<PAGE>
Filed Pursuant to Rule 424(b)(5)
of the Rules and Regulations
Under the Securities Act of 1933
Registration Statement No. 33-52713
Prospectus Supplement
(To Prospectus Dated April 20, 1995)
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IMAGE (LOGO) OMITTED
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$30,000,000
The Empire District Electric Company
First Mortgage Bonds, 7 3/4 % Series due 2025
The New Bonds offered hereby (the "Bonds") will mature on June 1, 2025. Interest
on the Bonds is payable semi-annually on each June 1 and December 1, beginning
December 1, 1995. The Bonds are subject to redemption prior to maturity upon not
less than 30 nor more than 60 days' notice, at the option of the Company, at any
time on or after June 1, 2005, as a whole or from time to time in part, at the
redemption prices applicable to the respective periods set forth herein. See
"Certain Terms of the Bonds -- Redemption," herein.
The Bonds will be issued and registered only in the name of Cede & Co., as
nominee for The Depository Trust Company, New York, New York ("DTC"), as
registered owner of all the Bonds. Principal and interest payments on the Bonds
will be made to DTC. Individual purchases will be made only in book-entry form
(as described herein). Purchasers of such book-entry interests in the Bonds will
not receive physical delivery of bond certificates and must maintain an account
with a broker, dealer or bank that participates in DTC's book-entry system. See
"Certain Terms of the Bonds -- Book-Entry System," herein.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------------------------------------------------------
Price to Underwriting Proceeds to
Public(1) Discount Company(1)(2)
Per Bond...................... 100.000% .875% 99.125%
Total ........................ $30,000,000 $262,500 $29,737,500
-----------------------------------------------------------------------------
(1) Plus accrued interest, if any, from June 7, 1995 to date of delivery.
(2) Before deducting expenses payable by the Company estimated to be
$140,000.
The Bonds are offered subject to receipt and acceptance by the Underwriter, to
prior sale and to the Underwriter's right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. The Bonds are
being offered by the Underwriter as set forth under "Underwriting" herein. It is
expected that the Bonds will be delivered in book-entry form only, on or about
June 7, 1995, through the facilities of DTC.
-----------------------------
Salomon Brothers Inc
--------------------------------------------------------------------
The date of this Prospectus Supplement is May 31, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS HEREBY
OFFERED AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
SUMMARY INFORMATION
The information set forth below should be read in conjunction with, and is
qualified in its entirety by, the detailed information contained in, and the
financial statements incorporated by reference into, this Prospectus Supplement
and the accompanying Prospectus.
The Offering
Issuer..................... The Empire District Electric Company, a Kansas
corporation.
Securities Offered......... $30,000,000 aggregate principal amount of First
Mortgage Bonds, 7 3/4 % Series due 2025.
Interest Payment Dates..... Semi-annually, on each June 1 and December 1,
beginning December 1, 1995.
Use of Proceeds............ To be added to the Company's general funds which
will be used to redeem on July 3, 1995 the Company's
$30,000,000 aggregate principal amount of First
Mortgage Bonds, 9% Series due 2019.
Certain Summary Financial Information
Income Statement Data:
<TABLE>
<CAPTION>
Twelve Months
Ended March 31, Year ended December 31,
--------------------------------
1995 1994 1993 1992
---- ---- ---- ----
(in thousands except ratios)
<S> <C> <C> <C> <C>
Operating Revenues .................... $178,480 $177,757 $168,439 $150,302
Operating Income ...................... 32,536 32,005 29,291 30,090
Net Income............................. 20,506 19,683 15,936 16,905
Ratio of Earnings to Fixed Charges (1) 3.14x 3.16x 2.73x 2.91x
Capitalization Of The Company At March 31, 1995:
Actual As Adjusted (2)
----------------------- ------------------------
Amount Percentage Amount Percentage
------ ---------- ------ ----------
(all dollar amounts in thousands)
<S> <C> <C> <C> <C>
First Mortgage Bonds Not Due Within One Year $184,907 47.1% $194,907 46.7%
Preferred Stock.............................. 32,902 8.4 32,902 7.9
Common Stock Equity ......................... 174,831 44.5 189,681 45.4
Total Capitalization......................... $392,640 100.0% $417,490 100.0%
<FN>
(1) For the purpose of computing this ratio, earnings consist of net income
(including allowances for funds used during construction) plus current and
deferred income taxes, deferred investment tax credits and fixed charges.
Fixed charges consist of interest charges (before reduction for allowances
for funds used during construction), amortization of debt expense and debt
discount and premium, and the interest factor of rental expense.
(2) Adjusted to reflect the issuance of the Bonds. See "Use of Proceeds." Also
adjusted to reflect the issuance on April 27, 1995 of (i) $10,000,000
aggregate principal amount of the Company's First Mortgage Bonds, 7.60%
Series due 2005 and (ii) 900,000 shares of the Company's Common Stock.
