Prospectus
IWC RESOURCES CORPORATION
Dividend Reinvestment and Share Purchase Plan
1,000,000 Common Shares
The Dividend Reinvestment and Share Purchase Plan
(the Plan) of IWC Resources Corporation (Resources or
the Corporation) provides a convenient way to purchase
the Corporation common shares (Common Shares) at a
discount from the current market price average and
without payment of any brokerage or other fees. Holders
of record of the Common Shares, any service of the
Corporation's Special Shares (the Special Shares, and
together with the Common Shares, the Shares) and
certain employees and utility customers of the
Corporation or its subsidiaries are eligible to
participate. Participants in the Plan may:
Automatically reinvest cash dividends on all
Shares registered in their names.
Automatically reinvest cash dividends on less
than all of the Shares registered in their names and
continue to receive cash dividends on the remaining
Shares.
Invest by making optional cash purchases of
Common Shares as often as twice per month in any amount
in excess of $100 ($10 in the case of employees) and up
to a total of $100,000 annually, whether or not any
dividends are being reinvested. Optional cash payments
will be invested on the investment dates, which
generally are the first or fifteenth day of each month.
Brokers, nominees and investment companies are not
eligible to elect this option.
The price of Common Shares purchased with
reinvested dividends or with optional cash payments
will be 97% of the average of the means between the
high and low sale prices of the Common Shares, as
supplied by the National Association of Securities
Dealers Automated Quotation National Market System and
reported in The Wall Street Journal, for, in general,
the five consecutive trading days ending on the day of
purchase. (See Question 13.)
Employees of the Corporation or its subsidiaries
who are residents of the State of Indiana or certain
other states may make optional cash purchases through
automatic payroll deductions. Customers of the
Corporation's utility subsidiaries who are residents of
the State of Indiana may also make optional cash
purchases under the Plan. Shareholders who do not
choose to participate in the Plan will continue to
receive cash dividends, as declared, by check in the
usual manner.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY 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.
This Prospectus relates to 1,000,000 authorized
but unissued Common Shares registered for purchase
under the Plan. It is suggested that this Prospectus be
retained for future reference.
The date of this Prospectus is May 24, 1996.
No person has been authorized to give any
information or to make any representation not contained
in this Prospectus. This Prospectus does not constitute
an offer of any securities other than those described
on the cover page or an offer to sell or a solicitation
of an offer to buy within any jurisdiction to any
person to whom it is unlawful to make such offer or
solicitation within such jurisdiction.
ASSISTANCE CONCERNING THE PLAN
Please address all correspondence concerning the
Plan to:
Fifth Third Bank
Corporate Trust Services
IWC Resources Corporation Dividend
Reinvestment and Share Purchase Plan
Mail Location 1090F5
38 Fountain Square Plaza
Cincinnati, OH 45263
Please reference IWC Resources Corporation in all
your correspondence and, if you are a participant, give
the number of your account. If you prefer, you may call
Fifth Third Bank at (800) 837-2755 or (513) 579-5320.
Assistance with Plan participation and other
shareholder matters also may be obtained from the
Corporation, P.O. Box 1220, Indianapolis, Indiana
46206. Its telephone number is (317) 639-1501.
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION 3
DOCUMENTS INCORPORATED BY REFERENCE 3
THE CORPORATION 4
DESCRIPTION OF THE PLAN 4
Purpose 5
Features 5
Administration 5
Eligibility 6
Participation 7
Optional Cash Payments 9
Purchases 10
Costs 11
Dividends 11
Reports to Participants 11
Certificates for Shares 11
Withdrawal from the Plan 12
Other Information 13
USE OF PROCEEDS 16
EXPERTS 16
LEGAL OPINIONS 16
AVAILABLE INFORMATION
The Corporation is subject to the informational
requirements of the Securities Exchange Act of 1934, as
amended (the Exchange Act), and in accordance
therewith files reports, proxy statements and other
information with the Securities and Exchange Commission
(the Commission). Reports, proxy statements and other
information filed by the Corporation may be inspected
and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at the
Commission's Regional Offices located at Seven World
Trade Center, Suite 1300, New York, New York 10048; and
500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 at
prescribed rates.
