue (in each case
whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to Senior Notes which
are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
Singapore
This prospectus supplement and
the accompanying prospectus have not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus supplement, the accompanying prospectus and any other document or material in connection with the offer or
sale, or invitation for subscription or purchase, of the Senior Notes may not be circulated or distributed, nor may the Senior Notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or
indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the Senior Notes are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not
an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited
investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be
transferable for six months after that corporation or that trust has acquired the Senior Notes under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.
Solely for the purposes of its obligations pursuant to sections 309B(1)(a) and 309B(1)(c) of the SFA, the Company has determined, and hereby
notifies all relevant persons (as defined in Section 309A of the SFA) that the Senior Notes are “prescribed capital markets products” (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded
Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
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Japan
The Senior Notes have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the Financial Instruments
and Exchange Law) and each underwriter has agreed that it will not offer or sell any Senior Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan,
including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of,
and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.
Taiwan
The Senior Notes have not been
and will not be registered or filed with, or approved by, the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations and may not be offered or sold in Taiwan through a public offering or in circumstances
which constitute an offer within the meaning of the Securities and Exchange Act of Taiwan or relevant laws and regulations that require a registration, filing or approval of the Financial Supervisory Commission of Taiwan. No person or entity in
Taiwan has been authorized to offer or sell the Senior Notes in Taiwan.
Canada
The Senior Notes may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors,
as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant
Obligations. Any resale of the Senior Notes must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this
prospectus supplement (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the
purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with
the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
United Arab Emirates
The Senior Notes have not been, and are not being, publicly offered, sold, promoted or advertised in the United Arab Emirates
(including the Dubai International Financial Centre) other than in compliance with the laws of the United Arab Emirates (and the Dubai International Financial Centre) governing the issue, offering and sale of securities. Further, the prospectus
supplement and the accompanying prospectus do not constitute a public offer of securities in the United Arab Emirates (including the Dubai International Financial Centre) and are not intended to be a public offer. The prospectus supplement and the
accompanying prospectus have not been approved by or filed with the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or the Dubai Financial Services Authority.
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Conflicts of Interest
As described in USE OF PROCEEDS on page S-11, some of the net proceeds of this offering may be used for the repayment of short-term debt,
including commercial paper. If more than 5% of the net proceeds of this offering, not including underwriting compensation, will be received by affiliates of certain underwriters in this offering, this offering will be conducted in compliance with
FINRA Rule 5121, as administered by the Financial Industry Regulatory Authority. Pursuant to that rule, the appointment of a qualified independent underwriter is not necessary in connection with this offering.
T+3 Settlement
We expect that delivery
of the Senior Notes will be made against payment for the Senior Notes on the settlement date, which will be the third business day following the date of this prospectus supplement (this settlement cycle being referred to as “T+3”). Under
Rule 15c6-1 of the SEC under the Exchange Act, trades in the secondary market generally are required to settle in two business days, unless the parties to that trade expressly agree otherwise. Accordingly,
purchasers who wish to trade Senior Notes on the date of this prospectus supplement will be required, by virtue of the fact that the Senior Notes initially will settle in T+3, to specify an alternate settlement cycle at the time of any such trade to
prevent a failed settlement and should consult their own advisers.
LEGAL MATTERS
Certain legal matters in connection with the offering of the Senior Notes will be passed upon for us by McGuireWoods LLP, and for the
underwriters by Troutman Sanders LLP, which also performs certain legal services for us and our other affiliates on other matters.
EXPERTS
The consolidated financial statements incorporated in this prospectus supplement by reference from Dominion Energy’s
Annual Report on Form 10-K for the year ended December 31, 2019 and the effectiveness of Dominion Energy’s internal control over financial reporting have been audited by Deloitte & Touche
LLP, an independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority
as experts in accounting and auditing.
S-30
PROSPECTUS
DOMINION ENERGY, INC.
120 Tredegar Street
Richmond, Virginia 23219
(804) 819-2000
Senior Debt Securities
Junior Subordinated Debentures
Junior Subordinated Notes
Common Stock
Preferred Stock
Stock Purchase Contracts
Stock Purchase Units
From time to time, we may offer and sell our securities. The securities we may offer may be convertible into or exercisable or
exchangeable for other securities of the Company.
We will file prospectus supplements and may provide other offering materials that furnish specific terms of the securities to be offered
under this prospectus. The terms of the securities will include the initial offering price, aggregate amount of the offering, listing on any securities exchange or quotation system, investment considerations and the agents, dealers or underwriters,
if any, to be used in connection with the sale of the securities. You should read this prospectus and any supplement or other offering materials carefully before you invest.
Investing in our securities involves risks. For a description of these
risks, see “Risk Factors” on page 4 of this prospectus and the Risk Factors section of our most recent Annual Report on Form 10-K and in our other reports we file with the Securities and Exchange
Commission.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
This prospectus is dated June 30, 2017.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission (SEC) utilizing a shelf registration process. Under this shelf process, we may, from time to time, sell either separately or in units any combination of the securities described in this prospectus in
one or more offerings up to an unspecified dollar amount.
This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement or other offering materials that will contain
specific information about the terms of that offering. Material federal income tax considerations applicable to the offered securities will also be discussed in the applicable prospectus supplement or other offering materials as necessary. The
prospectus supplement or other offering materials may also add, update or change information contained in this prospectus. You should read both this prospectus, any prospectus supplement or other offering materials together with additional
information described under the heading WHERE YOU CAN FIND MORE INFORMATION. When we use the terms “we”, “our”, “us”, “Dominion Energy” or the “Company” in this prospectus, we are referring to
Dominion Energy, Inc.
WHERE YOU CAN
FIND MORE INFORMATION
We file annual,
quarterly and current reports, proxy statements and other information with the SEC. Our file number with the SEC is 001-08489. Our SEC filings are available to the public over the Internet at the SEC’s web site at http://www.sec.gov. You
may also read and copy any document we file at the SEC’s public reference room at 100 F. Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room.
The SEC allows us to “incorporate by reference” the
information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file later
with the SEC will automatically update or supersede this information. We make some of our filings with the SEC on a combined basis with two of our subsidiaries, Virginia Electric and Power Company (Virginia Power) and Dominion Energy Gas Holdings,
LLC (Dominion Energy Gas). Our combined filings with the SEC present separate filings by each of Virginia Power, Dominion Energy Gas and the Company. We incorporate by reference the documents listed below (other than any portions of the documents
not deemed to be filed) and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, except those portions of filings that relate to Virginia Power or Dominion Energy Gas as a separate
registrant, until we sell all of the securities:
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Annual Report on Form 10-K for the year ended December
31, 2016;
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Quarterly Report on Form 10-Q for the quarter ended
March 31, 2017;
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Current Reports on Form 8-K, filed January 12, 2017, January 24
, 2017, January 27, 2017,
March
27, 2017, May 10, 2017 and May 18, 2017;
and
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the description of our common stock contained in Amendment No.
2 to our Current Report on Form 8-K, filed August 8, 2016.
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You may request a copy of any of the documents incorporated
by reference at no cost, by writing or telephoning us at: Corporate Secretary, Dominion Energy, Inc., 120 Tredegar Street, Richmond, Virginia 23219, (804) 819-2000.
You should rely only on the information incorporated by
reference or provided in this prospectus or to which this prospectus refers you. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it.
This prospectus may only be used where it is legal to sell these securities. The information which appears in this prospectus and which is incorporated by reference in this prospectus may only be accurate as of the date of this prospectus or the
date of the document in which incorporated information appears. Our business, financial condition, results of operations and prospects may have changed since that date.
SAFE HARBOR AND CAUTIONARY STATEMENTS
This prospectus or other offering materials
may contain or incorporate by reference forward-looking statements. Examples include discussions as to our expectations, beliefs, plans, goals, objectives and future financial or other performance. These statements, by their nature, involve
estimates, projections, forecasts and uncertainties that could cause actual results or outcomes to differ substantially from those expressed in the forward-looking statements. Factors that could cause actual results to differ from those in the
forward-looking statements may accompany the statements themselves; generally applicable factors that could cause actual results or outcomes to differ from those expressed in the forward-looking statements will be discussed in our reports on Forms
10-K, 10-Q and 8-K incorporated by reference herein and in prospectus supplements and other offering materials.
