FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-707
KANSAS CITY POWER & LIGHT COMPANY
(Exact name of registrant as specified in its charter)
Missouri 44-0308720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1201 Walnut Street
Kansas City, Missouri 64106
(Address of principal executive offices)
Registrant's telephone number, including area code: 816-556-2200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Cumulative Preferred Stock New York Stock Exchange
par value $100 per share -
3.80%, 4.50%, 4.35%
Common Stock without par value New York Stock Exchange
Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to the
Form 10-K. X
On March 13, 1997, KCPL had 61,895,819 outstanding shares of
common stock without par value, and the aggregate market value
(based upon the closing price of these shares on the New York
Stock Exchange) of voting securities held by nonaffiliates of
KCPL was approximately $1,763,113,626.
Documents Incorporated by Reference
Portions of the 1997 Proxy Statement are incorporated by
reference in Part III of this report.
<PAGE>
TABLE OF CONTENTS
Page
Number
Item 1. Business 1
Proposed Merger With Western Resources, Inc. 1
Regulation 2
Rates 2
Environmental Matters 2
Air 3
Water 3
Competition 3
Fuel Supply 4
Coal 4
Nuclear 4
High-Level Waste 4
Low-Level Waste 5
Employees 5
Subsidiaries 5
Officers of the Registrant 6
KCPL Officers 6
KLT Inc. Officers 7
Item 2. Properties 8
Generation Resources 8
Transmission and Distribution Resources 9
General 9
Item 3. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security
Holders 11
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters 11
Market Information 11
Holders 11
Dividends 11
Item 6. Selected Financial Data 12
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Item 8. Consolidated Financial Statements 21
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 42
Item 10. Directors and Executive Officers of the Registrant 42
Item 11. Executive Compensation 42
Item 12. Security Ownership of Certain Beneficial Owners
and Management 42
Item 13. Certain Relationships and Related Transactions 42
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 43
<PAGE>
PART I
ITEM 1. BUSINESS
Kansas City Power & Light Company (KCPL) was
incorporated in Missouri in 1922 and is headquartered in
downtown Kansas City, Missouri. KCPL is a medium-sized
public utility engaged in the generation, transmission,
distribution and sale of electricity to over 435,000
customers in a 4,700 square mile area located in all or
portions of 23 counties in western Missouri and eastern
Kansas. About two-thirds of the total retail kilowatt-hour
sales and revenues are from Missouri customers and the
remainder from Kansas customers. Customers include
approximately 381,000 residences, 51,000 commercial firms,
and 3,000 industrials, municipalities and other electric
utilities. Retail revenues in Missouri and Kansas accounted
for approximately 91% of KCPL's total revenues in 1996.
Wholesale firm power, bulk power sales and miscellaneous
electric revenues accounted for the remainder of revenues.
Low fuel costs and superior plant performance enable KCPL to
serve its customers well while maintaining a leadership
position in the bulk power market.
KCPL as a regulated utility does not have direct
competition for retail electric service in its service
territory; however, there is competition in the generation
of electricity and between electric and gas as an energy
source.
KLT Inc., a wholly-owned, unregulated subsidiary of
KCPL, pursues opportunities in domestic and international
energy-related ventures. See "Subsidiaries" on page 5 of
this report. KCPL also owns 47% of Wolf Creek Nuclear
Operating Corporation, the operating company for the Wolf
Creek Generating Station (Wolf Creek).
Proposed Merger With Western Resources, Inc.
On February 7, 1997, KCPL and Western Resources, Inc.
(Western Resources) entered into an Agreement and Plan of
Merger (the Merger Agreement) to form a strategic business
combination. The effective time of the merger is dependent
upon all conditions of the Merger Agreement being met or
waived. At the effective time, KCPL will merge with and
into Western Resources, with Western Resources being the
surviving corporation.
Western Resources first delivered an unsolicited
exchange offer to KCPL's Board of Directors during the
second quarter of 1996. This initial offer, subject to
numerous conditions, proposed the exchange of $28 (later
increased to $31) worth of Western Resources common stock
for each share of KCPL common stock. After careful
consideration, both offers were rejected by KCPL's Board of
Directors. In July 1996 Western Resources commenced an
exchange offer for KCPL common stock. In late 1996 KCPL
began discussing a possible merger with Western Resources
leading to the Merger Agreement.
Under the terms of the Merger Agreement, KCPL common
stock will be exchanged for Western Resources common stock
valued at $32.00, subject to a conversion ratio limiting the
amount of Western Resources common stock that holders of
KCPL common stock would receive per share of KCPL common
stock to no more than 1.1 shares (if Western Resources'
stock is priced at or below $29.09 per share), and no less
than 0.917 shares (if Western Resources' stock is priced at
or above $34.90 per share). However, there is a provision
in the Merger Agreement that allows KCPL to terminate the
merger if Western Resources' stock price drops below $27.64
and either the Standard and Poor's Electric Companies Index
increases or the decline in Western Resources stock exceeds
by approximately 5% any decline in this index. Western
Resources could avoid this termination by improving the
conversion ratio.
The transaction is subject to several closing
conditions including approval by each company's
shareholders, approval by a number of regulatory authorities
(statutory approvals) and dissenting shares equaling less
than 5.5% of KCPL's outstanding shares. If the effective
time has not occurred by June 30, 1998 (the termination
date), either party may terminate the agreement as long as
they did not contribute to the delay. This termination date
will be automatically extended to June 30, 1999, if all of
the Merger Agreement closing conditions have been met except
for certain conditions relating to statutory approvals.
The Merger Agreement does not allow KCPL to increase
its common stock dividend prior to the effective time or
termination. It also requires KCPL to redeem all
outstanding shares of preferred stock prior to completion of
the merger.
If the Merger Agreement is terminated under certain
circumstances, a payment of $50 million will be due Western
Resources if, within two and one-half years following
termination, KCPL agrees to consummate a business
combination with a third party that made a proposal to
combine prior to termination. Western Resources will pay
KCPL $5 to $35 million if the Merger Agreement is terminated
and all closing conditions are satisfied other than
conditions relating to Western Resources receiving a
favorable tax opinion, a favorable letter from its
accountants regarding pooling accounting, favorable
statutory approvals, or an exemption from the Public Utility
Holding Company Act of 1935.
Regulation
KCPL is subject to the jurisdiction of the Public
Service Commission of the State of Missouri (MPSC), the
State Corporation Commission of the State of Kansas (KCC),
the Federal Energy Regulatory Commission (FERC), the Nuclear
Regulatory Commission (NRC) and certain other governmental
regulatory bodies as to various phases of its operations,
including rates, service, safety and nuclear plant
operations, environmental matters and issuances of
securities.
Rates
KCPL's retail electric rates are regulated by the MPSC
and KCC for sales within the respective states of Missouri
and Kansas. FERC approves KCPL's rates for wholesale bulk
electricity sales. Firm electric sales are made by
contractual arrangements between the entity being served and
KCPL.
KCPL has not increased any of its retail or wholesale
rates since 1988. Pursuant to a stipulation and agreement
with the MPSC, KCPL reduced Missouri retail rates by about
2.7% effective January 1, 1994, 2% effective July 9, 1996,
and by about 2.5% effective January 1, 1997.
Environmental Matters
KCPL's operations must comply with federal, state and
local environmental laws and regulations. The generation
and transmission of electricity uses, produces and requires
disposal of certain products and by-products, including
polychlorinated biphenyl (PCBs), asbestos and other
potentially hazardous materials. KCPL's policy is to act in
an environmentally responsible manner and to use the latest
technology available to avoid and treat contamination. The
Federal Comprehensive Environmental Response, Compensation
and Liability Act (the Superfund law) imposes strict joint
and several liability for those who generate, transport or
deposit hazardous waste. This liability extends to the
current property owner as well as prior owners since the
time of contamination. KCPL continually conducts
environmental audits designed to detect contamination and
ensure compliance with governmental regulations. However,
compliance programs needed to meet future environmental laws
and regulations governing water and air quality, including
carbon dioxide emissions, hazardous waste handling and
disposal, toxic substances and the effects of
electromagnetic fields, could require substantial changes to
operations or facilities. KCPL cannot presently estimate
any additional costs of meeting such new regulations or
standards which might be established in the future, nor can
it estimate the possible effect which any new regulations or
standards could have upon its operations. However, KCPL
currently estimates that expenditures necessary to comply
with environmental regulations during 1997 will not be
material with the possible exceptions set forth below.
Air
The Clean Air Act Amendments of 1990 contain two
programs significantly affecting the utility industry. KCPL
has spent approximately $5 million for the installation of
continuous emission monitoring equipment to satisfy the
requirements under the acid rain provision. KCPL expects no
further material expenditures for this project. The other
utility-related program calls for a study of certain air
toxic substances. Based on the outcome of this study,
regulation of these substances, including mercury, could be
required. KCPL cannot predict the likelihood of any such
regulations or compliance costs.
Proposed regulations to revise the ozone and particulate
matter, National Ambient Air Quality Standards, are
scheduled to be issued by June 1997 and may require capital
expenditures which cannot be estimated at this time.
Water
KCPL commissioned an environmental assessment of its
Northeast Station and of its Spill Prevention Control and
Countermeasure plan as required by the Clean Water Act. The
assessment revealed contamination of the site by petroleum
products, heavy metals, volatile and semi-volatile organic
compounds, asbestos, pesticides and other regulated
substances. Based upon studies and discussions with Burns &
McDonnell, the cost of the cleanup could range between $1.5
million and $6 million.
Also, groundwater analysis has indicated that certain
volatile organic compounds are moving through the Northeast
site, just above bedrock, from unidentified sources off-
site. The Missouri Department of Natural Resources (MDNR)
was notified of the possible release of petroleum products
and the presence of volatile organic compounds moving under
the site. Monitoring and removal of free petroleum products
continues at the site. MDNR has concluded that the volatile
organic compounds originated from a source off-site. MDNR
stated it will continue to investigate the source of the
compounds. Because KCPL believes it will not have liability
in this matter, it has not performed a study regarding the
possible cost of remediation of the flow of organic
compounds.
Competition
See "Regulation and Competition" on page 12 of this
report.
Fuel Supply
KCPL's principal sources of fuel for electric generation
are coal and nuclear fuel. These fuels are expected to
satisfy about 99% of the 1997 fuel requirements with the
remainder provided by other sources including natural gas,
oil and steam. The 1996 and estimated 1997 fuel mix, based
on total Btu generation, are as follows:
Estimated
1996 1997
Coal 76% 73%
Nuclear 23% 26%
Other 1% 1%
The fuel mix varies depending on the operation of Wolf
Creek which requires a refueling and maintenance outage
about every 18 months. The next outage is scheduled for the
fourth quarter of 1997.
Coal
KCPL's average cost per million Btu of coal burned,
excluding fuel handling costs, was $0.85 in 1996 and $0.89
in 1995 and 1994. KCPL's cost of delivered coal is about 63%
of the regional average.
During 1997, approximately 10.4 million tons of coal
(7.3 million tons, KCPL's share) are projected to be burned
at KCPL's generating units, including jointly-owned units.
KCPL has entered into coal-purchase contracts with various
suppliers in Wyoming's Powder River Basin, the nation's
principal supplier of low-sulfur coal. These contracts,
with expiration dates ranging from 1997 through 2003, will
satisfy approximately 95% of the projected coal requirements
for 1997, 50% for 1998, 50% for 1999, and 20% thereafter.
Nuclear
The Wolf Creek Nuclear Operating Corporation (WCNOC),
which operates Wolf Creek, has on hand or under contract 70%
of the uranium required to operate Wolf Creek through
September 2003. The balance is expected to be obtained
through spot market and contract purchases.
Contracts are in place for 100% of Wolf Creek's uranium
enrichment requirements for 1997 and 82% of such
requirements for 1998 to March 2005. The balance of the
1998-2005 requirements is expected to be obtained through a
combination of spot market and contract purchases. The
decision not to contract for the full enrichment
requirements is one of cost rather than availability of
service.
Contracts are in place for the conversion of uranium to
uranium hexaflouride sufficient to meet Wolf Creek's
requirements through 2001.
High-Level Waste
The Nuclear Waste Policy Act of 1982 established
schedules, guidelines and responsibilities for the
Department of Energy (DOE) to develop and construct
repositories for the ultimate disposal of spent fuel and
high-level waste. The DOE has not yet constructed a high-
level waste disposal site and has announced that a permanent
repository may not be in operation prior to 2010 although an
interim storage facility may be available earlier. The DOE
likely will not immediately begin accepting Wolf Creek's
spent fuel upon opening of the permanent repository.
Instead, KCPL expects to experience a multi-year transfer
period beginning as much as six years after opening of the
permanent repository. Wolf Creek contains an on-site spent
fuel storage facility which, under current regulatory
guidelines, provides space for the storage of spent fuel
through 2005 while still maintaining fuel core off-load
capability. KCPL believes adequate additional storage space
can be obtained, as necessary.
Low-Level Waste
The Low-Level Radioactive Waste Policy Amendments Act of
1985 mandated that the various states, individually or
through interstate compacts, develop alternative low-level
radioactive waste disposal facilities. The states of
Kansas, Nebraska, Arkansas, Louisiana and Oklahoma formed
the Central Interstate Low-Level Radioactive Waste Compact
and selected a site in northern Nebraska to locate a
disposal facility. The present estimate of the cost for
such a facility is about $154 million. WCNOC and the owners
of the other five nuclear units in the compact have provided
most of the pre-construction financing for this project. As
of February 28, 1997, utilities in the compact have spent in
excess of $75 million, of which $13 million was WCNOC's
share.
There is uncertainty as to whether this project will be
completed. Significant opposition to the project has been
raised by the residents in the area of the proposed facility
and attempts have been made through litigation and proposed
legislation to slow down or stop development of the
facility.
Employees
At December 31, 1996, KCPL and its wholly-owned
subsidiaries had 2,297 employees (including temporary and
part-time employees), 1,474 of which were represented by
three local unions of the International Brotherhood of
Electrical Workers (IBEW). KCPL has labor agreements with
Local 1613, representing clerical employees (which expires
March 31, 1999), with Local 1464, representing outdoor
workers (which expires January 8, 2000), and with Local 412,
representing power plant workers (which expires February 28,
1998). KCPL is also a 47% owner of WCNOC, which employs
1,013 persons to operate Wolf Creek, 340 of which are
represented by the IBEW.
Subsidiaries
KLT Inc. has six wholly-owned direct subsidiaries:
- KLT Investments Inc., a passive investor in affordable
housing investments which generate tax credits.
- KLT Investments II Inc., a passive investor in
economic, community-development and energy-related projects.
- KLT Energy Services Inc., a partner in an energy
management services and lighting services business.
- KLT Power Inc., a participant in independent power and
cogeneration projects. KLT Power Inc. has four
subsidiaries, KLT Iatan Inc., which was formed for the co-
development of the Iatan Unit 2 coal-fired power plant; KLT
Power International, which participates in independent
power projects located in China; KLT Power Asia which
participates in independent power projects located in
certain Asian countries; and KLT Power Latin American which
participates in independent power projects located in Latin
America.
- KLT Gas Inc., a participant in oil and gas reserves and
exploration. KLT Gas Inc. has one wholly-owned subsidiary,
FAR Gas Acquisitions Corporation which holds limited
partnerships in coal seam methane gas wells that generate
tax credits.
- KLT Telecom Inc., an investor in communications and
information technology opportunities. KLT Telecom Inc. has
two majority-owned subsidiaries, Municipal Solutions, an
outsourcer of municipal services and Telemetry Solutions, a
provider of services using Cellnet-related technology.
KCPL's equity investment in KLT Inc. at December 31, 1996,
was $61 million.
Officers of the Registrant
KCPL Officers
Year Named
Name Age Positions Currently Held Officer
Drue Jennings 50 Chairman of the Board, President 1980
and Chief Executive Officer
Bernard J. Beaudoin 56 Executive Vice President - Chief 1984
Financial Officer
Marcus Jackson 45 Executive Vice President - Chief 1989
Operating Officer
J. Turner White 48 Executive Vice President - Corporate 1990
Development
John J. DeStefano 47 Senior Vice President - Business 1989
Development
Jeanie Sell Latz 45 Senior Vice President - Corporate 1991
Services, Corporate Secretary
and Chief Legal Officer
Frank L. Branca 49 Vice President - Wholesale and 1989
Transmission Services
Steven W. Cattron 41 Vice President - Marketing and Sales 1994
Charles R. Cole 50 Vice President - Customer Services 1990
and Purchasing
Douglas M. Morgan 54 Vice President - Information Technology 1994
Richard A. Spring 42 Vice President - Production 1994
Bailus M. Tate 50 Vice President - Human Resources 1994
Neil A. Roadman 51 Controller 1980
Mark C. Sholander 51 General Counsel and Assistant 1986
Secretary
Andrea F. Bielsker 38 Treasurer 1996
KLT Inc. Officers
Year Named
Name Age Positions Currently Held Officer
Ronald G. Wasson 52 President 1995
Floyd R. Pendleton 53 Vice President-Business 1992
Development
David M. McCoy 49 Vice President-Business 1996
Development
Mark G. English 45 Vice President and General 1995
Counsel
Janee C. Rosenthal 35 Corporate Secretary and Treasurer 1992
Teresa D. Cook 36 Controller 1997
All of the foregoing persons have been officers of KCPL
or employees in a responsible position with KCPL for the
past five years except for Mr. Spring. Mr. Spring was an
employee of KCPL from 1978 to 1993, when he left KCPL to
join Northern Indiana Public Service Company as Director of
Electric Production. In July 1994, he rejoined KCPL as Vice
President-Production.
The term of office of each officer commences with his or
her appointment by the Board of Directors and ends at such
time as the Board of Directors may determine.
ITEM 2. PROPERTIES
Generation Resources
KCPL's generating facilities consist of the following:
Estimated
1997
Year Megawatt(mw)
Unit Completed Capacity Fuel
Existing Units
Base Load...Wolf Creek(a) 1985 548(b) Nuclear
Iatan 1980 469(b) Coal
LaCygne 2 1977 334(b) Coal
LaCygne 1 1973 341(b) Coal
Hawthorn 6 1997 142(d) Gas/Oil
Hawthorn 5 1969 479 Coal/Gas
Montrose 3 1964 161 Coal
Montrose 2 1960 153 Coal
Montrose 1 1958 155 Coal
Peak Load...Northeast 13 and 14(c) 1976 110 Oil
Northeast 17 and 18(c) 1977 116 Oil
Northeast 15 and 16(c) 1975 111 Oil
Northeast 11 and 12(c) 1972 105 Oil
Grand Avenue (2 units) 1929 & 1948 73 Gas
___
Total 3,297
=====
(a) This unit is one of KCPL's principal generating
facilities and has the lowest fuel cost of any of
its generating facilities. An extended shutdown of
the unit could have a substantial adverse effect on
the operations of KCPL and its financial condition.
(b) KCPL's share of jointly-owned unit.
(c) Combustion turbines.
(d) KCPL has entered into an operating lease with
First Security Bank of Utah, N.A. for a V.84.3A
combustion turbine-generator, to be in service in
the year 1997, with an anticipated accredited
capacity of approximately 142 mw.
KCPL's maximum system net hourly peak load of 2,987 mw
occurred on July 19, 1996. The maximum winter peak load of
2,012 mw occurred on December 19, 1996. The accredited
generating capacity of KCPL's electric facilities in the
summer (when peak loads are experienced) of 1996 under MOKAN
Power Pool standards was 3,134 mw.
KCPL owns the Hawthorn Station (Jackson County,
Missouri), Montrose Station (Henry County, Missouri),
Northeast Station (Jackson County, Missouri) and two Grand
Avenue Station turbine generators (Jackson County,
Missouri). KCPL also owns 50% of the 682-mw LaCygne 1 Unit
and 668-mw LaCygne 2 Unit in Linn County, Kansas; 70% of the
670-mw Iatan Station in Platte County, Missouri; and 47% of
the 1,167 mw Wolf Creek in Coffey County, Kansas.
Transmission and Distribution Resources
KCPL's electric transmission system is interconnected
with systems of other utilities to permit bulk power
transactions with other electricity suppliers in Kansas,
Missouri, Iowa, Nebraska and Minnesota. KCPL is a member of
the MOKAN Power Pool, which is a contractual arrangement
among eleven utilities in western Missouri and Kansas which
interchange electric energy, share reserve generating
capacity, and provide emergency and standby electricity
services to each other.
KCPL owns approximately 1,700 miles of transmission
lines and approximately 9,000 miles of overhead distribution
lines, and approximately 3,100 miles of underground
distribution lines. KCPL has all franchises necessary to
sell electricity within the territories from which
substantially all of its gross operating revenue is derived.
General
KCPL's principal plants and properties, insofar as they
constitute real estate, are owned in fee; certain other
facilities are located on premises held under leases,
permits or easements; and its electric transmission and
distribution systems are for the most part located over or
under highways, streets, other public places or property
owned by others for which permits, grants, easements or
licenses (deemed satisfactory but without examination of
underlying land titles) have been obtained.
Substantially all of the fixed property and franchises
of KCPL, which consists principally of electric generating
stations, electric transmission and distribution lines and
systems, and buildings (subject to exceptions and
reservations) are subject to a General Mortgage Indenture
and Deed of Trust dated as of December 1, 1986.
ITEM 3. LEGAL PROCEEDINGS
Kansas City Power & Light Co. v. Western Resources, Inc.,
et. al
On May 20, 1996, KCPL commenced litigation in the United
States District Court for the Western District of Missouri,
Western Division (District Court), against Western
Resources, Inc. (Western Resources) and Robert L. Rives
(Rives) requesting the District Court to declare the Amended
and Restated Agreement and Plan of Merger between KCPL, KC
Merger Sub, Inc., UtiliCorp and KC United Corp., dated
January, 1996, amended May 20, 1996 (Amended Merger
Agreement), and the transactions contemplated thereby
(collectively the Transaction) were legal and could not be
reversed. On May 24, 1996, Jack R. Manson (Manson), filed
an action to become a party to the above litigation as the
shareholders' representative. Manson made claims against
KCPL and all its directors stating they had violated their
fiduciary duties, that their actions in adopting the Amended
Merger Agreement were illegal and ultra vires; that the
adoption of the Amended Merger Agreement illegally deprived
shareholders of rights under Missouri law; and that the
adoption of the Amended Merger Agreement was an excessive
response to Western Resources' acquisition offer. On June
7, 1996, Western Resources and Rives each filed claims
against KCPL, charging the same violations against the
directors as Manson.
The District Court on August 2, 1996 ruled the
transactions contemplated by the Amended Merger Agreement
were legally valid and authorized under Missouri law; but
the combined transactions resulted in a merger between KCPL
and UtiliCorp, requiring, under Missouri law, approval by
the holders of two-thirds of the outstanding shares of
KCPL's stock.
By order dated November 25, 1996, the District Court
allowed Manson to amend his original petition claiming the
directors breached their fiduciary duties by refusing to
meet with Western Resources and had committed reckless,
grossly negligent, or negligent waste of corporate assets by
pursuing the merger with UtiliCorp. In addition to
requesting termination of the Amended Merger Agreement,
Manson sought monetary damages in an unspecified amount.
KCPL filed a motion on December 9, 1996 to dismiss Manson's
claims and it is currently pending before the District
Court. KCPL cannot predict the outcome of these proceedings
at this time.
State of Missouri ex rel. Inter-City Beverage Co., Inc., et.
al vs. The Public Service Commission of the State of
Missouri, et. al;
Jewish Community Campus of Greater Kansas City, Inc. vs.
Kansas State Corporation Commission, et. al
On August 13, 1993, a lawsuit was filed by nine
customers in the Circuit Court of Jackson County, Missouri
against KCPL. The suit alleged the misapplication of
certain of KCPL's electric rate tariffs resulting in
overcharges to industrial and commercial customers which had
been provided service under those tariffs and requested
certification as a class action. On December 3, 1993, the
Court dismissed the matter for lack of subject matter
jurisdiction. Plaintiffs appealed to the Missouri Court of
Appeals, Western District. The Court of Appeals upheld the
dismissal. Plaintiffs then filed a motion to transfer the
case with the Missouri Supreme Court. The motion was
denied.
Plaintiffs then took their claims to the state
commissions filing complaints at the MPSC on August 23,
1995, and at the KCC on August 30, 1995. The MPSC complaint
was dismissed May 1, 1996. The Cole County, Missouri
Circuit Court affirmed the dismissal on January 29, 1997.
The time for filing an appeal from such circuit court's
decision has not yet lapsed. The KCC complaint was
dismissed April 9, 1996. The Johnson County, Kansas
District Court affirmed the dismissal on February 4, 1997.
The Plaintiff filed a Notice of Appeal to the Kansas Court
of Appeals on March 3, 1997.
Should the proceedings before the MPSC and KCC be
overturned by the state courts, KCPL could be required to
refund the alleged overcharges. KCPL believes it
will be able to successfully defend these actions.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the
fiscal year covered by this report to a vote of security
holders through the solicitation of proxies or otherwise.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
Market Information:
(1) Principal Market:
Common Stock of KCPL is listed on the New York
Stock Exchange and the Chicago Stock Exchange.
(2) Stock Price Information:
Common Stock Price Range
1996 1995
Quarter High Low High Low
First $27-1/4 $24 $24-1/2 $22-1/8
Second 27-3/4 23-5/8 24-1/8 22-1/8
Third 28-3/8 26-1/4 24-3/8 21-1/2
Fourth 29-3/8 26-1/2 26-5/8 23-1/2
Holders:
At December 31, 1996, KCPL's Common Stock was held by
26,763 shareholders of record.
Dividends:
Common Stock dividends were declared as follows:
Quarter 1997 1996 1995
First $0.405 $0.390 $0.380
Second 0.390 0.380
Third 0.405 0.390
Fourth 0.405 0.390
KCPL's Restated Articles of Consolidation contains
certain restrictions on the payment of dividends on
KCPL's Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
Year Ended December 31
1996(a) 1995 1994(b) 1993 1992
(dollars in millions except per share amounts)
Operating revenues $ 904 $ 886 $ 868 $ 857 $ 803
Net income $ 108 $ 123 $ 105 $ 106 $ 86
Earnings per common
share $ 1.69 $ 1.92 $ 1.64 $ 1.66 $ 1.35
Total assets at
year-end $2,915 $2,883 $2,770 $2,755 $2,647
Total redeemable
preferred stock and
long-term debt
(including current
maturities) $ 971 $ 911 $ 833 $ 870 $ 817
Cash dividends per
common share $ 1.59 $ 1.54 $ 1.50 $ 1.46 $ 1.43
Ratio of earnings to
fixed charges 3.06 3.94 4.07 3.80 3.12
(a) In 1996, KCPL recorded $31 million in merger related costs.
(b) In 1994, KCPL recorded a $22.5 million expense for a voluntary
early retirement program.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
REGULATION AND COMPETITION
As competition develops throughout the electric utility industry,
we are positioning Kansas City Power & Light Company (KCPL) to excel
in an open market. We are improving the efficiency of KCPL's core
utility operations and creating growth through its unregulated
subsidiary. As competition presents new opportunities, we will also
consider various strategies including partnerships, acquisitions,
combinations, additions to or dispositions of service territory, and
restructuring wholesale and retail businesses. In 1997 we will begin
offering natural gas contracts to certain customers. We have entered
an Agreement and Plan of Merger with Western Resources, Inc. (Western
Resources). This agreement was reached after nine months of defending
against an unsolicited exchange offer (see Note 11 to the Consolidated
Financial Statements).
In December 1996 the Federal Energy Regulatory Commission (FERC)
issued a statement concerning electric utility mergers. Under the
statement, companies must demonstrate that their merger does not
adversely affect competition or wholesale rates. As remedies, FERC
may consider a range of conditions including transmission upgrades or
divestitures of generating assets.
Competition in the electric utility industry was accelerated with
the National Energy Policy Act of 1992. This gave FERC the authority
to require electric utilities to provide transmission line access to
independent power producers (IPPs) and other utilities (wholesale
wheeling). KCPL, already active in the wholesale wheeling market, was
one of the first utilities to receive FERC's approval of an open-
access tariff for wholesale wheeling transactions. In April 1996 FERC
issued an order requiring all owners of transmission facilities to
adopt open-access tariffs and participate in wholesale wheeling; KCPL
has made the necessary filings to comply with that order.
FERC's April order is likely to encourage more movement toward
retail competition at the state level. An increasing number of states
have already adopted open access requirements for utilities' retail
electric service, allowing competing suppliers access to their retail
customers (retail wheeling). Many other states are actively
considering retail wheeling. Kansas has created a retail wheeling
task force to study and report on related issues.
Competition through retail wheeling could result in market-based
rates below current cost-based rates. This would provide growth
opportunities for low-cost producers and risks for higher-cost
producers, especially those with large industrial customers. Lower
rates and the loss of major customers could result in under-utilized
assets (stranded investment) and place an unfair burden on the
remaining customer base or shareholders. If an adequate and fair
provision for recovery of these lost revenues is not provided, certain
generating assets may have to be evaluated for impairment and
appropriate charges recorded against earnings. In addition to lower
profit margins, market-based rates could also require generating
assets to be depreciated over shorter useful lives, increasing
operating expenses.
Although Missouri and Kansas have not yet authorized retail
wheeling, we believe KCPL is positioned well to compete in an open
market with its diverse customer mix and pricing strategies. About
22% of KCPL's retail mwh sales are to industrial customers compared to
the utility average of about 35%. KCPL has a flexible rate structure
with industrial rates that are competitively priced within our region.
In addition, long-term contracts are in place or under negotiation for
a large portion of KCPL's industrial sales. There has not been direct
competition for retail electric service in our service territory
although there has been competition in the bulk power market and
between alternative fuels.
Increased competition could also force utilities to change
accounting methods. Financial Accounting Standards Board (FASB)
Statement No. 71 - Accounting for Certain Types of Regulation, applies
to regulated entities whose rates are designed to recover the costs of
providing service. An entity's operations could stop meeting the
requirements of FASB 71 for various reasons, including a change in
regulation or a change in the competitive environment for a company's
regulated services. For those operations no longer meeting the
requirements of regulatory accounting, regulatory assets would be
written off. KCPL's regulatory assets, totaling $164 million at
December 31, 1996, will be maintained as long as FASB 71 requirements
are met.
It is possible that competition could eventually have a
materially adverse affect on KCPL's results of operations and
financial position. Should competition eventually result in a
significant charge to equity, capital costs and requirements could
increase significantly.
NONREGULATED OPPORTUNITIES
KLT Inc. is a wholly-owned subsidiary pursuing nonregulated,
mainly energy-related business ventures. KLT's strategy capitalizes
on new market opportunities by combining our expertise in energy-
related fields with the knowledge of our joint venture partners.
Existing ventures include investments in domestic and international
nonregulated power production, energy services, oil and gas reserves,
telecommunications, and affordable housing limited partnerships.
We had a total equity investment in KLT of $61 million as of
December 31, 1996, and expect that investment to grow to about $210
million within the next five years. KLT's consolidated assets at
December 31, 1996, totaled $224 million. Within the next five years
we expect KLT consolidated assets of about $800 million, generated
through the $210 million of equity investment, subsidiary retained
earnings and borrowings. The growth of KLT accounts for the majority
of the increase in KCPL's consolidated investments and nonutility
property.
EARNINGS OVERVIEW
Earnings per share (EPS) for 1996 of $1.69 decreased $0.23 from
1995. Terminating our merger agreement with UtiliCorp United Inc.
(UtiliCorp) and defending against Western Resources' unsolicited
exchange offer reduced 1996 EPS by $0.31. Other factors contributing
to the decrease included mild summer temperatures and the effects of a
new stipulation and agreement with the Missouri commission. In
addition, EPS for 1995 included a $0.05 per share gain on the sale of
rail cars. Despite the unfavorable weather and merger related
charges, continued load growth contributed favorably to 1996 EPS.
EPS for 1995 of $1.92 increased $0.28 from 1994. This increase
was due mostly to 1994's one-time $22.5 million ($0.22 per share)
charge for the voluntary early retirement program (see Note 2 to the
Consolidated Financial Statements). Other factors increasing 1995 EPS
included load growth, warmer summer temperatures, savings from the
1994 early retirement program and a net gain of $0.05 per share from
the sale of railcars. Partially offsetting these increases, 1995 EPS
also reflected decreased bulk power sales and higher fuel and
purchased power costs as a result of a forced outage at a coal plant.
MEGAWATT-HOUR (MWH) SALES AND ELECTRIC OPERATING REVENUES
Sales and revenue data:
Increase (Decrease) from Prior Year
1996 1995
Mwh Revenues Mwh Revenues
(revenue change in millions)
Retail:
Residential 1 % $ - 6 % $ 17
Commercial 4 % 10 3 % 9
Industrial 6 % 5 - % (1)
Other (4)% - (6)% -
Total retail 4 % 15 3 % 25
Sales for resale:
Bulk power sales 1 % 6 (15)% (11)
Other 29 % - (11)% -
Total 21 14
Other revenues (3) 4
Total electric operating revenues $18 $18
During 1996 the Missouri Public Service Commission (MPSC)
approved a new stipulation and agreement authorizing a $20 million
revenue reduction in two phases, and an increase in depreciation and
amortization expense by $9 million per year. In July 1996 we
implemented phase one of the revenue reduction designed to reduce
revenues from commercial and industrial customers by an estimated $9
million per year. This decrease is achieved with an increase in
summer revenues offset by a larger decrease in winter revenues. This
design more closely follows our increased costs of generating
electricity in the summer. The second phase of this stipulation,
effective January 1, 1997, will further reduce Missouri residential,
commercial and industrial revenues by an estimated $11 million per
year. The decrease in 1996 revenues as a result of this stipulation
and agreement was about $3 million.
These lower rates, combined with lower billed sales in December
of 1996 versus December of 1995, resulted in a lower accounts
receivable balance at December 31, 1996, compared with December 31,
1995.
During April and May of 1995 about 600 net commercial customers
were reclassified to industrial to more appropriately reflect their
business operations. This change resulted in the reclassification of
about $680,000 (10,300 mwh sales) from commercial to industrial in
each subsequent month. Prior periods have not been restated.
Summer temperatures were very mild in 1996 compared with 1995,
remaining below normal for the fourth consecutive year. Despite this
mild weather pattern, retail mwh sales increased in each of the last
four years due to load growth. Load growth consists of higher usage-
per-customer as well as the addition of new customers.
Retail mwh sales for 1996 increased 4% over 1995 while retail
revenues increased only 2%. This difference is due largely to the
Missouri revenue reductions discussed above and the effect of long-
term sales contracts with certain major industrial customers. These
contracts are tailored to meet customers' needs in exchange for their
long-term commitment to purchase energy. Long-term contracts are in
place or under negotiation for a large portion of our industrial
sales.
Retail mwh sales and revenues for 1995 increased 3% over 1994.
This increase was due mainly to improved weather and continued load
growth. Similar to 1996, long-term contracts with major industrial
customers resulted in a slight decrease in 1995 industrial revenues
from 1994, despite an equal level of mwh sales.
Bulk power sales vary with system requirements, generating unit
and purchased power availability, fuel costs and the requirements of
other electric systems. A combination of these conditions contributed
to record bulk power sales in 1994.
Changes in other revenues during 1996 and 1995 reflected changes
in classification between other revenues and bulk power sales.
Total revenue per mwh sold varies with changes in the mix of mwh
sales among customer classifications and the effect of declining price
per mwh as usage increases. An automatic fuel adjustment provision is
included in only sales for resale tariffs, which apply to less than 1%
of revenues.
Future mwh sales and revenues per mwh will be affected by
national and local economies, tariff changes, weather and customer
conservation efforts. Competition, including alternative sources of
energy such as natural gas, cogeneration, IPPs and other electric
utilities, may also affect future sales and revenue.
FUEL AND PURCHASED POWER
Combined fuel and purchased power expenses for 1996 increased 8%
or $15 million from 1995, while total mwh sales (total of retail and
sales for resale) increased only 3%.
This increase is largely attributable to an increase in capacity
purchases. Capacity purchase contracts provide a cost-effective
alternative to constructing new capacity and have contributed to
increases in purchased power expenses. Additional capacity purchases
increased purchased power expenses about $9 million in 1996 and $4
million in 1995.
Nuclear fuel costs per MMBTU remain substantially less than the
MMBTU price of coal, despite increases of 26% during 1996 and 15%
during 1995. Nuclear fuel costs per MMBTU averaged 59%, 45% and 40%
of the MMBTU price of coal during 1996, 1995 and 1994, respectively.
We expect this relationship and the price of nuclear fuel to remain
fairly constant through the year 2001. During 1996 coal represented
about 75% of generation and nuclear fuel about 25%. During 1995
nuclear fuel accounted for about 30% of generation as no refueling
outage was scheduled during that year (see Wolf Creek section).
The price of coal burned declined 4% during 1996 and increased 1%
during 1995. Our coal procurement strategies continue to provide coal
costs at or below the regional average. We expect coal costs to
remain fairly consistent with 1996 levels through 2001.
Other items affecting the change in combined fuel and purchased
power expenses from 1995 to 1996 include a $2 million decrease in
expense from coal inventory adjustments, an increase in replacement
power expenses for Wolf Creek's spring 1996 refueling outage (see Wolf
Creek section) and a 1995 forced generating station outage. During
July 1995 a fire forced an outage at LaCygne I, a low-cost, coal-fired
generating unit. We replaced the power by increasing the usage of
higher-cost, coal-fired units and purchasing power on the wholesale
market. Damage to the unit was covered by insurance. However,
uninsured, incremental fuel and purchased power costs were about $4
million.
Combined fuel and purchased power expenses for 1995 increased 5%
or $9 million from 1994, despite a 2% decrease in total mwh sales.
Items contributing to this increase include the LaCygne forced outage,
increases in capacity purchase contracts, increases in the cost of
nuclear fuel and a $3 million increase in fuel costs from coal
inventory adjustments.
OTHER OPERATION AND MAINTENANCE EXPENSES
Combined other operation and maintenance expenses for 1994 were
higher than 1995 and 1996 due mainly to the costs of the voluntary
early retirement program in that year. Total program costs of $22.5
million ($0.22 per share) were expensed during 1994. The decrease in
1995 expenses from 1994 was partially offset by KCPL's $2 million
share of Wolf Creek's voluntary early retirement program recorded
during 1995. Other cost variances in 1996 and 1995 resulted from the
timing of scheduled maintenance programs.
We continue to emphasize new technologies, improved methods and
cost control. We are changing processes to provide increased
efficiencies and improved operations. Through the use of cellular
technology, a majority of customer meters are read automatically.
These types of changes have allowed us to assimilate work performed by
those who elected to participate in the early retirement programs.
INCOME TAXES
Operating income taxes decreased $9 million in 1996 from 1995.
The decrease was primarily due to adjustments necessary to reflect the
filing of the 1995 tax returns and the settlement with the Internal
Revenue Service regarding tax issues included in the 1985 through 1990
tax returns. This settlement is also the primary reason for the
decrease in accrued taxes.
GENERAL TAXES
Components of general taxes:
1996 1995 1994
(thousands)
Property $ 45,519 $ 46,019 $ 46,895
Gross receipts 42,554 41,416 40,397
Other 9,175 9,386 9,070
Total $ 97,248 $ 96,821 $ 96,362
OTHER INCOME
Miscellaneous Income
Miscellaneous income for 1995 includes a $5 million gain from
the sale of steel railcars, which were replaced by leased
aluminum cars. Aluminum cars are lighter-weight and offer more
coal capacity per car, contributing to lower delivered coal
prices.
Miscellaneous Deductions
Miscellaneous deductions increased in 1996 from 1995 due
primarily to the termination of the UtiliCorp merger agreement
and defense against Western Resources' unsolicited exchange offer
(see Notes 11 and 12 to the Consolidated Financial Statements).
During the third quarter of 1996, $13 million in previously
deferred merger costs and a $5 million termination fee were
expensed. In addition, costs incurred to defend against the
unsolicited exchange offer increased 1996 expenses by $13
million. Also, subsidiary expenses increased about $9 million
reflecting increased investing activities. Total subsidiary
expenses, including interest charges discussed below, are
substantially offset by related tax benefits.
Miscellaneous deductions increased in 1995 over 1994 due to
increases in charitable contributions, fees related to the sale
of customer accounts receivable and growing subsidiary
operations.
Income Taxes
We accrued tax credits in 1996, 1995 and 1994 of $12, $5 and $1
million, respectively, related primarily to KLT's investments in
affordable housing limited partnerships. Tax credits from the
investments in affordable housing more than offset the increase
in interest expense incurred from these investments. Non-
taxable increases in the cash surrender value of corporate-owned
life insurance contracts also affected the relationship between
miscellaneous deductions and income taxes.
INTEREST CHARGES
Interest expense increased during 1996 reflecting higher average
levels of long-term debt outstanding compared with 1995. The higher
levels of debt resulted from additional financing by KLT to support
expanding subsidiary operations and new investments in unregulated
ventures.
Interest expense increased during 1995 reflecting higher average
levels of long-term debt outstanding and higher weighted-average
interest rates compared with 1994. The higher average level of
outstanding debt was primarily due to subsidiary investments in
affordable housing partnerships.
The average interest rate on long-term debt, including current
maturities, was 6.0% in 1996 and 1995 compared with 5.4% in 1994.
We use interest rate swap and cap agreements to limit the
interest expense on a portion of our variable-rate long-term debt. We
do not use derivative financial instruments for trading or other
speculative purposes. Although these agreements are an integral part
of our interest rate management, their incremental effect on interest
expense and cash flows is not significant.
WOLF CREEK
Wolf Creek is one of KCPL's principal generating units
representing about 18% of its accredited generating capacity. The
plant's operating performance has remained strong, contributing about
25% of the annual mwh generation while operating at an average
capacity of 88% over the last three years. It has the lowest fuel
cost per MMBTU of any of KCPL's generating units.