The Corporation has filed with the Securities and
Exchange Commission a Registration Statement under the
Securities Act of 1933 with respect to the Common
Shares offered pursuant to this Prospectus. This
Prospectus does not contain all the information set
forth in the Registration Statement. For further
information with respect to the matters described in
this Prospectus, reference is made to the Registration
Statement and to the exhibits filed with the
Registration Statement, which may be inspected and
copied, at prescribed rates, at the Public Reference
Section maintained by the Commission at the addresses
set forth above. Any person to whom a copy of this
Prospectus is delivered, upon written or oral request,
may obtain without charge a copy of all information
incorporated by reference in the Registration Statement
(other than exhibits thereto unless such exhibits are
specifically incorporated by reference into the
information the Registration Statement incorporates) by
contacting John M. Davis, Secretary, IWC Resources
Corporation, P.O. Box 1220, Indianapolis, Indiana
46206; telephone (317) 639-1501.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Corporation
with the Commission are incorporated by reference into
this Prospectus:
The Corporation's Annual Report on Form 10-K for
the year ended December 31, 1995.
The Corporation's Quarterly Report on Form 10-Q
for the first quarter ended March 31, 1996.
The Corporation's Form S-3 filed with the
Securities & Exchange Commission (SEC) and approved on
January 23, 1996, to increase the Plan's share
reserve to 1,000,000 authorized but unissued shares.
The description of the Common Shares contained in
the definitive Proxy Statement and Prospectus of
Indianapolis Water Company and the Corporation, dated
April 25, 1986, filed pursuant to Rule 424(b) of the
Securities Act of 1933 and Section 14 of the Securities
Exchange Act of 1934 in connection with the annual
meeting of common shareholders of Indianapolis Water
Company held on May 29, 1986.
All documents filed by the Corporation pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 after the date of this Prospectus
and prior to the termination of the offering made by
this Prospectus shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof
from the date of filing of such documents. Any person
to whom a copy of this Prospectus is delivered may,
upon written or oral request, obtain without charge a
copy of any or all of the documents referred to above
which have been or may be incorporated in this
Prospectus by reference (other than certain exhibits to
such documents) by contacting John M. Davis, Secretary,
IWC Resources Corporation, P.O. Box 1220, Indianapolis,
Indiana 46206; telephone (317) 639-1501.
THE CORPORATION
The Corporation is a holding company. The
Corporation owns and operates seven subsidiaries,
including Indianapolis Water Company (IWC) and
Harbour Water Corporation (HWC) which supply water
for residential, commercial, and industrial uses, and
for fire protection service in Indianapolis, Indiana,
and the surrounding areas.
In addition to the two water utilities, Resources
has several other subsidiaries including Miller
Pipeline Corporation (MPC) and SM&P Utility
Resources, Inc. (SM&P). MPC installs, repairs, and
maintains natural gas distribtion systems and provides
technical repair and installation service and products
for gas, sewer, and water utilities. SM&P performs
underground utility locating and marking services in
Indiana and several other states.
The White River Environmental Partnership (the
Partnership), of which the Corporation is the
majority partner (52%), was formed during 1993. The
Partnership subsequently entered into a five-year
contract to operate and maintain the two Advanced
Wastewater Treatment facilities for the City of
Indianapolis.
The Corporation continues to seek expansion and
diversification of its operations through the
acquisition of other water utilities and other related
businesses. It is expected, however, that the water
utilities will continue as one of the principal sources
of revenue for the Corporation in the foreseeable
future.
The principal executive offices of the Corporation
are located at 1220 Waterway Boulevard Indianapolis,
Indiana 46202. Its telephone number is (317) 639-1501.
DESCRIPTION OF THE PLAN
The Plan is described in the following 29 numbered
questions and answers. The Plan replaces the prior
Dividend Reinvestment and Stock Purchase Plan
maintained by the Corporation, and all participants
under the prior Plan will be automatically enrolled in
this Plan.
Purpose
1. What is the purpose of the Plan?
The purpose of the Plan is to provide participants
with a convenient method of investing cash dividends
and optional cash payments in newly issued Common
Shares of the Corporation, at a discount from the
current market price average without payment of any
brokerage commission or service charge. Because the
Common Shares will be purchased from the Corporation,
the Corporation will receive additional funds that will
be available for general corporate purposes. The
Corporation believes that expenses of the Plan,
including the 3% discount offered to participants, are
less than the underwriting and other expenses that
would be incurred in selling additional newly issued
Common Shares in other ways.
