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REGISTRATION NO. 33-56983
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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UNITED CITIES GAS COMPANY
(Exact name of Registrant as specified in charter)
<TABLE>
<S> <C>
ILLINOIS & VIRGINIA 36-1801540
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
5300 MARYLAND WAY
BRENTWOOD, TENNESSEE 37027
615-373-5310
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
GENE C. KOONCE, PRESIDENT
5300 MARYLAND WAY
BRENTWOOD, TENNESSEE 37027
615-373-5310
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies of communications to:
<TABLE>
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JOHN M. DIXON, ESQ. ROBERT A. YOLLES, ESQ.
CHAPMAN AND CUTLER JONES, DAY, REAVIS & POGUE
111 W. MONROE STREET 77 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60603-4080 CHICAGO, ILLINOIS 60601-1692
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective as
determined by market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION, DATED MAY 31, 1995
UNITED CITIES GAS COMPANY
DEBT SECURITIES
COMMON STOCK
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United Cities Gas Company (the "Company") may offer, from time to time, (i)
its First Mortgage Bonds (the "Bonds"), (ii) its notes (the "Notes" and
collectively with the Bonds, the "Debt Securities") and/or (iii) shares of its
Common Stock, without par value (the "Common Stock"), at prices and on terms to
be determined when an agreement to sell is made or at the time or times of sale,
as the case may be. The Debt Securities and the Common Stock may be issued in
one or more series or issuances, as the case may be, and the aggregate initial
offering price thereof will not exceed $200,000,000. The Debt Securities and the
Common Stock are collectively referred to herein as the "Securities."
This Prospectus will be supplemented by an accompanying prospectus
supplement or supplements ("Prospectus Supplement") that will set forth, in the
case of any Debt Securities for which this Prospectus is being delivered
("Offered Bonds" in the case of Bonds or "Offered Notes" in the case of Notes),
the form in which such Debt Securities are to be issued and the designation
thereof, their aggregate principal amount, rate or rates and times of payment of
interest, maturity or maturities, their purchase price or prices and initial
offering price or prices, redemption or repurchase provisions, if any, whether,
in the case of Offered Notes, such Offered Notes will be collateralized by the
Company's First Mortgage Bonds or convertible into Common Stock and other
specific terms of such Debt Securities and, in the case of any Common Stock for
which this Prospectus is being delivered ("Offered Stock"), the number of shares
of such Common Stock and their purchase price and the initial public offering
price or prices. See "Description of Debt Securities" and "Description of
Capital Stock" herein.
The Common Stock of the Company is traded on the Nasdaq National Market
under the symbol "UCIT." Unless otherwise specified in the applicable Prospectus
Supplement, the Offered Stock will be listed, subject to notice of issuance, on
the Nasdaq National Market.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The Company may sell the Securities to or through underwriters, dealers or
agents, or directly to one or more purchasers. The Prospectus Supplement will
set forth the names of underwriters or agents, if any, any applicable
commissions or discounts and the net proceeds to the Company from any such sale.
See "Plan of Distribution" for possible indemnification arrangements for
underwriters, dealers and agents.
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The date of this Prospectus is , 1995.
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IN CONNECTION WITH THIS OFFERING THE UNDERWRITERS MAY, IF APPLICABLE,
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE CLASS OR SERIES OF THE SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Northeast Regional Office, 7 World Trade Center, Suite 1300, New
York, New York 10048; and Midwest Regional Office, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be modified or superseded, for purposes
of this Prospectus, to the extent that a statement contained herein or in any
subsequently filed document which is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents described above (other than
exhibits unless such exhibits are specifically incorporated by reference into
such documents). Requests for such copies should be directed to Investor
Relations/Corporate Communications, United Cities Gas Company, 5300 Maryland
Way, Brentwood, Tennessee 37027, telephone (615) 373-5310.
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THE COMPANY
The Company was incorporated under the laws of Illinois in 1929 and was
domesticated under the laws of Virginia in 1966. The Company's principal
executive offices are located at 5300 Maryland Way, Brentwood, Tennessee 37027,
and its telephone number is (615) 373-5310.
The Company's predominant business is the distribution of natural gas. As
of December 31, 1994 the Company supplied natural gas service to approximately
301,000 customers. In addition to its business of natural gas distribution, the
Company sells and installs gas appliances and performs certain appliance service
work.
The Company has two wholly-owned subsidiaries. One subsidiary, UCG Energy
Corporation ("UCG Energy"), incorporated under the laws of Delaware in 1965, is
a broker procuring natural gas for the Company, certain of the Company's
industrial customers, local distribution companies and others, and is engaged in
exploration and production activities. In addition, UCG Energy leases
appliances, real estate, equipment and vehicles to the Company and others.
UCG Energy has two wholly-owned subsidiaries, United Cities Propane Gas of
Tennessee, Inc. and UCG Leasing, Inc. United Cities Propane Gas of Tennessee,
Inc., incorporated under the laws of Tennessee in 1976, is engaged in the retail
distribution of propane (LP) gas. As of December 31, 1994, the propane operation
served approximately 22,000 customers in Tennessee, Virginia and North Carolina.
UCG Leasing, Inc. was incorporated under the laws of Georgia in 1987 and leases
vehicles, equipment and real estate to the Company.
The other subsidiary, United Cities Gas Storage Company ("UCG Storage"),
was formed in 1989 to provide natural gas storage services. A natural gas
storage field was purchased in Kentucky to supplement natural gas used by the
Company's customers in Tennessee and Illinois. In addition, natural gas storage
fields located in Kansas and included in the Company's 1989 acquisition of Union
Gas System, Inc. were sold to UCG Storage. These fields are used to supplement
natural gas used by the Company's Kansas customers.
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USE OF PROCEEDS
The net proceeds to be received by the Company from the issuance and sale
of the Securities offered hereby may be used for one or more of the following
purposes: for the repayment of all or a portion of the Company's short-term debt
outstanding at the time of issuance of the Securities; for the purchase,
acquisition and construction of additional properties and facilities, as well as
improvements to the Company's existing utility plant; for the refunding of
maturing long-term debt and satisfaction of sinking fund requirements; for the
refunding of higher-coupon long-term debt as market conditions permit; and for
general corporate purposes. Reference is made to the applicable Prospectus
Supplement for a description of the long-term debt, if any, to be refunded with
the net proceeds from any issuance and sale of the Securities offered hereby.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of consolidated earnings to fixed charges for the Company and
its subsidiaries for the twelve months ended March 31, 1995 and for each of the
years ended December 31, 1994 through 1990 are 2.22, 2.30, 2.21, 2.17, 1.92 and
1.42, respectively. Earnings consist of net income to which have been added
fixed charges and taxes on income. Fixed charges consist of interest on
long-term debt and amortization of debt discount.
DESCRIPTION OF DEBT SECURITIES
DESCRIPTION OF BONDS
General
The Bonds will be issued under the Indenture of Mortgage dated as of July
15, 1959 (the "Original Mortgage") from the Company to Bank of America Illinois
(successor to Continental Bank, National Association) (the "Mortgage Trustee")
and Robert J. Donahue (successor to M.J. Kruger), as Trustees (the Mortgage
Trustee and Robert J. Donahue are hereinafter referred to as the "Mortgage
Trustees"), as amended and supplemented, and as to be further supplemented by
one or more supplemental indentures creating the Bonds (the "Supplemental
Indenture"). The Original Mortgage as so amended and supplemented is hereinafter
referred to as the "Mortgage" and all bonds issued under the Mortgage are
hereinafter referred to as the "bonds." The statements herein concerning the
Bonds do not purport to be complete and are qualified in their entirety by
express reference to the Mortgage and to the definitions therein of the terms
used herein. References to article and section numbers under this heading are to
articles and section numbers in the Mortgage.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Offered Bonds (among others): (i) the designation and series of the
Offered Bonds; (ii) the percentage or percentages of their principal amount at
which such Offered Bonds will be issued; (iii) the date or dates on which the
Offered Bonds will mature; (iv) the rate or rates at which the Offered Bonds
will bear interest; (v) the times at which such interest will be payable; (vi)
the dates, if any, on which and the price or prices at which the Offered Bonds
will, pursuant to any mandatory sinking fund provisions, or may, pursuant to any
optional sinking fund provisions, be redeemed by the Company, and the other
detailed terms and provisions of any such sinking funds; (vii) the date, if any,
after which and the price or prices at which the Offered Bonds will, pursuant to
any optional redemption provisions, be redeemable at the option of the Company
or the holders thereof and the other detailed terms and provisions of such
optional redemptions; and (viii) any other special terms or provisions not
inconsistent with the terms of the Mortgage.
The Mortgage does not contain any covenants or other provisions that are
specifically intended to afford holders of the bonds special protection in the
event of a highly leveraged transaction.
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Form and Exchangeability
The Bonds will be issued only as fully registered bonds without coupons, in
denominations of $1,000 and multiples thereof. The Bonds will be exchangeable
for a like aggregate principal amount of other Bonds of the same series of
different authorized denominations, and may be transferred, in each case upon
surrender thereof at the principal corporate trust office of the Mortgage
Trustee in Chicago, Illinois. The Company may require the payment of a sum
sufficient to pay any stamp tax or other governmental charge imposed in relation
to any transfer or exchange of the Bonds, and in addition thereto, such charge
for any such transfer or exchange as it may deem proper, not exceeding $2.00 for
each new Bond issued upon such transfer or exchange.
Interest and Payment
Reference is made to the applicable Prospectus Supplement for the interest
rate or rates, if any, of the Offered Bonds and the date or dates on which such
interest is payable. Unless otherwise specified in the applicable Prospectus
Supplement, principal and interest on the Bonds are payable to the registered
holder thereof at the principal corporate trust office of the Mortgage Trustee
in Chicago, Illinois.
Redemption
The Supplemental Indenture will provide that the Bonds are redeemable, in
whole or in part, at any time upon notice as required in the Mortgage through
the application of cash deposited with the Mortgage Trustee in accordance with
the provisions of Section 3.14 of the Original Mortgage (relating to insurance
and certain other compensatory proceeds) or Section 7.02, 7.03 or 7.04 of the
Original Mortgage (relating to proceeds from the disposition, release or
governmental taking of mortgaged properties) at 100% of the principal amount
thereof, together with interest accrued thereon, if any, to the date of
redemption. (Art. 2, Sec. 2.03 of the Supplemental Indenture)
Any additional terms for the optional or mandatory redemption of Offered
Bonds will be set forth in the applicable Prospectus Supplement. Except as shall
otherwise be provided with respect to Offered Bonds redeemable at the option of
the holder thereof, such Offered Bonds will be redeemable only upon notice, by
mail, not less than 30 days and not more than 90 days prior to the date fixed
for redemption, postage prepaid, to each registered holder of Offered Bonds to
be redeemed. (Art. 4, Section 4.03 of the Original Mortgage) If less than all of
the Offered Bonds of any series are to be redeemed, the particular Offered Bonds
to be redeemed will be selected by such methods as the Mortgage Trustee deems
fair and appropriate. (Art. 3, Sec. 3.02 of the Supplemental Indenture)
Issuance of Additional Bonds
The Company may issue additional bonds:
(a) to a principal amount equal to 60% of the cost or fair value,
whichever is less, of net unbonded Property Additions (subject to
deductions if such net Property Additions secure Prior Lien Bonds or were
made the basis for the release of either property or cash under the
Mortgage) evidenced to the Mortgage Trustee for such purpose;
(b) to a principal amount equal to the amount of cash deposited with
the Mortgage Trustee for such purpose; and
(c) to a principal amount equal to the principal amount of any bonds
of any series voluntarily retired by the Company, by purchase or
redemption, and bonds retired by payment at their stated maturity; provided
that in case bonds described in clauses (a) and (b) above are issued, or
bonds described in this clause (c) are to be certified and delivered more
than one year prior to the maturity date of the bonds to be refunded and
are to bear a higher rate of interest than the bonds to be refunded, Net
Earnings for any period of 12 consecutive months within a 15 month period
ending not more than 60 days prior to the date of such proposed issue shall
have been at least equal to 175% of the interest requirements for a period
of
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12 months on all bonds (including Prior Lien Bonds) to be outstanding
immediately thereafter. (Art. 2, Sec. 2.02 of the Original Mortgage; Art.
5, Sec. 5.01 of the Nineteenth Supp. Ind.)
For purposes of the Mortgage, "Property Additions" is defined as all
property, with certain exceptions, of a fixed or permanent nature constructed or
acquired by the Company after July 31, 1959 and used or useful in the business
of providing natural gas service including all plants and properties constructed
or acquired and used solely for the purpose of furnishing other than natural gas
to augment the supply of natural gas in order to effect "peak shaving," all
property of the aforementioned described character in process of construction to
the extent that the Company has incurred liability therefor, and proper charges
for overhead in accordance with generally accepted principles of accounting, and
all Cushion Gas (defined as that minimum volume of natural gas necessary to be
retained in a gas storage reservoir owned by the Company in order to maintain
the integrity and viability of the geological strata and the horizons of a gas
reservoir for the storage of natural gas); provided, however, that until the
date on which no bonds of any series issued under the Mortgage and outstanding
immediately prior to January 26, 1990 are outstanding, the amount of Cushion Gas
which shall be included as Property Additions shall at no time exceed 10% of
Property Additions. (Art. 12, Sec. 12.05 of the Original Mortgage; Art. 5, Sec.
5.01 of the Nineteenth Supp. Ind.)
Two series of bonds issued under the Mortgage and outstanding immediately
prior to January 26, 1990 remain outstanding on May 31, 1995.
"Net Earnings" is defined, for any period, as the amount obtained by
deducting from the gross earnings derived from the operation of the mortgaged
property all operating expenses of the Company, and by adding to the remainder
all net non-operating earnings not in excess of 15% of such remainder; provided,
however, that the Supplemental Indenture will provide that each holder of the
Bonds and bonds of any subsequent series shall agree that effective on the
earlier of (i) the date on which the holders of the bonds of each series issued
under the Mortgage and outstanding immediately prior to January 26, 1990 consent
to such amendment, or (ii) the date on which no bonds of any series issued under
the Mortgage and outstanding immediately prior to January 26, 1990 remain
outstanding, the definition of Net Earnings shall be amended to replace the
words "not in excess of 15% of such remainder" with "other than any portion of
such earnings which represents the net gain arising from any sale or other
disposition of capital assets, or any other items, which would, in accordance
with generally accepted accounting principles, require separate treatment or
classification in the preparation of the Company's financial statements as
'extraordinary items'." (Art. 12, Sec. 12.05 of the Original Mortgage; Art. 5,
Sec. 5.01 of the Supplemental Indenture)
As of March 31, 1995, unbonded net Property Additions available as a basis
for the issuance of bonds were approximately $366,479,000 and unbonded bond
retirements available as a basis for the issuance of bonds were approximately
$292,607,000. It is expected that the Bonds will be issued primarily upon the
basis of unbonded net Property Additions.