Wolf Creek's eighth scheduled refueling and maintenance outage
began in early February 1996 and was completed in April 1996 (64
days). The incremental operating, maintenance and replacement power
costs are accrued evenly over the unit's operating cycle, normally 18
months. As actual outage expenses are incurred, the refueling
liability and related deferred tax asset are reduced. The eighth
outage started one month early when the plant was shut down after
water flow from the cooling lake was restricted by ice buildup on an
intake screen. This extended the length of the outage and was the
primary reason for the increase in Wolf Creek related replacement
power and maintenance expenses in 1996. Wolf Creek's ninth refueling
and maintenance outage is scheduled for the fall of 1997.
Wolf Creek's assets and operating expenses represent about 45%
and 20% of total assets and operating expenses, respectively.
Currently, no major equipment replacements are expected, but an
extended shutdown of the unit could have a substantial adverse effect
on KCPL's business, financial condition and results of operations.
Higher replacement power and other costs would be incurred as a
result. Although not expected, an unscheduled plant shutdown could be
caused by actions of the Nuclear Regulatory Commission reacting to
safety concerns at the plant or other similar nuclear units. If a
long-term shutdown occurred, the state regulatory commissions could
consider reducing rates by excluding the Wolf Creek investment from
rate base.
Ownership and operation of a nuclear generating unit exposes KCPL
to risks regarding the cost of decommissioning the unit at the end of
its life and to potential retrospective assessments and property
losses in excess of insurance coverage. These risks are more fully
discussed in the related sections of Notes 1 and 4 to the Consolidated
Financial Statements.
ENVIRONMENTAL MATTERS
Our policy is to act in an environmentally responsible manner and
use the latest technology available to avoid and treat contamination.
We continually conduct environmental audits designed to ensure
compliance with governmental regulations and detect contamination.
However, these regulations are constantly evolving; governmental
bodies may impose additional or more rigid environmental regulations
which could require substantial changes to operations or facilities.
The Clean Air Act Amendments of 1990 contain two programs
significantly affecting the utility industry. We have spent about $5
million for the installation of continuous emission monitoring
equipment to satisfy the requirements under the acid rain provision.
The other utility-related program calls for a study of certain air
toxic substances. Based on the outcome of this study, regulation of
these substances, including mercury, could be required. We cannot
predict the likelihood of any such regulations or compliance costs.
Other proposed regulations to revise the ozone and particulate
matter National Ambient Air Quality Standards, scheduled to be
finalized in June 1997, may require capital expenditures which cannot
be estimated at this time.
PROJECTED CONSTRUCTION EXPENDITURES
We are fully exploring alternatives to new construction. During
1995 we entered into an operating lease for a new 142 mw combustion
turbine, scheduled to be placed in service during 1997. We have also
contracted to purchase capacity through fixed-price agreements (see
Note 4 to the Consolidated Financial Statements - Capacity Purchase
Commitments). Compared to the long-term fixed costs of building new
capacity, these contracts provide a cost-effective way of meeting
uncertain levels of demand growth, even though there are risks
associated with market price fluctuations.
Total utility capital expenditures, excluding allowance for funds
used during construction, were $101 million in 1996. The utility
construction expenditures are projected for the next five years as
follows:
Construction Expenditures
1997 1998 1999 2000 2001 Total
(millions)
Generating facilities $ 35 $ 27 $ 35 $33 $ 19 $149
Nuclear fuel 20 21 2 24 27 94
Transmission facilities 11 5 2 4 3 25
Distribution and
general facilities 67 53 51 48 43 262
Total $133 $106 $ 90 $109 $ 92 $530
This construction expenditure plan is subject to continual review
and change. The next plan will be filed with the Missouri commission
in July 1997.
CAPITAL REQUIREMENTS AND LIQUIDITY
As of December 31, 1996, KCPL's liquid resources included cash
flows from operations, $300 million of registered but unissued,
unsecured medium-term notes and $375 million of unused bank lines of
credit. The unused lines consisted of KCPL's short-term bank lines of
credit of $280 million and KLT's long-term revolving line of credit of
$95 million.
KCPL continues to generate positive cash flows from operating
activities, although individual components of working capital will
vary with normal business cycles and operations including the timing
of receipts and payments. Cash required to meet current tax
liabilities has increased as we no longer receive the benefits of
accelerated tax depreciation on any significant generating plant
assets. Accelerated depreciation lowers tax payments in the earlier
years of an asset's life while increasing deferred tax liabilities;
this relationship reverses in the later years of an asset's life. Our
last significant generating plant addition was the completion of Wolf
Creek in 1985. The costs incurred to repair damages from an October
1996 snow storm also lowered cash flows from operating activities in
1996 and increased Other Regulatory Assets on the balance sheet.
Amortization of these costs will begin in 1997 and be reflected as
Amortization of Other in the Statement of Cash Flows. Amortization of
Other decreased in 1996 as the deferred costs of the 1993 flood were
fully amortized in 1995.
Cash used in investing activities varies with the timing of
utility capital expenditures and KLT's purchases of investments and
nonutility properties. The increase in nonutility properties during
1996 resulted mainly from KLT's purchase of certain oil and gas
projects during the year.
Subsidiary obligations increased during 1996 to finance KLT's
purchases of nonutility property and investments. KCPL's common
dividend payout ratio was 94% in 1996, 80% in 1995 and 91% in 1994.
Merger related costs in 1996 and costs of the voluntary early
retirement program in 1994 contributed to the higher ratios in those
years.
EPS for 1997 will be reduced by $0.52 due to a $53 million
payment in February 1997 to UtiliCorp for terminating a merger
agreement with them and then signing an agreement to combine with
Western Resources. After taxes, the payment will reduce 1997 net
income by $32 million. We sold commercial paper to pay this
termination fee.
Day-to-day operations, utility construction requirements and
dividends are expected to be met with internally-generated funds.
Uncertainties affecting our ability to meet these requirements with
internally-generated funds include the effect of inflation on
operating expenses, the level of mwh sales, regulatory actions,
compliance with future environmental regulations, the availability of
generating units, and the outcome of pending legal proceedings (see
Note 13 to the Consolidated Financial Statements). The funds needed
for the retirement of $393 million of maturing debt through the year
2001 will be provided from operations, refinancings or short-term
debt. We might incur additional debt and/or issue additional equity
to finance growth or take advantage of new opportunities.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31
1996 1995 1994
(thousands)
ELECTRIC OPERATING REVENUES $903,919 $885,955 $868,272
OPERATING EXPENSES
Operation
Fuel 140,505 139,371 135,106
Purchased power 52,455 38,783 33,929
Other 180,719 178,599 202,304
Maintenance 71,495 78,439 72,468
Depreciation 103,912 97,225 94,361
Income taxes 68,155 77,062 70,949
General taxes 97,248 96,821 96,362
Deferred Wolf Creek costs amortization 11,617 12,607 13,102
Total 726,106 718,907 718,581
OPERATING INCOME 177,813 167,048 149,691
OTHER INCOME
Allowance for equity funds
used during construction 2,368 2,279 2,087
Miscellaneous income 4,843 8,623 3,015
Miscellaneous deductions (55,172) (11,101) (7,174)
Income taxes 36,402 10,259 4,572
Total (11,559) 10,060 2,500
INCOME BEFORE INTEREST CHARGES 166,254 177,108 152,191
INTEREST CHARGES
Long-term debt 53,939 52,184 43,962
Short-term debt 1,251 1,189 1,170
Miscellaneous 4,840 3,112 4,128
Allowance for borrowed funds
used during construction (1,947) (1,963) (1,844)
Total 58,083 54,522 47,416
Net Income 108,171 122,586 104,775
Preferred Stock
Dividend Requirements 3,790 4,011 3,457
Earnings Available for
Common Stock $104,381 $118,575 $101,318
Average Number of Common
Shares Outstanding 61,902 61,902 61,903
Earnings per Common Share $1.69 $1.92 $1.64
Cash Dividends per
Common Share $1.59 $1.54 $1.50
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Year Ended December 31
1996 1995 1994
(thousands)
Beginning Balance $449,966 $426,738 $418,201
Net Income 108,171 122,586 104,775
558,137 549,324 522,976
Dividends Declared
Preferred stock - at required rates 3,782 4,029 3,384
Common stock 98,421 95,329 92,854
Ending Balance $455,934 $449,966 $426,738
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED BALANCE SHEETS
December 31 December 31
1996 1995
(thousands)
ASSETS
UTILITY PLANT, at original cost
Electric $ 3,472,607 $ 3,388,538
Less-accumulated depreciation 1,238,187 1,156,115
Net utility plant in service 2,234,420 2,232,423
Construction work in progress 69,577 72,365
Nuclear fuel, net of amortization of
$84,540 and $81,452 39,497 54,673
Total 2,343,494 2,359,461
REGULATORY ASSET - DEFERRED WOLF CREEK COSTS 0 8,880
REGULATORY ASSET - RECOVERABLE TAXES 126,000 123,000
INVESTMENTS AND NONUTILITY PROPERTY 231,874 166,751
CURRENT ASSETS
Cash and cash equivalents 23,571 28,390
Customer accounts receivable, net of allowance
for doubtful accounts of $1,644 and $1,574 27,093 32,830
Other receivables 36,113 31,838
Fuel inventories, at average cost 19,077 22,103
Materials and supplies, at average cost 47,334 47,175
Deferred income taxes 2,737 5,947
Other 5,055 5,179
Total 160,980 173,462
DEFERRED CHARGES
Regulatory assets
Settlement of fuel contracts 9,764 13,007
KCC Wolf Creek carrying costs 1,368 4,104
Other 26,615 21,231
Other deferred charges 14,417 12,610
Total 52,164 50,952
Total $2,914,512 $2,882,506
CAPITALIZATION AND LIABILITIES
CAPITALIZATION (see statements) $1,943,647 $1,824,087
CURRENT LIABILITIES
Commercial paper 0 19,000
Current maturities of long-term debt 26,591 73,803
Accounts payable 55,618 52,506
Accrued taxes 18,443 39,726
Accrued interest 21,054 16,906
Accrued payroll and vacations 25,558 22,764
Accrued refueling outage costs 7,181 13,563
Other 11,980 11,787
Total 166,425 250,055
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes 643,189 648,374
Deferred investment tax credits 67,107 71,270
Other 94,144 88,720
Total 804,440 808,364
COMMITMENTS AND CONTINGENCIES (note 4)
Total $2,914,512 $2,882,506
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31
1996 1995 1994
(thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $108,171 $122,586 $104,775
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation 103,912 97,225 94,361
Amortization of:
Nuclear fuel 16,094 14,679 10,136
Deferred Wolf Creek costs 11,617 12,607 13,102
Other 5,507 8,152 9,608
Deferred income taxes (net) (8,662) (3,268) 20,524
Deferred investment tax credit
amortization and reversals (4,163) (11,570) (4,345)
Deferred storm costs (8,885) 0 0
Allowance for equity funds used
during construction (2,368) (2,279) (2,087)
Cash flows affected by changes in:
Receivables 1,462 (17,551) 1,543
Fuel inventories 3,026 (5,533) (2,020)
Materials and supplies (159) (2,222) (796)
Accounts payable 3,112 (20,980) 14,065
Accrued taxes (21,283) 15,042 (3,116)
Accrued interest 4,148 4,697 (3,366)
Wolf Creek refueling outage accrual (6,382) 11,443 (5,142)
Pension and postretirement benefit
obligations (84) (4,176) 32,203
Other operating activities 11,846 4,325 (2,860)
Net cash from operating activities 216,909 223,177 276,585
CASH FLOWS FROM INVESTING ACTIVITIES
Utility capital expenditures (100,947) (134,070) (124,965)
Allowance for borrowed funds used
during construction (1,947) (1,963) (1,844)
Purchases of investments (35,362) (56,759) (67,560)
Purchases of nonutility property (20,395) 0 0
Other investing activities (931) 9,046 5,624
Net cash used in investing
activities (159,582) (183,746) (188,745)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt 135,441 111,055 133,793
Repayment of long-term debt (74,230) (33,428) (170,170)
Special deposits 0 0 60,118
Net change in short-term borrowings (19,000) (13,000) 3,000
Dividends paid (102,203) (99,358) (96,238)
Other financing activities (2,154) 3,473 335
Net cash used in financing
activities (62,146) (31,258) (69,162)
NET CHANGE IN CASH AND CASH
EQUIVALENTS (4,819) 8,173 18,678
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 28,390 20,217 1,539
CASH AND CASH EQUIVALENTS
AT END OF YEAR $23,571 $28,390 $20,217
CASH PAID DURING THE YEAR FOR:
Interest (net of amount capitalized) $52,457 $48,200 $48,246
Income taxes $58,344 $67,053 $53,720
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
December 31 December 31
1996 1995
(thousands)
COMMON STOCK EQUITY
Common stock-150,000,000 shares authorized
without par value-61,908,726 shares issued,
stated value $ 449,697 $ 449,697
Retained earnings (see statements) 455,934 449,966
Unrealized gain on securities available for sale 6,484 0
Capital stock premium and expense (1,666) (1,725)
Total 910,449 897,938
CUMULATIVE PREFERRED STOCK
$100 Par Value
3.80% - 100,000 shares issued 10,000 10,000
4.50% - 100,000 shares issued 10,000 10,000
4.20% - 70,000 shares issued 7,000 7,000
4.35% - 120,000 shares issued 12,000 12,000
No Par Value
4.38%* - 500,000 shares issued 50,000 50,000
$100 Par Value - Redeemable
4.00% - (note 8) 62 1,436
Total 89,062 90,436
LONG-TERM DEBT (excluding current maturities)
General Mortgage Bonds
Medium-term Notes due 1997-2008, 6.81% and
6.72% weighted-average rate at December 31 468,500 387,000
4.24%* Environmental Improvement Revenue
Refunding Bonds due 2012-23 158,768 158,768
Guaranty of Pollution Control Bonds
4.13%* due 2015-17 196,500 196,500
Subsidiary Obligations
Affordable Housing Notes due 2000-05, 8.51%
and 8.54% weighted-average rate at
December 31 65,368 69,945
Bank Credit Agreement due 1999, 6.78% and 7.66%
weighted-average rate at December 31 55,000 23,500
Total 944,136 835,713
Total $1,943,647 $1,824,087
* Variable rate securities, weighted-average rate as of December 31, 1996
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
KANSAS CITY POWER & LIGHT COMPANY
Notes to Consolidated Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
Kansas City Power & Light Company is a medium-sized electric
utility with more than 435,000 customers in western Missouri and
eastern Kansas. About 95% of our retail revenues are from the Kansas
City metropolitan area, an agribusiness center and major regional
center for wholesale, retail and service companies. About two-thirds
of our retail sales are to Missouri customers, the remainder to Kansas
customers.
The consolidated financial statements include the accounts of
Kansas City Power & Light Company and KLT Inc., a wholly-owned,
nonutility subsidiary. The consolidated entity is referred to as KCPL.
KLT was formed in 1992 as a holding company for various nonregulated
business ventures. Currently, the electric utility accounts for about
92% of consolidated assets and substantially all results of
operations. Intercompany balances and transactions have been
eliminated. KLT's revenues and expenses have been classified as Other
Income and Interest Charges in the income statement.
The accounting records conform to the accounting standards
prescribed by the Federal Energy Regulatory Commission (FERC) and
generally accepted accounting principles. These standards require the
use of estimates and assumptions that affect amounts reported in the
financial statements and the disclosure of commitments and
contingencies.
Cash and Cash Equivalents
Cash and cash equivalents consists of highly liquid investments
with original maturities of three months or less.
Derivative Financial Instruments
We use interest rate swap and cap agreements to reduce the impact
of changes in interest rates on variable-rate debt.
Interest rate swap agreements effectively fix the interest rates
on a portion of KCPL's variable-rate debt. Interest rate caps limit
the interest rate on a portion of KCPL's variable-rate debt by setting
a maximum rate. The costs of rate caps are paid annually and included
in interest expense. Any difference paid or received due to these
agreements is recorded as an adjustment to interest expense.
These agreements are not marked to market value as they are used
only to manage interest expense and the intent is to hold them until
their termination date. We do not use derivative financial
instruments for trading or other speculative purposes.
Fair Value of Financial Instruments
The stated values of financial instruments as of December 31,
1996 and 1995, approximated fair market values. KCPL's incremental
borrowing rate for similar debt was used to determine fair value if
quoted market prices were not available.
Securities Available for Sale
Certain investments in equity securities are accounted for as
securities available for sale in accordance with Financial Accounting
Standards Board (FASB) Statement No. 115 - Accounting for Certain
Investments in Debt and Equity Securities. This requires adjusting
the securities to market value with unrealized gains (or losses), net
of deferred income taxes, reported as a separate component of
shareholders' equity.
Investments in Affordable Housing Limited Partnerships
Through December 31, 1996, a subsidiary of KLT had invested $97
million in affordable housing limited partnerships. About $80 million
of these investments were recorded at cost; the equity method was used
for the remainder. Tax credits are recognized in the year generated.
A change in accounting principle relating to investments made after
May 19, 1995, requires limited partnership investments of more than 5%
to use the equity method. Of the investments recorded at cost,
$70 million exceed this 5% level but were made prior to May 19, 1995.
Utility Plant
Utility plant is stated at historical costs of construction.
These costs include taxes, an allowance for funds used during
construction (AFDC) and payroll-related costs including pensions and
other fringe benefits. Additions of, and replacements and
improvements to units of property are capitalized. Repairs of
property and replacements of items not considered to be units of
property are expensed as incurred (except as discussed under Wolf
Creek Refueling Outage Costs). When property units are retired or
otherwise disposed, the original cost, net of salvage and removal, is
charged to accumulated depreciation.
AFDC represents the cost of borrowed funds and a return on
equity funds used to finance construction projects. It is capitalized
as a cost of construction work in progress. AFDC on borrowed funds
reduces interest charges. AFDC on equity funds is shown as a noncash
item of other income. When a construction project is placed in
service, the related AFDC, as well as other construction costs, is
used to establish rates under regulatory rate practices. The rates
used to compute gross AFDC are compounded semi-annually and averaged
8.5% for 1996, 8.7% for 1995 and 7.8% for 1994.
Depreciation is computed using the straight-line method over the
estimated lives of depreciable property based on rates approved by
state regulatory authorities. Average annual composite rates were
about 3.1% in 1996 compared with 2.9% in 1995 and 1994.
Wolf Creek Refueling Outage Costs
Forecasted incremental costs to be incurred during scheduled Wolf
Creek Generating Station (Wolf Creek) refueling outages are accrued
monthly over the unit's operating cycle, normally about 18 months.
Estimated incremental costs, which include operating, maintenance and
replacement power expenses, are based on budgeted outage costs and the
estimated outage duration. Changes to or variances from those
estimates are recorded when known or probable.
Nuclear Plant Decommissioning Costs
The Missouri Public Service Commission (MPSC) and the Kansas
Corporation Commission (KCC) require the owners of Wolf Creek to
submit an updated decommissioning cost study every three years. The
most recent study was filed during 1996 and is currently under review
by the MPSC and the KCC. Based on this study, total decommissioning
costs are expected to increase to reflect 1996 dollars; however, no
increase in the current level of funding and expenses is anticipated.
The following table shows the decommissioning cost estimates and
the escalation rate and earnings assumptions approved by the MPSC and
the KCC in 1994 with regard to the study filed in 1993. The
decommissioning cost estimates are based on the immediate
dismantlement method and include the costs of decontamination,
dismantlement and site restoration. Plant decommissioning is not
expected to start before 2025.
KCC MPSC
Future cost of decommissioning:
Total Station $1.3 billion $1.8 billion
47% share $595 million $859 million
Current cost of decommissioning (in
1993 dollars):
Total Station $370 million $370 million
47% share $174 million $174 million
Annual escalation factor 3.45% 4.50%
Annual return on trust assets 6.48% 7.66%
We contribute to a tax-qualified trust fund (about $3 million for
each of the last three years) to be used to decommission Wolf Creek.
These costs were charged to other operation expenses and recovered in
rates. Based on the 1993 study, contributions are expected to
increase slightly beginning in 1997. These funding levels assume a
certain return on trust assets. If the actual return on trust assets
is below the anticipated level, we believe a rate increase will be
allowed ensuring full recovery of decommissioning costs over the
remaining life of the unit. This assumes we continue to be regulated.
As of December 31, 1996 and 1995, the trust fund balance,
including reinvested earnings, was $31 and $26 million,
respectively. These amounts are reflected in Investments and
Nonutility Property. The related liabilities for decommissioning are
included in Deferred Credits and Other Liabilities - Other.
In 1996 FASB issued an Exposure Draft of a proposed Statement of
Financial Accounting Standards, Accounting for Certain Liabilities
Related to Closure or Removal of Long-Lived Assets, that addressed the
accounting for obligations arising from dismantlement, removal, site
reclamation, and decontamination of certain long-lived assets. FASB
hopes to finalize a statement or revised exposure draft in 1997. If
current electric utility industry accounting practices for such
decommissioning costs are changed: 1) annual decommissioning expenses
could increase, and 2) trust fund income from the external
decommissioning trusts could be reported as investment income. We are
not able to predict what affect those changes would have on results of
operations, financial position, or related regulatory practices until
the final issuance of a revised accounting guidance. However, we do
not anticipate results of operations to be significantly affected as
long as we are regulated.
Nuclear Fuel
Nuclear fuel is amortized to fuel expense based on the quantity
of heat produced for the generation of electricity. Under the Nuclear
Waste Policy Act of 1982, the Department of Energy (DOE) is
responsible for the permanent disposal of spent nuclear fuel. We pay
the DOE a quarterly fee of one-tenth of a cent for each kilowatt-hour
of net nuclear generation delivered and sold for future disposal of
spent nuclear fuel. These disposal costs are charged to fuel expense
and recovered through rates.
A permanent disposal site may not be available for the industry
until 2010 or later, although an interim facility may be available
earlier. Under current DOE policy, once a permanent site is
available, the DOE will accept spent nuclear fuel on a priority basis;
the owners of the oldest spent fuel will be given the highest
priority. As a result, disposal services for Wolf Creek may not be
available prior to 2016. Wolf Creek has an on-site, temporary storage
facility for spent nuclear fuel. Under current regulatory guidelines,
this facility can provide storage space until about 2005. Management
believes additional temporary storage space can be built or obtained
as necessary.
Regulatory Assets
FASB Statement No. 71 - Accounting for Certain Types of
Regulation, applies to regulated entities whose rates are designed to
recover the costs of providing service. In accordance with this
statement, certain items that would normally be reflected in the
income statement are deferred on the balance sheet. These items are
then amortized as the related amounts are recovered from customers
through rates.
We recognize regulatory assets when allowed by a commission's
rate order or when it is probable, based on regulatory precedent, that
future rates will recover the amortization of the deferred costs. We
continuously monitor changes in market and regulatory conditions and
consider the effects of any changes in assessing the continued
applicability of FASB 71. If we were unable to apply FASB 71, the
unamortized balance of $164 million of our regulatory assets, net of
the related tax benefit, would be written off.
Deferred Wolf Creek Costs
The KCC and MPSC allowed continued construction accounting
for ratemaking purposes after Wolf Creek's 1985 commercial
in-service date. Certain other carrying costs were also deferred.
The deferrals were amortized and recovered in rates from 1987
through 1996.
Recoverable Taxes
See the following Income Taxes section.
Settlement of Fuel Contracts
We deferred the cost of terminating certain coal purchase
contracts. These costs are being amortized over various periods
ending in 2002.
KCC Wolf Creek Carrying Costs
The KCC ordered certain Wolf Creek carrying costs to be
deferred. These costs are being recovered and amortized over six
years ending in June 1997.
Other
Other regulatory assets include premium on redeemed debt,
deferred costs to decommission and decontaminate federal uranium
enrichment facilities and other costs. These deferrals are
amortized over various periods extending to 2023. Also included
in other regulatory assets are incremental costs of $8.9 million
related to an October 1996 snow storm. We have received
accounting authority orders from the KCC and MPSC approving the
deferral of these costs. The costs will be amortized over five
years beginning in January 1997.
Revenue Recognition
We use cycle billing and accrue estimated unbilled revenue at the
end of each reporting period.
Income Taxes
The balance sheet includes deferred income taxes for all
temporary differences between the tax basis of an asset or liability
and that reported in the financial statements. These deferred tax
assets and liabilities are determined using the tax rates scheduled by
the tax law to be in effect when the differences reverse.
Regulatory Asset - Recoverable Taxes mainly reflects the future
revenue requirements necessary to recover the tax benefits of existing
temporary differences previously passed through to customers.
Operating income tax expense is recorded based on ratemaking
principles. However, if the method used for the balance sheet were
reflected in the income statement, net income would remain the same.
Investment tax credits are deferred when utilized and amortized
to income over the remaining service lives of the related properties.
Environmental Matters
Environmental costs are accrued when it is probable a liability
has been incurred and the amount of the liability can be reasonably
estimated. We believe all appropriate costs related to environmental
matters have been recorded.
2. PENSION PLANS AND OTHER EMPLOYEE BENEFITS
Early Retirement Program
In 1994, 332 employees retired under a voluntary early retirement
plan. We expensed estimated pension and postretirement program costs
of $16.5 and $6.0 million, respectively ($0.22 per share).
In 1995, 56 employees retired under the Wolf Creek voluntary
early retirement plan. We expensed our share of estimated program
costs of $2.1 million ($0.02 per share) during the second quarter of
1995.
Pension Plans
KCPL has defined benefit pension plans for its employees,
including officers. Benefits under these plans reflect the employees'
compensation, years of service and age at retirement. KCPL satisfies
at least the minimum funding requirements under the Employee
Retirement Income Security Act of 1974.
Funded status of the plans:
December 31 1996 1995
(thousands)
Accumulated benefit obligation:
Vested $247,264 $251,042
Nonvested 6,526 6,474
Total $253,790 $257,516
Determination of plan assets less obligations:
Fair value of plan assets (a) $363,285 $339,236
Projected benefit obligation (b) 307,050 315,395
Difference $ 56,235 $ 23,841
Reconciliation of difference:
Accrued trust liability $(13,645) $(13,890)
Unrecognized transition obligation 10,541 12,612
Unrecognized net gain 63,022 29,293
Unrecognized prior service cost (3,683) (4,174)
Difference $ 56,235 $ 23,841
(a) Plan assets are invested in insurance contracts, corporate bonds,
equity securities, U.S. Government securities, notes, mortgages
and short-term investments.
(b) Based on weighted-average discount rates of 8.0% in 1996 and 7.5%
in 1995; and increases in future salary levels of 4% to 5% in
1996 and 1995.
Components of provisions for pensions (excluding 1995 and 1994 early
retirement program costs):
1996 1995 1994
(thousands)
Service cost $ 8,164 $ 6,414 $ 8,193
Interest cost on projected benefit
obligation 23,379 22,593 20,759
Actual return on plan assets (40,831) (50,108) (1,143)
Other 15,347 25,656 (22,297)
Net periodic pension cost $ 6,059 $ 4,555 $ 5,512
Long-term rates of return on plan assets of 8.5% to 9.25% were used.
Postretirement Benefits Other Than Pensions
In addition to providing pension benefits, certain postretirement
health care and life insurance benefits are provided for substantially
all retired employees.
We accrue the cost of postretirement health care and life
insurance benefits during an employee's years of service. These costs
are currently recovered through rates on an accrual basis in Missouri
and a pay-as-you-go basis in Kansas. In 1995 we began funding the
year's overall net periodic postretirement benefit cost, subject to
maximum deductible limits for income tax purposes.
Reconciliation of postretirement benefits to amounts recorded in the
balance sheets:
December 31 1996 1995
(thousands)
Accumulated postretirement benefit
obligation (APBO) (a):
Retirees $ 20,582 $22,515
Fully eligible active plan participants 3,149 2,659
Other active plan participants 8,459 9,315
Total APBO 32,190 34,489
Fair value of plan assets (b) (3,620) (2,189)
Unrecognized transition obligation (18,791) (19,965)
Unrecognized net gain 3,255 892
Unrecognized prior service cost (709) (786)
Accrued postretirement benefit obligation
(included in Deferred Credits
and Other Liabilities - Other) $ 12,325 $12,441
(a) Based on weighted-average discount rates of 8.0% in 1996 and 7.5%
in 1995; and increases in future salary levels of 4% in 1996 and
1995.
(b) Plan assets are invested in certificates of deposit.
Net periodic postretirement benefit cost (excluding 1995 and 1994
early retirement program costs):
1996 1995 1994
(thousands)
Service cost $ 574 $ 435 $ 645
Interest cost on APBO 2,520 2,423 2,305
Amortization of unrecognized
transition obligation 1,174 1,175 1,175
Other 6 (60) 75
Net periodic postretirement benefit cost $4,274 $3,973 $4,200
Actuarial assumptions include an increase in the annual health
care cost trend rate for 1997 of 10%, decreasing gradually over a four-
year period to its ultimate level of 6%. The health care plan
requires retirees to share in the cost when premiums exceed a certain
amount. Because of this provision, an increase in the assumed health
care cost trend rate by 1% per year would only increase the APBO as of
December 31, 1996, by about $704,000 and the combined service and
interest costs of the net periodic postretirement benefit cost for
1996 by about $80,000.
Long-term Incentive Plan
We have granted stock options where the exercise price equals the
market price of KCPL's common stock on the grant date. One-half of
all options granted vest one year after the grant date, the other half
vest two years after the grant date. When exercised, recipients
receive shares of stock and accumulated dividends (as though they had
been reinvested). Unexercised options expire 10 years after the grant
date.
KCPL follows APB Opinion 25 - Accounting for Stock Issued to
Employees and related Interpretations in accounting for this plan.
Because of the dividend provision, we expensed $1.4, $1.0 and $0.4
million for 1996, 1995 and 1994, respectively. The expense includes
accumulated and reinvested dividends plus the appreciation in stock
price since the grant date. If the stock price fell below the
exercise price, the cumulative expense related to those options is
reversed.
If KCPL accounted for this plan using the optional, fair-value
method of FASB Statement No. 123 - Accounting for Stock-Based
Compensation, the fair value of options granted and related expense
recorded for these plans would not be material.
For options outstanding at December 31, 1996, exercise prices
range from $20.625 to $26.188 and the weighted-average remaining
contractual life is 7 years.
Stock option activity over the last three years is summarized below:
1996 1995 1994
shares price* shares price* shares price*
Outstanding at January 1 266,125 $22.14 197,375 $21.87 145,125 $22.60
Granted 59,000 26.19 68,750 23.06 69,125 20.63
Exercised (26,250) 22.27 - - (6,000) 21.63
Canceled - - - - (10,875) 23.88
Outstanding at December 31 298,875 $22.96 266,125 $22.18 197,375 $21.87
Exercisable as of December 31 206,500 $22.02 162,813 $22.14 102,125 $22.20
*weighted-average exercise price
3. INCOME TAXES
Income tax expense consisted of the following:
1996 1995 1994
(thousands)
Current income taxes:
Federal $35,816 $69,697 $42,736
State 8,762 11,944 7,462
Total 44,578 81,641 50,198
Deferred income taxes, net:
Federal (7,441) (3,152) 17,005
State (1,221) (116) 3,519
Total (8,662) (3,268) 20,524
Investment tax credit amortization
and reversals (4,163) (11,570) (4,345)
Total income tax expense $31,753 $66,803 $66,377
KCPL's effective income tax rates differed from the statutory federal
rates mainly due to the following:
1996 1995 1994
Federal statutory income tax rate 35.0% 35.0% 35.0%
Differences between book and tax
depreciation not normalized (0.4) 1.2 1.2
Amortization of investment tax credits (3.0) (2.5) (2.5)
Income tax credits (9.1) (2.3) (0.2)
State income taxes 3.5 4.1 4.2
Other (3.3) (0.2) 1.1
Effective income tax rate 22.7% 35.3% 38.8%
The tax effects of major temporary differences resulting in deferred
tax assets and liabilities in the balance sheets are as follows:
December 31 1996 1995
(thousands)
Plant related $562,287 $572,792
Recoverable taxes 49,000 48,000
Other 29,165 21,635
Net deferred income tax liability $640,452 $642,427
The net deferred income tax liability consisted of the following:
December 31 1996 1995
(thousands)
Gross deferred income tax assets $(60,979) $(61,181)
Gross deferred income tax liabilities 701,431 703,608
Net deferred income tax liability $640,452 $642,427
4. COMMITMENTS AND CONTINGENCIES
Nuclear Liability and Insurance
Liability Insurance
The Price-Anderson Act currently limits the combined public
liability of nuclear reactor owners to $8.9 billion for claims
that could arise from a single nuclear incident. The owners of
Wolf Creek (the Owners) carry the maximum available commercial
insurance of $0.2 billion. The remaining $8.7 billion balance is
provided by Secondary Financial Protection (SFP), an assessment
plan mandated by the Nuclear Regulatory Commission.
Under SFP, if there were a catastrophic nuclear incident
involving any of the nation's licensed reactors, the Owners would
be subject to a maximum retrospective assessment per incident of
up to $79 million ($37 million, KCPL's share). The Owners are
jointly and severally liable for these charges, payable at a rate
not to exceed $10 million ($5 million, KCPL's share) per incident
per year, excluding applicable premium taxes. The assessment,
most recently revised in 1993, is subject to an inflation
adjustment every five years based on the Consumer Price Index.
Property, Decontamination and Premature Decommissioning Insurance
The Owners also carry $2.8 billion ($1.3 billion, KCPL's share)
of property damage, decontamination and premature decommissioning
insurance for loss resulting from damage to the Wolf Creek
facilities. Nuclear insurance pools provide $0.5 billion of
coverage, while Nuclear Electric Insurance Limited (NEIL)
provides $2.3 billion.
In the event of an accident, insurance proceeds must first be
used for reactor stabilization and site decontamination. KCPL's
share of any remaining proceeds can be used for property damage
and premature decommissioning costs. Premature decommissioning
coverage applies only if an accident at Wolf Creek exceeds
$500 million in property damage and decontamination expenses, and
only after trust funds have been exhausted (see Note 1 - Nuclear
Plant Decommissioning Costs).
Extra Expense Insurance - Including Replacement Power
The Owners also carry additional insurance from NEIL to cover
costs of replacement power and other extra expenses incurred in
the event of a prolonged outage resulting from accidental
property damage at Wolf Creek.
Retrospective Assessments
Under all NEIL policies, KCPL is subject to retrospective
assessments if NEIL losses, for each policy year, exceed the
accumulated funds available to the insurer under that policy.
The estimated maximum amount of retrospective assessments to KCPL
under the current policies could total about $8 million.
Other
In the event of a catastrophic loss at Wolf Creek, the
insurance coverage may not be adequate to cover property damage
and extra expenses incurred. Uninsured losses, to the extent not
recovered through rates, would be assumed by KCPL and could have
a material, adverse effect on our financial condition and results
of operations.
Nuclear Fuel Commitments
As of December 31, 1996, KCPL's portion of Wolf Creek nuclear
fuel commitments included $130 million for enrichment and fabrication
through 2025 and $15 million for uranium and conversion through 2001.
Environmental Matters
KCPL's operations must comply with federal, state and local
environmental laws and regulations. The generation and transmission
of electricity uses, produces and requires disposal of certain
products and by-products, including polychlorinated biphenyl (PCBs),
asbestos and other potentially hazardous materials. The Federal
Comprehensive Environmental Response, Compensation and Liability Act
(the Superfund law) imposes strict joint and several liability for
those who generate, transport or deposit hazardous waste. This
liability extends to the current property owner as well as prior
owners since the time of contamination. We continually conduct
environmental audits designed to detect contamination and ensure
compliance with governmental regulations. However, compliance
programs needed to meet future environmental laws and regulations
governing water and air quality, including carbon dioxide emissions,
hazardous waste handling and disposal, toxic substances and the
effects of electromagnetic fields, could require substantial changes
to operations or facilities.
Long-term Coal Contracts
KCPL's share of coal purchased under long-term contracts was $36,
$42 and $21 million in 1996, 1995 and 1994, respectively. Under these
coal contracts, KCPL's remaining share of purchase commitments totals
$113 million. Obligations for the years 1997 through 2001 total $34,
$20, $20, $10 and $10 million, respectively. The remainder of our
coal requirements are fulfilled through spot market purchases.
Leases
KCPL has a transmission line lease with another utility whereby,
with FERC approval, the rental payments can be increased by the
lessor. If this occurs, we can cancel the lease if we are able to
secure an alternative transmission path. Commitments under this lease
total $2 million per year and $54 million over the remaining life of
the lease if it is not canceled.
Rental expense for other leases including railcars, computer
equipment, buildings, transmission line and other items was $18 to
$20 million per year during the last three years. The remaining
rental commitments under these leases total $174 million. Obligations
for the years 1997 through 2001 average $14 million per year. Capital
leases are not material and are included in these amounts.
As the managing partner of three jointly-owned generating units,
we have entered into leases for railcars to serve those units. The
entire lease commitment is reflected in the above amounts although
about $2 million per year ($31 million total) will be reimbursed by
the other owners.
Purchased Capacity Commitments
We purchase capacity from other utilities and nonutility
suppliers. Purchased capacity gives us the option to purchase energy
if needed or when market prices are favorable. This provides a cost-
effective alternative to new construction. As of December 31, 1996,
contracts to purchase capacity total $267 million through 2016. During
1996, 1995 and 1994, capacity purchases were $26, $17 and $13 million,
respectively. For the years 1997 through 2001, these commitments
average $22 million per year. For each of the next five years, net
capacity purchases represent about 11% of KCPL's 1996 total available
capacity.
Legal Proceedings
See Note 13.
5. SECURITIES AVAILABLE FOR SALE
KLT Inc., a wholly-owned subsidiary of KCPL, held a $5 million
investment in convertible preferred stock. In September 1996 the
investee company completed a public offering triggering conversion of
the preferred stock into common stock. As a result of the conversion,
the carrying value of the investment at December 31, 1996, was
adjusted to its market value of $15.2 million. The $10.2 million
increase in market value over original cost resulted in an unrealized
gain at December 31, 1996, of $6.5 million (net of deferred taxes of
$3.7 million).
6. SALE OF ACCOUNTS RECEIVABLE
As of December 31, 1996 and 1995, an undivided interest in
$60 million of designated customer accounts receivable was sold with
limited recourse. Related costs of $3.5, $3.8 and $2.8 million for
1996, 1995 and 1994, respectively, were included in Other Income -
Miscellaneous deductions.
7. SHORT-TERM BORROWINGS
Short-term borrowings consist of funds borrowed from banks or
through the sale of commercial paper as needed. The weighted-average
interest rate on the short-term debt outstanding as of December 31,
1995, was 5.9%. As of December 31, 1996, under minimal fee
arrangements, unused bank lines of credit totaled $280 million.
8. COMMON STOCK EQUITY, PREFERRED STOCK AND REDEEMABLE PREFERRED STOCK
Common Stock Equity
KCPL has shares of common stock registered with the Securities
and Exchange Commission for a Dividend Reinvestment and Stock Purchase
Plan (the Plan). The Plan allows common shareholders, directors and
employees to purchase shares of the common stock by reinvesting
dividends or making optional cash payments. We are currently
purchasing shares for the Plan on the open market.
As of December 31, 1996 and 1995, KCPL held 12,907 and 6,643
shares of its common stock to be used for future distribution,
respectively. The cost of these shares is included in Investments and
Nonutility Property.
The Restated Articles of Consolidation contain a restriction
relating to the payment of dividends in the event common equity falls
to 25% of total capitalization.
If preferred stock dividends are not declared and paid when
scheduled, KCPL could not declare or pay common stock dividends or
purchase any common shares. If the unpaid preferred stock dividends
equal four or more full quarterly dividends, the preferred
shareholders, voting as a single class, could elect members to the
Board of Directors.
Preferred Stock and Redeemable Preferred Stock
Scheduled mandatory sinking fund requirements for the redeemable
4% Cumulative Preferred Stock are 1,600 shares per year. Shares
issued as of December 31 totaled 12,757 in 1996 and 14,357 in 1995.
Shares held by KCPL at December 31 to meet future sinking fund
requirements totaled 12,134 in 1996 and 3,192 in 1995. The cost of
the shares held at the end of 1996 is reflected as a reduction of the
capital account while at the end of 1995 is included in Investments
and Nonutility Property.
As of December 31, 1996, 0.4 million shares of $100 par
Cumulative Preferred Stock, 1.6 million shares of Cumulative No Par
Preferred Stock and 11 million shares of no par Preference Stock were
authorized. We have the option to redeem the $89 million Cumulative
Preferred Stock at prices approximating par or stated value.
9. LONG-TERM DEBT
General Mortgage Bonds and Unsecured Notes
KCPL is authorized to issue mortgage bonds under the General
Mortgage Indenture and Deed of Trust dated December 1, 1986, as
supplemented. The Indenture creates a mortgage lien on substantially
all utility plant.
As of December 31, 1996, $644 million general mortgage bonds were
pledged under the Indenture to secure the outstanding medium-term
notes and revenue refunding bonds.
KCPL is also authorized to issue up to $300 million in unsecured
medium-term notes under an indenture dated December 1, 1996. This
indenture prohibits KCPL from issuing additional general mortgage
bonds while any unsecured notes are outstanding. As of December 31,
1996, no unsecured notes had been issued.
Interest Rate Swap and Cap Agreements
As of December 31, 1996, we had entered into five interest rate
swap agreements and three cap agreements to limit the interest rate on
$120 million of long-term debt. The swap agreements mature from 1997
to 1998 and effectively fix the interest rates on $60 million of
variable-rate debt to a weighted-average rate of 3.84% as of December
31, 1996. The cap agreements limit the interest rate on $60 million
of variable-rate debt to 5.0% expiring through 1998.
As of December 31, 1995, we had entered into eight interest rate
swap agreements and three cap agreements limiting the interest rate on
$150 million of long-term debt. The swap agreements matured from 1996
to 1998 and effectively fixed the interest rates on $90 million of
variable-rate debt to a weighted-average rate of 3.7% as of December
31, 1995. The cap agreements limited the interest rate on $60 million
of variable-rate debt to 5.0% expiring through 1998.
These swap and cap agreements are with several highly rated
financial institutions and simply limit our exposure to increases in
interest rates. They do not subject KCPL to any material credit or
market risks. The fair value of these agreements is immaterial and is
not reflected in the financial statements. Although derivatives are
an integral part of our interest rate management, their incremental
effect on interest expense for 1996 and 1995 was insignificant.
