<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 333-62279
PROSPECTUS SUPPLEMENT
(To Prospectus Dated September 4, 1998)
Anticipated Ratings:
Standard & Poor's: "AAA"
Moody's: "Aaa"
(See "Ratings" herein)
$100,000,000
[LOGO] ONEOK
6.40% Senior Insured Quarterly Notes due 2019
(IQ NotesSM*)
----------------
The Senior Insured Quarterly Notes bear interest at the rate of 6.40% per
year. Interest on the Senior Insured Quarterly Notes is payable quarterly on
February 1, May 1, August 1 and November 1 of each year, beginning on May 1,
1999. The Senior Insured Quarterly Notes will mature on February 1, 2019. ONEOK
can redeem the Senior Insured Quarterly Notes on or after February 1, 2003.
ONEOK will also redeem the Senior Insured Quarterly Notes, subject to certain
conditions, at the option of the representative of any deceased noteholder.
The payment of the regularly scheduled principal and interest on the Senior
Insured Quarterly Notes will be insured by a financial guaranty insurance
policy issued by MBIA Insurance Corporation.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy of this Prospectus Supplement or the accompanying Prospectus. Any
representation to the contrary is a criminal offense.
Edward D. Jones & Co., L.P. has agreed to purchase the Senior Insured
Quarterly Notes at 97.35% of their principal amount ($97,350,000 aggregate
proceeds to ONEOK, before deducting ONEOK's expenses, which ONEOK estimates to
be $420,000), subject to the terms of ONEOK's purchase agreement. Edward D.
Jones & Co., L.P. plans to sell the Senior Insured Quarterly Notes from time to
time, in negotiated transactions or otherwise, at prices based on either the
prevailing market or negotiated prices.
ONEOK expects that the Senior Insured Quarterly Notes will be ready for
delivery in book-entry form only through The Depository Trust Company ("DTC"),
on or about February 17, 1999.
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*IQ Notes is a service mark of Edward D. Jones & Co., L.P.
Edward D. Jones & Co., L.P.
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The date of this Prospectus Supplement is February 10, 1999.
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TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
Prospectus Supplement
Cautionary Statement Concerning Forward-Looking Statements................. S-3
Summary of the Offer....................................................... S-4
Recent Developments........................................................ S-6
Capitalization............................................................. S-6
Use of Proceeds............................................................ S-6
Ratio of Earnings to Fixed Charges......................................... S-7
Description of the Senior Insured Quarterly Notes.......................... S-7
The Policy and the Insurer................................................. S-12
Ratings.................................................................... S-15
Experts.................................................................... S-15
Underwriting............................................................... S-16
Appendix A--Form of Policy................................................. S-17
Prospectus
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Disclosure Regarding Forward-Looking Statements............................ 3
The Company................................................................ 3
Use of Proceeds............................................................ 3
Description of Securities.................................................. 3
Plan of Distribution....................................................... 14
Legal Matters.............................................................. 15
Experts.................................................................... 15
</TABLE>
You should rely only on the information contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus. No one
has been authorized to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. ONEOK is not, and the Underwriter is not, making an offer to sell the
Senior Insured Quarterly Notes in any jurisdiction where the offer to sell the
Senior Insured Quarterly Notes is not permitted. You should assume that the
information appearing in this Prospectus Supplement or the accompanying
Prospectus, as well as information ONEOK previously filed with the Securities
and Exchange Commission and incorporated by reference, is accurate as of the
date on the front cover of those documents only. ONEOK's business, financial
condition, results of operations and prospects, as well as those of Southwest
Gas, may have changed since that date.
S-2
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Some of the statements contained and incorporated in this Prospectus
Supplement and the accompanying Prospectus constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. The forward-looking statements relate to anticipated financial
performance, management's plans and objectives for future operations, business
prospects, outcome of regulatory proceedings, market conditions, the timing of
the consummation of the proposed merger with Southwest Gas (as described under
"Recent Developments") and other matters. The Private Securities Litigation
Reform Act of 1995 provides a safe harbor for forward-looking statements in
certain circumstances. The following discussion is intended to identify
important factors that could cause future outcomes to differ materially from
those set forth in the forward-looking statements.
Forward-looking statements include the information concerning possible or
assumed future results of operations of ONEOK and other statements contained or
incorporated in this Prospectus Supplement or the accompanying Prospectus
identified by words such as "anticipate," "estimate," "expect," "intend,"
"believe," "projection" or "goal."
You should not place undue reliance on the forward-looking statements. They
are based on known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements of ONEOK to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. Those factors may affect ONEOK's
operations, markets, products, services and prices. In addition to any
assumptions and other factors referred to specifically in connection with the
forward-looking statements, factors that could cause ONEOK's actual results to
differ materially from those contemplated in any forward-looking statement
include, among others, the following: industry capacity; changes in technology;
regulatory delays or conditions imposed by regulatory bodies in approving the
proposed merger; the effects of weather and other natural phenomena; increased
competition from other energy suppliers as well as alternative forms of energy;
the capital intensive nature of ONEOK's business; economic climate and growth
in the geographic areas in which ONEOK does business; the uncertainty of gas
and oil reserve estimates; the timing and extent of changes in commodity prices
for natural gas, electricity and crude oil; conditions of capital markets and
equity markets, including conditions that may affect ONEOK's ability to finance
the proposed merger; Year 2000 issues; the effects of changes in governmental
policies and regulatory actions, including income taxes, environmental
compliance and authorized rates; and the other factors listed in the reports
previously or hereafter filed with the Securities and Exchange Commission,
which are incorporated by reference herein. Other factors and assumptions not
identified above were also involved in the derivation of these forward-looking
statements. The failure of those assumptions to be realized, as well as other
factors, may also cause actual results to differ materially from those
projected. ONEOK has no obligation and makes no undertaking to update publicly
or revise any forward-looking statements.
S-3
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SUMMARY OF THE OFFER
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement and in
the accompanying Prospectus.
The Company ................. ONEOK, Inc. ("ONEOK" or the "Company") is a
corporation organized under the laws of the
State of Oklahoma. ONEOK's predecessor was
founded in 1906 as Oklahoma Natural Gas
Company. The mailing address of ONEOK's
principal executive offices is 100 West Fifth
Street, Tulsa, Oklahoma 74103 and ONEOK's
telephone number is (918) 588-7000.
Senior Insured Quarterly
Notes Offered................ $100,000,000 aggregate principal amount of
ONEOK's Senior Insured Quarterly Notes.
Interest on the Senior Insured Quarterly Notes
will be payable quarterly in arrears on
February 1, May 1, August 1 and November 1 of
each year beginning on May 1, 1999.
Date of Maturity............. The Senior Insured Quarterly Notes will mature
on February 1, 2019.
Record Date ................. ONEOK will make payments to the holder of
record on the 15th calendar day of the month
prior to each February 1, May 1, August 1 and
November 1.
Ranking...................... The Senior Insured Quarterly Notes are
unsecured and rank equally with all of ONEOK's
other existing and future unsecured senior debt
and senior to any subordinated debt.
ONEOK's Optional Redemption ONEOK will have the option to redeem the Senior
............................. Insured Quarterly Notes, in whole or in part,
from time to time on or after February 1, 2003.
If ONEOK redeems the Senior Insured Quarterly
Notes, it will pay 100% of the principal amount
plus the accrued interest through the
redemption date.
Redemption Option of a
Deceased Noteholder's
Representative .............. ONEOK will also redeem the Senior Insured
Quarterly Notes at the option of the
representative of any deceased noteholder.
ONEOK will pay 100% of the principal amount,
plus accrued interest, subject to the following
condition: the maximum principal amount ONEOK
will redeem is $30,000 per deceased owner and
$3,000,000 in the aggregate for all deceased
owners during the initial period from the date
of the original issuance of the Senior Insured
Quarterly Notes until (but not including)
February 1, 2000 and during each twelve-month
period thereafter.
Insurance ................... The payment of the regularly scheduled
principal and interest on the Senior Insured
Quarterly Notes will be insured by a financial
guaranty insurance policy issued by MBIA
Insurance Corporation that will be issued at
the same time the Senior Insured Quarterly
Notes are delivered.
Ratings......................
ONEOK anticipates that the Senior Insured
Quarterly Notes will be rated "AAA" by Standard
& Poor's Ratings Group and "Aaa" by Moody's
Investors Services, Inc.
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Use of Proceeds.............. ONEOK estimates that the net proceeds of the
offering will be approximately $96,930,000.
ONEOK intends to use these proceeds from the
offering of the Senior Insured Quarterly Notes
to repay bank borrowings and for general
corporate purposes.
Ratio of Earnings to Fixed ONEOK's historical ratio of earnings to fixed
Charges...................... charges for each of the years ended August 31,
1998, 1997, 1996, 1996 and 1994 was 5.50x,
3.51x, 3.28x, 2.70x and 2.52x, respectively.
The historical ratio of earnings to combined
fixed charges and preferred stock dividend
requirements for each of the years ended August
31, 1998, 1997, 1996, 1995 and 1994 was 2.52x,
3.48x, 3.24x, 2.67x and 2.49x, respectively.
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RECENT DEVELOPMENTS
On December 14, 1998, ONEOK announced that it had entered into an Agreement
and Plan of Merger providing for the acquisition by merger of Southwest Gas for
cash of approximately $864 million. ONEOK will be the survivor of the proposed
merger transaction. The proposed merger is subject to customary conditions,
including approval by the shareholders of Southwest Gas and the receipt of
certain governmental and other authorizations, and is expected to close later
in 1999. ONEOK believes that the requisite regulatory approvals will be
received, but is uncertain when it will receive those approvals. It is possible
that regulatory approvals that are obtained will contain conditions or
limitations that will adversely affect the results of operations of the
combined company. The proposed merger is also subject to the right of the board
of directors of Southwest Gas to accept a superior offer, in which event the
proposed merger would not take place. Certain unaudited pro forma combined
condensed financial data giving effect to the proposed merger are included in
ONEOK's Current Report on Form 8-K/A dated January 26, 1999, which is
incorporated herein by reference. ONEOK expects to issue about $657 million of
debt and $250 million of trust preferred securities in order to finance the
proposed merger.
On February 3, 1999, ONEOK entered into a strategic alliance with Magnum
Hunter Resources, Inc. ("Magnum Hunter"). Under the strategic alliance, ONEOK
purchased $50 million of Magnum Hunter's 8% Convertible Preferred Stock (31% of
the equity of Magnum Hunter), $10 million of oil and gas properties, including
reserves and a gathering system, the right to market the natural gas production
of the Magnum Hunter group in Oklahoma and certain rights to participate in
future acquisitions of oil and gas properties by Magnum Hunter in Oklahoma.
In December of 1998 and January of 1999, ONEOK purchased certain other oil
and gas properties in Oklahoma for approximately $50 million.