Withdrawal of Certain Cash
Cash deposited with the Mortgage Trustee as a basis for the issuance of
additional bonds may be withdrawn by the Company against net unbonded Property
Additions (subject to deductions if such net Property Additions secure Prior
Lien Bonds or were made the basis for the release of either property or cash
under the Mortgage) in an amount equal to at least 166 2/3% of the amount of
such cash. (Art. 2, Sec. 2.04 of the Original Mortgage)
Cash deposited with the Mortgage Trustee pursuant to Section 3.14, 7.02,
7.03 or 7.04 of the Original Mortgage may be withdrawn by the Company against
gross unbonded Property Additions (subject to deductions if such gross Property
Additions secure Prior Lien Bonds or were made the basis for the release of
either property or cash under the Mortgage) in an amount equal to 100% of the
amount of such cash; provided, however, such cash shall be withdrawn by the
Company within twelve months, if such cash was deposited pursuant to Section
3.14 (relating to insurance and certain other compensatory proceeds), or two
years, if such cash was deposited pursuant to Section 7.02, 7.03 or 7.04
(relating to proceeds from the disposition, release or governmental taking of
mortgaged properties), from the date of deposit of such cash if
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the Company shall have gross Property Additions available for such purpose.
(Art. 3 and 7 of the Original Mortgage; Art. 4, Sec. 4.02 of the Supplemental
Indenture)
Limitations on Liens
The Company will not, directly or indirectly, create, assume, incur or
suffer to exist any lien upon any of its property or assets, whether now owned
or hereafter acquired, other than the lien of the Mortgage and permitted liens
and encumbrances described in the Mortgage, including, without limitation, Prior
Liens subject to the restrictions described below. (Art. 3, Sec. 3.09 of the
Original Mortgage)
The Mortgage provides that the Company will not acquire any property
subject to Prior Liens if the aggregate amount of Prior Lien Bonds outstanding
after such acquisition will:
(i) be in excess of 10% of the aggregate amount of bonds at the time
outstanding under the Mortgage, or
(ii) exceed 60% of the cost or fair value of such property, whichever
is less, unless there shall be filed with the Mortgage Trustee a
certificate evidencing gross Property Additions in an amount not less than
166-2/3% of such excess and all Property Additions certified for such
purpose shall constitute Funded Property. (Art. 3, Sec. 3.17 of the
Original Mortgage)
For purposes of the Mortgage, "Prior Liens" are defined as any mortgages or
other instruments constituting a lien upon property acquired by the Company
prior to the lien of the Mortgage. "Prior Lien Bonds" are defined as any bonds,
notes or other evidences of indebtedness secured by Prior Liens. (Art. 12, Sec.
12.05 of the Original Mortgage)
Maintenance of Net Earnings
The Company will, so long as the bonds of any series issued and outstanding
under the Mortgage immediately prior to January 26, 1990 remain outstanding,
maintain its Net Earnings for any period of 12 consecutive months within a 15
month period ending March 31 and September 30 of each year, at least equal to
175% of the interest requirements for a period of 12 months on all bonds
(including Prior Lien Bonds) outstanding as of such March 31 and September 30 of
each year. (Art. 5, Sec. 5.01 of the Nineteenth Supp. Ind.)
Dividend Restrictions
For so long as any of the bonds issued under the Mortgage prior to January
26, 1990 remain outstanding, the Company will not declare or pay any dividends
or directly or indirectly purchase, redeem or otherwise acquire any shares of
Common Stock (except out of the net cash proceeds derived from the issuance of
other shares of Common Stock), or make any other distribution on shares of
Common Stock (such non-excepted declarations, payments, purchases, redemptions
or other acquisitions and distributions, hereinafter referred to as "Restricted
Payments"), unless after giving effect thereto the aggregate amount of all such
Restricted Payments made during the period from December 31, 1985 to and
including the date of the making of the Restricted Payment in question does not
exceed the sum of $9,000,000 plus (or minus in case of a deficit) the amount of
Consolidated Net Income Available for Common Stock Dividends for such period.
The supplemental indentures, including, unless otherwise stated in the
applicable Prospectus Supplement, the Supplemental Indenture, creating each
series of bonds issued on and after January 26, 1990 contain or will contain a
similar dividend covenant but prohibit the making of Restricted Payments during
the period from December 31, 1988 in excess of the sum of $15,038,000 plus (or
minus in case of a deficit) the amount of Consolidated Net Income Available for
Common Stock Dividends for such period.
"Consolidated Net Income Available for Common Stock Dividends" for any
period is defined under the Mortgage as the net income of the Company and its
subsidiaries for such period available for dividends on capital stock, after
deducting therefrom dividends paid and accrued during such period on preferred
stock, determined on a consolidated basis in accordance with generally accepted
accounting principles; provided, however, that no effect shall be given to any
gains or losses or other additions or deductions arising by reason of
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the issue, purchase, sale, conversion or retirement by the Company or any
subsidiary of any of its or their securities, or arising by reason of any
purchases, sales, write-ups, write-downs, increase or decrease in book value, or
other transactions or changes in respect of capital assets, tangible or
intangible, and deductions for income taxes shall be adjusted by giving effect
to any change in the amount thereof resulting from the elimination of any of the
capital transactions or changes referred to above. (Art. 5 of the Fourteenth and
Eighteenth Supplemental Indentures; Art. 4 of the Fifteenth, Sixteenth,
Seventeenth, Nineteenth and Twentieth Supplemental Indentures; Art. 4, Sec. 4.03
of the Supplemental Indenture)
Under the foregoing provisions, none of the Company's retained earnings at
March 31, 1995 was unavailable to pay dividends on the Common Stock.
Merger, Consolidation and Sale
The Mortgage does not prevent any consolidation or merger of the Company
with or into, or any conveyance or transfer of all or substantially all of the
mortgaged property as an entirety to, any corporation lawfully entitled to
acquire and operate the same; unless such consolidation, merger, conveyance or
transfer shall impair the lien of the Mortgage, or any of the rights or powers
of the Mortgage Trustees or the bondholders thereunder. (Art. 8, Sec. 8.01 of
the Original Mortgage)
In the Supplemental Indenture, the Company will covenant that so long as
any of the Bonds remain outstanding, any of the provisions of Article 8 of the
Original Mortgage to the contrary notwithstanding, the Company will not
consolidate or merge with or into, or convey or transfer all or substantially
all of the mortgaged property to, any other entity if at the time thereof or
after giving effect thereto any event of default shall or would exist under the
Mortgage. (Art. 4, Sec. 4.04 of the Supplemental Indenture)
Modification of the Mortgage
The Mortgage may be modified with the written consent of the holders of not
less than 66 2/3% in aggregate principal amount of each series of bonds then
outstanding, and not less than 66 2/3% in principal amount of the bonds of any
particular series then outstanding can waive any right specifically applicable
to that series, provided that no such modification or waiver shall be effective
against any bondholder that changes the obligation of the Company in respect of
the amount or time of the payment of principal, interest, or premium on any bond
outstanding, or reduces the percentage in principal amount of the bonds required
to approve any such modification or waiver, or subordinates the bonds or the
lien of the Mortgage in favor of other creditors of the Company, without the
consent of such bondholder; and no modification of any of the rights or
obligations of the Mortgage Trustees under the Mortgage shall be effective
against the Mortgage Trustees without their consent. (Art. 12, Sec. 12.08 of the
Original Mortgage)
The Mortgage may be modified without the written consent of the holders of
the bonds to set out the provisions of an additional series of bonds, to subject
other property to the lien of the Mortgage, to add further covenants and
conditions of the Company for the further security of the bondholders, to limit
the amount of any bond or all bonds of any series that may be issued under the
Mortgage, to conform to the requirements of the Trust Indenture Act of 1939 and
the regulations thereunder as the same may from time to time be amended, or to
cure any ambiguity or to correct any defective or inconsistent provisions in the
Mortgage or in any supplemental indenture thereto. (Art. 12, Sec. 12.08 of the
Original Mortgage)
Default and Notice Thereof
The Mortgage Trustees or the holders of a majority in aggregate principal
amount of bonds outstanding may declare the principal and interest of the bonds
immediately due and payable if any of the following events of default exist: (a)
a default in the payment of any installment of interest on any of the bonds when
due and payable and such default continues for a period of 10 days; (b) a
default in the payment of any installment of sinking fund payments when due and
payable; (c) a default in the payment of the principal of or premium on any bond
when due and payable whether at its stated maturity, by call for redemption, by
declaration or otherwise; (d) a violation of covenants or conditions in the
Mortgage or any bonds which have not been cured within 60 days after written
notice by the Mortgage Trustee; or (e) the insolvency of the Company or the
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occurrence of certain bankruptcy, insolvency or receivership proceedings;
provided, however, at any time before a sale of the mortgaged property, the
holders of a majority in aggregate principal amount of bonds outstanding may
annul such declaration. (Art. 6 of the Original Mortgage) The holders of a
majority in aggregate principal amount of bonds outstanding have the right to
direct and control the time, method and place of any action of the Mortgage
Trustees to be taken upon the occurrence of a default. (Art. 6, Sec. 6.08 of the
Original Mortgage) The Mortgage Trustees are not required to act under the
Mortgage, whether or not requested to do so by the bondholders, unless they
shall have received indemnity satisfactory to them. (Art. 10, Sec. 10.01 of the
Original Mortgage) The Mortgage Trustees may withhold notice of an event of
default (except in the payment of principal, interest or sinking fund
installments on any bond) if they determine in good faith that the withholding
of such notice is in the interests of the holders of the bonds.
The Company is required to file annually with the Mortgage Trustee a
certificate as to compliance with all terms and conditions of the Mortgage.
(Art. 3, Sec. 3.08 of the Original Mortgage)
Defeasance
The Mortgage provides that when the principal of all bonds at the time
outstanding under the Mortgage shall have become payable, or will become payable
within six months, by their terms, on redemption, by declaration or in any other
manner, and the Company irrevocably deposits or causes to be deposited with the
Mortgage Trustee for the account of the holders of such bonds, a sum sufficient,
with any other moneys then held by the Mortgage Trustee applicable to that
purpose, to pay the whole amount of the principal, premium, if any, and interest
due or to become due on all of the bonds then outstanding, immediately upon such
irrevocable deposit and, in case of redemption, upon furnishing to the Mortgage
Trustee proof satisfactory to the Mortgage Trustee that the notice of redemption
has been given or waived as provided in the Mortgage or when there shall be or
shall have been delivered to the Mortgage Trustee, for immediate cancellation,
all bonds then outstanding, and, in such case, immediately upon such delivery,
then and in any such case the bonds shall cease to be entitled to any benefit or
security under the Mortgage except the right to receive payment of the moneys
deposited and held for the payment thereof and the lien of the Mortgage shall be
released and/or the mortgaged property shall revert to the Company. (Art. 11,
Sec. 11.01 of the Original Mortgage)
Security and Priority
The Bonds will rank pari passu as to security with the bonds of the other
series outstanding under the Mortgage, which, in the opinion of counsel to the
Company, is a valid first lien on substantially all the properties, franchises
and contract rights used by or useful to the Company in the operation of its
business, whether now owned or hereafter acquired by the Company (except as
noted below), subject to permitted liens and encumbrances described in the
Mortgage and, with respect to property hereafter acquired, to Prior Liens.
There are excepted from the lien of the Mortgage all cash, notes and bills,
accounts receivable, not specifically pledged, all stocks, bonds and securities
not specifically pledged, all merchandise held for resale and consumable
materials and supplies (other than Cushion Gas), all automotive equipment and
all inventory of pipe, meters and equipment. (Granting Clauses of the Original
Mortgage; Art. 5, Sec. 5.01 of the Nineteenth Supp. Ind.)
The Mortgage contains provisions subjecting to the lien thereof all
property, real, personal and mixed (other than property of the kind excepted
from the lien as described above) acquired by the Company after the date of the
delivery of the Original Mortgage.
Release and Substitution of Property
Unless an event of default shall have occurred and is continuing, the
Company may sell, exchange or dispose of, free from the lien of the Mortgage,
any property (other than real property) which has become worn out,
unserviceable, undesirable or unnecessary for use in the conduct of its
business; provided that the Company shall replace such property, if necessary
for the efficient and proper operation of its business, by other property of
equal or greater value or utility to the Company, or if not so necessary, the
Company shall
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deposit the proceeds of the disposition of such property with the Mortgage
Trustee. (Art. 7, Sec. 7.02 of the Original Mortgage)
DESCRIPTION OF NOTES
General
The Notes will be issued under an Indenture (the "Indenture") to be entered
into between the Company and Bank of America Illinois, as trustee (the
"Indenture Trustee"). The summaries under this heading do not purport to be
complete and are qualified in their entirety by express reference to the
detailed provisions of the Indenture. References to article and section numbers
under this heading are to articles and section numbers in the Indenture. Terms
used under this heading or in any Prospectus Supplement relating to the Offered
Notes which are defined under this heading are so defined solely with reference
to the Offered Notes.
The Indenture provides that debt securities (including both interest
bearing and original issue discount securities), including the Notes, may be
issued thereunder, without limitation as to the aggregate principal amount.
(Art. Three, Sec. 301) The Notes and all other debt securities issued under the
Indenture are collectively referred to herein as the "Indenture Securities." The
Indenture does not limit the amount of other debt, secured or unsecured, which
may be issued by the Company. The Notes will rank pari passu with all other
unsecured indebtedness of the Company; provided, however, that if specified in
the applicable Prospectus Supplement, a particular series of Offered Notes may
be collateralized by the Company's First Mortgage Bonds. See "Description of
Capital Stock -- Restriction on Issuance of Funded Debt" for a description of
provisions contained in the Company's Amended Articles of Incorporation, as
amended, which may restrict the Company's ability to issue Indenture Securities
under the Indenture.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Offered Notes (among others): (i) the title of such Offered Notes;
(ii) the limit, if any, upon the aggregate principal amount of such Offered
Notes; (iii) the rate or rates, or the method of determination thereof, at which
such Offered Notes will bear interest, if any, and the date or dates from which
such interest will accrue; (iv) the dates on which such interest will be payable
(each an "Interest Payment Date") and the regular record dates for the interest
payable on such Interest Payment Dates; (v) the obligation, if any, of the
Company to redeem or purchase such Offered Notes pursuant to any sinking fund or
analogous provisions or at the option of the holder thereof and the periods
within which or the dates on which, the prices at which and the terms and
conditions upon which such Offered Notes will be redeemed or purchased, in whole
or in part, pursuant to such obligation; (vi) the periods within which or the
dates on which, the prices at which and the terms and conditions upon which such
Offered Notes may be redeemed, if any, in whole or in part, at the option of the
Company; (vii) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which such Offered Notes will be issuable; (viii)
whether such Offered Notes are to be issued in whole or in part in the form of
one or more global Notes and, if so, the identity of the depositary for such
global Notes; (ix) the terms, if any, under which the Offered Notes may be
convertible into Common Stock; (x) whether such Offered Notes will be
collateralized by the Company's First Mortgage Bonds and (xi) any other terms of
such Offered Notes not inconsistent with the provisions of the Indenture.
The Indenture does not contain any covenants or other provisions that are
specifically intended to afford holders of the Notes special protection in the
event of a highly leveraged transaction.
Payment of Notes; Transfers; Exchanges
Except as may be provided in the applicable Prospectus Supplement,
interest, if any, on each Offered Note payable on each Interest Payment Date
will be paid by check mailed to the person in whose name such Note is registered
(the registered holder of any Indenture Security being herein called a "Holder")
as of the close of business on the regular record date relating to such Interest
Payment Date; provided, however, that interest payable at maturity (whether at
stated maturity, upon redemption or otherwise, hereinafter "Maturity") will be
paid to the person to whom principal is paid. However, if there has been a
default in the payment of interest on any Note, such defaulted interest may be
payable to the Holder of such Note as of the
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close of business on a date selected by the Indenture Trustee not more than 15
days and not less than 10 days prior to the date proposed by the Company for
payment of such defaulted interest.