Subsidiary Obligations
During 1995 KLT entered into a long-term revolving line of credit
agreement for $65 million collateralized by the capital stock of KLT's
direct subsidiaries. During 1996 KLT amended this agreement,
extending the amount of credit available to $150 million. Other
significant terms were not changed. The affordable housing notes are
collateralized by the affordable housing investments.
Scheduled Maturities
Long-term debt maturities for the years 1997 through 2001 are
$27, $73, $136, $66 and $91 million, respectively.
10. JOINTLY-OWNED ELECTRIC UTILITY PLANTS
Joint ownership agreements with other utilities provide undivided
interests in utility plants as of December 31, 1996, as follows (in
millions of dollars):
Wolf Creek LaCygne Iatan
Unit Units Unit
KCPL's share 47% 50% 70%
Utility plant in service $1,344 $ 287 $ 244
Estimated accumulated depreciation
(production plant only) $ 357 $ 171 $ 129
Nuclear fuel, net $ 39 $ - $ -
KCPL's accredited capacity-megawatts 548 672 469
Each owner must fund its own portion of the plant's operating
expenses and capital expenditures. KCPL's share of direct expenses is
included in the appropriate operating expense classifications in the
income statement. Western Resources, Inc. (Western Resources) also
owns a 47% share of the Wolf Creek unit and a 50% share of the LaCygne
units (see Note 11).
11. AGREEMENT AND PLAN OF MERGER WITH WESTERN RESOURCES
On February 7, 1997, KCPL and Western Resources entered into an
Agreement and Plan of Merger (the Merger Agreement) to form a
strategic business combination. The effective time of the merger is
dependent upon all conditions of the Merger Agreement being met or
waived. At the effective time, KCPL will merge with and into Western
Resources, with Western Resources being the surviving corporation.
Western Resources first delivered an unsolicited exchange offer
to KCPL's Board of Directors during the second quarter of 1996. This
initial offer, subject to numerous conditions, proposed the exchange
of $28 (later increased to $31) worth of Western Resources stock for
each share of KCPL stock. After careful consideration, both offers
were rejected by KCPL's Board of Directors. In July 1996 Western
Resources commenced an exchange offer for KCPL common stock. In late
1996 KCPL began discussing a possible merger with Western Resources
leading to the Merger Agreement.
Under the terms of the Merger Agreement, KCPL common stock will
be exchanged for Western Resources common stock valued at $32.00,
subject to a conversion ratio limiting the amount of Western Resources
common stock that holders of KCPL common stock would receive per share
of KCPL common stock to no more than 1.1 shares (if Western Resources'
stock is priced at or below $29.09 per share), and no less than 0.917
shares (if Western Resources' stock is priced at or above $34.90 per
share). However, there is a provision in the Merger Agreement that
allows KCPL to terminate the merger if Western Resources' stock price
drops below $27.64 and either the Standard and Poor's Electric
Companies Index increases or the decline in Western Resources stock
exceeds by approximately 5% any decline in this index. Western
Resources could avoid this termination by improving the conversion
ratio.
The transaction is subject to several closing conditions
including approval by each company's shareholders, approval by a
number of regulatory authorities (statutory approvals) and dissenting
shares equaling less than 5.5% of KCPL's outstanding shares. If the
effective time has not occurred by June 30, 1998 (the termination
date), either party may terminate the agreement as long as they did
not contribute to the delay. This termination date will be
automatically extended to June 30, 1999, if all of the Merger
Agreement closing conditions have been met except for certain
conditions relating to statutory approvals.
The Merger Agreement does not allow KCPL to increase its common
stock dividend prior to the effective time or termination. It also
requires KCPL to redeem all outstanding shares of preferred stock
prior to completion of the merger.
If the Merger Agreement is terminated under certain
circumstances, a payment of $50 million will be due Western Resources
if, within two and one-half years following termination, KCPL agrees
to consummate a business combination with a third party that made a
proposal to combine prior to termination. Western Resources will pay
KCPL $5 to $35 million if the Merger Agreement is terminated and all
closing conditions are satisfied other than conditions relating to
Western Resources receiving a favorable tax opinion, a favorable
letter from its accountants regarding pooling accounting, favorable
statutory approvals, or an exemption from the Public Utility Holding
Company Act of 1935.
In February 1997 KCPL paid UtiliCorp United Inc. (UtiliCorp) $53
million for agreeing to combine with Western Resources within two and
one-half years from the termination of KCPL's agreement to merge with
UtiliCorp. This agreement was terminated due to failure of KCPL
shareholders to approve the transaction with UtiliCorp.
12. QUARTERLY OPERATING RESULTS (UNAUDITED)
Quarter
1st 2nd 3rd 4th
(millions)
1996
Operating revenues $ 207 $ 226 $ 270 $ 201
Operating income 35 42 68 33
Net income 25 27 36 20
Earnings per common share $ 0.38 $ 0.43 $ 0.57 $0.31
Quarter
1st 2nd 3rd 4th
(millions)
1995
Operating revenues $ 199 $ 205 $ 278 $ 204
Operating income 29 31 72 35
Net income 23 19 58 23
Earnings per common share $ 0.35 $ 0.29 $ 0.91 $ 0.37
The quarterly data is subject to seasonal fluctuations with peak
periods occurring during the summer months. As a result of
terminating the merger agreement with UtiliCorp, $13 million in
previously deferred merger costs and a $5 million termination fee were
expensed lowering 1996 third quarter earnings. During 1996 about $13
million in costs to defend against Western Resources' unsolicited
exchange offer were expensed ($5 million during the second quarter and
$8 million during the third quarter).
13. LEGAL PROCEEDINGS
Jack R. Manson (Manson), as a representative of KCPL's
shareholders, alleged in a District Court proceeding, that KCPL and
its directors breached their fiduciary duties in adopting the Amended
Merger Agreement with UtiliCorp (Agreement). Manson also alleged
their actions 1) were illegal, 2) illegally deprived KCPL
shareholders of voting and appraisal rights under Missouri law, and 3)
were a disproportionate response to Western Resources' acquisition
offer. Also, on June 7, 1996, Western Resources and Robert L. Rives
each alleged against KCPL in the same court proceeding, that the
Agreement was illegal under Missouri law and the directors had
breached their fiduciary duties by adopting the Agreement.
By order dated November 25, 1996, the District Court allowed
Manson to amend his allegation to allege that the directors breached
their fiduciary duties by refusing to negotiate a merger with Western
Resources and committed reckless, grossly negligent, or negligent
waste of corporate assets by pursuing the merger with UtiliCorp.
Manson seeks monetary damages in an unspecified amount for the waste
of corporate assets. KCPL filed a motion on December 9, 1996, to
dismiss Manson's amendment; it is currently pending before the
District Court. The Company cannot predict the outcome of these
proceedings at this time.
14. SUBSEQUENT EVENTS
In 1997 KLT closed investments totaling nearly $60 million
financed through additional borrowings.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Kansas City Power & Light Company:
We have audited the consolidated financial statements of Kansas
City Power & Light Company and Subsidiary listed in the index on page
43 of this Form 10-K. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Kansas City Power & Light Company and Subsidiary as of
December 31, 1996 and 1995, and the consolidated results of their
operations and their cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accepted
accounting principles.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Kansas City, Missouri
February 14, 1997
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors
See General Note to Part III.
Executive Officers
See Part I, page 7, entitled "Officers of the
Registrant."
ITEM 11. EXECUTIVE COMPENSATION
See General Note to Part III.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
See General Note to Part III.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
GENERAL NOTE TO PART III
Pursuant to General Instruction G to Form 10-K, the
other information required by Part III (Items 10, 11, and
12) of Form 10-K not disclosed above will be either (i)
incorporated by reference to the Definitive Proxy Statement
for KCPL's 1997 Annual Meeting of Shareholders, filed with
the Securities and Exchange Commission not later than April
30, 1997, or (ii) included in an amendment to this report
filed with the Commission on Form 10-K/A.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
Page
No.
Financial Statements
a. Consolidated Statements of Income and Consolidated 21
Statements of Retailed Earnings for the years ended
December 31, 1996, 1995, and 1994
b. Consolidated Balance Sheets - December 31, 1996, and 22
c. Consolidated Statements of Cash Flows for the years ended 23
December 31, 1996, 1995, and 1994
d. Consolidated Statements of Capitalization - December 31,
1996 and 1995 24
e. Notes to Consolidated Financial Statements 25
f. Report of Independent Accountants 41
Exhibits
Exhibit
Number Description of Document
2 *Amendment and Plan of Merger (Exhibit (2)-1
to Form 8-K dated February 11, 1997).
3-a *Restated Articles of Consolidation of KCPL
dated as of May 5, 1992 (Exhibit 4 to Registration
Statement, Registration No. 33-54196).
3-b *By-laws of KCPL, as amended and in effect on
August 6, 1996 (Exhibit 3(ii) to Form 10-Q dated
September 30, 1996).
4-a *General Mortgage and Deed of Trust dated as
of December 1, 1986, between KCPL and UMB Bank,
n.a. (formerly United Missouri Bank) of Kansas
City, N.A., Trustee (Exhibit 4-bb to Form 10-K for
the year ended December 31, 1986).
4-b *Third Supplemental Indenture dated as of
April 1, 1991, to Indenture dated as of December 1,
1986 (Exhibit 4-aq to Registration Statement,
Registration No. 33-42187).
4-c *Fourth Supplemental Indenture dated as of
February 15, 1992, to Indenture dated as of
December 1, 1986 (Exhibit 4-y to Form 10-K for year
ended December 31, 1991).
4-d *Fifth Supplemental Indenture dated as of
September 15, 1992, to Indenture dated as of
December 1, 1986 (Exhibit 4-a to Form 10-Q dated
September 30, 1992).
4-e *Sixth Supplemental Indenture dated as of
November 1, 1992, to Indenture dated as of
December 1, 1986 (Exhibit 4-z to Registration
Statement, Registration No. 33-54196).
4-f *Seventh Supplemental Indenture dated as of
October 1, 1993, to Indenture dated as of December
1, 1986 (Exhibit 4-a to Form 10-Q dated
September 30, 1993).
4-g *Eighth Supplemental Indenture dated as of
December 1, 1993, to Indenture dated as of December
1, 1986 (Exhibit 4 to Registration Statement,
Registration No. 33-51799).
4-h *Ninth Supplemental Indenture dated as of
February 1, 1994, to Indenture dated as of December
1, 1986 (Exhibit 4-h to Form 10-K for year ended
December 31, 1993).
4-i *Tenth Supplemental Indenture dated as of
November 1, 1994, to Indenture dated as of December
1, 1986 (Exhibit 4I to Form 10-K for year ended
December 31, 1994).
4-j *Resolution of Board of Directors Establishing
3.80% Cumulative Preferred Stock (Exhibit 2-R to
Registration Statement, Registration No. 2-40239).
4-k *Resolution of Board of Directors Establishing
4% Cumulative Preferred Stock (Exhibit 2-S to
Registration Statement, Registration No. 2-40239).
4-l *Resolution of Board of Directors Establishing
4.50% Cumulative Preferred Stock (Exhibit 2-T to
Registration Statement, Registration No. 2-40239).
4-m *Resolution of Board of Directors Establishing
4.20% Cumulative Preferred Stock (Exhibit 2-U to
Registration Statement, Registration No. 2-40239).
4-n *Resolution of Board of Directors Establishing
4.35% Cumulative Preferred Stock (Exhibit 2-V to
Registration Statement, Registration No. 2-40239).
4-o *Certificate of Designation of Board of
Directors Establishing the $50,000,000 Cumulative
No Par Preferred Stock, Auction Series A (Exhibit 4-
a to Form 10-Q dated March 31, 1992).
4-p *Indenture for Medium-Term Note Program dated
as of April 1, 1991, between KCPL and The Bank of
New York (Exhibit 4-bb to Registration Statement,
Registration No. 33-42187).
4-q *Indenture for Medium-Term Note Program dated
as of February 15, 1992, between KCPL and The Bank
of New York (Exhibit 4-bb to Registration
Statement, Registration No. 33-45736).
4-r *Indenture for Medium-Term Note Program dated
as of November 15, 1992, between KCPL and The Bank
of New York (Exhibit 4-aa to Registration
Statement, Registration No. 33-54196).
4-s *Indenture for Medium-Term Note Program dated
as of November 17, 1994, between KCPL and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Smith Barney Inc. (Exhibit 4-s to
Form 10-K for year ended December 31, 1994).
4-t Indenture for Medium-Term Note Program
dated as of December 1, 1996, between KCPL and The
Bank of New York. (Exhibit 4 to Registration
Statement, Registration No. 333-17285).
10-a *Copy of Wolf Creek Generating Station Ownership
Agreement between Kansas City Power & Light
Company, Kansas Gas and Electric Company and Kansas
Electric Power Cooperative, Inc. (Exhibit 10-d to
Form 10-K for the year ended December 31, 1981).
10-b *Copy of Receivables Purchase Agreement dated as of
September 27, 1989, between KCPL, Commercial
Industrial Trade-Receivables Investment Company and
Citicorp North America, Inc., (Exhibit 10-p to Form
10-K for year ended December 31, 1989).
10-c *Copy of Amendment to Receivables Purchase
Agreement dated as of August 8, 1991, between KCPL,
Commercial Industrial Trade-Receivables Investment
Company and Citicorp North America, Inc. (Exhibit
10-m to Form 10-K for year ended December 31,
1991).
10-d *Long-Term Incentive Plan (Exhibit 28 to
Registration Statement, Registration 33-42187).
10-e Long-and Short-Term Incentive Compensation Plan,
January 1, 1997.
10-f *Copy of Indemnification Agreement entered into by
KCPL with each of its officers and directors.
(Exhibit 10-f to Form 10-K for year ended
December 31, 1995).
10-g *Copy of Severance Agreement entered into by KCPL
with certain of its executive officers. (Exhibit
10 to Form 10-Q dated June 30, 1993).
10-h *Copy of Amendment to Severance Agreement dated
January 15, 1996, entered into by KCPL with certain
of its executive officers. (Exhibit 10-h to Form
10-K dated December 31, 1995).
10-i Copy of Amendment to Severance Agreement dated
January, 1997 entered into by KCPL with certain of
its executive officers.
10-j *Copy of Supplemental Executive Retirement and
Deferred Compensation Plan (Exhibit 10-h to Form
10-K for year ended December 31, 1993).
10-k *Copy of $50 million Letter of Credit and
reimbursement agreement dated as of August 19,
1993, with The Toronto-Dominion Bank (Exhibit 10-i
to Form 10-K for year ended December 31, 1993).
10-l *Copy of $56 million Letter of Credit and
Reimbursement Agreement dated as of August 19,
1993, with Societe Generale, Chicago Branch
(Exhibit 10-j to Form 10-K for year ended
December 31, 1993).
10-m *Copy of $50 million Letter of Credit and
Reimbursement Agreement dated as of August 19,
1993, with The Toronto-Dominion Bank (Exhibit 10-k
to Form 10-K for year ended December 31, 1993).
10-n *Copy of $40 million Letter of Credit and
Reimbursement Agreement dated as of August 19,
1993, with Deutsche Bank AG, acting through its New
York and Cayman Islands Branches (Exhibit 10-l to
Form 10-K for year ended December 31, 1993).
10-o *Copy of Railcar Lease dated as of April 15, 1994,
between Shawmut Bank Connecticut, National
Association, and KCPL (Exhibit 10 to Form 10-Q for
period ended June 30, 1994).
10-p *Copy of Amendment No. 2 to Receivables Purchase
Agreement between KCPL and Ciesco L.P. and Citicorp
North America, Inc. (Exhibit 10 to Form 10-Q for
period ended September 30, 1994).
10-q *Copy of Railcar Lease dated as of January 31,
1995, between First Security Bank of Utah, National
Association, and KCPL (Exhibit 10-o to Form 10-K
for year ended December 31, 1994).
10-r *Copy of Lease Agreement dated as of October 18,
1995, between First Security Bank of Utah, N.A.,
and KCPL (Exhibit 10 to Form 10-Q for period ended
September 30, 1995).
12 Computation of Ratios of Earnings to Fixed
Charges.
23-a Consent of Counsel.
23-b Consent of Independent Accountants--Coopers &
Lybrand L.L.P.
24 Powers of Attorney.
27 Financial Data Schedules (filed electronically).
* Filed with the Securities and Exchange Commission as
exhibits to prior registration statements (except as
otherwise noted) and are incorporated herein by reference
and made a part hereof. The exhibit number and file number
of the documents so filed, and incorporated herein by
reference, are stated in parenthesis in the description of
such exhibit.
Copies of any of the exhibits filed with the Securities
and Exchange Commission in connection with this document may
be obtained from KCPL upon written request.
Reports on Form 8-K
No report on Form 8-K was filed in the last quarter of
1996; however, a report on Form 8-K was filed with the
Securities and Exchange Commission on February 11, 1997,
with attached copy of the Agreement and Plan of Merger dated
as of February 7, 1997, by and among KCPL and Western
Resources, Inc.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Kansas City, and State
of Missouri on the 17th day of March, 1997.
KANSAS CITY POWER & LIGHT COMPANY
By /s/Drue Jennings
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934,
this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signature Title Date
Chairman of the Board and )
/s/ Drue Jennings President (Principal )
(Drue Jennings) Executive Officer) )
)
Executive Vice President-Chief )
/s/ Bernard J. Beaudoin Financial Officer (Principal )
(Bernard J. Beaudoin) Financial Officer) )
)
/s/ Neil A. Roadman Controller (Principal )
(Neil A. Roadman) Accounting Officer) )
)
David L. Bodde* Director )
)
William H. Clark* Director ) March 17, 1997
)
Robert J. Dineen* Director )
)
Arthur J. Doyle* Director )
)
W. Thomas Grant II* Director )
)
George E. Nettels, Jr.* Director )
)
Linda Hood Talbott* Director )
)
Robert H. West* Director )
)
*By /s/ Drue Jennings
(Drue Jennings)
Attorney-in-Fact
<PAGE>
<PAGE>
Exhibit 4-t
KANSAS CITY POWER & LIGHT COMPANY
AND
THE BANK OF NEW YORK
Trustee
INDENTURE
Dated as of December 1, 1996
<PAGE>
TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture
dated as of December 1,1996,between Kansas City Power &
Light Company and The Bank of New York, Trustee:
<PAGE>
Section of Act Section of Indenture
310(a)(1)(2)and(5) ................ 9.09
310(a)(3)and(4)................... Not applicable
310(b).............................. 9.08 and 9.10
310(c).............................. Not applicable
311(a) and (b ...................... 9.14
311(c)............................. Not applicable
312(a) .............................. 7.01
312(b) and (c) ...................... 7.01
313(a) .............................. 7.03
313(b)(1)........................... Not applicable
313(b)(2) ........................... 7.03
313(c) .............................. 7.03
313(d) .............................. 7.03
314(a) .............................. 6.04, 7.02
314(b) .............................. 6.05
314(c)(1) and (2) ................... 15.05
314(c)(3)........................... Not applicable
314(d).............................. Not applicable
314(e) .............................. 15.05
314(f).............................. Not applicable
315(a), (c) and (d) ................. 9.01
315(b) .............................. 8.09
315(e) .............................. 8.10
316(a)(1) ........................... 8.01 and 8.08
316(a)(2) ........................... Omitted
316(a) last sentence ................ 10.04
316(b) .............................. 8.04
316(c) .............................. 10.06
317(a) .............................. 8.02
317(b) .............................. Omitted
318(a) .............................. 15.07
____________________________
This tie-sheet does not constitute a part of the
Indenture.
<PAGE>
TABLE OF CONTENTS
Page
Parties . . . . . . . . . . . . . . . . . . . . 1
Recitals 1
ARTICLE ONE
Definitions Section
1.01. Definitions . . . . . . . . . . . . . .1
Section 1.02 . . . . . . . . . . . . . . . . . .1
Section 1.03 . . . . . . . . . . . . . . . . . .2
Accrued Interest . . . . . . . . . . . . . . . .2
Accrued Interest Factor. . . . . . . . . . . . .2
Affiliate. . . . . . . . . . . . . . . . . . . .2
Authenticating Agent . . . . . . . . . . . . . .3
Authorized Agent . . . . . . . . . . . . . . . .3
Authorized Newspaper . . . . . . . . . . . . . .3
Base Rate. . . . . . . . . . . . . . . . . . . .3
Basis Point. . . . . . . . . . . . . . . . . . .3
Board of Directors . . . . . . . . . . . . . . .3
Board Resolution . . . . . . . . . . . . . . . .3
Business Day . . . . . . . . . . . . . . . . . .3
Calculation Agent. . . . . . . . . . . . . . . .4
Calculation Date . . . . . . . . . . . . . . . .4
Commercial Paper Rate. . . . . . . . . . . . . .4
Commercial Paper Rate Interest Determination
Date. . . . . . . . . . . . . . . . . . . . . 5
Commercial Paper Rate Notes . . . . . . . . . . 5
Company . . . . . . . . . . . . . . . . . . . . 5
Company Order . . . . . . . . . . . . . . . . . 5
Composite Quotations. . . . . . . . . . . . . . 6
Corporate Trust Office of the Trustee . . . . . 6
CUSIP . . . . . . . . . . . . . . . . . . . . . 6
Depositary. . . . . . . . . . . . . . . . . . . 6
Discharged. . . . . . . . . . . . . . . . . . . 7
Event of Default. . . . . . . . . . . . . . . . 7
Fixed Rate Note . . . . . . . . . . . . . . . . 7
Floating Rate Note. . . . . . . . . . . . . . . 7
Global Note . . . . . . . . . . . . . . . . . . 7
H.15(519) . . . . . . . . . . . . . . . . . . . 7
Indebtedness. . . . . . . . . . . . . . . . . . 7
Indenture . . . . . . . . . . . . . . . . . . . 8
Index Maturity. . . . . . . . . . . . . . . . . 8
Initial Interest Rate . . . . . . . . . . . . . 8
Interest Accrual Period . . . . . . . . . . . . 8
Interest Determination Date . . . . . . . . . . 8
Interest Factor . . . . . . . . . . . . . . . . 8
Interest Payment Date . . . . . . . . . . . . . 8
Interest Payment Period . . . . . . . . . . . . 9
Interest Rate . . . . . . . . . . . . . . . . . 10
Interest Reset Date . . . . . . . . . . . . . . 10
LIBOR . . . . . . . . . . . . . . . . . . . . . 11
LIBOR Interest Determination Date . . . . . . . 12
LIBOR Notes . . . . . . . . . . . . . . . . . . 12
London Banking Day. . . . . . . . . . . . . . . 12
Maturity. . . . . . . . . . . . . . . . . . . . 12
Maximum Interest Rate . . . . . . . . . . . . . 12
Minimum Interest Rate . . . . . . . . . . . . . 12
Money Market Yield. . . . . . . . . . . . . . . 12
Mortgage Bonds. . . . . . . . . . . . . . . . . 13
Mortgage Indenture. . . . . . . . . . . . . . . 13
Mortgage Trustee. . . . . . . . . . . . . . . . 13
Net Tangible Assets . . . . . . . . . . . . . . 13
Note or Notes; Outstanding. . . . . . . . . . . 13
Noteholder. . . . . . . . . . . . . . . . . . . 14
Officers' Certificate . . . . . . . . . . . . . 14
Opinion of Counsel. . . . . . . . . . . . . . . 14
Original Issue Date . . . . . . . . . . . . . . 15
Permitted Encumbrances. . . . . . . . . . . . . 15
Person. . . . . . . . . . . . . . . . . . . . . 17
Principal Executive Offices of the Company. . . 17
Principal Facility. . . . . . . . . . . . . . . 17
Record Date . . . . . . . . . . . . . . . . . . 18
Redemption Date . . . . . . . . . . . . . . . . 18
Regulated Subsidiary. . . . . . . . . . . . . . 18
Responsible Officer . . . . . . . . . . . . . . 18
Spread. . . . . . . . . . . . . . . . . . . . . 19
Spread Multiplier . . . . . . . . . . . . . . . 19
Subsidiary. . . . . . . . . . . . . . . . . . . 19
Treasury. . . . . . . . . . . . . . . . . . . . 19
Treasury Bills. . . . . . . . . . . . . . . . . 19
Treasury Rate . . . . . . . . . . . . . . . . . 19
Treasury Rate Interest Determination Date . . . 20
Treasury Rate Notes . . . . . . . . . . . . . 20
Trustee . . . . . . . . . . . . . . . . . . . . 20
U.S. Government Obligations . . . . . . . . . . 20
Wholly-Owned Subsidiary . . . . . . . . . . . . 21
ARTICLE TWO
Form, Issue, Execution, Registration And Exchange Of Notes
Section 2.01. Form Generally. . . . . . . . . . . . . 21
Section 2.02. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . .22
Section 2.03. Amount Limited. . . . . . . . . . . . . 22
Section 2.04. Denominations, Dates, Interest Payment
and Record Dates . . . . . . . . . . . .22
Section 2.05. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . 24
Section 2.06. Exchange and Registration of Transfer
of Notes.. . . . . . . . . . . . . . . 27
Section 2.07. Mutilated, Destroyed, Lost or Stolen
Notes. . . . . . . . . . . . . . . . . .28
Section 2.08. Temporary Notes . . . . . . . . . . . . 29
Section 2.09. Cancellation of Notes Paid, etc . . . . 29
Section 2.10. Interest Rights Preserved . . . . . . . 29
Section 2.11. Payment of Notes. . . . . . . . . . . . 30
Section 2.12. Notes Issuable in the Form of a Global
Note . . . . . . . . . . . . . . . . . .30
Section 2.13. CUSIP Numbers . . . . . . . . . . . . . 33
ARTICLE THREE
Redemption of Notes
Section 3.01. Applicability of Article. . . . . . . . 33
Section 3.02. Notice of Redemption;Selection of Notes.33
Section 3.03. Payment of Notes on Redemption; Deposit
of Redemption Price. . . . . . . . . . .34
ARTICLE FOUR
Mortgage Bonds
Section 4.01. Issuance Restrictions . . . . . . . . . 35
Section 4.02. Mortgage Bonds held by the Trustee. . . 36
Section 4.03. Trustee to Exercise Rights of Mortgage
Bondholder . . . . . . . . . . . . . . .36
Section 4.04. No Transfer of Mortgage Bonds; Exception.36
Section 4.05. Release of Mortgage Bonds . . . . . . . 36
Section 4.06. Voting of Mortgage Bonds. . . . . . . . 37
Section 4.07. Discharge of Mortgage Indenture . . . . 37
ARTICLE FIVE
Satisfaction and Discharge; Unclaimed Moneys
Section 5.01. Satisfaction and Discharge. . . . . . . 37
Section 5.02. Deposited Moneys to Be Held in Trust by
Trustee. . . . . . . . . . . . . . . . .40
Section 5.03. Return of Unclaimed Moneys. . . . . . . 40
Section 5.04. Reinstatement . . . . . . . . . . . . . 40
ARTICLE SIX
Particular Covenants of the Company
Section6.01. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . .41
Section 6.02. Office for Notices and Payments, etc. 41
Section 6.03. Appointments to Fill Vacancies in
Trustee's Office . . . . . . . . . . .41
Section 6.04. Annual Statement and Notice . . . . . 41
Section 6.05. Corporate Existence . . . . . . . . . 42
Section 6.06. Limitation Upon Mortgages and Liens . 42
Section 6.07. Waiver of Certain Covenants . . . . . 42
ARTICLE SEVEN
Noteholder Lists and Reports by the Company and the Trustee
Section 7.01. Noteholder Lists. . . . . . . . . . . 43
Section 7.02. Securities and Exchange Commission
Reports. . . . . . . . . . . . . . . . 43
Section 7.03. Reports by the Trustee. . . . . . . .. 43
ARTICLE EIGHT
Remedies of the Trustee and Noteholders on
Event of Default
Section 8.01. Events of Default . . . . . . . . . . 44
Section 8.02. Payment of Notes on Default; Suit
Therefor . . . . . . . . . . . . . . . 47
Section 8.03. Application of Moneys Collected by
Trustee. . . . . . . . . . . . . . . . 48
Section 8.04. Proceedings by Noteholders. . . . . . 49
Section 8.05. Proceedings by Trustee. . . . . . . . .50
Section 8.06. Remedies Cumulative and Continuing. . .50
Section 8.07. Restoration of Rights and Remedies. . .51
Section 8.08. Direction of Proceedings and Waiver of
Defaults by Majority Noteholders . . . 51
Section 8.09. Notice of Default . . . . . . . . . . 51
Section 8.10. Undertaking to Pay Costs. . . . . . . .52
ARTICLE NINE
Concerning the Trustee
Section 9.01. Duties and Responsibilities of Trustee 52
Section 9.02. Reliance on Documents, Opinions, etc.. 54
Section 9.03. No Responsibility for Recitals, etc . .55
Section 9.04. Trustee, Authenticating Agent or Registrar
May Own Notes. . . . . . . . . . . . . 55
Section 9.05. Moneys to Be Held in Trust. . . . . . .55
Section 9.06. Compensation and Expenses of Trustee. .55
Section 9.07. Officers' Certificate as Evidence . . .56
Section 9.08. Conflicting Interest of Trustee . . . .57
Section 9.09. Eligibility of Trustee. . . . . . . . .57
Section 9.10. Resignation or Removal of Trustee . . .57
Section 9.11. Appointment of Successor Trustee. . . .58
Section 9.12. Acceptance by Successor Trustee . . . .59
Section 9.13. Succession by Merger, etc . . . . . . .60
Section 9.14. Limitations on Rights of Trustee as a
Creditor . . . . . . . . . . . . . . . 60
Section 9.15. Authenticating Agent. . . . . . . . . .60
Section 9.16. Trustee's Application for Instructions
from the Company . . . . . . . . . . . 61
ARTICLE TEN
Concerning the Noteholders
Section 10.01. Action by Noteholders. . . . . . . . . 62
Section 10.02. Proof of Execution by Noteholders. . . 62
Section 10.03. Who Deemed Absolute Owners . . . . . . 62
Section 10.04. Company-Owned Notes Disregarded. . . . 63
Section 10.05. Revocation of Consents; Future Holders
Bound . . . . . . . . . . . . . . . . 63
Section 10.06. Record Date for Noteholder Acts. . . . 63
ARTICLE ELEVEN
Noteholders' Meeting
Section 11.01. Purposes of Meetings . . . . . . . . . 64
Section 11.02. Call of Meetings by Trustee. . . . . . 64
Section 11.03. Call of Meetings by Company or
Noteholders . . . . . . . . . . . . . .65
Section 11.04. Qualifications for Voting. . . . . . .65
Section 11.05. Regulations. . . . . . . . . . . . . . 65
Section 11.06. Voting . . . . . . . . . . . . . . . .66
Section 11.07. Right of Trustee or Noteholders not
Delayed . . . . . . . . . . . . . . . .66
ARTICLE TWELVE
Consolidation, Merger, Conveyance, Transfer or Lease
Section 12.01. Company May Consolidate, etc., only on
Certain Terms . . . . . . . . . . . . .67
Section 12.02. Successor Corporation Substituted. . . 68
ARTICLE THIRTEEN
Supplemental Indentures
Section 13.01. Supplemental Indentures without Consent
of Noteholders. . . . . . . . . . . . .68
Section 13.02. Supplemental Indentures with Consent of
Noteholders . . . . . . . . . . . . . .69
Section 13.03. Compliance with Trust Indenture Act;
Effect of Supplemental Indentures . . .70
Section 13.04. Notation on Notes. . . . . . . . . . . 71
Section 13.05. Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee . . 71
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders,
Officers and Directors
Section 14.01. Indenture and Notes Solely Corporate
Obligations . . . . . . . . . . . . . 71
ARTICLE FIFTEEN
Miscellaneous Provisions
Section 15.01. Provisions Binding on Company's
Successors. . . . . . . . . . . . . . 72
Section 15.02. Official Acts by Successor Corporation 72
Section 15.03. Addresses for Notices, etc . . . . . . 72
Section 15.04. Governing Law. . . . . . . . . . . . . 72
Section 15.05. Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . .72
Section 15.06. Business Days. . . . . . . . . . . . . 74
Section 15.07. Trust Indenture Act to Control . . . . 74
Section 15.08. Table of Contents, Headings, etc . . . 74
Section 15.09. Execution in Counterparts. . . . . . . 74
Section 15.10. Manner of Mailing Notice to Noteholders 74
EXHIBITS
Exhibit A Form of Global Fixed Rate Note
Exhibit B Form of Fixed Rate Note
Exhibit C Form of Global Floating Rate Note
Exhibit D Form of Floating Rate Note
<PAGE>
THIS INDENTURE, dated as of December 1,1996,
between Kansas City Power & Light Company, a corporation
duly organized and existing under the laws of the State of
Missouri (hereinafter sometimes called the "Company"), and
The Bank of New York, a New York banking corporation
organized and existing under the laws of the State of New
York (hereinafter called the "Trustee").
Witnesseth:
WHEREAS, for its lawful corporate purposes, the
Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time
of its Medium-Term Notes, (hereinafter sometimes called
"Notes"),to be issued as in this Indenture provided;
AND WHEREAS, all acts and things necessary to
make this Indenture a valid agreement according to its terms
have been done and performed,and the execution of this
Indenture and the issue hereunder of the Notes have in all
respects been duly authorized;
NOW THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions
upon which the Notes are, and are to be authenticated,
issued and delivered, and in consideration of the premises,
of the purchase and acceptance of the Notes by the holders
thereof and of the sum of one dollar duly paid to it by the
Trustee at the execution of these presents, the receipt
whereof is hereby acknowledged, the Company covenants and
agrees with the Trustee for the equal and proportionate
benefit of the respective holders from time to time
of the Notes, as follows:
ARTICLE ONE.
Definitions.
Section 1.01. Definitions. The terms defined in
this Article One (except as herein otherwise expressly
provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this
Article One.
Section 1.02. (a) Whenever this Indenture refers
to a provision of the Trust Indenture Act of 1939, as
amended ("TIA"), such provision is incorporated by reference
in and made a part of this Indenture. The following TIA
terms incorporated in this Indenture have the following
meanings:
"indenture securities" means the Notes.
"indenture note holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee"
means the Trustee.
"obligor" on the indenture securities means the
Company.
(b) All terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another
statute or defined by a rule of the Securities and Exchange
Commission have the meanings assigned to them in the TIA or
such statute or rule as in force on the date of execution of
this Indenture.
Section 1.03. For purposes of this Indenture, the
following terms have the following meanings.
Accrued Interest:
The term "Accrued Interest" at any Interest
Payment Date (a) for a Floating Rate Note shall mean the
amount obtained by multiplying the principal amount of such
Floating Rate Note by its Accrued Interest Factor, and (b)
for a Fixed Rate Note,shall mean the amount obtained by
multiplying the principal amount of such Fixed Rate Note by
its Interest Rate, and multiplying the product thus obtained
by a fraction, the numerator of which is the number of days
in the Interest Payment Period for such Note ended on such
Interest Payment Date, and the denominator of which is 360.
Accrued Interest Factor:
The term "Accrued Interest Factor" at any Interest
Payment Date for a Floating Rate Note shall mean the sum of
the Interest Factors for such Floating Rate Note calculated
for each day in the Interest Payment Period for such Note
ended on such Interest Payment Date or the prior Record
Date, as the case may be.
Affiliate:
The term "Affiliate" shall mean with respect to any
specified Person any other Person directly or indirectly
controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes
of this definition, "control" when used with respect to any
specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or
otherwise; and the terms"controlling: and "controlled" have
meanings correlative to the foregoing.
Authenticating Agent:
The term "Authenticating Agent" shall mean the
agent of the Trustee which shall be appointed and acting
pursuant to Section 9.15.
Authorized Agent:
The term "Authorized Agent" shall mean an agent
of the Company designated by an Officers' Certificate to
give to the Trustee the information specified in clause (a)
of "Company Order" for the issuance of a Note.
Authorized Newspaper:
The term "Authorized Newspaper" shall mean a
newspaper of general circulation in the relevant area,
printed in the English language and customarily published
on each Business Day; whenever successive publications in
an Authorized Newspaper are required by this Indenture, such
publications may be made on the same or different days and
in the same or in different Authorized Newspapers.
Base Rate:
The term "Base Rate" shall mean with respect to (a)
Commercial Paper Rate Notes, the Commercial Paper Rate, (b)
LIBOR Notes, LIBOR and (c) Treasury Rate Notes, the Treasury
Rate.
Basis Point:
The term "Basis Point" shall mean one-one
hundredth of a percentage point.
Board of Directors:
The term "Board of Directors" shall mean the
Board of Directors of the Company or the Executive Committee
of such Board or any other duly authorized Committee of such
Board.
Board Resolution:
The term "Board Resolution" shall mean a copy of
a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the
Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
Business Day:
The term "Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions or trust companies in the
Borough of Manhattan, the City and State of New York, are
obligated or authorized by law or executive order to close.
Calculation Agent:
The term "Calculation Agent" for a particular
Floating Rate Note shall mean the Trustee, unless otherwise
provided for in the applicable Company Order.
Calculation Date:
The term "Calculation Date" shall mean with
regard to any particular Interest Determination Date, the
tenth calendar day after such Interest Determination Date,
or, if any such day is not a Business Day, the next
succeeding Business Day.
Commercial Paper Rate:
The term "Commercial Paper Rate" for a
particular Floating Rate Note, unless otherwise indicated
in the applicable Company Order, shall mean, with respect
to any Commercial Paper Rate Interest Determination Date,
the Money Market Yield on such date of the rate for
commercial paper having the Index Maturity specified in
such Company Order, as such rate shall be published
in H.15(519) under the heading "Commercial Paper". In the
event that such rate is not published prior to 3:00 P.M.,
New York City time, on the Calculation Date pertaining to
such Commercial Paper Rate Interest Determination Date, then
the Commercial Paper Rate shall be the Money Market Yield
on such Commercial Paper Rate Interest Determination Date of
the rate for commercial paper of the specified Index
Maturity as published in Composite Quotations
under the heading "Commercial Paper". If by 3:00 P.M., New
York City time, on such Calculation Date such rate is
not published in either H.15(519) or Composite Quotations,
then the Commercial Paper Rate for such Commercial Paper
Rate Interest Determination Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the
arithmetic mean of the offered rates as of 11:00 A.M., New
York City time, on such Commercial Paper Rate Interest
Determination Date of three leading dealers of commercial
paper in The City of New York selected by the Calculation
Agent for commercial paper of the specified Index
Maturity placed for an industrial issuer whose bond rating
is "AA", or the equivalent, from a nationally recognized
rating agency; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not
quoting as set forth above,the Commercial Paper Rate will
be the Commercial Paper Rate in effect on such Commercial
Paper Rate Interest Determination Date.
Commercial Paper Rate Interest Determination Date:
The term "Commercial Paper Rate Interest
Determination Date" for a Commercial Paper Rate Note shall
mean the second Business Day preceding its Interest Reset
Date.
Commercial Paper Rate Notes:
The term "Commercial Paper Rate Notes" shall
mean Floating Rate Notes which are specified in the
applicable Company Order as having interest computed with
reference to the Commercial Paper Rate.
Company:
The term "Company" shall mean the corporation
named as the "Company" in the first paragraph of this
Indenture, and its successors and assigns.
Company Order:
The term "Company Order" shall mean:
(a) a written order signed in the name of the
Company by the Chairman of the Board, the President or
any Vice President and by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer of the
Company, and delivered to the Trustee, to authenticate a
Note and to make it available for delivery, and specifying
for such Note the following information:
(1) the name of the Person in which a Note to be
issued and authenticated shall be registered;
(2) the address of such Person;
(3) the taxpayer identification number of such
Person;
(4) the principal amount of such Note and, if
multiple Notes are to be issued to such Person, the
denominations of such Notes;
(5) the Original Issue Date of such Note;
(6) the date upon which such Note is scheduled to
mature;
(7) the Redemption Date and the price or
prices at which such Note is redeemable at the option
of the Company;
(8) if the Note is a Fixed Rate Note, the rate of
interest on such Note and the Interest Payment
Dates, if other than April 1 and October 1;
(9) if the Note is a Floating Rate Note, its:
(A) Base Rate
(B) Index Maturity
(C) Interest Payment Dates
(D) Initial Interest Rate
(E) Maximum Interest Rate
(F) Minimum Interest Rate
(G) Interest Reset Dates
(H) Initial Interest Reset Date
(I) Interest Payment Dates
(J) Spread
(K) Spread Multiplier
(10) all other information necessary for
the issuance of such Note; or
(b) confirmation given to the Trustee by
an officer of the Company designated by an
Officers' Certificate, by telephone, confirmed by
telex or facsimile or similar writing,of the
information given to the Trustee by an Authorized
Agent for the issuance of a Note, and the written
order of the Company to authenticate such Note and
to make it available for delivery.
Composite Quotations:
The term "Composite Quotations" shall
mean the daily statistical release "Composite 3:30
P.M. Quotations for U.S. Government Securities" or any
successor publication published by the Federal Reserve
Bank of New York.
Corporate Trust Office of the Trustee:
The term "corporate trust office of
the Trustee," or other similar term, shall mean the
principal corporate trust office of the Trustee in
the Borough of Manhattan, the City and State of New
York, at which at any particular time its corporate
trust business shall be administered, which office is
at the date of the execution of this Indenture located
at 101 Barclay Street, 21 W, New York, New York 10286.
CUSIP:
The term "CUSIP" shall mean
the registered trademark "Committee on Uniform
Securities Identification Procedures" or "CUSIP" and
a unique system of identification of each public
issue of a security owned by the
American Bankers Association and administered by
Standard and Poor's Corporation, as agent of
the American Bankers Association.
Depositary:
The term "Depositary" shall mean,
unless otherwise specified by the Company pursuant to
Section 2.05 hereof, The Depository Trust Company,
New York, New York, or any successor thereto
registered and qualified under the Securities and
Exchange Act of 1934, as amended, or
other applicable statute or regulation.
Discharged:
The term 'Discharged" shall have
the meaning specified in Section 5.01(c).
Event of Default:
The term "Event of Default" shall mean
any event specified in Section 8.01, continued for
the period of time,if any, and after the giving of
the notice, if any, therein designated.
