UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED).
For the fiscal year ended December 31, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED).
For the transition period from to
Commission file number 1-3576
ST. JOSEPH LIGHT & POWER COMPANY
(Exact name of registrant as specified in its charter)
State of Missouri 44-04l9850
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
520 Francis Street, P. O. Box 998, St. Joseph, Missouri
64502-0998
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 233-8888
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, without par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of the registrant's outstanding common
stock, based on the closing price therefor on the New York Stock
Exchange at February 29, 1996, was $127,283,878.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by
this report.
Common Stock, without par value 3,916,427 shares
(Class) (Outstanding at February 29, 1996)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1995 Annual Report to Shareholders are
incorporated by reference into Parts I, II and IV.
Portions of the 1996 Definitive Proxy Statement for the 1996
annual meeting are incorporated by reference into Part III,
excluding therefrom the sections titled "Report of Compensation
Committee" and "Cumulative Total Shareholder Return."
The 1995 Annual Report to Shareholders and the 1996 Definitive
Proxy Statement will be mailed to shareholders on or about April
2, 1996.
PART I
ITEM 1 - BUSINESS.
St. Joseph Light & Power Company (the Company) is a Missouri
corporation, incorporated in 1895, with its principal office in
St. Joseph, Missouri and is engaged primarily in the generation,
transmission and distribution of electric energy to customers in
its ten-county service territory in northwest Missouri. It
supplies this service in St. Joseph, the headquarters city, and 52
other incorporated communities and the intervening rural
territory. The service area contains approximately 3,300 square
miles. At December 31, 1995, there were approximately 60,900
electric customers. In 1995, electric revenues accounted for 88%
of total operating revenues.
Natural gas for residential, commercial and industrial purposes is
provided to customers in Maryville, a state university town of
about 10,000, and 14 other smaller communities in northwest
Missouri. Natural gas revenues accounted for 5% of total
operating revenues in 1995. Currently there are about 6,400
natural gas customers.
The Company supplies industrial steam to six customers in St.
Joseph. Industrial steam revenues accounted for 7% of total
operating revenues in 1995.
SOURCES AND AVAILABILITY OF RAW MATERIALS.
The Company's principal fuel for electric generation is coal.
Small amounts of natural gas and oil are also used. During 1995,
fuels utilized for electric generation consisted of 91% coal, 2%
oil and 7% gas.
The Company, Kansas City Power & Light Company (KCP&L) and Empire
District Electric Company (EDE), the joint owners of the Iatan
plant, entered into a twenty-year agreement with the Atlantic
Richfield Company for low sulphur western coal. The agreement,
effective January 1, 1984, provides for approximately two million
tons of Wyoming coal per year through the term of the agreement.
The coal is delivered by the Burlington Northern Railroad Company
under terms of an April 1, 1986 agreement which was renegotiated
in 1995 to extend through 2000.
Management anticipates meeting coal requirements for the Lake Road
plant in 1996 with present inventory and with contract and spot
purchases. During 1994, the Company entered into a new two-year
coal supply agreement effective through April 1996. Natural gas
requirements are met with purchases from regional suppliers and
transported under the industrial tariffs of Missouri Gas Energy as
an interruptible customer. The Company meets all of its oil
requirements through spot purchases.
As a result of the Federal Energy Regulatory Commission Order
#636, the Company entered into a ten-year agreement with ANR
Pipeline Company effective November 1993 to provide natural gas
storage and transportation services. The agreement allows for the
acquisition of natural gas on the open market. Management believes
the arrangement is sufficient to fulfill its natural gas
requirements.
FRANCHISES.
The Company currently holds non-exclusive franchises for its
electric utility operations in substantially all of the
incorporated portions of its service area. The Company holds a
perpetual electric franchise without limitation of time in St.
Joseph. Franchises in 51 additional incorporated municipalities
expire in various years until 2015. One small community is served
without a franchise.
The Company holds gas franchises in each of the 15 communities
served, expiring in various years until 2010.
COMPETITION.
There are four rural electric cooperatives (RECs) within the
Company's service area. These RECs purchase their total power
requirements from generating and transmission cooperatives which
are financed partially by government loans or grants.
Two municipally owned electric distribution systems are located in
the Company's territory serving approximately 900 customers.
The Company's rates are significantly lower than the RECs and
municipally owned systems in the area and also compare very
favorably with other investor-owned utilities in the region. Refer
to Management's Discussion and Analysis of Financial Condition and
Results of Operations in the 1995 Annual Report to Shareholders,
page 21, which is Exhibit 13 hereto, for further discussion.
FINANCIAL INFORMATION ABOUT SEGMENTS OF BUSINESS.
This information is incorporated by reference to Note 8 of the
Notes to Financial Statements in the 1995 Annual Report to
Shareholders, page 33, which is Exhibit 13 hereto.
ENVIRONMENTAL REQUIREMENTS.
This information is incorporated by reference to Management's
Discussion and Analysis of Financial Condition and Results of
Operations of the 1995 Annual Report to Shareholders, pages 16-21,
which is Exhibit 13 hereto.
NUMBER OF EMPLOYEES.
There were 347 full time employees and 2 part time employees at
December 31, 1995.
ITEM 2 - PROPERTIES.
The Company has an agreement with KCP&L and EDE for joint
ownership of the coal-burning generating plant at Iatan, Missouri.
The Company's 18% share of this plant is 121 megawatts (MW) of net
capability. Refer to "Jointly Owned Iatan Plant" incorporated by
reference to Note 1 of Notes to Financial Statements in the 1995
Annual Report to Shareholders, page 28, which is Exhibit 13
hereto.
The Company owns the Lake Road generating station in St. Joseph,
Missouri with an aggregate net capability of 261 MW (summer
rating), of which 107 MW is coal-fired and 154 MW utilize natural
gas and oil.
The Company owns a 62-mile segment of a 582 mile, 345 KV
transmission line connecting utilities from Kansas City, Missouri
to Minneapolis, Minnesota. A second 345 KV line, 23 miles in
length, is used as a tie-line for two neighboring utilities, one
of which pays all fixed and operating costs. The Company also owns
32 miles of 345 KV line connecting the Iatan generating plant with
the Company's system. In addition, the Company constructed, with
six other regional utilities, a 103-mile, 345 KV transmission
line, primarily in northwest Missouri, to strengthen the
interconnection network. The line provides a high capacity
interconnection facility directly linking the electric
transmission systems of Nebraska Public Power District, Associated
Electric Cooperative of Springfield, Missouri, and St. Joseph
Light & Power Company. The Company has 80 miles of 161 KV
transmission line which serves as the "backbone" for its internal
transmission/distribution system, and owns the necessary lower
voltage distribution lines, distribution substations, transformers
and equipment required to provide service in its territory.
ITEM 3 - LEGAL PROCEEDINGS.
Certain legal actions are pending which, in management's opinion,
are not expected to materially affect the Company's financial
position or results of operations.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the
fourth quarter of 1995.
Executive Officers of the Registrant.
The following are the executive officers of the Company:
T. F. STEINBECKER, President. Age 50. BSBA and MBA, University
of Missouri and CPA.
Employed by the Company in 1975; executive capacity since 1976;
present position since May 1986.
J. A. STUART, Vice President--Engineering and Construction. Age
42. BSEE, California Polytechnic State University. Employed by
the Company in present position since 1994. Prior positions
include Senior Operations Consultant, Pacific Gas and Electric
Company, June 1993-March 1994, and Gas and Electric Operations
Manager, Pacific Gas and Electric Company, March 1991-June 1993.
R. L. SLATER, Vice President--Administration. Age 63. BA,
Benedictine College, Atchison, Kansas. Employed by the Company in
1978; executive capacity since 1979; present position since
November 1986. Mr. Slater announced his retirement effective April
1, 1996.
L. J. STOLL, Vice President--Finance, Treasurer and Assistant
Secretary. Age 43. BSBA, Missouri
Western State College. MBA, Northwest Missouri State University.
Employed by the Company in 1975; executive capacity since 1980;
present position since May 1986.
D. V. SVUBA, Vice President--Power Supply. Age 53. BSEE, Iowa
State University. MSEE, University of Missouri. Employed by the
Company in 1966; executive capacity since 1990; present position
since November 1990.
G. L. MYERS, General Counsel and Secretary. Age 42. AB,
Washington University. JD, University of Missouri-Kansas City.
Employed by the Company and executive capacity since 1979; present
position since May 1989.
The Company announced a corporate restructuring effective February
1, 1996, that included the election of G. L. Myers as Vice
President, General Counsel and Secretary. Under the new
organization, departments are aligned under J. A. Stuart-Vice
President of Customer Service and Engery Delivery, L. J. Stoll-
Vice President of Finance and D. V. Svuba-Vice President of Energy
Supply.
Each officer is covered by a three-year employment agreement.
There are no family relationships between any officers of the
Company.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Information regarding the principal market for the Company's
common stock, the market prices and the dividends paid on such
stock for the past two years is incorporated by reference to the
1995 Annual Report to Shareholders, page 15 and 38, which is
Exhibit 13 hereto.
There were 5,065 holders of record of the Company's common stock
as of February 2, 1996, the record date fixed for the dividend
paid on February 20, 1996.
ITEM 6 - SELECTED FINANCIAL DATA.
This information is incorporated by reference to the 1995 Annual
Report to Shareholders, page 15, which is Exhibit 13 hereto.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
This information is incorporated by reference to the 1995 Annual
Report to Shareholders, pages 16-21, which is Exhibit 13 hereto.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
This information is incorporated by reference to the 1995 Annual
Report to Shareholders, pages 22-33 and page 36, which is Exhibit
13 hereto.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS OF THE REGISTRANT.
Information required by Item 10 regarding directors is not
answered for the reason that the registrant will, within 120 days
after the close of the fiscal year, file with the Securities and
Exchange Commission a "Definitive Proxy Statement" pursuant to
Regulation 14A of the Securities Exchange Act of 1934. The
information required is incorporated by reference to such
Definitive Proxy Statement. Certain information concerning the
executive officers of the Company is set forth in Part I under the
caption "Executive Officers of the Registrant."
ITEM 11 - EXECUTIVE COMPENSATION.
Item 11 is not answered for the reason that the registrant will,
within 120 days after the close of the fiscal year, file with the
Securities and Exchange Commission a "Definitive Proxy Statement"
pursuant to Regulation 14A of the Securities Exchange Act of 1934.
The information required is incorporated by reference to such
Definitive Proxy Statement.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
None.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Item 13 is not answered for the reason that the registrant will,
within 120 days after the close of the fiscal year, file with the
Securities and Exchange Commission a "Definitive Proxy Statement"
pursuant to Regulation 14A of the Securities Exchange Act of 1934.
The information required is incorporated by reference to such
Definitive Proxy Statement.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.
Financial Statements:
This information is incorporated by reference (as set forth below)
to the 1995 Annual Report to Shareholders, which is Exhibit 13
hereto.
Statements of Income, page 22
Balance Sheets, page 23
Statements of Capitalization, pages 24-25
Statements of Retained Earnings, page 25
Statements of Cash Flows, page 26
Statements of Taxes, page 27
Notes to Financial Statements, pages 28-33
Responsibility for Financial Statements, page 36
Report of Independent Public Accountants, page 36
Financial Statement Schedules:
Schedule II- Valuation and Qualifying Accounts - For the years
ended December 31, 1995, 1994 and 1993.
Schedules not listed above are omitted because of absence
of conditions under which they are required or because the
required information is included in the financial statements
submitted.
List of Exhibits:
Exhibit 3- Restated Articles of Incorporation adopted on May
20, 1987, which are incorporated by reference to
page 16 of the 1987 Form 10-K. By-laws of Company
as amended on January 16, 1991, which are
incorporated by reference to page 17 of the 1990
Form 10-K.
Exhibit 4- Indenture of Mortgage and Deed of Trust dated April
1, 1946, between the Company and Harris Trust and
Savings Bank and Bartlett Boder, Trustee which is
incorporated by reference to Exhibit (b) (1)-C in
File No. 2-62825.
- * Seventeenth Supplemental Indenture dated as of
February 1, 1991 between the Company and Harris
Trust and Savings Bank.
- * Medium-Term Notes Issuing and Paying Agency
Agreement dated as of November 19, 1993 between
the Company and Hassis Trust and Savings Bank.
Long-term debt instruments of the Company in
amounts not exceeding ten percent of the total
assets of the Company will be furnished to the
Commission upon request.
Exhibit 10- * Coal Freight Agreement between Burlington Northern
Railroad Company, Seller, and Kansas City Power &
Light Company, St. Joseph Light & Power Company and
The Empire District Electric Company, Buyers. This
exhibit is incorporated by reference to page 17 of
the 1986 Form 10-K. Amendment to Coal Freight
Agreement as amended on May 20, 1995.
- Coal Supply Agreement between Atlantic Richfield
Company, Seller, and Kansas City Power & Light
Company, St. Joseph Light & Power Company and The
Empire District Electric Company, Buyers. This
exhibit is incorporated by reference to page 17 of
the 1983 Form 10-K.
- CFSI Agreement which is incorporated by reference
to page 17 of the 1989 Form 10-K.
- ** Form of Key Management Employment Agreements which
is incorporated by reference to page 18 of the 1990
Form 10-K. Amendment to Key Management Employment
Agreements as amended on December 1, 1993, which is
incorporated by reference to page 18 of the 1993
Form 10-K.
- Directors Indemnification Agreement, which is
incorporated by reference to page 19 of the 1993
Form 10-K.
- ** Supplemental Executive Retirement Plan which is
incorporated by reference to page 19 of the 1990
Form 10-K. Amendment to Supplemental Executive
Retirement Plan as amended on November 17, 1993
which is incorporated by reference to page 20 of
the 1993 Form 10-K.
- Gas Purchase Agreements with ANR Pipeline Company,
which are incorporated by reference to page 21 of
the 1993 Form 10-K.
- Coal Supply Agreement with Alternative Fuels,
Incorporated which is incorporated by reference to
page 11 of the 1994 Form 10-K.
- * Long-Term Incentive Plan.