By making forward-looking statements, we are not intending to become obligated to publicly update or revise any forward-looking statements
whether as a result of new information, future events or other changes. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as at their dates.
DOMINION ENERGY
Dominion Energy, headquartered in Richmond, Virginia and
incorporated in Virginia in 1983, is one of the nation’s largest producers and transporters of energy. Our strategy is to be a leading provider of electricity, natural gas and related services to customers primarily in the eastern and Rocky
Mountain regions of the U.S. Our portfolio of assets includes approximately 26,200 megawatts of generating capacity, 6,600 miles of electric transmission lines, 57,600 miles of electric distribution lines, 15,000 miles of natural gas transmission,
gathering and storage pipeline and 51,300 miles of gas distribution pipeline, exclusive of service lines. We operate one of the nation’s largest natural gas storage systems with approximately one trillion cubic feet of storage capacity and
serve more than six million utility and retail energy customers.
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We are focused on expanding our investment in regulated and long-term contracted
electric generation, transmission and distribution and regulated natural gas transmission and distribution infrastructure. Our nonregulated operations include merchant generation, energy marketing and price risk management activities and natural gas
retail energy marketing operations. Our operations are conducted through various subsidiaries, including (i) Virginia Power, a regulated public utility that generates, transmits and distributes electricity for sale in Virginia and northeastern North
Carolina, (ii) Dominion Energy Gas, a holding company for the majority of our regulated natural gas businesses, which conducts business activities through a regulated interstate natural gas transmission pipeline and underground storage system, a
local, regulated natural gas transportation and distribution network and natural gas gathering and processing facilities, and (iii) Dominion Energy Questar Corporation, a holding company for our primarily regulated natural gas businesses, including
retail natural gas distribution in Utah, Wyoming and Idaho and related natural gas development and production. We also own the general partner, 50.9% of the common and subordinated units and 37.5% of the convertible preferred interests in Dominion
Energy Midstream Partners, LP, which was formed by us to own and grow a portfolio of natural gas terminaling, processing, storage, transportation and related assets.
Our address and telephone number are 120 Tredegar
Street, Richmond, Virginia, 23219, telephone (804) 819-2000.
For additional information about us, see WHERE YOU CAN FIND MORE INFORMATION on page 2.
RISK FACTORS
Investing in our securities involves certain risks. Our
business is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond our control. We have identified a number of these factors under the heading “Risk
Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016, which are incorporated by reference in this prospectus, as well as in other information included or incorporated by reference in this prospectus and any
prospectus supplement. In consultation with your own financial and legal advisers, you should carefully consider, among other matters, the discussions of risks that we have incorporated by reference before deciding whether an investment in our
securities is suitable for you. See WHERE YOU CAN FIND MORE INFORMATION on page 2.
USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement or other offering materials, we will use the net proceeds from the sale of the securities offered by this prospectus to finance capital
expenditures and future acquisitions and to retire or redeem debt securities issued by us and for other general corporate purposes which may include the repayment of commercial paper and debt under any of our credit facilities.
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DESCRIPTION OF DEBT SECURITIES
The term Debt Securities includes the Senior Debt
Securities, Junior Subordinated Debentures and Junior Subordinated Notes. We will issue the Senior Debt Securities in one or more series under our Senior Indenture dated as of June 1, 2015 between us and Deutsche Bank Trust Company Americas, as
Trustee, as amended and as supplemented from time to time. We will issue the Junior Subordinated Debentures in one or more series under our Junior Subordinated Indenture dated as of December 1, 1997 between us and The Bank of New York Mellon,
successor to JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), as Trustee, as amended and as supplemented from time to time. We will issue Junior Subordinated Notes in one or more series under our Junior Subordinated Notes
Indenture dated as of June 1, 2006 between us and The Bank of New York Mellon, successor to JPMorgan Chase Bank, N.A., as Trustee, as amended and as supplemented from time to time. The indenture related to the Junior Subordinated Debentures is
called the Subordinated Indenture in this prospectus and the indenture related to the Junior Subordinated Notes is called the Subordinated Indenture II; and together the Senior Indenture, the Subordinated Indenture and the Subordinated Indenture II
are called the “Indentures”. We have summarized selected provisions of the Indentures below. The Senior Indenture, the Subordinated Indenture and the Subordinated Indenture II have been filed as exhibits to the registration statement and
you should read the Indentures for provisions that may be important to you. In the summary below, we have included references to section numbers of the Indentures so that you can easily locate these provisions. Capitalized terms used in the summary
have the meanings specified in the Indentures.
General
The Senior Debt Securities will be our
direct, unsecured obligations and will rank equally with all of our other senior and unsubordinated debt, except to the extent provided in the applicable prospectus supplement or other offering materials. The Junior Subordinated Debentures will be
our unsecured obligations and are junior in right of payment to our Senior Indebtedness, as described under the caption ADDITIONAL TERMS OF THE JUNIOR SUBORDINATED DEBENTURES—Subordination. The Junior Subordinated Notes will be our unsecured
obligations and are junior in right of payment to our Priority Indebtedness, as described under the caption ADDITIONAL TERMS OF THE JUNIOR SUBORDINATED NOTES—Subordination.
Because we are a holding company that conducts all of our
operations through our subsidiaries, our ability to meet our obligations under the Debt Securities is dependent on the earnings and cash flows of those subsidiaries and the ability of those subsidiaries to pay dividends or to advance or repay funds
to us. Holders of Debt Securities will generally have a junior position to claims of creditors of our subsidiaries, including trade creditors, debtholders, secured creditors, taxing authorities, guarantee holders and any preferred stockholders. As
of March 31, 2017, our subsidiaries had approximately $33.5 billion in aggregate principal amount of outstanding long-term debt (including securities due within one year).
There is no limit on the amount of Debt Securities or other indebtedness we may issue. We may issue Debt
Securities from time to time under the Indentures in one or more series by
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entering into supplemental indentures and by our Board of Directors or duly authorized officers authorizing the issuance.
The Indentures do not protect the holders of Debt Securities
if we incur additional indebtedness or engage in a highly leveraged transaction.
Provisions of a Particular Series
The Debt Securities of a series need not be issued at the same time, bear interest at the same rate or mature on the same date. Unless otherwise provided in the terms of a series, a series may be
reopened, without notice to or consent of any holder of outstanding Debt Securities, for issuances of additional Debt Securities of that series. The prospectus supplement or other offering materials for a particular series of Debt Securities will
describe the terms of that series, including, if applicable, some or all of the following:
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the title and type of the Debt Securities;
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the total principal amount of the Debt Securities;
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the portion of the principal payable upon acceleration of maturity, if other than the entire principal;
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the date or dates on which principal is payable or the method for determining the date or dates, and any right that we have to change the date on which
principal is payable;
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the interest rate or rates, if any, or the method for determining the rate or rates, and the date or dates from which interest will accrue;
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any interest payment dates and the regular record date for the interest payable on each interest payment date, if any;
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any payments due if the maturity of the Debt Securities is accelerated;
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any optional redemption terms, or any terms regarding repayment at the option of the holder;
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if the Debt Securities are convertible into or exchangeable for other securities, and if so, the conversion terms and conditions;
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any provisions that would obligate us to repurchase, repay or otherwise redeem the Debt Securities, or any sinking fund provisions;
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the currency in which payments will be made if other than U.S. dollars, and the manner of determining the equivalent of those amounts in U.S. dollars;
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if payments may be made, at our election or at the holder’s election, in a currency other than that in which the Debt Securities are stated to be
payable, then the currency in which those payments may be made, the terms and conditions of the election and the manner of determining those amounts;
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any index or formula used for determining principal, interest or premium, if any;
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the percentage of the principal amount at which the Debt Securities will be issued, if other than 100% of the principal amount;
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whether the Debt Securities will be issued in fully registered certificated form or book-entry form, represented by certificates deposited with the
applicable trustee and registered in the name of a securities depositary or its nominee (Book-Entry Debt Securities);
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denominations, if other than $1,000 each or multiples of $1,000;
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any rights that would allow us to defer or extend an interest payment date in connection with any series of Debt Securities;
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any provisions requiring payment of principal or interest in our capital stock or with proceeds from the sale of our capital stock or from any other
specific source of funds in connection with any series of Debt Securities;
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the identity of the series trustee, if other than the trustee;
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any changes to events of defaults or covenants;
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if any series of Debt Securities will not be subject to defeasance or covenant defeasance; and
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any other terms of the Debt Securities. (Sections 201 & 301 of the Senior Indenture; Sections 2.1 & 2.3 of the Subordinated Indenture &
the Subordinated Indenture II.)