Fixed Rate Note:
The term "Fixed Rate Note" shall mean a
Note which bears interest at a fixed rate
specified in the applicable Company Order.
Floating Rate Note:
The term "Floating Rate Note"
shall mean a Commercial Paper Rate Note, a LIBOR Note
or a Treasury Rate Note.
Global Note:
The term "Global Note" shall mean a
single Note that pursuant to Section 2.05 is issued
to evidence Notes having identical terms and
provisions, which is delivered to the Depositary or
pursuant to instructions of the Depositary and
which shall be registered in the name of the
Depositary or its nominee.
H.15(519):
The term "H.15(519)" shall mean the
publication "Statistical Release H.15(519), Selected
Interest Rates" or any successor publication
published by the Board of Governors of
the Federal Reserve System.
Indebtedness:
The term "Indebtedness" shall mean
with respect to any Person (i) any liability of
such Person (a) for borrowed money, or (b)
evidenced by a bond, note, debenture or similar
instrument (including purchase money obligations
but excluding trade payables), or (c) for the
payment of money relating to a lease that is
required to be classified as a capitalized lease
obligation in accordance with generally
accepted accounting principles; (ii) any liability of
others described in the preceding clause (i) that
such Person has guaranteed, that is recourse to
such Person or that is otherwise its legal
liability; and (iii) any amendment, supplement,
modification, deferral, renewal, extension or
refunding of any liability of the types referred to
in clauses (i) and (ii) above.
Indenture:
The term "Indenture" shall mean this
instrument as originally executed or, if amended or
supplemented as herein provided, as so amended or
supplemented.
Index Maturity:
The term "Index Maturity" of a
particular Floating Rate Note shall mean the period to
Maturity of the instrument or obligation from which
the Base Rate of such Floating Rate Note is
calculated, as specified in the applicable
Company Order.
Initial Interest Rate:
The term "Initial Interest Rate" for
a particular Floating Rate Note shall mean the
interest rate specified in the applicable Company
Order as in effect from the Original
Issue Date of such Floating Rate Note to its First
Interest Reset Date.
Interest Accrual Period:
The term "Interest Accrual Period" for
a particular Floating Rate Note shall mean the period
from the date of issue of such Floating Rate Note,
or from an Interest Reset Date, if any, to its next
subsequent Interest Reset Date.
Interest Determination Date:
The term "Interest Determination Date"
shall mean each Commercial Paper Rate Interest
Determination Date, LIBOR Interest Determination
Date and Treasury Rate Interest Determination
Date.
Interest Factor:
The term "Interest Factor" for a Floating
Rate Note for each day in an Interest Accrual
Period for such Floating Rate Note shall be
computed by dividing the Interest Rate applicable
to such day by 360 in the case of Commercial
paper Rate Notes and LIBOR Notes or by the actual
number of days in the year in the case of Treasury
Rate Notes.
Interest Payment Date:
(a) The term "Interest Payment Date"
shall mean with respect to a Floating Rate Note
which has an Interest Reset Date which is (1)
daily, weekly or monthly: the third Wednesday of
each month or the third Wednesday of March,
June, September and December of each year, as
specified in the applicable Company Order, (2)
quarterly: the third Wednesday of March, June,
September and December of each year, (3)
semiannually: the third Wednesday of the two months
of each year specified in the applicable Company
Order; (4) annually: the third Wednesday of the
month specified in the applicable Company Order and,
in each case, at Maturity. If any Interest Payment
Date (other than at Maturity) for any Floating Rate
Note would fall on a day that is not a Business Day
with respect to such Floating Rate Note,such Interest
Payment Date will be the following day that is a
Business Day with respect to such Floating Rate
Note, except that, in the case of a LIBOR Note, if
such Business Day is in the next succeeding calendar
month, such Interest Payment Date shall be the
immediately preceding day that is a Business Day with
respect to such LIBOR Note;
(b) the term "Interest Payment Date" shall mean
with respect to a Fixed Rate Note each April 1 and
October 1, or such other dates which are
specified in the applicable Company Order during
the period such Fixed Rate Note is outstanding, the
date of Maturity of such Fixed Rate Note, and with
respect to defaulted interest on such Fixed Rate
Note, the date established by the Company for
the payment of such defaulted interest.
Interest Payment Period:
The term "Interest Payment Period" shall
mean for:
(a) each Floating Rate Note on which
interest is reset monthly, quarterly, semiannually or
annually, and each Fixed Rate Note, the period:
(1) beginning on and including the
Original Issue Date of such Note or the most
recent Interest Payment Date on which interest was
paid on such Note, and
(2) ending on but not including the
next Interest Payment Date or, for the last
Interest Payment Period, Maturity, of such Note;
(b) each Floating Rate Note on which
interest is reset daily or weekly, the period:
(1) beginning on and including the
Original Issue Date of such Floating Rate Note, or
beginning on but excluding the most recent Record Date
through which interest was paid on such Note, and
(2) ending on and including the next
Record Date or, for the last Interest Payment
Period, ending on but excluding Maturity, of such
Note; provided, however, that the first Interest
Payment Period for any Note which has its Original
Issue date after a Record Date and prior to its next
Interest Payment Date, shall begin on and include
such Original Issue Date and (i) end on and
include the next Record Date for Floating Rate
Notes on which interest is reset daily or weekly,
and (ii) end on but not include the second Interest
Payment Date after the Original Issue Date for all
other Notes.
Interest Rate:
(a) The term "Interest Rate" for
a particular Floating Rate Note shall mean (1) from
the date of issue of such Floating Rate Note to
the first Interest Reset Date for such Floating Rate
Note, the Initial Interest Rate, and (2) each
Interest Accrual Period commencing on or after
such First Interest Reset Date, the
Base Rate with reference to the Index Maturityfor
such Floating Rate Note as specified in the applicable
Company Order plus or minus the Spread, if
any, multiplied by the Spread Multiplier, if any;
provided, in the event no Spread or Spread
Multiplier is provided in such Company Order,
the Spread and Spread Multiplier shall be zero and
one, respectively; provided, further, in
no event shall the Interest Rate be greater than
the Maximum Interest Rate, if any, or less than
the Minimum Interest Rate, if any; and provided,
further, the Interest Rate in effect for the ten
days immediately prior to Maturity will be the
Interest Rate in effect on the tenth day
preceding such Maturity and provided, further, the
Interest Rate will in no event be higher than the
maximum rate permitted by applicable state law, as
the same may be modified by United States laws
of general application.
(b) The term "Interest Rate" for
a particular fixed Rate Note shall mean the interest
rate specified in the applicable Company Order.
Interest Reset Date:
The term "Interest Reset Date" shall mean,
in the case of a Floating Rate Note specified in
the applicable Company Order as being reset (a)
daily: each Business Day; (b) weekly: the Wednesday
of each week (with the exception of weekly reset
Treasury Rate Notes which reset the Tuesday of
each week, except as specified below); (c) monthly:
the third Wednesday of each month; (d) quarterly:
the third Wednesday of March, June, September and
December; (e) semiannually: the third Wednesday
of the two months specified in the applicable
Company Order; and (f) annually: the third Wednesday
of the month specified in the applicable Company
Order. If any Interest Reset Date for a Floating
Rate Note would otherwise be a day which is not a
Business Day, such Interest Reset Date shall be
postponed to the next succeeding day that is a
Business Day, except that in the case of a LIBOR
Note, if such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be
the next preceding Business Day. If, in the case
of a Treasury Rate Note, an Interest Reset Date
shall fall on a day on which the Treasury auctions
Treasury Bills, then such Interest Reset Date shall
instead be the first Business Day following such
auction.
LIBOR:
The term "LIBOR" for a particular
Floating Rate Note, unless otherwise indicated in
the applicable Company Order, shall mean, with
respect to any LIBOR Interest Determination Date, the
rate determined on the basis of the offered rates
for deposits (in United States dollars and in a
principal amount equal to an amount of not less than
$1,000,000 that is representative for a single
transaction in such market at such time for the
period of the Index Maturity specified in the
applicable Company Order),commencing on the second
London Banking Day immediately following such
LIBOR Interest Determination Date, which appears as of
11:00 A.M., London time, on the Reuters Screen LIBO Page
on the Reuters Monitor Rates Service on the
LIBOR Interest Determination Date. If at least
two such offered rates appear on the Reuters Screen
LIBO Page, LIBOR for such LIBOR Interest
Determination Date will be the arithmetic mean
(rounded, if necessary, to the nearest one hundred-
thousandth of a percent) of such offered rates as
determined by the Calculation Agent. If fewer than
two such offered rates appear, the Calculation
Agent shall request the principal London office of four major
banks in the London interbank market selected by the
Calculation Agent to provide the Calculation Agent
with a quotation of their offered rates for
deposits (in United States dollars for the period of
the applicable Index Maturity and in a principal
amount equal to an amount of not less than $1,000,000
that is representative for a single transaction
in such market at such time) at approximately
11:00 A.M., London time, on such
LIBOR Interest Determination Date commencing on the
second London Banking Day immediately
following such LIBOR Interest Determination Date.
If at least two such quotations are provided,
LIBOR for such LIBOR Interest Determination Date
will equal the arithmetic mean of such quotations.
If fewer than two quotations are provided,
LIBOR for such LIBOR Interest Determination
Date will equal the arithmetic mean of the rates
quoted by three major banks in The City of New
York, as selected by the Calculation Agent,
at approximately 11:00 A.M., New York City time, on
such LIBOR Interest Determination Date for loans to
leading European banks (in United States dollars
for the period of the applicable Index Maturity
and in a principal amount equal to an amount of not
less than $1,000,000 that is representative for a
single transaction in such market at such time)
commencing on the second London Banking Day
following such LIBOR Interest Determination Date; provided,
however, that if the banks selected as aforesaid by
the Calculation Agent are not quoting as set forth
above, LIBOR will be LIBOR in effect on
such LIBOR Interest Determination Date.
LIBOR Interest Determination Date:
The term "LIBOR Interest Determination
Date" for a LIBOR Note shall mean the Second
London Banking Day preceding its Interest Reset Date.
LIBOR Notes:
The term "LIBOR Notes" shall mean
Floating Rate Notes which are specified in the
applicable Company Order as having interest computed
with reference to LIBOR.
London Banking Day:
The term "London Banking Day" shall mean
any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
Maturity:
The term "Maturity", when used with respect
to any Note, shall mean the date on which the
principal of such Note becomes due and payable
as therein or herein provided, whether at the
stated maturity thereof or by declaration of
acceleration, call for redemption or otherwise.
Maximum Interest Rate:
The term "Maximum Interest Rate" shall
mean the maximum rate of interest, if any, which
may accrue to any Floating Rate Note during any
Interest Accrual Period as specified in the
applicable Company Order.
Minimum Interest Rate:
The term "Minimum Interest Rate" shall
mean the minimum rate of interest, if any, which may
be applicable to any Floating Rate Note during
any Interest Accrual Period as specified in the
applicable Company Order.
Money Market Yield:
The term "Money Market Yield" shall be
the yield (expressed as a percentage) calculated in
accordance with the following formula:
Money Market Yield = D x 360
___________ x 100
360-(D x M)
where "D" refers to the applicable per annum
rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and "M"
refers to the actual number of days in the
Interest Accrual Period for which interest is being
calculated.
Mortgage Bonds:
The term "Mortgage Bonds" shall mean
the Company's mortgage bonds issued under the
Mortgage.
Mortgage Indenture:
The term "Mortgage Indenture" shall
mean the General Mortgage Indenture and Deed of
Trust dated as of December 1, 1986, from the
Company to United Missouri Bank of Kansas City, N.A.,
as trustee, as from time to time supplemented and
amended.
Mortgage Trustee:
The term "Mortgage Trustee" shall mean
the trustee at the time serving as such under the
Mortgage Indenture.
Net Tangible Assets:
The term "Net Tangible Assets" shall mean, at any
time, the total assets less any amounts attributed to goodwill of
the Company and its consolidated subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting
principles, as of the end of the most recently completed fiscal
quarter of the Company for which financial information is then available.
Note or Notes; Outstanding:
The terms "Note or "Notes" shall mean any Fixed
Rate or Floating Rate Note or Notes, as the case may
be, authenticated and delivered under this
Indenture, including any GlobalNote. The term
"outstanding," when used with reference to otes,
shall, subject to Section 10.04, mean, as of any
particular time, all Notes authenticated and
delivered by the Trustee under this Indenture, except
(a) Notes theretofore cancelled by the Company or
delivered to the Company for cancellation;
(b) Notes, or portions thereof, for
the payment or redemption of which moneys in the
necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than
the Company) or shall have been set aside and segregated
in trust by the Company (if the Company shall act as its own
paying agent), provided that if such Notes are to be
redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in
Article Three, or provisions satisfactory to the
Trustee shall have been made for giving such
notice;
(c) Notes, or portions thereof, which shall have
been Discharged; and
(d) Notes in lieu of or in substitution for which
other Notes shall have been authenticated and
delivered, or which have been paid, pursuant to
Section 2.07.
Noteholder:
The terms "Noteholder" or "holder of Notes" shall
mean any Person in whose name at the time a particular Note is
registered on the books of the Company kept for that purpose
in accordance with the terms hereof.
Officers' Certificate:
The term "Officers' Certificate" when used
with respect to the Company, shall mean a certificate signed
by the Chairman of the Board, the President or any Vice President and
by the Secretary or an Assistant Secretary of the Company.
Each such certificate shall include the statements provided for in
Section 15.05 if and to the extent required by such Section.
Opinion of Counsel:
The term "Opinion of Counsel" shall mean
an opinion in writing signed by legal counsel, who
may be an employee of the Company, or such other
counsel who is satisfactory to the Trustee. Each
such opinion shall include the statements provided
for in Section 15.05 if and to the extent required by
such Section. In the event that the Indenture
requires the delivery of an Opinion of Counsel
to the Trustee,the text and substance of which has
been previously delivered to the Trustee, the Company may
satisfy such requirement by the delivery by the
legal counsel that delivered such previous Opinion of
Counsel of a letter to the Trustee to the effect that
the Trustee may rely on such previous Opinion of Counsel
as if such Opinion of Counsel was dated and
delivered the date delivery of such Opinion of Counsel is required.
Original Issue Date:
The term "Original Issue Date" shall mean for
a particular Note, or portions thereof, the date upon which
it, or such portion, was issued by the Company pursuant
to this Indenture and authenticated by the Trustee
(other than in connection with a transfer, exchange
or substitution).
Permitted Encumbrances:
The term "Permitted Encumbrances" shall mean:
(a) (i) any mortgage, pledge or other lien
or encumbrance on any property hereafter acquired or
constructed by the Company or a Subsidiary, or on
which property so constructed is located, and
created prior to, contemporaneously with or within
360 days after, such acquisition or construction
or the commencement of commercial operation of
such property to secure or provide or the payment
of any part of the purchase or
construction price of such property, or (ii) any
mortgage, pledge, or other lien or encumbrance
upon property existing at the time of
acquisition thereof by the Company or any
Subsidiary, whether or not assumed by the
Company or such Subsidiary, or
(iii) any mortgage, pledge, or other lien
or encumbrance existing on the property, shares
of stock or indebtedness of a corporation at the
time such corporation shall become a Subsidiary,
or any pledge of the shares of stock of such
corporation prior to, contemporaneously with or within
360 days after such corporation shall
become a Subsidiary to secure or provide for the
payment of any part of the purchase price of
such stock, or (iv) any conditional sales
agreement or other title retention agreement with
respect to any property hereafter acquired
or constructed; provided that, clauses (i)
through (iv) shall not apply to any property
acquired by the Company from any Subsidiary or by
any Subsidiary from the Company or another
Subsidiary,and provided further, that in the case
of clauses (i)through (iv), the lien of any such
mortgage, pledge or other lien does not spread to
property owned by the Company or any Subsidiary
prior to such acquisition or construction
or to other property thereafter acquired or
constructed other than additions to such acquired or constructed
property and other than property on which property so
constructed is located; and provided, further, that if a firm
commitment from a bank, insurance company
or other lender or investor (not including the
company or other lender or investor (not including
the Company, a Subsidiary or an Affiliate of
the Company) for the financing of the
acquisition or construction of property
is made prior to, contemporaneously with or within the 360-
day period hereinabove referred to, the
applicable mortgage, pledge, lien or
encumbrance shall be deemed to be permitted
by this subsection (a) whether or not created or
assumed within such period;
(b) any mortgage, pledge or other lien or
encumbrance created for the sole purpose of
extending, renewing or refunding any mortgage,
pledge, lien or encumbrance permitted by
subsection (a) of this definition;
provided, however, that the principal
amount of indebtedness secured thereby shall not
exceed the principal amount of indebtedness so
secured at the time of such extension, renewal
or refunding and that such extension, renewal
or refunding mortgage, pledge, Lien or
encumbrance shall be limited to all or any part
of the same property that secured the mortgage,
pledge or other lien or encumbrance
extended, renewed or refunded;
(c) liens for taxes or assessments or
governmentalcharges or levies not then due and
delinquent or the validity of which is being
contested in good faith,
and against which an adequate reserve has
been established;liens on any property created in
connection with pledges or deposits to secure public or
statutory obligations or to secure performance in
connection with bids or contracts; materialmen's, mechanics',
carrier's, workmen's, repairmen's or other like liens; or
liens on any property created in connection with deposits to
obtain the release of such liens; liens on any
property created connection with deposits to secure surety, stay,
appeal or customs bonds; liens created by or
resulting from any litigation or legal proceeding which is
currently being contested in good faith
by appropriate proceedings; leases and liens, rights or
reverter and other possessory rights of the lessor
thereunder; zoning restrictions, easements, rights-
of-way or other restrictions on the use of real property
or minor irregularities in the title thereto; and
any other liens and encumbrances similar to
those described in this subsection (c), the
existence of which does not, in
the opinion of the Company, materially impair the
use by the Company or a Subsidiary of the affected property
in the operation of the business of the Company or a
Subsidiary, or the value of such property for the
purposes of such business;
(d) any mortgage, pledge or other
lien or encumbrance created after the date of this
Indenture on any property leased to or purchased by
the Company or a Subsidiary after that date and securing,directly
or indirectly, obligations issued by a State, a
territory or a possession of the United States, or any political
subdivision of any of the foregoing, or the District
of Columbia, to finance the cost of acquisition or
cost of construction of such property; provided
that the interest paid on such obligations is entitled to be excluded
from gross income of the recipient
pursuant to Section 103(a)(1) of the Internal
Revenue Code of 1986, as amended (or any
successor to such provision), as in effect at the
time of the issuance of such obligations;
(e) any mortgage, pledge or other
lien or
encumbrance on any property now owned or
hereafter acquired or constructed by the Company
or a Subsidiary, or on
which property so owned, acquired or
constructed is located, to secure or provide
for the payment of any part of the construction
price or cost of improvements of
such property, and created prior to,
contemporaneously with
or within 360 days after, such construction or
improvement;
provided that if a firm commitment from a bank,
insurance company or other lender or investor
(not including
the Company, a Subsidiary or an Affiliate of the
Company) for the financing of the acquisition or
construction of
property is made prior to, contemporaneously with
or within the 360-day period hereinabove referred
to, the
applicable mortgage, pledge, lien or encumbrance shall
be deemed to be permitted by this subsection (e)
whether or not
created or assumed within such period; and
(f) any mortgage, pledge or other
lien
or encumbrance not otherwise permitted under
this Section; provided that the aggregate amount
of indebtedness s ecured by all such mortgages,
pledges, liens or encumbrances does not exceed
the greater of 15% of Net Tangible Assets.
Person:
The term "Person" shall mean any individual,
corporation, partnership, joint venture,
association, joint-
stock company, trust, unincorporated organization
or
government or any agency or political subdivision
thereof.
Principal Executive Offices of the Company:
The term "principal executive offices
of the
Company" shall mean the place where the main corporate
offices of the Company are located, currently 1201
Walnut, Kansas City, Missouri 64106, or such other
place where the main corporate offices of the
Company are located as designated in an Officer's
Certificate delivered to the Trustee.
Principal Facility:
The term "Principal Facility" shall mean
the real
property, fixtures, machinery and equipment relating
to any
facility owned by the Company or any Subsidiary
(which may
include a network of electric or gas
distribution facilities or a network of electric or
gas transmission facilities), except any facility
that, in the opinion of the Board of Directors, is not
of material importance to the business conducted
by the Company and its Subsidiaries, taken as a whole.
Record Date:
The term "Record Date" shall mean for
the Interest Payment Date for the payment of
interest for
an Interest Payment Period for a particular Note
(a) the
day which is fifteen calendar days prior to such
Interest Payment Date, whether or not such day is a
Business Day, (b) the date of Maturity of such Note,
unless such date of Maturity for a Fixed Rate Note is
an April 1 or an October 1, in which event the Record
Date will be as provided in clause (a), and (c) a
date which is not less than five Business Days
preceding the Interest Payment Date of defaulted
interest on such Note established by notice given by
first-class mail by or on behalf of the Company
to the holder of such Note not less than fifteen
days prior to such Interest Payment Date.
Redemption Date:
The term "Redemption Date" for a Note
shall mean
the date on or after which such Note is redeemable
at the option of the Company.
Regulated Subsidiary:
The term "Regulated Subsidiary" shall mean
any Subsidiary which owns or operates facilities
used for the
generation, transmission or distribution of
electric energy
and is subject to the jurisdiction of any
governmental authority of the United States or
any state or political subdivision thereof, as to
any of its: rates; services; accounts; issuances of
securities; affiliate transactions; or
construction, acquisition or sale of
any such facilities, except that any "exempt
wholesale generator", as defined in 15 USC
79z-5a(a)(1), "qualifying facility", as defined
in 18 CFR 29z,101(b)(1), "foreign utility
company", as defined in 15 USC 79z-5b(a)(3)
and "power marketer", as defined in Northwest Power
Marketing Company, L.L.C., 75
FERC Section 61,281, shall not be a Regulated
Subsidiary.
Responsible Officer:
The term "responsible officer" or
"responsible officers" when used with respect to the
Trustee shall
mean one or more of the following: the chairman
of the board of directors, the vice chairman of
the board of directors, the chairman of the
executive committee, the president, any vice
president, the cashier, the secretary, the
treasurer, any trust officer, any assistant trust
officer, any second or assistant vice president,
any assistant cashier, any assistant
secretary, any
assistant treasurer, or any other officer or assistant
officer of the Trustee customarily performing
functions similar to those performed by the
persons who at the time shall be such officers,
respectively, or to whom any corporate trust
matter is referred because of his or her knowledge of
and familiarity with the particular subject.
Spread:
The term "Spread" applicable to
a particular Floating Rate Note shall mean the
number of Basis Points above or below the Base Rate
for such Floating Rate Note as specified in the
applicable Company Order.
Spread Multiplier:
The term "Spread Multiplier"
applicable to a
particular Floating Rate Note shall mean the
percentage of the Base Rate applicable to the
Interest Rate for such Floating Rate Note as
specified in the applicable Company Order.
Subsidiary:
The term "Subsidiary" shall mean
any corporation of which at least a majority of
the outstanding stock having by the terms thereof
ordinary voting power to elect a majority of the
directors of such corporation, irrespective of
whether or not at the time stock of any
class or classes of such corporation shall have or
might have votig power by reason of the happening
of any contingency, is at the time, directly or
indirectly, owned or controlled by the Company or
by one or more Subsidiaries thereof,or by the
Company and one or more Subsidiaries.
Treasury:
The term "Treasury" shall mean the
United States
Department of Treasury.
Treasury Bills:
The term "Treasury Bills" shall
mean direct
obligations of the United States.
Treasury Rate:
The term "Treasury Rate" for a
particular Floating Rate Note, unless otherwise
indicated in the Applicable Company Order, shall
mean with respect to any Treasury Rate Interest
Determination Date, the rate applicable to the
most recent auction of Treasury Bills having the Index
Maturity specified in the applicable Company Order,
as such rate is published in H.15(519) under the
heading "Treasury bills-auction average (investment)"
or, if not so published by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such
Treasury Rate Interest Determination Date, the
auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis)
as otherwise announced by the Treasury. In the
event that the results of the
auction of Treasury Bills having the
specified Index
Maturity are not reported as provided by 3:00 P.M.,
New York City time, on such Calculation Date, or if
no such auction is held in a particular week, then
the Treasury Rate shall be
calculated by the Calculation Agent and shall be
a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis)
of the arithmetic mean of the secondary market
bid rates, as of approximately 3:30 P.M., New York
City time, on such Treasury Rate Interest
Determination Date, of three leading primary
United States government
securities dealers selected by the
Calculation Agent, for the issue of Treasury
Bills with a remaining maturity closest to the
applicable Index Maturity; provided, however, that
if the dealers selected as aforesaid by the
Calculation Agent are not quoting as set forth
above, the Treasury Rate will be the Treasury Rate
in effect on such Treasury Rate Interest Determination
Datte.
Treasury Rate Interest Determination Date:
The term "Treasury Rate Interest
Determination Date" for a Treasury Rate Note shall
mean the day of the week in which its Interest
Reset Date falls on which Treasury Bills normally
would be auctioned, provided, however, that if as
a result of a legal holiday an auction is held on the
Friday of the week preceding such Interest
Reset Date, the related Treasury Rate Interest
Determination Date shall be the preceding Friday.
Treasury Rate Notes:
The term "Treasury Rate Notes" shall
mean Floating Rate Notes which are specified in the
applicable Company Order as having interest
computed with reference to the Treasury Rate.
Trustee:
The term "Trustee" shall mean The Bank of
New York
and, subject to Article Nine, shall also
include any successor Trustee.
U.S. Government Obligations:
The term "U.S. Government Obligations"
shall mean
(a) direct non-callable obligations of, or
non-
callable obligations guaranteed as to timely
payment of principal and interest by, the United
States of America or an agency thereof for the
payment of which obligations or guarantee the full
faith and credit of the United States is pledged or
(b) certificates or receipts representing direct
ownership interests in obligations or specified
portions (such as principal or interest) of
obligations
described in (a) above, which obligations are
held by a
custodian in safekeeping on behalf of such
certificates or receipts.
Wholly-Owned Subsidiary:
The term "Wholly-Owned Subsidiary" shall mean
a Subsidiary of which all of the outstanding
voting
stock (other than directors' qualifying shares) is
at the time, directly or indirectly, owned by the
Company, or by one or more Wholly-Owned
Subsidiaries of the Company or by the Company and
one or more Wholly-Owned Subsidiaries.
ARTICLE TWO.
Form, Issue, Execution, Registration And Exchange
Of Notes.
Section 2.01. Form Generally.
(a) The Notes shall be titled "Medium-
Term Notes", and, if such Notes shall be in the form
of (a) a Fixed Rate Note which is a Global Note,
shall be in substantially the form set forth in
Exhibit A, (b) a Fixed Rate Note which is not a
Global Note, shall be in substantially the form
set forth in Exhibit B, (c) a Floating Rate Note
which is a Global Note, shall be in substantially the
form set forth in Exhibit C, and (d) a Floating
Rate Note which is not a Global Note, shall
be in substantially the form set forth in Exhibit D,
to this Indenture, or in any such case such
other form as shall be established by a Board
Resolution, or an Officers' Certificate pursuant to
a Board Resolution, or in one or more
indentures supplemental hereto, in
each case with such appropriate insertions, omissions,
substitutions and other variations as are
required or
permitted by this Indenture, and may have such
letters, numbers or other marks of identification
and such egends or endorsements placed thereon
as may be required to comply with the rules of any
securities exchange or with applicable law or as may,
consistently herewith, be determined by
the
officers executing such Notes, as evidenced by
their execution of such Notes. If the form of Notes
is established by a Board Resolution, or an Officers'
Certificate pursuant to a Board Resolution, a copy of
such Board Resolution or Officer's Certificate
shall be delivered to the Trustee at or prior to
the delivery to the Trustee of the Company
Order contemplated by Section 2.05 for the
authentication
and delivery of such Notes. (b) The definitive Notes
shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other
manner, all as determined by the officers executing
such Notes, as evidenced by their execution of such
Notes.
Section 2.02. Form of Trustee's Certificate
of Authentication. The Trustee's certificate of
authenticationon all Notes shall be in substantially
the following form: Trustee's Certificate of
Authentication
This is one of the Notes
designated
thereinreferred to in the within-mentioned Indenture.
The Bank of New
York,
as Trustee
By_____________________
Authorized Signatory
Section 2.03. Amount Limited. The
aggregate
principal amount of Notes which may be
authenticated and delivered under this Indenture is
limited to $300,000,000, or such lesser amount as
may from time to time be established by an Officers'
Certificate delivered to the Trustee.
Section 2.04. Denominations, Dates,
Interest
Payment and Record Dates.
(a) The Notes shall be issuable in
registered form
without coupons in denominations of $1,000
and
integral multiples of $1,000 in excess thereof.
(b) Each Note shall be dated and issued as
of the
date of its authentication by the Trustee, and
shall bear an
Original Issue Date or, as provided in Section
2.12(e), two or more Original Issue Dates;
each Note issued upon transfer, exchange or
substitution of a Note shall bear the Original
Issue Date or Dates of such transferred, exchanged
or substituted Note, subject to Section 2.12(e).
(c) Each Note shall bear interest, if any,
at its
Interest Rate during each Interest Payment Period
for such
Note, from the later of (1) its Original Issue
Date (or, if
pursuant to Section2.12, a Global Note has two or
more Original
Issue Dates, interest shall, beginning on each such
Original Issue Date, begin to accrue for that
part of the principal amount of such Global Note to
which that Original Issue Date is applicable), or (2)
the most recent date to which any interest has been
paid or duly provided for until the principal of
such Note is paid or made available for payment,
and Accrued Interest on each Note shall be payable
for each Interest Payment Period on the
Interest Payment Date immediately subsequent to the
Record Date for the payment of
interest for such Interest Payment Period.
(d) All percentages resulting from
any calculation of the Interest Rate for a Floating
Rate Note shall be rounded, if necessary, to
the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a
percentage point rounded upward (e.g., 9.876545% (or
.09876545) being rounded to 9.87655% (or
.0987655)), and all dollar amounts used in or
resulting
from such calculation shall be rounded to the
nearest cent (with one-half cent being rounded
upward).
(e) Each Note shall mature on a
date specified in such Note not less than nine
months nor more than 30 years after its Original
Issue Date, and the principal amount of each
outstanding Note shall be payable on the
maturity date specified therein.
(f) The Person in whose name any
Note is
registered at the close of business on any Record Date
with respect to an Interest Payment Date for such
Note shall be entitled to receive the Accrued
Interest payable on such Note on such Interest
Payment Date notwithstanding the cancellation of
such Note upon any registration of transfer, exchange
or substitution of such Note subsequent to such
Record Date and prior to such Interest Payment
Date.
(g) The Company shall cause the
Calculation
Agent to calculate each Interest Rate applicable
to each Floating Rate Note in accordance with
this Indenture, and the Company shall, or shall
cause the Calculation Agent to, notify the Trustee of
each determination of such Interest Rate promptly
after such determination.
(h) On the fifth Business
Day immediately preceding each Interest Payment Date,
the Trustee shall furnish to the Company a notice
setting forth the total amount of the Accrued
Interest payments to be made on such Interest Payment
Date and to the Depositary, a notice setting forth
the total amount of Accrued Interest payments to be
made on Global Notes on such Interest Payment Date.
The Trustee will provide monthly to the Company a
list of the principal of and any premium and
Accrued Interest
to be paid on Notes in the next succeeding month
and tot the Depositary a list of the principal of
and any premium and Accrued Interest to be paid on
Global Notes in the such succeeding month. Promptly
after the first Business Day of each month, the
Trustee shall furnish to the Company a written
notice setting forth the aggregate principal amount
of the Global Notes. The Company will provide to the
Trustee not later than the payment date sufficient
moneys to pay in full all principal of and any
premium and Accrued Interest payments due on such
payment date. The Trustee shall assume
responsibility for withholding taxes on interest paid
as required by law. (i) Upon the request of any
Noteholder of a Floating Rate Note, the Trustee
shall provide to such Noteholder the Interest Rate
then in effect and, if determined, the
Interest Rate that will become effective on the next
Interest Reset Date, with respect to such Floating
Rate Note.
Section 2.05. Execution,
Authentication, Delivery and Dating.
(a) The Notes shall be executed on behalf
of the
Company by the Chairman of the Board, the President or
any Vice President under its corporate seal (which may
be in the form of a facsimile thereof and may be
printed, engraved or otherwise reproduced thereon)
attested by the Secretaryor
an Assistant Secretary. The signature of any of such
officers on
any Notes may be manual or facsimile.
(b) Notes bearing the manual or
facsimile signatures of individuals who were at any
time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals
or any of them have ceased to hold such offices
prior to the authentication and delivery of such
Notes or did not hold such offices at the date of such
Notes.
(c) At any time and from time to time
after the
execution and delivery of this Indenture, the
Company may
deliver Notes executed by the Company to the
Trustee for
authentication, together with one or more Company
Orders for the authentication and delivery of
such Notes, and the Trustee in accordance with
any such Company Order shall authenticate such
Notes and make them available for delivery. Prior to
authenticating such Notes, and in accepting the
additional responsibilities under this Indenture in
relation to such Notes, the Trustee shall be entitled
to receive the following only at or before the
first issuance of Notes, and (subject to Section
9.01) shall be fully protected in relying upon:
(1) a Board Resolution authorizing
this Indenture and the Notes, and if applicable, an
appropriate record of any action taken pursuant
to such Board Resolution, certified by the
Secretary or an Assistant Secretary of the
Company;
(2) an Officers' Certificate designating
one or
more Authorized Agents and officers of the
Company
who are authorized to give Company Orders for
the issuance of, and specifying terms of,
Notes and, if
appropriate, setting forth the form of Notes in
accordance with Section 2.01;
(3) an Opinion of Counsel stating,
(A) if the form of Notes has been
established by or pursuant to a Board
Resolution or, an Officers' Certificate
pursuant to a Board Resolution, or in a
supplemental indenture as permitted by
Section 2.01, that such form has been
established in conformity with this
Indenture;
(B) that the Indenture has been duly
authorized, executed and delivered by the
Company and constitutes a valid and legally
binding agreement of the Company, enforceable
in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and
other laws of general applicability relating
to or affecting the enforcement of creditors'
rights and to general equity principles;
(C) that the Indenture is qualified
under the TIA;
(D) that any supplemental indenture
referred to in (A) above has been duly
authorized, executed and delivered by the
Company and constitutes a legal, valid and
legally binding agreement of the Company,
enforceable in accordance with its terms,
subject to bankruptcy, insolvency,
reorganization and other laws of general
applicability relating to or affecting the
enforcement of creditors' rights and to
general equity principles;
(E) that the Notes, when
authenticated and delivered by the Trustee
and issued by the Company in the manner and
subject to any conditions specified in such
Opinion of Counsel, will constitute legal,
valid and legally binding obligations of
the Company, enforceable in accordance with
their terms, subject to bankruptcy,
insolvency, reorganization and other laws
of general applicability relating to or
affecting the enforcement of creditors'
rights and to general equity principles;
(F) that all laws and requirements in
respect of the execution, delivery and sale
by the Company of the Notes have been
complied with;
(G) that the Company is not in
default in any of its obligations under
this Indenture, and that the issuance of
the Notes will not result in any such
default; and
(H) such other matters as the Trustee
may reasonably request.
(d) The Trustee shall have the right to decline to
authenticate and deliver any Note:
(1) if the issuance of such Note pursuant to
this
Indenture will affect the Trustee's own rights,
duties
or immunities under the Notes and this Indenture or
otherwise in a manner which is not reasonably
acceptable to the Trustee;
(2) if the Trustee, being advised by counsel,
determines that such action may not lawfully be
taken;
or
(3) if the Trustee in good faith by its Board of
Directors, executive committee or a trust committee of
directors and/or responsible officers in good faith
determines that such action would expose the Trustee
to personal liability to holders of any outstanding
Notes.
(e) No Note shall be entitled to any benefit
under
this Indenture or be valid or obligatory for
any purpose unless there appears on such Note
a certificate of authentication
substantially in the form provided for
herein executed by the Trustee by manual signature,
and such certificate upon
any Notes hall be conclusive evidence, and the
only evidence, that such Note has been duly
authenticated and delivered hereunder and is
entitled to the benefits of this Indenture,
provided, however, that if any Note shall
have been authenticated and delivered
hereunder but never issued and sold by the
Company, and the Company shall deliver such
Note to the Trustee for cancellation as
provided in Section 2.09, for all purposes of
this Indenture such Note shall be deemed never
to have been authenticated
and delivered hereunder and shall never be
entitled to the benefits of this Indenture.
Section 2.06. Exchange and Registration of
Transfer of Notes.
(a) Subject to Section 2.12, Notes may be
exchanged for one or more new Notes, of any
authorized denominations and of a like aggregate
principal amount and stated maturity and having the same
terms and Original Issue Date or Dates. Notes to be
exchanged shall be surrendered at any of the offices or
agencies to be maintained by the Company for such
purpose as provided
in Section 6.02, and the Company shall execute and register
and the Trustee shall authenticate and deliver in
exchange therefor the Note or Notes which the Noteholder
making the exchange shall be entitled to receive.
(b) The Trustee on behalf of the Company
shall
keep, at one of said offices or agencies, a
register in which, subject to such reasonable
regulations as it or the Company may prescribe, the
Trustee shall register or cause to be registered Notes and
shall register or cause to be registered the transfer of
Notes as in this Article Two provided. Such register
shall be in written form or in any other form capable
of being converted into written form within a
reasonable time. At all reasonable times such register
shall be open for inspection by the Trustee. Upon due
presentment for registration of transfer of any Note at any
such office or agency, the Company shall execute and
register or
cause to be registered and the Trustee shall authenticate
and make available for delivery, in the name of the
transferee or transferees, one or more new Notes, of any
authorized denominations and of a like aggregate principal
amount and
stated maturity and having the same terms and Original
Issue
Date or Dates.
(c) All Notes presented for registration of
transfer or for exchange, redemption or payment shall
(if so required by the Company) be duly endorsed by, or
be accompanied by a written instrument or instruments
of transfer in form satisfactory to the Company and the
Trustee duly executed by, the holder or the attorney of
such holder duly authorized in writing.
(d) No service charge shall be made for any
exchange or registration of transfer of Notes, but the
Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be
imposed in connection therewith.
(e) The Company shall not be required to
exchange or register a transfer of any Notes selected,
called or being called for redemption except, in the
case of any Note to be redeemed in part, the portion
thereof not to be so redeemed.
(f) If the principal amount and any
applicable premium or part, but not all of a Global Note is
paid, then upon surrender to the Trustee of such Global
Note,the
Company shall execute, and the Trustee shall
authenticate,and
make available for delivery, a Global Note in an
authorized denomination in aggregate principal amount equal
to, and having the
same terms and Original Issue Date or Dates as, the unpaid
portion of such Global Note.
Section 2.07. Mutilated, Destroyed, Lost or
Stolen
Notes.
(a) In case any temporary or definitive Note
shall
become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its
request the Trustee shall authenticate and deliver, a new
Note of like form and principal amount and having the
same termsand
Original Issue Date or Dates and bearing a number not
contemporaneously outstanding, in exchange and
substitution for the mutilated Note, or in lieu of and
in substitution for the Note so destroyed, lost or
stolen. In every case the applicant for a
substituted Note shall furnish to the Company,
the Trustee, any Authenticating
Agent or Note registrar such security or indemnity as may
be
required by them to save each of them harmless, and, in
every case of destruction, loss or theft of a Note,
the applicant shall also furnish to the Company and to the
Trustee evidence to their satisfaction of the destruction,
loss or theft of such Note and of the ownership thereof.
(b) The Trustee may authenticate any
such
substituted Note and deliver the same upon the written
request or authorization of any officer of the Company.
Upon the
issuance of any substituted Note, the Company may require
the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation
thereto and any other expenses connected therewith. In
case any Note which has matured or is about to mature shall
become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substituted Note,
pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated
Note) if the applicant for such payment shall furnish
to the Company, the Trustee, any
Authenticating Agent or Note registrar such security or
indemnity as may be required by them to save each of
them harmless and, in case of destruction, loss or
theft, evidence satisfactory to the Company and the
Trustee of the destruction, loss or theft of such Note and
of the ownership thereof.
(c) Every substituted Note issued pursuant to
this
Section 2.07 by virtue of the fact that any Note is
destroyed, lost or stolen shall constitute an
additional contractual obligation of the Company,
whether or not such destroyed, lost or stolen Note
shall be found at any time, and shall be entitled to
all the benefits of this Indenture equally and
proportionately
with any and all other Notes duly issued hereunder. All
Notes shall be held and owned upon the express condition
that, to
the extent permitted by law, the foregoing
provisions
are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes and shall
preclude any and all other rights or remedies
notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or
other securities without their surrender.
Section 2.08. Temporary Notes. Pending the
preparation of definitive Notes, the Company may
execute
and the Trustee shall authenticate and make available
for delivery, temporary Notes (printed,
lithographed or otherwise reproduced). Temporary
Notes shall be issuable in any authorized
denomination and substantially in the form of the
definitive Notes but with such omissions, insertions and
variations as may be appropriate
for temporary Notes, all as may be determined by the
Company. Every such temporary Note shall be authenticated
by the Trustee upon the same conditions and in
substantially the same manner, and with the same
effect, as the definitive Notes. Without unreasonable
delay the Company will execute and register and will deliver
to the Trustee definitive Notes and thereupon any or all
temporary Notes may be surrendered in exchange therefor, at
the Corporate Trust Office of the Trustee, and the Trustee
shall authenticate and deliver in exchange for
such temporary Notes an equal aggregate principal amount
of definitive Notes. Such exchange shall be made by the
Company at its own expense and without any charge therefor
to the oteholders. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes
authenticated and made available for delivery hereunder.
Section 2.09. Cancellation of Notes Paid,
etc.
All Notes surrendered for the purpose of payment,
redemption, exchange or registration of transfer
shallbe
surrendered to the Trustee for cancellation and promptly
cancelled by it and no Notes shall be issued in lieu
thereof except as expressly permitted by this Indenture.
All Notes so cancelled shall be retained by the Trustee.
If the Company shall acquire any of the Notes, however,
such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by
such Notes unless and until the same are cancelled by the
Trustee.
