As filed with the Securities and Exchange Commission on July 18, 1997.
REGISTRATION NO. 333-26115
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
WESTERN RESOURCES, INC.
(Exact name of registrant as specified in its charter)
KANSAS 48-0290150
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
818 KANSAS AVENUE
TOPEKA, KANSAS 66612
(913) 575-6300
(Address, including zip code, and telephone number, including
area code, of principal executive offices)
----------------
JOHN K. ROSENBERG, ESQ. STEVEN L. KITCHEN
EXECUTIVE VICE PRESIDENT EXECUTIVE VICE PRESIDENT AND
AND GENERAL COUNSEL CHIEF FINANCIAL OFFICER
WESTERN RESOURCES, INC. WESTERN RESOURCES, INC.
TOPEKA, KANSAS 66612 TOPEKA, KANSAS 66612
(913) 575-6300 (913) 575-6300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
-------------------------------------------------------------
This Registration Statement also constitutes Post-Effective Amendment No. 2
to Registration Statement No. 33-50069. Such Post-Effective Amendment shall
become effective concurrently with the effectiveness of this Post-Effective
Amendment to the Registration Statement in accordance with Section 8(c) of the
Securities Act of 1933.
================================================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale
of these securities in any State in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such State.
<PAGE>
SUBJECT TO COMPLETION, DATED JULY 17, 1997
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JULY , 1997)
$ ,000,000
Western Resources, Inc.
$ ,000,000 First Mortgage Bonds, % Convertible Series Due
Convertible at the option of the Company into
$ ,000,000% Unsecured Senior Notes Due
(INTEREST PAYABLE ON _________ AND __________)
$ ,000,000 First Mortgage Bonds, % Convertible Series Due
Convertible at the option of the Company into
$ ,000,000 % Unsecured Senior Notes Due
(INTEREST PAYABLE ON _________ AND _________)
-----------------------
The First Mortgage Bonds % Convertible Series Due (the " Series") mature on ,
and will not be redeemable prior to maturity. The First Mortgage Bonds %
Convertible Series Due (the " Series") mature on , and will not be redeemable
prior to maturity. The Series and the Series are sometimes collectively referred
to herein as the "New Bonds." At any time after the New Bonds are outstanding,
the Company may, solely at its option, convert all but not less than all of the
New Bonds of the Series into $ ,000,000 aggregate principal amount of the
Company's % Unsecured Senior Notes Due (the " Senior Notes"), and the New Bonds
of the Series into $ ,000,000 aggregate principal amount of the Company's %
Unsecured Senior Notes Due (the " Senior Notes"). If the Series is converted,
the Senior Notes will mature on , and will not be redeemable prior to maturity.
If the Series is converted, the Senior Notes will mature on , and will not be
redeemable prior to maturity. The Senior Notes and the Senior Notes are
sometimes collectively referred to herein as the "New Senior Notes" (the New
Bonds and New Senior Notes are referred to collectively as the "Offered
Securities"). The financial covenants and events of default pertaining to the
New Senior Notes will differ from those pertaining to the New Bonds. The New
Senior Notes will be unsecured general obligations of the Company and junior in
right of payment to the Company's First Mortgage Bonds. As of March 31, 1997,
the Company had $658.9 million of First Mortgage Bonds outstanding (excluding
the KGE Bonds (as defined in the accompanying Prospectus)) and would have had
$1.3 billion of Mortgage Bonds and other secured indebtedness outstanding on a
pro forma basis giving effect to the pending acquisition of Kansas City Power &
Light Company ("KCPL"), without giving effect to the offering made hereby. See
"Description of New Bonds -- Redemption and Purchase of New Bonds" and "
- --Company Conversion Option" and "Description of New Senior Notes" herein and
related information in the accompanying Prospectus.
------------------------
See "Risk Factors" on page S-4 for certain information relevant to an investment
in the new bonds, including the company's option to convert the new bonds into
new senior notes.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC* COMMISSIONS+ COMPANY++
<S> <C> <C> <C> <C> <C> <C>
Per Bond, Series........... % % %
Total........................... $ $ $
Per Bond, Series........... % % %
Total........................... $ $ $
</TABLE>
* The New Bonds will bear interest from the date of delivery, and no
accrual of interest will be paid on the date of delivery.
+ The Company has agreed to indemnify the Underwriters (as defined herein)
against certain civil liabilities, including liabilities under the
Securities Act of 1933. (See "Underwriting")
++ Before deduction of expenses payable by the Company, estimated at $ .
---------------------------
The New Bonds are being offered by the Underwriters as set forth
under "Underwriting" herein. It is expected that the New Bonds will be ready for
delivery through the facilities of The Depository Trust Company, New York, New
York on or about , 1997, against payment therefor in immediately available
funds. The Underwriters are:
DILLON, READ & CO. INC. SALOMON BROTHERS INc
PRUDENTIAL SECURITIES INCORPORATED SMITH BARNEY INC.
NATWEST SECURITIES LTD. OPPENHEIMER & CO., INC.
The date of this Prospectus Supplement is , 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NEW
BONDS INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN
SUCH SECURITIES DURING AND AFTER THE OFFERING. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
PROSPECTUS SUPPLEMENT SUMMARY
THE FOLLOWING SUMMARY INFORMATION IS QUALIFIED IN ITS ENTIRETY BY
THE DETAILED INFORMATION AND FINANCIAL STATEMENTS INCORPORATED HEREIN BY
REFERENCE.
THE COMPANY
The Company and its divisions and wholly owned subsidiaries include
KPL, a rate-regulated electric and gas division of the Company ("KPL"), Kansas
Gas and Electric Company ("KGE"), a rate-regulated utility and wholly owned
subsidiary of the Company, Westar Capital, Inc.("Westar Capital"), Westar
Security, Inc.("Westar Security"), Westar Energy, Inc., The Wing Group, Ltd.,
non-utility subsidiaries, and Mid Continent Market Center, Inc., a regulated gas
transmission service provider ("MCMC"). KGE owns 47% of Wolf Creek Nuclear
Operating Corporation ("WCNOC"), the operating company for the Wolf Creek
Generating Station ("Wolf Creek"). The Company's non-utility subsidiaries market
natural gas primarily to large commercial and industrial customers, provide
electronic security services, engage in international power project development
and provide other energy-related products and services.
The Company is engaged principally in the production, purchase,
transmission, distribution and sale of electricity, and the delivery and sale of
natural gas and the electronic security services. The Company serves
approximately 606,000 electric customers in eastern and central Kansas and
approximately 650,000 natural gas customers in Kansas and northeastern Oklahoma.
On December 12, 1996, the Company and ONEOK, Inc. ("ONEOK") announced a proposed
strategic alliance pursuant to which the Company will contribute its regulated
local natural gas distribution operations, MCMC and Westar Gas Marketing, Inc.,
and will become the largest shareholder of ONEOK. The transaction is anticipated
to be completed during the second half of 1997.
Westar Capital is a private investment company, wholly owned by the
Company, with investments in energy and security related and technology oriented
businesses. Westar Capital owns approximately 18 million shares of Tyco
International Ltd., formerly ADT Limited ("Tyco"), which represents less than
10% of the outstanding shares of Tyco. The market price of these shares at the
close of business on July 10, 1997 was $78.69 per common share, or approximately
$1.4 billion.
Westar Security is an electronic security services business with
over 400,000 customer accounts. On December 31, 1996, the Company acquired all
of the assets of Westinghouse Security Systems, Inc. ("Westinghouse Security"),
a national security system monitoring company and a subsidiary of Westinghouse
Electric Corporation ("Westinghouse"). Westar Security is the third-largest
monitored security company in the United States with offices in many major U.S.
markets and direct access to customers in 44 states.
On February 7, 1997, the Company announced that it had entered into
a merger agreement with KCPL, pursuant to which the Company will acquire KCPL.
KCPL is a public utility engaged in the generation, transmission, distribution
and sale of electricity to approximately 430,000 customers in western Missouri
and eastern Kansas.
S-2<PAGE>
THE OFFERING
Securities Offered $ ,000,000 aggregate principal amount of First
Mortgage Bonds % Convertible Series Due,
convertible at the option of the Company into $
,000,000 aggregate principal amount of % Unsecured
Senior Notes due. $ ,000,000 aggregate principal
amount of First Mortgage Bonds % Convertible Series
Due , convertible at the option of the Company into
$ ,000,000 aggregate principal amount of _____%
Unsecured Senior Notes due .
Interest Payment Dates Semiannually, on each _____ and _____, beginning
__________.
Redemption No redemption prior to maturity
Company Conversion Option The Company, solely at its option, may at any time
convert either or both the Series or the Series,
each only in whole and not in part, into the Senior
Notes and the Senior Notes, respectively.
Use of Proceeds The net proceeds from the sale of the New Bonds
will be used for repayment of short-term
indebtedness, corporate acquisitions and other
general corporate purposes. As of June 30, 1997,
such short-term indebtedness had a weighted average
interest rate of approximately 6.10% per annum and
maturities of less than a year from the date of
issuance. In the past 12 months short-term
indebtedness increased as the result of borrowings
for general corporate purposes as well as to
finance a portion of the cost of the acquisition of
Westinghouse Security and the Company's acquisition
in 1996 of shares of Tyco (see the accompanying the
Prospectus and the information incorporated by
reference therein).
The Company currently intends to surrender to the
Trustee any of the New Bonds which have been
converted into Senior Notes to effect the release
from the lien of the Company's First Mortgage of
substantially all of the Company's gas properties
in connection with the ONEOK transaction. See "Use
of Proceeds" herein and "Description of New Bonds
-- Release and Substitution of New Property" in the
accompanying Prospectus.
S-3
<PAGE>
RISK FACTORS
PROSPECTIVE PURCHASERS OF THE NEW BONDS SHOULD CAREFULLY REVIEW THE
INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS AND SHOULD PARTICULARLY CONSIDER THE FOLLOWING:
LOSS OF STATUS AS SECURED CREDITOR UPON CONVERSION.
The Company has the right, solely at its option, to convert the New
Bonds, which are secured under the Company's Mortgage, into the New Senior
Notes, which will be unsecured obligations of the Company. The Company may
exercise its conversion right at any time and may do so if, among other things,
it is necessary or desirable in connection with a transaction which requires the
release of property from the lien of the Mortgage. By converting the New Bonds,
the Company will be able to satisfy certain requirements under the Mortgage to
retire Bonds in order to obtain the release of all or substantially all of its
gas properties, which release will be required in order to consummate the ONEOK
Transaction which is anticipated to be completed during the second half of 1997.
See "The Company" in the accompanying Prospectus.
As a result of such a conversion, holders of the New Bonds would
become unsecured creditors of the Company as holders of the New Senior Notes.
The right to payment on the New Senior Notes will be junior to the right of
payment on any First Mortgage Bonds outstanding on the Conversion Date. As of
March 31, 1997, the Company had $658.9 million of First Mortgage Bonds
outstanding (excluding the KGE Bonds (as defined in the accompanying
Prospectus)) and would have had $1.3 billion of First Mortgage Bonds and other
secured indebtedness outstanding on a pro forma basis giving effect to the
consummation of the pending merger with KCPL. The holders of the New Bonds will
not receive any additional payments or any increase in the rate of interest
payable by the Company as the result of the conversion of the New Bonds into New
Senior Notes.
The Indenture pursuant to which the New Senior Notes would be issued
does not contain any covenant which restricts the Company's ability to incur
additional indebtedness.
STRUCTURAL SUBORDINATION OF NEW SENIOR NOTES.
Portions of the Company's operations are conducted through
subsidiaries. Therefore, due to structural subordination, the New Senior Notes
will be effectively subordinated to all existing and future indebtedness and
other liabilities and commitments of the Company's subsidiaries. The Indenture
pursuant to which the New Senior Notes would be issued does not contain any
covenant which restricts the ability of the subsidiaries of the Company to incur
additional indebtedness. As of March 31, 1997, the Company's subsidiaries had
$759 million of indebtedness outstanding.