**
Exhibit 13- * The 1995 Annual Report to Shareholders.
Exhibit 23- * Consent of Independent Public Accountants.
Exhibit 27- * Financial Data Schedule.
* Filed herewith.
** Exhibits marked with an asterisk relate to
management contracts or compensatory arrangements.
Reports on Form 8-K:
No Form 8-K was required to be filed during the quarter ended
December 31, 1995.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To St. Joseph Light & Power Company:
We have audited in accordance with generally accepted auditing
standards, the financial statements included in St. Joseph Light
& Power Company's Annual Report to Shareholders incorporated by
reference in this Form 10-K, and have issued our report thereon
dated January 26, 1996. Our audits were made for the purpose of
forming an opinion on those statements taken as a whole. The
schedules listed in the index above are presented for purposes of
complying with the Securities and Exchange Commission's rules and
are not part of the basic financial statements. These schedules
have been subjected to the auditing procedures applied in our
audits of the basic financial statements and, in our opinion,
fairly state in all material respects the financial data required
to be set forth therein in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Kansas City, Missouri,
January 26, 1996.
ST. JOSEPH LIGHT & POWER COMPANY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1995, 1994 and 1993
Column A Column B Column C Column D Column E
Deductions
for Purposes
Balance at Additions for Which Balance at
Beginning Charged Charged to Reserves End
Description of Year to Expense Construction Were Created of Year
Valuation accounts deducted from assets
to which they apply -
Allowance for Uncollectible
Accounts:
December 31, 1995 $339147 $161156 $0 $176173 (1) $324130
December 31, 1994 $390256 $160748 $0 $211857 (2) $339147
December 31, 1993 $252947 $278725 $0 $141416 (3) $390256
Other reserves -
Accrued Claims for Injuries
and Damages:
December 31, 1995 $299193 $371991 $46845 $355634 $362395
December 31, 1994 $303110 $222655 $27854 $254426 $299193
December 31, 1993 $439804 $134368 $3547 $274609 $303110
Accrued Other Post
Employment Benefits:
December 31, 1995 $1290991 $1030996 $182061 $1167239 $1336809 (4)
December 31, 1994 $838627 $1100200 $210397 $858233 $1290991 (5)
December 31, 1993 $0 $1055593 $132400 $349366 $838627 (6)
Accrued Major Medical:
December 31, 1995 $5525 $622163 $128037 $750200 $5525
December 31, 1994 $369986 $711900 $148983 $1225344 $5525
December 31, 1993 $349376 $843613 $108095 $931098 $369986
(1) Net of $128,049 recovery on accounts previously charged off.
(2) Net of $126,419 recovery on accounts previously charged off.
(3) Net of $94,839 recovery on accounts previously charged off.
(4) Includes Iatan reserve of $133,845.
(5) Includes Iatan reserve of $94,432.
(6) Includes Iatan reserve of $22,276.
EXHIBIT 23
ST JOSEPH LIGHT & POWER COMPANY
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
ST. JOSEPH LIGHT & POWER COMPANY
(Registrant)
March 20, 1996 By
T. F. Steinbecker, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on
behalf of the registrant and in the capacities and
on the dates indicated.
T. F. Steinbecker
President & Director (Principal Executive Officer)
March 20, 1996
L. J. Stoll
Vice President-Finance, Treasurer & Assistant
Secretary (Principal Financial & Accounting
Officer)
March 20, 1996
J.P. Barclay, Jr.
Director
March 20, 1996
D. A. Burkhardt
Director
March 20, 1996
R. M. Burridge
Director
March 20, 1996
J. P. Carolus
Director
March 20, 1996
W. J. Gremp
Director
March 20, 1996
D. W. Shinneman
Director
March 20, 1996
R. L. Simpson
Director
March 20, 1996
G. R. Sprong
Director
March 20, 1996
Exhibit 23
St Joseph Light & Power Company
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation
of our reports included or incorporated by reference in this Form 10-K
into the Company's previously filed Form S-3 Registration Statements
(Registration No. 2-90732 and 33-64687).
ARTHUR ANDERSEN LLP
Kansas City, Missouri
March 29, 1996
CONTRACT
ICC-BN-C2954
RAIL TRANSPORTATION CONTRACT
FOR THE TRANSPORTATION OF COAL ORIGINATING
IN THE POWDER RIVER BASIN OF WYOMING
AND DELIVERED TO POWER STATIONS
OPERATED
BY KANSAS CITY POWER & LIGHT COMPANY.
TABLE OF CONTENTS
Article Caption Page
I GENERAL 2
II EFFECTIVE DATE AND TERN 3
III OBLIGATION TO SHIP AND TRANSPORT 3
A. Utilities' Commitment 3
1. Annual Volume Requirement 3
2. Volume Reports 4
B. Shipment Plans 5
1. Annual Shipment Plans 5
2. Quarterly Shipment Plans 6
3. Changes to Shipment Plans 7
C. Quarterly Shipment Obligations 7
D. Consequences of Failure to Ship or
Transport 8
1. Utilities' Failure to Meet Quarterly
Shipment Obligations 8
2. Utilities' Failure to Meet Annual
Volume Requirement 9
3. Railroads' Failure to Transport 10
IV PROVISION OF EQUIPMENT 13
A. Rail Cars 13
B. Other Equipment 15
C. Lease of Rail Cars from Railroads 15
V MAINTENANCE OF EQUIPMENT 16
V RATES AND CHARGES 17
A. Base Rates and Charges 17
B. Adjustment of Rates and Charges 18
C. Entire Compensation 20
VII RAILROAD PERFORMANCE STANDARD 21
VIII LOADING, WEIGHING, AND ORIGIN DETENTION 23
A. Train Size; Minimum Weights;
Assessment of Freight Charges 23
B. Designation of Origin 25
C. Procedures at Origin 26
1. Advance Notice 26
2. Loading 26
3. Weighing 26
4. Overloaded Cars 28
D. Loading Time; Origin Detention
Charges 29
1. Computation of Loading Time 29
2. Origin Detention Charges 29
3. Exclusions From Loading Time 30
a. Nine Holidays 30
b. Loading Disabilities 30
c. Failure to Notify 30
d. Release of Locomotives and
Crew 31
IX UNLOADING AND DESTINATION DETENTION 32
A.Procedures at Destination 32
1. Advance Notice 32
2. Deliveries to Hawthorn 32
3. Deliveries to Iatan and LaCygne 32
4. Change of Destination 33
B.Unloading Time; Destination Detention
Charges 33
1. Computation of Unloading Time 33
2. Destination Detention Charges 34
3. Constructive Placement 34
4. Exclusions from Unloading Time 34
a. Bunching of Trains 34
b. Unloading Disabilities 34
c. Failure to Notify 35
d. Release of Locomotives and Crews 35
e. Actual Placement at Hawthorn 36
X MISCELLANEOUS HANDLING OF CARS 36
A. Bad-Ordered Cars 36
B. Scheduled Maintenance or Repairs 37
C. Storage of Shipper Cars 38
1. Individual Cars 38
2. Entire Trains 38
D. Turning of Trains 39
E. Free Storage of Spare Shipper Cars 39
F. Effect on Elapsed Transit Time 39
XI FORCE MAJEURE 40
A. Definition of Force Majeure 40
B. Effect of Force Majeure 41
C. Notice of Commencement and Termination 41
D. Efforts to Mitigate 41
E. Impact on Term; Rights 42
XII DEFAULT; TERMINATION 43
XIII NOTICES 43
XIV RESPONSIBILITY FOR LOST COAL 44
XV BILLS OF LADING, TARIFFS AND REGULATIONS 44
XVI GOVERNING LAWS 45
XVII EFFECT OF WAIVER 46
XVIII REPRESENTATIONS AND WARRANTIES 46
XIX INTERPRETATION AND AMENDMENT 47
XX RESOLUTION OF DISPUTES 47
XXI SUCCESSORS AND ASSIGNS 50
XXII COMPLIANCE WITH ANTI-POLLUTION
LAWS AND REGULATIONS 51
XXXIII CONFIDENTIALITY 52
XXIV BOOKS AND RECORDS 53
XXV BILLING AND PAYMENT 53
XXVI TRAIN LOCATION AND ACCIDENT
REPORTING 54
XXVII RISK OF LIABILITY 55
A. General Rule 55
1. Sole Fault 55
2. Joint Fault 56
B. Residual Liability 57
XXVIII BENEFICIATED COAL 57
XXIX RESPONSIBILITIES OF UTILITIES 59
EXHIBITS
Exhibit A-Series RATES AND CHARGES
Exhibit B INDEX OF DEFINED TERMS
Exhibit C COMPUTATION OF LIQUIDATED DAMAGES FOR
FAILURETO MEET QUARTFRTY SHIPMENT
OBLIGATION
Exhibit D COMPUTATION OF LIQUIDATED DAMAGES FOR
FAILURE TO MEET ANNUAL VOLUME REQUIREMENT
RAIL TRANSPORTATION CONTRACT ICC-BNC-2954
This Agreement, made as of this 18 day of May, 1995, by and
among the parties designated in Exhibit A-Series which is attached hereto
and incorporated herein as to all terms set forth therein.
WHEREAS, KCPL operates coal-fired electric generating units at three
power stations located in and around Kansas City, Missouri/Kansas, towit:
Unit No. 1 of the Iatan power station served by BN's Sadler rail station
("Iatan), Units No. 1 and No.2 of the LaCygne power station served by
Railroads' Amsterdam rail station ("LaCygne"), and Unit No. 5 of the
Hawthorn power station served by Railroads' Kansas
City rail station ("Hawthorn"); and
WHEREAS, Hawthorn is owned 100% by KCPL; Iatan is owned 70% by KCPL,
18% by St. Joseph, and 12% by Empire; and LaCygne is owned 50% by KCPL
and 50% by KGE; and
WHEREAS, Utilities desire to contract for the transportation of
coal from mines in the Powder River Basin in Wyoming, to their
aforesaid power stations; and
WHEREAS, Railroads are common carriers by railroad subject to the
Interstate Commerce Act, 49 U.S.C. 10101 et. seq., and collectively
have tracks connecting coal mines in the Powder River Basin with each
of the aforesaid power stations through the aforesaid rail stations;
and
WHEREAS, Railroads and Utilities desire to enter into a contract
pursuant to 49 U.S.C. 10713 for the transportation by Railroads of
Utilities'coal from mines in the Powder River Basin to the aforesaid
power stations, subject to the terms and conditions set forth herein; and
1
WHEREAS, the parties specifically intend that their
contractual arrangement be so structured as to promote maximum
equipment utilization and transportation economy and efficiency, and
that it provide all parties with economic incentives to that end;
NOW THEREFORE, for and in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt of
which is hereby acknowledged, Railroads and Utilities agree as follows:
Article I
GENERAL
This Agreement covers the "Transportations by Railroads of
subbituminous or bituminous coal, bearing Standard Transportation
Commodity Code(s) beginning with the three digits 11-2 as specified in
Tariff ICC STCC 6001-Series, (hereinafter, "Coal"), from one or more
"Origins" to one or more "Destinations."
For purposes of this Agreement, "Origin" shall mean the coal loading
facilities at any of the coal mines or coal processing facilities served by
BN located in Campbell and Converse Counties, Wyoming; "Destination" shall
mean the coal unloading facilities used to serve Hawthorn, Iatan, or
LaCygne; and "Transportation" (or "Transport") shall mean all of the rail
transportation services entailed in the movement of Coal from Origins to
Destinations in unit trains, including without limitation the line haul
transportation of the Coal, the movement of empty trains back to Origins,
the marshalling of equipment, and other services as provided herein.
1 Capitalized terms in this Agreement are ordinarily defined the
first time they are used. An index indicating the location of such
definitions is attached as Exhibit B.
2
Article II
EFFECTIVE DATE AND TERM
Within five (5) business days after the execution of this
Agreement by the parties, Railroads shall file the requisite summary
with the Interstate Commerce Commission ("ICC") in accordance with 49
C.F.R. Part 1313, et seq. This Agreement shall be effective on the date
that the summary is filed with the ICC (the "Effective Date"), and
shall remain in effect until midnight on December 31, 2000; PROVIDED,
HOWEVER, that the provisions of this Agreement shall apply only with
respect to Coal Tendered for Transportation on or after January 1,
1996, and the provisions hereof shall have no effect on the validity or
application of that certain Omnibus Rail Transportation Agreement
denominated as Contract ICC-BN-C-2227, as amended.
Article III
OBLIGATION TO SHIP AND TRANSioRT
A. Utilities' Commitment
1.Annual Volume Requirement
For purposes of this Agreement, Coal shall be deemed "Tendered" to
Railroads when (i) Utilities request Railroads to Transport Coal hereunder
which is available for loading at an Origin, or (ii) Railroads accept a
train containing said Coal at an Origin for Transportation hereunder,
whichever first occurs with respect to any particular Coal.
Subject to and in accordance with the terms and conditions of this
Agreement, KCPL, KGE, Empire and St. Joseph collectively agree to
Tender for shipment under this Agreement from one or more Origins to
one or more
Destinations during each Contract Year during the term hereof, 100% of
the
3
total amount of Coal transported from Origins to Destinations, by all
transportation modes and carriers, during said Contract Year (the
"Annual Volume Requirement"). In addition, subject to and in accordance
with the terms and conditions of this Agreement, Utilities agree to
Tender during each Contract Year at least 250,000 tons of Coal for
shipment to Hawthorn (the "Hawthorn Requirement"), and at least 850,000
tons of Coal for shipment to LaCygne (the "LaCygne Requirement").
Subject to and in accordance with the terms and conditions of this
Agreement, Railroads agree to Transport hereunder all of the Coal that
Utilities Tender for shipment hereunder.
2. Volume Reports
Utilities shall provide to Railroads, not later than February 28
following each Contract Year a report (the "Annual Volume Report")
specifying (a) the total amount of Coal Transported from each Origin to
each Destination while this Agreement was in effect during the preceding
Contract Year, via all carriers and modes of transportation, and (b) the
amount of Coal Tendered for shipment under this Agreement from each
Origin to each Destination during said
Contract Year.