Section 2.10. Interest Rights Preserved.
Each
Note delivered under this Indenture upon transfer of
or in
exchange for or in lieu of any other Note shall carry all
the rights to unpaid Accrued Interest, and interest to
accrue, which were carried by such other Note, and each
such Note shall be so dated that neither gain nor loss
of interest shall result from such transfer, exchange or
substitution.
Section 2.11. Payment of Notes. The
principal of and any premium and Accrued Interest on all
Notes shall be payable as follows:
(a) On or before 10:00 a.m., New York City
time,
of the day on which payment of principal, Accrued Interest
and
premium is due on any Global Note pursuant to the
terms thereof,
the Company shall deliver to the Trustee immediately
available
funds sufficient to make such payment. On or before
10:30
a.m., New York City time or such other time as shall be
agreed upon between the Trustee and the Depositary, of the
day on which such payment is due, the Trustee shall
deposit with the Depositary such funds by wire transfer
into the account specified by the Depositary. As a
condition to the payment at the Maturity of any part of
the principal and applicable premium of any Global Note,
the Depositary shall surrender, or cause to be
surrendered, such Global Note to the Trustee, whereupon
a new Global Note shall be
issued to the Depositary pursuant to Section 3.03(d).
(b) With respect to any Note that is not a
Global
Note, principal, any premium and Accrued Interest due at the
Maturity of such Note shall be payable in
immediately available funds when due upon presentation and
surrender of such Note at the Corporate Trust Office of
the Trustee. Accrued Interest on any Note that is
not a Global Note (other than Accrued Interest payable
at the maturity date) shall be paid in a
clearinghouse
funds check mailed on the Interest Payment Date;
provided, however, that if any holder of Notes, the
aggregate
principal amount of which equals or exceeds
$10,000,000,
provides a written request to the Trustee on or before the
applicable Record Date for such Interest Payment Date,
Accrued Interest on such principal amount shall be paid
by wire transfer of immediately available funds to a
bank within the continental United States or by direct
deposit into the account of such holder if such account is
maintained with the Trustee.
Section 2.12. Notes Issuable in the Form of
a
Global Note.
(a) If the Company shall establish pursuant to
Section 2.05 that the Notes of a particular series are to
be issued in whole or in part in the form of one or
more Global Notes, then the Company shall execute and
the Trustee shall, in accordance with Section 2.05 and
the Company Order delivered to the Trustee thereunder,
authenticate and make available for delivery, such
Global Note or Notes, which (1) shall represent, shall be
denominated in an mount equal to the aggregate
principal amount
of, and shall have the same terms as, the outstanding
Notes
to be represented by such Global Note or Notes, (2)
shall be
registered in the name of the Depositary or its nominee,
(3) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction and (4) shall bear
a legend substantially to the following effect: "Unless
and until it
is exchanged in whole or in part for the individual Notes
represented hereby, this Global Note may not be
transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary
to
the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary."
(b) Notwithstanding any other provision of
Section 2.06 or of this Section 2.12, unless the terms
of a Global Note expressly permit such Global Note to be
exchanged in whole or in part for individual Notes, a
Global Note may be transferred, in whole but not in
part, only to a nominee of the Depositary, or by a
nominee of the Depositary to the Depositary, or to a
successor
Depositary for such Global Note selected or approved by the
Company or to a nominee of such successor Depositary.
(c) (1) If at any time the Depositary for a
Global
Note notifies the Company that such Depositary is
unwilling or unable to continue as Depositary for such
Global Note or if at any time the Depositary for a Global
Note shall no longer be eligible or in good standing
under the Securities Exchange Act of 1934, as amended,
or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to
such Global Note. If a successor Depositary for such
Global Note is not appointed by the Company within 90
days after the Company receives such notice or
becomes aware of such ineligibility, the
Company's election pursuant to Section 2.05(c)(6) shall no
longer be effective with respect to such Global Note
and the Company shall execute, and the Trustee, upon
receipt of a Company Order for the authentication and
delivery of individual Notes of such series in exchange
for such Global Note, shall authenticate and make
available for delivery, individual Notes of such series of
like tenor and terms in definitive form in an
aggregate principal
amount equal to the principal amount of such Global Note in
exchange for such Global Note. The Trustee shall not be
charged with knowledge of notice of the ineligibility
of a
Depositary unless a responsible officer assigned to and
working in its corporate trustee administration department
shall have
actual knowledge thereof.
(2) The Company may at any time and in its
sole discretion determine that all outstanding (but not
less than all) the Notes issued or issuable in the form
of one or more Global Notes shall no longer be
represented by such Global Note or Notes. In such event
the Company shall execute, and the Trustee, upon receipt
of a Company Order for the authentication and delivery of
individual Notes in exchange for such Global Note, shall
authenticate and make available for delivery, individual
Notes of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal
amount of such Global Note or Notes in exchange for such
Global Note or Notes.
(3) If agreed upon by the Company and the
Depositary with respect to Notes issued in the form of
a
Global Note,the Depositary for such Global Note
shall
surrender such Global Note in exchange in whole or in
part for individual Notes of like tenor and terms in
definitive form on such terms as are acceptable to
the Company and such Depositary. Thereupon the Company
shall execute, and the Trustee shall authenticate
and make available for delivery, without a service charge,
(A) to each Person specified by the Depositary, a new Note
or Notes of like tenor and terms, and of any authorized
denomination as requested by such Person, in aggregate
principal amount equal to
and in exchange for the beneficial interest of such
Person
in such Global Note; and (B) to such Depositary a new
Global Note of like tenor and terms and in a denomination
equal to the difference, if any, between the principal
amount of the surrendered Global Note and the aggregate
principal
amount of Notes delivered to Holders thereof.
(4)In any exchange provided for in
Section
2.12(c)(1),(2) or (3), the Company will execute and the
Trustee will authenticate and make available for
delivery, individual Notes in definitive registered form in
authorized denominations. Upon the exchange of a Global
Note for individual Notes, such Global Note shall be
cancelled by the Trustee. Notes issued in exchange for
a Global Note pursuant to this Section 2.12 shall be
registered in such names and in such
authorized denominations as
the Depositary for such Global Note, pursuant to
instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall
deliver such Notes to the Depositary for delivery to the
Persons in whose names such Notes are so registered, or
if the Depositary shall refuse or be unable to deliver
such Notes, the Trustee shall deliver such Notes to the
Persons in whose names such Notes are registered,
unless otherwise agreed upon by the Trustee and the
Company.
(d) Neither the Company, the Trustee or any
Authenticating Agent will have any responsibility or
liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests
in a Global Note or for maintaining, supervising or
reviewing any records relating to such beneficial
ownership interests.
(e) Pursuant to the provisions of this
subsection, at the option of the Trustee and upon
thirty days' written notice to the Depositary, the
Depositary shall be required to surrender any two or
more Global Notes which have identical terms,
including, without limitation, identical maturities,
interest rates and redemption provisions (but which may
have differing Original Issue Dates) to the Trustee,
and the Company shall execute and the Trustee shall
authenticate and deliver to, or at the direction of, the
Depositary a Global Note in principal amount
equal to the aggregate principal amount of, and with all
terms identical to, the Global Notes so surrendered
to the Trustee, and such new Global Note shall indicate
each applicable Original Issue Date and the principal
amount applicable to each such Original Issue Date. The
exchange contemplated in this subsection shall be
consummated at least 30 days prior to any Interest Payment
Date applicable to any of the Global Notes so surrendered
to the Trustee. Upon any exchange of any Global Note with
two or more original Issue Dates, whether pursuant to this
Section or pursuant to Section 2.06 or Section 3.03, the
aggregate principal amount of the Notes with a
particular Original Issue Date shall be the same before and
after such exchange, giving effect to any retirement of
Notes and the Original Issue Dates applicable to such
Notes occurring in connection with such exchange.
Section 2.13. CUSIP Numbers. The Company in
issuing Notes may use CUSIP numbers (if then generally in
use), and, if so, the Trustee shall use CUSIP numbers
in notices of redemption Notes as a convenience to
Noteholders, provided, that any such notice may state that
no representation is made as to the correctness of such
CUSIP numbers either as printed on the Notes or as
contained in any notice of a redemption and that
reliance may be placed only on the other
identification numbers printed on the Notes, and any such
redemption shall not be affected by anydefect in or omission
of such numbers.
ARTICLE THREE.
Redemption of Notes
Section 3.01. Applicability of Article. The
provisions of this Article Three shall be applicable to any
Notes which are redeemable prior to their stated
maturity date.
Section 3.02. Notice of Redemption; Selection of
Notes.
(a) The election of the Company to redeem any
Notes shall be evidenced by a Board Resolution which
shall
be given with notice of redemption to the Trustee ten
Business Days prior to the giving of the notice of
redemption to holders of such Notes.
(b) Notice of redemption to each holder of
Notes
to be redeemed as a whole or in part shall be given in
the manner provided in Section 15.10 no less than 30 nor
more than 60 days prior to the date fixed for
redemption. Any notice which is given in the manner
herein provided shall be conclusively presumed to
have been duly given, whether or not the Noteholder
receives the notice. In any case, failure duly to give
such notice, or any defect in such notice, to the holder
of any Note designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the
redemption of any other Note.
(c) Each such notice shall specify the date
fixed
for redemption, the places of redemption and the
redemption price at which such Notes are to be redeemed,
and shall state that payment of the redemption price of
such Notes or portion thereof to be redeemed will be
made on surrender of such Notes at such places of
redemption, that Accrued Interest to the date fixed for
redemption will be paid as specified in such notice, and
that from and after such date interest thereon will
cease to accrue. If less than all the Notes having the
same terms are to be redeemed, the notice shall specify
the Notes or portions thereof to be redeemed. In case
any Note is to be redeemed in part only,
the notice which relates to such Note shall state the
portion of the principal amount thereof to be redeemed
(which shall be $1,000 or any integral multiple
thereof), and shall state that, upon surrender of such
Note, a new Note or Notes having the same terms in
aggregate principal amount equal to the unredeemed
portion thereof will be issued.
(d) If less than all of the Notes having the
same
terms are to be redeemed, the Trustee shall select in
such
manner as it shall deem appropriate and fair in its
discretion the particular Notes to be redeemed as a whole
or in part and
shall thereafter promptly notify the Company in writing
of the Notes so to be redeemed. Notes shall be
redeemed only in denominations of
$1,000, provided, that any remaining principal amount of
a
Note redeemed in part shall be at least $1,000.
(e) If at the time of the mailing of any
notice of redemption the Company shall not have
irrevocably directed the Trustee to apply funds deposited
with the Trustee or held by it and available to be used
for the redemption of Notes to redeem all the Notes
called for redemption, such notice may state that it is
subject to the receipt of the redemption moneys by the
Trustee before the date fixed for redemption and that
such notice shall be of no effect unless such moneys
are so receives before such date.
Section 3.03. Payment of Notes on
Redemption; Deposit of Redemption Price.
(a) If notice of redemption shall have been
given
as provided in Section 3.02, such Notes or portions of
Notes called for redemption shall become due and payable on
the date and at the places stated in such
notice at the applicable redemption price, together with
Accrued Interest to the date fixed for redemption of such
Notes, and on and after such date fixed for redemption,
provided that the Company shall have deposited with
the Trustee on such date of redemption the amount
sufficient to pay the redemption price together with
Accrued Interest to the date fixed for redemption.
Interest on the Notes or portions thereof so called for
redemption shall cease to accrue and such
Notes or portions thereof shall be deemed not to be
entitled
to any benefit under this Indenture except to receive
payment of the redemption price together with Accrued
Interest thereon to the date fixed for redemption. On
presentation and surrender of such Notes at such a
place of payment in such notice specified, such Notes or
the specified portions thereof shall be paid and redeemed
at the applicable redemption price, together with Accrued
Interest thereon to the date fixed for redemption.
(b) The Company shall not mail any notice of
redemption of Notes during the continuance of any Event of
Default, except (1) that where notice of redemption of any
Notes has been mailed, the Company shall redeem
such Notes provided that funds have theretofore been
deposited for such purpose, and (2) that notices of
redemption of all outstanding Notes may be given during the
continuance of an Event of Default.
(c) If any Note called for redemption shall not
be
so paid upon surrender thereof for redemption, the
principal of and any premium on such Note, shall
until paid bear interest from the date set for redemption
at the rate borne by such Note.
`
(d) Upon surrender of any Note redeemed in
part
only, the Company shall execute and register, and the
Trustee shall authenticate and make available for delivery,
a new Note or Notes of authorized denominations in
aggregate principal amount equal to, and having the same
terms and Original Issue Date or Dates as, the unredeemed
portion of the Note so surrendered.
ARTICLE FOUR
Mortgage Bonds.
Section 4.01. Issuance Restrictions. So long as
any Notes are outstanding, the Company will not (a)
issue additional Mortgage Bonds except to replace any
mutilated, lost, destroyed or stolen Mortgage Bonds or
to effect exchanges and transfers of Mortgage Bonds or
(b) subject to the lien of the Mortgage Indenture
any property which is the "Excepted Property" under
the
Mortgage Indenture, unless (i) concurrently with the
issuance of such Mortgage Bonds or subjection of any such
property to such lien, the Company issues, and the
trustee under the Mortgage Indenture authenticates
and delivers to the Trustee, a Mortgage Bond or
Bonds in an aggregate principal amount equal to the
aggregate principal amount of the Notes then
outstanding, and (ii) concurrently with and as a condition
precedent to the issuance of any Notes thereafter, the
Company issues, and the trustee under the Mortgage
Indenture authenticates and delivers
to the Trustee, a Mortgage Bond or Bonds in an aggregate
principal amount equal to the aggregate principal amount of
the Notes to be issued, and in each such case such
Mortgage Bonds shall have the same stated maturity, bear
interest at the same rates, have redemption and other
terms and provisions which are the same as, the Notes then
outstanding or to be issued, as the case may be.
Section 4.02. Mortgage Bonds held by the
Trustee. Mortgage Bonds delivered to the Trustee
pursuant to Section 4.01 shall be fully registered in
the name of the Trustee, which shall hold such Mortgage
Bonds in trust for the benefit of the holders from time
to time of the Notes, to provide the security of the
Mortgage Bonds for (a) the full and prompt payment of the
principal of each Note when and as the same shall become due
in accordance with the terms and provisions of this
Indenture, either at the stated maturity thereof, upon
declaration of acceleration of the maturity thereof or
upon call for redemption, and (b) the full and prompt
payment of any premium and interest on each Note when
and as the same shall become due in accordance with the
terms and provisions of this Indenture.
Section 4.03. Trustee to Exercise Rights of
Mortgage Bondholder. As the holder of Mortgage Bonds,
the Trustee shall have and exercise all of the rights of
a holder of Mortgage Bonds possessed under the Mortgage
Indenture.
Section 4.04. No Transfer of Mortgage Bonds;
Exception. Except as required to effect an assignment to
a
successor trustee under this Indenture, the Trustee
shall
not sell, assign or transfer any Mortgage Bonds held by it
and
the Company shall issue stop transfer instructions to
the
Mortgage Trustee and any transfer agent under the
Mortgage
Indenture to effect compliance with this Section 4.04.
Section 4.05. Release of Mortgage Bonds. When (a)
all of the principal of and any premium and interest on
all
Notes shall have been paid or provision therefor duly made
in accordance with this Indenture, or (b) all Notes shall
have
been delivered to the Trustee for cancellation by or
on behalf of the Company, or (c) no Note is any longer
outstanding under this Indenture and all conditions in
Article Five have been satisfied, the Trustee shall
upon request of the Company, within five Business Days
thereafter, deliver to the Company without charge all
Mortgage Bonds, together with such appropriate
instruments of release as may be required; the Mortgage
Bonds so acquired by the Company shall be delivered to the
Mortgage Trustee for cancellation.
Section 4.06. Voting of Mortgage Bonds.
(a) The Trustee, as holder of Mortgage
Bonds,
shall attend meetings of Bondholders under the
Mortgage
Indenture and either at such meeting, or otherwise when
the consent of holders of Mortgage Bonds is sought
without a meeting, the Trustee shall vote the
outstanding principal amount of the Mortgage Bonds, or
shall consent with respect thereto, proportionally
with respect to all other Mortgage Bonds then
outstanding and eligible to vote or consent.
(b) Notwithstanding Section 4.06(a), the
Trustee shall not vote any portion of the outstanding
principal amount of the Mortgage Bonds in favor of, or
give its consent to, any action which, in the
opinion of the Trustee, would materially adversely
affect the interests of the Noteholders, except with the
appropriate consent of the Noteholders.
Section 4.07.Discharge of Mortgage Indenture.
The Trustee shall surrender for cancellation to the
Mortgage Trustee all Mortgage Bonds then held by the
Trustee and issued under the Mortgage Indenture upon
receipt by the Trustee of:
(a) an Officer's Certificate requesting
such
surrender for cancellation of such Mortgage Bonds, and
to the effect that no Mortgage Bonds are outstanding
under the Mortgage Indenture other than Mortgage Bonds
held by the Trustee hereunder and that promptly upon such
surrender the Mortgage Indenture will be satisfied and
discharged pursuant to the terms thereof; and
(b) an Opinion of Counsel to the effect that
upon
satisfaction and discharge of the Mortgage Indenture the
property formerly subject to the lien of the Mortgage
Indenture will be subject to no lien except Permitted
Encumbrances.
ARTICLE FIVE.
Satisfaction and Discharge; Unclaimed Moneys.
Section 5.01. Satisfaction and Discharge.
a) If at any time
(1) the Company shall have paid or caused to be
paid the principal of and premium, if any, and
interest on all the outstanding Notes, as and when the same
shall have become due and payable, or
(2) the Company shall have delivered to the
Trustee for cancellation all Notes theretofore
authenticated other than any Notes which shall have been
destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.07 hereof), or
(3) (A) all such Notes not theretofore
delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become
due and payable within the year or are to be called for
redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption, and (B) the Company shall have
irrevocablydeposited or caused to be irrevocably
deposited with the Trustee as trust funds the entire
amount in cash (other than moneys repaid by the
Trustee or any paying agent to the Company in
accordance with Section 5.03 or moneys paid to any
State or to the District of Columbiapursuant to its
unclaimed property or similar laws), U.S. Government
Obligations maturing as to principal
and interest in such amounts and at such times as will
insure the availability of cash, or a combination of
cash and U.S. Government Obligations, sufficient to
pay at maturity all outstanding Notes not theretofore
delivered to the Trustee for cancellation, including
principal and any premium and interest due or to
become due to such date of maturity, as the case may be,
and
if, in any such case, the Company shall also pay or
cause to be paid all other sums payable hereunder by
the Company, then this Indenture shall cease to be
of further effect (except as to (i) rights of
registration
of transfer and exchange of Notes, (ii) substitution of
apparently mutilated, defaced, destroyed, lost or stolen
Notes, (iii) rights of Noteholders to receive payments
of principal thereof and any premium and interest
thereon, upon the original stated due dates
therefor (but not upon acceleration of maturity), (iv)
the rights, obligations and immunities of the
Trustee hereunder and (v) the rights of the holders of
Notes as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or
any of them), and the Trustee, on demand of the Company
accompanied by an Officers' Certificate and an Opinion of
Counsel and at the cost and expense of the
Company,shall execute proper instruments acknowledging such
satisfaction of and discharging this Indenture.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee
under Section 9.06 shall survive.
(b) The Company shall be deemed to have been
Discharged from its obligations with respect to the
Notes on the
91st day after the applicable conditions set forth
below
have been satisfied:
(1) the Company shall have deposited or
caused
to be deposited irrevocably with the Trustee as
trust
funds in trust, specifically pledged as security
for,
and dedicated solely to, the benefit of the holders of
the Notes
(A) money in an amount, or
(B) U.S. Government
Obligations, or a combination money and
U.S. Government Obligations,which through the
payment of interest and principal in respect
thereof in accordance with their terms will
provide, in the opinion of an accountant, who is
also an employee of the Company, expressed in a
written certification thereof delivered to the
Trustee,not later than one day before the due
date of any payment, money in an amount
sufficient to pay and discharge each
installment of principal of and any
premium and interest on the outstanding Notes
on the dates such installments of interest or
rincipal are due, provided that the Trustee
shall have been irrevocably instructed to apply
such money or
proceeds of such U.S. Government Obligations to
the payment of such installments of principal
of and any premium and interest with respect to
the
outstanding Notes; and
(2) no Event of Default or event (including
such
deposit) which with notice or lapse of time would become
an Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit.
(c) "Discharged" means that the Company shall be
deemed to have paid and discharged the entire
indebtedness represented by, and obligations under, the
Notes and to have
satisfied all the obligations under this Indenture
relating
to the Notes (and the Trustee, on demand of the
Company
accompanied by an Officers' Certificate and an Opinion of
Counsel and at the expense of the Company, shall execute
proper instruments acknowledging the same), except
(1) the rights of holders of the Notes to
receive, from the trust fund described in Section
5.01(b)(1), payments of the principal of and
interest on the Notes when such payments become due;
(2) the Company's obligations with respect to the
Notes under Sections 2.06, 2.07, 5.02, 5.03 and
6.02;
and
(3) the rights, powers, trusts, duties and
immunities of the Trustee with respect to the Notes as
specified in this Indenture, including the rights of the
Trustee to receive payment or reimbursement of
compensation and expenses pursuant to Section 9.06.
Section 5.02. Deposited Moneys to Be Held in
Trust
by Trustee. All moneys and U.S. Government Obligations
deposited
with the Trustee pursuant to Section 5.01 shall be held in
trust and applied by it to the payment, either directly or
through
any paying agent (including the Company if acting as its
own
paying agent), to the holders of the particular Notes
for the
payment or redemption of which such moneys and
U.S. Government Obligations have been deposited with the
Trustee, of all sums due and to become due thereon for
principal and premium, if any, and interest.
Section 5.03. Return of Unclaimed Moneys. Any
moneys deposited with or paid to the Trustee for payment of
the principal of or any premium or interest on any Notes and
not
applied but remaining unclaimed by the holders of such
Notes
for two years after the date upon which the principal of or
any
premium or interest on such Notes, as the case may be,
shall
have become due and payable, shall be repaid to the
Company by
the Trustee on written demand and all liability of
the
Trustee shall thereupon cease; and any holder of any of
such Notes shall thereafter look only to the Company for
any payment which
such holder may be entitled to collect; provided,
however, that
the Trustee before being required to make any
such
repament, may at the expense of the Company cause to be
mailed to such holder notice that such money remains
unclaimed and that, after a date specified therein which
shall not be less than 30 days from the date of such
mailing, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 5.04. Reinstatement. If the Trustee is
unable to apply any money or U.S. Government
Obligations in
accordance with Section 5.01 by reason of any legal
proceeding or any order or judgment of any court or
governmental authority
enjoining, restraining or otherwise prohibiting such
application, the
Company's obligations under this Indenture with respect to
the Notes to which such money or U.S.
Government
Obligations were to have been applied shall be revived
and reinstated as though no deposit had occurred pursuant
to Section 5.01 until
such time as the Trustee is permitted to apply such
money or U.S. Government Obligations in accordance
with Section 5.01; provided, however, that if the
Company has made any payment of principal of or any premium
or interest on any Notes because of the
reinstatement of its obligations, the Company shall be
subrogated to the rights of the holders of such Notes to
receive such payment from the money or U.S. Government
Obligations held by the Trustee.
ARTICLE SIX.
Particular Covenants of the Company.
Section 6.01. Payment of Principal, Premium and
Interest. The Company covenants and agrees for the
benefit
of the holders of the Notes that it will duly and
punctually pay or cause to be paid the principal of and
any premium and interest on each of the Notes at the
places, at the respective times and in the manner provided
in such Notes.
Section 6.02. Office for Notices and
Payments,etc.
So long as any of the Notes remain outstanding, the
Company
will maintain in the Borough of Manhattan, The City and
State of
New York, an office or agency where the Notes may be
presented
for registration of transfer and for exchange as in
this
Indedture provided, and where, at any time when the
Company is
obligated to make a payment upon Notes (other than an
interest payment as to which it has exercised its option
to make such payment by check), the Notes may be
presented for payment, and shall maintain at any such
office or agency and at its principal office an office or
agency where notices and demands to or upon the Company in
respect of the Notes or of this Indenture may be served,
provided that the Company may maintain at its
principal executive offices, one or more other offices or
agencies for any or all of the foregoing purposes; the
Company hereby appoints the Trustee
as agent of the Company for the foregoing purposes.
The
Company will give to the Trustee written notice of the
location of
each such office or agency and of any change of
location thereof.
In case the Company shall fail to maintain any such office
or
agency or shall fail to give such notice of the location or
of
any change in the location thereof, presentations may be
made
and notices and demands may be served at the
corporate
trust office of the Trustee.
Section 6.03. Appointments to Fill Vacancies in
Trustee's Office. The Company, whenever necessary to
avoid
or fill a vacancy in the office of Trustee, will appoint,
in
the manner provided in Section 9.11, a Trustee, so that
there
shall at all times be a Trustee hereunder.
Section 6.04. Annual Statement and Notice. (a)
The Company will deliver to the Trustee within 120
days
after the end of each fiscal year of the Company,
beginning with the fiscal year ending December 31,
1996, an Officers' Certificate which complies with TIA
Section 314(a)(4) stating that in the course of the
performance by the signers of their duties as officers
of the Company they would obtain knowledge of any default
by the Company in the performance of any covenant
contained in this Indenture or an Event of Default
stating whether they have obtained knowledge of any
such default and, if so, specifying each such default or
such Event of Default of which the signers have
knowledge, and the nature and status thereof.
(b) The Company shall give to the Trustee
written
notice of the occurrence of an Event of Default within
five
days after the Company becomes aware of such occurrence.
Section 6.05. Corporate Existence. Subject to
Article Twelve, the Company will do or cause to be done
all things
necessary to preserve and keep in full force and effect its
corporate existence, rights (charter and statutory) and
franchises; provided however, that the Company shall not be
required to preserve any such right or franchise if the
Company shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the
Company.
Section 6.06. Limitation Upon Mortgages and
Liens.
The Company will not at any time directly or
indirectly
create or assume and will not cause or permit a
Subsidiary directly or indirectly to create or assume,
except in favor of
the Company or a Wholly-Owned Subsidiary, any mortgage,
pledge or
other lien or encumbrance upon any Principal Facility or
any interest it may have therein or upon any stock of
any Regulated Subsidiary or any indebtedness of any
Subsidiary to the Company or any other Subsidiary,
whether now owned or hereafter acquired, without making
effective provision (and the Company covenants that
in such case it will make or cause to be made,
effective
provision) whereby the outstanding Notes and any other
indebtedness of
the Company then
entitled thereto shall be secured by
such mortgage, pledge, lien or encumbrance equally and
ratably with any and all other obligations and indebtedness
thereby secured, so long
as any such other obligations and indebtedness shall be
so secured;
provided, however, that the foregoing covenant shall not be
applicable to the lien of the Mortgage Indenture or
Permitted
Encumbrances.
Section 6.07. Waiver of Certain Covenants. The
Company may omit in any particular instance to comply
with any term, provision or condition set forth in Article
Four or
Section 6.06 (and if so specified, any other covenant
not set forth herein and specified pursuant to Section 2.05
to be
applicable to any Notes, except as otherwise
provided
pursuant to Section 2.05), if before the time for such
compliance
the holders of at least a majority in aggregate principal
amount of the
Notes then outstanding shall either waive such compliance
in such instance or generally waive compliance with such
term, provision
or condition, but no waiver shall extend to or affect
such
term, provision or condition except to the extent
expressly so
waived, and, until such waiver shall become effective,
the
obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall
remain in full force and
effect.
ARTICLE SEVEN.
Noteholder Lists and Reports by the Company and
the Trustee.
Section 7.01. Noteholder Lists. If it is not the
registrar for the Notes, the Company will, so long as any
Notes are outstanding under this Indenture, furnish or
cause to be
furnished to the Trustee within 15 days prior to
each
Interest Payment Date on Notes from time to time
outstanding, and at
such other times as the Trustee, may request in writing, the
information required by TIA Section 312(a), which the
Trustee shall preserve as required by TIA Section
312(a).
The Trustee shall also comply with TIA Section 312(b),
but the Trustee, the Company and each Person acting on
behalf of the Trustee or
the Company shall have the protection of TIA Section 312(c).
Section 7.02. Securities and Exchange
Commission
Reports. The Company shall (a) file with the Trustee,
within 15
days after the Company is required to file the same with the
Securities and Exchange Commission, copies of the
reports,
information and documents (or portions thereof) required to
be so filed pursuant to TIA Section 314(a), and (b)
comply with
the other provisions of TIA Section 314(a).
Section 7.03. Reports by the Trustee. The
Trustee
shall (a) transmit within 60 days after August 15 in
each
year, beginning with the year 1997, to the Noteholders
specified in TIA Section 3.13(c) and to the
Securities and
Exchange Commission, a brief report dated as of such
August 15 and complying with the requirements of TIA
Section 313(a), but no report shall be required if no
event described in TIA Section 313(a)
shall have occurred within the previous twelve months ending
on
such date. The Trustee shall also comply with the other
provisions of
TIA Section 313(b)(2).
ARTICLE EIGHT.
Remedies of the Trustee and Noteholders on
Event of Default.
Section 8.01. Events of Default.
(a) In case one or more of the following
Events of
Default shall have occurred and be continuing with
respect to the Notes:
(1) default in the payment of any installment of
interest upon any of the Notes as and when the same
shall become due and
payable, and continuance of such default for a period of
30 days; or
(2) default in the payment of the principal of or
any premium on any of the Notes as and when the same shall
become due and
payable, and continuance of such default for a period of
one day (whether at the stated maturity thereof or upon
declaration of
acceleration or call for redemption or otherwise); or
(3) failure on the part of the Company duly to
observe or perform any
other of the covenants or agreements on the part of the
Company contained in the Notes or in this Indenture for a
period of 60 days after the date on which written
notice of such failure,
requiring the same to be remedied and stating that such
notice is a "Notice of Default" hereunder, shall have
been given to the Company by the Trustee by
registered mail, or
to the Company and the Trustee by the holders of at
least 25% in aggregate principal amount of the Notes at
the time outstanding provided, however, that, subject to
Sections 9.01 and 6.04, the
Trustee shall not be deemed to have knowledge of such
failure unless either (A) a responsible officer of the
Trustee shall have actual knowledge of such failure, or (B)
the Trustee shall have
received written notice thereof from the Company or any
Noteholder; or
(4) default (i) in the payment of any
principal
of or interest on any Indebtedness of the Company
(other than the Notes), or on any Indebtedness of
any Subsidiary of the Company which is recourse to
the Company, aggregating more than $15,000,000 in
principal amount, when due after giving effect
to any applicable grace period or (ii) in the
performance of any other term or provision of any such
Indebtedness (other than Notes)in excess of
$15,000,000 principal amount that results in such
Indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise
become due and payable, and such acceleration shall not
have been rescinded or annulled, or such Indebtedness
shall not have been discharged, within a period of
15 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to
theCompany and the Trustee by the holders of at least
25% in principal amount of the Notes then outstanding,
a written notice specifying such default or defaults
and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry against the Company or any Subsidiary
of any judgment or order for the payment of money in excess
of $10,000,000 and either (x) enforcement proceedings
shall have been commenced
by any creditor upon such judgment or order or (y) there
shall be any period of 30 consecutive days during which a
stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect;
or
(6) the entry of a decree or order by a court
having jurisdiction in the premises for relief in
respect of the Company under Title 11 of the United
States Code, as now constituted or hereafter
amended,or any other applicable Federal or State
bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, trustee,
custodian,
sequestrator or similar official of the Company or
of any substantial part of its property, or ordering
the
winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or
(7) the filing by the Company of a petition or
answer or consent seeking relief under Title 11 of
the United States Code, as now constituted or hereafter
amended, or any other applicable Federal or State
bankruptcy, insolvency or other similar law, or the
consent by it to the institution of proceedings
thereunder or to the filing of any such petition or
to the appointment of or taking possession by a
receiver liquidator, assignee, trustee, custodian,
sequestrator
or other similar official of the Company or of any
substantial part of its property, or the failure of the
Company generally to pay its debts as such debts
become
due, or the taking of corporate action by the
Company
in furtherance of any such action; or
(8) any other Event of Default provided with
respect
to the particular Note specified in the
applicable Company Order;
then and in each and every such case, unless the
principal of all of the Notes shall have already become due
and payable, either the Trustee or the holders of a
majority in aggregate principal amount of the Notes then
outstanding, by notice in writing to the Company (and
to the Trustee if given by Noteholders), may declare the
principal of all the Notes to be due and payable
immediately and upon
any such declaration the same shall become and shall be
immediately due and
payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. This
provision, however, is subject to the condition that if,
at any time
after the principal of the Notes shall have been so declared
due
and payable,and before any judgment or decree for the
payment of the moneys due shall have been obtained
or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of
interest upon all of the Notes and the principal of and any
premium on any and all Notes which shall have become due
otherwise than by acceleration (with interest on overdue
installments of interest,to the extent that payment
of such interest is enforceable under applicable
law, and on such principal and any premium at the rate
borne by the Notes to the date of such payment or
deposit) and all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel, and any and all defaults under this
Indenture, other than the non-payment of principal
of and accrued interest on Notes which shall have become
due by acceleration of maturity, shall have been
cured or waived -- then and in every such case the
holders of a majority in aggregate principal amount of
the Notes then outstanding, by written notice to the
Company and to the Trustee, may waive all such defaults
and rescind and annul such declaration and its
consequences; but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent
default, or shall impair any right consequent thereon.
(b) In case the Trustee shall have proceeded to
enforce any right under this Indenture and such
proceedings
shall have been discontinued or abandoned because
of such
rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then
and in every such case the Company and the Trustee
shall be restored respectively to their several positions
and rights hereunder, and all rights, remedies and powers
of the Company and the Trustee shall continue as
though no such proceeding had been taken.
Section 8.02. Payment of Notes on Default;
Suit
Therefor.
(a) The Company covenants that in case of
(1) default in the payment of any installment of
interest upon any of the Notes as and when the same
shall become due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of
or
any premium on any of the Notes as and when the same
shall
have become due and payable, and continuance of such
default
for a period of one day (whether at the stated
maturity thereof or upon declaration of acceleration
or call
for redemption or otherwise)
then, upon demand of the Trustee, the Company will pay to
the Trustee, for the benefit of the holders of the Notes,
the whole amount that then shall have so become due and
payable on all such Notes for principal and any premium or
interest, or both, as the case may be, with interest upon
the overdue principal and any premium and (to the extent
that payment of such interest is enforceable under
applicable law) upon the overdue installments of
interest at the rate borne by the Notes; and, in
addition thereto, such further amounts as shall be
sufficient to cover the costs and expenses of collection,
including reasonable compensation to the Trustee, its
agents, attorneys and
counsel, and any expenses or liabilities incurred by the
Trustee
hereunder other than through its negligence or bad faith.
(b) In case the Company shall fail forthwith to
pay such amounts upon such demand, the Trustee, in its own
name
and as trustee of an express trust, shall be entitled
and
empowered to institute any actions or proceedings at law
or in equity for the collection of the sums so due and
unpaid, and may
prosecute any such action or proceeding to judgment or
final decree, and may enforce any such judgment or final
decree against the
Company or any other obligor on the Notes and collect in
the manner
provided by law out of the property of the Company or any
other obligor on such series of Notes wherever situated,
the moneys adjudged or decreed to be payable.
(c) In case there shall be pending proceedings for
the bankruptcy or for the reorganization of the Company or
any
other obligor on the Notes under the Federal Bankruptcy
Code or
any other applicable law, or in case a receiver or trustee
shall
have been appointed for the property of the Company or
such other
obligor, or in the case of any similar judicial
proceedings
relative to the Company or other obligor upon the Notes, or
to the creditors or property of the Company or such other
obligor, the Trustee, irrespective of whether the principal
of the
Notes shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether
the
Trustee shall have made any demand pursuant to this
Section 8.02,
shall be entitled and empowered, by intervention in
such proceedings or otherwise, to file and prove a claim or
claims for the whole amount of principal and any premium
and interest owing and
unpaid in respect of the Notes, and, in case of any judicial
proceedings, to file such proofs of claim and other
papers
or documents as may be necessary or advisable in order to
have
the claims of the Trustee (including any amounts due to
the Trustee under Section 9.06 hereof) and of the
holders of
Notes allowed in such judicial proceedings relative to the
Company of
any other obligor on the Notes, its or their creditors,
or its or
their property, and to collect and receive any moneys
or
other property payable or deliverable on any such
claims, and to distribute the same after the deduction
of its charges and expenses; and any receiver, assignee
or trustee in bankruptcy or
reorganization is hereby authorized by each of the
Noteholders to make such payments to the Trustee, and,
in the event that the Trustee shall consent to the
making of such payments directly to
the holders of any Notes, to pay to the Trustee any amount
due to it for compensation and expenses, including
counsel fees and
expenses incurred by it up to the date of such distribution.
(d) All rights of action and of asserting claims
under this Indenture, or under any of the Notes, may be
enforced
by the Trustee without the possession of any of the Notes,
or the
production thereof in any trial or other proceeding
relative
thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for
the ratable
benefit of the holders of the Notes in respect of which
such
action was taken.
(e) Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent or to
accept
or adopt on behalf of any Noteholder any plan
of
reorganization, arrangement, adjustment or composition
affecting the
Notes or the rights of any holder thereof, or to
authorize the Trustee to vote in respect of the claim of
any Noteholder in any
such proceeding.
Section 8.03. Application of Moneys Collected by
Trustee. Any moneys collected by the Trustee with
respect
to any of the Notes shall be applied in the order following,
at the
date or dates fixed by the Trustee for the distribution
of such
moneys, upon presentation of the several Notes, and
stamping
thereon the payment, if only partially paid, and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due to the
Trustee pursuant to Section 9.06;
SECOND: In case the principal of the
outstanding
Notes in respect of which such moneys have been
collected shall not have
become due and be unpaid, to the payment of interest on
the Notes, in the order of the maturity of the
installments of such
interest, with interest (to the extent allowed by law and to
the extent that such interest has been collected by the
Trustee) upon the
overdue installments of interest at the rate borne by the
Notes, such payments to be made ratably to the persons
entitled thereto;
THIRD: In case the principal of the outstanding
Notes in respect of which such moneys have been collected
shall have become due, by declaration or otherwise, to the
payment of the whole amount then owing and unpaid upon
the Notes for principal and any
premium and interest thereon, with interest on the
overdue principal and any premium and (to the extent
allowed by law and to the extent that such interest has
been collected by the Trustee) upon overdue installments
of interest at the rate borne by the Notes; and in case
such moneys shall be insufficient to
pay in full the whole amount so due and unpaid upon the
Notes, then to the payment of such principal and any
premium and nterest without preference or priority
of principal and any premium over interest, or of
interest over principal and any premium or of
any installment of interest over any other installment of
interest, or of any Note over any other Note,
ratably to the aggregate of such principal and any premium
and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any,
to the Company its successors or assigns, or to
whomsoever may lawfully be entitled to the same, or as
a court of competent jurisdiction may determine.
Section 8.04. Proceedings by Noteholders.
(a) No holder of any Note shall have any right by
virtue of or by availing of any provision of this
Indenture
to institute any suit, action or proceeding in equity or at
law
upon or under or with respect to this Indenture or for
the appointment of a receiver or trustee, or for any
other
remedy hereunder, unless such holder previously shall
have given to the Trustee written notice of default with
respect to such Note and of the continuance thereof, as
hereinabove provided, and unless
also the holders of not less than a majority in
aggregate
principal amount of the Notes then outstanding shall
have made
written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such
easonable indemnity as it may require
against the costs, expenses and liabilities to be incurred
therein or
thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall
have neglected
or refused to institute any such action, suit or
proceeding, it being understood and intended, and
being
expressly covenanted by the taker and the holder of
every Note with every other taker and holder and the
Trustee that no one or more holders of Notes shall have
any right in any manner whatever by virtue of or by
availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other holder of
Notes, or to
obtain or seek to obtain priority over or preference to
any other
such holder, or to enforce any right under this
Indenture, except
in the manner herein provided and for the equal, ratable
and
common benefit of all holders of Notes.
(b) Notwithstanding any other provision in
this
Indenture, however, the rights of any holder of any Note to
receive payment of the principal of and any premium
and interest on such Note, on or after the respective
due dates expressed in such Note, or to institute suit for
the enforcement of any such payment on or after such
respective dates shall not be
impaired or affected without the consent of such holder.
Section 8.05. Proceedings by Trustee. Incase
of
an Event of Default hereunder the Trustee may in its
discretion
proceed to protect and enforce the rights vested in it by
this Indenture by such appropriate judicial proceedings
as
the Trustee shall deem most effectual to protect and enforce
any of such rights, either by suit in equity or by action
at law or by
proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement
contained in this
Indenture or in aid of the exercise of any power granted in
this Indenture, or to enforce any other legal or
equitable right
vested in the Trustee by this Indenture or by law.
Section 8.06. Remedies Cumulative and
Continuing.
All powers and remedies given by this Article Eight to
the Trustee or to the Noteholders shall, to the extent
permitted by law, be deemed cumulative and not
exclusive of any powers and
remedies hereof or of any other powers and remedies
available to the
Trustee or the holders of the Notes, by judicial
proceedings
or otherwise, to enforce the performance or observance of
the
covenants and agreements contained in this Indenture, and
no
delay or omission of the Trustee or of any holder of any of
the Notes in exercising any right or power accruing upon
any
default occurring and continuing as aforesaid shall impair
any such
right or power, or shall be construed to be a waiver of
any such
default or an acquiescence therein; and, subject to
Section
8.04, every power and remedy given by this Article Eight or
by law
to the Trustee or to the Noteholders may be exercised from
time
to time, and as often as shall be deemed expedient, by
the
Trustee or by the Noteholders.
Section 8.07. Restoration of Rights and
Remedies.
If the Trustee or any Noteholder has instituted any
proceeding
to enforce any right or remedy under this Indenture and
such
proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or
to such Noteholder, then and in every such case, subject to
any determination in such proceeding, the Company, the
Trustee and the Noteholders shall be restored severally
and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and
the Noteholders shall continue as though no such
proceeding had been instituted.