POSSIBLE EFFECTS OF BANKRUPTCY ON HOLDERS OF NEW BONDS.
In the event that the Company becomes subject to bankruptcy
proceedings at a time when the New Bonds are outstanding and have not been
converted for New Senior Notes, a court in such proceedings may order or approve
the conversion of New Bonds into New Senior Notes, with the result that holders
of New Bonds would not be entitled to the rights of secured creditors of the
Company in such bankruptcy proceedings. As a further result, among other things,
such holders would not be expected to be entitled to adequate protection of
their security or to interest accruing after the date of commencement of
bankruptcy proceedings. Alternatively, a court in a bankruptcy proceeding with
respect to the Company may decide that, even if the New Bonds cannot be
converted for New Senior Notes, the claims of holders of New Bonds should
nevertheless be subordinated to other secured creditors of the Company under
principles of equitable subordination.
S-4
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the New Bonds will be used for
repayment of short-term indebtedness, corporate acquisitions and other general
corporate purposes. In the past 12 months short-term indebtedness increased as
the result of borrowings for general corporate purposes as well as to finance a
portion of the cost of the acquisition of Westinghouse Security and the
Company's acquisition in 1996 of shares of Tyco (see the accompanying Prospectus
and the information incorporated therein). As of June 30, 1997, such short-term
indebtedness had a weighted average interest rate of approximately 6.10% per
annum and maturities of less than a year from the date of issuance.
SUMMARY FINANCIAL INFORMATION
The summary financial information of the Company set forth below
should be read in conjunction with the financial statements and other financial
information contained or incorporated by reference herein.
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED
MARCH 31, FOR THE YEARS ENDED DECEMBER 31,
- --------------------------------------------------------------------------
1997 1996 1995 1994(1) 1993 1992(2)
---- ---- ---- ------- ---- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME SUMMARY:
Operating Revenues........... $2,117,394 $2,046,819 $1,743,300 $1,764,769 $2,028,411 $1,639,422
Operating Income............. 312,365 303,993 278,709 275,050 292,360 239,721
Income Before Interest 303,771 306,364 317,545 263,355
Charge.................... 330,408 318,276
Net Income................... 165,194 168,950 181,676 187,447 177,370 127,884
Ratio of Earnings to Fixed
Charges................... 2.06 2.16 2.41 2.65 2.36 2.02
</TABLE>
- ----------
(1) After giving effect to the sales of the Company's Missouri gas properties,
effective January 31, 1994 and February 28, 1994.
(2) After giving effect to the acquisition of KGE, effective March 31, 1992.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1997
AMOUNT PERCENT
---------------------------------------
(DOLLARS IN MILLIONS)
---------------------------------------
<S> <C> <C>
CONSOLIDATED CAPITALIZATION SUMMARY (3):
First mortgage and pollution control bonds (net of
premium/discount and amortization)........................... $1,341 40.2%
Other long-term debt.................................................. 66 2.0
Preferred and preference stock........................................ 75 2.2
Company-obligated mandatorily redeemable preferred securities of
subsidiary trusts holding solely Company subordinated
debentures...................................................... 220 6.6
Common stock equity.................................................. 1,638 49.0
------ -----
Total capitalization............................................ $3,340 100.0%
====== =====
Short-term debt...................................................... $1,227 --
</TABLE>
- ----------
(3) Does not reflect the issuance of the New Bonds.
S-5
<PAGE>
SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following summary pro forma combined financial information
summarizes historical income statement and capitalization statement information
for the Company and KCPL on a pro forma basis as of and for the twelve month
period ended March 31, 1997.
<TABLE>
<CAPTION>
FOR THE TWELVE MONTH PERIOD ENDED MARCH 31, 1997
-------------------------------------------------
WESTERN
RESOURCES KCPL PRO FORMA
(HISTORICAL) (HISTORICAL) COMBINED
------------ ------------ --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
PRO FORMA INCOME SUMMARY:
Operating Revenues........... $2,117,394 $892,039 $3,009,433
Operating Income............. 312,365 170,958 483,323
Income Before Interest 127,787 458,195
Charges................... 330,408
Net Income................... 165,194 68,518 233,710
Ratio of Earnings to Fixed
Charges................... 2.06 2.03(1) 2.05(1)
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, 1997
---------------------------------------------------------------
WESTERN
RESOURCES KCPL PRO FORMA PRO FORMA
(HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED
------------ ------------ ----------- --------
(DOLLARS IN MILLIONS) PERCENT
------------------------------------ -----------------
PRO FORMA CAPITALIZATION
<S> <C> <C> <C> <C> <C>
SUMMARY:
Long-term Debt.............. $ 1,407 $ 925 - $ 2,332 43.8%
Refinanced Short-term
Borrowings...... - 93 (93)(2) - -
Preferred and Preference
Stock............... 75 89 - 164 3.1
Company-obligated
mandatorily redeemable
preferred securities of
subsidiary trusts
holding solely Company
subordinated debentures... 220 - 150(2) 370 7.0
Common stock equity........ 1,638 864 (48)(3) 2,454 46.1
----- ---- ------- ----- ----
$ 3,340 $ 1,971 $ 9 $ 5,320 100.0%
===== ===== = ===== ======
Short-term Debt............ $ 1,227(4) $ 80 - $ 1,307
</TABLE>
- ----------
(1) The ratio includes a one-time payment during the first quarter of 1997 of
$53 million from KCPL to UtiliCorp United Inc. This payment was made as a
result of KCPL's announcement of its agreement to combine with the
Company. Excluding this one-time payment, the ratio would have been 2.79,
adjusted, KCPL only and 2.23 on a pro forma combined basis.
(2) As disclosed in the KCPL March 31, 1997 Quarterly Report on Form 10-Q, in
April 1997, a wholly owned subsidiary of KCPL issued $150 million of 8.3%
preferred securities. These securities are characterized as
company-obligated mandatorily redeemable preferred securities of
subsidiary trusts holding solely company subordinated debentures.
S-6
<PAGE>
(3) Reflects expensing of transaction costs to be charged to income in the
first period following consummation of a merger with KCPL.
(4) Does not reflect the issuance of the New Bonds.
S-7
<PAGE>
DESCRIPTION OF NEW BONDS
The following description of the particular terms of the New Bonds
offered hereby supplements, and to the extent inconsistent therewith replaces,
the description of the general terms and provisions of the New Bonds set forth
in the accompanying Prospectus under the heading "Description of the New Bonds",
to which description reference is hereby made.
INTEREST, MATURITY AND PAYMENT. The New Bonds of the Series will
mature on , , and the New Bonds of the Series will mature on , . The New Bonds
will bear interest from at the rates per annum shown in their title, payable on
and of each year, commencing . Interest is payable to holders of record
on the interest payment date. Principal and interest are payable at the office
or agency of the Company in New York City. For so long as the New Bonds are
registered in the name of The Depository Trust Company, New York, New York
("DTC"), or its nominee, the principal and interest due on the New Bonds will be
payable by the Company or its agent to DTC for payment to its Participants (as
defined in the accompanying Prospectus) for subsequent disbursement to the
beneficial owners.
REDEMPTION OF NEW BONDS. The New Bonds will not be redeemable for
any purpose prior to their maturity dates.
MODIFICATIONS. The Company has amended the Mortgage to provide that
the Mortgage may be modified or altered and the rights of the holders of Bonds
may be affected with the consent of the holders of 60% of the Bonds or, if less
than all series of Bonds are affected, the consent also of the holders of 60% of
the Bonds of each series affected.
RESERVATION OF RIGHTS TO AMEND THE MORTGAGE. The Company has
reserved the right, subject to appropriate corporate action, but without the
consent or other action of holders of bonds of any series created after January
1, 1997, to amend the Mortgage to permit, unless an event of default shall have
happened and be continuing, or shall happen as a result of making or granting an
application (1) the release of mortgaged property from the lien of the Mortgage,
provided the fair value to the Company of the mortgaged property subject to such
lien (excluding the mortgaged property to be released) equals or exceeds 10/7ths
of the aggregate principal amount of outstanding bonds under the Mortgage and
any prior lien bonds outstanding at the time of such release and (2) in the
event the Company is unable to obtain a release of property as described in
clause (1), the release from the lien of the Mortgage of mortgaged property if
the fair value to the Company thereof is less than 1/2 of 1% of the aggregate
principal amount of outstanding Bonds under the Mortgage and prior lien Bonds
outstanding; provided that, the property released pursuant to clause (2) in any
12 consecutive calendar months shall not exceed 1% of such bonds and prior lien
bonds; (3) the deletion of the net earnings test which must be met prior to the
issuance of additional bonds; (4) the deletion of the requirement to obtain an
independent engineer's certificate in connection with certain releases of
property from the lien of the Mortgage; and (5) the deletion of a financial test
to be met by another corporation in the event of the consolidation or merger of
the Company into or sale by the Company of its property as an entirety or
substantially as an entirety to such other corporation.
COMPANY CONVERSION OPTION. At any time the New Bonds are
outstanding, the Company may, solely at its option, convert either or both of
the Series or Series, each only in whole but not in part, into the Senior Notes
and the Senior Notes, respectively. See "Description of Debt Securities" below
and in the accompanying Prospectus for a summary of the terms of the Debt
Securities. Each of the Holders of New Bonds will be entitled to receive $1,000
in principal amount of New Senior Notes for each $1,000 of principal amount of
New Bonds held by such holder as of the date fixed for Conversion (the
"Conversion Date"). In connection with any such conversion, interest on
converted New Bonds which has accrued but has not been paid as of the Conversion
Date will accrue on New Senior Notes from the date on which interest was last
paid on the New Bonds so converted, provided that accrued interest on New Bonds
S-8
<PAGE>
converted after a record date, but before the related interest payment date,
shall be paid to the holder of record of such New Bonds on such interest payment
date, and the New Senior Notes into which such New Bonds shall have been
converted will begin to accrue interest from such interest payment date. The
rights of the holders of the New Bonds as bondholders of the Company with
respect to the New Bonds converted will cease and the person or persons entitled
to receive the New Senior Notes issuable upon Conversion will be treated as the
registered holder or holders of such New Senior Notes from the Conversion Date.
New Senior Notes issued in conversion of New Bonds will be issued in principal
amounts of $1,000 and integral multiples thereof. The Company may condition its
obligation to convert New Bonds upon the satisfaction of certain conditions. The
Company will mail to each holder of record of New Bonds to be converted into
Senior Notes written notice of such conversion at least 15 and not more than 120
days prior to the Conversion Date. DTC will be the only registered holder of the
New Bonds. See "Book-Entry" in the accompanying Prospectus).
As described more fully below under "Description of New Senior
Notes," following the Conversion Date holders of New Senior Notes will, among
other things, no longer be entitled to the security provided by the Mortgage
since the New Senior Notes will be unsecured obligations of the Company.
DESCRIPTION OF NEW SENIOR NOTES
The New Senior Notes will be identical to the New Bonds with respect
to their respective principal amounts, maturity dates, interest rates, record
dates and interest payment dates. However, holders of New Senior Notes will,
among other things, no longer be entitled to the security provided by the
Mortgage, and the financial covenants and the events of default pertaining to
the New Senior Notes will differ from those pertaining to the New Bonds. See
"Description of Debt Securities" in the accompanying Prospectus for a summary of
the other terms of the indenture under which the New Senior Notes will be
issued.