Principal of and premium, if any, and interest, if any, on the Notes at
maturity will be payable upon presentation of the Notes at the principal
corporate trust office of the Indenture Trustee in Chicago, Illinois. The
Company may change the place of payment on the Notes, may appoint one or more
paying agents (including the Company) and may remove any paying agent, all in
its discretion. The applicable Prospectus Supplement will identify any new place
of payment and any paying agent appointed, and will disclose the removal of any
paying agent effected, prior to the date of such Prospectus Supplement.
The transfer of Notes may be registered, and Notes may be exchanged for
other Notes of authorized denominations and of like tenor and aggregate
principal amount, at the principal corporate trust office of the Indenture
Trustee in Chicago, Illinois. The Company may change the place for registration
of transfer of the Notes, may appoint one or more additional security registrars
or transfer agents (including the Company) and may remove any security registrar
or transfer agent, all in its discretion. The applicable Prospectus Supplement
will identify any new place for registration of transfer and any additional
security registrar or transfer agent appointed, and will disclose the removal of
any security registrar or transfer agent effected, prior to the date of such
Prospectus Supplement. No service charge will be made for any transfer or
exchange of the Notes, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
(Art. Three, Sec. 305) The Company will not be required (a) to issue, register
the transfer of or exchange Notes during a period of 15 days prior to giving any
notice of redemption or (b) to issue, register the transfer of or exchange any
Note selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.
Redemption
Any terms for the optional or mandatory redemption of Offered Notes will be
set forth in the applicable Prospectus Supplement. Except as may otherwise be
provided in the applicable Prospectus Supplement with respect to Offered Notes
redeemable at the option of the Holder, such Offered Notes will be redeemable
only upon notice, by mail, not less than 30 or more than 60 days prior to the
date fixed for redemption and, if less than all of the Offered Notes of any
series, or any tranche thereof, are to be redeemed, the particular Offered Notes
will be selected by such methods as the Indenture Trustee deems fair and
appropriate. (Art. Four, Sec. 403 and 404)
Any notice of optional redemption may state that such redemption shall be
conditional upon the receipt by the Indenture Trustee, on or prior to the date
fixed for such redemption, of money sufficient to pay the principal of and
premium, if any, and interest, if any, on such Notes and that if such money has
not been so received, such notice will be of no force or effect and the Company
will not be required to redeem such Notes. (Art. Four, Sec. 404)
Conversion Rights
The applicable Prospectus Supplement will provide whether the Offered Notes
will consist of convertible Notes and, if so, the initial conversion price per
share at which such convertible Notes will be convertible into Common Stock.
Subject to prior redemption of the convertible Notes, the Holders of such Notes
will be entitled at any time on or before the close of business on the maturity
date thereof to convert such Notes (or, in the case of convertible Notes of
denominations in excess of $1,000 any portion of which is $1,000 or an integral
multiple of $1,000) into shares of Common Stock at the initial conversion price
set forth in the applicable Prospectus Supplement. No adjustment will be made on
conversion of any convertible Notes for interest accrued thereon or, except as
set forth below, for dividends on any securities issued upon such conversion.
In order to exercise the right of conversion, the Holder of any such
convertible Notes must surrender such convertible Notes to the Company at any
office or agency of the Company maintained for such purpose. The convertible
Notes to be surrendered must be accompanied by written notice to the Company
that the Holder elects to convert such Notes.
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If any convertible Note, whether or not called for redemption, is converted
between a record date for the payment of interest and the next succeeding
Interest Payment Date, such convertible Note must be accompanied by funds
payable to the Company equal to the interest payable to the registered Holder on
such Interest Payment Date on the principal amount so converted. In the case of
any convertible Note or portion thereof called for redemption, conversion rights
expire at the close of business on the Redemption Date, even if such redemption
occurs at a time when conversion of such Note or portion thereof is in the best
interests of the Holder.
No fractional shares of Common Stock will be issued upon conversion but, in
lieu thereof, an adjustment in cash will be made based on the market price at
the close of business on the date of conversion.
The Conversion Price will be subject to adjustment in the event of: (i) the
payment of certain stock dividends on the Common Stock; (ii) the issuance of
certain rights or warrants to all holders of the Common Stock entitling them to
subscribe for or purchase Common Stock at a price less than the market price;
(iii) the subdivision of Common Stock into a greater number of shares of Common
Stock; (iv) the distribution by the Company to all holders of the Common Stock
of evidences of indebtedness or assets of the Company (excluding rights or
warrants and any dividends or distributions mentioned above); and (v) the
reclassification of Common Stock into other securities. (Art. Five)
Events of Default
The following constitute Events of Default under the Indenture with respect
to each series of Indenture Securities outstanding thereunder:
(a) failure to pay any interest on any Indenture Security of such
series within 30 days after the same becomes due and payable;
(b) failure to pay any principal of any Indenture Security of such
series when the same becomes due and payable;
(c) failure to perform or breach of any covenant or warranty of the
Company in the Indenture (other than a covenant or warranty of the Company
in the Indenture solely for the benefit of one or more series of Indenture
Securities other than the Notes), for 60 days after written notice to the
Company by the Indenture Trustee, or to the Company and the Indenture
Trustee by the Holders of at least 25% in principal amount of the Indenture
Securities of such series outstanding under the Indenture as provided in
the Indenture;
(d) an event of default as defined in any mortgage, indenture or
instrument under which there may be issued any indebtedness for borrowed
money of the Company (including bonds issued under the Mortgage and
Indenture Securities of other series issued under the Indenture), which
event of default either (i) results in such indebtedness in an amount in
excess of $15,000,000 becoming or being declared due and payable prior to
maturity or (ii) results from the failure by the Company to make any
payment in excess of $15,000,000 of the principal of such indebtedness on
the date it becomes due and payable (after the expiration of any applicable
grace periods), and such acceleration shall not have been rescinded or
annulled or such failure to make payment shall not have been cured, as the
case may be, or such indebtedness shall not have been otherwise discharged,
within 90 days after notice shall have been given as provided in the
Indenture;
(e) certain events of bankruptcy, insolvency or reorganization with
respect to the Company; and
(f) any other Event of Default specified with respect to Indenture
Securities of such series. (Art. Eight, Sec. 801)
No Event of Default with respect to the Notes necessarily constitutes an Event
of Default with respect to the Indenture Securities of any other series issued
under the Indenture.
Remedies
If an Event of Default with respect to any series of Indenture Securities
occurs and is continuing, then either the Indenture Trustee or the Holders of
not less than 25% in principal amount of the outstanding Indenture Securities of
such series may declare the principal amount (or if the Indenture Securities of
such
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series are discount notes or similar Indenture Securities, such portion of the
principal amount of such Indenture Securities as may be specified in the terms
thereof) of all of the Indenture Securities of such series to be due and payable
immediately; provided, however, that if an Event of Default occurs and is
continuing with respect to more than one series of Indenture Securities, the
Indenture Trustee or the Holders of not less than 25% in aggregate principal
amount of the outstanding Indenture Securities of all such series, considered as
one class, may make such declaration of acceleration and not the Holders of the
Indenture Securities of any one of such series.
At any time after the declaration of acceleration with respect to the
Indenture Securities of any series has been made and before a judgment or decree
for payment of the money due has been obtained, the Event or Events of Default
giving rise to such declaration of acceleration will, without further act, be
deemed to have been waived, and such declaration and its consequences will,
without further act, be deemed to have been rescinded and annulled, if
(a) the Company has paid or deposited with the Indenture Trustee a sum
sufficient to pay
(1) all overdue interest on all Indenture Securities of such
series;
(2) the principal of and premium, if any, on any Indenture
Securities of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Indenture Securities;
(3) interest upon overdue interest at the rate or rates prescribed
therefor in such Indenture Securities, to the extent that payment of
such interest is lawful; and
(4) all amounts due to the Indenture Trustee under the Indenture;
and
(b) any other Event or Events of Default with respect to the Indenture
Securities of such series, other than the nonpayment of the principal of
the Indenture Securities of such series which has become due solely by such
declaration of acceleration, have been cured or waived as provided in the
Indenture. (Art. Eight, Sec. 802)
If an Event of Default with respect to the Indenture Securities of any
series occurs and is continuing, the Holders of a majority in principal amount
of the outstanding Indenture Securities of such series will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power conferred
on the Indenture Trustee, with respect to the Indenture Securities of such
series; provided, however, that if an Event of Default occurs and is continuing
with respect to more than one series of Indenture Securities, the Holders of a
majority in aggregate principal amount of the outstanding Indenture Securities
of all such series, considered as one class, will have the right to make such
direction, and not the Holders of the Indenture Securities of any one of such
series. (Art. Eight, Sec. 812) The Indenture Trustee is not required to exercise
any of the rights and powers vested in it under the Indenture at the request or
direction of any Holder unless such Holder shall have offered to the Indenture
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction. (Art. Nine, Sec. 903) The right of a Holder of any Indenture Security
of such series to institute a proceeding with respect to the Indenture is
subject to certain conditions precedent, but each Holder has an absolute right
to receive payment of principal and premium, if any, and interest, if any, when
due and to institute suit for the enforcement of any such payment. (Art. Eight,
Sec. 807 and 808) The Indenture provides that the Indenture Trustee, within 90
days after the occurrence of any default thereunder with respect to the
Indenture Securities of a series, is required to give the Holders of the
Indenture Securities of such series notice of any default known to it, unless
cured or waived; provided, however, that, except in the case of a default in the
payment of principal of or premium, if any, or interest, if any, on any
Indenture Securities of such series, the Indenture Trustee may withhold such
notice if the Indenture Trustee determines that it is in the interest of such
Holders to do so; and provided, further, that in the case of a default of the
character specified above in clause (c) under "Events of Default," no such
notice shall be given to such Holders until at least 75 days after the
occurrence thereof. (Art. Nine, Sec. 902)
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The Company will be required to furnish annually to the Indenture Trustee a
statement as to the performance by the Company of certain of its obligations
under the Indenture and as to any default in such performance. (Art. Six, Sec.
606)
Covenants; Consolidation, Merger, etc.
The Company will cause (or, with respect to property owned in common with
others, make reasonable effort to cause) all its properties used or useful in
the conduct of its business to be maintained and kept in good condition, repair
and working order and will cause (or, with respect to property owned in common
with others, make reasonable effort to cause) to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as, in the
judgment of the Company, may be necessary so that the business carried on in
connection therewith may be properly conducted; provided, however, that the
foregoing shall not prevent the Company from discontinuing, or causing the
discontinuance of, the operation and maintenance of any of its properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business. (Art. Six, Sec. 605)
Subject to the provisions described in the next paragraph, the Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and rights (charter and statutory) and
franchises of the Company; provided, however, that the Company not be required
to preserve any such right or franchise if, in the judgment of the Company,
preservation thereof is no longer desirable in the conduct of the business of
the Company and the loss thereof will not adversely affect the interests of the
Holders in any material respect. (Art. Six, Sec. 604)
The Company will not consolidate with or merge into any other corporation
or corporations or convey, transfer or lease its properties and assets
substantially as an entirety to any Person or Persons unless (a) the corporation
or corporations formed by such consolidation or into which the Company is merged
or the Person or Persons which acquires by conveyance or transfer, or which
leases, the property and assets of the Company substantially as an entirety,
expressly assumes, by supplemental indenture, the due and punctual payment of
the principal of and premium, if any, and interest, if any, on all the Indenture
Securities and the performance of all of the covenants of the Company under the
Indenture, (b) immediately after giving effect to such transactions no Event of
Default, and no event which after notice and lapse of time or both would become
an Event of Default, will have occurred and be continuing, and (c) the Company
will have delivered to the Indenture Trustee an opinion of counsel as provided
in the Indenture. (Art. Eleven, Sec. 1101)
Modification of Indenture
Without the consent of any Holders of Indenture Securities, the Company and
the Indenture Trustee may enter into one or more supplemental indentures for any
of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company in the
Indenture and the Indenture Securities pursuant to a consolidation, merger
or conveyance of substantially all of the Company's assets as described
above; or
(b) to add to the covenants of the Company for the benefit of the
Holders of all or any series of outstanding Indenture Securities or to
surrender any right or power conferred upon the Company by the Indenture;
or
(c) to add any additional Events of Default with respect to all or any
series of outstanding Indenture Securities; or
(d) to change or eliminate any provision of the Indenture or to add
any new provision to the Indenture; provided that if such change,
elimination or addition will adversely affect the interests of the Holders
of Indenture Securities of any series in any material respect, such change,
elimination or addition will become effective with respect to such series
only when there is no Indenture Security of such series remaining
outstanding under the Indenture; or
(e) to provide collateral security for all series of Indenture
Securities; or
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(f) to establish the form or terms of Indenture Securities of any
series as permitted by the Indenture; or
(g) to evidence and provide for the acceptance of the appointment of a
successor Indenture Trustee under the Indenture with respect to the
Indenture Securities of one or more series and to add to or change any of
the provisions of the Indenture as shall be necessary to provide for or to
facilitate the administration of the trusts under the Indenture by more
than one trustee; or
(h) to provide for the procedures required to permit the utilization
of a noncertificated system of registration for any series of Indenture
Securities; or
(i) to change any place where (1) the principal of and premium, if
any, and interest, if any, on Indenture Securities of any series, or any
tranche thereof, shall be payable, (2) any Indenture Securities of any
series, or any tranche thereof, may be surrendered for registration of
transfer, (3) Indenture Securities of any series, or any tranche thereof,
may be surrendered for exchange and (4) notices and demands to or upon the
Company in respect of the Indenture Securities of any series, or any
tranche thereof, and the Indenture may be served; or
(j) to cure any ambiguity or inconsistency or to make any other
provisions with respect to matters and questions arising under the
Indenture, provided such provisions shall not adversely affect the
interests of the Holders of Indenture Securities of any series in any
material respect. (Art. Twelve, Sec. 1201)
Except as described above, the consent of the Holders of not less than a
majority in principal amount of the Indenture Securities of all series then
outstanding under the Indenture, considered as one class, is required for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, the Indenture pursuant to an indenture or supplemental
indenture; provided, however, that if less than all of the series of Indenture
Securities outstanding under the Indenture are directly affected by a
supplemental indenture, then the consent only of the Holders of a majority in
aggregate principal amount of the outstanding Indenture Securities of all series
so directly affected, considered as one class, will be required; and provided,
further, that if the Indenture Securities of any series shall have been issued
in more than one tranche and if the proposed supplemental indenture shall
directly affect the rights of the Holders of Indenture Securities of one or
more, but less than all, of such tranches, then the consent only of the Holders
of a majority in aggregate principal amount of the outstanding Indenture
Securities of all tranches so directly affected, considered as one class, shall
be required; and provided, further, that no such supplemental indenture will,
without the consent of the Holder of each Indenture Security outstanding under
the Indenture of each such series directly affected thereby, (a) change the
stated maturity of, or any installment of principal of or the rate of interest
on (or the amount of any installment of interest on), any Indenture Security, or
reduce the principal thereof or redemption premium thereon, if any, or change
the amount payable upon acceleration of a discount note or method of calculating
the rate of interest thereon, or otherwise modify certain terms of payment of
the principal thereof or interest or yield or premium thereon, (b) reduce the
percentage in principal amount of the Indenture Securities outstanding of such
series required to consent to any supplemental indenture or waiver under the
Indenture or to reduce the requirement for quorum and voting, or (c) modify
certain of the provisions in the Indenture relating to supplemental indentures,
waivers of certain covenants and waivers of past defaults.