</TABLE>
S-2
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Bonds, after deducting
the underwriting discount and estimated offering expenses, are expected to be
approximately $29.6 million. The net proceeds from the offering will be added to
the Company's general funds which will be used to redeem on July 3, 1995 the
Company's $30,000,000 aggregate principal amount of First Mortgage Bonds, 9%
Series due 2019, at a redemption price of 105.00% of the principal amount
thereof plus accrued interest to the date of redemption.
CERTAIN TERMS OF THE BONDS
The following information concerning the Bonds supplements and should be read
in conjunction with the statements under "Description of the New Bonds" in the
accompanying Prospectus.
General
The Bonds will be issued as a new series of the Company's First Mortgage
Bonds under the Mortgage (as defined in the accompanying Prospectus) as
supplemented by the Twenty-Seventh Supplemental Indenture to be dated as of June
1, 1995.
The Mortgage does not contain any covenant or other provision that
specifically is intended to afford holders of Bonds special protection in the
event of a highly leveraged transaction.
Interest and Maturity
The Bonds will bear interest at the rate per annum shown on the cover page
hereof, payable semi-annually on June 1 and December 1, beginning December 1,
1995. Interest will be paid to the person in whose name a Bond is registered at
the close of business on the May 15 or November 15 next preceding each
semi-annual interest payment date. The Bonds will mature June 1, 2025 and will
be limited to a principal amount of $30,000,000.
Redemption
The Bonds are subject to redemption prior to maturity, upon not less than 30
nor more than 60 days' prior notice by mail, at the option of the Company, at
any time on or after June 1, 2005, as a whole or from time to time in part, at
the following redemption prices (expressed in percentages of principal amount)
plus accrued interest to the date fixed for redemption:
<TABLE>
<CAPTION>
YEAR
BEGINNING REDEMPTION YEAR BEGINNING REDEMPTION
JUNE 1, PRICE JUNE 1, PRICE
- ----------- ------------ ------------------ ------------
<S> <C> <C> <C>
2005 103.8750% 2011 101.5500%
2006 103.4875 2012 101.1625
2007 103.1000 2013 100.7750
2008 102.7125 2014 100.3875
2009 102.3250 2015 and thereafter 100.0000
2010 101.9375
</TABLE>
There is no sinking fund applicable to any outstanding series of bonds and
the Twenty-Seventh Supplemental Indenture will not provide a sinking fund for
the Bonds.
Book-Entry System
DTC will act as securities depository for the Bonds. The Bonds will be issued
as fully-registered securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully-registered Bond (the "Global Bond") certificate
will be issued for the Bonds, in the aggregate principal amount of $30,000,000,
and will be deposited with DTC.
S-3
<PAGE>
The Company understands that 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. 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
Participants' 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. 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 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 Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Bonds on DTC's records. The
ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is
in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchase, 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 Participant through which the Beneficial
Owner entered into the transaction. Transfers of ownership interests in the
Bonds 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 Bonds, except in the event that use of
the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Participants with
DTC are registered in the name of DTC's partnership nominee, Cede & Co. The
deposit of Bonds with DTC and their registration in the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Bonds; DTC's records reflect only the identity of the
Direct Participants to whose accounts such Bonds 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 Cede & Co. If less than all of the Bonds
are being redeemed, DTC's practice is to determine by lot the amount of the
Bonds of each Direct Participant to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds.
Under its usual procedures, DTC would mail an Omnibus Proxy to the Company as
soon as possible after the relevant record date. The Omnibus Proxy assigns Cede
& Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Bonds are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Principal and interest payments on the Bonds will be made to DTC. DTC has
advised the Company and the Principal Trustee (as defined in the accompanying
Prospectus) that its present practice is, upon receipt of any payment of
principal or interest, to immediately credit the accounts of the Direct
Participants with such payment in amounts proportionate to their respective
beneficial interests in the Global Bond as shown on the records of DTC. Payments
by Direct and Indirect Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, the
Trustees (as defined in the accompanying Pro-
S-4
<PAGE>
spectus) or the Company, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal and interest to DTC is
the responsibility of the Company or the Principal Trustee; disbursement of such
payments to Direct Participants will be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Bonds at any time by giving reasonable notice to the Company or
the Principal Trustee. Under such circumstances, in the event that a successor
securities depository is not obtained, Bond certificates are required to be
printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Bond certificates will be printed and delivered.
Beneficial Owners should consult with the Direct Participant or Indirect
Participant from whom they purchased a book-entry interest to obtain information
concerning the system maintained by such Direct Participant or Indirect
Participant to record such interests, to make payments and to forward notices of
redemption and other information.
Neither the Company nor either Trustee have any responsibility or liability
for any aspects of the records or notices relating to, or payments made on
account of, book-entry interest ownership, or for maintaining, supervising or
reviewing any records relating to that ownership.
UNDERWRITING
Subject to the terms and conditions of a purchase agreement (the "Purchase
Agreement") between the Company and Salomon Brothers Inc (the "Underwriter"),
the Underwriter has agreed to purchase and the Company has agreed to sell an
aggregate of $30,000,000 principal amount of the Bonds.
The Purchase Agreement provides that the obligations of the Underwriter are
subject to certain conditions precedent. The Underwriter will be obligated to
purchase the entire principal amount of the Bonds if any of the Bonds are
purchased.