CAPITALIZATION
The following table sets forth ONEOK's capitalization as of November 30,
1998, its supplemental capitalization to reflect the recent issuance of $100
million in aggregate principal amount of debentures due 2009 (the "Debentures
due 2009") and its supplemental capitalization, as adjusted to reflect the
issuance of the Senior Insured Quarterly Notes. The following data is qualified
in its entirety by reference to and should be read together with, the detailed
information and financial statements appearing in the documents incorporated in
this Prospectus Supplement and the accompanying Prospectus.
<TABLE>
<CAPTION>
As of November 30, 1998
---------------------------------------------
Supplemental As
Actual Supplemental Adjusted
---------- ---------------- ----------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Senior Insured Quarterly Notes
Offered Hereby................ $ -- $ -- -- % $ 100,000 5.9%
Debentures due 2009............ -- 100,000 6.0 100,000 5.9
Other Long-Term Debt (Excluding
Current Portion).............. 512,355 412,355 24.6 336,355 19.7
Convertible Preferred Stock.... 569,609 569,609 34.0 569,609 33.5
Common Shareholders' Equity.... 594,412 594,412 35.4 594,412 35.0
---------- ---------- ----- ---------- -----
Total Capitalization......... $1,676,376 $1,676,376 100.0% $1,700,376 100.0%
========== ========== ===== ========== =====
Short-Term Notes Payable....... $ 68,000 $ 68,000 $ 44,000
========== ========== ==========
</TABLE>
USE OF PROCEEDS
ONEOK will use the proceeds from the sale of the Senior Insured Quarterly
Notes to repay bank borrowings and for general corporate purposes. The bank
borrowings were used for general working capital requirements and to finance
the tender offer for and redemption of $175.9 million of ONEOK long-term debt
securities in December 1998. The bank borrowings bear interest at fluctuating
rates. The annual interest rate on the bank borrowings to be repaid was 5.91%
as of December 31, 1998.
S-6
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges and
the ratio of earnings to combined fixed charges and preferred stock dividend
requirements for ONEOK for the periods indicated:
<TABLE>
<CAPTION>
For the Quarter
Ended November 30, For the Years Ended August 31,
------------------------------- --------------------------------------------------
Merger Historical Merger Historical
Pro As Pro As
Forma(a) Adjusted(b) Historical Forma(a) Adjusted(b) Historical
-------- ---------- ---------- -------- ---------- -----------------------------
1998 1998 1998 1998 1998 1998 1997 1996 1995 1994
-------- ---------- ---------- -------- ---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges (c)...... -- 3.39x 2.98x 1.92x 6.50x 5.50x 3.51x 3.28x 2.70x 2.52x
Ratio of earnings to
combined fixed charges
and preferred stock
dividend
requirements(d)........ -- 1.38x 1.31x 1.52x 2.71x 2.52x 3.48x 3.24x 2.67x 2.49x
</TABLE>
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(a) Merger pro forma information gives effect to the proposed merger
transaction with Southwest Gas and is presented as if the proposed merger
transaction had occurred as of the beginning of the applicable period. On
a pro forma basis, giving effect to (1) the annual interest charges on
long-term debt and (2) the annual preferred securities distribution on the
trust preferred securities expected to be issued in order to finance the
proposed merger transaction with Southwest Gas, earnings would have been
insufficient to cover (x) fixed charges by approximately $12.7 million and
(y) combined fixed charges and preferred dividend requirements by
approximately $28.0 million for the three months ended November 30, 1998.
(b) Historical as adjusted information gives effect to the offering of the
Senior Insured Quarterly Notes and the recent offering of the Debentures
due 2009 and the application of the net proceeds therefrom and is
presented as if both offerings had occurred as of the beginning of the
applicable period. The information does not give effect to the proposed
merger transaction.
(c) For purposes of computing the ratio of earnings to fixed charges,
"earnings" consists of net income plus fixed charges and income taxes.
"Fixed charges" consists of interest charges, the amortization of debt
issue costs, the representative interest portion of operating leases and
preferred securities distributions of a subsidiary.
(d) For purposes of computing the ratio of earnings to combined fixed charges
and preferred stock dividend requirements, "earnings" consists of net
income plus fixed charges and income taxes. "Fixed charges" consists of
interest charges, the amortization of debt issue costs, the representative
interest portion of operating leases and preferred securities
distributions of a subsidiary. "Preferred stock dividend requirements"
consists of the pre-tax preferred stock dividend requirement.
DESCRIPTION OF THE SENIOR INSURED QUARTERLY NOTES
Set forth below is a description of the specific terms of the Senior Insured
Quarterly Notes. This description supplements, and should be read together
with, the description of the general terms and provisions of the Securities set
forth in the accompanying Prospectus under the caption "Description of
Securities." The following description does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the description
in the accompanying Prospectus and the indenture dated as of September 24, 1998
(the "Indenture") between ONEOK and Chase Bank of Texas, National Association,
as trustee (the "Trustee") pursuant to which the Senior Insured Quarterly Notes
will be issued.
General
The Senior Insured Quarterly Notes will be issued as a series of Securities
under the Indenture. The Senior Insured Quarterly Notes will be limited in
aggregate principal amount to $100,000,000.
The entire principal amount of the Senior Insured Quarterly Notes will
mature and become due and payable, together with any accrued and unpaid
interest thereon, on February 1, 2019. The Senior Insured Quarterly Notes are
not subject to any sinking fund provision.
S-7
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Interest
Each Senior Insured Quarterly Note will bear interest at 6.40% per year from
the date of original issuance, payable quarterly in arrears on February 1, May
1, August 1 and November 1 of each year (each, an "Interest Payment Date") to
the person in whose name such Senior Insured Quarterly Note is registered at
the close of business on the fifteenth calendar day of the month preceding the
respective Interest Payment Date. The initial Interest Payment Date is May 1,
1999. The amount of interest payable will be computed on the basis of a 360-day
year of twelve 30-day months. In the event that any date on which interest is
payable on the Senior Insured Quarterly Notes is not a business day, then
payment of the interest payable on the original date will be made on the next
succeeding day which is a business day (and without any interest or other
payment in respect of any such delay), except that, if such business day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding business day, in each case with the same force and effect
as if made on the original date.
Special Insurance Provisions of the Indenture
Notwithstanding any other provision of the Indenture, so long as MBIA
Insurance Corporation (the "Insurer") is not in default under the policy, the
Insurer shall be entitled to control and direct the enforcement of all rights
and remedies with respect to the Senior Insured Quarterly Notes, except for the
rights provided under "--Limited Right of Redemption Upon Death of Beneficial
Owner."
No provision of the Indenture may be amended in any manner without the prior
written consent of the Insurer.
Optional Redemption
The Company shall have the right to redeem the Senior Insured Quarterly
Notes, in whole or in part, without premium, from time to time, on or after
February 1, 2003, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest to the redemption date.
If notice of redemption is given as aforesaid, the Senior Insured Quarterly
Notes so to be redeemed shall, on the redemption date, become due and payable
at the redemption price together with any accrued interest thereon, and from
and after such date (unless the Company shall default in the payment of the
redemption price and accrued interest) such Senior Insured Quarterly Notes
shall cease to bear interest. If any Senior Insured Quarterly Note called for
redemption shall not be paid upon surrender thereof for redemption, the
principal shall, until paid, bear interest from the redemption date at the rate
set forth on the cover.
Subject to the foregoing and to applicable law (including, without
limitation, United States federal securities laws), the Company or its
affiliates may, at any time and from time to time, purchase outstanding Senior
Insured Quarterly Notes by tender, in the open market or by private agreement.
Limited Right of Redemption Upon Death of Beneficial Owner
Unless the Senior Insured Quarterly Notes have been declared due and payable
prior to their maturity by reason of an Event of Default, the Representative
(as defined herein) of a deceased Beneficial Owner (as defined herein) has the
right to request redemption at par of all or part of its interest, expressed in
integral multiples of $1,000 principal amount, in the Senior Insured Quarterly
Notes for payment prior to maturity, and the Company will redeem the same
subject to the limitations that the Company will not be obligated to redeem
during the period from the date of the original issuance of the Senior Insured
Quarterly Notes until (but not including) February 1, 2000 (the "Initial
Period"), and during each twelve-month period thereafter up to (but not
including) each February 1 thereafter (each such twelve-month period being
hereinafter referred to as a "Subsequent Period")
(i) on behalf of a deceased Beneficial Owner any interest in the Senior
Insured Quarterly Notes which exceeds an aggregate principal amount of
$30,000; or
S-8
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(ii) interests in the Senior Insured Quarterly Notes in an aggregate
principal amount exceeding $3,000,000.
A request for redemption may be initiated by the Representative of a deceased
Beneficial Owner at any time and in any principal amount in integral multiples
of $1,000. Representatives of deceased Beneficial Owners must make arrangements
with the Participant (as defined herein) through whom the deceased Beneficial
Owner's interest is owned in order that the Participant, and, in turn, DTC can
make redemption requests to the Trustee. If the Company, although not obligated
to do so, chooses to redeem interests of a deceased Beneficial Owner in the
Senior Insured Quarterly Notes in the Initial Period or in any Subsequent
Period in excess of the $30,000 limitation, such redemption, to the extent that
it exceeds the $30,000 limitation for any deceased Beneficial Owner, shall not
be included in the computation of the $3,000,000 aggregate limitation for such
Initial Period or such Subsequent Period, as the case may be, or for any
succeeding Subsequent Period.
Subject to the $30,000 and the $3,000,000 limitations, the Company will,
after the death of any Beneficial Owner, redeem the interest of the Beneficial
Owner in the Senior Insured Quarterly Notes within 60 days following receipt by
the Trustee of a Redemption Request (as defined herein). If, during the Initial
Period or any Subsequent Period, Redemption Requests exceed the aggregate
principal amount of interests in Senior Insured Quarterly Notes required to be
redeemed, then such excess Redemption Requests will be applied to successive
Subsequent Periods, regardless of the number of Subsequent Periods required to
redeem such interests. All Redemption Requests will be redeemed in the order in
which the Trustee receives the Redemption Requests.
A request for redemption of an interest in the Senior Insured Quarterly
Notes may be initiated by the personal representative or other person
authorized to represent the estate of a deceased Beneficial Owner or from a
surviving joint tenant(s) or tenant(s) by the entirety or tenant(s) in common
(each a "Representative"). The Representative shall deliver a request to the
Participant through whom the deceased Beneficial Owner owned such interest, in
form satisfactory to the Participant, together with evidence of the death of
the Beneficial Owner, evidence of the authority of the Representative
satisfactory to the Participant, such waivers, notices or certificates as may
be required under applicable state or federal law and such other evidence of
the right to such redemption as the Participant shall require. The request
shall specify the principal amount of the interest in the Senior Insured
Quarterly Notes to be redeemed. The Participant shall thereupon deliver to DTC
a request for redemption substantially in the form attached as an exhibit to
the Indenture (a "Redemption Request"), accompanied by the documents submitted
to the Participant as above provided, and DTC will forward the same to the
Trustee. Documents accompanying Redemption Requests shall be in form
satisfactory to the Company. The Trustee may conclusively assume, without
independent investigation, that the statements contained in each Redemption
Request are true and correct and shall have no responsibility for reviewing any
documents accompanying a Redemption Request.