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The prospectus supplement will also indicate any special tax implications of the Debt Securities and any provisions granting special rights to holders when a specified event occurs.
Conversion or Redemption
No Debt Security will be subject to conversion, amortization
or redemption, unless otherwise provided in the applicable prospectus supplement or other offering materials. Any provisions relating to the conversion, amortization or redemption of Debt Securities will be set forth in the applicable prospectus
supplement or other offering materials, including whether conversion, amortization or redemption is mandatory or at our option. If no redemption date or redemption price is indicated with respect to a Debt Security, we may not redeem the Debt
Security prior to its stated maturity. Debt Securities subject to redemption by us will be subject to the following terms:
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redeemable on and after the applicable redemption dates;
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redemption dates and redemption prices fixed at the time of sale and set forth on the Debt Security; and
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redeemable in whole or in part (provided that any remaining principal amount of the Debt Security will be equal to an authorized denomination) at our
option at the applicable redemption price, together with interest, payable to the date of redemption, on notice given not more than 60 nor less than 20 days prior to the date of redemption. (Section 1104 of the Senior Indenture; Section 3.2 of
the Subordinated Indenture & the Subordinated Indenture II.)
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We will not be required to:
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issue, register the transfer of, or exchange any Debt Securities of a series during the period beginning 15 days before the date the Debt Securities of
that series are selected for redemption; or
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register the transfer of, or exchange any Debt Security of that series selected for redemption except the unredeemed portion of a Debt Security being
partially redeemed. (Section 305 of the Senior Indenture; Section 2.5 of the Subordinated Indenture & the Subordinated Indenture II.)
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Option to Extend Interest Payment Period
If elected in the applicable supplemental indenture, we may
defer interest payments on the Debt Securities by extending the interest payment period for the number of consecutive extension periods specified in the applicable prospectus supplement or other offering materials (each, an Extension Period). Other
details regarding the Extension Period, including any limit on our ability to pay dividends during the Extension Period, will also be specified in the applicable prospectus supplement or other offering materials. No Extension Period may extend
beyond the maturity of the applicable series of Debt Securities. At the end of the Extension Period(s), we will pay all interest then accrued and unpaid, together with interest compounded quarterly at the interest rate for the applicable series of
Debt Securities, to the extent permitted by applicable law. (Section 301(26) of the Senior Indenture; Section 2.10 of the Subordinated Indenture & the Subordinated Indenture II.)
Payment and Transfer; Paying Agent
The paying agent will pay the principal of any Debt
Securities only if those Debt Securities are surrendered to it. Unless we state otherwise in the applicable prospectus supplement or other offering materials, the paying agent will pay principal, interest and premium, if any, on Debt Securities,
subject to such surrender, where applicable, at its office or, at our option:
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by wire transfer to an account at a banking institution in the United States that is designated in writing to the applicable trustee prior to the
deadline set forth in the applicable prospectus supplement or other offering materials by the person entitled to that payment (which in the case of Book-Entry Debt Securities is the securities depositary or its nominee); or
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by check mailed to the address of the person entitled to that interest as that address appears in the security register for those Debt Securities.
(Sections 307 & 1001 of the Senior Indenture; Section 4.1 of the Subordinated Indenture & the Subordinated Indenture II.)
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Neither we nor the applicable trustee will have any responsibility or liability for any aspect of the records relating to or payments made
on account of beneficial ownership interests in a Book-Entry Debt Security, or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests. We expect that the securities depositary, upon receipt of any
payment of principal, interest or premium, if any, in a Book-Entry Debt Security, will credit immediately the accounts of the related participants with payment in
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amounts proportionate to their respective holdings in principal amount of beneficial interest in the Book-Entry Debt Security as shown on the records of the securities depositary. We also expect
that payments by participants to owners of beneficial interests in a Book-Entry Debt Security will be governed by standing customer instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer
form or registered in “street name,” and will be the responsibility of the participants.
Unless we state otherwise in the applicable prospectus supplement or other offering materials, the applicable trustee will act as paying agent for the Debt Securities, and the principal corporate trust
office of the applicable trustee will be the office through which the paying agent acts. We may, however, change or add paying agents or approve a change in the office through which a paying agent acts. (Section 1002 of the Senior Indenture;
Section 4.2 of the Subordinated Indenture & the Subordinated Indenture II.)
Any money that we have paid to a paying agent for principal or interest on any Debt Securities which remains unclaimed at the end of two years after that principal or interest has become due will be
repaid to us at our request. After repayment to the Company, holders should look only to us for those payments. (Section 1003 of the Senior Indenture; Section 12.4 of the Subordinated Indenture & the Subordinated Indenture II.)
Fully registered securities may be
transferred or exchanged at the corporate trust office of the applicable trustee or at any other office or agency we maintain for those purposes, without the payment of any service charge except for any tax or governmental charge and related
expenses. (Section 1002 of the Senior Indenture; Section 2.5 of the Subordinated Indenture & the Subordinated Indenture II.)
Global Securities
We may issue some or all of the Debt Securities as Book-Entry Debt Securities. Book-Entry Debt Securities will be represented by one or
more fully registered global certificates. Book-Entry Debt Securities of like tenor and terms up to $500,000,000 aggregate principal amount may be represented by a single global certificate. Each global certificate will be registered in the name of
the securities depositary or its nominee and deposited with the applicable trustee, as agent for the securities depositary. Unless otherwise stated in any prospectus supplement or other offering materials, The Depository Trust Company will act as
the securities depositary. Unless it is exchanged in whole or in part for Debt Securities in definitive form, a global certificate may generally be transferred only as a whole unless it is being transferred to certain nominees of the securities
depositary. (Section 305 of the Senior Indenture; Section 2.5 of the Subordinated Indenture & the Subordinated Indenture II.)
Beneficial interests in global certificates will be shown on, and transfers of global certificates will be effected only through, records
maintained by the securities depositary and its participants. If there are any additional or differing terms of the depositary arrangement with respect to the Book-Entry Debt Securities, we will describe them in the applicable prospectus supplement
or other offering materials.
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Holders of beneficial interests in Book-Entry Debt Securities represented by a global
certificate are referred to as beneficial owners. Beneficial owners will be limited to institutions having accounts with the securities depositary or its nominee, which are called participants in this discussion, and to persons that hold beneficial
interests through participants. When a global certificate representing Book-Entry Debt Securities is issued, the securities depositary will credit on its book-entry, registration and transfer system the principal amounts of Book- Entry Debt
Securities the global certificate represents to the accounts of its participants. Ownership of beneficial interests in a global certificate will be shown only on, and the transfer of those ownership interests will be effected only through, records
maintained by:
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the securities depositary, with respect to participants’ interests; and
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any participant, with respect to interests the participant holds on behalf of other persons.
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As long as the securities depositary or its nominee is the
registered holder of a global certificate representing Book-Entry Debt Securities, that person will be considered the sole owner and holder of the global certificate and the Book-Entry Debt Securities it represents for all purposes. Except in
limited circumstances, beneficial owners:
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may not have the global certificate or any Book-Entry Debt Securities it represents registered in their names;
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may not receive or be entitled to receive physical delivery of certificated Book-Entry Debt Securities in exchange for the global certificate; and
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will not be considered the owners or holders of the global certificate or any Book-Entry Debt Securities it represents for any purposes under the Debt
Securities or the Indentures. (Section 308 of the Senior Indenture; Section 8.3 of the Subordinated Indenture & the Subordinated Indenture II.)