If Railroads disagree with any part of an Annual Volume Report,
they shall so notify Utilities within 20 days after their receipt
thereof, specifying in detail the information with which they disagree,
and the nature of their disagreement. If Railroads timely notify
Utilities of their disagreement with an Annual Volume Report as herein
provided, the parties shall attempt to resolve their disagreement
through negotiation, failing which, their dispute shall be resolved in
accordance with Article XX of this Agreement. If Railroads fail to
timely notify Utilities of their disagreement
4
with an Annual Volume Report as herein provided, Railroads shall
conclusively be deemed to have accepted said Report as correct. B.
Shipment Plans
1. Annual Shipment Plans
For purposes of this Agreement, "Contract Year" shall mean a
calendar year beginning on January 1 during the time this Agreement is
in effect.
On or before October 1 preceding each Contract Year, Utilities
shall provide Railroads with Utilities' Annual Shipment Plan" for said
Contract Year. The Annual Shipment Plan shall be a document specifying
(1) how much Coal (if any) KCPL, Empire, and St. Joseph intend to ship
under this Agreement to Iatan during the Contract Year in question
("Annual Target Volume/ Iatan," or "ATV/ I"); (2) how much Coal KCPL
and KGE intend to ship to LaCygne (the "Annual Target Volume/LaCygne,"
or "ATV/L"); and (3) how much Coal KCPL intends to ship to Hawthorn
("Annual Target Volume/Hawthorn," or "ATV/H"). The Annual Shipment Plan
shall show intended shipments on a monthly basis, and also shall
include Utilities' estimated maintenance and/or outage schedule for the
generating facilities at each Destination for such Contract Year. The
Annual Shipment Plan for any Contract Year shall be updated by
Utilities on or before December 1 preceding such Contract Year, which
changes shall be communicated to Railroads in writing. The sum of the
ATV/I, ATV/L and ATV/H as of December 1 shall constitute the "Total
Annual Target Volume" or "TATVn (i.e., TATV - ATV/I + ATV/L + ATV/H)
for the ensuing Contract Year. Except as otherwise provided in this
Agreement or otherwise agreed by the parties, the TATV for Contract
Years 1996 and 1997 shall not exceed 11,500,000 Tons and the TATV for
Contract Years 1998, 1999 and 2000 shall not exceed
5
12,000,000 Tons; PROVIDED, HOWEVER, that if Utilities expect that the
total number of Tons of Coal that will be shipped to Iatan, LaCygne and
Hawthorn in a given Contract Year will exceed the maximum allowable
TATV Tons for that Contract Year as stated above, Utilities shall so
inform Railroads on or before October 1 of the preceding Contract Year.
In such event, Railroads shall inform Utilities in writing within
fortyfive (45) days whether they will agree to increase the maximum TATV
for such Year to include all or part of the excess Tons. If Railroads do
so agree, then for purposes of the ensuing Contract Year only, the TATV
shall be established accordingly. In the ensuing Contract Year, Utilities
may ship via other carriers or modes, Tons of Coal in excess of the
maximum allowable TATV Tons for that Contract Year that Railroads do not
agree to Transport pursuant to the previous sentence and such Tons shall not
be counted for purposes of determining Utilities' obligations under
this Agreement, including but not limited to the provisions of this
Article III. Unless otherwise agreed by the parties, Railroads shall
have no obligation to Transport Tons of Coal in any Contract Year in
excess of the maximum allowable TATV Tons for that Contract Year as
determined under this paragraph .
2. Quarterly Shipment Plans
For purposes of this Agreement, "Contract Quarter" shall mean a
period of three consecutive calendar months beginning on January 1,
April 1, July 1, or October 1, during any Contract Year.
At least 30 days prior to the beginning of each Contract Quarter,
Utilities shall provide their "Quarterly Shipment Plan" for that Contract
Quarter to Railroads. Each Quarterly Shipment Plan shall be a document
specifying (1) how much Coal (if any) KCPL, Empire, and St. Joseph
intend to
6
ship to Iatan during said Contract Quarter (the "Quarterly Target
Volume/ Iatan," or "QTV/I"); (2) how much Coal (if any) KCPL and KGE
intend to ship to LaCygne (the "Quarterly Target Volume/ LaCygne," or
"QTV/L"); and (3) how much Coal (if any) KCPL intends to ship to
Hawthorn (the "Quarterly Target Volume/Hawthorn," or "QTV/H"). QTV/I
plus QTV/L plus QTV/H shall constitute the "Quarterly Volume
Requirement," or "QVR." Unless otherwise agreed by the parties, (a) the
applicable QTV (i.e., QTV/I, QTV/L or QTV/ H, as the case may be) shall
be no less than (i) 15% of the ATV applicable to Iatan, and (ii) 20% of
the ATV applicable to LaCygne and Hawthorn, and (b) the sum of the
QVR's for the four (4) Contract Quarters in a Contract Year shall be at
least 95% of the TATV for said Year.
3. Changes to Shipment Plans
Utilities may change any Annual Shipment Plan at any time on or
before the December 1 preceding the Contract Year to which the Plan
applies. Utilities may change any Quarterly Shipment Plan at any time
prior to the due date therefor. Utilities may change a Quarterly or
Annual Shipment Plan thereafter only with the consent of Railroads,
which shall not be unreasonably withheld .
C. Quarterlv Shipment Obligations
Except as otherwise provided in this Agreement, and unless
otherwise agreed by the parties, during each Contract Quarter Utilities
shall Tender for shipment under this Agreement at least 90% of the QVR
for that Contract Quarter. Railroads shall not be obligated to accept
for Transportation more than 110% of the QVR in any Contract
Quarter; PROVIDED, HOWEVER, that delivery of a train for loading at
an Origin which, when loaded and added to previous shipments during
that Contract Quarter, will cause total
7
shipments during said Contract Quarter to exceed 110% of the QVR,
shall constitute acceptance of said excess tonnage for Transportation
hereunder, and consent to the Tender of such excess tonnage; and
PROVIDED, FURTHER, that Railroads shall use their best efforts to
accept and Transport any and all tonnage Tendered by Utilities in
excess of 110% of the QVR.
D. Consequences of Failure to Ship or Transport
1. Utilities' Failure to Meet Quarterlv Shipment
Obligation
If (a) Utilities fail during a Contract Quarter (hereinafter,
the "Deficit Quarter") to Tender for shipment hereunder at least 90%
of the QVR for that Contract Quarter, (b) that failure is not caused
by any failure of Railroads to meet their obligations under this
Agreement or by an event of Force Majeure as defined in Article
XI, and (c) Utilities fail to Tender for shipment hereunder sufficient
Coal during the next Contract Quarter (the "Makeup Quarter") such that
the total amount of Coal Tendered during the two Contract Quarters
equals or exceeds 90% of the sum of the QVR's for the two Contract
Quarters, then Utilities shall pay Railroads, not as a penalty but
as liquidated damages for Railroads' loss of profits hereunder, which
shall be Railroads' sole remedy therefor, an amount determined in
accordance with Exhibit C. Liability for such payments of damages
shall be determined in accordance with Article XXIX, and such
payments shall be due 30 days after the end of the Makeup
Quarter, and shall be accompanied by a description of how
the amount was computed.2
If liquidated damages are paid to Railroads under the
preceding paragraph, the number of tons of Coal on which such
damages were paid shall be
2 Under Exhibit C, tons shipped during Makeup Quarter will be
credited first toward that Quarter's QVR, and only after that QVR has
been met will additional tonnage be credited toward the Deficit
Quarter's shortfall.
8
deemed to have been Tendered under this Agreement for purposes of
determining Utilities' compliance with the Annual Volume
Requirement.
2. Utilities' Failure to Meet Annual Volume
Requirement
If (a) Utilities fail during a Contract Year (hereinafter, the
"Deficit Year") to meet the Annual Volume Requirement, and (b) that
failure is not caused by any failure of Railroads to meet their
obligations under this Agreement or by an event of Force Majeure as
defined in Article XI, then Utilities shall pay Railroads, not as a
penalty but as liquidated damages for Railroads' loss of profits
hereunder, which shall be Railroads' sole remedy therefor, an amount
determined in accordance with Exhibit D. Liability for such payments of
damages to Railroads shall be determined in accordance with Article
XXIX, and such payments shall be due 30 days following Railroads'
acceptance of the Annual Volume Report for that Contract Year, and
shall be accompanied by a description of how the amount of damages
owing was computed.
If damages are paid to Railroads under the preceding paragraph for
the failure by Utilities to meet the Annual Volume Requirement, the
number of tons of Coal on which such damages were paid shall be deemed
to have been Tendered under this Agreement.
In addition to the foregoing, if in a Contract Year Utilities fail
to Tender or cause to be Tendered at least 250,000 tons of Coal for
shipment to Hawthorn, or fail to Tender or cause to be Tendered at
least 850,000 tons of Coal for shipment to LaCygne, as the case may be,
as required under Article III(A)(1), and if such failure is not caused
by any failure of Railroads to meet their obligations under this
Agreement or by an event of Force Majeure as defined in Article XI,
then Utilities shall pay KCS, not as a penalty but as liquidated
damages for loss of profits hereunder, an amount equal to: (i) 5%
9
of the weighted average Effective Rate (as defined in Article VI) to
Hawthorn; and/or (ii) 10% of the average Effective Rate (as defined
in Article VI) to LaCygne, as the case may be, for the Contract Year,
multiplied by the difference between (i) the Hawthorn Requirement
and/or the LaCygne Requirement, as the case may be, and (ii) the
amount of Coal actually Tendered or deemed Tendered for shipment
to Hawthorn and/or LaCygne, respectively, under this Agreement
during said Contract Year. Liability for such payments to KCS
shall be determined in accordance with Article XXIX, and such
payments shall be due 30 days after Railroads' acceptance
of the Annual Volume Report for that Contract Year.
3. Railroads' Failure to Transport
If Railroads fail to meet their Performance Standard (as defined
in Article VII hereof) during any Contract Year, or if they fail to
provide Replacement Cars as defined in Article IV hereof when required
to do so under Article IV, and if in either case Railroads as a
resuit fail to Transport all of the Coal Tendered by Utilities for
shipment hereunder to one or more Destination(s) during said Contract
Year (or 110% of the sum of the applicable QTVs for such Destination(s),
if less), then Railroads shall have an "Initial Volume Deficit" for the
Destination(s) in question. The Initial Volume Deficit for the
Destination shall be the lesser of (a) the difference between
the amount of Coal Tendered (up to 110% of the sum of the QTVs)
for shipment to that Destination and the amount of Coal actually
Transported to that Destination, or (b) the amount of additional
Coal that Railroads would have been able to Transport to that
Destination if they had met their Performance Standard and supplied
the required Replacement Cars. The latter amount shall be computed
based upon two assumptions: (a) additional shipments that
10
Railroads could have Transported had they met their Performance
Standard would have included the same amount of Coal as the average
shipment to that Destination during the preceding Contract Year (which,
for purposes of the 1996 Contract Year, shall be the 1995 calendar
year); and (b) any missing Replacement Cars would have carried the same
amount of Coal per trip as the average Rail Car used to Transport Coal
to that Destination during the preceding Contract Year; PROVIDED,
HOWEVER, that Railroads' liability for Initial Volume Deficits for any
Contract Year shall not exceed the difference between the TATV for the
Contract Year in question, and the total tons of Coal Transported to
all Destinations during such Contract Year.
If Railroads experience an Initial Volume Deficit, then with
Utilities' consent Railroads may, and at Utilities' request made within
the first 21 days of the next Contract Year, Railroads shall, during
said next Contract Year, Transport to such Destination at the
applicable weighted average Effective Rate(s) (based upon tons shipped)
in effect during the previous Contract Year, enough Coal (in addition
to the Coal Tendered for shipment to that Destination under the Annual
Shipment Plan for that Contract Year) to make up for that Initial
Volume Deficit. Railroads shall be responsible for supplying any
additional equipment (including Rail Cars, as defined below in Article
IV(A)) necessary to Transport such additional Coal, at no cost to
Utilities. If Railroads fail to provide enough extra Rail Cars
("Supplemental Cars") to meet their obligations under this Paragraph 3
by the twenty-first day following Utilities' timely request for such
service, Utilities may obtain the Supplemental Cars themselves and
Railroads shall pay Utilities an amount equal to the Car Rental Charge
as determined under Article VI for each Rail Car so obtained.
11
Utilities and Railroads shall confer as soon as practicable after
it becomes known to either of them that an Initial Volume Deficit is
likely, and in good faith seek to cooperate as to the scheduling of
such makeup shipments. In this Regard, Railroads shall have the right
to provide up to 4 trainsets of their own Rail Cars during the
Contract Year, at no cost to Utilities, for use in Transporting Coal
under this Agreement in order to avoid incurring an Initial Volume
Deficit; PROVIDED, HOWEVER, that Utilities shall not be required to
Tender Coal for loading into such trainsets in a manner or on a
schedule inconsistent with the Utilities' Coal requirements or their
arrangements with suppliers.
If Railroads fail during the subsequent Contract Year to Transport
all of the additional tonnage required to make up for an Initial Volume
Deficit, then (unless and to the extent such failure was caused by
Utilities' failure to request makeup service, to consent or to act in
good faith with respect to the scheduling of additional trainsets prior
to the incursion of an Initial Volume Deficit, or to Tender sufficient
additional Coal), so much of the Initial Volume Deficit as Railroads
fail to Transport shall constitute the "Final Volume Deficit."
Railroads shall pay Utilities, not as a penalty but as liquidated
damages for Utilities' loss of service hereunder, which shall be
Utilities' sole remedy therefor, an amount equal to 258 of the weighted
average of the applicable Effective Rate(s) (based upon tons shipped)
for the involved Destination(s) for the Contract Year in which the
Initial Volume Deficit was incurred multiplied by the Final Volume
Deficit(s) for the involved Destination(s).