A supplemental indenture which changes or eliminates any covenant or other
provision of the Indenture which has expressly been included solely for the
benefit of one or more particular series of Indenture Securities, or which
modifies the rights of the Holders of Indenture Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under the Indenture of the Holders of any other Indenture Securities.
(Art. Twelve, Sec. 1202)
Defeasance
The Indenture Securities of any series, or any portion of the principal
amount thereof, will be deemed to have been paid for purposes of the Indenture
(except as to any surviving rights of registration of transfer or exchange
expressly provided for in the Indenture), and the entire indebtedness of the
Company in respect
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thereof will be deemed to have been satisfied and discharged, if there shall
have been irrevocably deposited with the Indenture Trustee, in trust: (a) money
in the amount which will be sufficient, or (b) Government Obligations (as
defined below), which do not contain provisions permitting the redemption or
other prepayment thereof at the option of the issuer thereof, the principal of
and the interest on which when due, without any regard to reinvestment thereof,
will provide monies which, together with the money, if any, deposited with or
held by the Indenture Trustee, will be sufficient, or (c) a combination of (a)
and (b) which will be sufficient, to pay when due the principal of and premium,
if any, and interest, if any, due and to become due on such Indenture Securities
or portions thereof on and prior to the maturity thereof. (Art. Seven, Sec. 701)
For this purpose, "Government Obligations" include direct obligations of, or
obligations unconditionally guaranteed by, the United States of America entitled
to the benefit of the full faith and credit thereof and certificates, depositary
receipts or other instruments which evidence a direct ownership interest in such
obligations or in any specific interest or principal payments due in respect
thereof.
While there is no legal precedent on point, it is possible that, for
federal income tax purposes, any deposit contemplated in the preceding paragraph
could be treated as a taxable exchange of the related Notes for an issue of
obligations of the trust or a direct interest in the case of securities held in
the trust. In that case, Holders of such Notes would recognize gain or loss as
if the trust obligations or the cash or securities deposited, as the case may
be, had actually been received by them in exchange for their Notes. Such Holders
thereafter would be required to include in income a share of the income, gain or
loss of the trust. The amount so required to be included in income could be
different from the amount that would be includable in the absence of such
deposit. Prospective investors are urged to consult their own tax advisors as to
the specific consequences to them of such deposit.
DESCRIPTION OF CAPITAL STOCK
General
The authorized capital stock of the Company consists of 40,000,000 shares
of Common Stock, without par value and 200,000 shares of Preferred Stock,
without par value (the "Preferred Stock"). For a complete description of the
relative rights and preferences of the Company's capital stock, reference is
made to the Company's Amended Articles of Incorporation, as amended (the
"Articles"), a copy of which is an exhibit to the Registration Statement of
which this Prospectus is a part.
Each share of Common Stock and Preferred Stock has one vote on all matters
upon which shareholders are entitled to vote and all classes vote as a single
class except as provided by law or the Articles. The holders of Common Stock and
Preferred Stock are entitled to cumulative voting for the election of directors.
The Company's Board of Directors is divided into three classes serving staggered
three-year terms.
Of the total number of authorized shares of Common Stock, 11,117,920 were
issued and outstanding on May 25, 1995. In addition, as of May 25, 1995, 202,035
shares of Common Stock were reserved for issuance under the Employee Stock
Purchase Plan, 202,962 shares were reserved for issuance under the Dividend
Reinvestment and Stock Purchase Plan, 193,000 shares were reserved for issuance
under the Long-Term Stock Plan of 1989, 1,009,032 shares were reserved for
issuance under the Customer Stock Purchase Plan, 100,000 shares were reserved
for issuance under the Non-Employee Director Stock Plan, and 81,157 shares were
reserved for issuance under the 401(k) Savings Plan.
The Preferred Stock may be issued from time to time in one or more series,
and the Board of Directors, without further approval of the shareholders, is
authorized to fix the dividend rights and terms, redemption rights and terms,
liquidation preferences, conversion rights, special series voting rights and
sinking fund provisions applicable to each such series of Preferred Stock. If
the Company issues a series of Preferred Stock in the future that has special
voting rights or preferences over the Common Stock with respect to the payment
of dividends and upon the Company's liquidation, dissolution or winding up, the
rights of the holders of the Common Stock may be adversely affected. The
issuance of shares of Preferred Stock could be utilized, under certain
circumstances, in an attempt to prevent an acquisition of the Company and may
adversely affect the voting and other rights of the holders of Common Stock. As
of May 31, 1995, there were no issued and outstanding shares of Preferred Stock.
16
<PAGE> 18
Dividend Reinvestment and Stock Purchase Plan
The Company has a Dividend Reinvestment and Stock Purchase Plan (the
"Plan") under which participating shareholders may have cash dividends on all or
a portion of their shares of Common Stock automatically reinvested and/or may
invest optional cash payments of not less than $25 or more than $10,000 per
quarter to purchase additional shares of Common Stock. Under the Plan, the price
of shares of Common Stock purchased through reinvestment of cash dividends is
95% of the average of the closing sale price of Common Stock for the period of
five trading days ending on the dividend payment date, and optional cash
payments are invested at 100% of such average. No commission or service charge
is paid by participants in connection with purchases under the Plan. Shares of
Common Stock are offered for sale under the Plan only by means of a separate
prospectus available upon request from the Company.
Restriction on Dividends
Under the provisions of the Articles, the Company is not permitted to
declare or pay dividends on the Common Stock until full cumulative dividends on
any outstanding shares of the Preferred Stock have been paid.
The Common Stock is entitled to dividends when, as and if declared by the
Company's Board of Directors, subject to various limitations on the declaration
or payment of dividends imposed by the provisions of the Mortgage and, for so
long as any shares of Preferred Stock remain outstanding, the restriction
described in the prior paragraph. See "Description of Debt Securities --
Description of Bonds -- Dividend Restrictions."
Liquidation
In the event of liquidation, dissolution or winding up of the Company, the
holders of the Common Stock are entitled to receive pro rata such assets as may
remain upon discharge of all indebtedness and liabilities of the Company after
payment of the amounts payable on all the then outstanding shares of Preferred
Stock.
Other
The Common Stock has no conversion rights, redemption provisions or
pre-emptive rights and is not liable for any further calls or assessments. The
Preferred Stock has no pre-emptive rights.
The Articles contain provisions which may deter changes in control or
significant restructurings of the Company. In addition to providing for a
classified board of directors as described above, the Articles (i) require that
certain business combinations be approved by holders of at least 80% of the
outstanding shares of voting stock of the Company unless all Disinterested
Directors (as defined in the Articles) have approved the transaction or certain
procedural and minimum price requirements are met; (ii) require that the
transfer during a twelve-month period of assets equaling 10% or more of the book
value of the assets of the Company be approved by at least 66 2/3% of the
Company's directors; and (iii) impose supermajority voting requirements for
amending certain of the foregoing provisions. The Illinois Business Corporation
Act and the Virginia Stock Corporation Act also contain provisions requiring a
supermajority vote to approve certain transactions. Further, the Company's
Long-Term Stock Plan of 1989 provides that certain restrictions on options or
restricted stock granted to officers and employees of the Company will be
removed or waived if a change in control (as defined therein) of the Company
occurs.
One of the effects of the existence of authorized but unissued and
unreserved Common Stock and Preferred Stock may be to enable the Board of
Directors to issue shares in circumstances which could render more difficult or
discourage an attempt to obtain control of the Company by means of a merger,
tender offer, proxy contest or otherwise. Such additional shares also could be
used to dilute the stock ownership of persons seeking to obtain control of the
Company.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Common Stock is Harris Trust and
Savings Bank, 311 W. Monroe Street, Chicago, Illinois 60690.
17
<PAGE> 19
LEGAL OPINIONS
Certain legal matters in connection with the legality of the Securities
offered hereby will be passed upon for the Company by Chapman and Cutler,
Chicago, Illinois, and for any agents, underwriters or dealers by Jones, Day,
Reavis & Pogue, Chicago, Illinois. The statements as to matters of law and legal
conclusions made under "Description of Debt Securities -- Description of Bonds
- -- Security and Priority" are made on the authority of Chapman and Cutler, which
has relied, in part, on the opinions of local counsel.
EXPERTS
The consolidated financial statements and schedules included in the
Company's most recent Annual Report on Form 10-K, incorporated herein by
reference, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are so
incorporated herein in reliance upon the authority of said firm as experts in
giving said report. Reference is made to said report which includes an
explanatory paragraph with respect to the change in the method of accounting for
postretirement benefits other than pensions and income taxes effective January
1, 1993 as discussed in the notes to consolidated financial statements.
PLAN OF DISTRIBUTION
The Company may sell Securities through underwriters or dealers, directly
to one or more purchasers or through agents. The applicable Prospectus
Supplement will set forth the terms of the offering of any Securities, including
the names of any underwriters or agents, the purchase price of such Securities
and the proceeds to the Company from such sale, any underwriting discounts and
other items constituting underwriters' compensation, any initial public offering
price, any discounts or concessions allowed or reallowed or paid to dealers and
any securities exchanges on which such Securities may be listed.
If underwriters are used in the sale, Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. Such Securities may
be offered to the public either through underwriting syndicates represented by
managing underwriters or by underwriters without a syndicate. Unless otherwise
set forth in the applicable Prospectus Supplement, the obligations of the
underwriters to purchase such Securities will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase all of such
Securities if any of such Securities are purchased. Any initial offering price
and any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time. Only underwriters named in a Prospectus Supplement
are deemed to be underwriters in connection with the Securities offered thereby.
Securities may also be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of Securities will be named, and any commissions payable by the Company to
such agent will be set forth in the applicable Prospectus Supplement. Unless
otherwise indicated in the applicable Prospectus Supplement, any such agent will
act on a best efforts basis for the period of its appointment.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Securities at the public offering price set forth in
such Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a future date specified in such Prospectus Supplement.
Such contacts will be subject only to those conditions set forth in the
applicable Prospectus Supplement and such Prospectus Supplement will set forth
the commissions payable for solicitation of such contracts.
Any underwriters, dealers or agents participating in the distribution of
Securities may be deemed to be underwriters and any discounts or commissions
received by them on the sale or resale of Securities may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933, as
amended (the "Securities Act"). Agents and underwriters may be entitled under
agreements entered into with the Company
18
<PAGE> 20
to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act or to contribution with respect to payments
that the agents or underwriters may be required to make in respect thereof.
Agents and underwriters may be customers of, engage in transactions with, or
perform services for, the Company or its affiliates in the ordinary course of
business.
19
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee.............................................................. $ 68,966
Fees of state regulatory authorities.............................................. 5,000
Mortgage recording fees........................................................... 30,000
Printing expenses................................................................. 100,000
Accounting fees and expenses...................................................... 20,000
Legal fees and expenses........................................................... 150,000
Trustee fees...................................................................... 10,000
Transfer Agent and Registrar fee.................................................. 6,700
Blue Sky fees and expenses........................................................ 15,000
Rating Agency fees................................................................ 120,000
Miscellaneous expenses............................................................ 10,334
--------
Total........................................................................ $536,000
========
</TABLE>
All of the above amounts except the SEC registration fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Paragraph 56 of the Company's By-Laws provides in general that, subject to
applicable statutory limitations, each director or officer of the Company and
any person who, at the request of the Company, has served as a director or
officer of another corporation in which the Company has a financial interest
shall be indemnified against costs and expenses incurred (including any
judgments, fines or reasonable settlements) in connection with the defense of
any criminal or civil proceedings in which such person is named as a party by
reason of having been such director or officer, or by reason of any action taken
or not taken in such capacity unless such officer or director is finally
adjudged to have been liable for negligence or misconduct in the performance of
duty. Conviction or judgment in a criminal proceeding does not necessarily
constitute an adjudication of liability for negligence or misconduct in
performance of duty, under certain conditions. Paragraph 56 also provides that
the provisions thereof shall not be construed as a limitation on the general
power of the Company to enter into a contract or undertaking of indemnity with a
director or officer in any proper case not provided for in paragraph 56.
The Illinois Business Corporation Act and the Virginia Stock Corporation
Act generally provide that each corporation subject to such Acts shall have the
power to provide indemnification of the type summarized above, subject to
certain liabilities of its officers and directors.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------------------------------------------------------------------
<S> <C>
1.01 Form of Underwriting Agreement.
*1.02 Form of Distribution Agreement (to be filed under cover of Form 8-K).
4.01 Amendment to Amended Articles of Incorporation of Company, as amended, dated May
30, 1995.
*4.02 Amended Articles of Incorporation of Company, as amended April 29, 1994 (filed as
Exhibit 3.01 to Form 10-Q for the quarter ended March 31, 1994, File No. 0-1284).
4.03 Amendment to Amended By-Laws of Company, as amended, dated April 28, 1995.
*4.04 By-Laws of Company, as amended April 29, 1994 (filed as Exhibit 3.02 to Form 10-Q
for the quarter ended March 31, 1994, File No. 0-1284).
</TABLE>
II-1
<PAGE> 22
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------------------------------------------------------------------
<S> <C>
**4.05 Indenture of Mortgage, dated as of July 15, 1959, from the Company to Bank of
America Illinois (successor to Continental Bank, National Association) and Robert
J. Donahue (successor to M.J. Kruger), as Trustees, and the following supplemental
indentures thereto, the First Supplemental Indenture, dated as of November 1, 1960,
the Second Supplemental Indenture, dated as of June 1, 1962, the Third Supplemental
Indenture, dated as of February 1, 1963, the Fourth Supplemental Indenture, dated
as of June 15, 1963, the Fifth Supplemental Indenture, dated as of November 15,
1964, the Sixth Supplemental Indenture, dated as of March 15, 1968, the Seventh
Supplemental Indenture, dated as of August 1, 1970, the Eighth Supplemental
Indenture, dated as of September 1, 1972, the Ninth Supplemental Indenture, dated
as of January 1, 1974, the Tenth Supplemental Indenture, dated as of July 1, 1976,
the Eleventh Supplemental Indenture, dated as of December 1, 1976, the Twelfth
Supplemental Indenture, dated as of April 1, 1981, the Thirteenth Supplemental
Indenture, dated as of May 1, 1982, the Fourteenth Supplemental Indenture, dated as
of March 1, 1987, Fifteenth Supplemental Indenture, dated as of October 1, 1987,
the Sixteenth Supplemental Indenture, dated as of December 1, 1989, the Seventeenth
Supplemental Indenture, dated as of April 1, 1990, the Eighteenth Supplemental
Indenture, dated as of June 1, 1991, the Nineteen Supplemental Indenture, dated as
of May 1, 1992, and the Twentieth Supplemental Indenture, dated as of December 1,
1992.
**4.06 Form of Supplemental Indenture relating to the Bonds.
**4.07 Form of Bond (contained in Exhibit 4.06).
**4.08 Form of Indenture between the Company and Bank of America Illinois, as trustee,
relating to the Notes.
**4.09 Form of Note.
**4.10 Form of Common Stock certificate.
**5.01 Opinion of Chapman and Cutler.
**12.01 Computation of Ratio of Consolidated Earnings to Fixed Charges.
23.01 Consent of Arthur Andersen LLP.
**23.02 Consent of Chapman and Cutler (contained in Exhibit 5.01).
**24.01 Power of Attorney.
**25.01 Statement of Eligibility and Qualification of Bank of America Illinois on Form T-1
relating to the Bonds.