The following table sets forth certain material differences between
the financial covenants and events of default pertaining to the New Bonds and
those pertaining to the New Senior Notes:
<TABLE>
<CAPTION>
- ------------------------------------------ --------------------------------------------------- ----------------------------
<S> <C> <C>
Covenants: New Bonds New Senior Notes
- ----------------------------------------- --------------------------------------------------- ----------------------------
Limits on Company's ability to Additional Bonds may be issued only No restrictions
issue additional securities of if the Company pledges additional
same type property, deposits cash with the Trustee
or retires other Bonds and if certain
earnings coverage requirements are met
- ----------------------------------------- --------------------------------------------------- ----------------------------
Limits on Company's ability to issue Bonds have a first priority lien on all No restrictions unless
securities ranking senior Company utility property, plant and specifically set forth,
equipment and so are the Company's in the Prospectus Supplement
most senior ranked securities relating to an Issuance of
New Senior Notes
- ----------------------------------------- --------------------------------------------------- ----------------------------
Limits on the ability of the Company Must meet specified limits on the amount of No special tests
to combine with other companies debt owed by the combined company and so long
as prior series of Bonds are outstanding must
meet earnings test
- ----------------------------------------- --------------------------------------------------- ----------------------------
EVENTS OF DEFAULT:
- ---------------------------------------- --------------------------------------------------- ----------------------------
Failure to pay principal No grace period The Company lets five days
go by without payment
payment of principal
- --------------------------------------- --------------------------------------------------- ----------------------------
S-9
<PAGE>
- --------------------------------------- --------------------------------------------------- ----------------------------
Failure to pay interest The Company lets 30 days go by without paying The Company lets 60 days go
interest by without paying interest
- --------------------------------------- --------------------------------------------------- ----------------------------
Failure to observe other agreements The Company fails to observe certain The Company fails to observe
agreements made concerning the New Bonds certain agreements made
(other than the promise to pay) for more than concerning the New Senior
60 days after notice from the Trustee Notes (other than the
promise to pay) for more
than 90 days after notice
from the Trustee
- --------------------------------------- --------------------------------------------------- ----------------------------
</TABLE>
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Purchase
Agreement, the underwriters named below (the "Underwriters") have severally
agreed to purchase from the Company the principal amounts of New Bonds set forth
opposite their names. The nature of the Underwriters' obligation is such that
they are severally committed to purchase and pay for all of the New Bonds if any
are purchased.
<TABLE>
<CAPTION>
UNDERWRITER Principal Amount Principal Amount
----------- ---------------- ----------------
of series of series
-------------- --------------
<S> <C>
Dillon, Read & Co. Inc............................................ $ $
Salomon Brothers Inc .............................................
Prudential Securities Incorporated................................
Smith Barney Inc..................................................
NatWest Securities Ltd............................................
Oppenheimer & Co., Inc............................................
------------ ------------
Totals.................................. $ ,000,000 $ ,000,000
============ ============
</TABLE>
The Underwriters have advised the Company that the New Bonds will
initially be offered to the public by the Underwriters at the public offering
prices set forth on the cover hereof under "Price to Public," and to certain
dealers at such prices less a concession of % and % of the principal amount of
the Series and the Series, respectively. The Underwriters may allow, and such
dealers may reallow, a concession not exceeding % and % of the principal amount
of the Series and the Series, respectively, on sales to certain other dealers.
After the initial public offering, the offering prices, the concessions and the
reallowances may be changed by the Underwriters.
The offering of the New Bonds is made for delivery when, as and if
accepted by the Underwriters and subject to prior sale and to withdrawal,
cancellation or modification of the offer without notice. The Underwriters
reserve the right to reject any order for the purchase of the New Bonds.
The Company has agreed in the Purchase Agreement to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments made or required to be made
by the Underwriters with respect to such liabilities.
Certain of the Underwriters have rendered certain financial advisory
services and other related services to the Company for which they have received
customary fees.
S-11
<PAGE>
The Company does not intend to apply for the listing of the New
Bonds, or the New Senior Notes into which the New Bonds may be converted, on any
national securities exchange. The Company has been advised by the Underwriters
that they intend to make a market in the New Bonds. The Managing Underwriter is
under no obligation to do so and may discontinue, at any time and without
notice, any such market making in which it may engage. The Company cannot
predict the liquidity of any trading market for New Bonds or New Senior Notes
into which they may be converted.
In connection with the sale to the public of the New Bonds, certain
of the Underwriters may engage in transactions that stabilize, maintain or
otherwise affect the price of the New Bonds. Specifically, the Underwriters may
bid for and purchase the New Bonds in the open market to stabilize the price of
the New Bonds. The Underwriters may also overallot the New Bonds, creating a
syndicate short position, and may bid for and purchase the New Bonds in the open
market to cover the syndicate short position. In addition, the Underwriters may
bid for and purchase the New Bonds in market making transactions. These
activities may stabilize or maintain the market price of the New Bonds above
market levels that may otherwise prevail. The Underwriters are not required to
engage in these activities, and may end these activities at any time.
EXPERTS AND LEGALITY
The financial statements of Western Resources, Inc. included in or
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
The financial statements included in KCPL's Annual Report on Form
10-K for the year ended December 31, 1996 incorporated by reference in this
Prospectus and in the Registration Statement as an Exhibit to the Company's
April 2, 1997 Form 8-K, have been audited by Coopers & Lybrand, L.L.P.,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein, in reliance upon the authority of said firm as
experts in giving said reports.
For further information, see "Legal Opinions" and "Experts" in the
accompanying Prospectus.
S-12
<PAGE>
==========================================================================
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER
BY THE COMPANY OR BY ANY UNDERWRITER TO SELL SECURITIES IN ANY STATE TO ANY
PERSON TO WHOM IT IS UNLAWFUL FOR THE COMPANY OR SUCH UNDERWRITER TO MAKE SUCH
OFFER IN SUCH STATE. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
--------------------
TABLE OF CONTENTS
PAGE
PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary............................... S-2
Risk Factors................................................ S-4
Use of Proceeds............................................. S-5
Summary Financial Information............................... S-6
Summary Unaudited Pro Forma Combined
Financial Information................................... S-7
Description of New Bonds.................................... S-8
Description of New Senior Notes............................. S-9
Underwriting................................................ S-11
Experts and Legality........................................ S-12
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Documents
by Reference............................................ 2
Information on Kansas City Power
& Light Company......................................... 3
The Company................................................. 4
Use of Proceeds............................................. 5
Description of New Bonds.................................... 5
Description of Debt Securities.............................. 11
Book-Entry.................................................. 18
Plan of Distribution........................................ 19
Legal Opinions.............................................. 21
Experts..................................................... 21
==========================================================================
==========================================================================
WESTERN RESOURCES, INC.
_____________
$ ,000,000
$ ,000,000
FIRST MORTGAGE BONDS
% CONVERTIBLE SERIES DUE ,
CONVERTIBLE INTO
% UNSECURED SENIOR NOTES DUE
$ ,000,000
FIRST MORTGAGE BONDS,
% CONVERTIBLE SERIES DUE
CONVERTIBLE INTO
% UNSECURED SENIOR NOTES DUE
PROSPECTUS SUPPLEMENT
, 1997
DILLON, READ & CO. INC.
SALOMON BROTHERS INC
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
NATWEST SECURITIES LTD.
OPPENHEIMER & CO, INC.
=========================================================================
<PAGE>
[GRAPHIC OMITTED]
Information contained herein is subject to omletion or amendment. A registration
statement relating to these securities has been iled with the Securities and
Exchange Commission. These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement beomes effective. This
prospectus shall not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any State in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JULY 17 , 1997
$550,000,000
WESTERN RESOURCES, INC.
FIRST MORTGAGE BONDS
AND DEBT SECURITIES
----------------------
Western Resources, Inc. (the "Company") intends from time to time to
issue up to $550,000,000 aggregate principal amount of its First Mortgage Bonds
(the "New Bonds"), senior, unsecured debt securities (the "Debt Securities") or
any combination thereof (the New Bonds and Debt Securities are referred to
herein, collectively, as the "Securities"), in one or more series, on terms to
be determined at the time or times of sale. At each time that Securities (the
"Offered Securities") are offered for which this Prospectus is being delivered,
there will be an accompanying Prospectus Supplement (the "Prospectus
Supplement") that sets forth the series designation, aggregate principal amount,
maturity or maturities, rate or rates and times of payment of interest,
redemption terms, any sinking fund terms, any conversion terms, and any other
special terms of the Offered Securities. The Securities will be offered as set
forth under "Plan of Distribution." If described in a Prospectus Supplement, New
Bonds of any series may be converted, solely at the option of the Company, in
their entirety into Debt Securities with the same aggregate principal amount,
maturity date, interest rate and interest payment dates as the New Bonds so
converted. The financial covenants, events of default and certain other terms
pertaining to the Debt Securities will differ from those pertaining to the New
Bonds. See "Description of New Bonds -- Company Conversion Option" and
"Description of Debt Securities."
As of March 31, 1997, the Company had $658.9 million of First
Mortgage Bonds outstanding (excluding the KGE Bonds (as defined herein)) and
would have had $1.3 billion of First Mortgage Bonds and other secured
indebtedness outstanding on a pro forma basis giving effect to the consummation
of the pending merger with Kansas City Power & Light Company ("KCPL").
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements, and
other information filed by the Company, can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at certain of its Regional Offices at 7 World
Trade Center, 13th Floor, New York, N.Y. 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, IL. 60661-2511. Copies of such material can
be obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and by accessing the
Commission's Web site, http://www.sec.gov. Certain securities of the Company are
listed on the New York Stock Exchange (the "NYSE"), and reports, proxy
statements and other information concerning the Company can be inspected at the
offices of such Exchange, 20 Broad Street, New York, N.Y. 10005. Kansas City
Power & Light Company ("KCPL") has securities listed on the NYSE and on the
Chicago Stock Exchange (the "CSE"). Because KCPL is also subject to the
informational requirements of the 1934 Act and has securities listed on the
NYSE, information concerning KCPL is available from the same sources as given
above with respect to the Company. Furthermore, information concerning KCPL is
available at the offices of the CSE, 440 South LaSalle Street, Chicago, Illinois
60605.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated
herein by reference as of their respective dates of filing and shall be deemed
to be a part hereof:
1. The Company's Annual Report on Form 10-K (File No. 1-3523) for
the year ended December 31, 1996 (the "Company's 1996 Form 10-K").
2. The Company's Quarterly Report on Form 10-Q (File No. 1-3523) for
the quarter ended March 31, 1997.
3. The Company's Current Reports on Form 8-K (File No. 1-3523) filed
February 10, 1997 and April 2, 1997 (the "Company's April 2, 1997 Form 8-K")(in
which KCPL's Annual Report on Form 10-K is included as an exhibit).
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14, or 15(d) of the 1934 Act after the date of this Prospectus and prior
to the termination of this offering shall also be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a copy of this Prospectus has
been delivered, on the written or oral request of any such person, a copy of any
or all documents referred to above which have been or may be incorporated by
2
<PAGE>
reference in this Prospectus (not including exhibits to such incorporated
information that are not specifically incorporated by reference into such
information). Requests for such copies should be directed to Richard D. Terrill,
Esq., Secretary of the Company, 818 Kansas Avenue, Topeka, Kansas 66612, (913)
575-6322.
INFORMATION ON
KANSAS CITY POWER & LIGHT COMPANY
While the Company has included or incorporated in this Prospectus by
reference information concerning KCPL insofar as it is known or reasonably
available to the Company, KCPL is not affiliated with the Company. Although the
Company has no knowledge that would indicate that statements relating to KCPL
contained or incorporated by reference in this Prospectus in reliance upon
publicly available information are inaccurate or incomplete, the Company was not
involved in the preparation of such information and statements and, for the
foregoing reasons, is not in a position to verify any such information or
statements. See "The Company."
<PAGE>
THE COMPANY
GENERAL
The Company and its divisions and wholly owned subsidiaries include
KPL, a rate-regulated electric and gas division of the Company ("KPL"), Kansas
Gas and Electric Company ("KGE"), a rate-regulated utility and wholly owned
subsidiary of the Company, Westar Capital, Inc.("Westar Capital"), Westar
Security, Inc. ("Westar Security"), Westar Energy, Inc., The Wing Group, Ltd.,
non-utility subsidiaries, and Mid Continent Market Center, Inc., a regulated gas
transmission service provider ("MCMC"). KGE owns 47% of Wolf Creek Nuclear
Operating Corporation ("WCNOC"), the operating company for the Wolf Creek
Generating Station ("Wolf Creek"). The Company's non-utility subsidiaries market
natural gas primarily to large commercial and industrial customers, provide
electronic security services, engage in international power project development
and provide other energy-related products and services.