The Company has been advised by the Underwriter that it proposes initially to
offer the Bonds to the public at the public offering price set forth on the
cover page of this Prospectus Supplement, and to certain dealers at such price
less a concession not in excess of 0.50% of the principal amount of the Bonds.
The Underwriter may allow and such dealers may reallow a concession not in
excess of 0.25% of the principal amount of the Bonds to certain other dealers.
After the initial public offering, the public offering price and such
concessions may be changed.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
and to contribute to payments that the Underwriter may be required to make in
respect thereof.
There is at present no trading market for the Bonds. The Underwriter is not
obligated to make a market in the Bonds, and the Company cannot predict whether
a trading market for the Bonds will develop or, if developed, will be
maintained. The Company does not intend to apply for listing of the Bonds on a
national securities exchange.
S-5
<PAGE>
PROSPECTUS
[EMPIRE LOGO]
THE EMPIRE DISTRICT ELECTRIC COMPANY
Cumulative Preferred Stock; First Mortgage Bonds
--------------------
The Empire District Electric Company (the "Company") intends from time to
time to sell shares of its Cumulative Preferred Stock, $10.00 par value per
share (the "New Preferred Stock") and/or its First Mortgage Bonds (the "New
Bonds," and collectively with the New Preferred Stock, the "Securities"), in one
or more series, each on terms to be determined at the time of the offering. The
aggregate principal amount of the New Bonds and the par value of the New
Preferred Stock being offered will not exceed $110,000,000, of which Cumulative
Preferred Stock having an aggregate par value of $25,000,000 was issued in June
1994, $20,000,000 aggregate principal amount of First Mortgage Bonds was issued
in November 1994 and $10,000,000 aggregate principal amount of First Mortgage
Bonds is being sold pursuant to a prospectus supplement dated the date hereof.
All specific terms of the offering and sale of the Securities, including (i) the
specific number of shares, designation, liquidation preferences, issue price,
rate and terms of payment of dividends, redemption provisions and sinking fund
terms and voting or other special rights, if any, of the New Preferred Stock,
(ii) the specific designation, aggregate principal amount, maturity, rate and
terms of payment of interest, redemption provisions and sinking fund terms, if
any, of the New Bonds and (iii) other specific terms and any listing on a
securities exchange of the Securities in respect of which this Prospectus is
being delivered will be set forth in a Prospectus Supplement ("Prospectus
Supplement"), together with the terms of the offering of such Securities.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The Company may sell the Securities in any of the following ways: (i) through
underwriters or dealers, (ii) directly to a limited number of purchasers or to a
single purchaser, or (iii) through agents. The names of any such underwriters or
agents and any applicable commissions or discounts will be set forth in an
accompanying Prospectus Supplement. Pricing information and net proceeds to the
Company from the sale of the Securities will also be set forth in such
Prospectus Supplement. See "Plan of Distribution" herein.
--------------------
The date of this Prospectus is April 20, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports and other
information with the Securities and Exchange Commission which may be inspected
and copied at the offices of the Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; 500 West Madison Street, suite 1400, Chicago, Illinois
60601; and 7 World Trade Center, suite 1300, New York, New York 10048, and
copies of such material can be obtained from the Public Reference Section of the
Commission, Washington, D.C. 20549, at prescribed rates. Securities of the
Company are listed on the New York Stock Exchange ("NYSE") and reports and other
information concerning the Company may be inspected at the office of the NYSE at
20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the Commission are
incorporated herein by reference as of their respective filing dates:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 (File No. 1-3368).
(b) Current Report on Form 8-K dated March 27, 1995 (File No. 1-3368).
(c) Current Report on Form 8-K dated April 13, 1995 (File No. 1-3368).
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date of this Prospectus
and prior to the termination of the offering of the securities offered hereby
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents.
The Company hereby undertakes to provide without charge to each person to
whom a copy of the Prospectus has been delivered, on the request of any such
person, a copy of any or all of the documents referred to above which have been
or may be incorporated in this Prospectus by reference, other than exhibits to
such documents. Requests for such copies should be directed to The Empire
District Electric Company, P.O. Box 127, Joplin, Missouri 64802. Attention: Vice
President-Finance, (417) 625-5100.
2
<PAGE>
THE COMPANY
The Company, a Kansas corporation organized in 1909, is a public utility
engaged in the generation, purchase, transmission, distribution and sale of
electricity in parts of Missouri, Kansas, Oklahoma and Arkansas. The Company
also provides water service to three towns in Missouri. The executive offices of
the Company are located at 602 Joplin Street, Joplin, Missouri, 64801, and its
telephone number is (417) 625-5100.
USE OF PROCEEDS
The use of proceeds from the sale of the Securities will be set forth in the
Prospectus Supplement by which such Securities are offered.