**25.02 Statement of Eligibility and Qualification of Bank of America Illinois on Form T-1
relating to the Notes.
**25.03 Statement of Eligibility and Qualification of Robert J. Donahue on Form T-2
relating to the Bonds.
</TABLE>
- -------------------------
* Incorporated herein by reference as indicated.
** Previously filed.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any
II-2
<PAGE> 23
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
the volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of any
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 15, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
<PAGE> 24
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF BRENTWOOD, STATE OF TENNESSEE, ON MAY 30, 1995.
UNITED CITIES GAS COMPANY
By /s/ GENE C. KOONCE
-------------------------------------
Gene C. Koonce
President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- -------------------------------
<C> <C> <S>
/s/ DWIGHT C. BAUM* Chairman of the Board
- ---------------------------------------------
Dwight C. Baum
/s/ GENE C. KOONCE President and Director
- --------------------------------------------- (Principal Executive Officer)
Gene C. Koonce
/s/ JAMES B. FORD* Senior Vice President and
- --------------------------------------------- Treasurer (Principal Financial
James B. Ford Officer)
/s/ ADRIENNE H. BRANDON* Vice President and Controller
- --------------------------------------------- (Chief Accounting Officer)
Adrienne H. Brandon
/s/ THOMAS J. GARLAND* Director
- ---------------------------------------------
Thomas J. Garland
Director
- ---------------------------------------------
Dale A. Keasling
/s/ VINCENT J. LEWIS* Director
- ---------------------------------------------
Vincent J. Lewis
/s/ DENNIS L. NEWBERRY, II* Director
- ---------------------------------------------
Dennis L. Newberry, II
/s/ STIRTON OMAN, JR.* Director
- ---------------------------------------------
Stirton Oman, Jr.
</TABLE>
II-4
<PAGE> 25
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- -------------------------------
<C> <C>
/s/ TIMOTHY W. TRIPLETT* Director
- ---------------------------------------------
Timothy W. Triplett
/s/ GEORGE C. WOODRUFF, JR.* Director
- ---------------------------------------------
George C. Woodruff, Jr.
*By: /s/ GENE C. KOONCE
-----------------------------------------
(Gene C. Koonce, Attorney-in-fact)
</TABLE>
Dated: May 30, 1995
II-5
<PAGE> 1
EXHIBIT 1.01
Shares*
UNITED CITIES GAS COMPANY
Common Stock
UNDERWRITING AGREEMENT
, 199_
New York, New York
[Name and Address of Representatives]
Dear Sirs:
United Cities Gas Company, a corporation organized and existing under
the laws of the State of Illinois and the Commonwealth of Virginia (the
"Company"), proposes to issue and sell an aggregate of shares (the
"Firm Shares") of the Company's authorized and unissued common stock, without
par value (the "Common Stock") to you and to the other underwriters named in
Schedule I (collectively the "Underwriters"), for whom you are acting as
representatives (the "Representatives"). The Company agrees to grant to the
Underwriters an option (the "Option") to purchase up to an additional
shares of such Common Stock (the "Option Shares") on the terms and for the
purposes set forth in Section 1(b) hereof. The Firm Shares and the Option
Shares are hereinafter collectively referred to as the "Shares."
The Company confirms as follows its agreement with the Representatives
and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) The initial public offering price per share for the Firm
Shares and the purchase price per share for the Firm Shares to be paid
by the several Underwriters shall be as set forth on Exhibit A hereto.
The Company agrees to issue and sell to each Underwriter and, upon the
basis of the representations, warranties and agreements of the Company
herein contained, and subject to the terms and conditions herein set
forth, each Underwriter agrees, severally and not jointly, to purchase
from the Company at the purchase price per share for the Firm Shares
the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I, plus such additional number of Firm Shares
which such
- ---------------
* Plus an option to purchase up to additional shares to cover
over-allotments.
<PAGE> 2
Underwriter may become obligated to purchase pursuant to Section 8
hereof.
(b) Subject to all the terms and conditions hereof, the
Company grants to the Underwriters the Option to purchase, severally
and not jointly, all or any part of the Option Shares at the same
price per share as the Underwriters shall pay for the Firm Shares.
The Option may be exercised only to cover over-allotments in the sale
of Firm Shares by the Underwriters and may be exercised in whole or in
part at any time (but not more than once) on or before the th day
after the date of this Agreement upon written or telegraphic notice
(the "Option Shares Notice") by the Representatives to the Company no
later than 12:00 noon, New York City time at least two and no more
than five business days before the date specified for closing in the
Option Shares Notice (the "Option Closing Date") setting forth the
aggregate number of Option Shares to be purchased and the time and
date for such purchase. On the Option Closing Date, the Company will
issue and sell to the Underwriters the number of Option Shares set
forth in the Option Shares Notice, and each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of
Firm Shares that such Underwriter is purchasing, as adjusted by the
Representatives in such manner as it deems advisable to avoid
fractional Shares. The purchase price per share to be paid for the
Option Shares shall be the same price per share as for the Firm
Shares, less the amount of any dividend declared by the Company prior
to the date hereof and payable on the Firm Shares and as to which the
record date has occurred prior to the Option Closing Date.
(c) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on
Form S-3 (File No. 33-56983), including a prospectus, covering the
registration of the Shares and the offering thereof from time to time
in accordance with Rule 415 under the Securities Act of 1933, as
amended (the "Securities Act"). Such registration statement has been
declared effective by the Commission. As provided in Section 4(a)
hereof, a prospectus supplement reflecting the terms of the Shares,
the terms of the offering thereof and the other matters set forth
therein has been prepared and will be filed promptly pursuant to Rule
424 under the Securities Act ("Rule 424"). Such prospectus
supplement, in the form first filed with (or transmitted for filing
to) the Commission on or after the date hereof pursuant to Rule 424,
is herein referred to as the "Prospectus Supplement." Such
registration statement, as amended and supplemented at the date
hereof, including the exhibits thereto and the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, is herein called the "Registration Statement," and the
basic prospectus included therein at the Effective Date (as
hereinafter defined) relating to all offerings of securities under the
Registration Statement, as supplemented
2
<PAGE> 3
by the Prospectus Supplement, is herein called the "Prospectus,"
except that, if such basic prospectus is amended or supplemented
subsequent to the Effective Date, the term "Prospectus" shall refer to
the basic prospectus as so amended or supplemented and as further
supplemented by the Prospectus Supplement, in either case including
the documents filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that
are incorporated by reference therein.
2. Delivery and Payment. Delivery of the Firm Shares to the
Representatives for the accounts of the Underwriters against payment of the
purchase price by certified or official bank checks payable to the Company in
next day funds, shall take place at the office of Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois, at _____ a.m., __________ time, on the
[fourth] business day following the date of this Agreement or at such time on
such other date, not later than seven business days after the date of this
Agreement, as shall be agreed upon by the Representatives and the Company (such
date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice (such
date is hereinafter referred to as the "Option Closing Date").
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two full business days prior to the
Closing Date or the Option Closing Date, as the case may be, by written notice
to the Company. For purposes of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection, at such place in New York City as is designated by
the Representatives, at least 24 hours prior to the Closing Date or the Option
Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to
the respective Underwriters shall be borne by the Company. The Company will
pay and save each Underwriter and any subsequent holder of the Shares harmless
from any and all liabilities with respect to or resulting from any failure or
delay in paying federal and state stamp and other transfer taxes, if any, which
may be payable or determined to be payable in connection with the original
issuance or sale to such Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
represents to and warrants and covenants with each Underwriter that:
3
<PAGE> 4
(a) The Company meets the requirements for use of Form S-3
under the Securities Act and (i)(A) on the original effective date of
the Registration Statement, (B) on the effective date of the most
recent post-effective amendment thereto, if any, and (C) on the date
of the filing by the Company of any Annual Report on Form 10-K after
the original filing of the Registration Statement and prior to or on
the Closing Date (and if any Option Shares are purchased, prior to or
on the Option Closing Date) (the latest of such dates herein referred
to as the "Effective Date"), in each case the Registration Statement
and any amendments and supplements thereto complied in all material
respects with the requirements of the Securities Act and the rules and
regulations of the Commission thereunder (the "Rules"), and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) on the date hereof and at the
Closing Date (and, if any Option Shares are purchased, on the Option
Closing Date), neither the Registration Statement nor any amendment or
supplement thereto contains or will contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
and (iii) on the date that the Prospectus is filed with (or
transmitted for filing to) the Commission pursuant to Rule 424 and on
the Closing Date (and, if any Option Shares are purchased, on the
Option Closing Date), neither the Prospectus nor any amendment or
supplement thereto includes or will include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties in this subsection shall not apply to statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through you expressly for use in the Registration Statement or the
Prospectus.
(b) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act, at the time
they were filed with the Commission, complied in all material respects
with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder (the "Exchange Act Rules")
and, when read together and with the other information in the
Prospectus, do not and will not, on the date hereof and at the Closing
Date (and if any Option Shares are purchased, on the Option Closing
Date), include an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading.
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<PAGE> 5
(c) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(d) The Company has filed with the state public utility
regulatory commissions in Georgia, Illinois, Kansas, Tennessee and
Virginia seeking appropriate orders relating to the issuance and sale
of the Shares. Such orders have been entered by such commissions and
are effective and sufficient to permit the issuance and sale of the
Shares on the terms contemplated by this Agreement. The Company is
not subject to the jurisdiction of the Federal Energy Regulatory
Commission or the state public utility regulatory commissions in Iowa,
Kentucky, Missouri and South Carolina with respect to the issuance and
sale of the Shares.
(e) The certificate to be delivered pursuant to paragraph (f)
of Section 5 hereof and all other documents delivered by the Company
or its representatives in connection with the issuance and sale of the
Shares were on the dates on which they were delivered, or will be on
the dates on which they are to be delivered, true and complete in all
material respects.
(f) The Company has been duly incorporated and is, and at the
Closing Date and, if later, the Option Closing Date, will be, validly
existing and in good standing under the laws of the State of Illinois
and the Commonwealth of Virginia and duly licensed or qualified to do
business as a foreign corporation in the States of Georgia, Iowa,
Kansas, Kentucky, Missouri, South Carolina and Tennessee. The Company
has, and at the Closing Date will have, full power and authority
(corporate and other) to conduct all the activities conducted by it,
to own or lease all the assets owned or leased by it and to conduct
its business as described in the Registration Statement and the
Prospectus; and the Company is, and at the Closing Date and, if later,
the Option Closing Date, will be, duly licensed or qualified to do
business as a foreign corporation in all jurisdictions in which the
nature of the activities conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification
necessary and where the failure to so qualify would have a material
adverse effect upon the business or financial condition of the Company
and the Subsidiaries (as hereinafter defined), taken as a whole.
(g) The Company owns all of the outstanding common stock of
UCG Energy Corporation, a Delaware corporation ("UCG Energy") and
United Cities Gas Storage Company, a Delaware corporation ("UCG
Storage"), each of which is engaged in the business described in the
Prospectus and is a corporation duly organized and existing under the
laws of its state of incorporation. UCG Energy is duly qualified to
do business as a foreign corporation in the States of Alabama,
Florida,
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<PAGE> 6
Georgia, Illinois, Iowa, Louisiana, Mississippi, Missouri, North
Carolina, South Carolina, Tennessee, Texas and Virginia, with full
power and authority (corporate and other) to conduct all of the
activities conducted by it, to own or lease all the assets owned or
leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. UCG Storage is duly
qualified to do business as a foreign corporation in the States of
Kansas, Kentucky and Tennessee with full power and authority
(corporate and other), except as otherwise described in the
documentation delivered pursuant to the last sentence of paragraph
3(i) hereof, to conduct all of the activities conducted by it, to own
or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the
Prospectus. Each of UCG Energy and UCG Storage is licensed or
qualified to do business as a foreign corporation in each other state
or jurisdiction in which such licensing or qualification is necessary
for UCG Energy and UCG Storage to conduct their respective businesses
as presently conducted and where the failure to so qualify would have
a material adverse effect upon the business or financial condition of
the Company and the Subsidiaries, taken as a whole. Other than UCG
Energy, UCG Storage, UCG Leasing, Inc., a Georgia corporation ("UCG
Leasing"), and United Cities Propane Gas of Tennessee, Inc., a
Tennessee corporation ("UCPGT"), none of the Company, UCG Energy or
UCG Storage has any significant subsidiaries as defined in the Rules.
UCG Energy, UCG Storage, UCG Leasing and UCPGT are herein sometimes
referred to individually as a "Subsidiary" and collectively as the
"Subsidiaries."
(h) UCG Energy owns all of the outstanding common stock of
each of UCG Leasing and UCPGT, each of which is engaged in the
business described in the Prospectus and is a corporation duly
organized and existing under the laws of its state of incorporation.
UCG Leasing and UCPGT are each qualified or licensed to do business as
a foreign corporation in each state or jurisdiction in which such
licensing or qualification is necessary for UCG Leasing or UCPGT, as
applicable, to conduct its business as presently conducted and where
the failure to so qualify would have a material adverse effect upon
the business or financial condition of the Company and the
Subsidiaries, taken as a whole, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus.
(i) Except as set forth in the last sentence of this
paragraph (i), each of the Company and the Subsidiaries has valid and
sufficient grants, franchises, miscellaneous permits and easements,
free from unduly burdensome restrictions, adequate for the conduct of
its business in the territories in which it is now conducting such
business and the ownership of the properties now owned by it and,
except as otherwise set forth in the Prospectus, there are no legal or
governmental proceedings pending or threatened which might result in a
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<PAGE> 7
material modification, suspension or revocation thereof. Each of the
Company and the Subsidiaries has, and is operating in compliance with,
in all material respects, all requisite corporate power and authority,
and all material and necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental
regulatory officials and bodies, to own, lease, license and operate
its properties and conduct its business as presently conducted and as
contemplated by the Prospectus, and the Company and the Subsidiaries
have filed all reports and taken all other action required by the
authority issuing the same where the failure to file or take other
action might reasonably be expected to give rise to a right in such
authority to seek to revoke, suspend or materially limit any such
material license, certificate or permit. The Company has all
requisite power, authority, authorizations, approvals, orders,
licenses, certificates and permits to enter into this Agreement and to
carry out the provisions and conditions hereof. Neither the Company
nor any Subsidiary has received any notice (nor does the Company know
of any basis therefor) of conflict with asserted rights of others in
any respect which could materially adversely affect its business,
except as described in the Registration Statement and Prospectus. The
foregoing representations of the Company contained in this paragraph
(i) shall not apply with respect to those matters set forth in
documentation delivered to the Representatives concurrently with the
execution of this Agreement as they relate to the Federal Energy
Regulatory Commission's jurisdiction with respect to the Barnsley,
Kentucky storage field, the grants, franchises, miscellaneous permits
and easements relating to the operations of the Company in the State
of Missouri as to which matters the Company represents only that there
are no legal or governmental proceedings pending or threatened which
might result in a material modification, suspension or revocation of
any such grants, franchises, miscellaneous permits and easements, and
that any revocation, suspension or limitation of any or all such
grants, franchises, miscellaneous permits and easements would not have
a material adverse effect upon the business or financial condition of
the Company and the Subsidiaries, taken as a whole.