The price to be paid by the Company for an interest in the Senior Insured
Quarterly Notes to be redeemed pursuant to a request on behalf of a deceased
Beneficial Owner is one hundred percent (100%) of the principal amount thereof
plus accrued but unpaid interest to the date of payment. Subject to
arrangements with DTC, payment for interests in the Senior Insured Quarterly
Notes which are to be redeemed shall be made to DTC upon presentation of Senior
Insured Quarterly Notes to the Trustee for redemption in the aggregate
principal amount specified in the Redemption Requests submitted to the Trustee
by DTC which are to be fulfilled in connection with such payment. Any
acquisition of Senior Insured Quarterly Notes by the Company other than by
redemption at the option of any Representative of a deceased Beneficial Owner
shall not be included in the computation of either the $30,000 or the
$3,000,000 limitation for the Initial Period or for any Subsequent Period.
Interests in the Senior Insured Quarterly Notes held in tenancy by the
entirety, joint tenancy or by tenants in common will be deemed to be held by a
single Beneficial Owner, and the death of a tenant in common, tenant by the
entirety or joint tenant will be deemed the death of a Beneficial Owner. The
death of a person who, during such person's lifetime, was entitled to
substantially all of the rights of a Beneficial Owner of an
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interest in the Senior Insured Quarterly Notes will be deemed the death of the
Beneficial Owner, regardless of the recordation of such interest on the records
of the Participant, if such rights can be established to the satisfaction of
the Participant and the Company. Such interest shall be deemed to exist in
typical cases of nominee ownership, ownership under the Uniform Gifts to Minors
Act or the Uniform Transfers to Minors Act, community property or other similar
joint ownership arrangements, including individual retirement accounts of Keogh
[H.R.10] plans maintained solely by or for the decedent or by or for the
decedent and any spouse, and trust and certain other arrangements where one
person has substantially all of the rights of a Beneficial Owner during the
person's lifetime.
In the case of a Redemption Request which is presented on behalf of a
deceased Beneficial Owner and which has not been fulfilled at the time the
Company gives notice of its election to redeem the Senior Insured Quarterly
Notes, the interests in the Senior Insured Quarterly Notes which are the
subject of such Redemption Request shall not be eligible for redemption
pursuant to the Company's option to redeem but shall remain subject to
redemption pursuant to such Redemption Request.
Subject to the provisions of the immediately preceding paragraph, any
Redemption Request may be withdrawn upon delivery of a written request for such
withdrawal given to the Trustee by DTC prior to payment for redemption of the
interest in the Senior Insured Quarterly Notes by reason of the death of a
Beneficial Owner.
The Company is legally obligated to redeem Senior Insured Quarterly Notes
and interests of Beneficial Owners therein properly presented for redemption
pursuant to a Redemption Request in accordance with and subject to the terms,
conditions and limitations of the Indenture, as summarized above. The Company's
redemption obligation is not cumulative. Nothing in the Indenture prohibits the
Company from redeeming, in fulfillment of Redemption Requests made pursuant to
the Indenture, Senior Insured Quarterly Notes or interests therein of
Beneficial Owners in excess of the principal amount the Company is obligated to
redeem, nor does anything in the Indenture prohibit the Company from purchasing
any Senior Insured Quarterly Notes or interests therein in the open market.
However, the Company may not use any Senior Insured Quarterly Notes redeemed or
purchased as described in the immediately preceding sentence as a credit
against its redemption obligation.
Because of the limitations of the Company's requirement to redeem, no
Beneficial Owner can have any assurance that its interest in the Senior Insured
Quarterly Notes will be paid prior to maturity.
Book-Entry Only Issuance--The Depository Trust Company
DTC will act as the initial securities depositary for the Senior Insured
Quarterly Notes. The Senior Insured Quarterly Notes will be issued only as
fully registered securities registered in the name of Cede & Co., DTC's
nominee. One or more fully registered global Senior Insured Quarterly Notes
will be issued, representing in the aggregate the total principal amount of
Senior Insured Quarterly Notes, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participant's accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others such as securities brokers
and dealers, banks and trust companies that
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clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules applicable
to DTC and its Participants are on file with the Securities and Exchange
Commission.
Purchases of Senior Insured Quarterly Notes within the DTC system must be
made by or through Direct Participants, which will receive a credit for the
Senior Insured Quarterly Notes on DTC's records. The ownership interest of each
actual purchaser of Senior Insured Quarterly Notes (such purchaser, or the
person to whom such purchaser conveys his or her ownership interest, a
"Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or Indirect Participants
through which the Beneficial Owners purchased Senior Insured Quarterly Notes.
Transfers of ownership interests in the Senior Insured Quarterly Notes are to
be accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Senior Insured Quarterly Notes,
except in the event that use of the book-entry system for the Senior Insured
Quarterly Notes is discontinued, ONEOK determines that Beneficial Owners may
exchange their ownership interests for such certificates or there shall have
occurred an Event of Default.
DTC will have no knowledge of the actual Beneficial Owners of the Senior
Insured Quarterly Notes. DTC's records reflect only the identity of the Direct
Participants to whose accounts such Senior Insured Quarterly Notes are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices will be sent to DTC. If less than all of the Senior
Insured Quarterly Notes are being redeemed, DTC will reduce the amount of the
interest of each Direct Participant in the Senior Insured Quarterly Notes in
accordance with its procedures.
Although voting with respect to the Senior Insured Quarterly Notes is
limited, in those cases where a vote is required, neither DTC nor Cede & Co.
will itself consent or vote with respect to Senior Insured Quarterly Notes.
Under its usual procedures, DTC would mail an Omnibus Proxy to ONEOK as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Senior Insured Quarterly Notes are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Payments on the Senior Insured Quarterly Notes will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment
date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payments on such payment
date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the account of customers registered in "street name," and will be the
responsibility of such Participant and not of DTC or ONEOK, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment to DTC is the responsibility of ONEOK, disbursements of such payments
to Direct Participants is the responsibility of DTC and disbursements of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
Except as provided herein, a Beneficial Owner of an interest in a global
Senior Insured Quarterly Note will not be entitled to receive physical delivery
of Senior Insured Quarterly Notes. Accordingly, each Beneficial Owner must rely
on the procedures of DTC to exercise any rights under the Senior Insured
Quarterly Notes. The laws of some jurisdictions require that certain purchasers
of securities take physical delivery of securities
S-11
<PAGE>
in definitive form. Such laws may impair the ability to transfer beneficial
interests in a global Senior Insured Quarterly Note.
DTC may discontinue providing its services as security depositary with
respect to the Senior Insured Quarterly Notes at any time by giving reasonable
notice to ONEOK. Under such circumstances, in the event that a successor
securities depositary is not obtained, Senior Insured Quarterly Note
certificates will be printed and delivered to the holders of record.
Additionally, ONEOK may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor depositary) with respect to the Senior
Insured Quarterly Notes. In that event, certificates for the Senior Insured
Quarterly Notes will be printed and delivered to the holders of record.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that ONEOK believes to be reliable, but ONEOK
takes no responsibility for the accuracy thereof. ONEOK has no responsibility
for the performance by DTC or its Participants of their respective obligations
as described herein or under the rules and procedures governing their
respective operations.
THE POLICY AND THE INSURER
The following information has been furnished by MBIA Insurance Corporation
(the "Insurer") for use in this Prospectus Supplement. Reference is made to
Appendix A for a specimen of the Insurer's policy.
The Insurer's policy unconditionally and irrevocably guarantees the full and
complete payment required to be made by or on behalf of ONEOK to the Paying
Agent or its successor of an amount equal to (i) the principal of (at the
stated maturity) and interest on, the Senior Insured Quarterly Notes as such
payments shall become due but shall not be so paid (except that in the event of
any acceleration of the due date of such principal by reason of mandatory or
optional redemption or acceleration resulting from default or otherwise, the
payments guaranteed by ONEOK's policy shall be made in such amounts and at such
times as such payments of principal would have been due had there not been any
such acceleration); and (ii) the reimbursement of any such payment which is
subsequently recovered from any owner of the Senior Insured Quarterly Notes
pursuant to a final judgment by a court of competent jurisdiction that such
payment constitutes an avoidable preference to such owner within the meaning of
any applicable bankruptcy law (a "Preference").
The Insurer's policy does not insure against loss of any prepayment premium
which may at any time be payable with respect to any Senior Insured Quarterly
Note. The Insurer's policy does not, under any circumstance, insure against
loss relating to: (i) optional or mandatory redemptions (other than mandatory
sinking fund redemptions); (ii) any payments to be made on an accelerated
basis; (iii) payments of the purchase price of the Senior Insured Quarterly
Notes upon tender by an owner thereof; or (iv) any Preference relating to (i)
through (iii) above. The Insurer's policy also does not insure against
nonpayment of principal of or interest on the Senior Insured Quarterly Notes
resulting from the insolvency, negligence or any other act or omission of the
Paying Agent or any other paying agent for the Senior Insured Quarterly Notes.
Upon receipt of telephonic or telegraphic notice, such notice subsequently
confirmed in writing by registered or certified mail, or upon receipt of
written notice by registered or certified mail, by the Insurer from the Paying
Agent or any owner of Senior Insured Quarterly Notes the payment of an insured
amount for which is then due, that such required payment has not been made, the
Insurer on the due date of such payment or within one business day after
receipt of notice of such nonpayment, whichever is later, will make a deposit
of funds, in an account with State Street Bank and Trust Company, N.A., in New
York, New York, or its successor, sufficient for the payment of any such
insured amounts which are then due. Upon presentment and surrender of such
Senior Insured Quarterly Notes or presentment of such other proof of ownership
of the Senior Insured Quarterly Notes, together with any appropriate
instruments of assignment to evidence the assignment of the insured amounts due
on the Senior Insured Quarterly Notes as are paid by the Insurer, and
appropriate instruments to effect the appointment of the Insurer as agent for
such owners of the Senior Insured Quarterly
S-12
<PAGE>
Notes in any legal proceeding related to payment of insured amounts on the
Senior Insured Quarterly Notes, such instruments being in a form satisfactory
to State Street Bank and Trust Company, N.A., State Street Bank and Trust
Company, N.A. shall disburse to such owners or the Paying Agent payment of the
insured amounts due on such Senior Insured Quarterly Notes, less any amount
held by the Paying Agent for the payment of such insured amounts and legally
available therefor.