DESCRIPTION OF THE NEW PREFERRED STOCK
The following description of the New Preferred Stock sets forth certain
general terms and provisions of the Company's Restated Articles of
Incorporation, as amended (the "Articles") applicable to any series of New
Preferred Stock. The definitive terms of any such series of New Preferred Stock
are set forth in the Prospectus as amended and supplemented by the Prospectus
Supplement by which such series of New Preferred Stock is offered. The
statements set forth below are summaries of the terms of the Articles and do not
purport to be complete. These statements are qualified in their entirety by
reference to the Articles.
General
The Company is authorized to issue 5,000,000 shares of cumulative preferred
stock, par value $10.00 per share ("Cumulative Preferred Stock"), of which
390,180 shares of 5% Cumulative Preferred Stock, 400,000 shares of 4 3/4 %
Cumulative Preferred Stock and 2,500,000 shares of 8 1/8 % Cumulative Preferred
Stock are outstanding as of the date of this Prospectus. The New Preferred Stock
may be issued in one or more series with the specific number of shares,
designation, liquidation preferences, issue price, dividend rate, redemption
provisions and sinking fund terms, voting or other special rights or any other
specific term of the series to be determined by the Board of Directors without
any further action by the stockholders of the Company.
The New Preferred Stock will have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided for in a Prospectus
Supplement relating to any particular series of New Preferred Stock. Reference
is made to the Prospectus Supplement relating to the particular series of New
Preferred Stock offered thereby for specific terms, which may include one or
more of the following: (i) the designation and number of shares offered; (ii)
the liquidation preferences per share; (iii) the initial public offering price;
(iv) the dividend rate or rates, or the method of determining the dividend rate
or rates; (v) the dates on which dividends will accrue; (vi) any redemption or
sinking fund provision; (vii) voting or other special rights and (viii) any
additional terms, preferences or rights.
Dividends
The holders of each series of Cumulative Preferred Stock are, and the holders
of the New Preferred Stock will be, entitled to receive, if and when declared by
the Board of Directors out of funds legally available therefor, cumulative
quarterly dividends at the rates per annum fixed for each series thereof,
payable on March 1, June 1, September 1 and December 1 in each year, before any
dividends may be paid on or set apart for the Company's common stock, $1.00 par
value per share ("Common Stock") or the Company's preference stock, without par
value ("Preference Stock"). Dividends on the New Preferred Stock will be
cumulative from the date of issuance.
Liquidation
Provisions relating to the liquidation preference payable by the Company on
each series of New Preferred Stock will be as set forth in the Prospectus
Supplement by which such New Preferred Stock will be offered. If, upon any
liquidation, dissolution or winding up, the assets distributable among the
3
<PAGE>
holders of the Cumulative Preferred Stock of all series shall be insufficient to
permit the payment of the full preferential amounts to which they shall be
entitled, then the entire assets of the Company to be distributed shall be
distributed among the holders of the Cumulative Preferred Stock of all series
then outstanding, ratably in proportion to the full preferential amounts to
which they are respectively entitled. A consolidation or merger of the Company
or a sale or transfer of substantially all of its assets as an entirety shall
not be deemed to be a liquidation, dissolution or winding up of the Company.
Redemption Provisions
Any provisions relating to the optional redemption by the Company of each
series of New Preferred Stock will be as set forth in the Prospectus Supplement
by which such New Preferred Stock is to be offered.
Any provisions relating to a sinking fund for any series of the New Preferred
Stock will be as set forth in the Prospectus Supplement by which such New
Preferred Stock is to be offered.
There are no restrictions on the repurchase or redemption, including
redemption for any sinking fund, of shares of the New Preferred Stock by the
Company at prices not exceeding the redemption price thereof while there is an
arrearage in the payment of dividends thereon.
Voting Rights
The holders of New Preferred Stock shall not be entitled to vote except as
follows:
(a) In proceedings as to which their vote is mandatorily required by the
then existing laws of the State of Kansas; or
(b) If dividends payable on the outstanding Cumulative Preferred Stock shall
be accumulated and unpaid in an amount equivalent to four (4) full quarterly
dividends, the holders of such stock shall be entitled thereafter and until, but
only until, all dividends in default shall have been paid, (i) voting for such
purposes as a single class, at each succeeding annual meeting of stockholders,
to elect the smallest number of directors necessary to constitute a majority of
the Board of Directors, the remaining directors to be elected as usual by the
holders of the Common Stock or of the Preference Stock as may be entitled to
vote therefor; and (ii) to vote on all questions other than for the election of
directors in such manner that the holders thereof shall have the vote per share
of Cumulative Preferred Stock specified below; provided that if and when profits
available for dividends are in excess of such accumulated and unpaid dividends,
then the declaration and payment of such dividends shall not be unreasonably
withheld; or
(c) As set forth under "Restrictions on Corporate Action" below.
On any matter on which holders of Cumulative Preferred Stock shall be
entitled to vote, each share of Cumulative Preferred Stock entitled to vote
shall entitle the holder thereof to that number of votes (including any
fractional vote) determined by dividing the amount to which the share is
entitled in the event of involuntary liquidation, dissolution or winding up of
the Company (exclusive of accrued or accumulated and unpaid dividends) by $10.