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We will make all payments of principal, interest and premium,
if any, on a Book-Entry Debt Security to the securities depositary or its nominee as the holder of the global certificate. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in
definitive form. These laws may impair the ability to transfer beneficial interests in a global certificate.
Payments participants make to beneficial owners holding interests through those participants will be the responsibility of those
participants. The securities depositary may from time to time adopt various policies and procedures governing payments, transfers, exchanges and other matters relating to beneficial interests in a global certificate. None of the following will have
any responsibility or liability for any aspect of the securities depositary’s or any participant’s records relating to beneficial interests in a global certificate representing Book-Entry Debt Securities, for payments made on account of
those beneficial interests or for maintaining, supervising or reviewing any records relating to those beneficial interests:
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the applicable trustee; or
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any agent of any of the above.
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Covenants
Under the Indentures we will:
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pay the principal, interest and premium, if any, on the Debt Securities when due;
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maintain a place of payment;
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deliver an officer’s certificate to the applicable trustee at the end of each fiscal year confirming our compliance with our obligations under
each of the Indentures;
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in the case of the Senior Indenture, preserve and keep in full force and effect our corporate existence except as otherwise provided in the Senior
Indenture; and
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deposit sufficient funds with any paying agent on or before the due date for any principal, interest or premium, if any. (Sections 1001, 1002, 1003,
1005 & 1006 of the Senior Indenture; Sections 4.1, 4.2, 4.4 & 4.6 of the Subordinated Indenture & the Subordinated Indenture II.)
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Consolidation, Merger or Sale
The Indentures provide that we may not merge or consolidate
with any other corporation or sell or convey all or substantially all of our assets to any person or acquire all or substantially all of the assets of another person unless (i) either we are the continuing corporation, or the successor corporation
(if other than us) is a corporation organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such corporation expressly assumes the due and punctual payment of the principal of and
interest and other amounts due on the Debt Securities, and the due and punctual performance and observance of all of the covenants and conditions of the Indentures to be performed by us by supplemental indenture in form satisfactory to the
applicable trustee, executed and delivered to the applicable trustee by such corporation, and (ii) we or such successor corporation, as the case may be, will not, immediately after such merger or consolidation, or such sale or conveyance, be in
default in the performance of any such covenant or condition.
In case of any such consolidation, merger or conveyance, such successor corporation will succeed to and be substituted for us, with the same effect as if it had been named as us in the applicable
Indenture, and in the event of such conveyance (other than by way of a lease), we will be discharged of all of our obligations and covenants under the applicable Indenture and the Debt Securities. (Sections 801 & 802 of the Senior Indenture;
Sections 11.1, 11.2 & 11.3 of the Subordinated Indenture & the Subordinated Indenture II.)
Events of Default
Event of Default when used in each of the Indentures, will mean any of the following with respect to Debt Securities of any series:
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failure to pay the principal or any premium on any Debt Security when due;
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with respect to the Senior Debt Securities, failure to deposit any sinking fund payment for that series when due that continues for 60 days;
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failure to pay any interest on any Debt Securities of that series, when due, that continues for 60 days (or for 30 days in the case of any Junior
Subordinated Debentures or Junior Subordinated Notes, as applicable); provided that, if applicable, for this purpose, the date on which interest is due is the date on which we are required to make payment following any deferral of interest payments
by us under the terms of the applicable series of Debt Securities that permit such deferrals;
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failure to perform any other covenant in the Indentures (other than a covenant expressly included solely for the benefit of other series) that
continues for 90 days after the applicable trustee or the holders of at least 33% of the outstanding Debt Securities (25% in the case of the Junior Subordinated Debentures or Junior Subordinated Notes, as applicable) of that series give written
notice of the default;
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certain events in bankruptcy, insolvency or reorganization of Dominion Energy; or
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any other Event of Default included in the Indentures or any supplemental indenture. (Section 501 of the Senior Indenture; Section 6.1 of the
Subordinated Indenture & the Subordinated Indenture II.)
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In the case of a general covenant default described above, the applicable trustee may extend the grace period. In addition, if holders of a particular series have given a notice of default, then holders
of at least the same percentage of Debt Securities of that series, together with the applicable trustee, may also extend the grace period. The grace period will be automatically extended if we have initiated and are diligently pursuing corrective
action.
An Event of Default for a particular
series of Debt Securities does not necessarily constitute an Event of Default for any other series of Debt Securities issued under the Indentures. Additional events of default may be established for a particular series and, if established, will be
described in the applicable prospectus supplement or other offering materials.
If an Event of Default for any series of Debt Securities occurs and continues, the applicable trustee or the holders of at least 33% (25%, in the case of the Junior Subordinated Debentures or Junior
Subordinated Notes, as applicable) in aggregate principal amount of the Debt Securities of the series may declare the entire principal of all the Debt Securities of that series to be due and payable immediately. If this happens, subject to certain
conditions, the holders of a majority of the aggregate principal amount of the Debt Securities of that series can void the declaration. (Section 502 of the Senior Indenture; Section 6.1 of the Subordinated Indenture & the Subordinated
Indenture II.)
The applicable trustee may
withhold notice to the holders of Debt Securities of any default (except in the payment of principal or interest) if it considers the withholding of notice to be in the best interests of the holders. Other than its duties in case of a
default, a Trustee is not obligated to exercise any of its rights or powers under the Indentures at the request, order or direction of any holders, unless the holders offer the applicable trustee reasonable indemnity. If they provide this reasonable
indemnification, the holders of a majority in principal amount of any series of Debt Securities may direct the time, method and place of
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conducting any proceeding or any remedy available to the applicable trustee, or exercising any power conferred upon the applicable trustee, for any series of Debt Securities. However, the
applicable trustee must give the holders of Debt Securities notice of any default to the extent provided by the Trust Indenture Act. (Sections 512, 601, 602 & 603 of the Senior Indenture; Sections 6.6, 6.7, 7.1 & 7.2 of the
Subordinated Indenture & the Subordinated Indenture II.)
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 enforce those payments. (Section 508 of the Senior Indenture; Section 14.2 of the Subordinated Indenture & the Subordinated Indenture II.)
Satisfaction; Discharge
We may discharge all our obligations (except those described below) to holders of the Debt Securities issued under the Indentures, which
Debt Securities have not already been delivered to the applicable trustee for cancellation and which either have become due and payable or are by their terms due and payable within one year, or are to be called for redemption within one year, by
depositing with the applicable trustee an amount certified to be sufficient to pay when due the principal, interest and premium, if any, on all outstanding Debt Securities. However, certain of our obligations under the Indentures will survive,
including with respect to the following:
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remaining rights to register the transfer, conversion, substitution or exchange of Debt Securities of the applicable series;
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rights of holders to receive payments of principal of, and any interest on, the Debt Securities of the applicable series, and other rights, duties and
obligations of the holders of Debt Securities with respect to any amounts deposited with the applicable trustee; and
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the rights, obligations and immunities of the applicable trustee under the Indentures. (Section 401 of the Senior Indenture; Section 12.1 of the
Subordinated Indenture & the Subordinated Indenture II.)
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Under federal income tax law as of the date of this prospectus, a discharge under these circumstances may be treated as an exchange of the related Debt Securities. Each holder might be required to
recognize gain or loss equal to the difference between the holder’s cost or other tax basis for the Debt Securities and the value of the holder’s interest in the amounts deposited with the applicable trustee. Holders might be required to
include as income a different amount than would be includable without the discharge. We urge prospective investors to consult their own tax advisors as to the consequences of a discharge, including the applicability and effect of tax laws other than
federal income tax law.
Defeasance
Unless we elect differently in the applicable supplemental
indenture, we will be discharged from our obligations on the Senior Debt Securities or Junior Subordinated Notes of
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any series, as applicable, at any time if we deposit with the applicable trustee sufficient cash or government securities to pay the principal, interest, any premium and any other sums due to the
stated maturity date or a redemption date of the Senior Debt Securities and Junior Subordinated Notes of the series. If this happens, the holders of the Senior Debt Securities or Junior Subordinated Notes of the series, as applicable, will not be
entitled to the benefits of either the Senior Indenture or the Subordinated Indenture II, as applicable, except for registration of transfer and exchange of Senior Debt Securities or Junior Subordinated Notes, as applicable, and replacement of lost,
stolen or mutilated Senior Debt Securities or Junior Subordinated Notes, as applicable. (Section 402 of the Senior Indenture; Section 12.5 of the Subordinated Indenture II.)