The Insurer's policy is not covered by the Property/Casualty Insurance
Security Fund specified in Article 76 of the New York Insurance Law.
The Insurer is the principal operating subsidiary of MBIA Inc., a New York
Stock Exchange listed company. MBIA Inc. is not obligated to pay the debts of
or claims against the Insurer. The Insurer is domiciled in the State of New
York and licensed to do business in and subject to regulation under the laws of
all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, the Virgin Islands of the United
States and the Territory of Guam. The Insurer has two European branches, one in
the Republic of France and the other in the Kingdom of Spain. New York has laws
prescribing minimum capital requirements, limiting classes and concentrations
of investments and requiring the approval of policy rates and forms. State laws
also regulate the amount of both the aggregate and individual risks that may be
insured, the payment of dividends by the Insurer, changes in control and
transactions among affiliates. Additionally, the Insurer is required to
maintain contingency reserves on its liabilities in certain amounts and for
certain periods of time.
Effective February 17, 1998, MBIA Inc. acquired all of the outstanding stock
of Capital Markets Assurance Corporation ("CMAC") through a merger with its
parent CapMAC Holdings Inc. Pursuant to a reinsurance agreement CMAC has ceded
all of its net insured risks (including any amounts due but unpaid from third
party reinsurers), as well as its unearned premiums and contingency reserves,
to the Insurer. MBIA Inc. is not obligated to pay the debts of or claims
against CMAC.
The consolidated financial statements of the Insurer, a wholly owned
subsidiary of MBIA Inc., and its subsidiaries as of December 31, 1997 and
December 31, 1996 and for the three years ended December 31, 1997, prepared in
accordance with generally accepted accounting principles, included in the
Annual Report on Form 10-K of MBIA Inc. for the year ended December 31, 1997
and the consolidated financial statements of the Insurer and its subsidiaries
as of September 30, 1998 and for the nine-month periods ending September 30,
1998 and September 30, 1997 included in the Quarterly Report on Form 10-Q of
MBIA Inc. for the period ending September 30, 1998 are hereby incorporated by
reference into this Prospectus Supplement and shall be deemed to be a part
hereof. Any statement contained in a document incorporated by reference herein
shall be modified or superseded for purposes of this Prospectus Supplement to
the extent that a statement contained herein or in any other subsequently filed
document which also is 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
Supplement.
All financial statements of the Insurer and its subsidiaries included in
documents filed by MBIA Inc. pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus Supplement and prior
to the termination of the offering of the Senior Insured Quarterly Notes shall
be deemed to be incorporated by reference into this Prospectus Supplement and
to be a part hereof from the respective dates of filing such documents.
S-13
<PAGE>
The tables below present selected financial information of the Insurer
determined in accordance with statutory accounting practices prescribed or
permitted by insurance regulatory authorities ("SAP") and generally accepted
accounting principles ("GAAP"):
<TABLE>
<CAPTION>
SAP
------------------------------------
December 31, 1997 September 30, 1998
----------------- ------------------
(Audited) (Unaudited)
(In millions)
<S> <C> <C>
Admitted Assets............................ $5,256 $6,318
Liabilities................................ 3,496 4,114
Capital and Surplus........................ 1,760 2,204
<CAPTION>
GAAP
------------------------------------
December 31, 1997 September 30, 1998
----------------- ------------------
(Audited) (Unaudited)
(In millions)
<S> <C> <C>
Assets..................................... $5,988 $7,439
Liabilities................................ 2,624 3,268
Shareholder's Equity....................... 3,364 4,171
</TABLE>
Copies of the financial statements of the Insurer incorporated by reference
herein and copies of the Insurer's 1997 year-end audited financial statements
prepared in accordance with statutory accounting practices are available,
without charge, from the Insurer. The address of the Insurer is 113 King
Street, Armonk, New York 10504. The telephone number of the Insurer is (914)
273-4545.
The Insurer does not accept any responsibility for the accuracy or
completeness of this Prospectus Supplement or any information or disclosure
contained herein, or omitted herefrom, other than with respect to the accuracy
of the information regarding the Insurer's policy and Insurer set forth under
the heading "The Policy and the Insurer." Additionally, the Insurer makes no
representation regarding the Senior Insured Quarterly Notes or the advisability
of investing in the Senior Insured Quarterly Notes.
Moody's Investors Services, Inc. ("Moody's") rates financial strength of the
Insurer "Aaa."
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. ("S&P") rates the financial strength of the Insurer "AAA."
Fitch IBCA, Inc. (formerly known as Fitch Investors Service, L.P.) rates the
financial strength of the Insurer "AAA."
Each rating of the Insurer should be evaluated independently. The ratings
reflect the respective rating agency's current assessment of the
creditworthiness of the Insurer and its ability to pay claims on its policies
of insurance. Any further explanation as to the significance of the above
ratings may be obtained only from the applicable rating agency.
The above ratings are not recommendations to buy, sell or hold the Senior
Insured Quarterly Notes, and such ratings may be subject to revision or
withdrawal at any time by the rating agencies. Any downward revision or
withdrawal of any of the above ratings may have an adverse effect on the market
price of the Senior Insured Quarterly Notes. The Insurer does not guaranty the
market price of the Senior Insured Quarterly Notes nor does it guaranty that
the ratings on the Senior Insured Quarterly Notes will not be revised or
withdrawn.
S-14
<PAGE>
Year 2000 Readiness Disclosure
An area of potential risk to the Insurer's financial guarantee business
would be the inability of an issuer or its trustee or paying agent to make
payments on an Insurer insured transaction because of their failure to be Year
2000 ready. To mitigate this risk, the Insurer has been surveying all trustees,
all paying agents and selected high volume issuers to determine their state of
readiness. While the survey is not complete, the results to-date are that all
respondents are either ready or planning to be ready by late 1999. If the
Insurer is asked to pay in those situations where the issuer's system fails, it
will do so and would expect to recover any such payment in a fairly short time
period. It is not possible at this time to evaluate the extent of such
payments. The Insurer believes that it has adequate sources of liquidity to
cover these payments.
RATINGS
It is anticipated that S&P and Moody's will assign the Senior Insured
Quarterly Notes the ratings set forth on the cover page hereof conditioned upon
the issuance and delivery by the Insurer at the time of delivery of the Senior
Insured Quarterly Notes of the policy, insuring the timely payment of the
principal of and interest on the Senior Insured Quarterly Notes. Such ratings
reflect only the views of such rating agencies, and an explanation of the
significance of such ratings may be obtained only from such rating agencies at
the following addresses: Moody's Investors Service, Inc., 99 Church Street, New
York, New York 10007; and Standard & Poor's, 25 Broadway, New York, New York
10004. There is no assurance that such ratings will remain in effect for any
period of time or that they will not be revised downward or withdrawn entirely
by the rating agencies if, in their judgment, circumstances warrant. Neither
ONEOK nor the Underwriter has undertaken any responsibility to oppose any
proposed downward revision or withdrawal of a rating on the Senior Insured
Quarterly Notes. Any such downward revision or withdrawal of such ratings may
have an adverse effect on the market price of the Senior Insured Quarterly
Notes.
At present, each of such rating agencies maintains four categories of
investment grade ratings. They are for S&P--AAA, AA, A and BBB and for
Moody's--Aaa, Aa, A and Baa. S&P defines "AAA" as the highest rating assigned
to a debt obligation. Moody's defines "Aaa" as representing the best quality
debt obligation carrying the smallest degree of investment risk.
EXPERTS
The consolidated financial statements of ONEOK and its subsidiaries as of
August 31, 1998 and 1997, and for each of the years in the three-year period
ended August 31, 1998 are incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Southwest Gas and its subsidiaries
as of December 31, 1997 and 1996, and for each of the three years in the three-
year period ended December 31, 1997, incorporated by reference herein and in
the registration statement, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said report.
The consolidated balance sheets of MBIA Insurance Corporation and
Subsidiaries as of December 31, 1997 and December 31, 1996 and the related
consolidated statements of income, changes in shareholder's equity and cash
flows for each of the three years in the period ended December 31, 1997
incorporated by reference in this Prospectus Supplement, have been incorporated
herein in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
S-15
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, ONEOK has
agreed to sell to Edward D. Jones & Co., L.P. (the "Underwriter"), and the
Underwriter has agreed to purchase from ONEOK, the entire principal amount of
the Senior Insured Quarterly Notes.
The Underwriter has advised ONEOK that it proposes to offer the Senior
Insured Quarterly Notes from time to time for sale in one or more negotiated
transactions or otherwise, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Underwriter may effect such transactions by selling the Senior Insured
Quarterly Notes to or through dealers, and such dealers may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Underwriter and/or the purchasers of the Senior Insured Quarterly
Notes for whom they may act as agent. The Underwriter and any dealers that
participate with the Underwriter in the distribution of the Senior Insured
Quarterly Notes may be deemed to be underwriters, and any discounts or
commissions received by them and any profit on the resale of the Senior Insured
Quarterly Notes by them may be deemed to be underwriting discounts or
commissions, under the Securities Act of 1933.
ONEOK has agreed, during the period of 10 days from the date on which the
Senior Insured Quarterly Notes are purchased by the Underwriter, not to sell,
offer to sell, grant any option for the sale of, or otherwise dispose of any
Senior Insured Quarterly Notes, any security convertible into or exchangeable
into or exercisable for Senior Insured Quarterly Notes or any debt securities
substantially similar to the Senior Insured Quarterly Notes, without the prior
written consent of the Underwriter.
Prior to this offer, there has been no public market for the Senior Insured
Quarterly Notes. The Underwriter has advised ONEOK that it intends to make a
market in the Senior Insured Quarterly Notes. The Underwriter will have no
obligation to make a market in the Senior Insured Quarterly Notes, however, and
may cease market making activities, if commenced, at any time.
ONEOK has agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933 to contribute to
payments the Underwriter may be required to make in respect thereof.
The Underwriter has performed services for ONEOK and its affiliates in the
past.