Restrictions on Corporate Action
The Articles provide that the vote of the holders of Cumulative Preferred
Stock having two-thirds of the total number of votes possessed by the holders of
the then outstanding shares of Cumulative Preferred Stock will be required: (a)
to authorize or issue any additional stock ranking prior to or on a parity with
the Cumulative Preferred Stock as to dividends or assets; (b) to authorize
additional shares of Cumulative Preferred Stock or to authorize or issue any
obligation or security convertible into or evidencing the right to purchase
shares of Cumulative Preferred Stock or any stock ranking prior to or on parity
with the Cumulative Preferred Stock as to dividends or assets; (c) to issue
additional Cumulative Preferred Stock or stock of equal rank unless the net
income of the Company determined in accordance with generally accepted
accounting practices, for a specified twelve-month period, shall have
4
<PAGE>
been at least twice the annual dividend requirements upon the entire amount of
the Cumulative Preferred Stock and all stock ranking prior to or on a parity
with the cumulative preferred stock to be outstanding immediately after the
proposed issue of such additional shares, and unless the net income of the
Company available for interest and dividends for such twelve months, determined
in accordance with generally accepted accounting practices to be available for
the payment of interest, shall have been at least 1 1/2 times the sum of (i) the
annual interest requirements on the Company's indebtedness to be outstanding
immediately after the proposed issue of such additional shares and (ii) the
annual dividend requirements on the entire amount of Cumulative Preferred Stock
and all stock ranking prior to or on a parity with the cumulative preferred
stock to be outstanding immediately after the proposed issuance of such
additional shares (provided that the approval of only a majority of the
outstanding cumulative preferred stock shall be required if only the net income
available for interest and dividends test is not met) or (d) amend the Articles
so as to affect adversely any of the preferences or other rights thereby given
to the Cumulative Preferred Stock. Under these tests the Company could have
issued shares of Cumulative Preferred Stock having an aggregate par value of
approximately $86.4 million (8 1/8 % dividend rate assumed), based upon the
twelve months ended December 31, 1994.
The Articles provide that the vote of the holders of Cumulative Preferred
Stock having a majority of the total number of votes possessed by the holders of
the then outstanding shares of Cumulative Preferred Stock will be required to:
(a) effect a merger or consolidation with any other corporation, or sell the
property of the Company as or substantially as an entirety (other than a
mortgage of the Company's assets) or (b) create or issue any unsecured notes,
debentures or other unsecured indebtedness, or assume any such unsecured
securities, for purposes other than the refunding of outstanding unsecured
securities theretofore issued or assumed by the Company, if immediately after
such issue or assumption the total principal amount of all such unsecured
securities issued or assumed by the Company and then outstanding would exceed
20% of the aggregate of (i) the total principal amount of all secured
indebtedness issued or assumed by the Company and then outstanding plus (ii) the
capital and surplus of the Company; provided that if such approval is sought at
a meeting of holders of the Cumulative Preferred Stock the approval of only the
holders of a majority of the Cumulative Preferred Stock represented at such
meeting, and constituting a quorum, shall be required. Under this provision, the
Company at December 31, 1994 could have incurred additional unsecured
indebtedness approximating $78.3 million.
Articles of Incorporation
The Articles require a vote of the holders of 80% of the outstanding shares
of capital stock possessing full voting power for the election of directors,
considered as one class ("Voting Shares"), in order for the Company to enter
into a merger, consummate a sale of a substantial amount of assets or enter into
certain other transactions (each a "Business Combination") with any beneficial
holder (a "Substantial Stockholder") of 5% or more of the Company's outstanding
Common Stock unless two-thirds of the Continuing Directors (generally those in
office before the Substantial Stockholder became a Substantial Stockholder or
directors elected by such Continuing Directors) approve the Business
Combination, in which case a vote of the holders of a majority of the capital
stock entitled to vote is required to approve the Business Combination. A
majority vote of the holders of capital stock entitled to vote would also be
sufficient if (i) the percentage premium over fair market value paid to each
stockholder of any class of capital stock is at least as great as the ratio of
(x) the highest price paid for such capital stock by the Substantial Stockholder
in the previous two years to (y) the fair market value of such stock prior to
the Substantial Stockholder's initial acquisition of stock within the previous
two years, (ii) the per share consideration received by stockholders is at least
as much as the greatest of: (a) the highest price paid by the Substantial
Stockholder for stock of the same class, (b) the fair market value of the stock
and (c) the book value of the stock, (iii) the consideration paid by the
Substantial Stockholder to other stockholders is either cash or the same form
used by the Substantial Stockholder in acquiring stock prior to the Business
Combination, (iv) certain changes in the capitalization of the Company do not
occur between the time the Substantial Stockholder acquires a 5% interest and
the consummation of the Business Combination and (v) the Substantial Stockholder
delivers to the holders of all voting stock an
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information statement indicating the views of the Continuing Directors and, if
requested by the Continuing Directors, containing the opinion of an investment
banking firm on the fairness of the Business Combination.
The affirmative vote of the holders of 80% of the voting power of the then
outstanding Voting Shares or two-thirds of the Continuing Directors is required
to amend or repeal the above described provision or to adopt a provision
inconsistent therewith.