Section 8.08. Direction of Proceedings and
Waiver
of Defaults by Majority Noteholders. The holders of a
majority
in aggregate principal amount of the Notes at the
time outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any
remedy available to the
Trustee, or exercising any trust or power conferred on the
Trustee; provided, however, that (subject to Section
9.01) the Trustee shall have the right to decline to
follow any such
direction if the Trustee being advised by counsel
determines
that the action or proceeding so directed may not
lawfully be
taken or if the Trustee in good faith by its board of
directors or
trustees, executive committee, or a trust committee of
directors or trustees or responsible officers shall
determine that the
action or proceeding so directed would involve the
Trustee
in personal liability or would be unduly prejudicial to
the
rights of Noteholders not joining in such directions. Prior
to any
declaration accelerating the maturity of the Notes, the
holders of a majority in aggregate principal amount of
the Notes at the time outstanding may on behalf of all of
the holders of the
Notes waive any past default or Event of Default hereunder
and its
consequences except a default in the payment of
principal of
or any premium or interest on the Notes. Upon any such
waiver
the Company, the Trustee and the holders of the Notes shall
be
restored to their former positions and rights hereunder,
respectively, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair
any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as
permitted by this Section 8.07, said default or Event of
Default shall for allpurposes of the Notes and this
Indenture be deemed to have been cured and to be not
continuing.
Section 8.09. Notice of Default. The
Trustee
shall, within 90 days after the occurrence of a default with
respect to the Notes, give to all holders of the Notes
specified in TIA
Section 3.13(c), in the manner provided in Section 15.10,
notice of such default, unless such default shall have
been cured
before the giving of such notice, the term "default"
for the
purpose of this Section 8.08 being hereby defined to be any
event which is or after notice or lapse of time or both
would become an
Event of Default; provided that, except in the case of
default in the
payment of the principal of or any premium or interest on
any of the Notes, the Trustee shall be protected in
withholding such notice if and so long as its board of
directors or trustees, executive committee, or a trust
committee of directors or
trustees or responsible officers in good faith determines
that
the withholding of such notice is in the interests of the
holders
of the Notes. The Trustee shall not be charged with
knowledge of
any Event of Default unless a responsible officer of the
Trustee
assigned to the corporate trust division of the Trustee
shall have actual knowledge of such Event of Default.
Section 8.10. Undertaking to Pay Costs. All
parties to this Indenture agree, and each holder of any Note
by acceptance thereof shall be deemed to have agreed, that
any
court may in its discretion require, in any suit for
the
enforcement of any right or remedy under this Indenture or
in any suit against the Trustee for any action taken
or omitted by it as
Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any
party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by
such party litigant; but this Section 8.09 shall not apply
to any suit instituted by the Trustee, or to any suit
instituted by any Noteholder, or group of Noteholders,
holding in the aggregate more than 10% in principal amount
of the Notes outstanding, or to any suit instituted by any
Noteholder for the enforcement of the payment of the
principal of or any premium or interest on any Note on
or after the due date expressed in such Note.
ARTICLE NINE.
Concerning the Trustee.
Section 9.01. Duties and Responsibilities of
Trustee.
(a) The Trustee, prior to the occurrence of an
Event of Default and after the curing of all Events
of
Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically
set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived)
the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same
degree of
care and skill in their exercise, as a prudent man would
exercise
or use under the circumstances in the conduct of his own
affairs.
(b) No provisions of this Indenture shall be
construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to
act or its own willful misconduct, except that:
1) prior to the occurrence of any Event of
Default and after the curing or waiving of all
Events of Default which may have
occurred,
(A) the duties and obligations of the
Trustee
shall be determined solely by the express
provisions of this Indenture, and the
Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(B) in the absence of bad faith on the
part
of the Trustee, the Trustee may conclusively
rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture; but, in the case of any such
certificates or opinions which by any provision
hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(2) the Trustee shall not be liable for any
error
of judgment made in good faith by a responsible
officer
or officers of the Trustee, unless it shall be
proved
that the Trustee was negligent in ascertaining the
pertinent facts; and
(3) the Trustee shall not be liable with
respect
to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the holders of at
least a majority in principal amount of
the Notes at the time outstanding determined as provided
in Section 10.04 relating to the time,
method and place of conducting any proceeding for
any remedy
available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this
Indenture.
(c) Whether or not therein expressly so
provided,
every provision of this Indenture relating to the
conduct or
affecting the liability of or affording protection to
the Trustee shall be subject to this Section 9.01.
Section 9.02. Reliance on Documents,
Opinions,
etc. Except as otherwise provided in Section 9.01,
(a) the Trustee may rely and shall be
protected
in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report,
notice, request, consent, order, note or other paper or
document believed by it to be genuine and to have been
signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the
Company mentioned herein shall be sufficiently evidenced
by an Officers' Certificate (unless other evidence in
respect thereof is herein specifically (prescribed);
and any Board Resolution may be evidenced to the
Trustee by a copy thereof certified by the Secretary or
an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel
selected
by the Trustee, if such counsel is reasonably
satisfactory to the
Company, and any advice or Opinion
of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in
accordance
with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Indenture at the request, order or direction of any
of the Noteholders, pursuant to this Indenture, unless
such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the
costs, expenses and liabilities which may be
incurred by
such exercise;
(e) the Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Indenture;
(f) The Trustee shall not be bound to make any
investigation into
the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report,notice,
request,
direction, consent,order, approval, bond, note, other
evidence of
indebtedness or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or
investigation into such
facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or
investigation, it shall be
entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(g) no provision of this Indenture shall
require
the Trustee to extend or risk its own funds or otherwise
incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable
grounds for believing that repayment
of such funds or adequate indemnity against such risk
or
liability is not reasonably assured to it; and
(h) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder
either
directly or by or through agents or attorneys; provided,
however, that the Trustee shall not be liable for the
conduct or acts of
any such agent or attorney that shall have been
appointed in accordance herewith with due care.
Section 9.03. No Responsibility for Recitals,
etc.
The recitals contained herein and in the Notes (except in
the certificate of authentication) shall be taken as
the
statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes. The Trustee
shall not be accountable for the use or application by
the Company of any Notes or the proceeds of any Notes
authenticated and delivered by the Trustee in
conformity with this Indenture.
Section 9.04. Trustee, Authenticating Agent or
Registrar May Own Notes. The Trustee and any
Authenticating Agent or Note registrar, in its individual
or any other capacity,
may become the owner or pledgee of Notes with the
same rights it would have if it were not Trustee,
Authenticating Agent
or Note registrar.
Section 9.05. Moneys to Be Held in Trust.
Subject
to Section 5.03, all moneys received by the Trustee
shall,
until used or applied as herein provided, be held in trust
for the
purposes for which they were received, but need not
be segregated from other funds except to the extent required
by law.
Section 9.06. Compensation and Expenses of
Trustee.
(a) The Company agrees:
(1) to pay to the Trustee from time to time
such
compensation for all services rendered by it
hereunder
as has been agreed upon in writing
(which compensation shall not be limited by any
provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided
herein,to
reimburse each of the Trustee and any
predecessor
Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by
the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation
and the reasonable expenses and
disbursements of its agents and counsel), except any
auch expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any
predecessor Trustee for, and to hold it harmless against,
any loss, liability expense incurred without
negligence
or bad faith on its own part, arising out of or in
connection with the acceptance or administration of
the trust or trusts hereunder, including the costs
and
expenses of defending itself against any claim or
liability in
connection with the exercise or performance of any of
its powers or duties hereunder.
(b) As security for the performance of the
obligations of the Company under this Section 9.06, the
Trustee
shall have a claim prior to the Notes upon all property
and funds held or collected by the Trustee as such, except
funds held in trust
for the payment of principal of and any premium and interest
on
particular Notes.
(c) When the Trustee incurs expenses or
renders
services in connection with an Event of Default
specified in
Section 8.01(5) or (6), the expenses (including
the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute
expenses
of administration under any applicable Federal or
state bankruptcy, insolvency or other similar law.
(d) The provisions of this Section 9.06 shall
survive the termination of this Indenture.
Section 9.07. Officers' Certificate as
Evidence.
Except as otherwise provided in Section 9.01, whenever in
the administration of this Indenture the Trustee shall deem
it
necessary or desirable that a matter be proved or
established prior to taking, suffering or omitting any
action hereunder, such matter (unless other evidence in
respect thereof is
herein specifically prescribed) may, in the absence
of
negligence or bad faith on the part of the Trustee, be
deemed to be
conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such Officers'
Certificate, in the absence
of negligence or
bad faith on the part of the Trustee,
shall be full warrant to the Trustee for any action taken,
suffered or omitted by it under this Indenture in reliance
thereon.
Section 9.08. Conflicting Interest of
Trustee.
The Trustee will comply with TIA Section 310(b); provided,
however, that (a) there shall be excluded from the
requirements of
TIA Section 310(b)(1) all indentures which may be excluded
pursuant to the proviso to TIA Section 310(b)(1);
and(b) the
provisions of the first sentence of TIA Section 310(b)(9)
shall not apply to any securities described in the
second sentence of
TIA Section 310(b)(9).
Section 9.09. Eligibility of Trustee. The
Trustee
hereunder shall at all times be a corporation organized and
doing business under
the laws of the United States or any
State thereof or of the District of Columbia authorized
under such laws to exercise corporate trust powers,
having a combined
capital and surplus of at least $20,000,000 and subject
to
supervision or examination by Federal,State or District of
Columbia authority and shall not otherwise be
disqualified under TIA Section 310(a)(5). If such
corporation publishes reports
of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining
authority, then for the
purposes of this Section 9.09, the combined capital and
surplus of such corporation shall be deemed to be its
combined
capital and surplus as set forth in its most recent
report of
condition so published. In case at any time the Trustee
shall cease
to be eligible in accordance with this Section 9.09, the
Trustee shall resign immediately in the manner and
with the
effect specified in Section 9.10.
Section 9.10. Resignation or Removal of
Trustee.
(a) The Trustee may at any time resign and be
discharged of the trusts created by this Indenture by
giving written notice to the Company specifying the day
upon which such resignation shall take effect, and such
resignation shall take effect upon the day specified in
such notice unless previously a successor trustee shall
have been appointed by the Noteholders or the Company in
the manner provided in Section 9.11, and in such event such
resignation shall take effect immediately on the
appointment of such successor trustee.
(b) The Trustee may be removed at any time by an
instrument or concurrent instruments in writing filed
with
such Trustee and signed and acknowledged by the holders of
a
majority in principal amount of the then outstanding Notes
or by
their attorneys in fact duly authorized.
(c) In case at any time the Trustee shall cease to
be eligible in accordance with Section 9.09, then
the
Trustee so ceasing to be eligible shall resign
immediately in the
manner and with the effect provided in this Section 9.10,
and in the
event that it does not resign immediately in such case,
then it
may be removed forthwith by an instrument or
concurrent
instruments in writing filed with the Trustee so ceasing to
be eligible and either:
(1) signed by the President or any Vice
President
of the Company attested by the Secretary or an
Assistant Secretary of the Company; or
(2) signed and acknowledged by the holders of a
majority in principal amount of outstanding Notes
or by
their attorneys in fact duly authorized.
(d) Any resignation or removal of the Trustee and
any appointment of a successor Trustee pursuant to this
Section
9.10 shall become effective upon acceptance of appointment
by the
successor Trustee as provided in Section 9.12.
Section 9.11. Appointment of Successor
Trustee.
(a) In case at any time the Trustee shall
resign
or shall be removed (unless such Trustee shall be removed
as
provided in Section 9.10(c) in which event the vacancy
shall
be filled as provided therein), or shall become
adjudged a bankrupt or insolvent, or if a receiver of
the Trustee or of its property shall be appointed, or
if any public officer shall take charge or control of
the Trustee, or of its property or affairs, for the purpose
of rehabilitation, conservation or liquidation, or a vacancy
shall be deemed to exist in the office of the Trustee
for any other reason, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee. Within one
year after such resignation, removal or incapability or the
occurrence of such vacancy, a successor Trustee may be
appointed by act of the
holders of a majority in principal amount of the
outstanding
Notes, delivered to the Company and retiring Trustee,
and the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment, become the successor
Trustee
and supersede the successor Trustee appointed by the Company
or
by such receiver or Trustee.
(b) The Company shall publish notice of any
resignation and subsequent appointment of a successor
Trustee made by it or by act of Noteholders in one
Authorized Newspaper in the Borough of Manhattan, The City
of New York, and in one Authorized Newspaper in the
city in which the principal office of
the Trustee is located, once each.
(c) If in a proper case no appointment of
a
successor Trustee shall be made pursuant to Section 9.11(a)
within six
months after a vacancy shall have occurred in the office of
Trustee, any Noteholder or any resigning Trustee may
apply
to any court of competent jurisdiction to appoint
a successor Trustee. Said court may thereupon after such
notice, if any, as such court may deem proper and
prescribe, appoint a successor Trustee.
(d) If any Trustee resigns because of conflict of
interest as provided in Section 9.08 and a successor
Trustee
has not been appointed by the Company or the Noteholders or,
if
appointed, has not accepted the appointment, within 30
days
after the date of such resignation, the resigning
Trustee may
apply to any court of competent jurisdiction for the
appointment of a
successor Trustee.
(e) Any Trustee appointed under this Section
9.11
as a successor Trustee shall be a bank or trust
company eligible
underSection 9.09 and qualified under Section 9.08.
Section 9.12. Acceptance by Successor Trustee.
(a) Any successor Trustee appointed as
provided in
Section 9.11 shall execute, acknowledge and deliver to the
Company and to its predecessor Trustee an instrument
accepting
such appointment hereunder, and thereupon the
resignation or
removal of the predecessor Trustee shall become
effective
and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights,
powers,
duties and obligations of its predecessor hereunder,
with like effect as if originally named as Trustee herein;
but nevertheless, on the written request of the Company or
of
the successor Trustee, the Trustee ceasing to act shall,
upon
payment of any amounts then due it pursuant to Section
9.06, execute
and deliver an instrument transferring to such successor
Trustee
all the rights and powers of the Trustee so ceasing to
act.
Upon request of any such successor Trustee, the
Company shall
execute any and all instruments in writing in order more
fully and
certainly to vest in and confirm to such successor
Trustee
all such rights and powers. Any Trustee ceasing to act
shall, nevertheless, retain a lien upon all property or
funds held
or collected by such Trustee to secure any amounts then due
it
pursuant to Section 9.06.
(b) No successor Trustee shall accept
appointment
as provided in this Section 9.12 unless at the time of such
acceptance such successor Trustee shall be qualified
under Section 9.08 and eligible under Section 9.09.
(c) Upon acceptance of appointment by a
successor
Trustee as provided in this Section 9.12, the Company
shall
mail notice of the succession of such Trustee hereunder to
all holders of Notes as the names and addresses of such
holders
appear on the registry books. If the Company fails to
mail such notice in the prescribed manner within 10 days
after the acceptance of appointment by the successor
Trustee, the successor Trustee
shall cause such notice to be mailed at the expense
of
the Company.
Section 9.13. Succession by Merger, etc.
(a) Any corporation into which the Trustee may be
merged or converted or with which it may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a
party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder without the
execution or filing of any paper or any further act on
the part of any of the
parties hereto.
(b) In case at the time such successor to the
Trustee shall succeed to the trusts created by this
Indenture any of
the Notes shall have been authenticated but not delivered,
any
such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee, and deliver
such
Notes so authenticated; and in case at that time any of
the Notes
shall not have been authenticated, any successor to
the Trustee
may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor
Trustee; and in
all such cases such certificates shall have the full force
which
it is anywhere in the Notes or in this Indenture provided
that
the certificates of the Trustee shall have; provided,
however,
that the right to adopt the certificate of authentication
of any
predecessor Trustee or authenticate Notes in the name of any
predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
Section 9.14. Limitations on Rights of
Trustee as
a Creditor. The Trustee shall comply with TIA Section
311(a).
A Trustee which has resigned or been removed shall be
subject
to TIA Section 311(a) to the extent indicated therein.
Section 9.15. Authenticating Agent. (a)
There
may be one or more Authenticating Agents appointed by
the
Trustee with power to act on its behalf and subject to its
direction in
the authentication and delivery of Notes in connection
with
transfers and exchanges under Sections 2.05, 2.06, 2.07,
2.08, 3.02,
3.03, and 13.04, as fully to all intents and purposes as
though
such Authenticating Agents had been expressly authorized
by those
Sections to authenticate and deliver Notes. For
all purposes of this Indenture, the authentication and
delivery of Notes by
any Authenticating Agent pursuant to this Section 9.15
shall be
deemed to be the authentication and delivery of such
Notes
"by the Trustee." Any such Authenticating Agent shall
be a bank
or trust company of the character and qualifications
set forth in
Section 9.09.
(b) Any corporation into which any
Authenticating Agent may be merged or converted or
with which it may be consolidated, or any
corporation resulting from any merger, conversion
or consolidation to which any Authenticating
Agent shall be a party, or any corporation
succeeding to the corporate trust business of any
Authenticating Agent, shall be the successor of such
Authenticating Agent hereunder, if such successor
corporation is otherwise eligible under this Section
9.15, without the execution or filing of any paper
or any further act on the part of the parties hereto
or such Authenticating Agent or such successor
corporation.
(c) Any Authenticating Agent may at any
time resign by giving written notice of resignation
to the Trustee and to the Company. The Trustee may at
any time terminate the agency of any Authenticating
Agent by giving written notice of termination to
such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon
such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under
this Section 9.15, the Trustee shall promptly
appoint a successor Authenticating Agent, shall
give written notice of such appointment to the
Company and shall mail, in the manner provided in
Section 15.10, notice of such appointment to the
holders of Notes.
(d) The Trustee agrees to pay
to each
Authenticating Agent from time to time reasonable
compensation for its services, and the Trustee
shall be entitled to be reimbursed for such payments,
in accordance with Section 9.06.
(e) Sections 9.02, 9.03, 9.04, 9.06,
9.09 and
10.03 shall be applicable to any Authenticating Agent.
Section 9.16. Trustee's
Application for
Instructions from the Company. Any application
by the Trustee for written instructions from the
Company may, at the option of the Trustee, set
forth in writing any action proposed to be taken or
omitted by the Trustee under this Indenture and the
date on and/or after which such action shall be
taken or such omission shall be effective. The
Trustee shall not be liable for any action taken by,
or omission of, the Trustee in
accordance with a proposal included in such
application on or after the date specified in such
application (which date shall not be less than five
Business Days after the date any officer of
the Company actually receives such application,
unless any such officer shall have consented in
writing to any earlier date) unless prior to taking
any such action (or the effective date in the
case of an omission), the Trustee shall have
received written instructions in response to such
application specifying the action to be taken or
omitted.
ARTICLE TEN.
Concerning the Noteholders.
Section 10.01. Action by
Noteholders. (a)
Whenever in this Indenture it is provided that
the holders of a specified percentage in aggregate
principal amount of the Notes may take any action
(the making of any demand or request, or the giving
of any notice, consents or waivers in lieu of a
Noteholders' meeting or the taking of any other
action) the fact that at the time of taking any
such action the holders of such specified
percentage
have joined therein may be evidenced (a) by
any instrument or any number of instruments of similar
tenor executed by such Noteholders in person or by
agent or proxy appointed in writing, or (b) by the
record of such Noteholders voting in favor thereof
at any meeting of Noteholders duly called and
held in accordance with Article Eleven, or (c) by
a combination of such instrument or instruments and
any such record of such a meeting of Noteholders.
(b) Whenever in this Indenture it is
provided that
the holders of a specified percentage in
aggregate
principal amount of the Notes may take any action,
any party designated in writing by the Depositary, or
by any party so designated by the Depositary, as
the owner of a beneficial interest of a specified
principal amount of any Global Note held by
such Depositary shall be deemed to be a holder of
Notes in such principal amount for such purpose.
Section 10.02. Proof of Execution
by Noteholders. (a) Subject to Sections 9.01, 9.02
and 11.05, proof of the execution of any
instruments by a Noteholder or the agent or proxy for
such Noteholder shall be sufficient if made in
accordance with such reasonable rules and regulations
as may be prescribed by the Trustee or in such manner
as shall be satisfactory to the Trustee. The
ownership of Notes shall be proved by the Note
register of the Company or by a certificate of the
Note registrar.
(b) The record of any Noteholders'
meeting shall
be proven in the manner provided in Section 11.06.
Section 10.03. Who Deemed
Absolute Owners. Subject to Sections 2.04(f) and
10.01, the Company, the Trustee, any Authenticating
Agent and Note registrar may deem the person in
whose name any Note shall be registered upon
the Note register of the Company to be, and may
treat such person as, the absolute owner of such
Note (whether or not such Note shall be overdue)
for the purpose of receiving payment of or on account
of the principal of and any premium and interest on
such Note, and for all other purposes; and neither
the Company nor the Trustee nor any Authenticating
Agent nor any Note registrar shall be affected by
any notice to the contrary. All such payments shall
be valid and effectual to satisfy and discharge the
liability upon any such Note to the extent of the sum
or sums so paid.
Section 10.04. Company-Owned
Notes Disregarded. In determining whether the
holders of the requisite aggregate principal
amount of outstanding Notes have concurred in any
direction, consent or waiver under this
Indenture, Notes which are owned by the Company or
any other obligor on the Notes or by any person
directly or indirectly controlling or controlled
by or under direct or indirect common control with the
Company or any other obligor on the Notes shall be
disregarded and deemed not to be outstanding for
the purpose of any such etermination;
provided that for the purposes of determining
whether the Trustee shall be protected in relying on
any such direction, consent or waiver only Notes
which the Trustee knows are so owned shall be so
disregarded. Notes so owned which have been pledged
in good faith may be regarded as outstanding for the
purposes of this Section 10.04 if the pledgee
shall establish to the satisfaction of the
Trustee the pledgee's right to vote such Notes and
that the pledgee is not a person directly
or indirectly controlling or
controlled by or under direct or indirect
common control
with the Company or any such other obligor. In the
case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.
Section 10.05. Revocation of Consents;
Future
Holders Bound. At any time prior to the taking of any
action by the holders of the percentage in aggregate
principal amount of
the Notes specified in this Indenture in connection
with such
action, any holder of a Note, which is shown by the
evidence to be included in the Notes the holders
of which have consented to such action may, by
filing written notice with the Trustee at the
Corporate Trust Office of the Trustee and upon
proof of ownership as provided in Section 10.02(a),
revoke such action so far as it concerns such
Note. Except as aforesaid any such action taken by
the holder of any Note shall be conclusive and
binding upon such holder and upon all future holders
and owners of such Note and of any Notes issued in
exchange or substitution therefor, irrespective of
whether or not any notation thereof is made upon
such Note or such other Notes.
Section 10.06. Record Date for
Noteholder Acts.
If the Company shall solicit from the Noteholders
any request, demand, authorization, direction,
notice, consent, waiver or other act, the
Company may, at its option, by Board Resolution,
fix in advance a record date in compliance with
TIA Section 3.16(c) for the determination of
Noteholders entitled to give such request,
demand, authorization, direction, notice, consent,
waiver or other act, but the Company shall
have no obligation to do so. If such a record
date is fixed, such request, demand,
authorization, direction, notice, consent, waiver
or other
act may be given before or after the record date, but
only the
Noteholders of record at the close of business on
the record
date shall be deemed to be Noteholders for the
purpose of
determining whether holders of the requisite
aggregate principal amount of outstanding Notes have
authorized or agreed or consented to such
request,demand, authorization, direction, notice,
consent, waiver or other act, and for that
purpose the outstanding Notes shall be computed
as of the record date; provided, however, that no
such authorization, agreement or consent
by the Noteholders on the record date shall be deemed
effective unless it shall become effective pursuant
to this Indenture not later than six months after the
record date.
ARTICLE ELEVEN
Noteholders' Meeting.
Section 11.01. Purposes of Meetings.
A
meeting of Noteholders may be called at any time and
from time to time pursuant to this Article Eleven
for any of the following purposes:
(a) to give any notice to the Company or
to the
Trustee, or to give any directions to the
Trustee, or
to consent to the waiving of any default
hereunder and
its consequences, or to take any other action
authorized to be taken by Noteholders pursuant to
Article Eight;
(b) to remove the Trustee and nominate a
successor Trustee pursuant to Article Nine;
(c) to consent to the execution of
an indenture or indentures supplemental hereto
pursuant to Section 13.02; or
(d) to take any other action authorized to
be taken by or on behalf of the holders of
any
specified aggregate principal amount of the
Notes, as the case may be, under any other
provision of this Indenture
or under applicable law.
Section 11.02. Call of Meetings by
Trustee. The
Trustee may at any time call a meeting of holders
of
Notes to take any action specified in Section 11.01,
to be held at such time and at such place as
the Trustee shall determine. Notice of every such
meeting of Noteholders, setting forth the time and
the place of such meeting and in general terms
the action proposed to be taken at such meeting,
shall be given to holders of the Notes that may be
affected by the action proposed to be taken at such
meeting in the manner provided in Section
15.10.Such notice
shall be given not less than 20 nor more than 90
days prior
to the date fixed for such meeting.
Section 11.03. Call of Meetings by Company
or Noteholders. In case at any time the Company,
pursuant to a
Board Resolution, or the holders of at least
10% in
aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to
call a meeting of Noteholders, by written request
setting forth in reasonable detail the action
proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such
meeting within 20 days after receipt of such
request, then the Company or such Noteholders
may determine the time and the place for such meeting
and may call such meeting to take any action
authorized in Section 11.01, by giving notice
thereof as provided in Section 11.02.
Section 11.04. Qualifications for Voting.
To be
entitled to vote at any meetings of Noteholders
a Person
shall (a) be a holder of one or more Notes affected
by the action proposed to be taken or (b) be a Person
appointed by an instrument in writing as proxy by a
holder of one or more
such Notes. The only Persons who shall be entitled
to be present or to speak at any meeting of
Noteholders shall be the Persons entitled to vote
at such meeting and their counsel and any
representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 11.05. Regulations.
(a) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting
of Noteholders, in regard to proof of the holding
of Notes and of the appointment of proxies, and
in regard to the appointment and
duties of inspectors of votes, the
submission
and examination of proxies, certificates and other
evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it
shall think fit.
(b) The Trustee shall, by an
instrument in
writing, appoint a temporary chairman of the
meeting, unless the meeting shall have been
called by the Company or by the Noteholders as
provided in Section 11.03, in which case the Company
or Noteholders calling the meeting, as the case may
be,
shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by the
holders of a majority in aggregate principal amount
of the Notes present in person or by proxy at the
meeting.
(c) Subject to Section 10.04, at any
meeting each
Noteholder or proxy shall be entitled to one vote for
each
$1,000 principal amount of Notes held or
represented by
such Noteholder; provided, however, that no vote shall
be cast or counted at any meeting in respect of
any Note challenged as not outstanding and ruled
by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have
no right to vote other than by virtue of Notes
held by such chairman or instruments in writing as
aforesaid duly designating such chairman as the
person to vote
on behalf of other Noteholders. At any
meeting of
Noteholders duly called pursuant to Section 11.02
or 11.03, the presence of persons holding or
representing Notes in an aggregate principal
amount sufficient to take action on any business for
the transaction for which such meeting was
called shall constitute a quorum. Any meeting of
Noteholders duly called pursuant to Section 11.02 or
11.03 may be adjourned from time to time by the
holders of a majority in aggregate principal amount
of the Notes present in person or by proxy at the
meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further
notice.
Section 11.06. Voting. The vote
upon any
resolution submitted to any meeting of Noteholders
shall be by written ballots on which shall be
subscribed the signatures of the holders of Notes or
of their representatives by proxy and the principal
amount of Notes held or represented by them. The
permanent chairman of the meeting shall
appoint
two inspectors of votes who shall count all votes cast
at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting
their verified written reports in duplicate of all
votes cast at the meeting. A record n duplicate of
the proceedings of each meeting of Noteholders
shall be prepared by the secretary of the meeting
and there shall be attached to said record the
original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or
more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and
showing that said notice was given as provided in
Section 11.02. The record shall show the principal
amount of the Notes voting in favor of or against
any resolution. The record shall be signed and
verified by the affidavits of the permanent chairman
and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the
Trustee. Any
record so signed and verified shall be
conclusive
evidence of the matters therein stated.
Section 11.07. Right of Trustee or
Noteholders not
Delayed. Nothing in this Article Eleven contained
shall be
deemed or construed to authorize or permit, by reason
of any
call of a meeting of Noteholders or any rights
expressly or
impliedly conferred hereunder to make such call,
any hindrance or delay in the exercise of any
right or rights conferred upon or reserved to the
Trustee or to the holders of Notes under any of the
provisions of this Indenture or of the Notes.
ARTICLE TWELVE
Consolidation, Merger, Conveyance, Transfer
or Lease
Section 12.01. Company May Consolidate,
etc., only
on Certain Terms. The Company shall not
consolidate with
or merge into any other corporation or convey
or transfer
its properties and assets substantially as an
entirety to any Person unless:
(1) the corporation formed by
such consolidation or into which the Company is
merged or the Person which acquires by
conveyance or transfer the properties and
assets of the Company substantially as an
entirety shall be a corporation organized and
existing under the laws of the United States
of America or any State or the District of
Columbia, and shall expressly
assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form
satisfactory to
the Trustee, the due and punctual payment
of the principal of and any premium and interest on
all of the Notes and the performance of every
covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such
consolidation, merger, conveyance or transfer,
no
Event of Default, and no event which, after
notice or
lapse of time, or both, would become an Event of
Default,
shall have occurred and be continuing;
(3) if, as a result of such
consolidation, merger, conveyance, transfer or
lease, properties or assets of the Company
would become subject to a mortgage, pledge,
lien, security interest or other encumbrance which
would not otherwise be permitted by this Indenture
without making effective provision whereby the
Notes then outstanding and any other indebtedness
of the Company then entitled thereto will be
equally and ratably secured with any and all
indebtedness and obligations secured thereby,
the Company or the successor corporation or Person,
as the case may be, will take such action as
will be necessary effectively to secure all Notes
equally and ratably with (or prior to) all
indebtedness secured thereby; and
(4) the Company has delivered to the
Trustee an
Officers' Certificate and an Opinion of Counsel
each stating that such consolidation, merger,
conveyance or transfer and such supplemental
indenture comply with this Article Twelve and
that all conditions precedent herein provided
for relating to such consolidation, merger,
conveyance or transfer have been complied
with.
Section 12.02. Successor Corporation
Substituted.
Upon any consolidation or merger, or any
conveyance or
transfer of the properties and assets of the Company
substantially as an entirety in accordance with
Section 12.01, the successor corporation formed by
such consolidation or into which the Company is
merged or to which such conveyance or transfer
is made shall succeed to, and be substituted for,
and may exercise every right and power of, the
Company under this Indenture with the same effect as
if such successor corporation had been named as the
Company herein; provided, however, that no such
conveyance or transfer shall have the effect of
releasing the Person named as the "Company" in the
first paragraph of this Indenture or any successor
corporation which shall theretofore have become
such in the manner prescribed in this Article
Twelve from its liability as obligor and maker on any
of the Notes.
ARTICLE THIRTEEN
Supplemental Indentures.
Section 13.01. Supplemental Indentures
without
Consent of Noteholders.
(a) The Company, when authorized by
Board
Resolution, and the Trustee may from time to time and
at any time enter into an indenture or indentures
supplemental hereto for one or more of the following
purposes:
(1) to make such provision in regard
to matters
or questions arising under this Indenture as may
be necessary or desirable and not inconsistent
with
this Indenture or for the purpose of
supplying any omission, curing any ambiguity,
or curing, correcting or supplementing any
defective or inconsistent
provision or to make a change which does
not affect the rights of any Noteholder;
(2) to change or eliminate any of
the provisions of this indenture, provided that any
such change or elimination shall become
effective only when there is
no Note outstanding created prior to the
execution of
such supplemental indenture which is entitled to
the benefit of such provision;
(3) to secure the Notes;
(4) to establish the form of Notes as
permitted by Section 2.01 or to establish or reflect
any terms of any Note determined pursuant to Section
2.05;
(5) to evidence the succession of another
corporation to the Company, and the assumption
by any such successor of the covenants of the
Company
herein and in the Notes;
(6) to grant to or confer upon the Trustee
for the
benefit of the Holders any additional
rights, remedies, powers or authority;
(7) to permit the Trustee to comply
with
any duties imposed upon it by law;
(8) to specify further the duties and
resonsibilities of, and to define further the
relationships among, the Trustee, any
Authenticating Agent and any paying agent; and
(9) to add to the covenants of the Company
for the
benefit of the holders or to surrender a right
or power
conferred on the Company herein.
(b) The Trustee is hereby authorized to
join with
the Company in the execution of any such
supplemental indenture, to make any further
appropriate agreements and
stipulations which may be therein contained and to
accept the
conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated
to enter into any such
supplemental indenture which affects the Trustee's
own rights, duties or immunities under this
Indenture or otherwise.
(c) Any supplemental indenture authorized
by this
Section 15.01 may be executed by the Company and
the Trustee
without the consent of the holders of any of the
Notes at
the time outstanding, notwithstanding any of the
provisions
of Section 13.02.
Section 13.02. Supplemental
Indentures with
Consent of Noteholders.
(a) With the consent (evidenced as provided
in Section 10.01) of the holders of at least
50% in aggregate principal amount of the Notes at the
time outstanding
that would be affected by such
supplemental indenture, the
Company, when authorized by Board Resolution, and
the Trustee may from time to time and at any
time enter into an indenture or indentures
supplemental hereto for the purpose of adding
any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture
or of any supplemental indenture or of modifying
in any manner the rights of the Noteholders;
provided, however, that no such supplemental indenture
shall:
(1) change the maturity of any Note; or
reduce the rate or extend the time of payment of
interest
on any Note; or change the method of
calculating interest, or any term used in the
calculation of interest, or the period for
which interest is payable, on any Floating
Rate Note; or reduce the principal amount of
any Note or any premium thereon; or change
the coin or currency in which the principal of
any Note or any premium or interest thereon
is payable; or change the date on
which any Note may be redeemed; or adversely
affect
the rights of any Noteholder to institute suit
for the enforcement of any payment of principal
of or any
premium or interest on any Note; in each
case
without the consent of the holder of each Note
so affected (for purposes of this Section 13.02
(a)(1) only, the term "Note" shall include Notes
for which an offer has
been accepted by the Company); or
(2) reduce the aforesaid percentage of
Notes, the
holders of which are required to consent to any
such supplemental indenture, without the consent
of the holders of all of the Notes then
outstanding.
(b) Upon the request of the
Company, accompanied by a copy of the Board
Resolution authorizing the execution of any such
supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in
the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee's
own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may
in its discretion, but shall not be obligated to,
enter into such supplemental indenture.
(c) It shall not be necessary for the
consent of
the holders of Notes under this Section 13.02 to
approve the particular form of any proposed
supplemental indenture,
but it shall be sufficient if such consent shall
approve
the substance thereof.
(d) Promptly after the execution by
the Company and the Trustee of any supplemental
indenture pursuant to this Section 13.02, the
Company shall give notice in the manner provided in
Section 15.10, setting forth in general
terms the substance of such supplemental
indenture, to
all Noteholders. Any failure of the Company to give
such notice, or any defect therein shall not,
however, in any way impair or affect the validity of
any such supplemental indenture.
Section 13.03. Compliance with
Trust Indenture Act; Effect of Supplemental
Indentures. Any
supplemental indenture executed pursuant to this
Article Thirteen shall comply with the TIA. Upon
the execution of any supplemental indenture
pursuant to this Article Thirteen, this Indenture
shall be and be deemed to be modified and amended in
accordance therewith and the respective rights,
limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the
Company and the Noteholders hall thereafter be
determined, exercised and enforced hereunder subject
in all respects to such modifications and
amendments, and all the terms and conditions of any
such supplemental indenture shall be and be deemed to
be part of the
terms and conditions of this Indenture for any
and all
purposes.
Section 13.04. Notation on
Notes. Notes
authenticated and delivered after the
execution of any supplemental indenture pursuant
to this Article Thirteen may bear a notation in form
approved by the Trustee as to any matter provided
for in such supplemental indenture. If the Company or
the Trustee shall so determine, new Notes so
modified as to conform in the opinion of the Trustee
and the Board of Directors to any modification
of this Indenture contained in any such
supplemental indenture may be prepared and executed
by the Company, authenticated by the Trustee and
delivered in exchange for the Notes then
outstanding.
Section 13.05. Evidence of Compliance of
Supplemental Indenture to Be Furnished Trustee. The
Trustee, subject to Sections 9.01 and 9.02, may
receive an Officers'
Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed
pursuant hereto complies with the requirements of
this Article Thirteen.
ARTICLE FOURTEEN.
Immunity of Incorporators, Stockholders,
Officers and Directors.
Section 14.01. Indenture and Notes Solely
Corporate
Obligations. No recourse for the payment of
the principal of or any premium or interest on any
Note, or for any claim based thereon or
otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or
agreement of the Company, contained in this
Indenture or in any supplemental indenture, or
in any Note, or because of the creation of
any indebtedness represented thereby, shall be
had against any incorporator, stockholder,
officer or director, as such, past, present or future,
of the Company or any successor corporation, either
directly or through the Company or
any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or
otherwise; it being expressly understood that all
such liability is hereby
expressly waived and released as a condition of, and
as a
consideration for, the execution of this Indenture and
the issue of the Notes.
ARTICLE FIFTEEN.
Miscellaneous Provisions.
Section 15.01. Provisions Binding on
Company's Successors. All the covenants,
stipulations, promises and
agreements made by the Company in this Indenture
shall bind
its successors and assigns whether so expressed or
not.
Section 15.02. Official Acts by Successor
Corporation. Any act or proceeding by any provision of
this Indenture authorized or required to be done or
performed by any board, committee or officer of the
Company shall and may be done and performed with
like force and effect by the like board,
committee or officer of any corporation that shall at
the time be the lawful successor of the Company.
Section 15.03. Addresses for Notices,
etc. Any
notice or demand which by any provision of this
Indenture
is required or permitted to be given or served by the
Trustee or by the Noteholders on the Company may be
given or served by being deposited postage
prepaid in a post office letter box addressed
(until another address is filed by the Company
with the Trustee) to Kansas City Power & Light
Company, 1201 Walnut, Kansas City, Missouri 64106,
to the attention of the Corporate Secretary. Any
notice, direction, request or demand by any
Noteholder to or upon the Trustee shall be
deemed to have been sufficiently given or made,
for all purposes, if given or made in writing at the
Corporate Trust Office of the Trustee.
Section 15.04. Governing Law. This
Indenture and
each Note shall be deemed to be a contract made
under the laws of the State of New York, and for all
purposes shall be
construed in accordance with the laws of said State.
Section 15.05. Evidence of Compliance with
Conditions Precedent.
(a) Upon any application or demand by
the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that
all conditions precedent, if any, provided for in
this indenture relating to the proposed action
have been complied with and an Opinion of Counsel
stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.
(b) Each certificate or opinion provided
for in
this Indenture and delivered to the Trustee with
respect to
compliance with a condition or covenant provided
for in this Indenture shall include (1) a
statement that each Person making such
certificate or opinion has read such covenant or
condition and the definitions relating thereto; (2) a
brief statement as to the nature and scope of the
examination or investigation upon which the
statements or opinion contained in such certificate or
opinion are based; (3) a statement that, in the
opinion of each such Person, such Person has made such
examination or investigation as is necessary to
enable such Person to express an informed opinion
as to whether or not such covenant or condition has
been complied with; and (4) a statement as to
whether or not, in the opinion of each such
Person, such condition or covenant
has been complied with.
(c) In any case where several matters
are required to be certified by, or covered by an
opinion of, any specified Person, it is not
necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one
document, but one such Person may certify or give an
opinion with respect to some matters and one or more
other such Persons as to other matters,and and
such Person may certify or give an opinion as to such
matters in one or several documents.
(d) Any certificate or opinion of an
officer of
the Company
may be based, insofar as it relates to
legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care
should know, that the certificate or opinion
or representations with respect to the matters upon
which such certificate or opinion is based are
erroneous. Any such certificate or Opinion of
Counsel may be based, insofar as it relates to
factual matters,upon a certificate or opinion
of, or representations by,
an officer or officers of the Company stating that the
information with respect to such factual matters is
in the
possession of the Company, unless such person knows,
or in
the exercise of reasonable care should know,
that the
certificate or opinion or representations with
respect to such matters are erroneous.
(e) Any certificate, statement or opinion
of any
officer of the Company, or of counsel, may be
based, insofar
as it relates to accounting matters, upon a
certificate or
opinion of or representations by an accountant or
firm of
accountants, unless such officer or counsel, as the
case may be, knows that the certificate or
opinion or representations with respect to the
accounting matters upon which the certificate,
statement or opinion of such officer or counsel may
be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the
same are erroneous. Any certificate or opinion of
any firm of independent public accountants filed
with the Trustee shall contain a statement that such
firm is independent.
(f) Where any Person is required to make,
give or
execute two or more applications, requests, consents,
certificates, statements, opinions or
other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
Section 15.06. Business Days.
Unless otherwise provided herein, in any case where
the date of maturity of the principal of or any
premium or interest on any Note or the date fixed
for redemption of any Note is not a Business Day,
then payment of such principal or any premium or
interest need not be made on such date but may
be made on the next succeeding Business Day with
the same force and effect as if made on the date of
maturity or the date fixed for redemption, and, in
the case of payment, no interest shall accrue for the
period from and after such date.
Section 15.07. Trust Indenture Act to
Control. If
and to the extent that any provision of this
Indenture limits, qualifies or conflicts with
another provision included in this Indenture which
is required to be included in this Indenture by
any of Sections 310 to 317, inclusive, of the
TIA, such required provision shall control.
Section 15.08. Table of Contents,
Headings, etc.
The table of contents and the titles and
headings of the
articles and sections of this Indenture have
been inserted for convenience of reference only,
are not to be considered a part hereof, and shall
in no way modify or restrict any of the
terms or provisions hereof.