S-16
<PAGE>
APPENDIX A--FORM OF POLICY
FINANCIAL GUARANTY INSURANCE POLICY
MBIA Insurance Corporation
Armonk, New York 10504
[Number]
MBIA Insurance Corporation (the "Insurer"), in consideration of the payment of
the premium and subject to the terms of this policy, hereby unconditionally and
irrevocably guarantees to any owner, as hereinafter defined, of the following
described obligations, the full and complete payment required to be made by or
on behalf of the Issuer to
or its successor (the "Paying Agent") of an amount equal to (i) the principal
of (either at the stated maturity or by any advancement of maturity pursuant to
a mandatory sinking fund payment) and interest on, the Obligations (as that
term is defined below) as such payments shall become due but shall not be so
paid (except that in the event of any acceleration of the due date of such
principal by reason of mandatory or optional redemption or acceleration
resulting from default or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments guaranteed hereby
shall be made in such amounts and at such times as such payments of principal
would have been due had there not been any such acceleration); and (ii) the
reimbursement of any such payment which is subsequently recovered from any
owner pursuant to a final judgment by a court of competent jurisdiction that
such payment constitutes an avoidable preference to such owner within the
meaning of any applicable bankruptcy law. The amounts referred to in clauses
(i) and (ii) of the preceding sentence shall be referred to herein collectively
as the "Insured Amounts." "Obligations" shall mean:
[PAR]
[LEGAL NAME OF ISSUE]
Upon receipt of telephonic or telegraphic notice, such notice subsequently
confirmed in writing by registered or certified mail, or upon receipt of
written notice by registered or certified mail, by the Insurer from the Paying
Agent or any owner of an Obligation the payment of an Insured Amount for which
is then due, that such required payment has not been made, the Insurer on the
due date of such payment or within one business day after receipt of notice of
such nonpayment, whichever is later, will make a deposit of funds, in an
account with State Street Bank and Trust Company, N.A., in New York, New York,
or its successor, sufficient for the payment of any such Insured Amounts which
are then due. Upon presentment and surrender of such Obligations or presentment
of such other proof of ownership of the Obligations, together with any
appropriate instruments of assignment to evidence the assignment of the Insured
Amounts due on the Obligations as are paid by the Insurer, and appropriate
instruments to effect the appointment of the Insurer as agent for such owners
of the Obligations in any legal proceeding related to payment of Insured
Amounts on the Obligations, such instruments being in a form satisfactory to
State Street Bank and Trust Company, N.A., State Street Bank and Trust Company,
N.A. shall disburse to such owners, or the Paying Agent payment of the Insured
Amounts due on such Obligations, less any amount held by the Paying Agent for
the payment of such Insured Amounts and legally available therefor. This policy
does not insure against loss of any prepayment premium which may at any time be
payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any
Obligation as indicated in the books maintained by the Paying Agent, the
Issuer, or any designee of the Issuer for such purpose. The term owner shall
not include the Issuer or any party whose agreement with the Issuer constitutes
the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices
located at 113 King Street, Armonk, New York 10504 and such service of process
shall be valid and binding.
This policy is non-cancellable for any reason. The premium on this policy is
not refundable for any reason including the payment prior to maturity of the
Obligations.
This policy is not covered by the Property/Casualty Insurance Security Fund
specified in Article 76 of the New York Insurance Law.
IN WITNESS WHEREOF, the Insurer has caused this policy to be executed in
facsimile on its behalf by its duly authorized officers, this [DAY] day of
[MONTH, YEAR].
MBIA Insurance Corporation
------------------------------------
President
Attest:
------------------------------------
Assistant Secretary
S-17
<PAGE>
ONEOK, Inc.
$400,000,000
Debt Securities
----------------
ONEOK, Inc., an Oklahoma corporation (and together with its subsidiaries and
its predecessor, ONEOK Inc., a Delaware corporation, and its subsidiaries, the
"Company"), may offer from time to time, together or separately, its debt
securities ("Securities") on terms to be determined at the time of offering.
Securities with an aggregate issue price of up to $400,000,000 may be issued,
in one or more series, under this Prospectus. The Securities will be unsecured
and will rank equally with all other unsecured and unsubordinated indebtedness
of the Company.
The prospectus supplement ("Prospectus Supplement") accompanying this
Prospectus sets forth, with respect to the particular series or issue of
Securities for which this Prospectus and the Prospectus Supplement are being
delivered ("Offered Securities"): the terms of the Securities offered,
including, where applicable, their title, aggregate principal amount, maturity,
rate of any interest (or the manner of calculation and time of payment
thereof), any redemption or repayment terms, any index, formula or other method
pursuant to which principal, premium or interest may be determined and the form
of such Securities (which may be in registered or global form), any initial
public offering price, the purchase price and net proceeds to the Company and
the other specific terms of such offering.
----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON
THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
Offered Securities may be sold directly to purchasers or to or through
underwriters, dealers or agents. If any underwriters, dealers or agents are
involved in the offering of any Offered Securities, their names and any
applicable fee, commission or discount arrangements will be set forth in the
Prospectus Supplement. See "Plan of Distribution."
----------------
The date of this Prospectus is September 4, 1998.
<PAGE>
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"), which may be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and
at the following regional offices of the Commission: New York Office (Seven
World Trade Center, Suite 1300, New York, New York 10048) and Chicago Office
(500 W. Madison St., Suite 1400, Chicago, Illinois 60621-2511). Copies of such
materials also can be obtained upon request from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates. In addition, such materials may
also be inspected and copied at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005, on which exchange the
Company's common stock is listed. Finally, copies of reports, proxy statements
and other information filed with the Commission electronically by the Company
may be inspected by accessing the Commission's Internet site at
http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement. Such
additional information may be obtained from the Commission's principal office
in Washington, D.C. Statements contained in this Prospectus as to the contents
of any contract or other document referred to herein or therein are not
necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement or such other document. A copy of the Registration Statement and the
exhibits and schedules thereto may be examined without charge at the
Commission's principal offices at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, and copies of such materials can be obtained from
the Public Reference Section of the Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have heretofore been filed by the Company
with the Commission pursuant to the Exchange Act, are incorporated herein by
reference and are deemed to be a part hereof:
(a) Annual Report on Form 10-K for the fiscal year ended August 31,
1997;
(b) Quarterly Reports on Form 10-Q for the quarters ended November 30,
1997; February 28, 1998 and May 31, 1998; and
(c) Current Reports on Form 8-K dated August 25, 1998, July 23, 1998;
May 26, 1998; March 11, 1998; February 10, 1998; December 12, 1997,
November 26, 1997 and November 14, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby also shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any or all of the foregoing documents incorporated herein by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Such requests should be
directed to: ONEOK, Inc., 100 West Fifth Street, P.O. Box 871, Tulsa, OK 74102-
0871, Attention: Chief Financial Officer.
2
<PAGE>
Any statement contained in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified shall not be deemed to
constitute a part of this Prospectus except as so modified, and any statement
so superseded shall not be deemed to constitute part of this Prospectus.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Prospectus, including the documents that are
incorporated by reference as set forth in "Incorporation of Certain Documents
by Reference," that are not historical facts are forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. Forward-
looking statements are based on management's beliefs as well as assumptions
made by and information currently available to management. Because such
statements are based on expectations as to future economic performance and are
not statements of fact, actual results may differ materially from those
projected. Important factors that could cause future results to differ include,
but are not limited to, national, regional and local economic competitive
conditions, regulatory and business trends and decisions, technological
developments, Year 2000 issues, inflation rates, weather conditions, and other
factors discussed in this and other filings by the Company with the Commission,
all of which are difficult to predict and many of which are beyond the control
of the Company. Accordingly, while the Company believes these forward-looking
statements to be reasonable, there can be no assurance that they will
approximate actual experience or that the expectations derived from them will
be realized. When used in the Company's documents or oral presentations, the
words "anticipate," "estimate," "expect," "objective," "projection,"
"forecast," "goal" or similar words are intended to identify forward- looking
statements.
THE COMPANY
The Company engages in several aspects of the energy business. The Company
purchases, gathers, compresses, transports, and stores natural gas for
distribution to consumers. It transports gas for others and leases pipeline
capacity to others for their use in transporting gas. The Company drills for
and produces oil and gas, extracts and sells natural gas liquids, and is
engaged in the gas marketing business. In addition, it leases and operates a
headquarters office building (leasing excess space to others) and owns and
operates a related parking facility. As a regulated natural gas utility the
Company distributes natural gas to approximately 1.4 million customers in the
states of Oklahoma and Kansas.
The Company's principal executive offices are located at 100 West Fifth
Street, Tulsa, Oklahoma 74103 and its telephone number is (918) 588-7000.
USE OF PROCEEDS
The net proceeds from the sale of the Securities will be added to the
Company's general funds and are expected to be used to retire existing
indebtedness and for general corporate purposes, except as may be stated in a
Prospectus Supplement.
DESCRIPTION OF SECURITIES
The Securities will be issued under an Indenture ("Indenture") between the
Company and the ("Trustee"). The form of the Indenture has been filed as an
exhibit to the Registration Statement. The Indenture is subject to and governed
by the Trust Indenture Act of 1939, as amended ("TIA"). The following
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summary of certain provisions of the Indenture does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the
Indenture, including the definitions of certain terms therein. Whenever
particular sections or defined terms of the Indenture are referred to, such
sections or defined terms are incorporated by reference herein as part of the
statement made, and the statement is qualified in its entirety by such
reference.
General
The Indenture provides that any Offered Securities may be issued in one or
more series, in each case as authorized from time to time by the Company; the
Indenture does not limit the aggregate principal amount of debt securities that
may be issued thereunder. Reference is made to the Prospectus Supplement
relating to the Offered Securities for the following:
(1) The title of such Securities.
(2) The aggregate principal amount of such Securities, the percentage of
their principal amount at which such Securities will be issued and the date
or dates on which the principal of such Securities will be payable or the
method by which such date or dates will be determined or extended.
(3) The rate or rates (which may be fixed or variable) at which such
Securities will bear interest, if any, and, if variable, the method by
which such rate or rates will be determined.
(4) The date or dates from which any interest will accrue or the method
by which such date or dates will be determined, the date or dates on which
any interest will be payable (including the Regular Record Dates for such
Interest Payment Dates) and the basis on which any interest will be
calculated if other than on the basis of a 360-day year of twelve 30-day
months.
(5) The place or places, if any, other than or in addition to New York
City, where the principal of (and premium, if any, on) and interest, if
any, on such Securities will be payable, where any Securities may be
surrendered for registration of transfer, where such Securities may be
surrendered for exchange and where notices or demands to or upon the
Company in respect of such Securities may be served.
(6) The period or periods within which, the price or prices at which and
the other terms and conditions upon which, such Securities may be redeemed,
in whole or in part, at the option of the Company, if the Company is to
have that option.
(7) The obligation, if any, of the Company to redeem, purchase or repay
such Securities, in whole or in part, pursuant to any sinking fund or
analogous provision or at the option of a holder thereof, and the period or
periods within which, the price or prices at which and the other terms and
conditions upon which, such Securities will be so redeemed, purchased or
repaid.
(8) Whether the amount of payments of principal of (and premium, if any,
on) and interest, if any, on such Securities may be determined with
reference to an index, formula or other method (which index, formula or
method may, without limitation, be based on one or more commodities, equity
indices or other indices) and the manner in which such amounts will be
determined.
(9) Any deletions from, modifications of or additions to the Events of
Default or covenants of the Company with respect to such Securities (which
Events of Default or covenants may not be consistent with the Events of
Default or covenants set forth in the general provisions of the Indenture).