The Company is engaged principally in the production, purchase,
transmission, distribution and sale of electricity, the delivery and sale of
natural gas and electronic security services. The Company serves approximately
606,000 electric customers in eastern and central Kansas and approximately
650,000 natural gas customers in Kansas and northeastern Oklahoma. On December
12, 1996, the Company and ONEOK, Inc. ("ONEOK") announced a proposed strategic
alliance pursuant to which the Company will contribute its regulated local
natural gas distribution operations, MCMC and Westar Gas Marketing, Inc.
("Westar Gas Marketing"), and will become the largest shareholder of ONEOK. This
transaction is scheduled to be completed during the second half of 1997.
Westar Capital is a private investment company, wholly owned by the
Company, with investments in energy-related and technology oriented businesses.
Westar Capital owns approximately 18 million shares of Tyco International Ltd.,
formerly ADT Limited ("Tyco"), which represents less than 10% of the outstanding
shares of Tyco. The Company's average basis in its Tyco common stock
approximates $35 per share. The market price of these shares at the close of
business on July 10, 1997 was $78.69 per common share, or approximately $1.4
billion.
Westar Security is a rapidly growing electronic security services
business with over 400,000 customer accounts. On December 31, 1996, the Company
acquired all of the assets of Westinghouse Security Systems, Inc. ("Westinghouse
Security"), a national security system monitoring company and a subsidiary of
Westinghouse Electric Corporation ("Westinghouse"). Westar Security is the
third-largest monitored security company in the United States with offices in
many major U.S. markets and direct access to customers in 44 states.
On February 7, 1997, the Company announced that it had entered into
a merger agreement with KCPL, pursuant to which the Company will acquire KCPL.
KCPL is a public utility engaged in the generation, transmission, distribution
and sale of electricity to approximately 430,000 customers in western Missouri
and eastern Kansas.
The Company was incorporated under the laws of the State of Kansas
in 1924. The Company's principal executive offices are located at 818 Kansas
Avenue, Topeka, Kansas 66612, and its telephone number is (913) 575-6300.
4
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Securities will be used for
repayment of short-term indebtedness, corporate acquisitions and other general
corporate purposes. Information concerning the use of proceeds from the sale of
each series of the Securities will be set forth in the Prospectus Supplement
relating to such series.
DESCRIPTION OF NEW BONDS
The New Bonds are to be issued under and secured by the Mortgage and
Deed of Trust, dated July 1, 1939 (the "Original Indenture"), between the
Company and Harris Trust and Savings Bank, as Trustee (the "Trustee"), as
supplemented and amended by thirty-two supplemental indentures and as to be
supplemented and amended by a new supplemental indenture or indentures providing
for the series of New Bonds to be issued (the Original Indenture as so
supplemented and amended being herein called the "Mortgage"). The Mortgage has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part, and the bonds of any series issued under the Mortgage are referred to
herein as "Bonds" or "First Mortgage Bonds." The following is a brief summary of
certain provisions contained in the Mortgage. Such summary does not purport to
be complete and is qualified in its entirety by express reference to the
Mortgage.
If the Supplemental Indenture under which a series of New Bonds are
issued so provides, at any time such New Bonds are outstanding, the Company may,
solely at its option, convert the New Bonds, in whole but not in part, into Debt
Securities. Such Debt Securities will be identical to the series of New Bonds
with respect to the maturity date, interest rate and interest payment dates;
however, holders of Debt Securities will, among other things, no longer be
entitled to the security provided by the Mortgage since the Debt Securities will
be unsecured obligations of the Company, and the financial covenants, the events
of default and certain other terms pertaining to the Debt Securities will differ
from those pertaining to the New Bonds. See "--Company Conversion Option" and
"Description of Debt Securities."
GENERAL
The New Bonds will be issued only in the form of registered bonds
without coupons in denominations of $1,000 and multiples thereof. New Bonds will
be exchangeable for other New Bonds of the same series in equal aggregate
principal amounts without charge to the holders except for any applicable tax or
governmental charge. The Company intends that the New Bonds will be issued in
the form of one or more fully registered global certificates representing the
aggregate principal amount of the New Bonds and will be deposited with The
Depository Trust Company ("DTC"). See "Book-Entry."
The Prospectus Supplement for each series of New Bonds will set
forth the issue date, maturity date, interest rate, and interest payment dates
applicable to such series and whether such series of New Bonds will be
convertible at the Company's option for Debt Securities, as well as the terms
thereof. Subject to certain exceptions provided in the Mortgage, interest is
payable at either the office of the Trustee in Chicago, Illinois, or of the
Paying Agent, Harris Trust and Savings Bank, New York, New York, to the persons
in whose names the New Bonds are registered at the close of business on the
tenth day prior to the interest payment date (the "Record Date") or, at the
option of the Company, may be paid by checks mailed to such persons at their
registered addresses. Principal of the New Bonds is to be payable at either of
the agencies of the Company mentioned above.
There will be no improvement or maintenance fund for the New Bonds.
The applicable Prospectus Supplement will set forth any sinking fund provided
for a particular series of New Bonds.
5
<PAGE>
The Company maintains routine banking relationships with the Bank of
Montreal, the parent of the Trustee. The Trustee is also Indenture Trustee under
the Indenture pursuant to which the Debt Securities will be issued. The Bank of
Montreal had a $49.5 million participation in the Company's revolving credit
facilities as of March 31, 1997.
REDEMPTION PROVISIONS
The Prospectus Supplement for each series of New Bonds will set
forth the redemption provisions, if any, of such New Bonds.
ISSUANCE OF ADDITIONAL BONDS
Additional Bonds ranking equally with the Bonds of other series then
outstanding may be issued having such dates, maturities, interest rates,
redemption prices and other terms as may be determined by the Board of
Directors. Additional Bonds may be issued in principal amounts not exceeding:
(1) 60% (so long as Bonds issued prior to January 1, 1997 remain outstanding,
and thereafter 70%) of the net bondable value of property additions not subject
to an unfunded prior lien; (2) the principal amount of Bonds retired or to be
retired (except out of trust moneys); and (3) the amount of cash deposited with
the Trustee for such purpose, which may thereafter be withdrawn upon the same
basis that additional Bonds are issuable under (1) or (2) above. Additional
Bonds may not be issued on the basis of property additions subject to an
unfunded prior lien. (Mortgage, Article III; Twenty-Sixth, Twenty-Eighth,
Twenty-Ninth, Thirtieth, Thirty-First and Thirty-Second Supplemental Indentures,
Article V.)
As of December 31, 1996, the Company had approximately $1.0 billion
of net bondable property additions not subject to unfunded prior liens (the KGE
Mortgage described under "Priority and Security" below constitutes such an
unfunded prior lien in respect of certain properties of the Company) enabling it
to issue approximately $618 million principal amount of additional Bonds on such
date. As of December 31, 1996, the Company may also issue up to approximately $3
million of additional Bonds on the basis of Bonds which have been retired. The
New Bonds may be issued against the principal amount of Bonds retired or to be
retired.
So long as Bonds issued prior to January 1, 1997 remain outstanding,
additional Bonds may not be issued unless net earnings of the Company available
for interest, depreciation and property retirements for a period of any 12
consecutive months during the period of 15 calendar months immediately preceding
the first day of the month in which the application for authentication and
delivery of additional Bonds is made shall have been not less than the greater
of two times the annual interest charges on, or 10% of the principal amount of,
all Bonds then outstanding, all additional Bonds then applied for, all
outstanding prior lien bonds and all prior lien bonds, if any, then being
applied for. Bonds cancelled at or prior to the time application is made for the
issuance of New Bonds are not deemed to be outstanding for purposes of
calculating interest charges in determining whether the net earnings test is met
for the issuance of additional Bonds. Bonds or prior lien bonds for which moneys
sufficient for the payment thereof have been deposited are not considered
outstanding for this purpose. The net earnings test referred to need not be
satisfied to issue additional Bonds (i) on the basis of property additions
subject to an unfunded prior lien which simultaneously will become a funded
prior lien, if application for the issuance of the additional Bonds is made at
any time after a date two years prior to the date of the maturity of the Bonds
secured by the prior lien and (ii) on the basis of the payment at maturity of
Bonds theretofore issued by the Company, or the redemption, conversion or
purchase of Bonds after a date two years prior to the date on which such Bonds
mature. Based on the Company's results for the year ended December 31, 1996, the
Company could issue approximately $772 million principal amount of additional
Bonds (7.75% interest rate assumed, without giving effect to the issuance of the
New Bonds offered hereby). (Mortgage, Article III, Sections 3, 4, and 6;
6
<PAGE>
Twenty-Sixth, Twenty-Eighth, Twenty-Ninth, Thirtieth, Thirty-First and
Thirty-Second Supplemental Indentures, Article V.) The Company has reserved the
right and intends to amend the Mortgage to eliminate the foregoing requirement
once all Bonds issued prior to January 1, 1997 are no longer outstanding. See
"Modification of the Mortgage."
RELEASE AND SUBSTITUTION OF PROPERTY
The Mortgage provides that, subject to various limitations, property
may be released from the lien thereof upon the basis of cash deposited with the
Trustee, Bonds or purchase money obligations delivered to the Trustee, prior
lien bonds delivered to the Trustee, or unfunded net property additions
certified to the Trustee. (Mortgage, Article VII.) The Mortgage also in effect
permits the withdrawal of cash against the certification to the Trustee of gross
property additions at 100%, or the net bondable value of property additions at
60% (so long as Bonds issued prior to January 1, 1997 remain outstanding and
thereafter 70%), or the deposit with the Trustee of Bonds acquired by the
Company. (Mortgage, Article VIII; Sections 1-3; Twenty-Sixth, Twenty-Eighth,
Twenty-Ninth, Thirtieth, Thirty-First and Thirty-Second Supplemental Indentures,
Article V.)
The Mortgage contains special provisions with respect to the release
of all or substantially all of the Company's gas properties or its electric
properties. (Twenty-Sixth, Twenty-Eighth, Twenty-Ninth, Thirtieth, Thirty-First
and Thirty-Second Supplemental Indentures, Article IV, Sections 2 and 3.) The
Company currently intends to tender the converted New Bonds to the Trustee to
effect the release of substantially all of its gas properties in connection with
the closing of the ONEOK Transaction. See "The Company." To the extent not so
used, converted New Bonds may be used by the Company to provide for the issuance
of additional Bonds under the Mortgage in substitution of such New Bonds.
(Mortgage, Article III, Section 6). The Company has reserved the right and
intends to amend the Mortgage to change the release and substitution provisions.
See "Modification of the Mortgage."
PRIORITY AND SECURITY
In the opinion of Richard D. Terrill, Esq., Corporate Secretary and
Associate General Counsel of the Company, the New Bonds, with the qualifications
described in the last two paragraphs under this "Priority and Security" caption
relating to the lien of the KGE Mortgage (as defined below), will be secured,
equally and ratably with all of the Bonds now outstanding or hereafter issued
under the Mortgage, by the lien on substantially all of the Company's fixed
property and franchises purported to be conveyed by the Mortgage, subject to the
exceptions referred to below, to certain minor leases and easements, permitted
liens and to the exceptions and reservations in the instruments by which the
Company acquired title to its property and to the prior lien of the Trustee for
compensation, expenses and liability.
In the opinion of Mr. Terrill, the Mortgage constitutes a lien on
after-acquired property of the character intended to be mortgaged property.
Excepted from the lien of the Mortgage are: cash and accounts
receivable; contracts or operating agreements; securities not pledged under the
Mortgage; electric energy, gas, water, materials and supplies held for
consumption in operation or held in advance of use for fixed capital purposes;
and merchandise, appliances and supplies held for resale or lease to customers.
