<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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$10,000,000
The Empire District Electric Company
First Mortgage Bonds, 7.60% Series due 2005
The New Bonds offered hereby (the "Bonds") will mature on April 1, 2005 and are
not redeemable prior to maturity. Interest on the Bonds is payable semi-annually
on each April 1 and October 1, beginning October 1, 1995.
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.
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Price to Underwriting Proceeds to
Public(1) Discount Company(1)(2)
Per Bond............... 100.000% .650% 99.350%
Total............. .... $10,000,000 $65,000 $9,935,000
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(1) Plus accrued interest, if any, from April 27, 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. It is expected
that delivery of the Bonds will be made at the office of Salomon Brothers Inc,
Seven World Trade Center, New York, New York or through the facilities of The
Depository Trust Company, on or about April 27, 1995.
Salomon Brothers Inc
The date of this Prospectus Supplement is April 20, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NEW
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........ $10,000,000 aggregate principal amount of First
Mortgage Bonds, 7.60% Series due 2005.
Interest Payment Dates.... Semi-annually, on each April 1 and October 1,
beginning October 1, 1995.
Use of Proceeds.......... To be added to the Company's general funds which
will be used to repay short-term indebtedness or
for expenses incurred in connection with the
Company's construction program.
Certain Summary Financial Information
Income Statement Data:
Twelve Months
Ended March 31, Year ended December 31,
1995 1994 1993 1992
(in thousands except ratios)
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 December 31, 1994:
<TABLE>
<CAPTION>
Actual As Adjusted (2)
Amount (3) Percentage Amount Percentage
(all dollar amounts in thousands)
<S> <C> <C> <C> <C>
First Mortgage Bonds Not Due Within
One Year ........................ $184,977 47.2% $194,977 46.8%
Preferred Stock ................... 32,902 8.4 32,902 7.9
Common Stock Equity ............... 173,780 44.4 188,630 45.3
------- ------ -------- -----
Total Capitalization ............ $391,659 100.0% $416,509 100.0%
<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) Includes adjustments to reflect the issuance of the Bonds and 900,000
shares of Common Stock which the Company is offering concurrently. See
"Use of Proceeds."
(3) At March 31, 1995, the Company also had outstanding $18.5 million of
indebtedness incurred to provide interim financing of the Company's
construction program. See "Use of Proceeds."
</TABLE>
S-2
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USE OF PROCEEDS
The net proceeds to the Company from the sale of the New Bonds, after
deducting the underwriting discount and estimated offering expenses, are
expected to be approximately $9.8 million. The Company is concurrently offering
to the public, by a separate prospectus, 900,000 shares (990,000 shares if the
underwriters thereof exercise their over-allotment option in full) of its Common
Stock. The net proceeds from the two offerings will be added to the Company's
general funds, which will be used to repay short-term indebtedness or for
expenses incurred in connection with the Company's construction program. The
sale of the Bonds is not contingent on the sale of such Common Stock. At March
31, 1995, the Company had outstanding $18.5 million of short-term indebtedness
bearing interest at an average rate of 6.2% per annum. For further information
with respect to the Company's construction program, reference is made to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994
and other documents incorporated by reference.
RECENT DEVELOPMENTS
The Company's First Mortgage Bonds are rated A+, A1 and A- by Duff &
Phelps Credit Rating Co. ("Duff & Phelps"), Moody's Investors Services, Inc.
("Moody's") and Standard & Poor's Corporation, respectively. While Moody's
reaffirmed its rating in a press release dated April 13, 1995, it stated that
the Company's rating outlook is unfavorable because "expected rate relief may
jeopardize the Company's currently strong competitive position in an era of
increasing deregulation." The rating assigned by Duff & Phelps is under review
and may be subject to possible lowering.
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-Sixth Supplemental Indenture to be dated as of April
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 April 1 and October 1, beginning October 1,
1995. Interest will be paid to the person in whose name a Bond is registered at
the close of business on the March 15 or September 15 next preceding each
semi-annual interest payment date. The Bonds will mature April 1, 2005 and will
be limited to a principal amount of $10,000,000.
Redemption
The Bonds are not subject to redemption prior to maturity. The
Twenty-Sixth Supplemental Indenture will not provide a sinking fund for the
Bonds.
S-3
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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 $10,000,000 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 0.40% 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-4
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PROSPECTUS
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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 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.
3
<PAGE>
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 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.
4
<PAGE>
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 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.
5
<PAGE>
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 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.)
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<PAGE>
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 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.)
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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.
10
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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
-------
Prospectus Supplement
Summary Information ................... S-2
Use of Proceeds ....................... S-3
Recent Developments.................... S-3
Certain Terms of the Bonds ............ S-3
Underwriting .......................... S-4
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
$10,000,000
The Empire District
Electric Company
First Mortgage Bonds,
7.60% Series due 2005
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Salomon Brothers Inc
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Prospectus Supplement
Dated April 20, 1995
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