(10) If other than the entire principal amount thereof, the portion of
the principal amount of such Securities that will be payable upon
declaration of acceleration of the maturity thereof or the method by which
such portion will be determined.
(11) Any provisions in modification of, in addition to or in lieu of any
of the provisions concerning defeasance and covenant defeasance contained
in the Indenture that will be applicable to such Securities.
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(12) Any provisions granting special rights to the holders of such
Securities upon the occurrence of such events as may be specified.
(13) If other than the Trustee, the designation of any Paying Agent or
Security Registrar for such Securities, and the designation of any transfer
or other agents or depositories for such Securities.
(14) Whether such Securities will be issuable initially in temporary
global form, whether any such Security is to be issuable in permanent
global form (a "Global Security") and, if so, whether beneficial owners of
interests in any Global Security may exchange such interests for Securities
of like tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
provided in the Indenture, and, if such Securities are to be issuable as a
Global Security, the identity of the depository for such Securities.
(15) The person to whom any interest on any Security will be payable, if
other than the person in whose name such Security (or one or more
Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, or the manner in which any interest
payable on a temporary Security issued in global form will be paid (if
other than as described in "Book-Entry Securities" below).
(16) The denomination or denominations in which such Securities will be
issuable, if other than $1,000 or any integral multiple thereof.
(17) Whether and under what circumstances the Company will pay
Additional Amounts, as contemplated by Section 1008 of the Indenture, on
such Securities to any holder who is not a United States person (including
any modification of the definition of such term as contained in the
Indenture) in respect of any tax, assessment or governmental charge and, if
so, whether the Company will have the option to redeem such Securities
rather than pay such Additional Amounts (and the terms of any such option).
(18) Any other, terms, conditions, rights and preferences (or
limitations on such rights and preferences) of such Securities not
inconsistent with the provisions of the Indenture (Section 301).
If the terms of any series of Securities provide that the Company may be
required to pay Additional Amounts in respect thereof, for purposes of this
Prospectus, any reference to the payment of the principal of (and premium, if
any, on) or interest, if any, on such Securities will be deemed to include
mention of the payment of the Additional Amounts provided for by the terms of
such Securities.
The Securities referred to on the cover page of this Prospectus, and any
additional debt securities issued under the Indenture, are herein collectively
referred to, while a single Trustee is acting with respect to all debt
securities issued thereunder, as the "Indenture Securities". The Indenture
provides that there may be more than one Trustee thereunder, each with respect
to one or more series of Indenture Securities. At a time when two or more
Trustees are acting under the Indenture, each with respect to only certain
series, the term "Indenture Securities" as used herein will mean the series
with respect to which each respective Trustee is acting. In the event that
there is more than one Trustee under the Indenture, the powers and trust
obligations of each Trustee as described herein will extend only to the series
of Indenture Securities for which it is the Trustee. If two or more Trustees
are acting under the Indenture, then the Indenture Securities for which each
Trustee is acting would in effect be treated as if issued under separate
indentures.
The Securities may provide for less than the entire principal amount thereof
to be due and payable upon a declaration of acceleration of the maturity
thereof. A discussion of the federal income tax and other considerations
applicable to Original Issue Discount Securities will be set forth in the
Prospectus Supplement relating thereto.
The Securities will be unsecured obligations of the Company and will rank on
a parity with all other unsecured and unsubordinated Indebtedness of the
Company.
The general provisions of the Indenture do not limit the ability of the
Company to incur Indebtedness and do not afford holders of Securities
protection in the event of highly leveraged or similar transactions involving
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the Company. However, the general provisions of the Indenture do provide that
neither the Company nor any Restricted Subsidiary will subject certain of its
properties or assets to any mortgage or other encumbrance unless the Indenture
Securities outstanding thereunder are secured equally and ratably with or prior
to such other Indebtedness thereby secured. See "Limitations on Liens" and
"Limitation on Sale and Leaseback Transactions" under the heading "Certain
Covenants". Reference is made to the Prospectus Supplement for information with
respect to any deletions from, modifications of or additions to the Events of
Default or covenants of the Company that are described below, including any
addition of a covenant or other provision providing event risk or similar
protection.
Under the Indenture, the Company has the ability to issue Indenture
Securities with terms different from those of Indenture Securities previously
issued thereunder and, without the consent of the holders, to reopen a previous
issue of a series of Indenture Securities and issue additional Indenture
Securities of such series (unless such reopening was restricted when such
series was created) in an aggregate principal amount determined by the Company
(Section 301).
There is no requirement that future issues of debt securities of the Company
be issued under the Indenture, and the Company will be free to employ other
indentures or documentation, possibly containing provisions different from
those included in the Indenture or applicable to one or more issues of
Indenture Securities, in connection with such future issues.
Certain Covenants
Limitations on Liens
The Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, create, incur, issue or assume any Indebtedness
secured by any Lien on any Principal Property, or on shares of stock or
Indebtedness of any Restricted Subsidiary ("Restricted Securities"), without
making effective provision for the Outstanding Indenture Securities (other than
any Outstanding Indenture Securities not entitled to this covenant) to be
secured by the Lien equally and ratably with (or prior to) any and all
Indebtedness and obligations secured or to be secured thereby for so long as
such Indebtedness is so secured, except that the foregoing restriction will not
apply to:
(1) Any Lien existing on the date of the first issuance of Indenture
Securities.
(2) Any Lien on any Principal Property or Restricted Securities of any
Person existing at the time such Person is merged or consolidated with or
into the Company or a Restricted Subsidiary, or such Person becomes a
Restricted Subsidiary.
(3) Any Lien on any Principal Property existing at the time of
acquisition of such Principal Property by the Company or a Restricted
Subsidiary, whether or not assumed by the Company or such Restricted
Subsidiary, provided that no such Lien may extend to any other Principal
Property of the Company or any Restricted Subsidiary.
(4) Any Lien on any Principal Property (including any improvements on an
existing Principal Property) of the Company or any Restricted Subsidiary,
and any Lien on the shares of stock of a Restricted Subsidiary that was
formed or is held for the purpose of acquiring and holding such Principal
Property, in each case to secure all or any part of the cost of
acquisition, development, operation, construction, alteration, repair or
improvement of all or any part of such Principal Property (or to secure
Indebtedness incurred by the Company or a Restricted Subsidiary for the
purpose of financing all or any part of such cost); provided that such Lien
is created prior to, at the time of, or within 12 months after the latest
of, the acquisition, completion of construction or improvement or
commencement of commercial operation of such Principal Property and
provided, further, that no such Lien may extend to any other Principal
Property of the Company or any Restricted Subsidiary, other than any
theretofore unimproved real property on which the Principal Property is so
constructed or developed or the improvement is located.
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(5) Any Lien on any Principal Property or Restricted Securities to
secure Indebtedness owing to the Company or to another Restricted
Subsidiary.
(6) Any Lien in favor of governmental bodies to secure advances or other
payments pursuant to any contract or statute or to secure Indebtedness
incurred to finance the purchase price or cost of constructing or improving
the property subject to such Lien.
(7) Any Lien created in connection with a project financed with, and
created to secure, Non-Recourse Indebtedness.
(8) Carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of
business which are not delinquent or remain payable without penalty or
which are being contested in good faith and by appropriate proceedings.
(9) Liens (other than Liens imposed by ERISA) on the property of the
Company or any of its Subsidiaries incurred, or pledges or deposits
required, in connection with workmen's compensation, unemployment insurance
and other social security legislation.
(10) Liens securing taxes that remain payable without penalty or which
are being contested in good faith by appropriate proceedings where
collection thereof is stayed; provided that the Company has set aside on
its books reserves with respect to such taxes (segregated to the extent
required by GAAP) deemed by it to be adequate.
(11) Any right which any municipal or governmental body or agency may
have by virtue of any franchise, license or contract to purchase or
designate a purchaser of, or order the sale of, any property of the Company
upon payment of reasonable compensation therefor or to terminate any
franchise, license or other rights or to regulate the property and business
of the Company.
(12) Any Liens, neither assumed by the Company nor on which it
customarily pays interest, existing upon real estate or rights in or
relating to real estate acquired by the Company for sub-station, measuring
station, regulating station, gas purification station, compressor station,
transmission line, distribution line or right-of-way purposes.
(13) Easements or reservations in any property of the Company for the
purpose of roads, pipe lines, gas transmission and distribution lines,
electric light and power transmission and distribution lines, water mains
and other like purposes, and zoning ordinances, regulations and
restrictions which do not impair the use of such property in the operation
of the business of the Company.
(14) Any extension, renewal, substitution or replacement (or successive
extensions, renewals, substitutions or replacements), in whole or in part,
of any Lien referred to in the foregoing clauses (1) through (13), provided
that the Indebtedness secured thereby may not exceed the principal amount
of Indebtedness so secured at the time of such renewal or refunding, and
that such renewal or refunding Lien must be limited to all or any part of
the same property and improvements thereon, shares of stock or Indebtedness
that secured the Lien renewed or refunded.
(15) Any Lien not permitted above securing Indebtedness that, together
with the aggregate outstanding principal amount of other secured
Indebtedness that would otherwise be subject to the foregoing restrictions
(excluding Indebtedness secured by Liens permitted under the foregoing
exceptions) and the Attributable Debt in respect of all Sale and Leaseback
Transactions (not including Attributable Debt in respect of any such Sale
and Leaseback Transactions described in clause (iii) or (iv) of the next
succeeding paragraph) would not then exceed 15% of Consolidated Net
Tangible Assets (Section 1006).
Limitation on Sale and Leaseback Transactions
The Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, enter into any Sale and Leaseback Transaction unless
(i) the Company or a Restricted Subsidiary would be entitled, without securing
the Outstanding Indenture Securities, to incur Indebtedness secured by a Lien
on the Principal Property that is the subject of such Sale and Leaseback
Transaction; (ii) the Attributable Debt associated therewith would be in an
amount permitted under clause (15) of the preceding paragraph; (iii) the
proceeds
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received in respect of the Principal Property so sold and leased back at the
time of entering into such Sale and Leaseback Transaction are used for the
business and operations of the Company or any Subsidiary; or (iv) within 12
months after the sale or transfer, an amount equal to the proceeds received in
respect of the Principal Property so sold and leased back at the time of
entering into such Sale and Leaseback Transaction is applied to the prepayment
(other than mandatory prepayment) of any Outstanding Indenture Securities or
Funded Indebtedness of the Company or a Restricted Subsidiary (other than
Funded Indebtedness that is held by the Company or any Restricted Subsidiary or
Funded Indebtedness of the Company that is subordinate in right of payment to
any Outstanding Indenture Securities) (Section 1007).