There is further expressly excepted any property of any other corporation, all
the securities of which may be owned or later acquired by the Company. (Granting
Clauses of the Mortgage.) The lien of the Mortgage does not apply to property of
KGE or the Company's other subsidiaries so long as they remain subsidiaries of
the Company, or to securities owned by the Company.
7
<PAGE>
The Mortgage permits the consolidation or merger of the Company with
or the conveyance of its property to any other corporation, provided that the
successor corporation assumes the due and punctual payment of the principal and
interest on the Bonds of all series then outstanding under the Mortgage and
assumes the due and punctual performance of all the covenants and conditions of
the Mortgage. (Mortgage, Article XII, Section 1.)
KGE has outstanding first mortgage bonds (the "KGE Bonds") which are
secured by a lien on substantially all of KGE's fixed property and franchises
purported to be conveyed by the Mortgage and Deed of Trust and the various
Supplemental Indentures creating the KGE Bonds (collectively, the "KGE
Mortgage"). In the event that KGE combines with the Company, the after-acquired
property clauses of the Mortgage would cause the lien of the Mortgage to attach
(but in a subordinate position to the prior lien of the KGE Mortgage) to the
property of KGE owned by KGE at the date of combination. All property subject to
the after-acquired property clause of the Mortgage acquired by the Company after
the effective date of combination of KGE with the Company would be subject to
the first lien of the Mortgage, with the exception of (a) betterments,
extensions, improvements and additions to the property formerly owned by KGE,
(b) property made the basis for the issuance of new KGE Bonds or property
acquired with insurance or eminent domain proceeds relating to the former KGE
property or (c) property acquired to comply with the covenants contained in the
KGE Mortgage, on all of which property the KGE Mortgage would continue to
constitute a first, and the Mortgage a subordinate, lien. The Company may not
issue additional Bonds on the basis of property additions subject to the prior
lien of the KGE Mortgage. There is no certainty as to whether or when such a
combination would occur or as to the terms and conditions thereof.
KCPL has outstanding first mortgage bonds (the "KCPL Bonds") which
are secured by a lien on substantially all of KCPL's fixed property and
franchises purported to be conveyed by the General Mortgage Indenture and Deed
of Trust and the various Supplemental Indentures creating the KCPL Bonds
(collectively, the "KCPL Mortgage"). If the Company merges with KCPL, the
Company, as the successor corporation to such a merger, would be required
pursuant to the terms of the KCPL Mortgage to confirm the liens thereunder and
to keep the mortgaged property with respect thereto as far as practicable
identifiable. In the absence of an express grant, however, the KCPL Mortgage
will not constitute or become a lien on any property or franchises owned by the
Company prior to such a merger or on any property or franchises which may be
purchased, constructed or otherwise acquired by the Company except for such as
form an integral part of the mortgaged property under the KCPL Mortgage. Upon
consummation of a merger with KCPL, the after-acquired property clauses of the
Company's Mortgage would cause the lien of the Mortgage to attach (but in a
subordinate position to the prior lien of the KCPL Mortgage) to the property of
KCPL at the date of combination.
MODIFICATION OF THE MORTGAGE
The Mortgage may be modified or altered, subject to the rights and
obligations of the Company and the rights of Bondholders thereunder, by the
affirmative vote of the holders of at least 80% in principal amount of the
Bonds; provided, that no action may be taken which would affect less than all
series of Bonds without, in addition, the affirmative vote of the holders of at
least 80% in principal amount of the Bonds of each series so affected. The
Company intends upon the next issuance of Bonds under the Mortgage to exercise
the right it has reserved to amend the Mortgage to provide that the Mortgage may
be modified or altered and the rights of the holders of Bonds may be affected
with the consent of the holders of 60% of the Bonds and, if less than all series
of Bonds are affected, the consent also of the holders of 60% of the Bonds of
each series affected. No modification or alteration may be made which will
permit the extension of the time or times of payment of the principal of or
interest on any Bond or a reduction in the rate of interest thereon, or
otherwise affect the terms of payment of the principal of or interest on any
Bond or a reduction in the rate of interest thereon or reduce the percentages
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required for the taking of any action thereunder. Bonds owned by the Company or
any affiliated corporation are excluded for the purpose of any vote,
determination of a quorum or consent. (Mortgage, Article XV; Section 6;
Twenty-Sixth, Twenty-Eighth, Twenty-Ninth, Thirtieth, Thirty-First and
Thirty-Second Supplemental Indentures, Article V, Sections 3 and 4.)
The Mortgage also provides that no modification or alteration of the
Mortgage may be made, without the consent of the holder of any Bond issued
thereunder, which would impair or affect the right of such holder to receive
payment of the principal of, and interest on, such Bond, on or after the
respective due date expressed in such Bond, or to institute suit for the
enforcement of any such payment on or after such respective dates.
(Mortgage, Article XXII, Section 2.)
The Company intends upon the next issuance of Bonds under the
Mortgage to reserve the right, subject to appropriate corporate action but
without the consent or other action of holders of Bonds of any series created
after January 1, 1997, to amend the Mortgage to permit, unless an event of
default shall have happened and be continuing, or shall happen as a result of
making or granting an application, (1) the release of mortgaged property from
the lien of the Mortgage provided the fair value to the Company of the mortgaged
property subject to such lien (excluding the mortgaged property to be released)
equals or exceeds 10/7ths of the aggregate principal amount of outstanding Bonds
under the Mortgage and any prior lien bonds outstanding at the time of such
release; (2) in the event the Company is unable to obtain a release of property
as described in clause (1), the release from the lien of the Mortgage of
mortgaged property if the fair value to the Company thereof is less than 1/2 of
1% of the aggregate principal amount of Bonds and prior lien bonds outstanding;
provided that, the property released pursuant to clause (2) in any 12
consecutive calendar months shall not exceed 1% of such Bonds and prior lien
bonds; (3) the deletion of the net earnings test which must be met prior to the
issuance of additional bonds; (4) the deletion of the requirement to obtain an
independent engineer's certificate in connection with certain releases of
property from the lien of the Mortgage; and (5) the deletion of a financial test
to be met by another corporation in the event of the consolidation or merger of
the Company into or sale by the Company of its property as an entirety or
substantially as an entirety to such other corporation.
EVENTS OF DEFAULT
An event of default under the Mortgage includes: (a) default in the
payment of the principal of any Bond when the same shall become due and payable,
whether at maturity or otherwise; (b) default continuing for 30 days in the
payment of any installment of interest on any Bond or in the payment or
satisfaction of any sinking fund obligation; (c) default in performance or
observance of any other covenant, agreement or condition in the Mortgage
continuing for a period of 60 days after written notice to the Company thereof
by the Trustee or by the holders of not less than 15% of the aggregate principal
amount of all Bonds then outstanding; (d) failure to discharge or stay within 30
days a final judgment against the Company for the payment of money in excess of
$100,000; and (e) certain events in bankruptcy, insolvency or reorganization.
(Mortgage, Article IX, Section 1.)
The Trustee is required, within 90 days after the occurrence
thereof, to give to the holders of the Bonds notice of all defaults known to the
Trustee unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for such purposes being defined to be the events
specified above, not including any periods of grace); provided, however, that
except in the case of default in the payment of the principal of or interest on
any of the Bonds, or in the payment or satisfaction of any sinking or purchase
fund installment, the Trustee shall be protected in withholding such notice if
and so long as the Trustee in good faith determines that the withholding of such
notice is in the interests of the holders of the Bonds and, in the case of any
default specified in (c) above, no notice shall be given until at least 60 days
after the occurrence thereof. (Mortgage, Article XIX, Section 3.) The Trustee is
under no obligation to defend or initiate any action under the Mortgage which
would result in the incurring of non-reimbursable expenses unless one or more of
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the holders of Bonds issued under the Mortgage, including the New Bonds,
furnishes the Trustee with reasonable indemnity against such expenses. In the
event of default, the Trustee is not required to act unless requested to act by
holders of at least 25% in aggregate principal amount of the Bonds then
outstanding. (Mortgage, Article IX, Sections 1 and 4, Article XIII, Section 2
and Article XXI, Section 6.) In addition, a majority of the Bondholders have the
right to direct all proceedings under the Mortgage, provided the Trustee is
indemnified to its satisfaction. (Mortgage, Article IX, Section 11.)
COMPANY CONVERSION OPTION
If the Supplemental Indenture under which a series of New Bonds is
issued so provides, the Company may, solely at its option, convert such series
of New Bonds, in whole but not in part, into the Debt Securities. The Debt
Securities would be identical to such series of New Bonds with respect to the
maturity date, interest rate and interest payment dates; however, holders of
Debt Securities will, among other things, no longer be entitled to the security
provided by the Mortgage since the Debt Securities will be unsecured obligations
of the Company and the financial covenants, the events of default and certain
other terms pertaining to the Debt Securities will differ from those pertaining
to such series of New Bonds. See "Description of the Debt Securities" below for
a summary of the terms of the Debt Securities. Holders of New Bonds so converted
will be entitled to receive an equal principal amount of Debt Securities for the
principal amount of New Bonds held by such holder as of the date fixed for
conversion (the "Conversion Date"). In connection with any such conversion,
interest on converted New Bonds which has accrued but has not been paid as of
the Conversion Date will accrue on Debt Securities from the date on which
interest was last paid on the New Bonds so converted, provided that accrued
interest on New Bonds converted after a record date, but before the related
interest payment date, shall be paid to the holder of record of such New Bonds
on such interest payment date, and the Debt Securities into which such New Bonds
shall have been converted will begin to accrue interest from such interest
payment date. The rights of the holders of the New Bonds as bondholders of the
Company with respect to the Bonds converted will cease, and the person or
persons entitled to receive the Debt Securities issuable upon Conversion will be
treated as the registered holder or holders of such Debt Securities from the
Conversion Date. Debt Securities issued in conversion of New Bonds will be
issued in principal amounts of $1,000 and integral multiples thereof. The
Company may condition its obligation to convert New Bonds upon the satisfaction
of certain conditions. The Company will mail to each holder of record of New
Bonds to be converted into Debt Securities written notice thereof at least 15
and not more than 120 days prior to the Conversion Date. The notice must state
(i) the Conversion Date, (ii) the place or places where certificates for New
Bonds may be surrendered for conversion into Debt Securities, (iii) that
interest on the Debt Securities will accrue from the date on which interest on
the New Bonds was last paid (except in the case of a Conversion Date after a
record date, but before the related interest payment date, in which case
interest will accrue from the interest payment date next following such record
date), (iv) the conditions to conversion, if any, required to be satisfied
concurrent with or prior to the Conversion Date; and (v) that whether or not
certificates for New Bonds are surrendered for conversion on such Conversion
Date, holders of the New Bonds will be treated as holders of Debt Securities
from and after the Conversion Date, which each holder of the Bonds by its
acceptance of the issue thereof agrees to. It is anticipated that the only
holder of record of the New Bonds will be DTC. See "Book-Entry"
In the event that the Company becomes subject to bankruptcy
proceedings at a time when the New Bonds are outstanding and have not been
converted for Debt Securities, a court in such proceedings may order or approve
the conversion of New Bonds into Debt Securities, with the result that holders
of New Bonds would not be entitled to the rights of secured creditors of the
Company in such bankruptcy proceedings. As a further result, among other things,
such holders would not be expected to be entitled to adequate protection of
their security or to interest accruing after the date of commencement of
bankruptcy proceedings. Alternatively, a court in a bankruptcy proceeding with
respect to the Company may decide that, even if the New Bonds cannot be
converted for Debt Securities, the claims of holders of New Bonds should
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nevertheless be subordinated to other secured creditors of the Company under
principles of equitable subordination.