Features
2. What are the features of the Plan?
As a participant in the Plan (a) you may purchase
Common Shares by automatically reinvesting cash
dividends on all or less than all of the Shares
registered in your name, or (b) you may purchase Common
Shares (provided you are not a broker, nominee or
investment company) as often as twice per month by
making optional cash payments in any amount of at least
$100 ($10 monthly in the case of employees) and up to a
maximum of $100,000 per calendar year, or (c) you may
do both. You do not pay any brokerage commission or
service charge for your purchases under the Plan and
purchases are made at a discount from the current
market price average. Full investment of funds is
possible under the Plan because the Plan permits
fractions of shares, as well as full shares, to be
credited to your account. You can avoid the
inconvenience and expense of safekeeping certificates
for shares credited to your account under the Plan.
Regular reports will be mailed to you to provide
simplified recordkeeping. (See Question 17.)
Because optional cash purchases will be made only
on Investment Dates, participants will not be able to
time precisely the purchase of additional Common Shares
and therefore will be unable to control the price at
which Common Shares will be purchased. (See Question
12.) Also, participants in the Plan will recognize
income for tax purposes on reinvested dividends even
though they receive no cash dividends. The amount of
income recognized will be based upon the fair market
value of the Common Shares purchased, and not the
discounted price at which the Common Shares are
purchased. In addition, a participant may recognize
income as a result of optional cash purchases of Common
Shares. (See Question 26.)
Administration
3. Who administers the Plan for participants?
Fifth Third Bank (the Agent) administers the
Plan for participants, keeps records, sends statements
of account to participants and performs other
administrative duties relating to the Plan. The Agent
purchases Common Shares from the Corporation as agent
for participants in the Plan and credits the Common
Shares to the accounts of the individual participants.
Common Shares held for the accounts of participants are
registered in the name of the Agent, the Agent's
nominee or the Agent's depository. None of the Agent,
the Agent's nominee or the Agent's depository will
control, be controlled by, or be under common control
with the Corporation.
Eligibility
4. Who is eligible to participate?
All holders of record of Shares and certain
employees and customers of the Corporation and its
subsidiaries may participate in the Plan. Customers of
the Corporation's utility subsidiaries, including IWC
or HWC, who are residents of the State of Indiana may
also make optional cash purchases as often as twice per
month with a minimum purchase of $100 and up to a total
of $100,000 annually. (See Question 6.) Employees of
the Corporation or its subsidiaries who are residents
of the State of Indiana or certain other states may
make optional cash purchases through automatic payroll
deductions with a minimum purchase of $10 per month.
(See Question 7.)
A broker or nominee may participate in the
dividend reinvestment portion of the Plan on behalf of
beneficial owners by signing and returning the Broker
and Nominee Authorization Form (B and N Authorization
Form). Participation by the broker or nominee on
behalf of a beneficial owner will be optional with each
cash dividend declared by the Corporation. The B and N
Authorization Form provides that the record holder will
provide the Agent with written instructions on an
appropriate form identifying one or more beneficial
owners and specifying as to each owner the number of
full shares with respect to which the dividend is to be
reinvested. The Agent, on the Investment Dates (as
defined in Question 12), will reinvest the dividend
payable with respect to the number of Shares specified
in the record holder's instructions for each identified
owner in as many full Common Shares as can be purchased
with such dividend at the purchase price computed in
accordance with the Plan. The remaining dividend, if
any, will be paid to the record holder by check. As
soon as practicable following the Investment Dates, the
Agent will transmit to the record holder a listing
containing the identification of each beneficial owner
furnished by the record holder in its instructions
showing as to each such owner: (a) the number of Shares
specified for reinvestment of the dividend, (b) the
total dividend paid with respect
to such Shares, (c) the number of full Common Shares
purchased, (d) the total cost of the Common Shares
purchased, (e) the amount of the total dividend not
reinvested, and (f) other relevant information.
Accompanying the listing will be a separate share
certificate, registered in the name of the record
holder, for the Common Shares purchased for each
beneficial owner identified on the listing, and one
check for the aggregate amount of the dividend not
reinvested for such owners.
The B and N Authorization Form and appropriate
instructions must be received by the Agent no later
than the fifth business day following the record date
for a dividend or no dividends will be reinvested
based on such B and N Authorization Form. To obtain
additional information and the necessary forms, brokers
and nominees may write Fifth Third Bank, Corporate
Trust Services, IWC Resources Corporation Dividend
Reinvestment and Share Purchase Plan, Mail Location
1090F5, 38 Fountain Square Plaza, Cincinnati, OH 45263;
or telephone (800) 837-2755 or (513) 579-5320.