Certain Definitions
"Attributable Debt" means, as to any particular lease under which any Person
is at the time liable, at any date as of which the amount thereof is to be
determined, the total net amount of rent required to be paid by such Person
under such lease during the remaining term thereof (excluding amounts required
to be paid on account of maintenance and repairs, services, insurance, taxes,
assessments, water rates and similar charges and contingent rents), discounted
from the respective due dates thereof at the weighted average of the rates of
interest (or Yield to Maturity, in the case of Original Issue Discount
Securities) borne by the Indenture Securities then outstanding under the
Indenture, compounded annually.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests (however designated) in stock issued by that
corporation.
"Consolidated Net Tangible Assets" means (i) the total amount of assets
(less applicable reserves and other properly deductible items) which under GAAP
would be included on a consolidated balance sheet of the Company and its
Subsidiaries after deducting therefrom (a) all current liabilities, provided,
however, that there shall not be deducted billings recorded as revenues
deferred pending the outcome of rate proceedings (less applicable income taxes
thereon), if and to the extent the obligation to refund the same shall not have
been finally determined, (b) appropriate allowance for minority interests in
common stocks of Subsidiaries and (c) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles,
which in each case under GAAP would be included on such consolidated balance
sheet, less (ii) the amount which would be so included on such consolidated
balance sheet for investments (less applicable reserves) made in Subsidiaries.
"Funded Indebtedness" as applied to any Person, means all Indebtedness of
such Person maturing after, or renewable or extendible at the option of such
Person beyond, 12 months from the date of determination.
"Indebtedness" means obligations for money borrowed, evidenced by notes,
bonds, debentures or other similar evidences of indebtedness.
"Lien" means any lien, mortgage, pledge, encumbrance, charge or security
interest securing Indebtedness; provided, however, that the following types of
transactions will not be considered for purposes of this definition to result
in a Lien: (i) any acquisition by the Company or any Restricted Subsidiary of
any property or assets subject to any reservation or exception under the terms
of which any vendor, lessor or assignor creates, reserves or excepts or has
created, reserved or excepted an interest in oil, gas or any other mineral in
place or the proceeds thereof, (ii) any conveyance or assignment whereby the
Company or any Restricted Subsidiary conveys or assigns to any Person or
Persons an interest in oil, gas or any other mineral in place or the proceeds
thereof, (iii) any Lien upon any property or assets either owned or leased by
the Company or any Restricted Subsidiary or in which the Company or any
Restricted Subsidiary owns an interest that secures for the benefit of the
Person or Persons paying the expenses of developing or conducting operations
for the recovery, storage, transportation or sale of the mineral resources of
such property or assets (or property or assets with which it is unitized) the
payment to such Person or Persons of the Company's or the Restricted
Subsidiary's proportionate
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part of such development or operating expenses or (iv) any hedging arrangements
entered into in the ordinary course of business, including any obligation to
deliver any mineral, commodity or asset in connection therewith.
"Non-Recourse Indebtedness" means, at any time, Indebtedness incurred after
the date of the Indenture by the Company or a Restricted Subsidiary in
connection with the acquisition of property or assets by the Company or a
Restricted Subsidiary or the financing of the construction of or improvements
on property, whenever acquired, provided that, under the terms of such
Indebtedness and pursuant to applicable law, the recourse at such time and
thereafter of the lenders with respect to such Indebtedness is limited to the
property or assets so acquired, or such construction or improvements, including
Indebtedness as to which a performance or completion guarantee or similar
undertaking was initially applicable to such Indebtedness or the related
property or assets if such guarantee or similar undertaking has been satisfied
and is no longer in effect.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Principal Property" means any property located in the United States, except
any such property that in the opinion of the Board of Directors of the Company
is not of material importance to the total business conducted by the Company
and its consolidated Subsidiaries.
"Restricted Subsidiary" means any Subsidiary that owns or leases a Principal
Property.
"Sale and Leaseback Transaction" means any arrangement with any Person
pursuant to which the Company or any Restricted Subsidiary leases any Principal
Property that has been or is to be sold or transferred by the Company or the
Restricted Subsidiary to such Person, other than (i) a lease for a term,
including renewals at the option of the lessee, of not more than three years or
classified as an operating lease under generally accepted accounting
principles, (ii) leases between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries and (iii) leases of a Principal Property
executed by the time of, or within 12 months after the latest of, the
acquisition, the completion of construction or improvement, or the commencement
of commercial operation, of the Principal Property.
"Subsidiary" of the Company means (i) a corporation, of which a majority of
the Capital Stock with voting power, under ordinary circumstances, to elect
directors is owned, directly or indirectly, at the date of determination, by
the Company, by one or more Subsidiaries or by the Company and one or more
Subsidiaries or (ii) any other Person (other than a corporation) in which at
the date of determination the Company, one or more Subsidiaries or the Company
and one or more Subsidiaries, directly or indirectly, has at least a majority
ownership and power to direct the policies, management and affairs thereof.
Denominations
Unless otherwise provided in the applicable Prospectus Supplement,
Securities in fully registered form shall be issued in denominations of $1,000
and integral multiples of $1,000. Securities issued in global form shall be in
denominations set forth in the applicable Prospectus Supplement. (Sections 201,
301 and 302).
Payment, Transfer and Exchange
The Company will be required to maintain an office or agency in each Place
of Payment for such series, and may from time to time designate additional
offices or agencies, at which the principal of (and premium, if any, on) and
interest, if any, on such series will be payable (Sections 301 and 1002).
Unless otherwise provided in the Prospectus Supplement, the Place of Payment
will be New York City, and the Company will initially designate the office of
the agent of the Trustee in New York City as an office where such principal,
premium and interest will be payable. Notwithstanding the foregoing, at the
option of the Company, interest, if any, may
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be paid on Securities (i) by check mailed to the person entitled thereto at
such person's address appearing in the Security Register or (ii) by wire
transfer to an account located inside the United States maintained by the
person entitled thereto as specified in the Security Register (Sections 308 and
1002). Unless otherwise provided in the Prospectus Supplement, payment of any
installment of interest on Securities will be made to the person in whose name
such Security is registered at the close of business on the Regular Record Date
for such interest (Section 308).
The Company may from time to time designate additional offices or agencies,
approve a change in the location of any office or agency and, except as
provided above, rescind the designation of any office or agency.
All moneys paid by the Company to the Trustee or a Paying Agent for the
payment of principal of (or premium, if any, on) or interest, if any, on any
Security that remains unclaimed for the lesser of the time period specified in
applicable abandoned property or similar laws and two years after such
principal, premium or interest becomes due and payable will be repaid to the
Company, and the holder of such Security will (subject to applicable abandoned
property or similar laws) thereafter, as an unsecured general creditor, look
only to the Company for payment thereof (Section 1003).
Subject to the terms of the Indenture and the limitations applicable to
Global Securities, Securities of any series will be exchangeable for other
Securities of the same series of any authorized denominations and of a like
aggregate principal amount (Section 306).
Subject to the terms of the Indenture and the limitations applicable to
Global Securities, Securities of a series may be presented for registration of
transfer and for exchange (i) at each office or agency required to be
maintained by the Company for payment of such series, as described above, and
(ii) at each other office or agency that the Company may designate from time to
time for such purposes. Registration of transfers and exchanges will be
effected if the transfer agent is satisfied with the evidence of ownership and
identity of the person making the request and if the transfer form thereon is
duly executed. No service charge will be made for any registration of transfer
or exchange of Securities, but the Company may require payment of any tax or
other governmental charge payable in connection therewith (Section 306).
In the event of any redemption in part, the Company will not be required (i)
to register the transfer of or exchange Securities of any series during a
period beginning at the opening of business 15 days before any selection of
Securities of that series to be redeemed and ending at the close of business on
the date the relevant notice of redemption is mailed, (ii) to register the
transfer of or exchange any Security or portion thereof called for redemption,
except the unredeemed portion, if any, of a Security being redeemed in part or
(iii) to register the transfer of or exchange any Security that has been
surrendered for repayment at the option of the holder, except the portion, if
any, of such Security not to be so repaid (Section 306).
Consolidation, Merger and Sale of Assets
The Company may not consolidate with or merge into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to, any Person, unless each of the following conditions is satisfied:
(1) Immediately after giving effect to such transaction, no Event of
Default (or event that with notice or lapse of time, or both, would be
such) with respect to the Indenture Securities will have happened and be
continuing.
(2) The corporation or other entity formed by such consolidation or into
which the Company is merged, or the Person to which such properties and
assets will have been conveyed, transferred or leased, assumes the
Company's obligation as to the due and punctual payment of the principal of
(and premium, if any, on) and interest, if any, on the Indenture Securities
and the performance and observance of every covenant to be performed by the
Company under the Indenture, and will be organized under the laws of the
United States, one of the States thereof or the District of Columbia.
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(3) The Company has delivered to the Trustee an Officers' Certificate
and Opinion of Counsel, each stating that the transaction complies with
these conditions (Section 801).
In the event that any transaction described in and complying with the
conditions listed in the immediately preceding paragraph occurs, the Company
would be discharged from all obligations and covenants under the Indenture and
all obligations under the Indenture Securities, with the successor corporation
or Person succeeding to such obligations and covenants of the Company (Section
802).
In the event of any such transaction, the Indenture provides that, if any
Principal Property or Restricted Securities would thereupon become subject to
any Lien, the Indenture Securities (other than any Indenture Securities not
entitled to the benefit of the "Limitation of Liens" covenant) will be secured,
as to such Principal Property or Restricted Securities, equally and ratably
with (or prior to) the Indebtedness that upon the occurrence of such
transaction would become secured by such Lien, unless such Lien could be
created under the Indenture without equally and ratably securing such Indenture
Securities (Section 803).
Modification and Waiver
The Indenture permits the Company and the Trustee, with the consent of the
holders of not less than a majority in aggregate principal amount of
Outstanding Indenture Securities affected thereby, to execute supplemental
indentures adding any provisions to or changing or eliminating any provisions
of the Indenture or modifying the rights of such holders, except that no such
supplemental indenture may, without the consent of the holder of each
Outstanding Indenture Security affected thereby:
(1) Change the Stated Maturity of the principal of (or premium, if any,
on) or any installment of interest on any Indenture Security, or reduce the
principal amount thereof (or any premium, if any, thereon) or the rate of
interest, if any, thereon, or change any obligation of the Company to pay
Additional Amounts on any Indenture Security as contemplated by Section
1008 of the Indenture, or reduce the amount of the principal of an Indexed
Security or an Original Issue Discount Security that would be due and
payable upon an acceleration of maturity thereof or the amount thereof
provable in bankruptcy, or adversely affect the right of repayment, if any,
at the option of the holder, or change any Place of Payment where any
Indenture Security or any premium or interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or on or after any Redemption Date or
Repayment Date), or adversely affect any right to convert or exchange any
Indenture Security.
(2) Reduce the aforesaid percentage in principal amount of Outstanding
Indenture Securities, the consent of the holders of which is required for
any such supplemental indenture.