Section 15.09. Execution in
Counterparts. This
Indenture may be executed in any number
of
counterparts, each of which shall be an
original, but such counterparts shall together
constitute but one and the same instrument.
Section 15.10. Manner of Mailing Notice to
Noteholders. Any notice or demand which by
any provision of this Indenture is required or
permitted to be given or served by the Trustee or the
Company to or on the holders of Notes, as the case may
be, shall be given or served by first-class mail,
postage prepaid, addressed to the holders of such
Notes at their last addresses as the same appear on
the Note register referred to in Section 2.06, and
any such notice shall be deemed to be given or
served by being deposited in a post office letter box
in the form and manner provided in this Section 15.10.
In Witness Whereof, Kansas City Power
& Light
Company has caused this Indenture to be signed and
acknowledged by its Executive Vice President, and its
corporate seal to
be affixed hereunto, and the same to be attested by
its Secretary or an Assistant Secretary, and The Bank
of New York has caused this Indenture to be
signed and acknowledged by one of its Assistant
Vice Presidents and its corporate seal to
be affixed hereunto, and the same to be
attested by one of its Assistant Treasurers,
as of the day and year first written above.
KANSAS CITY POWER & LIGHT COMPANY
By_______________________________
Bernard J. Beaudoin
Executive
Vice
President
Attest:
__________________________
Jeanie Sell Latz
Secretary
[Seal)
THE BANK OF NEW
YORK, as
Trustee
By_______________________
__ Assistant Vice
President
Attest:
__________________________
Assistant Treasurer
[Seal]
STATE OF MISSOURI )
) ss:
COUNTY OF JACKSON )
I, ________________________, a Notary Public
in and
for
said County and State aforesaid, do hereby certify
that Bernard J. Beaudoin of Kansas City Power &
Light Company, a
Missouri corporation and Jeanie Sell Latz
of said
corporation,
who are personally known to me to be the same
persons whose
names
are subscribed to the foregoing instrument and who
are both
personally known to me to be Executive Vice
President and
Secretary of said corporation, appeared before me
this day
in
person and severally acknowledged that they this
day signed,
sealed and delivered the said instrument as their
free and
voluntary act as such Executive Vice
President
and
Secretary,
respectively, of said corporation and as the
free and
voluntary
act of said corporation, for the uses and
purposes
therein
set
forth, and that the seal affixed to said instrument
is the
corporate seal of said corporation and that
the said
instrument
was executed, signed, sealed and delivered on behalf
of said
corporation by authority of its Board of Directors,
and acknowledged said instrument to be the free
and voluntary
act and
deed of said corporation.
GIVEN under my hand and notarial
seal this
__________
day of December, 1996.
_______________________________
My commission expires:
STATE OF _______ )
) ss:
COUNTY OF ______ )
I, _____________________________, a
Notary Public
in
and for said County and State aforesaid, do
hereby
certify
that
_________________________________ of The Bank of
New York, a
corporation organized and existing under the laws
of the
State of
New York, and ____________________, of said
corporation, who
are
personally known to me to be the same persons
whose names
are
subscribed to the foregoing instrument and who are
both personally known to me to be an Assistant Vice
President and
Assistant Treasurer of said corporation, appeared
before me
this
day in person and severally acknowledged that they
this day
signed, sealed and delivered the said instrument
as their
free
and voluntary act as such an Assistant Vice
President and
Assistant Treasurer, respectively, of said
corporation, and
as
the free and voluntary act of said corporation, for
the uses
and
purposes therein set forth, and that the seal
affixed to
said
instrument is the corporate seal of said
corporation and
that the
said instrument was executed, signed, sealed
and delivered
on
behalf of said corporation by authority of its By-
laws, and
acknowledged said instrument to be the free
and voluntary
act and
deed of said corporation.
GIVEN under my hand and notarial seal this
_____ day
of
December, 1996.
_____________________________
Notary Public
My commission expires:
EXHIBIT A
Global
Fixed Rate
Note
Registered
REGISTERED
NO.
KANSAS CITY POWER & LIGHT
COMPANY Fixed Rate
Medium-Term Note
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME
OF THE
DEPOSITARY (REFERRED TO HEREIN) OR A NOMINEE
THEREOF AND,
UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR THE
INDIVIDUAL
NOTES REPRESENTED HEREBY, THIS GLOBAL NOTE MAY
NOT BE
TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE
DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR
ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH
SUCCESSOR DEPOSITARY.
CUSIP:
PRINCIPAL
AMOUNT:
$
ORIGINAL ISSUE
DATES:
MATURITY
DATE:
INTEREST
RATE:
REDEMPTION
DATE:
INTEREST PAYMENT DATES:
Kansas City Power & Light Company, a Missouri
corporation (herein called the "Company",
which term
includes any
successor Person under the Indenture referred to
on the
reverse
hereof) for value received hereby promises to pay to
or registered assigns the principal sum of
DOLLARS
on the Maturity Date set forth above and to
pay interest
thereon
from the Original Issue Date (or if this Global Note
has two
or
more Original Issue Dates, interest shall, beginning
on each
such
Original Issue Date, begin to accrue for that part
of the
principal amount to which such Original Issue
Date is
applicable)
set forth above, or from the most recent
Interest Payment
Date to
which interest has been paid or duly provided
for,
semi-
annually
in arrears on the Interest Payment Dates set
forth above in
each
year commencing on (a) the first such Interest
Payment Date
next
succeeding the earliest Original Issue Date or
Dates set
forth
above, or (b) if such Original Issue Date is after
a Record
Date
and prior to the first Interest Payment Date, on
the second
Interest Payment Date, at the per annum Interest
Rate
set
forth
above until the principal hereof is paid or
made available
for
payment. The interest so payable and punctually
paid or
duly
provided for on any Interest Payment Date will,
as provided
in
such Indenture, be paid to the Person in whose
name
this
Note is
registered at the close of business on the Record
Date
for
such
Interest Payment Date, which shall be the
date
fifteen
calendar
days (whether or not a Business Day) preceding
such Interest
Payment Date, provided, however, that if an
Original Issue
Date
falls between a Record Date and an Interest
Payment Date,
the
first payment of interest with respect to
such
Original
Issue
Date will be paid on the second Interest
Payment Date
subsequent
to such Original Issue Date to the Person in whose
name this
Note
is registered at the close of business on the
Record Date
for
such second Interest Payment Date, and
provided further,
that
interest payable on the Maturity date or,
if
applicable,
upon
redemption, shall be payable to the Person to
whom principal
shall be payable. Except as otherwise provided
in
the
Indenture,
any such interest not so punctually paid or
duly provided
for
will forthwith cease to be payable to the holder
on
such
Record
Date and shall be paid to the Person in whose name
this Note
is
registered at the close of business on a Record Date
for the
payment of such defaulted interest to be fixed
by
the
Company,
notice whereof shall be given to Noteholders not
less than
fifteen days prior to such Record Date. Payment
of
the
principal
of and any premium and interest on this Note will
be made at
the
Corporate Trust Office of the Trustee in the Borough
of Manhattan, The City of New York, or such other
office or
agency
of the Company as may be designated by it for
such purpose,
in
such coin or currency of the United States of America
as at
the
time of payment is legal tender for payment of
public and
private
debts, provided, however, that at the option of
the Company,
payment of interest may be made by United
States dollar
check
mailed to the address of the Person entitled thereto
as such
address shall appear in the Note Register.
Under certain circumstances, this Global Note is
exchangeable in whole or from time to time in part for
a definitive Note or Notes, with the same Original
Issue Date
or
Dates, Maturity Date, Interest Rate
and redemption
provisions as
provided herein or in the Indenture.
REFERENCE IS HEREBY MADE TO THE
FURTHER PROVISIONS
OF
THIS GLOBAL NOTE SET FORTH IN FULL ON THE
REVERSE
HEREOF,
WHICH
FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME
EFFECT AS
IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication
hereon has
executed by the Trustee referred to on the
reverse hereof,
directly or through an Authenticating Agent,
by
manual
signature
of an authorized signatory, this Note shall not
be entitled
to
any benefit under the Indenture or be valid
or
obligatory
for any
purpose.
IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed under its
corporate seal.
Dated
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
Kansas
City Power &
Light
Company
This is one of the notes designated
therein referred to in the within- By
mentioned
Indenture
Executive
Vice
President
THE BANK OF NEW YORK, as Trustee
By Attest
Authorized
Signatory
Secretary
KANSAS CITY POWER & LIGHT COMPANY
MEDIUM-TERM NOTE
This Global Note is one of, and a
global security
which
represents Notes which are part of, a duly
authorized
issue
of
Notes of the Company (herein called the "Notes"),
issued and
to
be issued under an Indenture dated as of December
1, 1996
(herein
called the "Indenture") between the Company and The
Bank of
New
York, as Trustee (herein called the "Trustee",
which term
includes any successor Trustee under the
Indenture), to
which
Indenture and all indentures supplemental
thereto reference
is
hereby made for a statement of the
respective rights,
limitations
of rights, duties and immunities thereunder of
the Company,
the
Trustee and the Noteholders, and of the terms upon
which the
Notes are, and are to be, authenticated and
delivered. The
Notes
are limited to $300,000,000 aggregate principal
amount.
Each Note shall be dated the date
of its
authentication
by the Trustee. Each Note shall also bear an
Original Issue
Date
or Dates which with respect to this Global Note
(or any
portion
thereof), shall mean the date or dates of the
original issue
of
the Notes represented hereby as specified on
the face
hereof, and
such Original Issue Date or Dates shall remain the
same for
all
Notes subsequently issued upon transfer, exchange, or
substitution of such original Note (or
such subsequently
issued
Notes) regardless of their dates of authentication.
This Global Note may not be redeemed prior
to the
Redemption Date set forth on the face hereof.
If no
Redemption
Date is so set forth, this Global Note is
not redeemable
prior to
its maturity. On or after the Redemption Date set
forth on
the
face hereof this Note is redeemable in whole or in
part in
increments of $1,000 (provided that any
remaining principal
amount of this note shall be at least $1,000) at
the
option
of
the Company at the following redemption
prices (expressed as
percentages of the principal amount to be
redeemed) together
with
interest thereon payable to the date of redemption:
Redemption Periods Redemption
Prices
Notice of redemption will be given by mail to
Holders of
Notes
not less than 30 nor more than 60 days prior to
the date
fixed
for redemption all as provided in the Indenture.
In the
event of
redemption of this Global Note in part only, a
new Global
Note or
Notes and of like tenor for the unredeemed
portion hereof
will be
issued in the name of the Noteholder hereof
upon the
surrender
hereof.
This Global Note will not be entitled
to the
benefit of
a sinking fund.
Interest payments on this Global Note
will include
Accrued Interest to but excluding the Interest
Payment Date.
Interest payments on this Note shall be computed
and paid on
the
basis of a 360-day year of twelve 30-day months.
The Company at its option, subject to the
terms and
conditions provided in the Indenture, will
be discharged
from any
and all obligations in respect of the Notes
(except
for
certain
obligations including obligations to register
the transfer
or
exchange of Notes, replace stolen, lost or
mutilated Notes,
maintain paying agencies and hold monies for
payment in
trust),
91 days after the Company deposits with the
Trustee money or
U.S.
Government Obligations which through the payment
of interest
thereon and principal thereof in accordance with
their terms
will
provide money, or a combination of money and
U.S. Government
Obligations, in an amount sufficient to pay
all
the
principal of
and any premium and interest on the Notes on the
dates such
payments are due in accordance with the terms of
the Notes.
If an Event of Default with respect to
Notes shall
occur and be continuing, the principal of the Notes
may be
declared due and payable in the manner and with
the effect
provided in the Indenture.
The Indenture permits, with certain
exceptions as
therein provided, the amendment thereof and
the
modification
of
the rights and obligations of the Company and the
rights of
the
Noteholders to be affected under the Indenture at
any
time
by the
Company and the Trustee with the consent of the
holders of
not
less than a majority in principal amount of
the outstanding
Notes
affected thereby. The Indenture also
contains provisions
permitting the holders of not less than a
majority in
principal
amount of the outstanding Notes affected thereby,
on behalf
of
the holders of all Notes, to waive compliance by
the Company
with
certain provisions of the Indenture. The
Indenture
also
provides
that the holders of not less than a majority
in principal
amount
of the outstanding Notes may waive certain past
defaults and
their consequences on behalf of the holders of
all Notes.
Any
such consent or waiver by the holder of this
Global Note
shall be
conclusive and binding upon such holder and upon
all future
holders of this Global Note and of any Note issued
upon the
registration of transfer hereof or in exchange
herefor or in
lieu
hereof, whether or not notation of such consent
or waiver is
made
upon this Global Note or such Note.
As set forth in, and subject to,
the provisions of
the
Indenture, no holder of any Notes will have any right
to institute any proceeding with respect to the
Indenture or
for any
remedy thereunder, unless such holder shall
have previously
given
to the Trustee written notice of a continuing
Event of
Default
with respect to the Notes, the holders of not less
than a
majority in principal amount of the outstanding
Notes shall
have
made written request, and offered reasonable
indemnity, to
the
Trustee to institute such proceeding as Trustee,
and the
Trustee
shall have failed to institute such proceeding
within 60
days,
provided, however, that such limitations do not
apply to a
suit
instituted by the holder hereof for the
enforcement of
payment of
the principal of and any premium or interest on
this Global
Note
on or after the respective due dates expressed herein.
As provided in the Indenture and subject
to certain
limitations therein set forth, this Global Note may be
transferred, in whole but not in part, only
by the
Depositary to
a nominee of the Depositary, or by a nominee
of the
Depositary to
another nominee or the Depositary or by the
Depositary or
any
such nominee to a successor Depositary for this
Global Note
selected or approved by the Company or to a nominee
of such
successor Depositary.
If at any time the Depositary for this
Global Note
notifies the Company that it is unwilling or
unable to
continue
as Depositary for this Global Note or if at any time
the Depositary for this Global Note shall no
longer be eligible
or in
good standing under the Securities Exchange Act of
1934, as
amended, or other applicable statute or
regulation, the
Company
shall appoint a successor Depositary with respect
to this
Global
Note. If a successor Depositary for this Global Note
is not
appointed by the Company within 90 days after
the Company
receives such notice or becomes aware of
such ineligibility,
the
Company's election to issue this Note in global
form shall
no
longer be effective with respect to this Global Note
and the
Company will execute, and the Trustee, upon
receipt
of a
Company
Order for the authentication and delivery
of
individual
Notes in
exchange for this Global Note, will authenticate
and deliver
individual Notes of like tenor and terms in
definitive form
in an
aggregate principal amount equal to the principal
amount of
such
Global Note or Notes in exchange for such Global
Note or
Notes.
If specified by the Company and agreed by the
Depositary with respect to Notes issued in the
form of a
Global
Note, the Depositary for such Global Note
shall surrender
such
Global Note in exchange in whole or in part
for
individual
Notes
of like tenor and terms in definitive form on
such terms as
are
acceptable to the Company and such
Depositary. Thereupon
the
Company shall execute, and the Trustee
shall
authenticate
and
deliver, without service charge, (1) to
each
Person
specified by
such Depositary, a new Note or Notes of like tenor
and terms
and
of any authorized denomination as requested by
such Person
in
aggregate principal amount equal to and in exchange
for beneficial interest of such Person in such Global
Note; and
(2)
to such Depositary a new Global Note of like tenor
and terms
and
in a denomination equal to the difference, if
any, between
the
principal amount of the surrendered Global Note
and
the
aggregate
principal amount of Notes delivered to Holders
thereof.
Under certain circumstances specified
in the
Indenture,
the Depositary may be required to surrender any two
or more
Global Notes which have identical terms (but which
may have
differing Original Issue Dates) to the Trustee,
and
the
Company
shall execute and the Trustee shall authenticate
and deliver
to,
or at the direction of, the Depositary a Global
Note in
principal
amount equal to the aggregate principal amount of,
and with
all
terms identical to, the Global Notes surrendered
thereto and
which shall indicate all Original Dates and
the principal
amount
applicable to each such Original Issue Date.
No reference herein to the Indenture
and no
provision
of this Global Note or of the Indenture shall
alter or
impair the
obligation of the Company, which is
absolute
and
unconditional,
to pay the principal of and any premium and interest
on this
Note
at the times, places and rates, and in the coin
or currency,
herein prescribed.
Prior to due presentment of this Global
Note for
registration of transfer, the Company, the Trustee
and any
agent
of the Company or the Trustee may treat the Person
in whose
name
this Global Note is registered as the owner hereof
for all
purposes, whether or not this Global Note is
overdue,
and
neither
the Company, the Trustee nor any such agent
shall be
affected by
notice to the contrary.
The Indenture and the Notes shall be
governed by,
and
construed in accordance with, the laws of the State
of New
York.
All terms used in the Note which are defined
in the
Indenture shall have the meanings assigned to them
in
the
Indenture.
ABBREVIATIONS
The following abbreviations, when used in
the inscription of
the
face of this instrument, shall be construed as
though they
were
written out in full according to applicable
laws or
regulations:
TEN COM - as tenants in common UNIT GIFT
MIN
ACT -
_____Custodian_____
TEN ENT - as tenants by
the
(Cust)
(Minor)
entireties
Under
Uniform
Gifts
to
Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants
in
common
___________________
State
Additional abbreviations may also be
used though
not in
the above list.
______________________
FOR VALUE RECEIVED the undersigned
hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
_______________________________________
______________________________________________________
__ ____
_____
Please print or typewrite name and address
including postal zip code of assignee
______________________________________________________
__ ____
_____
the within note and all rights
thereunder,
hereby
irrevocably
constituting
and
appointing
_____________________________________
_______________________ attorney to transfer said
note on
the
books of the Company, with full power of substitution
in the
premises.
Dated:____________________
___________________________________
NOTICE: The signature
to this
assignment must
correspond with
the
name as written upon
the face
of
the within instrument
in every
particular,
without
alteration
or
enlargement or
any
change
whatever.
EXHIBIT B
Fixed Rate
Note
Registered REGISTERED
NO.
KANSAS CITY POWER & LIGHT COMPANY
Fixed Rate
Medium-Term Note
CUSIP:
PRINCIPAL
AMOUNT:
$
ORIGINAL ISSUE
DATE:
MATURITY
DATE:
INTEREST
RATE:
REDEMPTION
DATE:
INTEREST PAYMENT DATES:
Kansas City Power & Light Company, a Missouri
corporation (herein called the "Company",
which
term
includes any
successor Person under the Indenture referred to
on the
reverse
hereof) for value received hereby promises to pay to
or registered assigns the principal sum of
DOLLARS
on the Maturity Date set forth above, and to
pay interest
thereon
from the Original Issue Date set forth above, or
from the
most
recent Interest Payment Date to which interest has
been paid
or
duly provided for, semi-annually in arrears on
the Interest
Payment Dates set forth above in each year,
commencing on
(a) the
first such Interest Payment Date next
succeeding
the
Original
Issue Date set forth above, or (b) if such
Original Issue
Date is
after a Record Date and prior to the first
Interest Payment
Date,
on the second Interest Payment Date, at the
per annum
Interest
Rate set forth above until the principal hereof is
paid or
made
available for payment. The interest so
payable and
punctually
paid or duly provided for on any Interest Payment
Date will,
as
provided in such Indenture, be paid to the Person
in whose
name
this Note is registered at the close of business
on the
Record
Date for such Interest Payment Date, which shall be
the date
fifteen calendar days (whether or not a
Business Day)
preceding
such Interest Payment Date, provided, however that
if the
Original issue Date falls between a Record Date
and an
Interest
Payment Date, the first payment of interest will be
paid on
the
second Interest Payment Date subsequent to
such Original
Issue
Date to the Person in whose name this Note is
registered at
the
close of business on the Record Date for
such second
Interest
Payment Date, and provided further, that
interest payable on
the
Maturity Date, or if applicable, upon redemption,
shall be
payable to the Person to whom principal shall
be payable.
Except
as otherwise provided in the Indenture, any
such interest
not so
punctually paid or duly provided for will
forthwith cease to
be
payable to the holder on such Record Date and shall
be paid
to
the Person in whose name this Note is registered
at
the
close of
business on a Record Date for the payment of
such defaulted
interest to be fixed by the Company, notice
whereof shall be
given to Noteholders not less than fifteen days
prior to
such
Record Date. Payment of the principal of and
any
premium
and
interest on this Note will be made at the
Corporate Trust
Office
of the Trustee in the Borough of Manhattan, The City
of New
York,
or such other office or agency of the Company as may
be designated by it for such purpose, in such
coin or currency
of
the United States of America as at the time of
payment is
legal
lender for payment of public and private
debts,
provided,
however, that at the option of the Company,
payment of
interest
may be made by United States dollar check mailed
to the
address
of the Person entitled thereto as such address
shall appear
in
the Security Register.
REFERENCE IS HEREBY MADE TO THE
FURTHER PROVISIONS
OF
THIS NOTE SET FORTH IN FULL ON THE REVERSE
HEREOF, WHICH
FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME
EFFECT AS IF
SET
FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication
hereon has
executed by the Trustee referred to on the
reverse hereof,
directly or through an Authenticating Agent,
by manual
signature
of an authorized signatory, this Note shall not
be entitled
to
any benefit under the Indenture or be valid
or obligatory
for any
purpose.
IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed under its
corporate seal
Dated
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
Kansas
City Power &
Light
Company
This is one of the notes designated
therein referred to in the within- By
mentioned
Indenture
Executive
Vice
President
THE BANK OF NEW YORK, as Trustee
By Attest
Authorized
Signatory
Secretary
KANSAS CITY POWER & LIGHT COMPANY
MEDIUM-TERM NOTE
This Note is one of a duly authorized
issue of
Notes of
the Company (herein called the "Notes"), issued and
to be
issued
under an Indenture dated as of December 1,
1996 (herein
called
the "Indenture") between the Company and The Bank
of New
York, as
Trustee (herein called the "Trustee", which
term
includes
any
successor Trustee under the Indenture), to
which Indenture
and
all indentures supplemental thereto reference is
hereby made
for
a statement of the respective rights, limitations
of rights,
duties and immunities thereunder of the Company,
the Trustee
and
the Noteholders, and of the terms upon which the
Notes are,
and
are to be, authenticated and delivered. The
Notes are
limited to
$300,000,000 aggregate principal amount.
Each Note shall be dated the date
of
its
authentication
by the Trustee. Each Note shall also bear an
Original Issue
Date
which with respect to this Note (or any
portion thereof),
shall
mean the date of its original issue as specified on
the face
hereof, and such Original Issue Date shall remain
the same
for
all Notes subsequently issued upon transfer, exchange
or substitution of such original Note (or
such subsequently
issued
Notes) regardless of their dates of authentication.
This Note may not be redeemed prior
to the
Redemption
Date set forth on the face hereof. If no
Redemption Date is
so
set forth, this Note is not redeemable prior
to its
maturity. On
or after the Redemption Date set forth on the
face hereof
this
Note is redeemable in whole or in part in
increments of
$1,000
(provided that any remaining principal amount of
this note
shall
be at least $1,000) at the option of the Company
at the
following
redemption prices (expressed as percentages of
the principal
amount to be redeemed) together with
interest thereon
payable to
the date of redemption:
Redemption Periods Redemption Prices
Notice of redemption will be given by mail to
Holders of
Notes
not less than 30 nor more than 60 days prior to
the date
fixed
for redemption, all as provided in the Indenture.
In the
event
of redemption of this Note in part only, a new Note
or Notes
and
of like tenor for the unredeemed portion hereof
will be
issued in
the name of the Noteholder hereof upon the
surrender hereof.
This Note will not be entitled to the
benefit of a
sinking fund.
Interest payments on this Note will
include Accrued
Interest to but excluding the Interest
Payment Date.
Interest
payments on this Note shall be computed and paid
on the
basis of
a 360-day year of twelve 30-day months.
The Company at its option, subject to the
terms and
conditions provided in the Indenture, will
be discharged
from any
and all obligations in respect of the Notes
(except for
certain
obligations including obligations to register
the transfer
or
exchange of Notes, replace stolen, lost or
mutilated Notes,
maintain paying agencies and hold monies for
payment in
trust),
91 days after the Company deposits with the
Trustee money or
U.S.
Government Obligations which through the payment
of interest
thereon and principal thereof in accordance with
their terms
will
provide money, or a combination of money and
U.S. Government
Obligations, in an amount sufficient to pay
all the
principal of
and any premium and interest on the Notes on the
dates such
payments are due in accordance with the terms of
the Notes.
If an Event of Default with respect to
Notes shall
occur and be continuing, the principal of the Notes
may be
declared due and payable in the manner and with
the effect
provided in the Indenture.
The Indenture permits, with certain
exceptions
as
therein provided, the amendment thereof and
the
modification
of
the rights and obligations of the Company and the
rights of
the
Noteholders to be affected under the Indenture at
any
time
by the
Company and the Trustee with the consent of the
holders of
not
less than a majority in principal amount of
the outstanding
Notes
affected thereby. The Indenture also
contains provisions
permitting the holders of not less than a
majority in
principal
amount of the outstanding Notes affected thereby,
on behalf
of
the holders of all Notes, to waive compliance by
the Company
with
certain provisions of the Indenture. The
Indenture also
provides
that the holders of not less than a majority
in principal
amount
of the outstanding Notes may waive certain past
defaults and
their consequences on behalf of the holders of
all
Notes.
Any
such consent or waiver by the holder of this Note
shall be
conclusive and binding upon such holder and upon
all future
holders of this Note and of any Note issued
upon the
registration
of transfer hereof or in exchange herefor or in
lieu hereof,
whether or not notation of such consent or waiver
is made
upon
this Note or such Note.
As set forth in, and subject to,
the provisions of
the
Indenture, no holder of any Notes will have any right
to institute any proceeding with respect to the
Indenture or
for any
remedy thereunder, unless such holder shall
have previously
given
to the Trustee written notice of a continuing
Event of
Default
with respect to the Notes, the holders of not less
than
a
majority in principal amount of the outstanding
Notes shall
have
made written request, and offered reasonable
indemnity, to
the
Trustee to institute such proceeding as Trustee,
and the
Trustee
shall have failed to institute such proceeding
within 60
days,
provided, however, that such limitations do not
apply to a
suit
instituted by the holder hereof for the
enforcement of
payment of
the principal of and any premium or interest on
this Note on
or
after the respective due dates expressed herein.
No reference herein to the Indenture
and no
provision
of this Note or of the Indenture shall alter or
impair the
obligation of the Company, which is
absolute and
unconditional,
to pay the principal of and any premium and interest
on this
Note
at the times, places and rates, and in the coin
or currency,
herein prescribed.
As provided in the Indenture and subject
to certain
limitations therein set forth, the transfer of this
Note is
registrable in the Note Register. Upon surrender
of this
Note
for registration of transfer at the Corporate
Trust Office
of the
Trustee or such other office or agency as may
be
designated
by it
in the Borough of Manhattan, The City of New
York, duly
endorsed
by, or accompanied by a written instrument of
transfer in
form
satisfactory to the Company and the Note
registrar duly
executed
by the holder hereof or the attorney of such holder
duly authorized in writing, and thereupon one or
more new Notes
of
like tenor, of authorized denominations and for the
same
aggregate principal amount, will be issued to
the designated
transferee or transferees.
The Notes are issuable only in
registered form,
without
coupons, in denominations of $1,000 and
any
integral
multiple of
$1,000 in excess thereof. As provided in the
Indenture and
subject to certain limitations therein set forth,
Notes are
exchangeable for a like aggregate principal amount
of Notes
of
like tenor of a different authorized
denomination, as
requested
by the holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange but the
Company may
require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this
Note for
registration
of transfer, the Company, the Trustee and any agent
of the
Company or the Trustee may treat the Person in
whose name
this
Note is registered as the owner hereof for
all
purposes,
whether
or not this Note is overdue, and neither the
Company, the
Trustee
nor any such agent shall be affected by notice
to the
contrary.
The Indenture and the Notes shall be
governed by,
and
construed in accordance with, the laws of the State
of New
York.
All terms used in the Note which are defined
in the
Indenture shall have the meanings assigned to them
in the
Indenture.
ABBREVIATIONS
The following abbreviations, when used in
the inscription of
the
face of this instrument, shall be construed as
though they
were
written out in full according to applicable
laws
or
regulations:
TEN COM - as tenants in common UNIT GIFT
MIN
ACT
- -
_____Custodian_____
TEN ENT - as tenants by
the
(Cust)
(Minor)
entireties
Under
Uniform
Gifts
to
Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants
in
common
___________________
State
Additional abbreviations may also be
used though
not in
the above list.
______________________
FOR VALUE RECEIVED the undersigned
hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
_______________________________________
______________________________________________________
__ ____
_____
Please print or typewrite name and address
including postal zip code of assignee
______________________________________________________
__ ____
_____
the within note and all rights
thereunder,
hereby
irrevocably
constituting
and
appointing
_____________________________________
_______________________ attorney to transfer said
note on
the
books of the Company, with full power of substitution
in
the
premises.
Dated:____________________
___________________________________
NOTICE: The signature
to this
assignment must
correspond with
the
name as written upon
the face
of
the within instrument
in every
particular,
without alteration
or
enlargement or
any change
whatever.
EXHIBIT C
Global
Floating Rate
Note
Registered REGISTERED
NO.
KANSAS CITY POWER & LIGHT COMPANY
Floating Rate
Medium-Term Note
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME
OF THE
DEPOSITARY (REFERRED TO HEREIN) OR A NOMINEE
THEREOF AND,
UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR THE
INDIVIDUAL
NOTES REPRESENTED HEREBY, THIS GLOBAL NOTE MAY
NOT BE
TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE
DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR
ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH
SUCCESSOR DEPOSITARY.
CUSIP:
Original Issue Dates:
Base Rate:
Index Maturity:
Interest Payment Dates:
Initial Interest Rate:
Initial Interest Reset Date:
Interest Reset Dates:
Principal Amount: $
Maturity Date:
Maximum Interest Rate:
Minimum Interest Rate:
Redemption Date:
Spread:
Spread Multiplier:
Kansas City Power & Light Company, a Missouri
corporation (herein called the "Company",
which term
includes any
successor Person under the Indenture referred to
on the
reverse
hereof) for value received hereby promises to pay to
or registered assigns the principal sum of
DOLLARS
on the Maturity Date set forth above and to
pay interest
thereon
from the Original Issue Date (or if this Global Note
has two
or
more Original Issue Dates, interest shall, beginning
on each
such
Original Issue Date, begin to accrue for that part
of the
principal amount to which such Original Issue
Date is
applicable)
set forth above, or from the most recent
Interest Payment
Date to
which interest has been paid or duly provided
for, monthly,
quarterly, semiannually or annually as specified
above under
Interest Payment Period, on the Interest
Payment Dates
specified
above, commencing on (a) the first such
Interest
Payment
Date
next succeeding the earliest Original Issue Date
or Dates
set
forth above, or (b) if such Original Issue Date
is after a
Record
Date and prior to the first Interest Payment Date,
on
the
second
Interest Payment Date, and at Maturity, at a rate
per annum
equal
to the Initial Interest Rate specified above
until the
Initial
Interest Reset Date specified above, and
thereafter at a
rate per
annum determined in accordance with the provisions
in the
Indenture for calculating the Interest Rate for
Notes having
the
Base Rate specified above, until the principal
hereof is
paid or
made available for payment. The interest so payable
and punctually paid or duly provided for on any
Interest Payment
Date
will, as provided in such Indenture, be paid to
the Person
in
whose name this Note is registered at the close
of business
on
the Record Date for such Interest Payment Date,
which shall
be
the fifteenth day (whether or not a Business
Day) next
preceding
such Interest Payment Date provided, however, that
if an
Original
Issue Date falls between a Record Date and
an
Interest
Payment
Date, the first payment of interest with respect
to
such
Original
Issue Date will be paid on the second Interest
Payment Date
subsequent to such Original Issue Date to the
Person in
whose
name this Note is registered at the close of business
on the
Record Date for such second Interest Payment
Date, and
provided
further, that interest payable on the Maturity Date
or, if
applicable, upon redemption, shall be payable to
the Person
to
whom principal shall be payable. Except
as
otherwise
provided in
the Indenture, any such interest not so punctually
paid or
dully
provided for will forthwith cease to be payable
to the
holder on
such Record Date and shall be paid to the Person
in whose
name
this Note is registered at the close of business on
a Record
Date
for the payment of such defaulted interest to be
fixed by
the
Company, notice whereof shall be given to
Noteholders
not
less
than fifteen days prior to such Record Date. Payment
of the
principal of and any premium and interest on this
Note will
be
made at the Corporate Trust Office of the Trustee
in the
Borough
of Manhattan, The City of New York, or such other
office or
agency of the Company as may be designated by it
for such
purpose, in such coin or currency of the United
States of
America
as at the time of payment is legal lender for
payment of
public
and private debts, provided, however, that at the
option of
the
Company, payment of interest may be made by
United
States
dollar
check mailed to the address of the Person
entitled thereto
as
such address shall appear in the Note Register.
Under certain circumstances, this Global Note is
exchangeable in whole or from time to time in part for
a definitive Note or Notes, with the same Original
Issue Date
or
Dates, Maturity Date, Interest Rate
and
redemption
provisions as
provided herein or in the Indenture.
REFERENCE IS HEREBY MADE TO THE
FURTHER PROVISIONS
OF
THIS GLOBAL NOTE SET FORTH IN FULL ON THE
REVERSE HEREOF,
WHICH
FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME
EFFECT AS
IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication
hereon has
executed by the Trustee referred to on the
reverse hereof,
directly or through an Authenticating Agent,
by
manual
signature
of an authorized signatory, this Note shall not
be entitled
to
any benefit under the Indenture or be valid
or
obligatory
for any
purpose.
IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed under its
corporate seal.
Dated
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
Kansas
City Power &
Light
Company
This is one of the notes designated
therein referred to in the within- By
mentioned
Indenture
Executive
Vice
President
THE BANK OF NEW YORK, as Trustee
By Attest
Authorized
Signatory
Secretary
KANSAS CITY POWER & LIGHT COMPANY
MEDIUM-TERM NOTE
This Global Note is one of, and a
global security
which
represents Notes which are part of, a duly
authorized issue
of
Notes of the Company (herein called the "Notes"),
issued and
to
be issued under an Indenture dated as of December
1, 1996
(herein
called the "Indenture") between the Company and The
Bank of
New
York, as Trustee (herein called the "Trustee",
which term
includes any successor Trustee under the
Indenture), to
which
Indenture and all indentures supplemental
thereto reference
is
hereby made for a statement of the
respective rights,
limitations
of rights, duties and immunities thereunder of
the Company,
the
Trustee and the Noteholders, and of the terms upon
which the
Notes are, and are to be, authenticated and
delivered. The
Notes
are limited to $300,000,000 aggregate principal
amount.
Each Note shall be dated the date
of its
authentication
by the Trustee. Each Note shall also bear an
Original Issue
Date
or Dates which with respect to this Global Note
(or any
portion
thereof), shall mean the date or dates of the
original issue
of
the Notes represented hereby as specified on
the face
hereof, and
such Original Issue Date or Dates shall remain the
same for
all
Notes subsequently issued upon transfer, exchange, or
substitution of such original Note (or
such subsequently
issued
Notes) regardless of their dates of authentication.
This Global Note may not be redeemed prior
to the
Redemption Date set forth on the face hereof.
If no
Redemption
Date is so set forth, this Global Note is
not redeemable
prior to
its maturity. On or after the Redemption Date set
forth on
the
face hereof this Note is redeemable in whole or in
part in
increments of $1,000 (provided that any
remaining principal
amount of this note shall be at least $1,000) at
the option
of
the Company at the following redemption
prices (expressed as
percentages of the principal amount to be
redeemed) together
with
interest thereon payable to the date of redemption:
Redemption Periods Redemption
Prices
Notice of redemption will be given by mail to
Holders of
Notes
not less than 30 nor more than 60 days prior to
the date
fixed
for redemption all as provided in the Indenture.
In the
event of
redemption of this Global Note in part only, a
new Global
Note or
Notes and of like tenor for the unredeemed
portion hereof
will be
issued in the name of the Noteholder hereof
upon the
surrender
hereof.
This Global Note will not be entitled
to the
benefit of
a sinking fund.
The Company at its option, subject to the
terms and
conditions provided in the Indenture, will
be discharged
from any
and all obligations in respect of the Notes
(except for
certain
obligations including obligations to register
the transfer
or
exchange of Notes, replace stolen, lost or
mutilated Notes,
maintain paying agencies and hold monies for
payment in
trust),
91 days after the Company deposits with the
Trustee money or
U.S.
Government Obligations which through the payment
of interest
thereon and principal thereof in accordance with
their terms
will
provide money, or a combination of money and
U.S. Government
Obligations, in an amount sufficient to pay
all the
principal of
and any premium and interest on the Notes on the
dates
such
payments are due in accordance with the terms of
the Notes.
If an Event of Default with respect to
Notes shall
occur and be continuing, the principal of the Notes
may be
declared due and payable in the manner and with
the effect
provided in the Indenture.
The Indenture permits, with certain
exceptions as
therein provided, the amendment thereof and
the
modification
of
the rights and obligations of the Company and the
rights of
the
Noteholders to be affected under the Indenture at
any
time
by the
Company and the Trustee with the consent of the
holders of
not
less than a majority in principal amount of
the outstanding
Notes
affected thereby. The Indenture also
contains provisions
permitting the holders of not less than a
majority in
principal
amount of the outstanding Notes affected thereby,
on behalf
of
the holders of all Notes, to waive compliance by
the Company
with
certain provisions of the Indenture. The
Indenture
also
provides
that the holders of not less than a majority
in principal
amount
of the outstanding Notes may waive certain past
defaults and
their consequences on behalf of the holders of
all
Notes.
Any
such consent or waiver by the holder of this
Global Note
shall be
conclusive and binding upon such holder and upon
all future
holders of this Global Note and of any Note issued
upon the
registration of transfer hereof or in exchange
herefor or in
lieu
hereof, whether or not notation of such consent
or waiver is
made
upon this Global Note or such Note.
As set forth in, and subject to,
the provisions of
the
Indenture, no holder of any Notes will have any right
to institute any proceeding with respect to the
Indenture or
for any
remedy thereunder, unless such holder shall
have previously
given
to the Trustee written notice of a continuing
Event of
Default
with respect to the Notes, the holders of not less
than a
majority in principal amount of the outstanding
Notes shall
have
made written request, and offered reasonable
indemnity, to
the
Trustee to institute such proceeding as Trustee,
and the
Trustee
shall have failed to institute such proceeding
within 60
days,
provided, however, that such limitations do not
apply to a
suit
instituted by the holder hereof for the
enforcement of
payment of
the principal of and any premium or interest on
this Global
Note
on or after the respective due dates expressed herein.
As provided in the Indenture and subject
to certain
limitations therein set forth, this Global Note may be
transferred, in whole but not in part, only
by the
Depositary to
a nominee of the Depositary, or by a nominee
of the
Depositary to
another nominee or the Depositary or by the
Depositary or
any
such nominee to a successor Depositary for this
Global Note
selected or approved by the Company or to a nominee
of such
successor Depositary.
If at any time the Depositary for this
Global Note
notifies the Company that it is unwilling or
unable to
continue
as Depositary for this Global Note or if at any time
the Depositary for this Global Note shall no
longer be eligible
or in
good standing under the Securities Exchange Act of
1934,
as
amended, or other applicable statute or
regulation, the
Company
shall appoint a successor Depositary with respect
to this
Global
Note. If a successor Depositary for this Global Note
is not
appointed by the Company within 90 days after
the Company
receives such notice or becomes aware of
such
ineligibility,
the
Company's election to issue this Note in global
form shall
no
longer be effective with respect to this Global Note
and the
Company will execute, and the Trustee, upon
receipt of a
Company
Order for the authentication and delivery
of
individual
Notes in
exchange for this Global Note, will authenticate
and deliver
individual Notes of like tenor and terms in
definitive form
in an
aggregate principal amount equal to the principal
amount of
such
Global Note or Notes in exchange for such Global
Note or
Notes.
If specified by the Company and agreed by the
Depositary with respect to Notes issued in the
form
of a
Global
Note, the Depositary for such Global Note
shall surrender
such
Global Note in exchange in whole or in part
for
individual
Notes
of like tenor and terms in definitive form on
such terms as
are
acceptable to the Company and such
Depositary. Thereupon
the
Company shall execute, and the Trustee
shall authenticate
and
deliver, without service charge, (1) to
each
Person
specified by
such Depositary, a new Note or Notes of like tenor
and terms
and
of any authorized denomination as requested by
such Person
in
aggregate principal amount equal to and in exchange
for
beneficial interest of such Person in such Global
Note; and
(2)
to such Depositary a new Global Note of like tenor
and terms
and
in a denomination equal to the difference, if
any, between
the
principal amount of the surrendered Global Note
and
the
aggregate
principal amount of Notes delivered to Holders
thereof.
Under certain circumstances specified
in the
Indenture,
the Depositary may be required to surrender any two
or more
Global Notes which have identical terms (but which
may have
differing Original Issue Dates) to the Trustee,
and
the
Company
shall execute and the Trustee shall authenticate
and deliver
to,
or at the direction of, the Depositary a Global
Note in
principal
amount equal to the aggregate principal amount of,
and with
all
terms identical to, the Global Notes surrendered
thereto and
which shall indicate all Original Dates and
the principal
amount
applicable to each such Original Issue Date.
No reference herein to the Indenture
and no
provision
of this Global Note or of the Indenture shall
alter or
impair the
obligation of the Company, which is
absolute and
unconditional,
to pay the principal of and any premium and interest
on this
Note
at the times, places and rates, and in the coin
or currency,
herein prescribed.
Prior to due presentment of this Global
Note for
registration of transfer, the Company, the Trustee
and
any
agent
of the Company or the Trustee may treat the Person
in whose
name
this Global Note is registered as the owner hereof
for all
purposes, whether or not this Global Note is
overdue,
and
neither
the Company, the Trustee nor any such agent
shall be
affected by
notice to the contrary.
The Indenture and the Notes shall be
governed by,
and
construed in accordance with, the laws of the State
of New
York.
All terms used in the Note which are defined
in the
Indenture shall have the meanings assigned to them
in
the
Indenture.