Brokers, nominees and investment companies are not
eligible to participate in the optional cash purchase
portion of the Plan.
Participation
5. How do shareholders participate?
A holder of record of Shares may join the Plan at
any time by completing and signing an Enrollment Card
and returning it to the Agent. An Enrollment Card and a
postage-paid return envelope may be obtained at any
time by writing to Fifth Third Bank, Corporate Trust
Services, IWC Resources Corporation Dividend
Reinvestment and Share Purchase Plan, Mail Location
1090F5, 38 Fountain Square Plaza, Cincinnati, OH 45263;
or telephone (800) 837-2755 or (513) 579-5320.
Enrollment Cards may also be obtained from the
Corporation.
See Question 4 for a description of how and to
what extent beneficial owners of Shares registered in
names other than their own may participate.
6. How does a non-shareholder who is a customer of
one of the Corporation's utility subsidiaries and a
resident of the State of Indiana participate?
Customers of the Corporation's utility
subsidiaries who are Indiana residents may apply for
enrollment in the Plan by completing and returning an
Enrollment Card to the Agent, together with a check in
an amount not less than $100 nor more than $100,000,
made payable to Fifth Third Bank.
The Enrollment Card requires you to provide
certification of Indiana residency, and to appoint the
Agent to purchase Common Shares on your behalf. It also
allows you to decide the amount of your initial
investment, which will be used to purchase full and
fractional Common Shares. All cash dividends credited
to your Plan account will be fully reinvested and used
to purchase additional Common Shares, until you notify
the Agent otherwise.
7. How does an employee participate?
Any employee of the Corporation or its
subsidiaries who is a resident of the state of Indiana,
Arkansas, California, Illinois, Kansas, Massachusetts,
Mississippi, New Jersey, Ohio, Texas or Wiscon-
sin, or of certain other states, may join the Plan at
any time by completing an Enrollment Card and a
Payroll Deduction Authorization Card and returning them
to the Agent or to the Corporation.
The Enrollment Card and the Employee Payroll
Deduction Authorization Card require you to provide
verification of residency and to appoint the Agent to
purchase Common Shares on your behalf. They also allow
you to decide the dollar amount to be deducted from
your pay each month. These deductions will be used to
purchase full and fractional Common Shares as optional
cash purchases under the Plan. All cash dividends
credited to your Plan account will be fully reinvested
and used to purchase additional Common Shares, unless
and until you notify the Agent otherwise.
An Enrollment Card and an Employee Payroll
Deduction Authorization Card will be furnished to you
at any time upon request to the Agent. Payrol l
deduction authorizations will be for an indefinite
period of time. The employee must specify the amount to
be withheld each pay period. The minimum monthly
deduction is $10. Payroll deductions will be invested
as of the next Investment Date.
8. What are my options under the Plan?
Participants in the Plan may choose among the
following investment options:
To reinvest automatically cash dividends on
all Shares registered in their names in Common Shares
at 97% of the current market price average, computed as
described in Question 13.
To reinvest automatically cash dividends on
less than all of the Shares registered in their names
(a specific number of full shares) in Common Shares at
97% of the current market price average and continue to
receive cash dividends on the remaining Shares.
To invest as often as twice per month by
making optional cash payments in amounts of at least
$100 ($10 monthly in the case of employees) and up to a
total of $100,000 per calendar year, whether or not any
dividends are being reinvested, in Common Shares at 97%
of the current market price average.
Participants may elect one of the dividend
reinvestment options, the optional cash purchase
option, or both. Under all of the options, cash
dividends on Common Shares credited to their accounts
under the Plan are automatically reinvested in
additional Common Shares at 97% of the current market
price average. Brokers and nominees (whether acting on
behalf of themselves or beneficial owners) and
investment companies may elect to participate only in
one of the dividend reinvestment options, not in the
optional cash purchase option.
9. When will investment of my dividends start?
If your Enrollment Card is received by the Agent
by the record date for determining the holders of
Common Shares entitled to the next dividend,
reinvestment of your dividends will commence with the
next dividend. Dividends are presently anticipated to
be payable to holders of the Common Shares on a
quarterly basis on the first day of March, June,
September, and December, and the record dates for such
dividend payments are expected to be the 10th days of
February, May, August, and November, respectively,
unless the 10th falls on a Sunday, in which case the
record date will be the next following business day or
unless the 10th falls on a Saturday or some other day
on which banking institutions are authorized or
obligated to close, in which case the record date will
be the next preceding business day.