Under federal income tax law as of the date of this
prospectus, a discharge under these circumstances may be treated as an exchange of the related Senior Debt Securities or Junior Subordinated Notes, as applicable. Each holder might be required to recognize gain or loss equal to the difference
between the holder’s cost or other tax basis for the Senior Debt Securities or Junior Subordinated Notes, as applicable, and the value of the holder’s interest in the defeasance trust. Holders might be required to include as income a
different amount than would be includable without the discharge. We urge prospective investors to consult their own tax advisors as to the consequences of such a discharge, including the applicability and effect of tax laws other than federal income
tax law.
Modification of Indentures; Waiver
Under the Indentures our rights and obligations and the
rights of the holders may be modified with the consent of the holders of a majority in aggregate principal amount of the outstanding Debt Securities of each series affected by the modification. No modification of the principal or interest payment
terms, and no modification reducing the percentage required for modifications, is effective against any holder without its consent. (Section 902 of the Senior Indenture; Section 10.2 of the Subordinated Indenture & the Subordinated Indenture
II.) In addition, we may supplement the Indentures to create new series of Debt Securities and for certain other purposes, without the consent of any holders of Debt Securities. (Section 901 of the Senior Indenture; Section 10.1 of the
Subordinated Indenture & the Subordinated Indenture II.)
The holders of a majority of the outstanding Debt Securities of all series under the applicable Indenture with respect to which a default has occurred and is continuing may waive a default for all those
series, except a default in the payment of principal or interest, or any premium, on any Debt Securities or a default with respect to a covenant or provision which cannot be amended or modified without the consent of the holder of each outstanding
Debt Security of the series affected. (Section 513 of the Senior Indenture; Section 6.6 of the Subordinated Indenture & the Subordinated Indenture II.)
In addition, under certain circumstances, the holders of a
majority of the outstanding Junior Subordinated Debentures or Junior Subordinated Notes of any series, as applicable, may waive in advance, for that series, our compliance with certain restrictive provisions of the
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Subordinated Indenture or the Subordinated Indenture II under which those Junior Subordinated Debentures or Junior Subordinated Notes, as applicable, were issued. (Section 4.7 of the
Subordinated Indenture & the Subordinated Indenture II.)
Concerning the Trustees
Deutsche Bank Trust Company Americas is the Trustee under the Senior Indenture. We and certain of our affiliates maintain deposit accounts
and banking relationships with Deutsche Bank Trust Company Americas. Deutsche Bank Trust Company Americas also serves as trustee under other indentures pursuant to which securities of certain of our affiliates are outstanding. Affiliates of Deutsche
Bank Trust Company Americas have purchased, and are likely to purchase in the future, our securities and securities of our affiliates.
As Trustee under the Senior Indenture, Deutsche Bank Trust Company Americas will perform only those duties that are specifically described
in the Senior Indenture unless an event of default under the Senior Indenture occurs and is continuing. It is under no obligation to exercise any of its powers under the Senior Indenture at the request of any holder of Senior Debt Securities unless
that holder offers reasonable indemnity to the Trustee against the costs, expenses and liabilities which it might incur as a result. (Section 601 of the Senior Indenture.)
The Senior Indenture permits us to name a different trustee
for individual series of Senior Debt Securities. If named, a series trustee performs the duties that would otherwise be performed by the Trustee under the Senior Indenture with respect to that series; the series trustee will have no greater
liabilities or obligations and will be entitled to all the rights and exculpations with respect to such series that would otherwise be available to the Trustee under the Senior Indenture. If a series trustee is named, information about any series
trustee will be disclosed in the prospectus supplement and the Trustee under the Senior Indenture will have no responsibility with respect to that series.
Deutsche Bank Trust Company Americas administers its corporate trust business at 60 Wall Street, 16th Floor, New York, NY 10005 or such
other address as it may notify to the Company from time to time.
The Bank of New York Mellon, successor to JPMorgan Chase Bank, N.A., is the Trustee under the Subordinated Indenture and the Subordinated Indenture II. We and certain of our affiliates maintain deposit
accounts and banking relationships with The Bank of New York Mellon. The Bank of New York Mellon also serves as trustee under other indentures pursuant to which securities of ours and of certain of our affiliates are outstanding. Affiliates of The
Bank of New York Mellon have purchased, and are likely to purchase in the future, our securities and securities of our affiliates.
As Trustee under the Subordinated Indenture and the Subordinated Indenture II, The Bank of New York Mellon will perform only those duties
that are specifically described in the Subordinated Indenture and the Subordinated Indenture II unless an event of default under either indenture occurs and is continuing. It is under no obligation to exercise any of its powers under the Indentures
at the request of any holder of Junior Subordinated Debenture or
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Junior Subordinated Notes unless that holder offers reasonable indemnity to the Trustee against the costs, expenses and liabilities which it might incur as a result. (Section 7.1 of the
Subordinated Indenture & the Subordinated Indenture II.)
The Subordinated Indenture II permits us to name a different trustee for individual series of Junior Subordinated Notes. If named, a series trustee performs the duties that would otherwise be performed by
the Trustee under the Subordinated Indenture II with respect to that series; the series trustee will have no greater liabilities or obligations and will be entitled to all the rights and exculpations with respect to such series that would otherwise
be available to the Trustee under the Subordinated Indenture II. If a series trustee is named, information about any series trustee will be disclosed in the prospectus supplement and the Trustee under the Subordinated Indenture II will have no
responsibility with respect to that series.
The
Bank of New York Mellon administers its corporate trust business at 101 Barclay Street, 7W ATTN: Corporate Trust Administration, New York, New York 10286 or such other address as it may notify to the Company from time to time.
ADDITIONAL TERMS OF THE SENIOR DEBT SECURITIES
Repayment at the Option of the Holder
We must repay the Senior Debt Securities at the option of
the holders prior to the Stated Maturity Date only if specified in the applicable prospectus supplement or other offering materials. Unless otherwise provided in the prospectus supplement or other offering materials, the Senior Debt Securities
subject to repayment at the option of the holder will be subject to repayment:
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on the specified Repayment Dates; and
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at a repayment price equal to 100% of the unpaid principal amount to be repaid, together with unpaid interest accrued to the Repayment Date.
(Section 1302 of the Senior Indenture.)
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For any Senior Debt Security to be repaid, the Trustee must receive, at its office maintained for that purpose in the Borough of Manhattan, New York City not more than 180 nor less than 60 calendar days
prior to the date of repayment:
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in the case of a certificated Senior Debt Security, the certificated Senior Debt Security and the form in the Senior Debt Security entitled Option of
Holder to Elect Purchase duly completed; or
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in the case of a book-entry Senior Debt Security, instructions to that effect from the beneficial owner to the securities depositary and forwarded by
the securities depositary. Exercise of the repayment option by the holder will be irrevocable. (Section 1303 of the Senior Indenture.)
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Only the securities depositary may exercise the repayment option in respect of beneficial interests in the book-entry Senior Debt
Securities. Accordingly, beneficial owners that desire repayment in respect of all or any portion of their beneficial interests must instruct the
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participants through which they own their interests to direct the securities depositary to exercise the repayment option on their behalf. All instructions given to participants from beneficial
owners relating to the option to elect repayment will be irrevocable. In addition, at the time the instructions are given, each beneficial owner will cause the participant through which it owns its interest to transfer its interest in the book-entry
Senior Debt Securities or the global certificate representing the related book-entry Senior Debt Securities, on the securities depositary’s records, to the Trustee. See DESCRIPTION OF DEBT SECURITIES—Global Securities.