ABBREVIATIONS
The following abbreviations, when used in
the
inscription of
the
face of this instrument, shall be construed as
though they
were
written out in full according to applicable
laws or
regulations:
TEN COM - as tenants in common UNIT GIFT
MIN
ACT
- -
_____Custodian_____
TEN ENT - as tenants by
the
(Cust)
(Minor)
entireties
Under
Uniform
Gifts
to
Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants
in
common
___________________
State
Additional abbreviations may also be
used though
not in
the above list.
______________________
FOR VALUE RECEIVED the undersigned
hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
_______________________________________
______________________________________________________
__ ____
_____
Please print or typewrite name and address
including postal zip code of assignee
______________________________________________________
__ ____
_____
the within note and all rights
thereunder, hereby
irrevocably
constituting
and
appointing
_____________________________________
_______________________ attorney to transfer said
note on
the
books of the Company, with full power of substitution
in the
premises.
Dated:____________________
___________________________________
NOTICE: The signature
to this
assignment must
correspond with
the
name as written upon
the face
of
the within instrument
in every
particular,
without alteration
or
enlargement or
any change
whatever.
EXHIBIT D
Floating Rate
Note
Registered REGISTERED
NO.
KANSAS CITY POWER & LIGHT
COMPANY Floating Rate
Medium-Term Note
CUSIP:
Original Issue Dates:
Base Rate:
Index Maturity:
Interest Payment Dates:
Initial Interest Rate:
Initial Interest Reset Date:
Interest Reset Dates:
Principal Amount: $
Maturity Date:
Maximum Interest Rate:
Minimum Interest Rate:
Redemption Date:
Spread:
Spread Multiplier:
Kansas City Power & Light Company, a Missouri
corporation (herein called the "Company",
which term
includes any
successor Person under the Indenture referred to
on the
reverse
hereof) for value received hereby promises to pay to
or registered assigns the principal sum of
DOLLARS
on the Maturity Date set forth above, and to
pay interest
thereon
from the Original Issue Date set forth above, or
from the
most
recent Interest Payment Date to which interest has
been paid
or
duly provided for, monthly, quarterly,
semiannually or
annually
as specified above under Interest Payment Period,
on the
Interest
Payment Dates specified above, commencing on (a)
the first
such
Interest Payment Date next succeeding the
Original Issue
Date or
Dates set forth above or (b) if such Original Issue
Date is
after
a Record Date and prior to the first Interest
Payment
Date,
on
the second Interest Payment Date, and at maturity, at
a rate
per
annum equal to the Initial Interest Rate
specified above
until
the Initial Interest Rate Reset Date specified
above, and
thereafter at a rate per annum determined in
accordance with
the
provisions in the Indenture for calculating
the Interest
Rate for
Notes having the Base Rate specified above,
until the
principal
hereof is paid or made available for payment.
The interest
so
payable and punctually paid or duly provided for
on
any
Interest
Payment Date will, as provided in such Indenture,
be paid to
the
Person in whose name this Note is registered at
the close of
business on the Record Date for such interest
which shall be
the
fifteenth day (whether or not a Business
Day), next
preceding
such Interest Payment Date provided, however that
if
the
Original
Issue Date falls between a Record Date and
an
Interest
Payment
Date, the first payment of interest will be paid
on
the
second
Interest Payment Date subsequent to such Original
Issue Date
to
the Person in whose name this Note is registered
at
the
close of
business on the Record Date for such second
Interest Payment
Date, and provided further, that interest payable
on
the
Maturity
Date, or, if applicable, upon redemption, shall
be payable
to the
Person to whom principal shall be payable.
Except as
otherwise
provided in the Indenture, any such interest
not so
punctually
paid or duly provided for will forthwith cease to
be
payable
to
the holder on such Record Date and shall be paid
to
the
Person in
whose name this Note is registered at the close
of business
on a
Record Date for the payment of such defaulted
interest to be
fixed by the Company, notice whereof shall be given to
Noteholders not less than fifteen days prior to
such Record
Date.
Payment of the principal of and any premium and
interest on
this
Note will be made at the Corporate Trust Office
of
the
Trustee in
the Borough of Manhattan, The City of New York,
or
such
other
office or agency of the Company as may be designated
by it
for
such purpose, in such coin or currency of the
United States
of
America as at the time of payment is legal
tender for
payment of
public and private debts, provided, however, that
at
the
option
of the Company, payment of interest may be made
by United
States
dollar check mailed to the address of the
Person
entitled
thereto
as such address shall appear in the Security Register.
REFERENCE IS HEREBY MADE TO THE
FURTHER PROVISIONS
OF
THIS NOTE SET FORTH IN FULL ON THE REVERSE
HEREOF, WHICH
FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME
EFFECT AS IF
SET
FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication
hereon has
executed by the Trustee referred to on the
reverse hereof,
directly or through an Authenticating Agent,
by
manual
signature
of an authorized signatory, this Note shall not
be entitled
to
any benefit under the Indenture or be valid
or obligatory
for any
purpose.
IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed under its
corporate seal
Dated
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
Kansas
City Power &
Light
Company
This is one of the notes designated
therein referred to in the within- By
mentioned
Indenture
Executive
Vice
President
THE BANK OF NEW YORK, as Trustee
By Attest
Authorized
Signatory
Secretary
KANSAS CITY POWER & LIGHT COMPANY
MEDIUM-TERM NOTE
This Note is one of a duly authorized
issue of
Notes of
the Company (herein called the "Notes"), issued and
to be
issued
under an Indenture dated as of December 1,
1996 (herein
called
the "Indenture") between the Company and The Bank
of New
York, as
Trustee (herein called the "Trustee", which
term
includes
any
successor Trustee under the Indenture), to
which Indenture
and
all indentures supplemental thereto reference is
hereby made
for
a statement of the respective rights, limitations
of rights,
duties and immunities thereunder of the Company,
the Trustee
and
the Noteholders, and of the terms upon which the
Notes are,
and
are to be, authenticated and delivered. The
Notes are
limited to
$300,000,000 aggregate principal amount.
Each Note shall be dated the date
of its
authentication
by the Trustee. Each Note shall also bear an
Original Issue
Date
which with respect to this Note (or any
portion thereof),
shall
mean the date of its original issue as specified on
the face
hereof, and such Original Issue Date shall remain
the same
for
all Notes subsequently issued upon transfer, exchange
or substitution of such original Note (or
such subsequently
issued
Notes) regardless of their dates of authentication.
This Note may not be redeemed prior
to the
Redemption
Date set forth on the face hereof. If no
Redemption Date is
so
set forth, this Note is not redeemable prior
to its
maturity. On
or after the Redemption Date set forth on the
face hereof
this
Note is redeemable in whole or in part in
increments of
$1,000
(provided that any remaining principal amount of
this note
shall
be at least $1,000) at the option of the Company
at the
following
redemption prices (expressed as percentages of
the principal
amount to be redeemed) together with
interest thereon
payable to
the date of redemption:
Redemption Periods Redemption Prices
Notice of redemption will be given by mail to
Holders of
Notes
not less than 30 nor more than 60 days prior to
the date
fixed
for redemption, all as provided in the Indenture.
In the
event
of redemption of this Note in part only, a new Note
or Notes
and
of like tenor for the unredeemed portion hereof
will be
issued in
the name of the Noteholder hereof upon the
surrender hereof.
This Note will not be entitled to the
benefit of a
sinking fund.
The Company at its option, subject to the
terms and
conditions provided in the Indenture, will
be discharged
from any
and all obligations in respect of the Notes
(except for
certain
obligations including obligations to register
the transfer
or
exchange of Notes, replace stolen, lost or
mutilated Notes,
maintain paying agencies and hold monies for
payment in
trust),
91 days after the Company deposits with the
Trustee money or
U.S.
Government Obligations which through the payment
of interest
thereon and principal thereof in accordance with
their terms
will
provide money, or a combination of money and
U.S. Government
Obligations, in an amount sufficient to pay
all the
principal of
and any premium and interest on the Notes on the
dates such
payments are due in accordance with the terms of
the Notes.
If an Event of Default with respect to
Notes shall
occur and be continuing, the principal of the Notes
may be
declared due and payable in the manner and with
the effect
provided in the Indenture.
The Indenture permits, with certain
exceptions as
therein provided, the amendment thereof and
the
modification
of
the rights and obligations of the Company and the
rights of
the
Noteholders to be affected under the Indenture at
any time
by the
Company and the Trustee with the consent of the
holders of
not
less than a majority in principal amount of
the outstanding
Notes
affected thereby. The Indenture also
contains provisions
permitting the holders of not less than a
majority in
principal
amount of the outstanding Notes affected thereby,
on behalf
of
the holders of all Notes, to waive compliance by
the Company
with
certain provisions of the Indenture. The
Indenture also
provides
that the holders of not less than a majority
in principal
amount
of the outstanding Notes may waive certain past
defaults and
their consequences on behalf of the holders of
all Notes.
Any
such consent or waiver by the holder of this Note
shall be
conclusive and binding upon such holder and upon
all future
holders of this Note and of any Note issued
upon the
registration
of transfer hereof or in exchange herefor or in
lieu hereof,
whether or not notation of such consent or waiver
is made
upon
this Note or such Note.
As set forth in, and subject to,
the provisions of
the
Indenture, no holder of any Notes will have any right
to institute any proceeding with respect to the
Indenture or
for any
remedy thereunder, unless such holder shall
have previously
given
to the Trustee written notice of a continuing
Event of
Default
with respect to the Notes, the holders of not less
than a
majority in principal amount of the outstanding
Notes shall
have
made written request, and offered reasonable
indemnity, to
the
Trustee to institute such proceeding as Trustee,
and the
Trustee
shall have failed to institute such proceeding
within 60
days,
provided, however, that such limitations do not
apply to a
suit
instituted by the holder hereof for the
enforcement of
payment of
the principal of and any premium or interest on
this Note on
or
after the respective due dates expressed herein.
No reference herein to the Indenture
and no
provision
of this Note or of the Indenture shall alter or
impair the
obligation of the Company, which is
absolute and
unconditional,
to pay the principal of and any premium and interest
on this
Note
at the times, places and rates, and in the coin
or currency,
herein prescribed.
As provided in the Indenture and subject
to certain
limitations therein set forth, the transfer of this
Note is
registrable in the Note Register. Upon surrender
of this
Note
for registration of transfer at the Corporate
Trust Office
of the
Trustee or such other office or agency as may
be
designated
by it
in the Borough of Manhattan, The City of New
York, duly
endorsed
by, or accompanied by a written instrument of
transfer in
form
satisfactory to the Company and the Note
registrar duly
executed
by the holder hereof or the attorney of such holder
duly authorized in writing, and thereupon one or
more new Notes
of
like tenor, of authorized denominations and for the
same aggregate principal amount, will be issued
to the designated
transferee or transferees.
The Notes are issuable only in
registered form,
without
coupons, in denominations of $1,000 and
any
integral
multiple of
$1,000 in excess thereof. As provided in the
Indenture and
subject to certain limitations therein set forth,
Notes are
exchangeable for a like aggregate principal amount
of Notes
of
like tenor of a different authorized
denomination, as
requested
by the holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange but the
Company may
require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this
Note for
registration
of transfer, the Company, the Trustee and any agent
of the
Company or the Trustee may treat the Person in
whose name
this
Note is registered as the owner hereof for
all
purposes,
whether
or not this Note is overdue, and neither the
Company, the
Trustee
nor any such agent shall be affected by notice
to the
contrary.
The Indenture and the Notes shall be
governed by,
and
construed in accordance with, the laws of the State
of New
York.
All terms used in the Note which are defined
in the
Indenture shall have the meanings assigned to them
in the
Indenture.
ABBREVIATIONS
The following abbreviations, when used in
the inscription of
the
face of this instrument, shall be construed as
though they
were
written out in full according to applicable
laws or
regulations:
TEN COM - as tenants in common UNIT GIFT
MIN
ACT
- -
_____Custodian_____
TEN ENT - as tenants by
the
(Cust)
(Minor)
entireties
Under
Uniform
Gifts
to
Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants
in
common
___________________
State
Additional abbreviations may also be
used though
not in
the above list.
______________________
FOR VALUE RECEIVED the undersigned
hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
_______________________________________
______________________________________________________
__ ____
_____
Please print or typewrite name and address
including postal zip code of assignee
______________________________________________________
__ ____
_____
the within note and all rights
thereunder,
hereby
irrevocably
constituting
and
appointing
_____________________________________
_______________________ attorney to transfer said
note on
the
books of the Company, with full power of substitution
in the
premises.
Dated:____________________
___________________________________
NOTICE: The signature
to this
assignment must
correspond with
the
name as written upon
the face
of
the within instrument
in every
particular,
without alteration
or
enlargement or
any change
whatever.
STATE OF MISSOURI )
) ss:
COUNTY OF JACKSON )
I, ________________, a Notary Public in
and for
said
County and State aforesaid, do hereby certify
that Bernard
J.
Beaudoin of Kansas City Power & Light Company,
a Missouri
corporation and Jeanie Sell Latz of said
corporation, who
are
personally known to me to be the same persons
whose names
are
subscribed to the foregoing instrument and who are
both personally known to me to be Executive Vice
President and
Secretary of said corporation, appeared before me
this day
in
person and severally acknowledged that they this
day signed,
sealed and delivered the said instrument as their
free and
voluntary act as such Executive Vice
President and
Secretary,
respectively, of said corporation and as the
free and
voluntary
act of said corporation, for the uses and
purposes
therein
set
forth, and that the seal affixed to said instrument
is the
corporate seal of said corporation and that
the said
instrument
was executed, signed, sealed and delivered on behalf
of said
corporation by authority of its Board of Directors,
and acknowledged said instrument to be the free
and voluntary
act and
deed of said corporation.
GIVEN under my hand and notarial
seal this
___________
day of December, 1996.
____________________________
My commission expires:
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
I, _____________________________, a
Notary Public
in
and for said County and State aforesaid, do
hereby
certify
that
_________________________________ of The Bank of
New York, a
corporation organized and existing under the laws
of the
State of
New York; and _____________________, of
said corporation,
who are
personally known to me to be the same persons
whose names
are
subscribed to the foregoing instrument and who are
both personally known to me to be an Assistant Vice
President and
Assistant Treasurer of said corporation, appeared
before me
this
day in person and severally acknowledged that they
this day
signed, sealed and delivered the said instrument
as their
free
and voluntary act as such an Assistant Vice
President and
Assistant Treasurer, respectively, of said
corporation, and
as
the free and voluntary act of said corporation, for
the uses
and
purposes therein set forth, and that the seal
affixed to
said
instrument is the corporate seal of said
corporation and
that the
said instrument was executed, signed, sealed
and
delivered
on
behalf of said corporation by authority of its By-
laws, and
acknowledged said instrument to be the free
and voluntary
act and
deed of said corporation.
GIVEN under my hand and notarial seal this
____ day
of
December, 1996.
___________________________
Notary Public
My commission expires:
<PAGE>
Exhibit 10-e
KANSAS CITY POWER & LIGHT COMPANY
LONG- AND SHORT-TERM INCENTIVE COMPENSATION PLAN
JANUARY 1, 1997
I. Purposes
The Kansas City Power & Light Company Incentive
Compensation Plan (the "Plan") is designated to provide
a means of paying incentive compensation, in addition
to annual salaries, to Officers and Key Employees of
the Company who, by virtue of their responsibilities,
may contribute materially to the success of the
Company. The opportunity to receive incentive
compensation is intended as a strong motivational
program and one that will result in improved corporate
performance.
The key objectives of the Plan are to align both
the long-term and short-term interests of the
shareholders, Officers, and key employees of Kansas
City Power & Light (KCPL), create strong incentives for
KCPL Officers and key employees to maximize the
Company's shareholder value, retain the management team
by providing attractive compensation opportunities and
limit shareholder cost to a reasonable level.
II. Definitions
The following terms shall have the meanings set
forth below:
1. "Company" shall mean Kansas City Power & Light
Company and its successors and assigns, by merger,
purchase or otherwise.
2. "Board of Directors" or "Board" shall mean the
Board of Directors of the Company.
3. "Committee" shall mean the Nominating &
Compensation Committee of the Board of Directors, all
of whose members shall consist of Directors who are not
employees and who are not eligible for participation in
this Plan.
4. "Officer" shall mean any full-time Officer of the
Company.
5. "Key Employee" shall mean those employees deemed
critical to the execution of the Company's business
plans.
6. "Participant" shall mean each Officer or Key
Employee who has been selected by the Committee in the
manner hereinafter provided for participation in the
Plan with respect to a Plan Year.
7. "Plan Year" shall mean the applicable fiscal year
of the Company.
8. "Salary" shall mean the direct compensation earned
by a Participant as base salary during the Plan Year,
excluding any and all commissions, bonuses,
contributions by the Company to its Pension Plan on
behalf of the Participant, incentive payments for the
current Plan Year or prior Plan Years, and other
similar payments.
9. "EVA" shall mean an estimate of the Company's true
economic profit after subtracting the cost of all
capital employed.
10. "Target Bonus" shall mean the bonus earned for
achieving the expected level of EVA improvement.
11. "Expected EVA Improvement" shall mean EVA
improvement required for the Company's shareholders to
earn a cost of capital return on the market value of
their investment, as well as the EVA improvement
required to earn the Target Bonus.
12. "Bonus Bank" shall mean the personal account to
which the bonus earned is credited and from which the
bonus paid is deducted; the Bonus Bank balance is the
amount held in reserve to be recouped if prior EVA
improvement is not sustained or (when negative) to be
recovered before additional bonus is paid.
III. Approval, Amendment, Termination and
Administration of the Plan
A. Approval of Awards Under the Plan
Payment of awards under the Plan are become
effective upon approval by the Board of Directors of
the Company.
B. Committee Oversight
The Committee shall administer the Plan. The
Committee may establish such rules and regulations
as it deems necessary for the Plan, its
interpretation and administration. In addition, the
Committee may make such determinations and take such
actions in connection with the Plan as it deems
necessary.
C. Finality of Determination
Each determination made by the Committee, in
accordance with the provisions of this Plan, shall
be final, binding, and conclusive for all purposes
and on all persons.
D. Amendment and Termination of the Plan
The Board of Directors in its sole discretion may
modify, suspend, terminate, or reinstate the Plan,
provided, however, that no such modification,
suspension, termination or reinstatement shall
diminish, reduce, alter or impair the value of or
the rights to any award made prior to the date of
such modification, suspension, termination or
reinstatement of the Plan without the consent of the
Participant. Following termination of the Plan for
reasons other than change of control, each
Participant's Bonus Bank balance will be paid in two
equal installments over two years, beginning at the
end of the final Plan Year.
IV. Eligibility and Participation
A. Selection of Participants
Participants for each Plan Year shall be selected by
the Committee from among the Officers and management
employees upon recommendation by the chief executive
officer.
B. Future Participation
Participation in the Plan during one Plan Year will
not guarantee participation in any subsequent Plan
Year.
V. Determination of Awards
A. Target Bonus
Target Bonus levels shall be determined by the
Committee and expressed as a percentage of each
Participant's base salary for the Plan Year. Target
Bonus levels may vary by Participant and reflect the
level of responsibility of the Participant in the
corporate structure. Target and maximum Bbonus
levels for the Participants are set forth below:
Target Maximum
Officer Bonus Percent Bonus Percent
Chief Executive Officer 50% 100%
Executive Vice President 45% 90%
Senior Vice President 40% 80%
Other Officers 35% 70%
Key Employees 25% 50%
B. Corporate Performance
EVA Improvement shall be the Committee's measure of
corporate performance. Not more than 90 days after
the beginning of the Plan Year, and, in any event,
before 25 percent or more of the Plan Year has
elapsed, the Committee will establish the EVA
Improvement goal for the Target Bonus awards of the
Participants. Expected EVA Improvement represents
an estimate of the EVA Improvement required for the
Company's investors to earn a cost of capital return
on the market value of their investment. The
Committee may establish a multi-year schedule of
Expected EVA Improvement to link bonus compensation
to cumulative investor return.
If EVA Improvement for the Plan Year is greater than
$0, an award shall be paid to Participants.
Expected EVA Improvement shall be the dollar amount
of EVA Improvement required to earn the tTarget
bBonus. Two times the Expected EVA Improvement level
shall be required for Participants to receive
maximum incentive awards. If EVA Improvement for
the Plan Year is greater than $0 but less than
Maximum EVA Improvement, awards for Participant's
for such Plan Year shall be based on a table of
percentage awards, such percentages to begin at zero
percent for EVA Improvement of $0 or less and
increase to maximum awards at Maximum EVA
Improvement. The Committee shall establish a
table of bonus awards, with Target Bonus set at
Expected EVA Improvement. The table will establish
a minimum level of EVA Improvement performance that
must be achieved before any bonus is awarded. The
table will also establish an EVA Improvement level
for which a maximum bonus will be awarded. Such
table shall be based on straight-line interpolation.
For example, a Participant has a Target Bonus level
of 40% of Salary, and the award table is constructed
with Minimum EVA Improvement at $-5 million,
Expected EVA Improvement at $5,000,000, and Maximum
EVA Improvement at $15,000,000. Actual EVA
Improvement achieved for the Plan Year is
$6,000,000. Using the award table for that Plan
Year the Participant would be credited with
achieving a bonus award of 44% of Salary. The 44%
of Salary is considered the bonus earned for that
year.
C. Bonus Bank
A Bonus Bank shall be established for each
Participant. The initial balance of each
Participant's bonus bank shall be zero. Each year
in which the bonus earned is positive, the
Participant shall receive 1/2 of the bonus earned by
the Participant for that Plan Year. In each year a
negative bonus is earned, the negative amount is
deducted from any Bonus Bank balance. The balance
of the bonus (which may be a negative amount) shall
be credited to the Participant's Bonus Bank balance.
At the end of each year in which the Bonus Bank
balance is positive, a bonus shall be paid to the
Participant equal to 1/2 of the amount of the Bonus
Bank balance. (Attachment A)
No interest shall be credited or charged on the
Bonus Bank balance.
VI. Payment of Awards: Changes in Year and Capitalization
A. Form of Payment
Bonus Awards shall be paid shall be paid in cash
within thirty days following determination of the
amount of such awards by the Committee.
B. Change of Fiscal Year
In the event of a change in the Company's fiscal
year resulting in a fiscal year of less that twelve
months, the Committee shall make adjustments in the
EVA Improvement target as it shall, in its sole
discretion, deem appropriate.
VII. Employment Provisions
A. Promotions and New Employees
Employees who are newly hired or promoted into
positions eligible for participation in the Plan
during a Plan Year shall participate in the Plan to
the degree deemed appropriate, if at all, by the
Committee on the recommendation of the chief
executive officer. In the absence of special
circumstances, any reward for a Participant whose
eligibility commences after the beginning of a Plan
Year shall be based on the Participant's salary
earned during that portion of the Plan Year
commencing with the determination of such
Participant's eligibility.
B. Termination of Employment
Following termination of employment during a Plan
Year by reason of death, disability, or normal
retirement, the Participant's Bonus Bank balance
will be at the end of the Plan Year in which the
Participant's termination occurs. A Participant
will be eligible to receive an award determined in
accordance with Section VI of the Plan, but based on
the Participant's salary actually earned for the
Plan Year in which such termination of employment
occurs. Such awards will be paid in accordance with
Section VII above. The Committee in its discretion
shall determine whether a Participant shall be
eligible to receive an award for a Plan Year in
which he takes early retirement and, if so, the
amount of such award. Following termination during
a Plan Year for any reason other than death,
disability, or early or normal retirement, a
Participant will not be eligible to receive an award
for that Plan Year. Similarly, any amounts in the
Participant's Bonus Bank shall be forfeited if the
employment of such Participant is terminated for any
reason other than death, disability or retirement.
C. Future Eligibility of a Participant
Participation in this Plan during one Plan Year
shall not guarantee any Officer or Key Employee the
right to participate in the Plan in subsequent Plan
Years. Payment of an award with respect to one Plan
Year, moreover, shall not guarantee an Officer or
Key Employee the right to receive an award with
respect to subsequent Plan Years.
D. Key Employee Participation is RESULTS Workforce
Incentive
Key Employees designated by the Committee as
Participants in the Plan will forfeit their
participation in the RESULTS Workforce Incentive
Plan.
E. Change in Control
In the event of a Change in Control (as defined
below) of the Company, and except as the Committee
may expressly provide otherwise, (i) mid-Plan Year
Change in Control will result in bonus calculations
based year-to-date performance as measured against
the pre-established EVA Improvement goal for
determination of award levels; and (ii) Participants
with positive Bonus Bank balances will be paid the
balance in their account within 30 days of the
consummation of a merger agreement.
A "Change in Control" shall be deemed to have
occurred if (i) any person other than a trustee or
other fiduciary holding securities under an employee
benefit plan of the Company, and other than the
Company or corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their
ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Company
representing 20 percent or more of the Common Stock
of the Company then outstanding; or (ii) during any
period of two consecutive years, individuals who at
the beginning of such period constitute the Board
and any new director (other than a director
designated by a person who has into an agreement
with the Company to effect a transaction described
in (i) above) whose election by the Board or
nomination for election by the Company's
stockholders was approved by a vote of at least two-
thirds (2/3) of the directors then still in office
who either were director at the beginning of the
period or whose election or nomination for election
was previously so approved, cease for any reason to
constitute the majority thereof.
F. No Employment Contract
Neither the action of the Company in establishing
this Plan, nor any action taken by the Company, the
Board, the Committee, or the chief executive Officer
with respect to the Plan, nor any provision herein
shall be construed as granting to any Officer or Key
Employee the right to continue in the employ of the
Company.
VIII. Miscellaneous Provisions
A. Nonassignability of Benefits
No Participant, nor his or her legal
representatives, shall have any right to assign,
transfer, appropriate, encumber, or anticipate any
interest in the Plan or any payments hereunder.
Participants have only the right to receive payments
under this Plan if, as, and when such payments are
due and payable under the terms and provisions of
the Plan.
B. Expenses of the Plan
The Company shall bear all of the expenses of
administering the Plan and shall not charge such
expenses against amounts payable hereunder.
C. Applicable Law
This Plan, all derminations made hereunder, and
all actions taken pursuant hereto will be governed by
the the laws of the State of Missouri.
D. First Plan Year
The first Plan Year of this Plan shall commence
on January 1, 1997.
<PAGE>
Exhibit 10-i
AMENDMENT TO
SEVERANCE AGREEMENT
This Agreement is entered into as of January
[NUMBER] by and between Kansas City Power & Light
Company (the "Company") and <FirstName> (the
"Executive").
WHEREAS, the Company and the Executive have
entered into a Severance Agreement as of <SevDate>
(and, as amended as described in the next clause,
hereinafter referred to as the "Agreement"); and
WHEREAS, the Company and the Executive amended the
agreement as of <AmendDate> (the "Amendment"); and
WHEREAS, it has come to the attention of the
Company and the Executive that the Agreement contains
mutual mistakes which were contrary to the intended
purposes of the Amendment, and the Company and the
Executive desire to further amend the Agreement in
order to correct those mutual mistakes and to more
fully reflect the intended purposes of the Amendment.
NOW, THEREFORE, the Agreement is hereby amended as
set forth below.
Terms which are defined in the Agreement shall
have the same meaning in this further amendment.
1. Section 1 (g) of the Agreement is hereby amended so that the portion
preceding paragraph (1) thereof reads as follows:
(g) "Good Reason" means, without Executive's express written consent, the
occurrence of any of the following events after a Change in Control (or after
any potential Change in Control under the circumstances described in Clause (
ii) of Section 3 (d) hereof (treating all references in this paragraph (g) to
a "Change in Control" as references to a "Potential Change in Control")).
2. Section 3 (d) of the Agreement is hereby amended to read as follows:
(d) For the purposes of this Agreement, the Executive's employment shall
be deemed to have been terminated within the Termination Period other
than by reason of a Nonqualifying Termination if (i) the Executive's
employment is terminated without Cause prior to a Change in Control (or,
if later, prior to the consummation of the transaction the approval of which
by the Company's stockholders constitutes a Change in Control under Section 1
(d) (III) or (IV) and such termination was at the request or direction of a
Person who has entered into an agreement with the Company the consummation of
which or the approval of which by the Company's stockholders would constitute
a Change in Control, (ii) the Executive terminates his employment with Good
Reason prior to a Change of Control (or, if later, prior to the consummation
of the transaction the approval of which by the Company's stockholders
constitutes a Change in Control under Section 1 (d) (III) or (IV)) and the
circumstance or event which constitutes Good Reason occurs at the
request or direction of such Person, or, (iii) the Executive's employment is
terminated without Cause prior to a Change in Control (or, if later, prior to
the consummation of the transaction the approval of which by the Company's
stockholders constitutes a Change in Control under Section 1 (d) (III) or (IV))
and such termination is otherwise in connection with or in anticipation of a
Change in Control which actually occurs.
3. Clause (ii) of Section 2 (a) of the Agreement is amended to read as
follows:
"(ii) if a Change in Control shall occur, until 90 days following such
Change of Control (or, if later, until the consummation of the transaction
the approval of which by the Company's stockholders constitutes a Change in
Control under Section 1 (d) (III) or (IV) hereof)."
4. Clause (ii) of Section 3 (a) (1) of the Agreement is amended by
deleting the second occurrence of the phrase "Change in Control" therein and
inserting in lieu thereof, the phrase "Date of Termination".
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed
by a duly authorized officer of the Company and Executive has executed this
Amendment as of the day and year first above written.
KANSAS CITY POWER & LIGHT COMPANY
By:__________________
<CEO>
_____________________
<LastName>
<PAGE>
<TABLE>
Exhibit 12
KANSAS CITY POWER & LIGHT COMPANY
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<CAPTION>
1996 1995 1994 1993 1992
(Thousands)
<S> <C> <C> <C> <C> <C>
Net income $108,171 $122,586 $104,775 $105,772 $86,334
Add:
Taxes on income 31,753 66,803 66,377 67,953 52,196
Kansas City earnings tax 558 958 524 495 382
Total taxes on income 32,311 67,761 66,901 68,448 52,578
Interest on value of
leased property 8,301 8,269 6,732 7,273 6,366
Interest on long-term debt 53,939 52,184 43,962 50,118 54,266
Interest on short-term debt 1,251 1,189 1,170 750 2,749
Other interest expense
and amortization 4,840 3,112 4,128 4,113 2,173
Total fixed charges 68,331 64,754 55,992 62,254 65,554
Earnings before taxes
on income and fixed
charges $208,813 $255,101 $227,668 $236,474 $204,466
Ratio of earnings to
fixed charges 3.06 3.94 4.07 3.80 3.12
</TABLE>
<PAGE>
Exhibit 23-a
OPINION AND CONSENT OF COUNSEL
As Senior Vice President-Corporate Services, Corporate
Secretary and Chief Legal Officer of Kansas City Power
& Light Company, I have reviewed the statements as to
matters of law and legal conclusions in the Annual
Report on Form 10-K for the fiscal year ended December
31, 1996, and consent to the incorporation by reference
of such statements in the Company's previously-filed
Form S-3 Registration Statements (Registration No. 33-
51799 and Registration No. 333-17285) and Form S-8
Registration Statements (Registration No. 33-45618 and
Registration No. 33-58917).
/s/ Jeanie Sell Latz
Jeanie Sell Latz
Kansas City, Missouri
March 17, 1997
<PAGE>
Exhibit 23-b
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of Kansas City Power & Light Company on Form S-3 (File Nos.
33-51799 and 333-17285) and Form S-8 (File Nos. 33-45618 and 33-58917)
of our report dated February 14, 1997, on our audits of the
consolidated financial statements of Kansas City Power & Light Company
and Subsidiary as of December 31, 1996 and 1995, and for the years
ended December 31, 1996, 1995, and 1994, which report is included in
this Annual Report on Form 10-K.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Kansas City, Missouri
March 14, 1997
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of
Kansas City Power & Light Company, a Missouri
corporation, does hereby constitute and
appoint Drue Jennings or Jeanie Sell Latz,
his true and lawful attorney and agent, with
full power and authority to execute in the
name and on behalf of the undersigned as such
director an Annual Report on Form 10-K;
hereby granting unto such attorney and agent
full power of substitution and revocation in
the premises; and hereby ratifying and
confirming all that such attorney and agent
may do or cause to be done by virtue of these
presents.
IN WITNESS WHEREOF, I have hereunto set
my hand and seal this 4th day of February,
1997.
/s/David L. Bodde
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 5th day of February, 1997,
before me the undersigned, a Notary Public,
personally appeared David L. Bodde, to be
known to be the person described in and who
executed the foregoing instrument, and who,
being by me first duly sworn, acknowledged
that he executed the same as his free act and
deed.
IN TESTIMONY WHEREOF, I have hereunto
set my hand and affixed my official seal the
day and year last above written.
/s/Cathy Claypole
Notary Public
Cathy Claypole
Notary Public-Notary Seal
State of Missouri
Clay County
My Commission Expires:
February 27, 2000
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of
Kansas City Power & Light Company, a Missouri
corporation, does hereby constitute and
appoint Drue Jennings or Jeanie Sell Latz,
his true and lawful attorney and agent, with
full power and authority to execute in the
name and on behalf of the undersigned as such
director an Annual Report on Form 10-K;
hereby granting unto such attorney and agent
full power of substitution and revocation in
the premises; and hereby ratifying and
confirming all that such attorney and agent
may do or cause to be done by virtue of these
presents.
IN WITNESS WHEREOF, I have hereunto set
my hand and seal this 4th day of February,
1997.
/s/William H. Clark
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 5th day of February, 1997,
before me the undersigned, a Notary Public,
personally appeared William H. Clark, to be
known to be the person described in and who
executed the foregoing instrument, and who,
being by me first duly sworn, acknowledged
that he executed the same as his free act and
deed.
IN TESTIMONY WHEREOF, I have hereunto
set my hand and affixed my official seal the
day and year last above written.
/s/Cathy Claypole
Notary Public
Cathy Claypole
Notary Public-Notary Seal
State of Missouri
Clay County
My Commission Expires:
February 27, 2000
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of
Kansas City Power & Light Company, a Missouri
corporation, does hereby constitute and
appoint Drue Jennings or Jeanie Sell Latz,
his true and lawful attorney and agent, with
full power and authority to execute in the
name and on behalf of the undersigned as such
director an Annual Report on Form 10-K;
hereby granting unto such attorney and agent
full power of substitution and revocation in
the premises; and hereby ratifying and
confirming all that such attorney and agent
may do or cause to be done by virtue of these
presents.
IN WITNESS WHEREOF, I have hereunto set
my hand and seal this 4th day of February,
1997.
/s/Robert J. Dineen
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 5th day of February, 1997,
before me the undersigned, a Notary Public,
personally appeared Robert J. Dineen, to be
known to be the person described in and who
executed the foregoing instrument, and who,
being by me first duly sworn, acknowledged
that he executed the same as his free act and
deed.
IN TESTIMONY WHEREOF, I have hereunto
set my hand and affixed my official seal the
day and year last above written.
/s/Cathy Claypole
Notary Public
Cathy Claypole
Notary Public-Notary Seal
State of Missouri
Clay County
My Commission Expires:
February 27, 2000
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of
Kansas City Power & Light Company, a Missouri
corporation, does hereby constitute and
appoint Drue Jennings or Jeanie Sell Latz,
his true and lawful attorney and agent, with
full power and authority to execute in the
name and on behalf of the undersigned as such
director an Annual Report on Form 10-K;
hereby granting unto such attorney and agent
full power of substitution and revocation in
the premises; and hereby ratifying and
confirming all that such attorney and agent
may do or cause to be done by virtue of these
presents.
IN WITNESS WHEREOF, I have hereunto set
my hand and seal this 4th day of February,
1997.
/s/Arthur J. Doyle
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 5th day of February, 1997,
before me the undersigned, a Notary Public,
personally appeared Arthur J. Doyle, to be
known to be the person described in and who
executed the foregoing instrument, and who,
being by me first duly sworn, acknowledged
that he executed the same as his free act and
deed.
IN TESTIMONY WHEREOF, I have hereunto
set my hand and affixed my official seal the
day and year last above written.
/s/Cathy Claypole
Notary Public
Cathy Claypole
Notary Public-Notary Seal
State of Missouri
Clay County
My Commission Expires:
February 27, 2000
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of
Kansas City Power & Light Company, a Missouri
corporation, does hereby constitute and
appoint Drue Jennings or Jeanie Sell Latz,
his true and lawful attorney and agent, with
full power and authority to execute in the
name and on behalf of the undersigned as such
director an Annual Report on Form 10-K;
hereby granting unto such attorney and agent
full power of substitution and revocation in
the premises; and hereby ratifying and
confirming all that such attorney and agent
may do or cause to be done by virtue of these
presents.
IN WITNESS WHEREOF, I have hereunto set
my hand and seal this 5th day of February,
1997.
/s/W. Thomas Grant II
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 5th day of February, 1997,
before me the undersigned, a Notary Public,
personally appeared W. Thomas Grant II, to be
known to be the person described in and who
executed the foregoing instrument, and who,
being by me first duly sworn, acknowledged
that he executed the same as his free act and
deed.
IN TESTIMONY WHEREOF, I have hereunto
set my hand and affixed my official seal the
day and year last above written.
/s/Cathy Claypole
Notary Public
Cathy Claypole
Notary Public-Notary Seal
State of Missouri
Clay County
My Commission Expires:
February 27, 2000
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of
Kansas City Power & Light Company, a Missouri
corporation, does hereby constitute and
appoint Drue Jennings or Jeanie Sell Latz,
his true and lawful attorney and agent, with
full power and authority to execute in the
name and on behalf of the undersigned as such
director an Annual Report on Form 10-K;
hereby granting unto such attorney and agent
full power of substitution and revocation in
the premises; and hereby ratifying and
confirming all that such attorney and agent
may do or cause to be done by virtue of these
presents.
IN WITNESS WHEREOF, I have hereunto set
my hand and seal this 4th day of February,
1997.
/s/George E. Nettels, Jr.
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 5th day of February, 1997,
before me the undersigned, a Notary Public,
personally appeared George E. Nettels, Jr.,
to be known to be the person described in and
who executed the foregoing instrument, and
who, being by me first duly sworn,
acknowledged that he executed the same as his
free act and deed.
IN TESTIMONY WHEREOF, I have hereunto
set my hand and affixed my official seal the
day and year last above written.
/s/Cathy Claypole
Notary Public
Cathy Claypole
Notary Public-Notary Seal
State of Missouri
Clay County
My Commission Expires:
February 27, 2000
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of
Kansas City Power & Light Company, a Missouri
corporation, does hereby constitute and
appoint Drue Jennings or Jeanie Sell Latz,
her true and lawful attorney and agent, with
full power and authority to execute in the
name and on behalf of the undersigned as such
director an Annual Report on Form 10-K;
hereby granting unto such attorney and agent
full power of substitution and revocation in
the premises; and hereby ratifying and
confirming all that such attorney and agent
may do or cause to be done by virtue of these
presents.
IN WITNESS WHEREOF, I have hereunto set
my hand and seal this 4th day of February,
1997.
/s/Linda H. Talbott
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 5th day of February, 1997,
before me the undersigned, a Notary Public,
personally appeared Linda H. Talbott, to be
known to be the person described in and who
executed the foregoing instrument, and who,
being by me first duly sworn, acknowledged
that she executed the same as her free act
and deed.
IN TESTIMONY WHEREOF, I have hereunto
set my hand and affixed my official seal the
day and year last above written.
/s/Cathy Claypole
Notary Public
Cathy Claypole
Notary Public-Notary Seal
State of Missouri
Clay County
My Commission Expires:
February 27, 2000
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of
Kansas City Power & Light Company, a Missouri
corporation, does hereby constitute and
appoint Drue Jennings or Jeanie Sell Latz,
his true and lawful attorney and agent, with
full power and authority to execute in the
name and on behalf of the undersigned as such
director an Annual Report on Form 10-K;
hereby granting unto such attorney and agent
full power of substitution and revocation in
the premises; and hereby ratifying and
confirming all that such attorney and agent
may do or cause to be done by virtue of these
presents.
IN WITNESS WHEREOF, I have hereunto set
my hand and seal this 4th day of February,
1997.
/s/Robert H. West
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 5th day of February, 1997,
before me the undersigned, a Notary Public,
personally appeared Robert H. West, to be
known to be the person described in and who
executed the foregoing instrument, and who,
being by me first duly sworn, acknowledged
that he executed the same as his free act and
deed.
IN TESTIMONY WHEREOF, I have hereunto
set my hand and affixed my official seal the
day and year last above written.
/s/Cathy Claypole
Notary Public
Cathy Claypole
Notary Public-Notary Seal
State of Missouri
Clay County
My Commission Expires:
February 27, 2000
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Dec-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,343,494
<OTHER-PROPERTY-AND-INVEST> 231,874
<TOTAL-CURRENT-ASSETS> 160,980
<TOTAL-DEFERRED-CHARGES> 178,164
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,914,512
<COMMON> 449,697
<CAPITAL-SURPLUS-PAID-IN> (1,666)
<RETAINED-EARNINGS> 455,934
<TOTAL-COMMON-STOCKHOLDERS-EQ> 910,449
62
89,000
<LONG-TERM-DEBT-NET> 944,136
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 26,591
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 944,274
<TOT-CAPITALIZATION-AND-LIAB> 2,914,512
<GROSS-OPERATING-REVENUE> 903,919
<INCOME-TAX-EXPENSE> 68,155
<OTHER-OPERATING-EXPENSES> 657,951
<TOTAL-OPERATING-EXPENSES> 726,106
<OPERATING-INCOME-LOSS> 177,813
<OTHER-INCOME-NET> (11,559)
<INCOME-BEFORE-INTEREST-EXPEN> 166,254
<TOTAL-INTEREST-EXPENSE> 58,083
<NET-INCOME> 108,171
3,790
<EARNINGS-AVAILABLE-FOR-COMM> 104,381
<COMMON-STOCK-DIVIDENDS> 98,421
<TOTAL-INTEREST-ON-BONDS> 53,939
<CASH-FLOW-OPERATIONS> 216,909
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 1.69
</TABLE>