The dividend payment dates on the Common Shares
and the record dates described here are the ones
presently anticipated to be followed by the
Corporation. However, such dates are subject to change.
If your Enrollment Card is received after the record
date, reinvestment of your dividends will not start
until payment of the second following dividend.
10. May I change options under the Plan?
Yes. You may change options at any time by
completing and signing a new Enrollment Card and
returning it to the Agent. Enrollment Cards and return
envelopes may be obtained from the Agent. Any change of
option concerning the reinvestment of dividends must be
received by the Agent not later than the record date
for a dividend (see Question 9) in order for the change
to become effective with that dividend. Participation
by beneficial owners of Shares registered in names
other than their own must be authorized as directed in
Question 4 with respect to each cash dividend declared
by the Corporation.
Optional Cash Payments
11. How does the cash payment option work?
Holders of record who are not brokers, nominees or
investment companies, and certain employees and
customers of the Corporation or its subsidiaries may
invest in additional Common Shares by making optional
cash payments as often as twice per month. Any optional
cash payment must be at least $100 ($10 monthly in the
case of employees) and may not aggregate more than
$100,000 in any calendar year. Except for employees,
payments may be made at irregular intervals, and the
same amount of money need not be sent for each
purchase. Employees will have a regular amount deducted
from their pay each pay period. (See Question 7.)
Participants in the Plan have no obligation to make any
optional cash payments.
Optional cash payments will be held by the Agent
until they are invested in Common Shares on the next
Investment Date. An optional cash payment may be made
by a shareholder or customer by enclosing a check or
money order with the Enrollment Card when enrolling,
and thereafter by forwarding a check or money order to
the Agent with the payment form which is attached to
each statement of account. Checks and money orders
should be made payable to Fifth Third Bank. Optional
cash payments will not earn interest for the time they
are held by the Agent before being applied to purchase
Common Shares.
Purchases
12. When will purchases of Common Shares be made?
Optional cash payments received by the Agent will
be applied by the Agent to the purchase of additional
Common Shares from the Corporation on the next
Investment Date following the date on which the
optional cash payment is received. The Investment
Dates in each month are the first and fifteenth days
of each month, unless such days fall on a Saturday,
Sunday or other day on which banking institutions are
authorized or obligated to close, in which case the
Investment Date is the next following business day. In
the case of optional cash payments received within five
business days in advance of the first day of a month or
within five business days after the first day of such
month, the Investment Date shall be the 15th day of
such month, unless such day falls on a Saturday, Sunday
or other day on which banking institutions are
authorized or obligated to close, in which case the
Investment Date shall be the next following business
day. All Common Shares purchased with optional cash
payments on an Investment Date in a month next
preceding a month in which a dividend on the Common
Shares is payable will be entitled to dividends
declared and payable in the next succeeding month,
provided that such Investment Date is on or before the
record date for such dividend.
Dividends will be reinvested on each dividend
payment date.
13. What will be the price of shares purchased under
the Plan?
The price of Common Shares purchased from the
Corporation with participants' reinvested cash
dividends and optional cash payments will be 97% of the
average of the means between the high and low sale
prices of the Common Shares, as supplied by the
National Association of Securities Dealers Automated
Quotation National Market System and reported by The
Wall Street Journal, for the five consecutive trading
days ending on the Investment Date or, if the
securities markets are closed in the Investment Date,
the period of five consecutive trading days immediately
preceding the Investment Date. If there are no
reported sale prices for the Common Shares during any
trading day in the five-day period, or if publication
by The Wall Street Journal of reports of such prices
for any trading day in the five-day period does not
take place or is subject to reporting error, the
purchase price will be determined by the Corporation on
the basis of such market quotations as the Corporation
and the Agent deem appropriate.
14. How will the number of shares purchased for me be
determined?
The number of Common Shares that will be purchased
for you on any Investment Date will depend on the
amount of the dividend on your Shares (if the
Investment Date is a dividend payment date), the amount
of any optional cash payments made by you, and the
applicable purchase price of the Common Shares. Your
account will be credited with the number of Common
Shares (including fractions computed to four decimal
places) that result from dividing the amount of
dividends or optional payments to be invested by the
applicable purchase price for Common Shares (also
computed to four decimal places). See Question 4 for an
explanation regarding the purchase of Common Shares on
behalf of beneficial owners of Shares registered in
names other than their own.