Miscellaneous
None of the Cumulative Preferred Stock, including the New Preferred Stock,
has any preemptive or conversion rights.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the New Preferred Stock will be Chemical
Bank, New York, New York.
DESCRIPTION OF THE NEW BONDS
The New Bonds will be issued as one or more new series under the Indenture of
Mortgage and Deed of Trust, dated as of September 1, 1944 ("Original
Indenture"), between the Company and Harris Trust and Savings Bank ("Principal
Trustee") and Mercantile Bank of Joplin (successor to The Joplin National Bank
and Trust Company), as Trustees ("Trustees"), as heretofore amended and
supplemented and as to be supplemented by a supplemental indenture for each
series of New Bonds, which Original Indenture as so amended and supplemented is
herein called the "Mortgage." The statements herein concerning the New Bonds and
the Mortgage are merely a summary and do not purport to be complete. These
statements make use of terms defined in the Mortgage, which has been filed as an
Exhibit to the Registration Statement of which this Prospectus is a part, and
such statements are qualified in their entirety by reference to said documents.
The definitive provisions of the New Bonds will not be determined until the
time of sale and, accordingly, the provisions set forth below may be changed and
new provisions may be added. The definitive terms of each series of New Bonds
are set forth in the Prospectus as amended and supplemented by the Prospectus
Supplement by which such New Bonds are offered.
General
Each series of New Bonds will mature on the date or dates and bear interest,
payable semi-annually, at the rate or rates set forth, or determined as set
forth, in the Prospectus Supplement by which such series of New Bonds is
offered.
The Company has designated the principal office of Harris Trust and Savings
Bank in Chicago, Illinois, as its office or agency where principal, premium (if
any), and interest on the New Bonds will be payable. Unless the Prospectus
Supplement with respect to a series of New Bonds provides otherwise, interest on
such series of New Bonds will be paid to the person in whose name such New Bond
is registered at the close of business on the 15th day of the month preceding
the interest payment date in respect thereof. The New Bonds will be issued as
fully registered bonds, without coupons, in denominations of $1,000 and integral
multiples thereof. The New Bonds will be transferable without any service or
other charge by the Company or the Principal Trustee except stamp or other taxes
and other governmental charges, if any. (Article I of the Supplemental Indenture
relating to each series of New Bonds.)
Security
The New Bonds will rank pari passu, except as to any sinking fund or similar
fund provided for a particular series, with all bonds at any time outstanding
under the Mortgage. In the opinion of Spencer, Scott & Dwyer, P.C., counsel for
the Company, the Mortgage constitutes a first mortgage lien on substantially all
the fixed property and franchises owned by the Company, other than property
specifically
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excepted, subject only to Permitted Encumbrances as defined in the Mortgage and,
as to after-acquired property, to liens thereon existing or liens placed thereon
at the time of acquisition for unpaid portions of the purchase price. The
principal properties subject to the lien of the Mortgage are the electric
properties owned by the Company. (Granting and Habendum Clauses and Sections
1.04 and 1.05 of the Mortgage.)
The Mortgage contains restrictions on (1) the acquisition of property (other
than electric equipment subject to chattel mortgages or similar liens) subject
to a prior lien securing indebtedness exceeding 60% of the sum of (i) the fair
value of the property and (ii) 166 2/3 % of the amount of bonds issuable on the
basis of property additions and (2) the issuance of bonds, withdrawal of cash or
release of property on the basis of property additions subject to a prior lien
and prior lien bonds. Indebtedness secured by a prior lien on property at the
time of its acquisition may not be increased unless the evidences of such
increases are pledged with the Principal Trustee. (Sections 1.05, 4.16, 4.18 and
4.20 of the Mortgage.)
Issuance of Additional Bonds
The Mortgage limits the aggregate principal amount of the bonds at any one
time outstanding to $1,000,000,000. (Section 2.01 of the Mortgage as amended by
the Fourteenth Supplemental Indenture.)
Additional bonds may be issued under the Mortgage in a principal amount equal
to (a) 60% of net property additions (as defined in the Mortgage) acquired or
constructed subsequent to the date of the execution of the Original Indenture,
(b) the principal amount of certain retired bonds or prior lien bonds and (c)
the amount of deposited cash. (Article 3 of the Mortgage.)
No bonds may be issued as provided in clauses (a) and (c) above, nor as
provided in clause (b) above with certain exceptions, unless the net earnings of
the Company (as defined in Section 1.06 of the Mortgage) are at least two times
the annual interest on all bonds (including the bonds proposed to be issued) and
indebtedness secured by a prior lien. (Article 3 of the Mortgage.) Net earnings
are computed without deduction of (i) income and profits taxes (as defined in
the Mortgage), (ii) expenses or provisions for interest on any indebtedness, or
for any sinking or similar fund for retirement of indebtedness, or (iii)
amortization of debt discount and expense. (Section 1.06 of the Mortgage.)