Limitation on Liens
While any of the Senior Debt Securities are outstanding
(other than those to which the limitation on liens covenant is expressly inapplicable), we are not permitted to create liens upon any Principal Property (as defined below) or upon any shares of stock of any Material Subsidiary (as defined below),
which we now own or will own in the future, to secure any of our debt, unless at the same time we provide that the Senior Debt Securities will also be secured by that lien on an equal and ratable basis. However, we are generally permitted to create
the following types of liens:
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purchase money liens on future property acquired by us; liens of any kind existing on property or shares of stock or other securities at the time they are acquired by
us; conditional sales agreements and other title retention agreements on future property acquired by us (as long as none of those liens cover any of our other properties);
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liens on our property or any shares of stock or other securities of any Material Subsidiary that existed as of the date the Senior Debt Securities were first issued;
liens on the shares of stock or other securities of any legal entity, which liens existed at the time that entity became a Material Subsidiary; certain liens typically incurred in the ordinary course of business;
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liens in favor of the United States (or any State), any foreign country or any department, agency or instrumentality or political subdivision of those jurisdictions, to
secure payments pursuant to any contract or statute or to secure any debt incurred for the purpose of financing the purchase price or the cost of constructing or improving the property subject to those liens, including, for example liens to secure
debt of the pollution control or industrial revenue bond type;
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(4)
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debt that we may issue in connection with a consolidation or merger of Dominion Energy or any Material Subsidiary with or into any other company (including any of our
affiliates or Material Subsidiaries) in exchange for secured debt of that company (Third Party Debt) as long as that debt (i) is secured by a mortgage on all or a portion of the property of that company, (ii) prohibits secured debt from being
incurred by that company, unless the Third Party Debt is secured on an equal and ratable basis, or (iii) prohibits secured debt from being incurred by that company;
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(5)
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debt of another company that we must assume in connection with a consolidation or merger of that company, with respect to which any of our property is subjected to a
lien;
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(6)
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liens on any property that we acquire, construct, develop or improve after the date the Senior Debt Securities are first issued that are created before or within 18
months after the acquisition, construction, development or improvement of the property and secure the payment of the purchase price or related costs;
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(7)
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liens in favor of us, our Material Subsidiaries or our wholly-owned subsidiaries;
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(8)
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the replacement, extension or renewal of any lien referred to above in clauses (1) through (7) as long as the amount secured by the liens or the property subject to the
liens is not increased; and
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(9)
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any other lien not covered by clauses (1) through (8) above as long as immediately after the creation of the lien the aggregate principal amount of debt secured by all
liens created or assumed under this clause (9) does not exceed 10% of the common shareholders’ equity, as shown on the company’s consolidated balance sheet for the accounting period occurring immediately prior to the creation or assumption
of such lien.
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When we use the term
“lien” in this section, we mean any mortgage, lien, pledge, security interest or other encumbrance of any kind; “Material Subsidiary” means each of our subsidiaries whose total assets (as determined in accordance with GAAP in the
United States) represent at least 20% of our total assets on a consolidated basis; and “Principal Property” means any of our plants or facilities located in the United States that in the opinion of our Board or management is of material
importance to the business conducted by us and our consolidated subsidiaries taken as whole. (Section 1008 of the Senior Indenture.)
ADDITIONAL TERMS OF THE JUNIOR SUBORDINATED DEBENTURES
Subordination
Each series of Junior Subordinated Debentures will be subordinate and junior in right of payment, to the extent set forth in the
Subordinated Indenture, to all Senior Indebtedness as defined below. If:
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we make a payment or distribution of any of our assets to creditors upon our dissolution, winding-up, liquidation or reorganization, whether in
bankruptcy, insolvency or otherwise;
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a default beyond any grace period has occurred and is continuing with respect to the payment of principal, interest or any other monetary amounts due
and payable on any Senior Indebtedness; or
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the maturity of any Senior Indebtedness has been accelerated because of a default on that Senior Indebtedness;
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then the holders of Senior Indebtedness generally will have the right to
receive payment, in the case of the first instance, of all amounts due or to become due upon that Senior Indebtedness, and, in the case of the second and third instances, of all amounts due on that Senior Indebtedness, or we will make provision for
those payments, before the holders of any Junior Subordinated Debentures have the right to receive any payments of principal or interest on their Junior Subordinated Debentures. (Sections 14.1 & 14.9 of the Subordinated Indenture.)
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Senior Indebtedness means, with respect to any series of Junior Subordinated
Debentures, the principal, premium, interest and any other payment in respect of any of the following, unless otherwise specified in the prospectus supplement or offering materials:
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all of our current and future indebtedness for borrowed or purchase money or other similar instruments whether or not evidenced by notes, debentures,
bonds or other written instruments;
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our obligations for reimbursement under letters of credit, banker’s acceptances, security purchase facilities or similar facilities issued for our
account;
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any of our other indebtedness or obligations with respect to derivative contracts, including commodity contracts, interest rate, commodity and currency
swap agreements, forward contracts and other similar agreements or arrangements; and
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all indebtedness of others of the kinds described in the preceding categories which we have assumed or guaranteed.
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Senior Indebtedness will not include our obligations to trade
creditors or indebtedness to our subsidiaries. (Section 1.1 of the Subordinated Indenture.)
Senior Indebtedness will be entitled to the benefits of the subordination provisions in the Subordinated Indenture irrespective of the amendment, modification or waiver of any term of the Senior
Indebtedness. We may not amend the Subordinated Indenture to change the subordination of any outstanding Junior Subordinated Debentures without the consent of each holder of Senior Indebtedness that the amendment would adversely affect. (Sections
10.2 & 14.7 of the Subordinated Indenture.)
The Subordinated Indenture does not limit the amount of Senior Indebtedness that we may issue.
ADDITIONAL TERMS OF THE JUNIOR SUBORDINATED
NOTES
Subordination
Each series of Junior Subordinated Notes will be subordinate
and junior in right of payment, to the extent set forth in the Subordinated Indenture II, to all Priority Indebtedness as defined below. If:
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we make a payment or distribution of any of our assets to creditors upon our dissolution, winding-up, liquidation or reorganization, whether in
bankruptcy, insolvency or otherwise;
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a default beyond any grace period has occurred and is continuing with respect to the payment of principal, interest or any other monetary amounts due
and payable on any Priority Indebtedness; or
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the maturity of any Priority Indebtedness has been accelerated because of a default on that Priority Indebtedness unless otherwise specified in the
prospectus supplement and offering materials;
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then the holders of Priority Indebtedness generally will have the right to receive payment, in the case
of the first instance, of all amounts due or to become due upon that Priority Indebtedness, and, in the case of the second and third instances, of all amounts due on that Priority Indebtedness, or we will make provision for those payments, before
the holders of any Junior Subordinated Notes have the right to receive any payments of principal or interest on their Junior Subordinated Notes. (Sections 14.1 & 14.9 of the Subordinated Indenture II.)
Priority Indebtedness means, with respect to any series of
Junior Subordinated Notes, the principal, premium, interest and any other payment in respect of any of the following:
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all of our current and future indebtedness for borrowed or purchase money whether or not evidenced by notes, debentures, bonds or other similar written
instruments;
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our obligations under synthetic leases, finance leases and capitalized leases;
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our obligations for reimbursement under letters of credit, banker’s acceptances, security purchase facilities or similar facilities issued for our
account;
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any of our other indebtedness or obligations with respect to derivative contracts, including commodity contracts, interest rate, commodity and currency
swap agreements, forward contracts and other similar agreements or arrangements; and
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all indebtedness of others of the kinds described in the preceding categories which we have assumed or guaranteed.
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Priority Indebtedness will not include trade accounts
payable, accrued liabilities arising in the ordinary course of business or indebtedness to our subsidiaries. (Section 1.1 of the Subordinated Indenture II.)
Priority Indebtedness will be entitled to the benefits of the
subordination provisions in the Subordinated Indenture II irrespective of the amendment, modification or waiver of any term of the Priority Indebtedness. We may not amend the Subordinated Indenture II to change the subordination of any outstanding
Priority Indebtedness without the consent of each holder of Priority Indebtedness that the amendment would adversely affect. (Sections 10.2 & 14.7 of the Subordinated Indenture II.)
The Subordinated Indenture II does not limit the amount of Priority Indebtedness that we may issue.