(j) The capital stock of the Company (including the
Shares being issued) has been duly authorized by all necessary
corporate action on the part of the Company. All of the issued and
outstanding shares of capital stock of the Company have been, and the
Shares upon issuance will be, duly and validly authorized and issued,
fully paid and nonassessable and free of preemptive or similar rights.
The description of the Common Stock in the Registration Statement and
the Prospectus is, and at the Closing Date and, if later, the Option
Closing Date will be, complete and accurate in all material respects.
Except as set forth in the Prospectus, the Company does not have
outstanding, and at the Closing Date or, if later, the Option Closing
Date will not have outstanding,
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<PAGE> 8
any options to purchase, or any rights or warrants to subscribe for,
or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock, any shares
of capital stock of any Subsidiary or any such warrants, convertible
securities or obligations. No holders of securities of the Company
have any rights to the registration of shares of capital stock or
other securities of the Company. Upon issuance and delivery of the
Shares hereunder and payment of the purchase price as herein
contemplated, the several Underwriters will acquire valid marketable
title to the Shares free and clear of any liens, pledges,
encumbrances, equities and claims whatsoever.
(k) All of the outstanding shares of capital stock of UCG
Energy and UCG Storage have been duly and validly authorized and
issued and are fully paid and nonassessable and are legally owned by
the Company free and clear of all liens, claims, security interests or
other encumbrances. All of the outstanding shares of UCG Leasing and
UCPGT have been duly and validly authorized and issued and are fully
paid and nonassessable and are legally owned by UCG Energy free and
clear of all liens, claims, security interests or other encumbrances.
Other than as described in the Prospectus, there are no rights to
subscribe for or to purchase (by way of the exercise of any option or
warrant, the conversion or redemption of any other security, or
otherwise), or any restriction upon the voting or transfer of, any of
the capital stock of any Subsidiary.
(l) Neither the Company nor any Subsidiary is, nor at the
Closing Date or the Option Closing Date will any of them be, in
violation of its certificate or articles of incorporation or bylaws.
No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default in the due
performance and observance of any obligation, agreement or condition
by the Company or any Subsidiary contained in any mortgage, indenture,
deed of trust, note, loan agreement or other agreement or instrument
to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary is bound or to which any property or asset
of the Company or any Subsidiary is subject, except for defaults the
effect of which would not be material to the Company and the
Subsidiaries taken as a whole.
(m) The performance of this Agreement and the
consummation of the transactions contemplated hereby will not conflict
with, result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the assets of the Company
or any Subsidiary pursuant to the terms or provisions of, or give any
other party a right to terminate any of its obligations under, or
result in the acceleration of any obligation under the certificate or
articles of incorporation or bylaws (or equivalent documents)
8
<PAGE> 9
of the Company or any Subsidiary, any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other
agreement or instrument to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary or any of its
properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any
court or other governmental agency or body applicable to the business
or properties of the Company or any Subsidiary; and no consent,
approval, authorization or order of or any filing or declaration with,
any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part herein
contemplated, except as have been obtained under the Securities Act or
the Rules and such as may be required under state securities or Blue
Sky laws or the by-laws and rules of the National Association of
Securities Dealers, Inc. ("NASD") in connection with the purchase and
distribution by the Underwriters of the Shares to be sold by the
Company.
(n) The financial statements, selected financial
information and schedules included or incorporated by reference in the
Registration Statement and the Prospectus fairly present the financial
condition, results of operations and cash flow of the Company and the
Subsidiaries on a consolidated basis at the respective dates thereof
and for the respective periods covered thereby, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the period involved, except as otherwise disclosed in the
Prospectus. No other financial statements or schedules of the Company
are required by the Securities Act, the Exchange Act, the Exchange Act
Rules or the Rules to be included in the Registration Statement or the
Prospectus.
(o) Arthur Andersen LLP (the "Accountants"), who audited
certain of the financial statements filed with the Commission and
included or incorporated by reference in the Registration Statement
and the Prospectus, are independent accountants with respect to the
Company as required by the Securities Act and the Rules.
(p) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any Subsidiary has sustained any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, which is
material to the Company and the Subsidiaries taken as a whole,
otherwise than as set forth or contemplated by the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there have not
9
<PAGE> 10
been, and prior to the Closing Date or the Option Closing Date, as the
case may be, there will not be, any declaration or payment of any
dividends or other distributions with respect to the capital stock of
the Company, any default in the payment of principal or interest on
any outstanding indebtedness of the Company, any material change in
the capital stock of the Company or any Subsidiary or in the long-term
debt, liabilities, contingent or otherwise, or obligations under
capital leases of the Company or any Subsidiary or any material
adverse change, or any development known to the Company involving a
prospective material adverse change, in or affecting the business,
prospects, financial position, stockholders' equity, or results of
operations of the Company or any Subsidiary, in each case otherwise
than as set forth in or contemplated by the Prospectus. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material
transaction entered into by the Company or any Subsidiary, other than
transactions in the ordinary course of business and changes and
transactions contemplated by the Registration Statement and the
Prospectus. The Company and the Subsidiaries have no contingent
obligations which are not disclosed in the Registration Statement and
Prospectus which can reasonably be expected to have a material adverse
effect on the financial condition, business, operations or prospects
of the Company and the Subsidiaries taken as a whole.
(q) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(r) Except as set forth in the Registration Statement and
the Prospectus, there are no actions, suits or proceedings pending or,
to the knowledge of the Company, threatened against or affecting the
Company or any Subsidiary or any of their respective officers in their
capacity as such, before or by any federal or state court, commission,
regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or
finding might materially and adversely affect the Company and its
Subsidiaries taken as a whole or the business, properties, business
prospects, condition (financial or otherwise) or results of operations
of the Company and its Subsidiaries taken as a whole.
(s) There is no document or contract of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required.
(t) No statement, representation, warranty or covenant
made by the Company in this Agreement or made in any certificate or
document required by this Agreement to be
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<PAGE> 11
delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect.
(u) Neither the Company nor, to the knowledge of the
Company, any of its directors, officers or controlling persons has
taken, directly or indirectly, any action designed or which might
reasonably be expected to cause or result, under the Securities Act or
otherwise, in, or which has constituted, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of any of the Shares.
(v) No holder of securities of the Company has rights to
the registration of any securities of the Company because of the
filing of the Registration Statement.
(w) Neither the Company nor any Subsidiary is in
violation of any law, statute, ordinance, rule, regulation, order or
decree of any court, governmental body or regulatory authority or
administrative agency having jurisdiction over the Company or any
Subsidiary or any of the property or assets of the Company or any
Subsidiary (including, without limitation, to the best of the
knowledge of the Company, any such law, statute, ordinance, rule,
regulation, order or decree with respect to environmental protection
or the release, handling, treatment, storage or disposal of hazardous
substances or toxic wastes) which violation is likely to materially
adversely affect the financial condition, business, operations or
prospects of the Company and the Subsidiaries taken as a whole.
(x) Any certificate signed by any officer of the Company and
delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty of the Company to the
Underwriters as to the matters covered thereby.
(y) In the opinion of counsel for the Company, the Company is
not a "holding company" or a "subsidiary company" of a "public utility
company" or of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as
amended (the "Holding Company Act").
(z) The Shares are eligible for quotation on the National
Association of Securities Dealers Automated Quotation System.
(aa) No claims have been asserted by any person to the use of
any material trademarks or trade names used by or necessary for the
conduct of the business of the Company or any Subsidiary or
challenging or questioning the right of the Company or any Subsidiary
to use any such trademark or trade
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<PAGE> 12
name. The use in connection with the business and operations of the
Company and the Subsidiaries of such trademarks and trade names does
not, to the Company's knowledge, infringe on the rights of any person.
4. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If reasonably requested by you in connection with the
offering of the Shares, the Company will prepare a preliminary
prospectus supplement containing such information as you and the
Company deem appropriate and, immediately following the execution of
this Agreement, the Company will prepare a Prospectus Supplement that
complies with the Securities Act and the Rules and that sets forth the
number of Firm Shares and their terms not otherwise specified in the
Prospectus, the name of each Underwriter participating in the offering
and the number of Firm Shares that each severally has agreed to
purchase, the name of each Underwriter, if any, acting as
representative of the Underwriters in connection with the offering,
the price at which the Firm Shares are to be purchased by the
Underwriters from the Company, the initial public offering price, any
selling concession and reallowance, and such other information as you
and the Company deem appropriate in connection with the offering of
the Shares. The Company will promptly transmit a copy of the
Prospectus Supplement to the Commission via EDGAR for filing pursuant
to Rule 424 under the Securities Act and will furnish to the
Underwriters as many copies of any preliminary prospectus supplement
and the Prospectus as you shall reasonably request.
(b) If at any time when the Prospectus is required by the
Securities Act to be delivered in connection with sales of the Shares
any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or counsel
for the Company, to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order
to comply with the requirements of the Securities Act or the Rules, or
at any time to file under the Exchange Act any documents to be
incorporated by reference in the Registration Statement pursuant to
Item 12 of Form S-3 in order to comply with the Securities Act, the
Rules, the Exchange Act or the Exchange Act Rules, then the Company
will promptly prepare and file with the Commission, subject to Section
4(e) hereof, such amendment or supplement as may be necessary to
correct such
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<PAGE> 13
untrue statement or omission or to make the Registration Statement or
the Prospectus comply with such requirements.
(c) During the period when the Prospectus is required by the
Securities Act to be delivered in connection with sales of the Shares,
the Company will notify you immediately, and confirm the notice in
writing, (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the mailing or the delivery to the Commission for
filing of any supplement to the Prospectus or any document that would
as a result thereof be incorporated by reference in the Prospectus,
(iii) of the receipt of any comments from the Commission with respect
to the Registration Statement, the Prospectus, the Prospectus
Supplement or any document incorporated by reference in the
Prospectus, (iv) of any request by the Commission for any amendment to
the Registration Statement or any supplement to the Prospectus or for
additional information relating thereto or to any document
incorporated by reference in the Prospectus and (v) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the institution
or threatening of any proceeding for any of such purposes. The
Company will use every reasonable effort to prevent the issuance of
any such stop order or of any order suspending such qualification and,
if any such order is issued, to obtain the lifting thereof at the
earliest possible moment.
(d) During the period when the Prospectus is required by the
Securities Act to be delivered in connection with sales of the Shares,
the Company will, subject to Section 4(e) hereof, file promptly all
documents required to be filed with the Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act.
(e) During the period when the Prospectus is required by
the Securities Act to be delivered in connection with sales of the
Shares, the Company will inform you of its intention to file documents
required to be filed with the Commission pursuant to Section 13 or 14
of the Exchange Act, including any amendment to the Registration
Statement, any supplement to the Prospectus or any document that would
as a result thereof be incorporated by reference in the Prospectus;
will furnish you with copies of any such amendment, supplement or
other document a reasonable time in advance of filing; and will not
file any such amendment, supplement or other document in a form to
which you or counsel for the Underwriters shall object in good faith.
(f) The Company has furnished or will furnish to you,
without charge, three signed copies of the Registration Statement as
originally filed and of all amendments thereto (or, to the extent a
signed copy is not available, a conformed
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<PAGE> 14
copy, certified by an officer of the Company to be in the form as
originally filed), whether filed before or after the Registration
Statement became effective, three copies of all exhibits and documents
filed therewith or incorporated by reference therein pursuant to Item
12 of Form S-3 (through the end of the period when the Prospectus is
required by the Securities Act to be delivered in connection with
sales of the Shares) and three signed copies of all consents and
certificates of experts and has furnished or will furnish to you, for
each other Underwriter, one conformed copy of the Registration
Statement (as originally filed) and of each amendment thereto
(including documents incorporated by reference into the Prospectus but
without exhibits, except any exhibits specifically incorporated by
reference into the Prospectus).
(g) The Company will use its best efforts, in cooperation
with the Underwriters, to qualify the Shares for offering and sale
under the applicable securities laws of such states and other
jurisdictions as you may designate and to maintain such qualifications
in effect for a period of not less than one year from the date hereof;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so
subject. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Shares have been
qualified as above provided.
(h) The Company will make generally available to its
stockholders as soon as practicable, but not later than 45 days after
the close of the period covered thereby, an earnings statement of the
Company (in form complying with the provisions of Rule 158 of the
Rules), covering (i) a period of 12 months beginning after the
effective date of the Registration Statement but not later than the
fist day of the Company's fiscal quarter next following such effective
date and (ii) a period of 12 months beginning after the date of this
Agreement but not later than the first day of the Company's fiscal
quarter next following the date of this Agreement.
(i) The Company will use the net proceeds received by
it from the sale of the Shares in the manner specified in the
Prospectus under the caption "Use of Proceeds."
(j) For a period of five years after the Closing Date, the
Company will furnish to you and, upon request, to each Underwriter,
copies of all annual reports, quarterly reports and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated
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<PAGE> 15
by the Commission, and such other documents, reports and information
as shall be furnished by the Company to its stockholders generally.
(k) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company
will pay, or reimburse if paid by the Representative, all costs and
expenses incident to the performance of the obligations of the Company
under this Agreement, including costs and expenses of or relating to
(1) the preparation, printing and filing of the Registration Statement
and exhibits thereto, each preliminary prospectus, the Prospectus, any
amendment or supplement to the Registration Statement or the
Prospectus, (2) the preparation and delivery of certificates
representing the Shares, (3) the printing of this Agreement, any
Agreement Among Underwriters and any Dealer Agreements, (4) the
registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the jurisdictions referred to in
paragraph (g) of this Section 4, including the reasonable fees,
disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (5) furnishing (including
costs of shipping and mailing) such copies of the Registration
Statement, the Prospectus, any preliminary prospectus, and all
amendments and supplements thereto as may be requested for use in
connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, (6) counsel to
the Company and (7) the fees of the transfer agent and registrar for
the Shares.
(l) The Company will comply with all the provisions of
any undertakings contained in the Registration Statement.
(m) If this Agreement shall be terminated by the Company
(otherwise than pursuant to Section 8) or if for any reason the
Company shall be unable to perform its obligations hereunder, the
Company will reimburse the several Underwriters for all out-of-pocket
expenses (including the fees, disbursements and other reasonable
charges of counsel to the Underwriters) reasonably incurred by them in
connection herewith.
(n) The Company will not at any time, directly or
indirectly, take any action designed or which might reasonably be
expected to cause or result in, under the Securities Act or otherwise,
or which will constitute, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of any
of the Shares.
(o) The Company will use its best efforts to do and
perform all things required or necessary to be done and performed
under this Agreement by the Company prior to the Closing Date or the
Option Closing Date, as the case may be,
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<PAGE> 16
and to satisfy all conditions precedent to delivery of the Shares.
(p) The Company will use its best efforts to maintain
qualification of the Company's Common Stock in the National Market
System of the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") and comply with Schedule D of the NASD
By-laws.
(q) The Company will not, for a period of 90 days after
the commencement of the public offering of the Shares, without the
prior written consent of the Underwriters, issue, sell, offer to sell
or otherwise dispose of any shares of Common Stock or rights to
acquire such shares (other than shares issued by the Company (i)
pursuant to the Company's (a) Employee Stock Purchase Plan, (b)
Dividend Reinvestment and Stock Purchase Plan, (c) Long-Term Stock
Plan of 1989, (d) Customer Stock Purchase Plan, (e) Non-Employee
Director Stock Plan, (ii) in connection with the acquisition of all of
the outstanding shares of Monarch Gas Company pursuant to the letter
of intent dated April 6, 1995, or (iii) for the benefit of
participants in the Company's employee investment plan under Section
401(k) of the Internal Revenue Code of 1986, as amended).