If, by reason of the Company's merger with KCPL, or for any other
reason, properties of KCPL become subject to the Mortgage, and within the
applicable preference period thereafter the Company becomes the subject of
federal bankruptcy proceedings, the security interests of holders of New Bonds
in such newly acquired properties may be voidable as preferences. The applicable
preference period, generally, is 90 days for holders of New Bonds who are not
"insiders" of the Company and one year for holders of New Bonds who are
"insiders" of the Company, as that term is defined in the Federal bankruptcy
code.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued in one or more series under an
Indenture (the "Indenture") between the Company and Harris Trust and Savings
Bank, as Indenture Trustee, the form of which is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Indenture do not purport to be complete and are qualified in their entirety by
express reference to the Indenture and the Securities Resolutions or the
indentures supplemental thereto (copies of which have been or will be filed with
the Commission). Capitalized terms used in this section without definition have
the meanings given such terms in the Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities that can
be issued thereunder and provides that the Debt Securities may be issued from
time to time in one or more series pursuant to the terms of one or more
Securities Resolutions or supplemental indentures creating such series. As of
the date of this Prospectus, there were no Debt Securities outstanding under the
Indenture. The Debt Securities will be unsecured and will rank on a parity with
all other unsecured and unsubordinated debt of the Company, but will rank junior
to the Company's First Mortgage Bonds. The Debt Securities will be senior to all
indebtedness of the Company which by its terms is made subordinate to the Debt
Securities. Although the Indenture provides for the possible issuance of Debt
Securities in other forms or currencies, the only Debt Securities covered by
this Prospectus will be Debt Securities denominated in U.S. dollars in
registered form without coupons.
Substantially all of the fixed properties and franchises of the
Company are subject to the lien of the Mortgage under which the Company's Bonds
are outstanding. See "Description of New Bonds."
TERMS
Reference is made to the Prospectus Supplement for the following
terms, if applicable, of the Debt Securities offered thereby: (1) the
designation, aggregate principal amount, currency or composite currency and
denominations; (2) the price at which such Debt Securities will be issued and,
if an index formula or other method is used, the method for determining amounts
of principal or interest; (3) the maturity date and other dates, if any, on
which principal will be payable; (4) the interest rate (which may be fixed or
variable), if any; (5) the date or dates from which interest will accrue and on
which interest will be payable, and the record dates for the payment of interest
(see "Description of New Bonds -- Company Conversion Option"); (6) the manner of
paying principal and interest; (7) the place or places where principal and
interest will be payable; (8) the terms of any mandatory or optional redemption
by the Company including any sinking fund; (9) the terms of any conversion or
exchange right; (10) the terms of any redemption at the option of Holders; (11)
any tax indemnity provisions; (12) if the Debt Securities provide that payments
of principal or interest may be made in a currency other than that in which Debt
Securities are denominated, the manner for determining such payments; (13) the
portion of principal payable upon acceleration of a Discounted Security (as
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defined below); (14) whether and upon what terms Debt Securities may be
defeased; (15) whether the covenant referred to below under "Certain
Covenants--Limitations on Liens" applies, and any events of default or
restrictive covenants in addition to or in lieu of those set forth in the
Indenture; (16) provisions for electronic issuance of Debt Securities or for
Debt Securities in uncertificated form; and (17) any additional provisions or
other special terms not inconsistent with the provisions of the Indenture,
including any terms that may be required or advisable under United States or
other applicable laws or regulations, or advisable in connection with the
marketing of the Debt Securities. (Section 2.01)
Debt Securities of any series may be issued as registered Debt
Securities, bearer Debt Securities or uncertificated Debt Securities, and in
such denominations as specified in the terms of the series. (Section 2.01)
In connection with its original issuance, no bearer Security will be
offered, sold or delivered to any location in the United States, and a bearer
Security in definitive form may be delivered in connection with its original
issuance only upon presentation of a certificate in a form prescribed by the
Company to comply with United States laws and regulations. (Section 2.04)
Registration of transfer of registered Debt Securities may be
requested upon surrender thereof at any agency of the Company maintained for
that purpose and upon fulfillment of all other requirements of the agent.
(Sections 2.03 and 2.07)
Securities may be issued under the Indenture as Discounted Debt
Securities to be offered and sold at a substantial discount from the principal
amount thereof. Special United States federal income tax and other
considerations applicable thereto will be described in the Prospectus Supplement
relating to such Discounted Debt Securities. "Discounted Debt Security" means a
Security where the amount of principal due upon acceleration is less than the
stated principal amount. (Section 2.10)
CERTAIN COVENANTS
The Debt Securities will not be secured by any properties or assets
and will represent unsecured debt of the Company. As indicated under "General"
above, substantially all of the fixed properties and franchises of the Company
are subject to the lien of the Mortgage securing the Company's First Mortgage
Bonds.
As discussed below, the Indenture includes certain limitations on
the Company's ability to create liens which will apply only if the Securities
Resolution establishing the terms of a series of Debt Securities so provides (in
which event the Prospectus Supplement will so state). If applicable, the
limitations are subject to a number of qualifications and exceptions. The
Indenture does not limit the Company's ability to issue additional First
Mortgage Bonds or to enter into sale and leaseback transactions. In addition,
the Indenture does not limit the ability of the Company's subsidiaries to issue
debt, and the Debt Securities will be effectively subordinated to all existing
and future indebtedness and other liabilities and commitments of the Company's
subsidiaries.
Unless otherwise indicated in a Prospectus Supplement, such
covenants, if applicable, do not afford holders of the Debt Securities
protection in the event of a highly leveraged or other transaction involving the
Company that may adversely affect holders of the Debt Securities.
ISSUANCE OF ADDITIONAL FIRST MORTGAGE BONDS
If the Securities Resolution establishing the terms of a series of
Debt Securities so provides (in which event the Prospectus Supplement will so
state), the following provision of the Indenture will be applicable so long as
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there remain outstanding any Debt Securities of any series to which this
covenant applies, and subject to termination upon defeasance as referred to
above. The Company will not (i) issue any additional First Mortgage Bonds under
the Mortgage, or any mortgage bonds (such additional First Mortgage Bonds and
mortgage bonds being hereafter referred to as "Mortgage Bonds") under any
additional mortgage which it may enter into or the obligations of which it may
assume (collectively, the "Restricted Mortgages") except (A) to replace any
mutilated, lost, destroyed or stolen Mortgage Bonds or to effect exchanges and
transfers of Mortgage Bonds or (B) to issue Mortgage Bonds in connection with
any refinancing of Mortgage Bonds, or any security for which Mortgage Bonds
provide collateral, having the same or lesser aggregate principal amount at
maturity and the same or earlier maturity date, but with such other terms as the
Company may determine or (ii) subject to the lien of any Restricted Mortgage,
any property which is excepted and excluded under such Restricted Mortgage and
the lien and operation thereof by the terms of such Restricted Mortgage, unless
concurrently with the issuance of such Mortgage Bonds or subjection of any such
property to such lien, the Company issues to the Trustee under the Indenture a
Mortgage Bond or Bonds in the same aggregate principal amount and having the
same interest rate or rates, maturity date or dates, redemption provisions and
other terms as the Debt Securities then outstanding and thereby gives to the
holders of all outstanding Debt Securities the benefit of the security of such
First Mortgage Bond or Bonds, provided, that the obligation of the Company to
make payments with respect to the principal of and interest on any such Mortgage
Bond or Bonds issued under a Restricted Mortgage to the Trustee shall be fully
or partially, as the case may be, satisfied or discharged to the extent that, at
the time that any such payment shall be due, the then due principal of and
interest on the Debt Securities shall have been fully or partially paid. For
purposes of this provision the merger or combination of the Company with another
entity having Mortgage Bonds outstanding under a Restricted Mortgage on the date
such a transaction is consummated shall not constitute an issuance of additional
Mortgage Bonds and therefore, Mortgage Bonds shall not be required to be issued
under such Restricted Mortgage in connection with the consummation of such a
transaction.
At such time as the Trustee under the Indenture is the only holder
of Mortgage Bonds outstanding under a Restricted Mortgage, the Trustee will
surrender such Mortgage Bonds to the Company for cancellation and such
Restricted Mortgage will be discharged and defeased. (Section 4.08).
LIMITATION ON LIENS
If the Securities Resolution establishing the terms of a series so
provides (in which event the Prospectus Supplement will so state), the following
provisions of the Indenture will be applicable so long as there remain
outstanding any Debt Securities of any series to which this limitation applies,
and subject to termination upon defeasance as referred to above, the Company
will not create or suffer to be created or to exist any mortgage, pledge,
security interest or other lien (collectively, "Lien") on any of its properties
or assets, owned as of the date such series is issued or hereafter acquired to
secure any indebtedness, without making effective provision whereby the Debt
Securities of such series shall be equally and ratably secured with any and all
such indebtedness and with any other indebtedness similarly entitled to be
equally and ratably secured. This restriction does not apply to, or prevent the
creation or existence of: (1) the Mortgage securing the Company's First Mortgage
Bonds or any indenture supplemental thereto subjecting any property to the Lien
thereof or confirming the Lien thereof upon any property, whether owned before
or acquired after the date of the Indenture; (2) the Lien of any Restricted
Mortgage; (3) Liens on property existing at the time of the acquisition or
construction of such property (or created within two years after completion of
such acquisition or construction), whether by purchase, merger, construction or
otherwise, or to secure the payment of all or any part of the purchase price or
construction cost thereof, including the extension of any such Liens to repairs,
renewals, replacements, substitutions, betterments, additions, extensions and
improvements then or thereafter made on the property subject thereto; (4) a Lien
securing any bank indebtedness now or hereafter incurred or assumed by the
Company; (5) any extensions, renewals or replacements (or successive extensions,
renewals or replacements), in whole or in part, of Liens (including, without
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limitation, the Restricted Mortgages) permitted by the foregoing clauses (1),
(2), (3) and (4); (6) the pledge of any bonds or other securities at any time
issued under any of the Liens permitted by clause (1), (2), (3), (4) or (5)
above; or (7) Permitted Encumbrances. (Section 4.07)
"Permitted Encumbrances" includes, among other items: (a) the pledge
or assignment in the ordinary course of business of electricity, gas (either
natural or artificial), steam, fuel (including nuclear fuel) whether or not
consumable in the operation of the mortgaged property, accounts receivable or
customers' installment paper; (b) Liens affixing to property of the Company at
the time a person consolidates with or merges into, or transfers all or
substantially all of its assets to, the Company, provided that in the opinion of
the Board of Directors of the Company or Company management (evidenced by a
certified Board resolution or an Officers' Certificate delivered to the Trustee)
the property acquired pursuant to the consolidation, merger or asset transfer is
adequate security for such Lien; (c) Liens or encumbrances not otherwise
permitted if, at the time of incurrence thereof and after giving effect thereto,
the aggregate of all obligations of the Company secured thereby does not exceed
10% of Tangible Net Worth (as defined below); (d) Liens on securities held by
the Company; and (e) Liens or encumbrances affixing to the property of a
Subsidiary.
"Tangible Net Worth" means (i) common stockholders' equity appearing
on the most recent balance sheet of the Company (or consolidated balance sheet
of the Company and its Subsidiaries if the Company then has one or more
consolidated Subsidiaries) prepared in accordance with generally accepted
accounting principles, less (ii) intangible assets (excluding intangible assets
recoverable through rates as prescribed by applicable regulatory authorities).
"Subsidiary" of any person means (i) a corporation more than 50% of
the outstanding voting stock of which is owned, directly or indirectly, by such
person or by one or more other Subsidiaries of such person or by such person and
one or more Subsidiaries thereof; or (ii) any other person (other than a
corporation) in which such person, or one or more Subsidiaries of such person or
such person and one or more Subsidiaries thereof, directly or indirectly, has at
least a majority ownership and power to direct the policy, management and
affairs thereof. (Section 4.06)
Further, this restriction will not apply to or prevent the creation
or existence of leases made, or existing on property acquired, in the ordinary
course of business. (Section 4.07)
OTHER COVENANTS
Any other restrictive covenants which may apply to a particular
series of Debt Securities will be described in the Prospectus Supplement
relating thereto.