If Railroads fail in any calendar month to Transport all of the
Coal that Utilities Tender (within the rate of shipment reflected in
the QTV
12
and Utilities' outage and maintenance schedule) for shipment under this
Agreement to a Destination in relatively even amounts during that
month, for any reason other than Utilities' failure to fulfill their
obligations under this Agreement, Utilities may during the following
calendar month ship via other carriers or modes, the Coal that
Railroads were unable to Transport and such shipments shall be deemed
shipments Transported under this Agreement for purposes of determining
Utilities' compliance with the Annual Volume Requirement, Hawthorn
Requirement and/or LaCygne Requirement.
Article IV
PROVISION OF EOUIPMENT
A. Rail Cars
For purposes of this Agreement, "Rail Car" shall mean
an open-top gondola or hopper car, aluminum or steel, equipped
with rotary couplers, suitable for use in the loading facilities
at the Origins and in the unloading facilities at the
Destination(s), and having a marked lading capacity of at least
100 Tons. All such Rail Cars shall be registered with the AAR's
UMLER System and shall be suitable for interchange under the AAR
Interchange Rules (as defined in Article V).
During any Contract Quarter for which the Quarterly Shipment Plan
specifies a Quarterly Target Volume greater than zero for a
Destination, Utilities shall, at no cost to Railroads, provide
Railroads with a sufficient number of Rail Cars meeting the
specifications set forth above (in trainsets of at least 110 Rail Cars
for service to Hawthorn, and at least 115 Rail Cars for service to
LaCygne or Iatan, plus up to 10 spare Rail Cars for each trainset) to
enable Railroads to Transport all Coal Tendered for
13
Transportation to such Destination ("Equipment Obligation").
Utilities'Equipment Obligation for a Destination for a Contract
Quarter shall be determined based on the following assumptions:
(a) that Railroads meet their Performance Standard, under
Article VII; (b) that trains are not delayed by one or more events
of Force Majeure or causes attributable to Utilities or a mine
operator; (c) that average Loading and Unloading
Times (as defined in Articles VIII(D)(1) and IX(B)(1), before
adjustments specified in VIII(D)(3) and IX(B)(4)) do not exceed 4 hours
for loading, 5 hours for unloading at Iatan, 8 hours for unloading at
LaCygne, and 24 hours for unloading at Hawthorn; and (d) that the
average weight of the Coal per Rail Car per shipment will be
approximately the same as the average weight per Rail Car for shipments
to that Destination during the Contract Year preceding the
determination of the Equipment Obligation.
The number of Rail Cars that Utilities are required to
provide under the preceding paragraph shall be reduced during
any Contract Quarter in which Rail Cars provided by Utilities for
service to such Destination are damaged or destroyed under
circumstances such that Railroads are required to provide
Replacement Cars as defined in Article V hereof, by the
number of Replacement Cars Railroads are obligated to provide.
That reduction shall remain in effect until
Railroads' obligation to provide such Replacement Cars
under Article V expires.
Utilities may remove trainsets from service hereunder at any time,
in accordance with Article X(B)(4)(d) (if the trainset is at Iatan or
LaCygne), Article IX(B)(4)(e) (if the trainset is at Hawthorn), or
Article X(C)(2) (if the trainset is en route from a Destination to an
Origin). Utilities may add trainsets to service hereunder at any time,
on not less than
14
forty-eight (48) hours' prior notice to Railroads; provided, that
Railroads'obligation to accept more than one additional trainset
per Destination under this Agreement during any Contract Quarter
(calculated quarterly based upon the applicable QTV and resulting
Equipment Obligation) shall be subject to the availability of
suitable motive power.
Utilities may switch trainsets already in service hereunder from
one Destination to another in accordance with Article VIII(B) or
IX(A)(4).
Railroads shall not use Rail Cars assigned to one Destination
to transport Coal to another Destination without the prior consent
of Utilities and shall use their best efforts not to intermingle
aluminum and steel Rail Cars in an individual trainset.
B. Other Equipment
Except as set forth above, Railroads shall be responsible for
providing all equipment (including locomotives, and cabooses where
required) needed by them to Transport Coal under this Agreement. Any
Rail Cars furnished by Railroads hereunder shall meet all of the
requirements set forth in this Article.
C. Lease of Rail Cars from Railroads
At Utilities' request, Railroads shall lease Rail Cars to
Utilities for their use hereunder, if and to the extent Railroads
can make such Rail Cars ("Rental Cars") available for this purpose
without significantly impairing Railroads' ability to serve
their other customers. Unless otherwise agreed, any such lease of
a Rail Car to Utilities shall be for at least thirty (30) days,
and the "Car Rental Charge" payable to Railroads for their use
shall be determined under Article VI.
15
Article V
MAINTENANCE OF EQUIPMENT
For purposes of this Agreement, "AAR Interchange Rules" or
"Interchange Rules",shall mean the "Field Manual of the Interchange
Rules" and the "Office Manual of the Interchange Rules" as adopted by
the Association of American Railroads, Mechanical Division, Operations
and Maintenance Department, as amended from time to time.
Except as otherwise provided in this Agreement, Utilities shall be
responsible for maintaining in serviceable condition all "Shipper Cars"
(Rail Cars furnished by Utilities to Railroads for use hereunder, other
than Supplemental Cars, Replacement Cars (as defined below), and Rental
Cars).
Railroads shall be responsible for maintenance and repair of
Supplemental Cars, Replacement Cars, Rental Cars, and any other
equipment (including locomotives and cabooses) provided by them and
used in the provision of services under this Agreement, except as
otherwise provided in the AAR Interchange Rules.
Railroads shall be responsible for the repair of Shipper Cars
to the extent and under the conditions specified in the Interchange
Rules. Railroads shall also be responsible for paying Utilities for
the destruction of any Shipper Cars hereunder to
the extent specified in said Interchange Rules.
Railroads shall provide running maintenance for Shipper Cars
in accordance with said Interchange Rules, and shall bill Utilities
for such maintenance services at the rates and to the extent provided
by said Interchange Rules.
16
If Shipper Cars are damaged under circumstances such that
Railroads are responsible for the cost of repairing them under the
foregoing paragraphs, or if Shipper Cars are destroyed under
circumstances such that Railroads are responsible for paying Utilities
for them, Railroads shall at Utilities' request provide an equivalent
number of suitable Rail Cars ("Replacement Cars") to Utilities, at no
charge, for Utilities' use under this Agreement. Replacement Cars shall
remain available for Utilities' use until Utilities' damaged Shipper
Cars are repaired and returned to service by Railroads, or in the case
of destroyed Shipper Cars, until Utilities obtain and tender to
Railroads new Shipper Cars to replace the destroyed Cars, or until 180
days after Railroads have paid Utilities the amounts due under this
Article for the destruction of Utilities' Shipper Cars, whichever first
occurs.
If Railroads fail to provide Replacement Cars to Utilities within
30 days following Utilities' request that they do so, Utilities may
supply such Cars and Railroads shall pay to Utilities an amount per car
equal to the Car Rental Charge determined under Article VI, or such
other amount as may be agreed upon by the parties.
Article VI
RATES AND CHARGES
A. Base Rates and Charges
The rates and charges payable under this Agreement, as in effect
as of April 1, 1994 ("Base Rates" and "Base Charges"), are set forth in
Exhibit A-Series.
17
B. Adjustment of Rates and Charges
1. The Base Rates and~Base Charges set forth in Exhibit A
Series to this Agreement shall be adjusted quarterly commencing July 1,
1994, in accordance with this Article VI(B). The adjusted rates and
charges as so determined shall be the "Effective Rates" and "Effective
Charges."
2. Commencing July 1, 1994 and continuing through December 31,
1995, the Base Rates and Base Charges and, subsequent to the first
adjustment, the Effective Rates and Effective Charges, shall be
adjusted at the same time and in the same manner as rates and charges
are adjusted pursuant to Exhibit B of Contract ICC-BN-C-2227, as
amended. During the period April 1, 1994 through December 31, 1995,
the methodology referenced in this Paragraph shall constitute the
sole means by which rates and charges under this Agreement shall
be adjusted.
3. Commencing January 1, 1996, the Effective Rates and
Effective Charges shall be adjusted quarterly, upward or downward,
by sixtythree and one-half percent (63.5%) of the percentage change
in the Rail Cost Adjustment Factor, unadjusted for changes in
railroad productivity ("RCAF-U"), published by the ICC or successor
pursuant to 49 U.S.C. 10707a(a) and regulations thereunder as of the
Effective Date of this Agreement. For purposes of this Article,
"successor" shall mean any independent entity publishing the RCAF-U
whether governmental or private. Adjustments shall be made
through application of the following formula:
18
N - ((CRCAF U minus PRCAF U ) )
(( times.635) plus 1 ) times R
(( PRCAF-U ) )
Where:
N - The new rate or charge, as of the Adjustment Date.
CRCAF U - The RCAF-U published for the Contract Quarter which
begins on the Adjustment Date.
PRCAF U - For the January 1, 1996 adjustment, the RCAF-U
published for the fourth quarter of 1995; for each
subsequent adjustment, the CRCAF-U used in the prior
adjustment subject to paragraph 6 of this
Article VI(B).
R - The rate or charge in effect on the day prior to
the Adjustment Date.
4. The adjustment process described in Paragraph 3 shall be
repeated on April 1, 1996, and on every July 1, October 1, January 1,
and April 1 thereafter during the term of this Agreement, with the
new Effective Rates and Effective Charges for the three month period
following each such Adjustment Date" being determined by
application of the formula described in Paragraph 3 for that Adjustment
Date to the Effective Rates and Effective Charges in effect during
the previous three month period.
5. If the ICC or a successor ceases to publish the RCAF-U or
materially alters the methodology by which the RCAF-U is derived, the
parties shall determine the most appropriate substitute index which
most closely matches the economic structure of the discontinued or
materially altered RCAFU, to be used for adjustments for the remainder
of the term of this Agreement, immediately following such action. If
within sixty (60) days after the discontinuance or alteration the
parties are unable to reach agreement on a suitable replacement, either
Utilities or Railroads may submit the matter for resolution by
arbitration in accordance with Article XX of this Agreement. The
Effective Rates and Charges shall not be adjusted until the replacement
19
index is determined (either by mutual agreement or by arbitration,
as the case may be), at which time the parties shall amend this
Agreement in writing accordingly, and a retroactive adjustment to
Effective Rates and Charges shall be made to the date of the
aforedescribed discontinuance or material alteration .
6. If the ICC or a successor rebases the RCAF-U during the
term of this Agreement, a linking factor shall be developed and
applied in order to calculate the first adjustment to Effective
Rates and Charges occurring on or after the date the rebasing
takes effect. The linking factor shall be equal to the ratio of
the RCAFU for the Contract Quarter prior to rebasing divided by
the RCAF-U for the same Quarter as rebased. The linking factor
is multiplied by the Current Quarter RCAF-U as approved by the ICC
or a successor. The Current Quarter RCAF-U is now on a similar basis
as used for the Contract Quarter prior to rebasing. Commencing with
the next ensuing Adjustment Date, the rebased RCAF-U values as
published for the prior and current Contract Quarters and approved
by the ICC or a successor shall be used for purposes of
adjustments hereunder.
7. In computing the quarterly adjustment under Paragraph 3,
all rates and charges shall be rounded to the nearest whole cent.
If there is no nearest whole cent, rates and charges shall be rounded
to the nearest even whole cent. For example, $8.935 and
$8.945 would be rounded to $8.94.
C. Entire Compensation
The rates and charges determined under this Article VI shall
constitute the entire compensation payable to Railroads by Utilities
for Railroads' Transportation and other services performed for, and
facilities
20
provided to, Utilities under this Agreement, except as otherwise
provided in this Agreement
The method described in Article VI(B) shall be the sole method of
modifying the rates Wand charges specified in this Agreement during the
term hereof.
Article VII
RAILROAD PERFORMANCE STANDARD
For purposes of this Agreement, a train shall be deemed "Placed"
for loading at an Origin when the first Rail Car behind the locomotives
is in position beneath the tipple for loading with Coal. A train shall
be deemed Placed for unloading at LaCygne or Iatan when the first Rail
Car behind the locomotives is in position for unloading. A train shall
be deemed Placed for unloading at Hawthorn when Railroads remove their
locomotives and crew from the train after placing it on KCPL-owned or
KCS-owned trackage at such Destination .
For each shipment of Coal moving under this Agreement, Railroads
shall compute and record the shipment's "Elapsed Transit Time" ("ETT").
The Elapsed Transit Time shall begin when the operator of the Mine at
an Origin from which Utilities are obtaining Coal ("Mine Operator")
releases a shipment of Coal to Railroads for Transportation to a
Destination, and shall stop when Railroads Place a train for unloading
at the applicable Destination (or, if the train is Constructively
Placed as defined in Article IX(B)(3), shall stop when notice of
Constructive Placement is given, shall begin again when the loaded
train departs (or passes) the point where Constructive Placement began,
and shall stop when the train is actually Placed for unloading at the
21
Destination in question). The Elapsed Transit Time shall resume when,
after shipment is unloaded, the train is released to Railroads by
Utilities at a Destination for Transportation back to an Origin,
and shall stop when the empty train is Placevd at an Origin.
Elapsed Transit Time for a shipment shall not include en route
delays for which Utilities are responsible, as more particularly
described in Article X(F), nor shall ETT include delays excused
under Article XI (Force Majeure); provided,however, that with respect
to this Article VII, the 48-hour provision of
said Article XI shall not apply in the case of derailments.
Railroads hereby promise to operate trains under this Agreement
in an efficient manner, and in particular to maintain average
Elapsed Transit Times for all shipments to each Destination during each
Contract Year no greater than the target levels specified in the
following paragraph. This commitment is the Railroads' Performance
Standard" hereunder.
The average Elapsed Transit Times which Railroads promise to
achieve to each Destination during each Contract Year are 108 hours on
shipments to Hawthorn, 114 hours on shipments to LaCygne, and 94 hours
on shipments to Iatan.