Costs
15. Are there any costs to me for my purchases under
the Plan?
No. There are no brokerage fees for purchases.
Common Shares are purchased directly from the
Corporation. All costs of administration of the Plan
will be paid by the Corporation. However, if you
request the Agent to sell your Common Shares, the Agent
may deduct any brokerage commission and transfer tax or
other charge incurred. (See Question 21.)
Dividends
16. Will dividends be paid on shares held in my Plan
account?
Yes. Cash dividends on full shares and any
fraction of a share credited to your account are
automatically reinvested in additional Common Shares
which are credited to your account.
Reports to Participants
17. What kind of reports will be sent to me?
Assuming that you are a holder of record of
Shares, following each purchase of Common Shares for
your account, the Agent will mail to you a statement
showing amounts invested, purchase prices, the number
of Common Shares purchased and other relevant
information. Any activity that affects share balance
(i.e.) optional cash purchases, sale of shares, and
employee payroll deductions, will be reflected in a
monthly statement to shareholders. These statements are
your record of the costs of your purchases and should
be retained for income tax and other purposes. In
addition, you will receive copies of the same
communications sent to all other holders of record of
Common Shares, including the Corporation's quarterly
report and annual report to shareholders, a notice of
the annual meeting and proxy statement and dividend
information required by the Internal Revenue Service to
be furnished by the Corporation and the Agent.
Certificates for Shares
18. Will I receive certificates for Common Shares
purchased under the Plan?
Common Shares purchased by the Agent for your
account will be held by the Agent and regis-
tered in the name of the Agent, the Agent's nominee or
the Agent's depository. Certificates for such shares
will not be issued to you until requested. The total
number of shares credited to your account will be shown
on each statement of account. This custodial service
protects you against the risk of loss, theft or
destruction of stock certificates.
Certificates for any number of whole shares
credited to your account will be issued to you at any
time upon written request to the Agent. Any remaining
full shares and any fraction of a share will continue
to be credited to your account. Certificates for
fractions of shares will not be issued.
19. May shares in my Plan account be pledged?
No. If you wish to pledge shares credited to your
Plan account, you must request certificates for such
shares to be pledged.
20. If I request certificates for shares, in whose
name will such certificates be registered?
When issued upon your request, certificates for
shares will be registered in the name in which your
Plan account is maintained. For shareholders, this
generally will be the name or names in which your
certificates are registered at the time you enroll in
the Plan.
Withdrawal from the Plan
21. How do I withdraw from the Plan?
You may withdraw from the Plan at any time with
respect to all or part of your shares by sending a
written notice stating that you wish to withdraw to
Fifth Third Bank, Corporate Trust Services, IWC
Resources Corporation Dividend Reinvestment and Share
Purchase Plan, Mail Location 1090F5, 38 Fountain Square
Plaza, Cincinnati, OH 45263. When you withdraw from the
Plan, or upon termination of the Plan by the
Corporation, certificates for whole shares credited to
your account under the Plan will be issued to you and
you will receive a cash payment for any fraction of a
share. (See Question 22.) The agent must receive such
notice of termination 5 business days prior to the
dividend record date in order for such notice to be
effective as to that dividend. The agent will send the
certificates and/or funds to the participant within 30
days of receipt of the termination notice.
Upon withdrawal from the Plan, you may also
request that all or part of the shares, both whole and
fractional, credited to your account be sold by the
Agent. If such sale is requested, the sale will be made
for your account by the Agent as promptly as possible
after the request for withdrawal is processed. You will
receive from the Agent a check within 30 days for the
proceeds of the sale. Such charges, if any, will be
comparable to or less than the prevailing competitive
rates being charged in the brokerage industry at the
time of such sale for similar services.
22. What happens to my fractional share when I
withdraw from the Plan?
When you withdraw from the Plan, a cash adjustment
representing any fraction of a share then credited to
your account will be mailed directly to you. The cash
payment will be handled as described
in the second paragraph of Question 21 above. In order
to effect the sale of a fraction of a share credited
to your account, it may be necessary for the Agent to
combine the sale of your fractional share interest with
the sales of fractional share interests of other
withdrawing participants so that whole shares may be
sold.
Other Information
23. What happens if I sell or transfer all of the
Shares registered in my name?
If you dispose of all Shares registered in your
name, the dividends on the shares credited to your Plan
account will continue to be reinvested until you notify
the Agent that you wish to withdraw from the Plan.