(3) Reduce the percentage in principal amount of outstanding Indenture
Securities, the consent of the holders of which is necessary to modify or
waive any default under the Indenture (Section 902).
The holders of a majority in aggregate principal amount of Outstanding
Indenture Securities have the right to waive compliance by the Company with
certain covenants contained in the Indenture (Section 1009).
Modification and amendment of the Indenture may be made by the Company and
the Trustee without the consent of any holder, for any of the following
purposes: (i) to evidence the succession of another Person to the Company as
obligor under the Indenture; (ii) to add to the covenants of the Company for
the benefit of the holders of any series of Indenture Securities; (iii) to add
Events of Default for the benefit of the holders of any such series; (iv) to
change or eliminate any provisions of the Indenture, provided that any such
change or elimination will become effective only when there is no Indenture
Security Outstanding thereunder of any series that is entitled to the benefit
of such provisions; (v) to secure the Indenture Securities Outstanding under
the Indenture pursuant to the requirements of Section 803 or 1006 of the
Indenture, or otherwise; (vi) to establish the form or terms of Indenture
Securities of any series, as permitted by Sections 201 and 301 of the
Indenture; (vii) to provide for the acceptance of appointment by a successor
Trustee or facilitate the administration of the trusts under the Indenture by
more than one Trustee; (viii) to close the Indenture with
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respect to the authentication and delivery of additional series of Indenture
Securities; (ix) to cure any ambiguity or inconsistency in the Indenture,
provided such action does not adversely affect in any material respect the
interests of holders of Indenture Securities of any series thereunder; (x) to
supplement any of the provisions of the Indenture to the extent necessary to
permit or facilitate defeasance and discharge of any series of Indenture
Securities, provided that such action does not adversely affect in any material
respect the interests of the holders of the Indenture Securities; or (xi) to
make any other change that does not affect the rights of any holder (Section
901).
The Indenture provides that in determining whether the holders of the
requisite principal amount of Indenture Securities of a series then outstanding
have given any request, demand, authorization, direction, notice, consent or
waiver thereunder or whether a quorum is present at a meeting of holders of
such Indenture Securities, (i) the principal amount of an Original Issue
Discount Security that will be deemed to be outstanding will be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon acceleration of the maturity thereof and (ii) the principal
amount of an Indexed Security that may be counted in making such determination
or calculation and that will be deemed outstanding for such purpose will be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided with respect to such Indenture Security
pursuant to Section 301 (Section 101).
Events of Default
The following are Events of Default with respect to any series of Indenture
Securities: (i) default in the payment of any installment of interest upon any
Indenture Security of such series when it becomes due and payable, continued
for 30 days; (ii) default in the payment of the principal of (or premium, if
any, on) any Indenture Security of such series at its Maturity; (iii) failure
on the part of the Company to observe or perform any other covenant or
agreement contained in the Indenture (other than a covenant or agreement
included in the Indenture solely for the benefit of less than all series of
Indenture Securities or a covenant the default in the performance of which
would be covered by clause (vi) below) for 60 days after written notice of such
failure, requiring the Company to remedy the same, has been given to the
Company by the Trustee or to the Company and the Trustee by the holders of at
least 25% in aggregate principal amount of Outstanding Indenture Securities of
such series; (iv) default under any indenture or instrument under which the
Company or any Restricted Subsidiary has at the time outstanding Indebtedness
for borrowed money or guarantees thereof in any individual instance in excess
of $15,000,000 and, if not already matured in accordance with its terms, such
Indebtedness has been accelerated and such acceleration is not rescinded or
annulled within 30 days after notice thereof has been given to the Company by
the Trustee or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of Outstanding Indenture Securities of such series;
provided that, if, prior to the entry of judgment in favor of the Trustee for
payment of the Indenture Securities of such series, the default under such
indenture or instrument has been remedied or cured by the Company or such
Restricted Subsidiary, or waived by the holders of such Indebtedness, then the
Event of Default under the Indenture will be deemed likewise to have been
remedied, cured or waived; (v) certain events of bankruptcy, insolvency or
reorganization affecting the Company; and (vi) any other Event of Default
included in the Indenture for the benefit of Indenture Securities of such
series (Section 501).
If an Event of Default with respect to Indenture Securities of any series at
the time Outstanding occurs and is continuing, either the Trustee or the
holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series (or, if the Indenture Securities of that series are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal amount as may be specified in the terms of that series) by notice as
provided in the Indenture may declare the principal amount of all the Indenture
Securities of that series and the accrued interest thereon to be due and
payable immediately. At any time after a declaration of acceleration with
respect to Indenture Securities of any series has been made, but before a
judgment or decree for payment of money has been obtained by the Trustee, the
holders of a majority in aggregate principal amount of the Outstanding
Securities of that series may, under certain circumstances, rescind and annul
such acceleration (Section 502).
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The holders of a majority in aggregate principal amount of Outstanding
Indenture Securities of any series have the right to waive certain past
defaults under the Indenture (Section 513).
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders, unless such holders shall have
offered to the Trustee reasonable indemnity (Section 602). Subject to such
provisions for the indemnification of the Trustee, the holders of a majority in
aggregate principal amount of the Outstanding Securities of any series will
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Indenture Securities of
that series unless the Trustee shall determine that the action specified would
be in conflict with any rule or law (Section 512).
The Company will be required to furnish the Trustee annually a certificate
stating whether or not the Company is in default under the Indenture and, if
so, specifying all such defaults and the nature thereof (Section 1004).
Defeasance and Covenant Defeasance
The Indenture provides that the Company may elect either (i) to defease and
be discharged from any and all obligations with respect to all or a portion of
the Indenture Securities of any series (except for the obligations (a) to pay
Additional Amounts, if any; (b) to register the transfer of or exchange such
Indenture Securities; (c) to replace temporary or mutilated, destroyed, lost or
stolen Indenture Securities of such series; (d) to maintain an office or agency
in respect of such Indenture Securities; and (e) to hold moneys for payment in
trust) ("defeasance"); or (ii) to be released from its obligations with respect
to such outstanding Indenture Securities under Sections 1006 and 1007 of the
Indenture (being the restrictions described above under "Limitations on Liens"
and "Limitation on Sale and Leaseback Transactions", respectively, under the
heading "Certain Covenants") or, if so provided pursuant to the Indenture, its
obligations with respect to any other covenant, and any omission to comply with
such obligations will not constitute a default or an Event of Default with
respect to such Indenture Securities ("covenant defeasance"), in either case
upon the irrevocable deposit by the Company with the Trustee (or other
qualifying trustee), in trust, of (i) an amount in cash; (ii) Government
Obligations (as defined below) that, through the payment of principal and
interest in accordance with their terms, will provide money in an amount; or
(iii) a combination thereof in an amount, sufficient to pay the principal of
(and premium, if any, on) and interest, if any, to Stated Maturity (or
redemption) on such Indenture Securities and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor (Article 14).
Such a trust may only be established if, among other things, the Company has
delivered to the Trustee an Opinion of Counsel to the effect that the holders
of such Indenture Securities will not recognize income, gain or loss for United
States federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to United States federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such defeasance or covenant defeasance had not occurred, and such opinion,
in the case of defeasance under clause (i) above, must refer to and be based
upon a ruling of the Internal Revenue Service or a change in applicable United
States federal income tax law occurring after the date of the Indenture
(Section 1404).
The Prospectus Supplement may further describe the provisions, if any,
permitting such defeasance or covenant defeasance, including any modifications
to the provisions described above, with respect to the Indenture Securities of
or within a particular series.
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PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to one or more underwriters for
public offering and sale by them or may sell the Offered Securities to
investors directly or through agents. Any such underwriter or agent involved in
the offer and sale of the Offered Securities will be named in the related
Prospectus Supplement. The Company has reserved the right to sell the Offered
Securities directly to investors on its own behalf in those jurisdictions where
it is authorized to do so.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Company also may, from time to time, authorize dealers, acting as the Company's
agents, to offer and sell the Offered Securities upon such terms and conditions
as set forth in the related Prospectus Supplement. In connection with the sale
of the Offered Securities, underwriters may receive compensation from the
Company in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of the Offered Securities for whom they may
act as agent. Underwriters may sell the Offered Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions (which may
be changed from time to time) from the purchaser for whom they may act as
agents.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the related Prospectus Supplement. Dealers and agents
participating in the distribution of the Offered Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any profit
realized by them on resale of the Offered Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements entered into with the
Company, to indemnification against and contribution towards certain civil
liabilities, including any liabilities under the Securities Act.
Until the distribution of the Offered Securities is completed, rules of the
Commission may limit the ability of underwriters to bid for and purchase the
Offered Securities. As an exception to these rules, underwriters are permitted
to engage in certain transactions that stabilize the price of the Offered
Securities. Such transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the Offered Securities. If
underwriters create a short position in the Offered Securities in connection
with the offering, i.e., if they sell more Offered Securities than are set
forth on the cover page of the applicable Prospectus Supplement, underwriters
may reduce that short position by purchasing Offered Securities in the open
market. In general, purchase of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. Such activities, if
commenced, may be discontinued at any time.
If so indicated in the related Prospectus Supplement, the Company will
authorize underwriters, dealers or agents to solicit offers by certain
institutions to purchase such Offered Securities from the Company pursuant to
delayed delivery contracts providing for payment and delivery at a future date.
Such contracts will be subject only to those conditions set forth in the
related Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Offered Securities issued hereunder will be new issues of securities with no
established trading market. Any underwriters or agents to or through whom such
Offered Securities are sold by the Company for public offering and sale may
make a market in such Offered Securities, but such underwriters or agents will
not be obligated to do so and may discontinue any market at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any such Offered Securities.
Certain of the underwriters, dealers or agents and their associates may
engage in transactions with, and perform services for, the Company and certain
of its affiliates in the ordinary course of business.
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LEGAL MATTERS
Certain legal matters relating to the Securities will be passed upon for the
Company by Gable & Gotwals, Tulsa, Oklahoma. The validity of the Offered
Securities will be passed upon for any underwriters, dealers or agents by
Cleary, Gottlieb, Steen & Hamilton, New York, New York.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries as
of August 31, 1997 and 1996, and for each of the years in the three-year period
ended August 31, 1997, have been incorporated by reference herein in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The report of KPMG Peat Marwick LLP
covering the August 31, 1997 financial statements refers to the adoption of
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of, in
1996.
The audited financial statements of the Gas Business, a business unit of
WRI, as of August 31, 1996 and 1995 and for each of the years in the three-year
period ended August 31, 1996, incorporated by reference herein, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said report.
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$100,000,000
[LOGO] ONEOK
ONEOK, Inc.
6.40% Senior Insured Quarterly Notes due 2019
PROSPECTUS SUPPLEMENT
Edward D. Jones & Co., L.P.
February 10, 1999