5. Conditions of the Obligations of the Underwriters. The obligations
of each Underwriter hereunder are subject to the accuracy, on the date of this
Agreement, and on the Closing Date and the Option Closing Date, as applicable,
of the representations of the Company in this Agreement, the accuracy and
completeness in all material respects of all statements made by the Company or
any its officers in any certificate delivered to the Representatives or its
counsel pursuant to this Agreement, performance by the Company of its
obligations under this Agreement and each of the following conditions:
(a) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall be pending or threatened by the Commission, (ii) no
order suspending the effectiveness of the Registration Statement or
the qualification or registration of the Shares under the securities
or Blue Sky laws of any jurisdiction shall be in effect and no
proceeding for such purpose shall be pending before or threatened or
contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part
of the staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission or
such authorities and (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have
been filed unless a copy thereof was first submitted to the
Representatives within a reasonable period of time prior to the filing
thereof and the Representatives did not object
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<PAGE> 17
thereto in good faith, and (v) the Representatives shall have received
certificates of the Company, dated the Closing Date and the Option
Closing Date and signed by the President or any Vice President of the
Company (who may, as to proceedings threatened, rely upon the best of
their information and belief), to the effect of clauses (i), (ii) and
(iii).
(b) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) there
shall not have been any material adverse change in the general
affairs, business prospects, management, business, properties,
condition (financial or otherwise) or results of operations of the
Company and the Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Registration
Statement and the Prospectus and (2) neither the Company nor any
Subsidiary shall have sustained any material loss or interference with
its business or properties from fire, explosion, flood or other
casualty, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement
and the Prospectus, if, in the judgment of the Representatives, any
such development makes it impracticable or inadvisable to consummate
the sale and delivery of the Shares by the Underwriters at the initial
public offering price.
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall
have been no litigation or other proceeding instituted against the
Company or any of its Subsidiaries or any of their respective officers
or directors in their capacities as such, before or by any federal,
state or local court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding
would materially and adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries taken as a whole.
(d) Each of the representations and warranties of the
Company contained herein shall be true and correct in all material
respects at the Closing Date and, with respect to the Option Shares,
at the Option Closing Date, as if made at the Closing Date and, with
respect to the Option Shares, at the Option Closing Date, and all
covenants and agreements herein contained to be performed on the part
of the Company and all conditions herein contained to be fulfilled or
complied with by the Company at or prior to the Closing Date and, with
respect to the Option Shares, at or prior to the Option Closing Date,
shall have been duly performed, fulfilled or complied with.
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<PAGE> 18
(e) Concurrently with the execution and delivery of this
Agreement and at the Closing Date and, as to the Option Shares, at the
Option Closing Date, there shall be furnished to the Representatives a
certificate of the Company, dated the date of its delivery, signed by
the President or any Vice President of the Company, in form and
substance satisfactory to the Representatives, to the effect that (1)
each signer has carefully examined the Registration Statement and the
Prospectus (including the incorporated documents) and (A) as of the
date of such certificate, such documents are true and correct in all
material respects and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
(B) in the case of the certificate delivered on the Closing Date and,
if later, the certificate delivered on the Option Closing Date, since
the date of the Prospectus Supplement, no event has occurred as a
result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances under which they are made, not untrue or misleading in
any material respect and there has been no document required to be
filed under the Exchange Act and the Exchange Act Rules that upon such
filing would be deemed to be incorporated by reference into the
Prospectus that has not been so filed, (2) each of the representations
and warranties of the Company contained in this Agreement were, when
originally made, and are at the time such certificate is delivered
true and correct in all material respects, (3) each of the covenants
required to be performed by the Company on or prior to the date of
such certificate has been duly, timely and fully performed and each
condition herein required to be complied with by the Company on or
prior to the delivery of such certificate has been duly, timely and
fully complied with, (4) to the knowledge of such officer, no actions
to prohibit the sale of the Shares have been taken or threatened by
the Commission, (5) to the knowledge of such officer, no order
suspending the effectiveness of the Registration Statement or
prohibiting the sale of the Shares has been issued and no proceedings
for such purpose are pending before or threatened by the Commission,
(6) when the Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate, the
Registration Statement and the Prospectus and any amendments or
supplements thereto contained all statements and information required
to be included therein, in the light of the circumstances in which
made, and neither the Registration Statement nor the Prospectus nor
any amendment or supplement thereto included any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they are made, not misleading,
(7) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
contemplated in the Prospectus,
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<PAGE> 19
neither the Company nor any Subsidiary incurred any direct or
contingent liabilities or obligations material to the Company and the
Subsidiaries, taken as a whole, not in the ordinary course of
business, or entered into any transactions material to the Company and
the Subsidiaries, taken as a whole, not in the ordinary course of
business, and there has not been any change in the capital stock or
outstanding indebtedness of the Company or any Subsidiary material to
the Company and the Subsidiaries, taken as a whole, or any adverse
change in the financial position, net worth or results of operations
of the Company or any Subsidiary which is material to the Company and
the Subsidiaries, taken as a whole, and (8) subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any Subsidiary
has sustained any loss of or damage to its properties, whether or not
insured, which is material to the Company and the Subsidiaries, taken
as a whole.
(f) The Representatives shall have received on each of
the Closing Date and the Option Closing Date from Chapman and Cutler,
counsel for the Company, an opinion, dated such Closing Date or Option
Closing Date, as the case may be, satisfactory in form and substance
to counsel for the Underwriters, to the effect that:
(i) The Company (A) is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of Illinois and the Commonwealth of Virginia, (B) is
duly qualified and in good standing as a foreign corporation
in the States of Georgia, Iowa, Kansas, Kentucky, Missouri,
South Carolina and Tennessee, and to the best of the
knowledge, information and belief of such counsel, the Company
is duly qualified and in good standing as a foreign
corporation in each other state or jurisdiction in which the
location of its properties or the conduct of its business
makes such qualification necessary and where the failure to so
qualify would have a material adverse effect upon the business
or financial condition of the Company and the Subsidiaries,
taken as a whole, and (C) has due corporate authority to carry
on its business as described in the Prospectus and to own,
lease, license and operate the properties used in said
business;
(ii) Each Subsidiary (A) is a corporation duly incorporated,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (B) to the best of the
knowledge, information and belief of such counsel, is duly
qualified and in good standing as a foreign corporation in
each jurisdiction in which the location of its properties or
the conduct of its business makes such qualification necessary
and where the failure to so qualify would have a material
adverse effect upon the business or financial condition of the
Company and
19
<PAGE> 20
the Subsidiaries, taken as a whole, and (C) has due corporate
authority to carry on its business as described in the
Prospectus and to own, lease, license and operate the
properties used in said business;
(iii) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally
binding agreement of the Company, subject, however, to
bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally and by the exercise
of judicial discretion in accordance with general principles
applicable to equitable and similar remedies and to possible
limitations on the validity or enforceability of the
indemnification and contribution provisions contained in this
Agreement as a result of securities laws or public policy;
(iv) The Company has valid and sufficient grants, franchises,
miscellaneous permits and easements free from unduly
burdensome restrictions, adequate for the conduct of its
business in the territories in which it is now conducting such
business and the ownership of the properties now owned by it,
except as to such matters relating to the operations of the
Company in the State of Missouri as may be acceptable to the
Representatives;
(v) All authorizations, approvals, consents or other orders
of any governmental authority or agency required in connection
with the authorization, issuance and sale of the Shares by the
Company pursuant to this Agreement (other than qualification
under state securities laws, Blue Sky laws or the by-laws and
rules of the NASD) have been obtained and continue in full
force and effect;
(vi) The Company has authorized capital stock as set forth in
the Registration Statement and the Prospectus under the
heading "Description of Capital Stock;" the authorized capital
stock conforms, as to legal matters, to the description
thereof contained in the Prospectus under the caption
"Description of Capital Stock;"
(vii) The issue and sale of the Shares by the Company and the
performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a material
breach or violation of any of the terms or provisions of, or
constitute a material default under, any indenture, mortgage,
deed of trust, loan agreement, partnership agreement, joint
venture, stock purchase agreement, or other material agreement
or instrument known to such counsel to which the Company is a
party or by which the Company is bound or to which any of the
properties or assets of the Company or any Subsidiary is
subject, nor will such action result in any
20
<PAGE> 21
violation of the provisions of the Amended Articles of
Incorporation, as amended, or By-laws, as amended, of the
Company, or any statute or, to the best of such counsel's
knowledge, any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
Company or any of its properties;
(viii) The Shares have been duly authorized by all necessary
corporate action, the certificates therefor are in due and
proper form and, when issued, delivered and paid for in
accordance with the terms of this Agreement, and duly
countersigned by the transfer agent and registrar thereof,
will be validly issued, fully paid and nonassessable, and free
of all preemptive or similar rights. The Shares conform to
the description thereof contained in the Prospectus;
(ix) The Registration Statement has become effective under
the Securities Act and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending before or are
contemplated by the Commission. Any required filing of the
Prospectus or any supplements to it have been made in
accordance with Rule 424(b) of the Rules;
(x) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any
Subsidiary is a party or to which any of the properties of the
Company or any Subsidiary is subject which is required to be
described in the Registration Statement or the Prospectus and
is not so described, or of any contract or other document
which is required to be described in the Registration
Statement or the Prospectus or is required to be filed as an
exhibit to the Registration Statement which is not described
or has not been filed as required. The statements in the
Prospectus, insofar as such statements constitute a summary of
documents referred to therein or of statutes, laws or legal or
governmental proceedings, are accurate summaries in all
material respects and fairly and correctly present the
information called for with respect to such documents and
matters;
(xi) The Registration Statement, at the Effective Date, and
the Prospectus, at the date it was filed with (or transmitted
for filing to) the Commission pursuant to Rule 424 (except the
financial statements, schedules and financial and statistical
data included therein, as to which no opinion need be
expressed) complied as to form in all material respects with
the Securities Act and the Rules; and
21
<PAGE> 22
(xii) The Company is not a "holding company" or a "subsidiary
company" of a "public utility company" or of a "holding
company" or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," as such terms are
defined in the Holding Company Act.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, counsel for the Underwriters, representatives of the
independent public accountants for the Company and the Representatives
at which the contents of the Registration Statement and Prospectus and
related matters were discussed and, although, except for the matters
referred to under the heading "Legal Opinions" in the Prospectus, such
counsel is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus, on the basis of the foregoing,
no facts have come to the attention of such counsel that lead them to
believe that either the Registration Statement, at the Effective Date,
or the Prospectus, at the date it was filed with (or transmitted for
filing to) the Commission pursuant to Rule 424 and as of the date of
such opinion, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no comment with respect to
the financial statements, schedules and other financial and
statistical data included in the Registration Statement or the
Prospectus).
With respect to the matters covered by foregoing clauses (i)
and (ii), Chapman and Cutler may rely upon certificates of responsible
officers of the Company as to the nature and extent of business being
conducted by the Company and the Subsidiaries in states or
jurisdictions wherein they are not licensed or qualified as foreign
corporations. With respect to the matters covered by foregoing clause
(iv) and, insofar as it relates to states other than the State of
Illinois, in clause (v) above, such counsel may rely upon the opinion
of Mark G. Thessin, Esq., Vice President, Regulatory Affairs for the
Company. Such opinion of counsel for the Company shall state that the
opinion of such other counsel is in form and substance satisfactory to
counsel for the Company and, in their opinion, they and the
Underwriters are justified in relying on such other opinion. In
addition, such counsel need not express any opinion with respect to
the Federal Energy Regulatory Commission's jurisdiction with respect
to the Barnsley, Kentucky storage field and UCG Storage.
(g) The Representatives shall have received on each of
the Closing Date and the Option Closing Date from Jones, Day, Reavis &
Pogue, counsel to the Underwriters, an opinion dated
22
<PAGE> 23
such Closing Date or Option Closing Date, as the case may be, with
respect to the Registration Statement, the Prospectus and this
Agreement, which opinion shall be satisfactory in all respects to the
Representatives. The Company must have furnished to such counsel such
documents as they may request for the purpose of enabling them to
render such opinion. In rendering such opinion, Jones, Day, Reavis &
Pogue may rely on certificates of responsible officers of the Company
as to matters of fact and upon advice from State authorities as to
good standing.
(h) The Representatives shall have received on the
Closing Date and the Option Closing Date from the Accountants a signed
letter dated the date hereof, the Closing Date or the Option Closing
Date, as the case may be, in form and substance satisfactory to the
Representatives (and the Representatives, in its sole discretion, may
determine that any such letter is satisfactory to the Representatives
even though it discloses changes in financial condition from earlier
specified periods which in the Representatives's judgment are
immaterial) to the effect that they are independent public accountants
with respect to the Company as required by the Securities Act and the
Rules, and it is their opinion that the financial statements and
schedules examined by them and included or incorporated by reference
in the Company's most recently filed Annual Report on Form 10-K and
included or incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, the Exchange Act and
the regulations relating to financial statements in annual reports on
Form 10-K and with respect to such other matters as the
Representatives may reasonably request.
(i) The approvals and consents of the Illinois Commerce
Commission, the Kansas State Corporation Commission, the Tennessee
Public Service Commission, the Georgia Public Service Commission and
the Virginia State Corporation Commission and any other required
approvals and consents required for the valid issuance and sale of the
Shares by the Company in accordance with the provisions of this
Agreement shall have been obtained and shall be in full force and
effect.
(j) The Company shall have furnished to the
Representatives such certificates, in addition to those specifically
mentioned herein, as the Representatives may have reasonably requested
as to the accuracy and completeness at the Closing Date and the Option
Closing Date of any statement in the Registration Statement or the
Prospectus or any documents filed under the Exchange Act and deemed to
be incorporated by reference into the Prospectus, as to the accuracy
at the Closing Date and the Option Closing Date of the representations
and warranties of the Company herein, as to the performance by the
Company of its obligations
23
<PAGE> 24
hereunder, or as to the fulfillment of the conditions concurrent and
precedent to the obligations hereunder of the Representatives.
(k) The Shares shall be qualified for sale in such states
as the Representatives may reasonably request, each such qualification
shall be in effect and not subject to any stop order or other
proceeding on the Closing Date or the Option Closing Date as
applicable.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement will comply with this Agreement only if they are in
form and scope satisfactory to counsel for the Representatives. The use by the
Underwriters of any amendments or supplements to the Prospectus which are
furnished by the Company will not constitute a waiver of any of the conditions
of this Section 5.