24. What happens if the Corporation issues a stock
dividend, declares a stock split or has a rights
offering?
Any stock dividend or split shares distributed by
the Corporation on shares credited to your Plan account
will be added to your account. Stock dividends or split
shares distributed on shares registered in your name
but not credited to your Plan account will be mailed
directly to you in the same manner as to shareholders
who are not participating in the Plan.
In a regular rights offering you will receive
rights based upon the total number of whole shares that
you own; that is, the total amount of shares registered
in your name and the total number of whole shares held
in your Plan account.
25. Can I vote shares in my Plan account at meetings
of shareholders?
Yes. You will receive a proxy for the total number
of whole Shares held-both the Shares registered in your
name and those credited to your Plan account. The total
number of whole Shares held may also be voted in person
at a meeting. Fractional shares held in Plan accounts
may not be voted.
26. What are the Federal income tax consequences of
participation in the Plan?
Dividends that are reinvested in Common Shares
will be treated for Federal income tax purposes as
having been received in the form of a taxable stock
distribution, rather than as a cash dividend. An amount
equal to the fair market value on the Investment Date
of shares acquired with reinvested dividends will be
treated as a taxable dividend. This fair market value
will be the average of the high and low sale prices for
the shares on the Investment Date, and not the
discounted price at which such shares are purchased for
a shareholder's Plan account. A statement mailed to
shareholders at year end will indicate total dividend
income.
The tax consequences of an optional cash purchase
of shares pursuant to the Plan are not entirely clear.
A person who purchases Common Shares in his capacity as
a shareholder of the Corporation will recognize
dividend income in an amount equal to the difference
between the fair market value of the Common Shares
purchased on the Investment Date and the purchase price
for those Common Shares. An individual who purchases
Common Shares in his capacity as an employee of the
Corporation or any of its subsidiaries will recognize
additional income in an amount equal to the difference
between the fair market value of the Common Shares
purchased on the Investment Date and the purchase price
of those Common Shares. This income will be subject to
ordinary Federal and State income taxes. It is unclear
whether a person who purchases Common Shares as a
customer of one of the Corporation's utility
subsidiaries will recognize any income at the time of
purchase. The Internal Revenue Service (IRS) might
successfully assert that customers should recognize
income as a result of purchasing Common Shares at a
purchase price that is less than the fair market value
on the date of purchase. Although, the Corporation does
not currently believe any taxable income results from
the purchase of Common Stock by customers, the
Corporation could change its position as the result of
subsequent guidance from the IRS or as the result of
subsequent decisions by the courts.
There is no authority or guidance from the IRS on
the tax consequences to a person who is eligible to
purchase Common Shares pursuant to the Plan in more
than one capacity. For example, it is unclear whether
an individual who purchases Common Shares pursuant to
the Plan who is both a shareholder of the Corporation
and a customer of IWC should be treated as purchasing
those Common Shares as a shareholder or as a customer.
Currently, customers of the Corporation can purchase
Common Stock through the Corporation and will not
recognize any income at the time of their initial
purchase. All subsequent purchases will recognize
additional income in an amount equal to the difference
between the fair market value of the Common Shares
purchased on the Investment Date and the purchase price
of those Common Shares. However, there can be no
assurance that the IRS could not successfully challenge
such designation.
The Corporation must withhold 31% of all dividend
payments, unless an exemption applies, to participants
who have not furnished the Corporation with their
taxpayer identification numbers in the manner required.
Backup withholding is also required in certain other
limited circumstances. Any such tax withheld will be
treated as a credit against the participant's Federal
income tax liability. Pursuant to applicable Treasury
Regulations, the Corporation expects to satisfy this
requirement, when necessary, by withholding an amount
equal to 31% of the cash dividend otherwise payable to
such participant, and using the remainder to purchase
Common Shares, as described above. In such case, the
participant will be considered to receive a taxable
dividend equal to the sum of (a) the fair market
value of such purchased Common Shares, plus (b) the
amount of tax withheld.
The tax basis of shares acquired under the Plan by
reinvestment of dividends will be equal to the fair
market value of the shares allocated on the Investment
Date. The tax basis of shares purchased with an
optional cash payment will be the amount of such
optional cash payment plus the amount of income, if
any, recognized as a result of such purchase.