Property additions must consist of property used or useful in the electric
business acquired or constructed by the Company subsequent to the date of
execution of the Original Indenture. (Section 1.05 of the Mortgage.) Under the
foregoing tests, the Company could issue an additional $74.0 million of First
Mortgage Bonds at December 31, 1994 (8.5% interest rate per annum assumed).
Cash deposited under clause (c) above may be withdrawn by the Company in an
amount equal to the bonds issuable pursuant to clauses (a) and (b) above without
regard to net earnings, or may be applied to the purchase or redemption of bonds
of any series designated by the Company. (Sections 3.09, 3.10 and 8.11 of the
Mortgage.)
Redemption Provisions
Any provisions relating to the optional and mandatory redemption by the
Company of each series of New Bonds will be as set forth in the Prospectus
Supplement by which each such series is to be offered.
Supplemental indentures under which certain outstanding series of bonds were
issued provide for sinking funds for the benefit of such respective series, each
applicable only so long as the bonds of such respective series are outstanding.
Sinking fund provisions applicable to a series of New Bonds, if any, will be as
set forth in the Prospectus Supplement by which such series of New Bonds is to
be offered.
Maintenance and Replacement Fund
The Mortgage does not provide for a Maintenance and Replacement Fund for any
series of New Bonds.
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Dividend Restriction
So long as any of the New Bonds are outstanding, the Company will not declare
or pay any dividends (other than dividends payable in shares of its Common
Stock) or make any other distribution on, or purchase (other than with the
proceeds of additional Common Stock financing) any shares of, its Common Stock
if the cumulative aggregate amount thereof after August 31, 1944 (exclusive of
the first quarterly dividend of $98,000 paid after said date) would exceed the
earned surplus (as defined) accumulated subsequent to August 31, 1944, or the
date of succession in the event that another company succeeds to the rights and
liabilities of the Company by a merger or consolidation. (Section 4.11 of the
Mortgage and Article IV of the Supplemental Indenture relating to such series of
New Bonds.)
Events of Default
The Mortgage provides generally that failure for 60 days to pay any interest
due on any bonds issued thereunder; failure to pay when due the principal of any
bonds issued under the Mortgage or the principal of or interest on any
outstanding prior lien bonds; failure to perform or observe for 90 days after
notice of such failure any other of the covenants, agreements or conditions of
the Mortgage, indentures supplemental thereto or any of the bonds issued
thereunder; and the occurrence of insolvency, bankruptcy, receivership or
similar events, constitute defaults. (Section 9.01 of the Mortgage.)
Upon the occurrence and continuation of a default, either of the Trustees, or
the holders of not less than 25% in principal amount of the outstanding bonds
may declare the bonds immediately due and payable, but the holders of a majority
in principal amount of the bonds may annul such declaration and its consequences
if such default has been cured. (Section 9.01 of the Mortgage.)
The holders of not less than 75% in principal amount of the outstanding bonds
(including not less than 60% in aggregate principal amount of bonds of each
series) may waive any default under the Mortgage, except a default in payment of
principal of, or premium or interest on, the bonds and a default arising from
the creation of any lien prior to or on a parity with the lien of the Mortgage.
(Section 9.21 of the Mortgage.)
The Company is required to file with the Principal Trustee such information,
documents and reports with respect to compliance by the Company with the
conditions and covenants of the Mortgage as may be required by the rules and
regulations of the Securities and Exchange Commission. No periodic evidence is
required to be furnished, however, as to the absence of default. (Article 9 of
the Mortgage.)
Modification of the Mortgage
The Mortgage and the rights of bondholders may be modified with the consent
(in writing or given at a meeting of bondholders) of the holders of not less
than 60% in principal amount of the bonds then outstanding or, in the event that
all series are not so affected, of not less than 60% in principal amount of the
outstanding bonds of all series which may be affected by any such modification
voting together. Without the consent of the holder of each bond affected, the
bondholders have no power to (a) extend the time of payment of the principal of
or interest on any bonds, (b) reduce the principal amount thereof or the rate of
interest thereon or otherwise modify the terms of payment of principal or
interest, (c) permit the creation of any lien ranking prior to or on a parity
with the lien of the Mortgage with respect to any of the Mortgaged Property, (d)
deprive any non-assenting bondholder of a lien upon the Mortgaged Property for
the security of such bondholder's bonds or (e) reduce the percentage of
bondholders authorized to take such action. Such prohibition against
modification does not prevent abolition of or changes in any sinking or other
fund. (Article 15 of the Mortgage, as amended by the Twenty-Fourth Supplemental
Indenture.)
Concerning the Trustees
The Company maintains a line of credit with the Principal Trustee and has
other banking and trust relationships with each of the Trustees.
The Mortgage provides that the holders of a majority in principal amount of
the outstanding bonds will have the right to require the Trustees to take
certain action on behalf of the bondholders but under
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certain circumstances the Trustees may decline to follow such directions or to
exercise certain of their powers. Prior to taking such action the Trustees are
entitled to indemnity satisfactory to the Trustees against costs, expenses and
liabilities that may be incurred in the course of such action. This right does
not, however, impair the absolute right of any bondholder to enforce payment of
the principal of and interest on his bond when due. (Sections 9.16 and 9.17
of the Mortgage.)