Upon reasonable request by Railroads, Utilities shall provide
Railroads with information regarding Loading and Unloading Times
(as defined in Articles VIII and IX), volumes loaded and unloaded,
time spent in Constructive Placement, duration of enroute delays, and
other similar data in Utilities' possession to enable Railroads to
calculate ETT each Contract Year. Such calculations shall be subject
to inspection and verification by Utilities.
22
Article VIII
LOADING. WEIGHINGS AND ORIGIN DETENTION
A. Train Size: Minimum Weights: Assessment of
Freight Charges
The "Minimum Train Size" for trains operated under this Agreement
shall be 110 Cars for service to Hawthorn, and 115 Cars for service to
Iatan and LaCygne, in each case (a) minus the number of Shipper Cars
(if any) removed from the trainset in question for which Railroads are
(or will be) required to provide Replacement Cars; (b) plus the number of
Replacement Cars (if any) included in the trainset; (c) minus the number
(if any) of spare Shipper Cars that are being stored by Railroads and that
re suitable for service to the Destination in question, but which
Railroads have failed to add to the trainset; and (d) minus the total
number of Rail Cars in excess of the applicable Minimum Train Size that
are included in other trainsets in service to the same Destination.
BN shall assemble Shipper Cars furnished by Utilities for use
under this Agreement, Rental Cars leased to Utilities pursuant to
Article IV(C), and Supplemental Cars and Replacement Cars provided by
(or for the account of) Railroads under Articles III and V, into one or
more trains of between the Minimum Train Size and the Minimum Train
size plus 10 Rail Cars. Railroads shall include at least 110 Cars (for
Hawthorn) or 115 Cars (for Iatan or LaCygne), as the case may be, in
each such train, if sufficient Shipper Cars, Rental Cars, Supplemental
Cars, and Replacement Cars are available, and for this purpose will add
any Shipper Cars being stored by them as spares to such a train, as
needed. Railroads shall not include more than the Minimum Train Size
plus 5 Rail Cars in any train operated under this Agreement without
Utilities' consent.
23
The "Minimum Shipment Weight" for a shipment of Coal
under this Agreement shall be l00 tons for shipments in steel
Rail Cars; 119 tons for shipments in aluminum Rail Cars made in the
months of April, May, June,July, August, September and October;
and 118 tons for shipments in aluminum Rail Cars made in the months
of January, February, March,November and December, times the number
of Rail Cars in the trainset into which the shipment is loaded, plus
(if the trainset is smaller than its Minimum Train Size) 100 tons for
shipments in steel Rail Cars;119 tons for shipments in aluminum Rail
Cars made in the months of April, May, June, July, August, September
and October; and 118 tons for shipments in aluminum Rail Cars made
in the months of January,February, March, November and December,
as the case may be, times the difference between the trainset's
Minimum Train Size and the number of Rail Cars in the trainset;
PROVIDED, HOWEVER, that if a trainset is comprised of both steel
and aluminum Rail Cars, the Minimum Shipment Weight shall be reduced
by nineteen (19) tons for each steel Rail Car placed in an aluminum
Rail Car trainset; and PROVIDED FURTHER, that for
all steel trainsets, -the Minimum Shipment Weight shall be reduced for
carryback coal by the difference (if any) between (a) the sum of the
preloading light weights of all Rail Cars in the trainset, and (b) the
sum of the tare weights of all Rail Cars in the trainset .
Effective Rates under Article VI shall be assessed on the actual
weight of the Coal for a shipment in steel Rail Cars, plus (if the
actual weight is less than the Minimum Shipment Weight) 50% of the
difference between the Minimum Shipment Weight and the actual weight of
the Coal for the shipment in steel Rail Cars. Tons of Coal which are
not actually Transported but for which charges are paid under the
preceding sentence (i.e., 50% of the tonnage
24
shortfall) shall be deemed Coal Tendered to Railroads for purposes of
determining Utilities' compliance with the Annual Volume Requirement,
Hawthorn Requirement and/or LaCygne Requirement.
If Railrooads do not have a sufficient number of Shipper Cars,
Rental Cars,Supplemental Cars, and Replacement Cars in good working
order in their possession to assemble a train of at least the
Minimum Train Size for loading under this Agreement, Railroads shall
at Utilities' request assemble and operate a shorter train.
If Supplemental Cars, Rental Cars, or Replacement Cars are
added to a train of Shipper Cars under this Agreement, such Cars
shall, insofar as possible, be kept in a separate block at the
very beginning or the very end of the train, and not intermingled with
Shipper Cars. Railroads and Utilities shall use their best efforts
to keep Rail Cars of similar type (hopper cars, single tub gondolas,
twin tub gondolas, etc.) in consecutive strings to avoid mixing
of different types of cars.
B. Designation of Origins
Unless and until Utilities otherwise direct in accordance with
this Article, Railroads shall return empty trains for loading to the
Origins where they were loaded the previous time. Utilities may name a
different Origin for any particular train by giving Railroads telephonic
notice (subsequently confirmed in writing) of such change prior to the
departure of the empty train from Alliance, Nebraska. (If such notice is
by wire or telefax, it need not be confirmed in writing.) If Utilities
request diversion of a particular train to a different Origin but fail
to so request prior to departure of the train from Alliance, Railroads
will if possible divert the
25
train to the alternate Origin for a "Diversion Fee" determined
under Article VI.
C. Procedures at Origin
1. Advance Notice
Railroads shall give Utilities (or the Mine Operator at
the Origin to which an empty train is being sent for loading
under this Agreement) at least four hours advance notice by
telephone of the arrival of the train. Such notice shall include
the number of Cars in the train.
2. Loading
The loading of the train with Coal shall be performed at no
expense to Railroads, and shall not exceed the maximum weight limit
specified under Article VIII(C)(4). Railroads will move the empty cars
under the loading chutes at a controlled speed during the loading
process, and shall use their best efforts to move such cars at a speed
which will permit the loading of all Rail Cars to full visible
capacity. Utilities shall not be obligated to perform (or have
performed) the loading of Coal under this Agreement on Saturdays,
Sundays, or holidays, unless the Mine Operator's loading facilities
normally operate on those days. As used herein, the term "holidays"
shall mean the following: New Year's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Veterans' Day, Thanksgiving Day, the day
after Thanksgiving Day, the day before Christmas Day, Christmas Day,
Washington's Birthday, Miners Day (April 1), and any other holidays
specified under the Mine Operator's labor agreements.
3. Weighing
Except as otherwise provided herein, Railroads will not perform
the service of weighing Coal shipments for the assessment of freight
charges
26
hereunder. Weights for such billing purposes shall be determined by
Utilities (or by the Mine Operator) on scales iinspected and calibrated
in accordance with the then-current AAR Scale Handbook specifications
for such scales. Railroads shall have. the right to monitor
the weighing process, and to inspect a listing of the loaded car
weights as soon as such listing is available.
If the scales at the Origin are temporarily nonoperational,
Utilities may weigh the shipment on scales at Destination, and the
weight of the shipment thus determined shall be used for the
determination of freight charges hereunder.
If a train or portion thereof cannot be weighed at an Origin
due to a breakdown of the Origin scales, and if that shipment is
not weighed by Railroads (as discussed below) or by Utilities, the
following estimating procedures will apply for determining
the assessment of freight charges hereunder. In cases where valid
weights are obtained at Origin for less than all of the Rail Cars in
a train, but valid weights are obtained at Origin on twenty-five (25)
or more Rail Cars in the train, the average of the weight of the Coal
per Rail Car for the Rail Cars that were weighed will be used as the
weight of the Coal per Rail Car for each of the Rail Cars that was
not weighed. In cases where valid weights are obtained on fewer than
twenty-five (25) Rail Cars, the average weight of the Coal per Rail
Car of the last ten (10) trains of comparable equipment under this
Agreement that were weighed at the same Origin prior to the scale
breakdown shall be applied to each of the Rail Cars in the unweighed
train. No trains for which the weights were estimated on twenty-five
25) or more Rail Cars shall be included in the ten (10) train average
calculations. If less than ten (10) trains under this Agreement of
comparable equipment were weighed at that Origin prior to the
27
breakdown, the requisite sample of ten (10) trains shall be composed of
the trains of comparable equipment that were operated under this
Agreement and weighed at that Origin prior to the breakdown, plus
enough additional trains of comparable equipment that are operated
under this Agreement and weighed at that Origin after the breakdown is
corrected to add up to ten (10) trains.
Railroads will weigh one or more Rail Cars (in a cut of consecutive
Cars) hereunder only if a scale is available at an Origin, Destination
or en route and upon request by Utilities (or by the Mine Operator
originating a shipment), for a "Weighing Charge" determined under Article VI.
If the scales used by the Mine Operator at an Origin are
determined to be in error by 0.5% or more in a weigh-in-motion test for
a full trainload weight, the weights used for the assessment for
freight charges hereunder shall be adjusted upward or downward, as the
case may be, by the amount of the scale error. If it is possible to
determine when the error began, weights shall be adjusted for the
entire period from the date the error began until the date the scales
are recalibrated; otherwise the adjustment shall be made for shipments
originating during the second half of the period beginning on the date
of the last recalibration and ending on the date of the recalibration
correcting the error.
4. Overloaded Cars
Utilities (or the Mine Operator) shall be responsible for ensuring
that no steel Rail Cars are loaded in excess of maximum weight of
263,000 pounds (adjusted for a 1% tolerance for a weighin-motion scale,
or for a 0.2% tolerance for a static scale) and that no aluminum Rail
Cars are loaded in excess of maximum weight of 286,000 pounds (adjusted
for a 0.5% tolerance for a weigh-inmotion scale, or for a 0.2%
tolerance for a static scale).
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Overloaded Rail Cars discovered at Origin shall be adjusted and
reduced by Utilities or by the Mine Operator (except at Black
Thunder) before the release of the shipment to Railroads, and
applicable Origin Detention Charges as defined in this Article
shall be assessed against Utilities when reducing the overload
causes Loading Time (defined below) to exceed Origin Free Time
(also defined below).
If Railroads discover overloaded Rail Cars after a shipment
of Coal is en route to a Destination, Railroads shall immediately
notify Utilities thereof by telephone and request Utilities to
correct the overload at their own expense. If Utilities
decline such a request or fail to correct the overload, Railroads
shall be responsible for correcting the overload, but any cost
reasonably incurred by them in doing so shall be reimbursed by
Utilities. The time during which a shipment is stopped en route
to correct an overload shall not be included in Elapsed Transit Time.
D. Loading Time: Origin Detention Charges
1. Computation of Loading Time
A shipment's "Loading Time" shall commence when Railroads Place
the first empty Rail Car in a train under the loading chute at
the proper location to load at a Mine Operator's loading facility
and shall end when Utilities (or the Mine Operator) release the
shipment to Railroads for movement to a Destination.
2. Origin Detention Charges
The first four hours of Loading Time shall constitute
"Origin FreeTime;" no Origin Detention Charge shall be imposed
by Railroads on a shipment for which the Loading Time does
not exceed Origin Free Time. If Loading Time exceeds Origin
Free Time, the excess shall constitute "Origin Penalty Time."
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For each hour or fraction thereof (e.g., 1.25 hours would
count as 2 hours) that a shipment incurs Origin Penalty Time,
Utilities shall pay Railroads an"Origin Detention Charge" as
determined under Article VI.
3. Exclusions From Loading Time
a. Mine Holidays
In the event an empty train operated hereunder shall arrive
at a designated Origin for loading on a day when the Mine
Operator at that Origin is not obligated to load and is not
loading, Placement, shall not be deemed to occur (and Loading
Time hereunder shall not begin to run) until actual Placement is
made and loading begins. (Such a train shall nevertheless be
deemed held by the Mine Operator for loading for purposes of
computing the Elapsed Transit Time for said train.)
b. Loading Disabilities
In the event an occurrence at an Origin not reasonably
within the control of Utilities or the Mine Operator ("Loading
Disability") physically prevents the loading of a train operated
under this Agreement within the Origin Free Time, Loading Time
will stop running for a period of time equivalent to the time
such Loading Disability prevents or delays loading. Utilities or
the Mine Operator shall notify BN in writing of the occurrence of
a Loading Disability within ten (10) days after the Disability
terminates. Such notice shall include a description of the cause
of the Disability and a statement of the times and date(s) such
Disability began and ended.
c. Failure to Notify
Loading Time shall not begin to run until four hours after
Placement of the train, if Railroads fail to provide advance
notice of the
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train's arrival at the designated Origin in accordance with Article
VIII(C)(1).
d. Release of Locomotives and Crew
If a the loading and weighing process is not completed (or is not
likely to be completed) before the Origin Free Time expires, Utilities
or the Mine Operator may request Railroads to remove their locomotives
and crew from the train. If such a request is made, a one-time "Release
Charge" (determined under Article VI) will be assessed in lieu of the
Origin Detention Charges that would otherwise apply, and Railroads may
at their option remove their locomotives and crew from the train. If
Utilities or the Mine Operator make their request for removal of the
locomotives and crew after Origin Free Time has expired, the Release
Charge shall be assessed in addition to the Origin Detention Charges
that have accrued prior to such request.
If a train operated under this Agreement is left on Railroad-owned
or leased trackage when the locomotives and crew are removed, a "Track
Rental Charge," determined under Article VI, shall be imposed in
addition to the above-specified Release Charge.
Upon notification from Utilities or the Nine Operator that a train
from which the locomotives and crew have been removed is loaded and
ready for departure, Railroads shall send locomotives and a crew back
to pick up the loaded train without additional charge.
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Article IX
UNLOADING AND DESTINATION DETENTION
A. Procedures at Destination
1. Advance Notice
Railroads shall give Utilities four hours advance notice by
telephone of the arrival at Destination of a shipment of Coal being
transported under this Agreement. For shipments destined to Hawthorn,
such notice shall be given four hours in advance of arrival at the
interchange with KCS. Such notice shall include the number of Rail Cars
in the train.
2. Deliveries to Hawthorn
When the Railroads deliver a shipment of Coal to Hawthorn, they
shall move the loaded Rail Cars onto tracks designated by KCPL. After
Placing the Cars on such tracks, Railroads shall remove their
locomotives and crew without charge. KCPL shall thereafter be solely
responsible for unloading the Coal at such Destination.