6. Indemnification.
(a) The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person, if any, who controls each Underwriter
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act from and against any and all losses, claims,
damages, expenses and liabilities (including any and all
investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages, expenses or
liabilities arise out of or are based on any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus supplement, the
Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus or any incorporated document, or the
omission or alleged omission to state in such document a material fact
required to be stated in it or necessary to make the statements in it
not misleading, provided that the Company will not be liable to the
extent that such loss, claim, damage, expense or liability arises from
the sale of the Shares in the public offering to any person by an
Underwriter and is based on an untrue statement or omission or alleged
untrue statement or omission (1) made in reliance on and in conformity
with information furnished in writing to the Company by the
Representatives on behalf of any Underwriter expressly for inclusion
in the Registration Statement, any preliminary prospectus supplement
or the Prospectus or (2) in a preliminary prospectus supplement if the
Prospectus (or the Prospectus as amended or supplemented) corrects the
untrue statement or omission or alleged untrue statement or omission
that is the basis of the
24
<PAGE> 25
loss, claim, damage, expense or liability for which indemnification is
sought and the person asserting any such loss, claim, damage, expense
or liability purchased Shares from such Underwriter but was not sent
or given a copy of the Prospectus at or prior to the written
confirmation of the sale of such Shares to such person. The Company
acknowledges that the statements set forth under the heading
"Underwriting" and, based on the Company's representation in paragraph
3(u) hereof, in the first paragraph on the inside front cover in any
preliminary prospectus supplement and the Prospectus constitute the
only information relating to any Underwriter furnished in writing to
the Company by the Representatives on behalf of the Underwriters
expressly for inclusion in the Registration Statement, any preliminary
prospectus supplement or the Prospectus. This indemnity agreement
will be in addition to any liability that the Company might otherwise
have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each director of the Company and each officer of the Company
who signs the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each Underwriter, but
only insofar as losses, claims, damages, expenses or liabilities arise
out of or are based on any untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity
with information relating to any Underwriter furnished in writing to
the Company by the Representatives on behalf of such Underwriter
expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus. The Company acknowledges that the
statements under the caption "Underwriting" and, based on the
Company's representation in paragraph 3(u) hereof, in the first
paragraph on the inside front cover in any preliminary prospectus
supplement and the Prospectus constitute the only information
furnished in writing to the Company by the Representatives on behalf
of the Underwriters expressly for inclusion in the Registration
Statement, any preliminary prospectus supplement or the Prospectus.
This indemnity will be in addition to any liability that each
Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of
notice of commencement of any action against such party in respect of
which a claim is to be made against an indemnifying party or parties
under this Section 6, notify each such indemnifying party of the
commencement of such action, enclosing a copy of all papers served,
but the omission so to notify such indemnifying party will not relieve
it from any liability that it may have to any indemnified party under
this Section 6 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by
25
<PAGE> 26
the indemnifying party. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate
in, and, to the extent that it elects by delivering written notice to
the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with
any other indemnifying party similarly notified, to assume the defense
of the action, with counsel satisfactory to the indemnified party,
and, after notice from the indemnifying party to the indemnified party
of its election to assume the defense, the indemnifying party will not
be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in
connection with the defense. The indemnified party will have the
right to employ its counsel in any such action, but the fees, expenses
and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying
party, (2) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to
those available to the indemnifying party, (3) a conflict or potential
conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which
case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice
of the commencement of the action, in each of which cases the fees,
disbursements, expenses and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that
no indemnifying party shall, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one
separate firm (in addition to any local counsel) at any one time for
all such indemnified party or parties. All such fees, disbursements
and other charges will be reimbursed by the indemnifying party
promptly as they are incurred. An indemnifying party will not be
liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided
for in the foregoing paragraphs of this Section 6 is applicable in
accordance with its terms but for any reason is held to be unavailable
from the Company or the Underwriters, the Company and the Underwriters
will contribute to the total loss, claim, damage, expense and
liability (including any investigative, legal and other expenses
reasonably incurred in
26
<PAGE> 27
connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the
Underwriters, such as persons who control the Company within the
meaning of the Securities Act, officers of the Company who signed the
Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company and any one or more of
the Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other. The relative
benefits received by the Company and the Underwriters shall be deemed
to be in the same proportions as the net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the front cover of the
Prospectus. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing
sentence, but also the relative fault of the Company or the
Underwriters with respect to the statements or omissions which
resulted in such loss, claim, damage, expense or liability, or any
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company
or by the Representatives on behalf of the Underwriters, the intent of
the parties, and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage, expense and
liability referred to in this Section 6(d) shall be deemed to include,
for purposes of this Section 6(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 6(d), no Underwriter shall be required
to contribute any amount in excess of the amount of the underwriting
discounts and commissions received by it, and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) will be entitled to contribution from any
person who was not guilty of such
27
<PAGE> 28
fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 6(d) are several (and not
joint) in proportion to the respective underwriting obligations. For
purposes of this Section 6(d), any person who controls a party to this
Agreement within the meaning of the Securities Act will have the same
rights to contribution as that party, and each officer of the Company
who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against such party in respect of
which a claim for contribution may be made under this Section 6(d),
will notify any such party or parties from whom contribution may be
sought, but the omission so to notify will not relieve the party or
parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6 except to the extent such
party or parties are prejudiced by the failure to receive such notice.
No party will be liable for contribution with respect to any action or
claim settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained
in this Section 6 and the representations and warranties of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on
behalf of the Underwriters, (ii) acceptance of any of the Shares and
payment therefor or (iii) any termination of this Agreement.
7. Termination.
(a) The obligations of the several Underwriters under
this Agreement may be terminated at any time prior to the Closing Date
(or, with respect to the Option Shares, on or prior to the Option
Closing Date), by notice to the Company from the Representatives,
without liability on the part of any Underwriter to the Company, if,
prior to delivery and payment for the Firm Shares (or the Option
Shares, as the case may be), in the sole judgment of the
Representatives (i) the Company shall have failed, refused or been
unable, at or prior to the Closing Date (or the Option Closing Date,
as the case may be) to perform any agreement on its part to be
performed, or because any other condition to the Underwriters'
obligations hereunder required to be fulfilled by the Company is not
fulfilled, (ii) trading in any of the equity securities of the Company
shall have been suspended by the Commission or by the National
Association of Securities Dealers Automated Quotations Market System,
(iii) trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum or maximum prices
shall have been generally established on such exchange, or additional
material governmental restrictions, not in force on the date
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<PAGE> 29
of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court
of other governmental authority, (iv) a general banking moratorium
shall have been declared by either federal or New York State
authorities, (v) if at or prior to the Closing Date (or the Option
Closing Date, as the case may be) the Company shall have sustained a
loss by strike, fire, flood, accident or other calamity of such
character as to interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss
shall have been insured, or (vi) any material adverse change in the
financial or securities markets in the United States or in political,
financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis
shall have occurred, the effect of any of which is such as to make it,
in the sole judgment of the Representatives, impracticable or
inadvisable to market the Shares on the terms and in the manner
contemplated by the Prospectus.
8.
Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it
or they have agreed to purchase hereunder, and the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of Firm
Shares, the other Underwriters shall be obligated, severally, to purchase the
Firm Shares which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase, in the proportions which the number of Firm Shares
which they have respectively agreed to purchase pursuant to Section 1 bears to
the aggregate number of Firm Shares which all such non-defaulting Underwriters
have so agreed to purchase, or in such other proportions as the Representatives
may specify; provided that in no event shall the maximum number of Firm Shares
which any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 8 by more than one-ninth of such number of
Firm Shares to be purchased by such Underwriter without the prior written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company for the purchase or sale of any
Shares.
In any such case, either the Representatives or the Company will have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any
29
<PAGE> 30
other documents or arrangements may be effected. Any action taken pursuant to
this Section 8 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
9. Miscellaneous. The reimbursement, indemnification and contribution
agreements in Sections 4 and 6 will remain in full force and effect regardless
of any termination of this Agreement, any investigation made by or on behalf of
any Underwriter, the Company or any controlling person and delivery of and
payment for the Shares.
This Agreement is solely for the benefit of the Underwriters and the
Company and their successors and assigns, and, to the extent expressed in this
Agreement, for the benefit of persons controlling any of the Underwriters or
the Company, and directors and officers of the Company, and their respective
successors and assigns, and no other person, partnership, association or
corporation shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" does not include any purchaser of
Shares from any Underwriter merely because of such purchase.
This Agreement shall become effective upon execution.
All notices and communications under this Agreement will be in
writing, effective only on receipt and mailed or delivered, by messenger,
facsimile transmission or otherwise, if to the Underwriters, to the
Representatives, c/o ________________________ at __________________________
______________________, and if to the Company, to its agent for service at
such agent's address on the cover of the Registration Statement.
This Agreement may be signed in multiple counterparts that taken as a
whole constitute one agreement.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
THE COMPANY AND THE UNDERWRITERS EACH HEREBY IRREVOCABLY WAIVE ANY
RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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<PAGE> 31
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
UNITED CITIES GAS COMPANY
By____________________________
Confirmed:
By________________________________
Acting on behalf of itself and the
Underwriters named in Schedule I
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SCHEDULE I
NUMBER OF FIRM
SHARES TO BE
NAME PURCHASED
---- -------------
____________
Total . . . . . . . . . . . . . . ============
<PAGE> 33
EXHIBIT A
UNITED CITIES GAS COMPANY
________________________
PRICE INFORMATION
1. The initial public offering price per share for the
Firm Shares shall be $ .
2. The purchase price per share for the Firm Shares to be
paid by the several Underwriters shall be $ representing an amount equal to
the initial public offering price set forth above, less $ per share.
<PAGE> 1
EXHIBIT 4.01
AMENDMENT TO ARTICLES OF INCORPORATION MAY 30, 1995
ARTICLE FIVE
Paragraph 1: The aggregate number of shares which the corporation is
authorized to issue is 40,200,000, divided into two classes consisting of
200,000 shares designated as Preferred Stock, without par value, issuable in
series as hereinafter provided (hereinafter referred to as the "Preferred
Stock"), and 40,000,000 shares designated as Common Stock, without par value
(hereinafter referred to as the "Common Stock").
Paragraph 2: The preferences, qualifications, limitations,
restrictions, and the special or relative rights in respect of the shares of
each class hereinabove designated shall be as follows:
Section 1. Issuance of Preferred Stock in Series. The Preferred
Stock may be divided into and issued from time to time as shares of one or more
series, each series to be appropriately designated by a distinguishing number,
letter, or title prior to the issue of any shares thereof. The Preferred Stock
of all series shall be of the same class and of equal rank and shall be
identical except as to the terms that may be fixed by the Board of Directors as
hereinafter in this Section 1 provided. All shares of each series shall be
alike in every particular. Before any shares of Preferred Stock of any series
shall be issued, the Board of Directors shall fix and is hereby expressly
empowered to fix, in the manner provided by law, the following relative rights
and preferences, in respect of any or all of which there may be variations
between different series:
(i) The designation of such series and the number of shares
which shall constitute such series, which number may, unless the
authorized number of shares of such series shall be limited, be
increased or decreased (but not below the number of shares thereof, if
any, then outstanding) from time to time by like action of the Board of
Directors;
(ii) The rate of dividend;
(iii) The price at and the terms and conditions on which shares
may be redeemed;
(iv) The amount payable on shares of such series in the event
of any voluntary liquidation, dissolution or winding up of the affairs
of the corporation;
(v) The amount payable on shares of such series in the event
of any involuntary liquidation, dissolution or winding up of the affairs
of the corporation;
(vi) Any sinking fund provisions for the redemption or
purchase of shares;
(vii) The terms and conditions on which shares may be
converted, if the shares of any series are issued with the privilege of
conversion;
<PAGE> 2
(viii) Any special voting rights providing for the required
approval of a specified proportion of the shares of any series for any
specified corporate action;
so far as not inconsistent with the provisions of this Article Five applicable
to all series of Preferred Stock. Shares of Preferred Stock shall be issued
only as full-paid and nonassessable shares.
All or any shares of any series of Preferred Stock at any time redeemed,
purchased or acquired by the corporation shall be canceled in accordance with
law and shall not be reissued as shares of the same series, but shall become
authorized and unissued shares of Preferred Stock undesignated as to series.
Section 2. Dividends. Out of any source lawfully available for the
payment of dividends, as and when declared by the Board of Directors, the
holders of Preferred Stock of each series shall be entitled to receive
dividends at, but not exceeding, the maximum dividend rate fixed for such
series and expressed in the certificates therefore, payable at the times fixed
for such series and expressed in the certificates therefore, and accruing from
the date of original issue of each share of such stock, before any dividends
shall be declared or paid or set apart for payment on the Common Stock and
before any sum shall be paid or set apart for the purchase or redemption of any
Preferred Stock.
After full dividends on Preferred Stock for all past dividend periods
and for the then current dividend period shall have been declared and paid, or
set apart for payment, then, and not otherwise, dividends may be declared and
paid out of any remaining source lawfully available for the payment thereof
upon the Common Stock, share and share alike, to the exclusion of the holders
of Preferred Stock.
Section 3. Liquidation, Dissolution or Winding Up. In the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the corporation, the holders of the Preferred Stock of each series
shall be entitled to receive in cash for each share thereof the amount fixed
for the respective series as herein provided, with an amount equal to any
accrued and unpaid dividends thereon to the date fixed for such payment, before
any distribution of the assets shall be made to the holders of Common Stock.
After such payment shall have been made in full to the holders of the
outstanding Preferred Stock or funds necessary for such payment shall have been
set aside by the corporation in trust for the account of the holders of the
outstanding Preferred Stock so as to be and continue available therefor, the
remaining assets of the corporation shall be divided and distributed among the
holders of the Common Stock ratably, share and share alike. If, upon such
liquidation, dissolution or winding-up, the assets of the corporation
distributable aforesaid among the holders of the Preferred Stock shall be
insufficient to permit the payment to them of said amount, the entire assets
shall be distributed ratably according to their respective interest among the
holders of the Preferred Stock. A consolidation or merger of the corporation
or any purchase or redemption of the stock of the corporation or any purchase
or redemption of stock of the corporation of any class shall not be regarded as
a liquidation, dissolution or winding up of the affairs of the corporation
within the meaning of this Section 3.
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<PAGE> 3
Section 4. Common Stock. Subject to the foregoing provisions of
this Article Five, such dividends (payable in cash, stock or otherwise) as may
be determined by the Board of Directors may be declared and paid out of funds
legally available therefore upon the Common Stock of the corporation from time
to time.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the corporation, after payment to the holders of
Preferred Stock of the amounts to which they are entitled as hereinbefore
provided, the holders of the Common Stock shall be entitled to share ratably in
all assets then remaining subject to distribution to the shareholders.
Section 5. No Pre-Emptive Rights. No holder of any shares of the
capital stock of the corporation shall be entitled as of right to purchase or
subscribe for any unissued stock of any class or any additional shares of any
class to be issued by reason of any increase of the authorized capital stock of
this corporation of any class, or bonds, certificates of indebtedness,
debentures or other securities convertible into stock of this corporation of
any class, or bonds, certificates of indebtedness debentures or other
securities convertible into stock of this corporation or carrying any right to
purchase stock of any class, but any such unissued stock or such additional
authorized issue of any stock or of other securities convertible into stock or
carrying any right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations or
associations and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its discretion.
Section 6. Voting Rights. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
In all elections for directors every shareholder shall have the right to
vote, in person or by proxy, for the number of shares owned by him, for as many
persons as there are directors to be elected or to cumulate said shares, and
give one candidate as many votes as the number of directors multiplied by the
number of his shares shall equal, or to distribute them on the same principle
among as many candidates as he shall think fit.
-3-
<PAGE> 1
EXHIBIT 4.03
April 28, 1995
AMENDMENT TO BY-LAWS
NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED, that the first
sentence of Section 13 of the By-Laws of this Corporation be and it is hereby
amended to increase the number of Directors consituting the whole Board of
Directors to nine (9).
<PAGE> 1
EXHIBIT 23.01
[ON ARTHUR ANDERSEN LLP LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Amendment No. 1 to the Form S-3 registration statement (No.
33-56983) of our report dated February 16, 1995 appearing in the Annual Report
on Form 10-K for the year ended December 31, 1994 of United Cities Gas Company,
and to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Nashville, Tennessee
May 26, 1995