The holding period of Common Shares acquired under
the Plan, whether purchased with dividends or optional
cash payments, will begin on the day following the date
as of which the shares were purchased for a
shareholder's account.
A shareholder who participates in the Plan will
not realize any taxable income when they receive
certificates for whole shares credited to their
account, either upon request for such certificates or
upon withdrawal from, or termination of, the Plan.
However, shareholders will recognize gain or loss when
whole shares acquired under the Plan are sold or
exchanged-either by the Agent at the shareholder's
request when the shareholder withdraws from the Plan or
by the shareholder after withdrawal from, or
termination of, the Plan. Shareholders also will
recognize gain or loss upon receipt of a cash payment
for a fractional share credited to a shareholder's
account upon withdrawal from, or termination of, the
Plan. The amount of such gain or loss will be the
difference between the amount received by the
shareholder for such fractional share and the tax basis
thereof. For most participants, such gain or loss will
be capital gain or loss. Backup withholding of 31% is
applicable upon the sale of shares by the Agent on
behalf of a participant or the payment of cash for
fractional shares under the circumstances described
above for withholding on reinvested dividends.
The above provisions are subject to changes as may
from time to time be required due to changes in
applicable federal, state or local tax laws and
regulations.
Participants should consult their own tax advisors
concerning the tax consequences of their participation
in the Plan, including the effects of state, local and
foreign taxes.
27. How are income tax withholding provisions applied
to foreign participants?
In the case of foreign participants who elect to
have dividends on their Shares reinvested and whose
dividends are subject to United States income tax
withholding, an amount equal to the dividends payable
to such participants, less the amount of tax required
to be withheld, will be applied by the Agent to the
purchase of Common Shares.
All optional cash payments, including those
received from foreign participants, must be in United
States dollars.
28. What is the responsibility of the Corporation and
the Agent under the Plan?
The Agent has not participated in the preparation
of this Prospectus and assumes no responsibility for
its contents. Neither the Corporation nor the Agent, in
administering the Plan, will accept liability for any
act done in good faith or for any good faith omission
to act, including, without limitation, any claim of
liability arising out of failure to terminate a
participant's account upon such participant's death
prior to receipt of notice in writing of such death. It
is the position of the Securities and Exchange
Commission that the waiver of federal securities law
liabilities is void as a matter of public policy.
Neither the Corporation nor the Agent can assure you of
a profit or protect you against a loss on shares
purchased under the Plan.
29. May the Plan be changed or discontinued?
The Corporation reserves the right to modify,
suspend or terminate the Plan at any time. All
participants will receive notice of any such action.
Any such modification, suspension or termination will
not, of course, affect previously executed
transactions. The Corporation also reserves the right
to adopt, and from time to time to change, such
administrative rules and regulations (not inconsistent
in substance with the basic provisions of the Plan then
in effect) as it deems desirable or appropriate for the
administration of the Plan. The Agent reserves the
right to resign at any time upon reasonable written
notice to the Corporation.
USE OF PROCEEDS
The Corporation has no basis for estimating
precisely the number of Common Shares that ultimately
may be sold pursuant to the Plan or the prices at which
such shares will be sold. The Corporation proposes to
use the net proceeds from the sale of Common Shares
pursuant to the Plan, when and as received, for
retirement of debt, working capital, repurchase of
shares, or other general corporate purposes.
EXPERTS
The consolidated balance sheets of the Corporation
and subsidiaries as of December 31, 1995 and 1994 and
the related consolidated statements of earnings,
shareholders' equity and cash flows for each of the
years in the three-year period ended December 31, 1995,
which financial statements appear in the 1995 Annual
Report to shareholders, have been incorporated by
reference in the Corporation's annual report on Form
10-K for the year ended December 31, 1995, and have
been incorporated by reference herein as indicated
under Documents Incorporated by Reference in reliance
upon the report of KPMG Peat Marwick, independent
certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts
in accounting and auditing. The report of KPMG Peat
Marwick covering the financial statements for the
three-year period ended December 31, 1995, refers to
changes in the method of accounting for income taxes
and post-retirement benefits other than pensions in
1993.
LEGAL OPINIONS
Certain legal matters with respect to the Plan and
in connection with the issuance of the Common Shares
pursuant thereto have been passed upon for the
Corporation by its counsel, Baker & Daniels, 300 North
Meridian Street, Indianapolis, Indiana 46204. Fred E.
Schlegel, a partner in the firm of Baker & Daniels, is
a director of the Corporation and IWC.