3. Deliveries to Iatan and LaCszne
When delivering a loaded train to Iatan or LaCygne, Railroads
shall Place each ofthe first three Rail Cars behind the locomotives in
proper position for unloading.
Thereafter, the unloading process shall be the responsibility of Utilities.
In the event of a breakdown of unloading equipment, at Utilities'
request Railroads shall pull part or all of the train through the
unloading facilities in a manner which permits the required positioning
and unloading-of each Rail Car by Utilities. Such service shall be
performed by Railroads at Iatan up to six times per Contract Year at no
extra charge to Utilities. Thereafter, at Iatan Railroads and Utilities
shall share equally the
32
additional cost (if any) incurred by Railroads in performing such
service, such costs to be substantiated by Railroads in writing to
Utilities. For the same service at LaCygne, Utilities shall pay KCS a
"Pull Charge" as determined under Article VI.
4. Change of Destination
Utilities may change the Destination of a loaded train from the
Destination specified in the bill of lading while the train is en
route, by giving Railroads telephonic notice (subsequently confirmed in
writing) of such change prior to arrival of the train at Lincoln,
Nebraska. (If such notice is by wire or telefax, it need not be
confirmed in writing.) If Utilities request diversion of a train to a
different Destination but fail to so request prior to the arrival of
the train at Lincoln, Railroads will if possible divert the train to
the alternate Destination for a Diversion Fee determined under Article
VI.
B. Unloading Time: Destination Detention Charges
1. Computation of Unloading Time
"Unloading Time" for a shipment of Coal under this Agreement shall
commence when the train is Placed for unloading at the designated
Destination (or, if the train is Constructively Placed, when notice of
Constructive Placement is given to Utilities), and shall end when
Utilities notify Railroads that the unloading is completed and the
empty Rail Cars are ready for Transport back to an Origin. If a train
is Constructively Placed, Unloading Time shall stop when Utilities
notify Railroads that actual Placement may now take place at the
Destination in question, and shall resume when the train is actually
Placed for unloading.
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2. Destination Detention Charges
The first five (5) hours of Unloading Time shall constitute
"Destination Free Time"; no Destination Detention Charge shall be
imposed by Railroads on a shipment for which the Unloading Time
does not exceed Destination Free Time. If Unloading Time exceeds
Destination Free Time, the excess shall constitute "Destination
Penalty Time." For each hour or fraction thereof that a shipment
incurs Destination Penalty Time, Utilities shall pay Railroads
a "Destination Detention Charge" determined under
Article VI.
3. Constructive Placement
When delivery of a shipment of Coal cannot be made at a
Destination due to a cause solely attributable to Utilities, Railroads
may "Constructively Place" the train short of the Destination and so
notify Utilities by telephone, to be confirmed in writing, at which
point the Unloading Time specified herein shall begin to run.
4. Exclusions from Unloading Time
a. Bunching of Trains
If a train carrying Coal under this Agreement arrives at a
Destination while another train is occupying (or blocking access to or
use of) Utilities' unloading facilities, and such bunching is not due
to a cause solely attributable to Utilities, the second train shall not
be deemed Placed for unloading, and Unloading Time shall not begin to
run, until the second train is actually Placed for unloading.
b. Unloading Disabilities
In the event an occurrence at a Destination not reasonably within
the control of Utilities ("Unloading Disability") physically prevents
the unloading of a train within the Destination Free Time, the
Unloading Time
34
provided in this Article for said train shall be extended for a period
of time equal to the time such Unloading Disability prevents or delays
such unloading.Utilities shall notify Railroads in writing of the
occurrence of an Unloading Disability within te,n (10) days after
the Disability terminates. Such notice shall include a description
of the cause of the Disability and a statement of the times and
date(s) such Disability began and ended.
c. Failure to Notify
Unloading Time shall not begin to run until four hours after a
train is Placed (or Constructively Placed) for unloading at a
Destination, if Railroads failed to provide advance notice of the
train's arrival in accordance with Article IX(A)(1).
d. Release of Locomotives and Crews
Utilities may at any time request Railroads to remove locomotives and
crew from a train after it has been Placed (or Constructively Placed) for
unloading at a Destination. If such a request is made, a one time Release
Charge, as determined under Article VI, will be assessed, and Unloading
Time shall stop running. Railroads may at their option actually remove
their locomotives and crew from the train. If Utilities make their
request for removal of the locomotives and crew after Destination Penalty
Time has begun to run, the Release Charge shall be assessed in addition
to the Destination Detention Charges that have accrued prior to such
request.
If a train operated under this Agreement is left on Railroad-owned
or leased trackage when the locomotives and crews are requested to be
removed, a "Track Rental Charge," determined under Article VI, shall
be imposed in addition to the above specified Release Charge.
35
Upon notification from Utilities that a train from which the
locomotives and crew have been removed is unloaded and ready for
departure, Railroads shall send locomotives and a crew back to pick up
the loaded train without additional charge.
e. Actual Placement at Hawthorn
Unloading Time shall not run, and Destination Detention Charges shall
not apply, with respect to shipments of Coal delivered to Hawthorn
following actual Placement at that Destination. KCPL shall be subject
to Destination Detention Charges at Hawthorn only if a train destined
for such Destination is Constructively Placed, and held in
Constructive Placement for a period exceeding Destination Free Time.
Article X
MISCELLANEOUS HANDLING OF CARS
A. Bad-Ordered Cars
In the event a Shipper Car must be removed from a train for
maintenance or repairs while the train is en route between an Origin
and a Destination (in either direction), Railroads will switch the car
out of the train and arrange for the repairs. The switching and
handling of such "BadOrder" Shipper Cars moving into and out of service
at intermediate points will be performed by Railroads at no charge to
Utilities. (Responsibility for the cost of the repairs themselves is
determined under Article V.) When such maintenance or repairs have been
completed, the Shipper Car will be forwarded by Railroads to a
Destination or to an Origin, as the case may be, on the next
appropriate train.
36
At Utilities' request, BN will also switch Shipper Cars
into or out of trains at Origins and Iatan at no charge (except
that the time required for such service shall be included in
Loading Time or Unloading Time as the case may be, and thus may
cause Utilities to incur Origin or Destination Detention Charges).
B. Scheduled Maintenance or Repairs
At Utilities' request, Railroads will stop a train of empty
Shipper Cars on the return movement to an Origin at any maintenance
facility specified by Utilities on the route of movement where trackage
is available to accommodate the train, and will remove from the train
such Shipper Car(s) and replace in the train such other Shipper Car(s)
as Utilities may specify. Utilities shall pay Railroads a "Switching
Charge" determined under Article VI for such switching services,
computed from the time the train stops to commence the removal or
replacement of Shipper Cars until the time the train has been re-
assembled and is again ready for movement. Such Switching Charge shall
not apply for switching services performed by KCS at LaCygne. For
switching services at LaCygne, KCS will be paid the charges in Exhibit
A-2, Paragraph 2(B)(12). Railroads shall document starting and stopping
times on invoices for Switching Charges.
If a car maintenance facility used by Utilities is on trackage
served by Railroads, but not on the route of movement to Origins,
Railroads will at Utilities' request stop an empty train of Shipper
Cars at the nearest practicable point on the route of movement to the
maintenance facility, and remove from and/or add to the train such
Shipper Car(s) destined to or coming from such maintenance facility as
may be specified by Utilities, for the charges specified in the
previous paragraph. Railroads will also move the
37
Shipper Car(s) removed from the train to the maintenance facility and
back, for an "Out-of-Route Movement Charge'; determined under Article
VI.
The Charges described in this Part B will not apply on Shipper
Cars which Railroads are responsible for repairing under Article V
hereof. No Charges will be incurred by Utilities for such services
with respect to such Cars.
C. Storage of Shipper Cars
1. Individual Cars
. The switching and handling services specified in Part B of this
Article shall also be available to Utilities, at their request and for
the Charges specified in Part B. if Utilities wish to store one or more
Shipper Cars on trackage not owned by Railroads.
2. Entire Trains
If trackage is available at a location on the route of movement to
Origins, Railroads will, at Utilities' request, place an entire train
of empty Shipper Cars on such trackage for storage. Upon subsequent
request by Utilities, the Railroad performing the service will remove
the train from storage and return it to service. For each such
occurrence, Railroads will be paid a onetime "Storage Charge"
determined under Article VI for placing and removing the train on such
trackage. In addition, if the trackage in question is Railroad-owned,
Railroads will be paid a Track Rental Charge (also determined under
said Article VI) for the period that the train is stored on such
trackage. If the storage track is located at a point not on the route
of movement, Railroads will at Utilities' request move the train of
empty Shipper Cars to and from such storage track for the Charges
outlined in this paragraph, plus an Out-of-Route Movement Charge, as
defined in Part B. above.
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No Switching Charges shall apply to services provided under this
Article X(C)(2).
D. Turning of Trains
At Utilities' request, BN will without charge turn a trainset of
Rail Cars around at Iatan, or at an Origin or a point on the
route-ofmovement between an Origin and a Destination where suitable
facilities are located, so that the trainset will operate in the
opposite direction and thereby balance wheel wear on both sides of the
Cars. Railroads, obligation to turn trainsets without charge under
this paragraph shall be limited to one occurrence per trainset
per calendar month.
E. Free Storage of Spare Shipper Cars
BN will also store, at Utilities' request, spare Shipper Cars
provided by Utilities, at an appropriate location on the route of
movement between Origins and Destinations. Such spare Shipper Cars
shall be used by Railroads to replace Shipper Cars that have been
Bad-Ordered or otherwise removed from the train en route and not
previously replaced, so as to bring the number of Rail Cars in the
train up to at least 110 for Hawthorn or 115 for Iatan or LaCygne.
No separate charge shall be assessed by Railroads for the storage
of such Shipper Cars, or for the switching of such Shipper Cars
into and out of trains operated hereunder.
F. Effect on Elapsed Transit Time
The time that a train of Shipper Cars used in transporting Coal
for Utilities is stopped so that Railroads may perform the services
specified in Part D of this Article, switching at Origin or Destination
at Utilities' request under Part A of this Article, or any of the
services specified in
39
Parts B and C of this Article for which Charges are payable by
Utilities, shall not be counted as part of Elapsed Transit Time.
Article XI
FORCE MAJEURE
A. Definition of Force Majeure
For purposes of this Agreement, "Force Majeure" shall mean
any cause or causes not reasonably within the control of a party,
such as an Act of God; unusual accumulation of snow sufficient
to immobilize or halt the movement of loaded or empty trains; war;
insurrection; riot or other civil disturbance; derailment; destruction
of or damage to right-of-way, including bridges; strike or other
labor disturbance; explosion, fire, or mechanical or electrical
breakdown (including shutdown for emergency maintenance or a like
emergency which may be necessary-to mitigate or eliminate the imminent
threat of explosion, fire, or mechanical or electrical breakdown);
acts of military authorities; acts of local, state, or federal
agencies or regulatory bodies; court Actions; and, without limitation
by enumeration, any other cause or causes affecting the facilities of
a Mine Operator at an Origin, Railroads' facilities or equipment, or
Utilities' facilities at a Destination or elsewhere, and which wholly
or partly prevents a party from performing its obligations hereunder.
In determining whether a cause is reasonably within the control of a
party, allegations that the cause resulted in whole or in part from
the fault or negligence of that party or another shall not be
considered.
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B. Effect of Force Majeure
If a Force Majeure condition arises and continues for forty-eight
(48) consecutive hours or more, and wholly or partly prevents a party
from performing its obligations hereunder, such party's obligations and
those of such other parties as are affected thereby shall be suspended
for the duration of such Force Majeure, to the extent made necessary
thereby, and Utilities shall be excused from their obligation to meet
their Annual Volume Requirement, Quarterly Shipment Obligations, the
Hawthorn Requirement and/or the LaCygne Requirement to the extent
provided in Part E of this Article, subject to the notice requirements
set forth in Part C of this Article;
PROVIDED, HOWEVER, that the parties shall make all reasonable efforts
to continue to meet their obligations during the duration of the Force
Majeure. Such party shall act with due diligence to determine the cause
of the Force Majeure, and upon doing so shall notify all other parties
thereof in writing. C. Notice of Commencement and Termination
In order for Force Majeure to be effective, the party affected by
Force Majeure shall notify promptly by telephone, to.be immediately
confirmed in writing, all other parties of the nature of the Force
Majeure, when it began, and, if possible, its projected duration. Such
party shall notify promptly by telephone, to be confirmed in
writing, all other parties upon the cessation of the Force Majeure.
Such party also shall act with due diligence to determine the cause
of the Force Majeure, and upon doing so shall notify all other
parties thereof in writing.
D. Efforts to Mitigate
The parties shall make all reasonable efforts to eliminate
or abate such Force Majeure and resume their obligations
expeditiously upon its
41
elimination, except that (1) no party hereto will be required to
acquiesce to unfavorable settlement of any labor dispute, and
(2) Utilities shall not be required to obtain Coal from another
Origin to replace Coal they have committed to obtain from one
Origin, but which they are unable to obtain from that Origin due
to Force Majeure.
E. Impact on Term: Rights
The suspension of any obligations due to Force Majeure shall
neither cause the term of this Agreement to be extended nor affect
any rights accrued under this Agreement prior to the advent of
the Force Majeure condition .
The Hawthorn Requirement and LaCygne Requirement each shall be
reduced by l/365th, the applicable Quarterly Target Volume(s) shall
be reduced by l/9lst, and the Annual Volume Requirement shall be
reduced by 1/365th of the TATV, for each day during which a Force
Majeure condition lasting fortyeight (48) consecutive hours or more
and affecting Utilities exists in any Contract Year; provided that if
the Force Majeure condition only partially prevents Utilities from
taking or using Coal hereunder, the reduction in the Hawthorn,
LaCygne and Annual Volume Requirements and in the Quarterly
Target Volume(s) shall be correspondingly smaller.