SUCCESSOR OBLIGOR
The Indenture provides that, unless otherwise specified in the
Securities Resolution establishing a series of Debt Securities, the Company
shall not consolidate with or merge into, or transfer all or substantially all
of its assets to, any person in any transaction in which the Company is not the
survivor, unless: (1) the person is organized under the laws of the United
States or a State thereof or is organized under the laws of a foreign
jurisdiction and consents to the jurisdiction of the courts of the United States
or a State thereof; (2) the person assumes by supplemental indenture all the
obligations of the Company under the Indenture, the Debt Securities and any
coupons; (3) all required approvals of any regulatory body having jurisdiction
over the transaction shall have been obtained; and (4) immediately after the
transaction no Default (as defined) exists. The successor shall be substituted
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for the Company, and thereafter all obligations of the Company under the
Indenture, the Debt Securities and any coupons shall terminate. (Section 5.01)
EXCHANGE OF DEBT SECURITIES
Registered Debt Securities may be exchanged for an equal aggregate
principal amount of registered Debt Securities of the same series and date of
maturity in such authorized denominations as may be requested upon surrender of
the registered Debt Securities at an agency of the Company maintained for such
purpose and upon fulfillment of all other requirements of such agent. (Section
2.07)
DEFAULT AND REMEDIES
Unless the Securities Resolution establishing the series otherwise
provides (in which event the Prospectus Supplement will so state), an "Event of
Default" with respect to a series of Debt Securities will occur if:
(1) the Company defaults in any payment of interest on
any Debt Securities of such series when the same becomes due and
payable and the Default continues for a period of 60 days;
(2) the Company defaults in the payment of the principal
and premium, if any, of any Debt Securities of the series when the
same becomes due and payable at maturity or upon redemption,
acceleration or otherwise and such default shall continue for five
or more days;
(3) the Company defaults in the payment or satisfaction
of any sinking fund obligation with respect to any Debt Securities
of a series as required by the Securities Resolution establishing
such series and the Default continues for a period of 60 days;
(4) the Company defaults in the performance of any of
its other agreements applicable to the series and the Default
continues for 90 days after the notice specified below;
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian for
it or for all or substantially all of its
property, or
(D) makes a general assignment for the benefit of
its creditors;
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case,
(B) appoints a Custodian for the Company or for
all or substantially all of its property, or
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(C) orders the liquidation of the Company, and the
order or decree remains unstayed and in effect
for 60 days; or
(7) there occurs any other Event of Default provided for
in such series. (Section 6.01)
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law. (Section 6.01)
"Default" means any event which is, or after notice or passage of
time would be, an Event of Default. A Default under subparagraph (4) above is
not an Event of Default until the Trustee or the Holders of at least 33-1/3% in
principal amount of the series notify the Company of the Default and the Company
does not cure the Default within the time specified after receipt of the notice.
(Section 6.01) The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Debt Securities of the series. (Section 7.01)
Subject to certain limitations, Holders of a majority in principal amount of the
Debt Securities of the series may direct the Trustee in its exercise of any
trust or power with respect to such series. (Section 6.05) Except in the case of
Default in payment on a series, the Trustee may withhold from Securityholders of
such series notice of any continuing Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in their
interest (Section 7.04) The Company is required to furnish the Trustee annually
a brief certificate as to the Company's compliance with all conditions and
covenants under the Indenture. (Section 4.04)
The failure to redeem any Debt Securities subject to a Conditional
Redemption (as defined) is not an Event of Default if any event on which such
redemption is so conditioned does not occur and is not waived before the
scheduled redemption date. (Section 6.01)
The Indenture does not have a cross-default provision. Thus, a
default by the Company on any other debt, including any other series of Debt
Securities, would not constitute an Event of Default.
AMENDMENTS AND WAIVERS
The Indenture and the Debt Securities or any coupons of the series
may be amended, and any default may be waived as follows: Unless the Securities
Resolution otherwise provides (in which event the Prospectus Supplement will so
state), the Debt Securities and the Indenture may be amended with the consent of
the Holders of a majority in principal amount of the Debt Securities of all
series affected voting as one class. (Section 10.02) Unless the Securities
Resolution otherwise provides (in which event the Prospectus Supplement will so
state), a Default on a particular series may be waived with the consent of the
Holders of a majority in principal amount of the Debt Securities of the series.
(Section 6.04) However, without the consent of each Securityholder affected, no
amendment or waiver may (1) reduce the amount of Debt Securities whose Holders
must consent to an amendment or waiver, (2) reduce the interest on or change the
time for payment of interest on any Security, (3) change the fixed maturity of
any Security, (4) reduce the principal of any non-Discounted Security or reduce
the amount of the principal of any Discounted Security that would be due on
acceleration thereof, (5) change the currency in which the principal or interest
on a Security is payable, (6) make any change that materially adversely affects
the right to convert any Security, or (7) waive any Default in payment of
interest on or principal of a Security. (Sections 6.04 and 10.02) Without the
consent of any Securityholder, the Indenture or the Debt Securities may be
amended: to cure any ambiguity, omission, defect or inconsistency; to provide
for assumption of Company obligations to Securityholders in the event of a
merger or consolidation requiring such assumption; to provide that specific
provisions of the Indenture shall not apply to a series of Debt Securities not
previously issued; to create a series and establish its terms; to provide for a
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separate Trustee for one or more series; or to make any change that does not
materially adversely affect the rights of any Securityholder. (Section 10.01)
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Debt Securities of a series may be defeased in accordance with their
terms and, unless the Securities Resolution establishing the terms of the series
otherwise provides, as set forth below. The Company at any time may terminate as
to a series all of its obligations (except for certain obligations, including
obligations with respect to the defeasance trust and obligations to register the
transfer or exchange of a Security, to replace destroyed, lost or stolen Debt
Securities and coupons and to maintain paying agencies in respect of the Debt
Securities) with respect to the Debt Securities of the series and any related
coupons and the Indenture ("legal defeasance"). The Company at any time may
terminate as to a series its obligations with respect to the Debt Securities and
coupons of the series under the covenant described under "Certain
Covenants--Limitations on Liens" and any other restrictive covenants which may
be applicable to a particular series ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option. If the Company exercises
its legal defeasance option, a series may not be accelerated because of an Event
of Default. If the Company exercises its covenant defeasance option, a series
may not be accelerated by reference to the covenant described under "Certain
Covenants--Limitations on Liens" or any other restrictive covenants which may be
applicable to a particular series. (Section 8.01)
To exercise either defeasance option as to a series, the Company
must (i) irrevocably deposit in trust (the "defeasance trust") with the Trustee
or another trustee money or U.S. Government Obligations, deliver a certificate
from a nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due on the deposited
U.S. Government Obligations, without reinvestment, plus any deposited money
without investment will provide cash at such times and in such amounts as will
be sufficient to pay the principal and interest when due on all Debt Securities
of such series to maturity or redemption, as the case may be, and (ii) comply
with certain other conditions. In particular, the Company must obtain an opinion
of tax counsel that the defeasance will not result in recognition of any gain or
loss to holders for Federal income tax purposes. "U.S. Government Obligations"
means direct obligations of the United States or an instrumentality of the
United States, the payment of which is unconditionally guaranteed by the United
States, which, in either case, have the full faith and credit of the United
States of America pledged for payment and which are not callable at the issuer's
option, or certificates representing an ownership interest in such obligations.
(Section 8.02)
REGARDING THE TRUSTEE
Harris Trust and Savings Bank will act as Indenture Trustee and
Registrar for Debt Securities issued under the Indenture and, unless otherwise
indicated in a Prospectus Supplement, the Indenture Trustee will also act as
Transfer Agent and Paying Agent with respect to the Debt Securities. (Section
2.03) The Company may remove the Indenture Trustee with or without cause if the
Company so notifies the Indenture Trustee three months in advance and if no
Default occurs during the three-month period. (Section 7.07) The Indenture
Trustee is also Trustee under the Mortgage for the Company's First Mortgage
Bonds, including the New Bonds, and provides services for the Company and
certain affiliates, as a depository of funds, registrar, trustee under other
indentures and similar services.
17
<PAGE>
BOOK-ENTRY
DTC will act as securities depository for the Securities. The
Securities will be issued only as fully registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One or more fully registered
global certificates will be issued for the Securities representing the aggregate
principal amount of the Securities and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act, as
amended, DTC holds securities that its participants (the "Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Direct
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly (the "Indirect Participants," and
together with the Direct Participants, the "Participants"). The rules applicable
to DTC and its Participants are on file with the SEC.
Purchases of the Securities within the DTC system must be made by or
through Direct Participants which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each Security
(a "Beneficial Owner") will in turn be recorded on the Direct and Indirect
Participants' respective records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interest in the Securities will be effected by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interest in
Securities except in the event that use of the book-entry system for the
Securities is discontinued.
The deposit of the Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other direct communications by DTC to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of
the Securities of an issue are being redeemed, DTC's practice will determine by
lot the amount of the interest of each Direct Participant in such series to be
redeemed.
18
<PAGE>
In the event of a Conversion of New Bonds into Debt Securities,
notice thereof shall be sent to Cede & Co. After the Conversion Date, DTC or its
nominee, as the record holder of the New Bonds, will receive a registered global
certificate or certificates representing the Debt Securities and will deliver
the global certificate or certificates representing the New Bonds to the Trustee
for cancellation.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Securities. Under its usual procedures. DTC mails an omnibus proxy (an "Omnibus
Proxy") to the Participants as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest on the Securities will be
paid to DTC. DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payment
on such payment date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street-name," and will be the responsibility of such Participant and not of
DTC, the underwriters, or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal,
premium, if any, and interest to DTC is the responsibility of the Company or the
Trustee. Disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to the
Company. Under such circumstances and in the event that a successor securities
depository is not obtained, certificates for the Securities are required to be
printed and delivered. In addition, the Company may decide to discontinue use of
the system of book-entry transfers through DTC (or any successor securities
depository). In that event, certificates for the Securities will be printed and
delivered.
The Company will not have any responsibility or obligation to
Participants or to the persons for whom they act as nominees with respect to the
accuracy of the records of DTC, its nominees or any Direct or Indirect
Participant with respect to any ownership interest in the Securities, or with
respect to payments or providing of notice to the Direct Participants, the
Indirect Participants or the Beneficial Owners.
So long as Cede & Co. is the registered owner of the Securities, as
nominee of DTC, references herein to holders of the Securities shall mean Cede &
Co. or DTC and shall not mean the Beneficial Owners of the Securities.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from DTC. None of the Company, the Trustees or the
underwriters take any responsibility for the accuracy or completeness thereof.
PLAN OF DISTRIBUTION
The Company may sell Securities in any of the following ways: (i)
through underwriters or dealers; (ii) directly to one or more purchasers; or
(iii) through agents. The applicable Prospectus Supplement will set forth the
terms of the offering of any Securities, including the names of any underwriters
or agents, the purchase price of such Securities and the proceeds to the Company
from such sale, any underwriting discounts and other items constituting
19
<PAGE>
underwriters' compensation, any initial public offering price, any discounts or
concessions allowed or reallowed or paid to dealers and any securities exchanges
on which such Securities may be listed.
If underwriters are used in the sale, Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. Such
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise set forth in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase such Securities will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all of such Securities if any of such Securities are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time. Only underwriters named in a
Prospectus Supplement are deemed to be underwriters in connection with the
Securities offered thereby.
Securities may also be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offer or sale of Securities will be named, and any commissions payable by the
Company to such agent will be set forth in the applicable Prospectus Supplement.
Unless otherwise indicated in the applicable Prospectus Supplement, any such
agent will act on a best efforts basis for the period of its appointment.