DESCRIPTION OF CAPITAL STOCK
As of March 31, 2017, our authorized capital stock was
1.02 billion shares. Those shares consisted of 20 million shares of preferred stock and one billion shares of common stock. As of March 31, 2017, approximately 629 million shares of common stock and no shares of preferred stock were issued and
outstanding. No holder of shares of common stock or preferred stock has any preemptive rights.
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Common Stock
Listing
Our outstanding shares of common stock are listed on the New
York Stock Exchange under the symbol “D”. Any additional common stock we issue will also be listed on the New York Stock Exchange.
Dividends
Common shareholders may receive dividends when declared by the Board of Directors. Dividends may be paid in cash, stock or other form. In
certain cases, common shareholders may not receive dividends until we have satisfied our obligations to any preferred shareholders. Under certain circumstances, if specified in the applicable supplemental indenture, the Indentures may restrict our
ability to pay cash dividends.
Authorized But
Unissued Shares
Our authorized but unissued
shares of common stock will be available for future issuance without shareholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate
acquisitions and employee benefit plans. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of the Company by means of a proxy contest, tender
offer, merger or otherwise.
Fully Paid
All outstanding shares of common stock are
fully paid and non-assessable. Any additional common stock we issue will also be fully paid and non-assessable.
Voting Rights
Each share of common stock is entitled to one vote in the election of directors and other matters. Common shareholders are not entitled to
cumulative voting rights.
Other Rights
We will notify common shareholders of any
shareholders’ meetings according to applicable law. If we liquidate, dissolve or wind up our business, either voluntarily or not, common shareholders will share equally in the assets remaining after we pay our creditors and preferred
shareholders.
Transfer Agent and Registrar
Broadridge Corporate Issuer Solutions, Inc.
is transfer agent and registrar for our common stock.
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Preferred Stock
The following description of the terms of the preferred
stock sets forth certain general terms and provisions of our authorized preferred stock. If we issue preferred stock, the specific designations and rights will be described in the prospectus supplement or other offering materials and a description
will be filed with the SEC.
Our Board of
Directors can, without approval of shareholders, issue one or more series of preferred stock. The Board of Directors can also determine the number of shares of each series and the rights, preferences and limitations of each series including the
dividend rights, voting rights, conversion rights, redemption rights and any liquidation preferences, the number of shares constituting each series and the terms and conditions of issue. In some cases, the issuance of preferred stock could delay a
change in control of the Company and make it harder to remove present management. Under certain circumstances, preferred stock could also restrict dividend payments to holders of our common stock.
The preferred stock will, when issued, be fully paid and
non-assessable. Unless otherwise specified in the applicable prospectus supplement or other offering materials, the preferred stock will rank on a parity in all respects with any outstanding preferred stock we may have and will have priority over
our common stock as to dividends and distributions of assets. Therefore, the rights of any preferred stock that may subsequently be issued may limit the rights of the holders of our common stock and preferred stock.
The transfer agent, registrar, and dividend disbursement
agent for a series of preferred stock will be named in a prospectus supplement or other offering materials. The registrar for shares of preferred stock will send notices to shareholders of any meetings at which holders of the preferred stock have
the right to elect directors or to vote on any other matter.
VIRGINIA STOCK CORPORATION ACT AND THE ARTICLES AND THE BYLAWS
General
We are a Virginia corporation subject to the Virginia Stock Corporation Act (the Virginia Act). Provisions of
the Virginia Act, in addition to provisions of our Articles of Incorporation (Articles) and Bylaws, address corporate governance issues, including the rights of shareholders. Some of these provisions could hinder management changes while others
could have an anti- takeover effect. This anti-takeover effect may, in some circumstances, reduce the control premium that might otherwise be reflected in the value of our common stock. If you are buying this stock as part of a short-term investment
strategy, this might be especially important to you.
We have summarized the key provisions below. You should read the actual provisions of our Articles and Bylaws and the Virginia Act that relate to your individual investment strategy.
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Business Combinations
Our Articles require that any merger, share exchange or sale of substantially all of the assets of the Company
be approved by a majority of the votes entitled to be cast on the matter by each voting group entitled to vote on the matter. Abstentions and broker non-votes will have no effect on the outcome.
Article 14 of the Virginia Act contains several provisions
relating to transactions with interested shareholders. Interested shareholders are holders of more than 10% of any class of a corporation’s outstanding voting shares. Transactions between a corporation and an interested shareholder are referred
to as affiliated transactions. The Virginia Act requires that material affiliated transactions must be approved by at least two-thirds of the shareholders not including the interested shareholder. Affiliated transactions requiring this two-thirds
approval include mergers, share exchanges, material dispositions of corporate assets, dissolution or any reclassification of securities or merger of the corporation with any of its subsidiaries which increases the percentage of voting shares owned
by an interested shareholder by more than five percent.
For three years following the time that a shareholder becomes an interested shareholder, a Virginia corporation cannot engage in an affiliated transaction with the interested shareholder without approval
of two-thirds of the disinterested voting shares and majority approval of disinterested directors. A disinterested director is a director who was a director on the date on which an interested shareholder became an interested shareholder or was
recommended for election or elected by a majority of the disinterested directors then on the board. After three years, an affiliated transaction must be approved by either two-thirds of disinterested voting shares or a majority of disinterested
directors.
The provisions of the Virginia Act
relating to affiliated transactions do not apply if a majority of disinterested directors approve the acquisition of shares making a person an interested shareholder.
The Virginia Act permits corporations to opt out of the
affiliated transactions provisions. We have not opted out.
The Virginia Act also contains provisions regulating certain control share acquisitions, which are transactions causing the voting strength of any person acquiring beneficial ownership of shares of a
public corporation in Virginia to meet or exceed certain threshold voting percentages (20%, 331/3%, or 50%). Shares acquired in a control share acquisition have no voting rights unless the voting rights are granted by a
majority vote of all outstanding shares other than those held by the acquiring person or any officer or employee-director of the corporation. The acquiring person may require that a special meeting of the shareholders be held to consider the grant
of voting rights to the shares acquired in the control share acquisition.
Our Bylaws give us the right to redeem the shares purchased by an acquiring person in a control share acquisition. We can do this if the acquiring person fails to deliver a statement to us listing
information required by the Virginia Act or if our shareholders vote not to grant voting rights to the acquiring person.
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The Virginia Act permits corporations to opt out of the control share acquisition
provisions. We have not opted out.
Directors’ Duties
The standards of conduct for directors of
Virginia corporations are listed in Section 13.1-690 of the Virginia Act. Directors must discharge their duties in accordance with their good faith business judgment of the best interests of the corporation. Directors may rely on the advice or acts
of others, including officers, employees, attorneys, accountants and board committees if they have a good faith belief in their competence. Directors’ actions are not subject to a reasonableness or prudent person standard. Virginia’s
federal and state courts have focused on the process involved with directors’ decision-making and are generally supportive of directors if they have based their decision on an informed process. These elements of Virginia law could make it more
difficult to take over a Virginia corporation than corporations in other states.
Board of Directors
Members of our Board of Directors serve one-year terms and are elected annually. Except when the number of nominees exceeds the number of directors to be elected (a contested election), directors are
elected by majority vote. In the case of a contested election, directors are elected by a plurality vote. Directors may be removed from office for cause if the number of votes cast to remove the director constitutes a majority of the votes entitled
to be cast at an election of directors of the voting group by which the director was elected.
Shareholder Proposals and Director Nominations
Our shareholders can submit shareholder proposals and nominate candidates for the Board of Directors if the shareholders follow advance notice procedures described in our Bylaws.
To nominate directors, shareholders must submit a written
notice to our corporate secretary at least 60 days before a scheduled meeting. The notice must include the name and address of the shareholder and of the nominee, a description of any arrangements between the shareholder and the nominee, information
about the nominee required by the SEC, the written consent of the nominee to serve as a director and other information.
Shareholder proposals must be submitted to our corporate secretary at least 90 days before the first anniversary of the date of our last
annual meeting. The notice must include a description of the proposal, the reasons for presenting the proposal at the annual meeting, the text of any resolutions to be presented, the shareholder’s name and address and number of shares held and
any material interest of the shareholder in the proposal.