If Railroads are excused from Transporting any Coal Tendered
hereunder by Utilities by a Force Majeure condition claimed by
Railroads, such coal shall be deemed Coal Transported by Railroads
for purposes of determining Utilitiest compliance with the Annual
Volume Requirement, Quarterly Shipment Obligations, Hawthorn Requirement
and/or LaCygne Requirement. Utilities at their option may ship such Coal to
Destinations via other carriers or modes during the continuance of
the Force Majeure event, with no further obligation
42
to Railroads hereunder with respect thereto. If Utilities desire to
ship such Coal via other carriers or modes after the event of Force
Majeure has concluded, Utilities first shall so notify Railroads in
writing, which notification shall ivnclude a schedule for the shipment
of such Coal, a representation of the availability of Shipper Cars to
Transport such Coal, and a request that Railroads provide
Transportation in accordance with the schedule. If within five (5)
business days Railroads fail to respond or decline to Transport such
Coal in accordance with Utilities' schedule, then Utilities may ship
such Coal to Destinations via other carriers or modes with no further
obligation to Railroads hereunder with respect thereto.
Article XII
DEFAULT; TERMINATION
If Utilities or Railroads shall be in default of any material covenant,
condition, or obligation to the other party or parties under this Agreement,
which default is not cured within sixty (60) days after notice thereof is
given by the non-defaulting party to the defaulting party, the
nondefaulting party may, at its option and without prejudice to any
other rights and remedies it may have under this Agreement or
otherwise, terminate this Agreement by notice thereof to the party in
default.
Article XIII
NOTICES
Any notice, election, or other communication required or permitted
to be made by one party to another under this Agreement shall be
effective upon receipt, shall be in writing, and shall be delivered
personally to the
43
party to whom addressed, or sent by wire or telefax or by United
States mail or private express service with all necessary postage
or other charges fully prepaid, addressed to the party to whom directed
at the address specified in Exhibit A-Series. Any party may change
the address at which it receives notice by giving notice of such
change to the other parties, in the manner specified
above.
Any notice pertaining to matters of an operational or emergency
nature may be delivered by mail, messenger, telephone, telegraph,
or by any other reasonable means, to such representative of the
party hereto being notified as may be appropriate under the
circumstances, and such notice shall be effective upon receipt.
If such notice is given verbally, by telephone or otherwise,
it shall be confirmed in writing as soon as practicable
thereafter.
Article XIV
RESPONSIBILITY FOR LOST COAL
Railroads' responsibility for loss of, damage to, or destruction
of Coal being Transported for Utilities under this Agreement shall be
the same as if such services were performed by Railroads in their
capacity as common carriers by railroad.
Article XV
BILLS OF LADING. TARIFFS. AND REGULATIONS
Utilities shall arrange for shipments of Coal under this Agreement
to be provided to Railroads on a standard bill of lading. The terms of this
Agreement shall control in the event of any conflict between this Agreement
and any such bill of lading, or between this Agreement and any prior contract
44
or agreement otherwise applicable to Utilities (or any of them)
and Railroads (or any of them) respecting the traffic moving
pursuant to this Agreement.
All matters relating to the Transportation of Coal pursuant to
this Agreement which are not covered by this Agreement shall be
governed by the published tariffs, rules, and regulations in effect on
the Effective Date, that would have applied if the shipments had moved
under tariff.. Any tariff charges that may be payable by Utilities
pursuant to the foregoing sentence shall be the lesser of (a) the
charges specified in the applicable tariff as of the date the charges
are incurred, or (b) the tariff charges in effect on the Effective Date
of this Agreement, as adjusted by application of intervening changes in
the rail cost adjustment factor compiled or verified by the ICC
pursuant to 49 U.S.C. 10707a. In the event of any conflict between
this Agreement and such tariffs, rules, and regulations, the terms of
this Agreement shall govern.
Article XVI
GOVERNING LAWS
For all purposes, this Agreement shall be deemed to be a contract
entered into pursuant to 49 U.S.C. 10713, made in the State of
Missouri, and shall be governed by and construed according to the
laws of Missouri (but without regard to that State's conflict of
laws provisions) and applicable federal laws.
45
Article XVII
EFFECT OF WAIVER
The failure of any party to insist in any one or more instances
upon strict performance of any provisions of this Agreement by the
other party or parties, or to take advantage of any of its rights,
shall not be construed as a waiver by it of any such provisions or the
relinquishment by it of any such rights in respect to any subsequent
non-performance of such provision, but the same shall continue and
remain in full force and effect.
Article XVIII
PRESENTATIONS AND WARRANTIES
Utilities severally represent and warrant to Railroads, and
Railroads severally represent and warrant to Utilities, that (i) they
are duly organized corporations in good standing under applicable state
and/or federal laws,and have all requisite power and authority to enter
into this Agreement and to carry out the terms and provisions thereof;
and (ii) there is no action, proceeding, or investigation current or
pending, and no term or provision of any charter, bylaw, certificate,
license, mortgage, indenture, contract, agreement, judgment, decree,
order, statute, rule, or regulation to which they are subject, which in
any way prevents, hinders, or otherwise adversely affects, or would be
violated by, their entering into and performing this Agreement.
Each person executing this Agreement on behalf of his respective
company,represents and warrants for himself and for his company that
he personally has authority to sign on behalf of his company.
46
Article XIX
INTERPRETATION AND AMENDMENT
The section headings herein are for convenience
only, and shall no affect the interpretation of this Agreement.
Nothing expressed orimplied in this Agreement shall give or be
construed to give to any person, firm or corporation other than
Utilities and Railroads any legal or equitable right, remedy, or
claim under or in respect of this Agreement. Neither this Agreement
nor any of the terms hereof may be terminated, amended, supplemented,
waived, or modified orally, but only by an instrument in writing
signed by Utilities and Railroads, unless a provision hereof
expressly permits fewer than all of the parties hereto
to effect such termination, amendment, supplementation, waiver, or
modification, in which event such action shall be taken in accordance
with the terms of such provision.
This Agreement represents the product of arms-length negotiations
and shall not be interpreted against either Utilities or Railroads
as the drafter hereof.
Article XX
RESOLUTION OF DISPUTES
Except as otherwise provided in this Article, any dispute
between Railroads and Utilities that relates to this Agreement and
that cannot be resolved by negotiation shall be resolved by the
filing of an appropriate action in a federal or state court
of competent jurisdiction, located in the State of Missouri.
Disputes arising under Article VI regarding the selection of a
substitute index to replace the RCAF-U following discontinuance or
material
47
change thereof, or under Article XXVIII, shall be resolved by binding
arbitration. Arbitration shall be in accordance with the Commercial
Arbitration Rules of the American Arbitration Association in effect at
the arbitration (the "AAA Rules"); provided, however, that to
the extent that the AAA Rules are inconsistent with the terms of this
Agreement or the terms of this Agreement are more specific than the AAA
Rules, the terms of this Agreement will govern.
The question or controversy upon which the parties cannot agree
shall be submitted for arbitration to a single competent disinterested
arbitrator, if the parties are able to agree upon such single
arbitrator within 30 days after the party desiring such arbitration
notifies the other party of such desire.
If a single arbitrator cannot be agreed upon within such 30-day
period, a board of three arbitrators shall be used. Such arbitrators
shall be selected as follows: the party demanding arbitration shall
give the other party notice of such demand, stating specifically the
question or questions to be submitted for decision and nominating a
person to act as one arbitrator. (For purposes of this Article XX,
Railroads shall be deemed a single party, and KCPL, KGE, Empire and St.
Joseph shall be deemed a single party.) The party to whom such notice
is given shall appoint a second arbitrator and give the party demanding
arbitration notice of such appointment within 30 days from the time of
receipt of the demanding party's notice. If the responding party does
not timely notify the party demanding arbitration of its nomination of
a second arbitrator, the party making the demand for arbitration may
select the second arbitrator. The first and second arbitrators so
chosen shall select a third arbitrator, but if the arbitrators shall be
unable to agree upon such a
48
third arbitrator within a period of 30 days from the day of
appointment of the second arbitrator, the third arbitrator may
be appointed upon motion or application of any party to the
United States District Court for the Western District of Nissouri
Upon selection of the arbitration board of either one or
three members, the board shall proceed with reasonable diligence
to inquire into and determine the questions or controversies at
issue before them, as disclosed in the demanding party's notice and
any responses thereto. The board shall give to both Utilities and
Railroads reasonable notice of the time and place (of which the board
shall be the judge) at which the board will take such evidence as it
may deem reasonable, with or without requiring witnesses to be sworn,
and at which the board may hear arguments of counsel or others.
If any arbitrator shall decline or fail to act, the party (or
parties in the case of a single arbitrator) by whom he or she was
chosen, or the court (in the case of an arbitrator selected through
application to the District Court), shall appoint another
to act in his or her place.
After hearing the evidence and arguments submitted by the
parties, the board shall state its decision and award, in writing,
within 90 days of the final submission by the parties, which decision
and award, when delivered to both parties, shall be final and binding.
Utilities and Railroads expressly agree to be bound conclusively by
any such decision and award as to any of the matters submitted to
arbitration in accordance with this Article; and judgment may be
entered upon such decision and award in any court of competent jurisdiction.
49
Article XXI
SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of, and be binding upon,
the parties and their respective successors and assigns; provided,
however, that this Agreement shall not be assigned by Railroads or
by Utilities without the written consent of the other parties
(which consent shall not be withheld unreasonably), except in the
following cases where no such consent shall be required:
A. A pledge, assignment or other security arrangement to
secure indebtedness by either party, specifically including any
financing arrangements deemed advisable by Railroads.
B. An assignment (i) by a Utility to a successor in interest of
part or all of its ownership share in one or more of the power stations
at Destinations, (ii) by a Utility or by a Railroad of substantially
all of its assets or capital stock by way of a merger, consolidation,
sale, divesture pursuant to an order or decree of a court, or similar
corporate reorganization, or (iii) to a parent or wholly-owned
subsidiary of a Utility or of a Railroad; provided, however, that no
such assignment under (i) or (ii) of this Part B shall relieve assignor
of its liability unless and until such assignee shall assume, in
writing, the obligations of the assignor; and provided, further, that
any party assigning any interest under (iii) of this Part B shall
remain secondarily liable and obligated for performance of all of the
assigned obligations unless the other party has consented to such
assignment and specifically releases the assignor therefrom.
50
Article XXII
COMPLIANCE WITH ANTIPOLLUTION LAWS AND REGULATIONS
The parties recognize that, during the term of this Agreement,
legislative or regulatory bodies or the courts having jurisdiction over
the subject matter may enact laws, regulations, or issue orders relating
to pollution, such as but not limited to those relating to air pollution
the effect of which will make it impossible or impracticable for
Utilities to utilize the Coal to be Transported under this Agreement
for operation of one or more of the power stations without substantially
changing or altering their utilization or equipment. Such laws,
regulations, or orders may pertain to, but would not necessarily be
limited to, sulfur content of the Coal. If any such laws, regulations,
or orders are imposed, Utilities shall notify Railroads thereof and,
to the extent Utilities deem proper, proceed to exhaust the
administrative remedies available to them to avoid the effect
of such restrictions. If such action does not avoid the effect of such
restrictions, Utilities shall promptly consider what steps can be taken in
the handling and combustion of Coal at the involved power station(s) to
avoid such restrictions and if such steps are available, which in Utilities'
good faith judgment are feasible and will not result in unreasonable expense
to them, Utilities shall take such steps and this Agreement shall continue
in full force and effect. Such steps may include the installation of
equipment which is commercially proven and available and which can be
reasonably expected to avoid the effect of such restrictions or which will
result in compliance therewith If, in Utilities' good faith judgment, no
such steps are available, or if such steps are not reasonable or will result
in unreasonable expense to them, Utilities shall so advise Railroads.
If Utilities are unable to comply with any such
51
law, regulation or order in the manner provided in this Article, Utilities
shall have the right to terminate this Agreement without penalty.
Article XXIII
CONFIDENTIALITY
The parties shall protect the confidentiality of this Agreement
and any information developed by other parties in connection with this
Agreement; provided, however, that no party shall be precluded from
providing the Agreement to corporate Affiliates, using the Agreement
or any such information in the normal conduct of its commercial
activities, in obtaining or attempting to obtain financing for
facilities or equipment, or in filing reports with or furnishing
other information to the Securities and Exchange Commission,
securities commissions of the various states,
state regulatory commissions, or to any other appropriate governmental
authorities. The term "Affiliates as it relates to a Utility or a
Railroad means any corporation, partnership or other entity which owns
or controls, is owned or controlled by, or is under common ownership or
control with, a Utility or a Railroad. Ownership or control shall
consist of more that fifty percent (50%) of the voting stock or general
partnership interests of such corporation, partnership or entity or, if
applicable law prohibits such ownership, then the maximum permitted by
law. Parties may use the Agreement and such information in making
public announcements required by the securities laws or stock exchange
provisions. When required, the parties may also submit the Agreement or
any such information to consultants and contractors performing work on
or related to the subject matter of this Agreement, who agree in
writing to protect the confidentiality of such information in the same
manner provided herein.
52
Article XXIV
BOOKS AND RECORDS
Each party hereto shall have the right to inspect the books and
records of the other parties pertaining to the performance of this
Agreement, at the usual place of business of the party whose books
and records are being inspected, on reasonable notice and during
regular business hours; provided that no party shall be required
to retain any books or records beyond the period required by
applicable law; and provided further that subject to Article XXIII,
a party inspecting the books and records of another
party shall maintain the confidentiality of any information
designated by the other party as proprietary or commercially sensitive.
Article XXV
BILLING AND PAYMENT
Railroads, at their option, may render either paper invoices or
electronic invoices for freight services rendered under this
Agreement. All accessorial services (such as switching, crew
and power release,etc.) must be invoiced on paper unless mutually
agreed upon to convert these accessorial service invoices to the
electronic system. Paper invoices shall be delivered via U.S. Mail or
other courier service. Electronic invoices shall be delivered via
Electronic Data Interchange ("EDI") using Klein Schmidt as the
clearinghouse or other mutually agreeable clearinghouse and using
the TDCC 410 billing format or other agreed upon format.