If so indicated in a Prospectus Supplement with respect to
Securities, the Company will authorize agents, underwriters or dealers to
solicit offers by certain institutions to purchase such Securities from the
Company at the public offering price set forth in the Prospectus Supplement
pursuant to Delayed Delivery Contracts ("Contracts") providing for payment and
delivery on the date or dates stated in the Prospectus Supplement. Each Contract
will be for an amount not less than, and the aggregate principal amount of the
Securities sold pursuant to the Contracts shall be not less nor more than, the
respective amounts stated in the Prospectus Supplement. Institutions with whom
the Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions, but will in all cases be
subject to the approval of the Company. The Contracts will not be subject to any
conditions except (i) the purchase by an institution of the Securities covered
by its Contract shall not at the time of delivery be prohibited under the laws
of any jurisdiction in the United States to which such institution is subject,
and (ii) if the Securities are being sold to underwriters, the Company shall
have sold to such underwriters the total principal amount of the Securities less
the principal amount thereof covered by the Contracts. The underwriters will not
have any responsibility in respect of the validity or performance of the
Contracts.
If dealers are utilized in the sale of any Securities, the Company
will sell such Securities to the dealers, as principal. Any dealer may then
resell such Securities to the public at varying prices to be determined by such
dealer at the time of resale. The name of any dealer and the terms of the
transaction will be set forth in the Prospectus Supplement with respect to such
Securities being offered thereby.
It has not been determined whether any series of Securities will be
listed on a securities exchange. Underwriters will not be obligated to make a
market in any series of Securities. The Company cannot predict the level of
trading activity in, or the liquidity of, any series of Securities.
Any underwriters, dealers or agents participating in the
distribution of Securities may be deemed to be underwriters, and any discounts
or commissions received by them on the sale or resale of Securities may be
deemed to be underwriting discounts and commissions under the Securities Act of
1933. Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain liabilities,
20
<PAGE>
including liabilities under the Securities Act of 1933, or to contribution with
respect to payments that the agents or underwriters may be required to make in
respect thereof. Agents and underwriters may be customers of, engaged in
transactions with, or perform service for, the Company or its affiliates in the
ordinary course of business.
LEGAL OPINIONS
The statements as to matters of law and legal conclusions set forth
in this Prospectus and in the documents incorporated by reference herein have
been reviewed by Richard D. Terrill, Esq., Corporate Secretary and Associate
General Counsel of the Company, and are set forth or incorporated herein in
reliance upon the opinion of Mr. Terrill. At April 24, 1997, Mr. Terrill owned
directly and/or beneficially, 1190 shares of Common Stock and had been granted,
pursuant to and subject to the terms of the Company's long-term incentive
programs, 376 performance shares and stock options exercisable for 4500 shares
of Common Stock.
Certain legal matters in connection with the Securities will be
passed upon by Richard D. Terrill, Esq., Corporate Secretary and Associate
General Counsel of the Company, by Cahill Gordon & Reindel, a partnership
including a professional corporation, counsel for the Company, and by Sidley &
Austin counsel for the underwriters, dealers, purchasers or agents. Cahill
Gordon & Reindel and Sidley & Austin will not pass upon the incorporation of the
Company and will rely upon the opinion of Richard D. Terrill, Esq. as to matters
of Kansas law.
EXPERTS
The financial statements of Western Resources, Inc. included in or
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
The financial statements included in KCPL's Annual Report on Form
10-K for the year ended December 31, 1996 incorporated by reference in this
Prospectus and in the Registration Statement as an Exhibit to the Company's
April 2, 1997 Form 8-K, have been audited by Coopers & Lybrand L.L.P.,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein, in reliance upon the authority of said firm as
experts in giving said reports.
21
<PAGE>
================================================================================
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, INCLUDING ANY PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFER OF THE NEW BONDS OR DEBT SECURITIES,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCE IN
WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS
PROSPECTUS.
--------------------
TABLE OF CONTENTS
PAGE
Available Information....................................... 2
Incorporation of Certain Documents
by Reference.............................................. 2
Information on ADT Limited and
Kansas City Power & Light Company......................... 3
The Company................................................. 4
Use of Proceeds............................................. 5
Description of New Bonds.................................... 5
Description of Debt Securities.............................. 11
Book-Entry.................................................. 18
Plan of Distribution........................................ 20
Legal Opinions.............................................. 21
Experts..................................................... 21
================================================================================
================================================================================
WESTERN RESOURCES, INC.
---------
PROSPECTUS
---------
FIRST MORTGAGE BONDS
AND DEBT SECURITIES
,1997
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An estimate of expenses, other than underwriting discount, follows:
Securities and Exchange Commission registration fee....... $166,667
State commission fees .................................... 46,000
Mortgage Registration Tax................................. 900,000
Trustee's fees and expenses............................... 30,000
Printing.................................................. 30,000
Legal fees and expenses .................................. 300,000
Accountants' fees and expenses............................ 35,000
Rating agencies fees...................................... 235,000
Blue Sky expenses ........................................ 10,000
Miscellaneous expenses.................................... 22,333
--------
Total .............. $ 1,775,000*
===========
- -----------------
* All expenses, except the Securities and Exchange Commission registration
fee, are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article XVIII of the Registrant's Restated Articles of
Incorporation, as amended, provides that a director of the Registrant shall not
be personally liable to the Registrant or its stockholders for monetary damages
for breach of fiduciary duty as a director except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for paying a dividend or
approving a stock repurchase in violation of the Kansas General Corporation Law
or (iv) for any transaction from which the director derived an improper personal
benefit. This provision is specifically authorized by Section 17-6002(b)(8) of
the Kansas General Corporation Law.
Section 17-6305 of the Kansas General Corporation Law (the
"Indemnification Statute") provides for indemnification by a corporation of its
corporate officers, directors, employees and agents. The Indemnification Statute
provides that a corporation may indemnify such persons who have been, are, or
may become a party to an action, suit or proceeding due to his or her status as
a director, officer, employee or agent of the corporation. Further, the
Indemnification Statute grants authority to a corporation to implement its own
broader indemnification policy. Article XVIII of the Company's Restated Articles
of Incorporation, as amended, requires the Company to indemnify its directors
and officers to the fullest extent provided by Kansas law. Further, as is
provided for in Article XVIII the Company has entered into indemnification
agreements with its directors, which provide indemnification broader than that
available under Article XVIII and the Indemnification Statute.
The Standard Purchase Agreement filed as Exhibit 1 to the
Registration Statement includes provisions requiring underwriters to indemnify
the Company as well as its directors and officers who signed this Registration
Statement, as well as its controlling persons, against certain civil
liabilities, including liabilities under the Securities Act of 1933, in certain
circumstances.
ITEM 16. EXHIBITS.
The Exhibits to this Registration Statement are listed in the
Exhibit Index on Pages E-1 and E-2 of this Registration Statement, which Index
is incorporated herein by reference.
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any
facts or events arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration
Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
if the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
that contains a form of prospectus shall be deemed to be a new
Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 15
above, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Western
Resources, Inc., the Registrant, certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Post-Effective Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunder duly authorized, in the City
of Topeka, State of Kansas on the 17th day of July, 1997.
WESTERN RESOURCES, INC.
(Registrant)
By: /S/ JOHN E. HAYES, JR.
----------------------
John E. Hayes, Jr.
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to Registration Statement has been signed below by the
following persons, in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/S/ JOHN E. HAYES, JR. Chairman of the Board and Chief Executive Officer July 17, 1997
- -------------------- (Principal Executive Officer)
John E. Hayes, Jr.
/S/ STEVEN L. KITCHEN Executive Vice President and Chief Financial July 17, 1997
- --------------------- Officer (Principal Financial and Accounting
Steven L. Kitchen Officer)
July 17, 1997
/S/ FRANK J. BECKER* Director
- -------------------
Frank J. Becker
/S/ GENE A. BUDIG* Director July 17, 1997
- -------------------
Gene A. Budig
/S/ C. Q. CHANDLER* Director July 17, 1997
- -------------------
C. Q. Chandler
/S/ THOMAS R. CLEVENGER* Director July 17, 1997
- --------------------------
Thomas R. Clevenger
II-4
<PAGE>
/S/ JOHN C. DICUS * Director July 17, 1997
- --------------------------
John C. Dicus
/S/ DAVID H. HUGHES* Director July 17, 1997
- --------------------------
David H. Hughes
/S/ RUSSELL W. MEYER, JR * Director July 17, 1997
- --------------------------
Russell W. Meyer, Jr
/S/ JOHN H. ROBINSON* Director July 17, 1997
- --------------------------
John H. Robinson
/S/ LOUIS W. SMITH* Director July 17, 1997
- --------------------------
Louis W. Smith
/S/ DAVID C. WITTIG* Director July 17, 1997
- --------------------------
David C. Wittig
*By: /S/ JOHN E. HAYES, JR. July 17, 1997
---------------------
John E. Hayes, Jr.
Attorney-in-fact
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
<S> <C> <C>
1 -- Standard Purchase Agreement (1)
2(a) -- Agreement and Plan of Merger between Western Resources, Inc. and Kansas City Power
& Light Company, dated as of February 10, 1997 (2)
4(a) -- Mortgage and Deed of Trust dated July 1, 1939 between the Company and Harris Trust
and Savings Bank, Trustee (2)
4(b) -- Twenty-Sixth Supplemental Indenture dated February 15, 1990 (2)
4(c) -- Twenty-Eighth Supplemental Indenture dated July 1, 1992 (2)
4(d) -- Twenty-Ninth Supplemental Indenture dated as of August 20, 1992 (2)
4(e) -- Thirtieth Supplemental Indenture dated as of February 1, 1993 (2)
4(f) -- Thirty-First Supplemental Indenture dated as of April 15, 1993 (2)
4(g) -- Thirty-Second Supplemental Indenture dated as of April 15, 1994(2)
4(h) -- Form of Supplemental Indenture for New Bonds (1)
4(i) -- Form of Indenture for Debt Securities (1)
4(j) -- Form of Securities Resolution (1)
5 -- Opinion of Richard D. Terrill, Esq. (1)
10(a) -- Agreement between Western Resources, Inc. and ONEOK, Inc. dated as of December 12, 1996 (2)
12(a) -- Computation of Ratio of Earnings to Fixed Charges for year ended December 31, 1996 (2)
12(b) -- Computation of Ratio of Earnings to Fixed Charges for twelve months ended March 31, 1997(2)
23(a) -- Consent of Richard D. Terrill, Esq. (contained in Exhibit 5) (1)
23(b) -- Consent of Arthur Andersen LLP (1)
23(c) -- Consent of Coopers & Lybrand L.L.P.(1)
24 -- Power of Attorney (set forth on the signature page of this Registration Statement)
25(a) -- Statement of Eligibility of Trustee regarding Form of Supplemental Indenture (1)
25(b) -- Statement of Eligibility of Trustee regarding Form of Indenture of Debt Securities(1)
</TABLE>
- -------------
(1) Previously filed.
(2) Incorporated by reference to exhibits previously filed with the SEC as
follows:
<TABLE>
<CAPTION>
Exhibit Number
In this Registration Former Exhibit File
Statement Reference Reference
-------------------- -------------- ----------
<S> <C> <C>
1 1 33-48470*
2(a) 99 Form 8-K, dated February 10, 1997**
4(a) 4(a) 33-21739*
4(b) 4(m) Form 10-K, Year ended December 31, 1989**
4(c) 4(o) Form 10-K, Year ended December 31, 1992**
4(d) 4(p) Form 10-K, Year ended December 31, 1992**
4(e) 4(q) Form 10-K, Year ended December 31, 1992**
4(f) 4(r) 33-50069*
4(g) 4(s) Form 10-K, Year ended December 31, 1995
10(a) 99.2 Form 8-K, dated December 18, 1996**
12(a) 12(a) Form 10-K, Year ended December 31, 1996**
12(b) 12(b) Form 10-Q, Quarter ended March 31, 1997**
</TABLE>
- --------------
(*) Registration Statements under the Securities Act of 1933.
(**) File No. 1-3523 under the Securities Exchange Act of 1934.