PLAN OF DISTRIBUTION
The Company may sell the Securities in any of the following ways: (i) through
underwriters or dealers; (ii) directly to a limited number of purchasers or to a
single purchaser; or (iii) through agents. The Prospectus Supplement with
respect to the Securities being offered thereby sets forth the terms of the
offering of such Securities, including the name or names of any underwriters,
the purchase price of such Securities and the proceeds to the Company from such
sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchanges on which
such Securities may be listed. Only underwriters named in a Prospectus
Supplement are deemed to be underwriters in connection with the Securities
offered thereby.
If underwriters are used in the sale of the Securities, such Securities will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of
sale. The Securities may be offered to the public either through underwriting
syndicates (which may be represented by managing underwriters designated by the
Company) or directly by one or more underwriters acting alone. Unless otherwise
set forth in the Prospectus Supplement, the obligations of the underwriters to
purchase the Securities of the series offered thereby will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all
such Securities if any are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
The Securities may be sold directly by the Company or through agents
designated by the Company from time to time. The Prospectus Supplement with
respect to any of the Securities sold in this manner sets forth the name of any
agent involved in the offer or sale of such Securities as well as any
commissions payable by the Company to such agent. Unless otherwise indicated in
the Prospectus Supplement, any such agent is acting on a best efforts basis for
the period of its appointment.
If dealers are utilized in the sale of any of the Securities, the Company
will sell such Securities to the dealers, as principal. Any dealer may then
resell such Securities to the public at varying prices to be determined by such
dealer at the time of resale. The name of any dealer and the terms of the
transaction will be set forth in the Prospectus Supplement with respect to such
Securities being offered thereby.
It has not been determined whether any of the Securities will be listed on a
securities exchange. Underwriters will not be obligated to make a market in any
of the Securities. The Company cannot predict the activity or liquidity of
trading in any of the Securities.
Agents, underwriters and dealers may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribution with respect to payments which the agents, underwriters or dealers
may be required to make in respect thereof. Agents, underwriters and dealers may
be customers of, engage in transactions with, or perform services for the
Company in the ordinary course of business.
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LEGAL MATTERS
Certain legal matters in connection with the Securities are being passed upon
by Spencer, Scott & Dwyer, P.C., Joplin, Missouri; Anderson, Byrd, Richeson &
Flaherty, Ottawa, Kansas; Brydon, Swearengen & England, Professional
Corporation, Jefferson City, Missouri; and Cahill Gordon & Reindel, New York,
New York, counsel for the Company. Certain legal matters are being passed upon
for the underwriters or purchasers by Thompson & Mitchell, St. Louis, Missouri.
Cahill Gordon & Reindel is relying as to matters of Kansas law upon the opinion
of Anderson, Byrd, Richeson & Flaherty, as to matters of Missouri law (except as
to matters relating to the approval of the Missouri Public Service Commission)
upon the opinion of Spencer, Scott & Dwyer, P.C. and as to matters relating to
the approval of the Missouri, Arkansas and Oklahoma public utility commissions
upon the opinion of Brydon, Swearengen & England, Professional Corporation.
EXPERTS
The statements of law and legal conclusions made under "Description of the
New Bonds--Security" have been reviewed by Spencer, Scott & Dwyer, P.C. and are
included in reliance upon the authority of that firm as experts. As of April 12,
1995, members of Spencer, Scott & Dwyer, P.C. held an aggregate of 6,456 shares
of the Company's Common Stock.
The audited financial statements and financial statement schedule of the
Company incorporated in this Prospectus by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994 have been so
incorporated in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
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No dealer, salesman, or any other person has
been authorized to give any information or to
make any representations other than those
contained in this Prospectus Supplement or the
Prospectus in connection with the offer
contained in this Prospectus Supplement and
the Prospectus and, if given or made, such
information or representations must not be
relied upon as having been authorized by the
Company or any Underwriter. Neither the
delivery of this Prospectus Supplement and the
Prospectus nor any sale made hereunder shall,
under any circumstances, create any
implication that there has been no change in
the affairs of the Company since the date
hereof. This Prospectus Supplement and the
Prospectus are not an offer to sell or a
solicitation of an offer to buy any security
in any jurisdiction in which it is unlawful to
make such offer or solicitation.
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Table of Contents
PAGE
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Prospectus Supplement
Summary Information ................... S-2
Use of Proceeds ....................... S-3
Certain Terms of the Bonds ............ S-3
Underwriting .......................... S-5
Prospectus
Available Information ................. 2
Incorporation of Certain Documents
by Reference .......................... 2
The Company ........................... 3
Use of Proceeds ....................... 3
Description of the New Preferred Stock 3
Description of the New Bonds .......... 6
Plan of Distribution .................. 9
Legal Matters ......................... 10
Experts................................ 10
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$30,000,000
The Empire District
Electric Company
First Mortgage Bonds,
7 3/4 % Series due 2025
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Salomon Brothers Inc
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Prospectus Supplement
Dated May 31, 1995
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