Director nominations and shareholder proposals that are late or that do not include all required information may be rejected. This could prevent shareholders from bringing certain matters before an annual
or special meeting, including making nominations for directors.
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Proxy Access
Our Bylaws permit a shareholder, or a group of up to 20
shareholders, owning 3% or more of our outstanding common stock continuously for at least three years, to nominate and include in our annual meeting proxy materials director candidates to occupy up to two or 20% of our board seats (whichever is
greater), provided that such shareholder or group of shareholders satisfies the requirements set forth in the Bylaws.
Meetings of Shareholders
Under our Bylaws, meetings of the shareholders may be called by the chairman of the board, the vice chairman, the president or a majority
of the Board of Directors. Special meetings of shareholders will also be held whenever called by the Corporate Secretary, upon the written request of shareholders owning continuously for a period of at least one year prior to the date of such
request more than one-third of all of our outstanding shares of common stock. These provisions could have the effect of delaying until the next annual shareholders’ meeting shareholder actions which are favored by the holders of less than
one-third of our outstanding shares of common stock, because such holders would be able to take action as shareholders, such as electing new directors or approving a merger, only at a duly called shareholders’ meeting.
Amendment of Articles
Generally, our Articles may be amended if the votes cast
favoring the amendment exceed the votes cast opposing the amendment at a meeting where a quorum is present. Some provisions of the Articles, however, may only be amended or repealed by a majority of the votes entitled to be cast on the matter by
each voting group entitled to vote on the matter.
Indemnification
Under our Articles, we indemnify our officers and directors to the fullest extent permitted under Virginia law against all liabilities
incurred in connection with their service to us. We have also entered into agreements relating to the advancement of expenses for certain of our directors and officers in advance of a final disposition of proceedings or the making of any
determination of eligibility for indemnification pursuant to our Articles.
Limitation of Liability
Our Articles provide that our directors and officers will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors or officers, unless they violated their duty
of loyalty to us or our shareholders, acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived an improper personal benefit from their action as directors or officers. This provision
applies only to claims against directors or officers arising out of their role as directors or officers and not in any other capacity. Directors and officers remain liable for violations of the federal securities laws and we retain the right to
pursue legal remedies other than monetary damages, such as an injunction or rescission for breach of the officer’s or director’s duty of care.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts,
including contracts obligating holders to purchase from us, and us to sell to the holders, a specified or varying number of shares of common stock or preferred stock at a future date or dates, which we refer to in this prospectus as stock purchase
contracts. Alternatively, the stock purchase contracts may obligate us to purchase from holders, and obligate holders to sell to us, a specified or varying number of shares of common stock or preferred stock. The price per share of common stock or
preferred stock and the number of shares of common stock or preferred stock may be fixed at the time the stock purchase contracts are issued or may be determined by reference to a specific formula or method set forth in the stock purchase contracts.
The stock purchase contracts may be issued separately or as part of units consisting of a stock purchase contract and beneficial interests in debt securities, preferred stock or debt obligations of third parties, including U.S. treasury securities
or obligations of our subsidiaries, securing the holders’ obligations to purchase the common stock or preferred stock under the stock purchase contracts, which we refer to in this prospectus as stock purchase units. The stock purchase contracts
may require us to make periodic payments to the holders of the stock purchase units or vice versa, and these payments may be unsecured or refunded and may be paid on a current or on a deferred basis. The stock purchase contracts may require holders
to secure their obligations under those contracts in a specified manner.
The applicable prospectus supplement or other offering materials will describe the terms of the stock purchase contracts or stock purchase units and will contain a discussion of the material federal
income tax considerations applicable to the stock purchase contracts and stock purchase units. The description in the applicable prospectus supplement or other offering materials will not necessarily be complete, and reference will be made for
additional information to the purchase contract agreement or unit purchase agreement, as applicable, that we will enter into at the time of issue, and, if applicable, collateral or depositary arrangements, relating to the stock purchase contracts or
stock purchase units.
PLAN OF
DISTRIBUTION
We may sell the securities
being offered hereby in any one or more of the following ways:
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directly to purchasers;
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to or through underwriters; or
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We may distribute the securities from time to time in one or more transactions at:
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a fixed price or prices, which may be changed;
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market prices prevailing at the time of sale;
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prices related to prevailing market prices; or
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We may directly solicit offers to purchase securities, or we may designate agents to solicit such offers. We will, in the prospectus
supplement or other offering materials relating to such offering, name any agent that could be viewed as an underwriter under the Securities Act of 1933, as amended (the Securities Act), and describe any commissions we must pay. Any such agent will
be acting on a best efforts basis for the period of its appointment or, if indicated in the applicable prospectus supplement or other offering materials, on a firm commitment basis. Agents, dealers and underwriters may be customers of, engage in
transactions with, or perform services for us in the ordinary course of business.
If any underwriters or agents are utilized in the sale of the securities in respect of which this prospectus is delivered, we will enter into an underwriting agreement or other agreement with them at the
time of sale to them, and we will set forth in the prospectus supplement or other offering materials relating to such offering their names and the terms of our agreement with them.
If a dealer is utilized in the sale of the securities in
respect of which this prospectus is delivered, we will sell such securities to the dealer, as principal. The dealer may then resell such securities to the public at varying prices to be determined by such dealer at the time of resale.
We may engage in at-the-market offerings to or through a
market maker or into an existing trading market, on an exchange or otherwise, in accordance with Rule 415(a)(4). An at-the-market offering may be through an underwriter or underwriters acting as principal or agent for us.
The securities may also be offered and sold, if so indicated
in the applicable prospectus supplement or other offering materials, 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. Any remarketing firm will be identified and the terms of its agreement, if any, with us and its compensation will be described in the applicable prospectus supplement or other offering
materials.
Remarketing firms, agents,
underwriters and dealers may be entitled under agreements which they may enter into with us to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, and may be customers of, engage in transactions
with or perform services for us in the ordinary course of business.
In order to facilitate the offering of the securities, any underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the securities or any other securities the
prices of which may be used to determine payments on such securities. Specifically, any underwriters may over-allot in connection with the offering, creating a short position for their own accounts. In addition, to cover over-allotments or to
stabilize the price of the securities or of any such other securities, the underwriters may bid for, and purchase,
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the securities or any such other securities in the open market. Finally, in any offering of the securities through a syndicate of underwriters, the underwriting syndicate may reclaim selling
concessions allowed to an underwriter or a dealer for distributing the securities in the offering if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions, in stabilization transactions or
otherwise. Any of these activities may stabilize or maintain the market price of the securities above independent market levels. Any such underwriters are not required to engage in these activities and may end any of these activities at any time.
We may enter into derivative transactions with
third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement or other offering materials indicates, in connection with those derivatives, the third
parties may sell securities covered by this prospectus and the applicable prospectus supplement or other offering materials, including in short sale transactions. If so, the third parties may use securities pledged by us or borrowed from us or
others to settle those sales or to close out any related open borrowings of securities, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of securities. The third parties in such sale
transactions will be underwriters and, if not identified in this prospectus, will be identified in the applicable prospectus supplement or other offering materials (or a post-effective amendment).
We or one of our affiliates may loan or pledge securities to
a financial institution or other third party that in turn may sell the securities using this prospectus. Such financial institution or third party may transfer its short position to investors in our securities or in connection with a simultaneous
offering of other securities offered by this prospectus or otherwise.
Any underwriter, agent or dealer utilized in the initial offering of securities will not confirm sales to accounts over which it exercises discretionary authority without the prior specific written
approval of its customer.
LEGAL
MATTERS
McGuireWoods LLP, counsel to the
Company, will issue an opinion about the legality of the offered securities for us. Underwriters, dealers or agents, if any, who we will identify in a prospectus supplement or other offering materials, may have their counsel pass upon certain legal
matters in connection with the securities offered by this prospectus.
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EXPERTS
The consolidated financial statements incorporated in this Prospectus by reference from Dominion Energy,
Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016 and the effectiveness of the Dominion Energy, Inc. and subsidiaries’ internal control over financial reporting have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference. Such consolidated financial statements have been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
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Dominion Energy (NYSE:DCUE)
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