All payments for paper invoices due hereunder by Utilities to
Railroads, or by Railroads to Utilities, shall be due and payable
by mail within 10 working days following the receipt by the payor
of the payee's
53
invoice therefor, unless a different deadline for payment is
specified in another provision of this Agreement. Payments of
paper invoices shall be deemed made when mailed.
All payments for electronic invoices due hereunder by
Utilities to Railroads, or by Railroads to Utilities, shall be due
and payable in accordance with the applicable A-Series Exhibit.
Whenever a payment due under this Agreement is not made when due
(including payments withheld in connection with disputed bills which
are thereafter determined by agreement or by resolution under Article
XX to have been payable), such amounts shall bear interest at the prime
rate announced from time to time by the Chase Manhattan Bank in New
York City, or (if less) the maximum rate permitted under Missouri law,
in either case compounded daily and calculated from the day after the
payment to which interest applies was due, until the date said payment
is made, both dates inclusive.
Article XXVI
TRAIN LOCATION AND ACCIDENT REPORTING
Utilities may at any time while this Agreement remains in effect ask
Railroads for a report on the current location of any or all trains or
Rail Cars Transporting Coal (or returning empty to Origin following the
delivery of Coal at a Destination).Railroads shall promptly provide
such information to Utilities without charge. At Utilities' request,
Railroads shall, if feasible, allow Utilities to obtain such
information through electronic communication between Utilities'
computer(s) and railroads' computer(s).
54
In the event a train carrying Coal under this Agreement or
containing Shipper Cars provided by Utilities to Railroads hereunder
(or Rental Cars leased to Utilities by Railroads) derails or is
otherwise subject to damage, Railroads shall.promptly notify Utilities
of the derailment or other occurrence causing damage, and shall as
promptly as possible (and in any event within two (2) days) provide
Utilities with all information reasonably requested by them, including
without limitation a listing of the involved Rail Cars, a preliminary
description and dollar estimate of the damage to each Car, if any, and
a preliminary estimate of the amount of Coal lost, if any. Updated
estimates for damages and loss of Coal should be provided to Utilities
within two (2) weeks of the date such damage or loss occurs. Utilitiest
sole remedy for Railroads' failure to provide the notification
specified herein shall be reimbursement of any costs incurred by
Utilities attributable to such failure .
Article XXVII
RISK OF LIABILITY
A. General Rule
1. Sole Fault
Subject to Article V (pertaining to responsibility for Rail Cars)
and Article XIV (pertaining to responsibility for lost Coal), each
party to this Agreement shall indemnify and save harmless the other
parties from all cost and liability for injury to or death of any
person, and for loss of, damage to, or destruction of any property,
arising out of activities conducted under this Agreement and caused
solely by the negligence or willful misconduct of the indemnifying
party, its agents, servants, or employees (or jointly by
55
the negligence or willful misconduct of such party, its agents,
servants or employees and the negligence or willful misconduct
of another person not affiliated with the other parties to
this Agreement).
2. Joint Fault
If injury to or death of any person, or loss of, damage to, or
destruction of any property, arises out of activities conducted under
this Agreement and is caused by the negligence or willful misconduct of
two or more Railroads or their agents, servants, or employees, without
any negligence or willful misconduct on the part of any Utility or its
agents, servants, or employees; or if such injury, death, loss, damage,
or destruction is caused by the negligence or willful misconduct of two
or more Utilities or their agents, servants, or employees, without any
negligence or willful misconduct on the part of any Railroad or its
agents, servants, or employees, liability shall be determined by
applying Article XXVII(A)(1), above, as though the culpable Railroads
or Utilities were a single party.
If injury to or death of any person, or loss of, damage to, or
destruction of any property, arises out of activities conducted under
this Agreement and is caused by the negligence or willful misconduct of
one or more Railroads or their agents, servants, or employees, and by
the negligence or willful misconduct of one or more Utilities or their
agents, servants, or employees, then each culpable party shall
indemnify and save harmless the other parties from any liability for
injuries to or death of the indemnifying party's employees, and for
loss of, damage to, or destruction of property in the custody,
possession, or control of the indemnifying party or that party's
employees .
56
B. Residual Liability
Except as otherwise provided in Part A, above, liability for
injuries to or death of any person, and for loss of, damage to, or
destruction of any property, arising out of activities conducted
under this Agreement, shall be determined under applicable law.
Article XXVIII
Beneficiated Coal
A. Utilities may during the term of this Agreement commence shipments of
"Beneficiated Coal" (Coal which has been dried or otherwise
treated or processed beyond the "raw" or "clean" state), pursuant to
the terms of this Agreement as modified by this Article. Washed Coal
and Coal treated solely to reduce dust and/or to prevent or reduce
freezing in the Rail Cars will not be considered Beneficiated Coal
within the meaning of this Article,and may be shipped under the terms
of this Agreement. Shipments of Beneficiated Coal shall be counted as
Coal shipped for purposes of satisfying the parties' obligations
under Article III, even if new rates are established under this Article.
B. Utilities shall give Railroads written notice of their
intention to ship Beneficiated Coal not less than twelve (12) months
in advance of the desired date of commencement of shipments of
Beneficiated Coal.Such notice shall include sufficient information
about the transportation requirements and physical characteristics of the
Beneficiated Coal to enable 0 : Railroads to assess transportation risks
or costs. Within ninety (90) days of receipt of such notice, Railroads
shall give written notice to Utilities if they desire to negotiate
new rates, charges or lump sum or amortized payments
57
in connection with the Transportation and handling of such Beneficiated
Coal. Such notice to Utilities shall specify such proposed new rates,
charges, or payments, and provide supporting documentation.
C. Within sixty (60) days of such notice by Railroads to Utilities,
the parties shall meet at a mutually convenient time and place to begin
negotiation. Each party agrees to provide to the others the
documentation or studies it may have to support its position. If the
negotiations result in the parties' agreeing upon new rates
and/or charges, then the parties shall sign an amendment to this
Agreement reflecting such agreement. If the parties fail to reach
an agreement, the matter shall be submitted for resolution in
accordance with Article XX of this Agreement. Railroads shall not
be obligated to Transport any Beneficiated Coal until all issues, including
the terms and conditions of the acceptance and handling of Beneficiated
Coal by Utilities, have been resolved by mutual agreement or in
accordance with Article XX of this Agreement.
D. Any increase in the rates and/or charges applicable to
Beneficiated Coal over the then-applicable Effective Rates or any lump
sum or amortized payments shall be permitted only to the extent
justified by demonstrated increased costs or risks of Transporting such
Beneficiated Coal in comparison to the costs or risks of Transporting
Coal, due to safety, environmental, or operating considerations related
to the physical or transportation characteristics of such Beneficiated
Coal. Cost differences which vary in direct proportion with the tonnage
Transportation and can be reasonably apportioned to the Effective Rates
and/or Charges per ton of Beneficiated Coal shall be so apportioned.
Cost differences which cannot be so apportioned (referenced herein as
"fixed expensest) shall be reimbursed by
58
Utilities to Railroads in the form of lump sum payments or amortized
payments (including interest) over a reasonable period not to exceed
(i? the remaining life of this Agreement, or (ii) the duration of the
Beneficiated Coal shipments for which Jthe expense was incurred,
whichever is the shorter period. If this Agreement shall be terminated
prior to the completion of all payments on the agreed amortization
schedule, Utilities shall either promptly pay the remaining balance in
a lump sum, or shall continue to make payments according to the agreed
schedule until the balance is paid in full.
Article XXIX
RESPONSIBILITIES OF UTILITIES
The rights, responsibilities, and liabilities of Utilities under
this Agreement with respect to Railroads and with respect to one
another are several and not joint,and in the case of rights,
responsibilities, and liabilities attributable to a specific Destination
or Destinations, are limited to each Utility's proportionate
share based on its ownership interest in the power station(s) at
the Destination(s) involved.
Notwithstanding the foregoing, KCPL is authorized to act on behalf
of all of the Utilities on all matters arising under this Agreement. In
particular, Railroads shall accept instructions and commitments of KCPL,
made on behalf of one or more Utilities in addition to itself with
respect to matters arising under this Agreement, and such actions by KCPL
shall bind all of the Utilities and Railroads in the same manner as if
the instructions or ; commitments were made by each Utility on its own
behalf.
KCPL shall be responsible for ensuring that Utilities'
obligations to Railroads under this Agreement are fulfilled, and to
that end Railroads may
59
look to KCPL for payment of all amounts due them under this Agreement.
If KCPL incurs expense in fulfilling the obligations of another Utility
under this Agreement, KCPL shall be entitled to reimbursement of such
expense by the responsible Utility.
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EXHIBIT A1
THIS AGREEMENT, including the Rail Transportation Contract
ICC-BN-C-2954 ("Contract"), this Exhibit A-1, and Exhibits B. C,
and D, is made as of this 18th day of May, 1995, by and among
BURLINGTON NORTHERN RAILROAD COMPANY, a Delaware corporation
with its principal place of business in Fort Worth, Texas
(hereinafter referred to as"BN" or "Railroads"); KANSAS CITY
POWER & LIGHT COMPANY, a Missouri corporation with
its principal place of business in Kansas City, Missouri
("KCPL"); THE EXPIRE DISTRICT ELECTRIC COMPANY, a Kansas
corporation with its principal place of business in Joplin,
Missouri ("Empire"); and ST. JOSEPH LIGHT & POWER COMPANY,
a Missouri corporation with its principal place of business in
St. Joseph, Missouri ("St. Joseph") (hereinafter
referred to as "Utilities").
WITNESSETH
For purposes of this Agreement:
1. DEFINITION
As used herein, "Iatan" shall mean Unit No. 1 of the coal-fired
electric generating station operated by KCPL at the Iatan Power Station
served by Railroads' Sadler rail station.
2. BASE RATES AND CHARGES
A. Base Rates
For shipments in steel Rail Cars: $6.65 per net Ton
For shipments in aluminum Rail Cars: $6.29 per net Ton
Exhibit A-1, Page 1 of 6
Consistent with their obligations under the Contract,
Utilities shall be responsible for providing aluminum Rail Cars
for use in Transporting Coal at the aluminum Rail Car Rate.
If Utilities provide a sufficient number of aluminum Rail Cars
for an aluminum trainset as required under Article IV, and subject
to Article V, Transportation charges for all Coal shipped in that
train shall be assessed at the aluminum Rail Car
Rate, including Coal loaded in steel Rail Cars which become
intermingled in such train through no fault of Utilities; PROVIDED,
HOWEVER, that if aluminum Rail Cars in a train are loaded to an average
of less than the Minimum Shipment Weight for those Cars, then
Transportation charges for all Coal shipped in that train shall be
assessed at the Effective Rate for steel Rail Cars.
The foregoing Base Rates shall be adjusted pursuant to Article
VI(B) of the Contract beginning July 1, 1994. Such adjusted rates shall
apply to all of the Coal Transported by Railroad to Iatan, except that
during the term of this Agreement the Effective Rates shall not be less
than (i) $5.73 per net Ton for shipments in steel Rail Cars; and (ii)
$5.42 per net Ton for shipments in aluminum Rail Cars.
For purposes of this Agreement, the "Actual Volume Tendered" shall
mean the greater of (a) the amount of Coal actually Transported during
a Contract Year under this Agreement, or (b) if Railroads do not
Transport all of the Coal Tendered by Utilities during such Contract
Year, the amount of Coal actually Tendered by Utilities during the
Contract Year (up to 110% of the sum of the QTVs for the Contract
Year).
B. Base Charges
(1) The Base Origin Detention Charge under Article VIII(D)(2) of
the Contract shall be $252.18 per train per hour or fraction thereof.
Exhibit A-1, Page 2 of 6
(2) The Base Destination Detention Charge under
Articles IX(B) of the Contract shall be $252.18 per train per hour
or fraction thereof.
(3) The Base Weighing Charge, payable to Railroads by Utilities
under Article VIII(C)(3) of the Contract if Railroads weigh one or more
Rail Cars under this Agreement at the request of Utilities, shall be
$55.47 per Rail Car, plus switching charges as provided in Paragraph
B(10) hereof.
(4) The Base Car Rental Charge, payable by Utilities to Railroads
for any Rail Cars leased to Utilities by Railroads pursuant to
Articles IV(C) and V of the Contract, shall be $40.32 per Rail Car
per day or fraction thereof.
(5) The Base Diversion Fee, payable by Utilities to Railroads
under Article VIII(B) of the Contract for late-notice diversion of an
empty train to a different Origin and under Article IX(A) of the
Contract for latenotice diversion of a loaded train to a different
Destination, shall be $621.39 per occurrence.
(6) The Base Release Charge, payable by Utilities under
Article VIII(D)(3)(d) of the Contract in order to prevent (or toll)
Origin Detention Charges when a train is delayed in loading, and
under Article IX(B) of the Contract in order to prevent (or
toll) Destination Detention Charges, shall be $1,311.39 per occurrence.
(7) The Base Storage Charge, payable by Utilities under Article
X(C) of the Contract for placement of an entire empty train of
Shipper Cars on available trackage between Origins and a Destination
for storage, shall be $1,311.39 per occurrence.
(8) The Base Track Rental Charge, payable by Utilities under
Article X(C) of the Contract, in addition to the Base Storage Charge,
if the
Exhibit A-1, Page 3 of 6
storage track is owned by Railroads, and under Articles
VIII(D)(3)(e) and IX(B)(4)(d) of the Contract if a train from
which the locomotives and crew have been released is left on
Railroad-owned trackage, shall be $174.52 per 24-hour period or
fraction thereof.
(9) The Base Out-of-Route Movement Charge, payable by Utilities
under Article X(B) and (C) of the Contract for movement of Shipper
Cars to points served by Railroads off the route-ofmovement for
storage or maintenance, shall be as follows, subject to a minimum of
75 miles per occurrence
25 Cars or less -- $1.02 per car per mile
26-75 cars -- $0.92 per car per mile
76 cars or more -- $0.86 per car per mile
(10) The Base Switching Charge, payable by Utilities under Article
X(B) and (C) of the Contract for removal and replacement of individual
Shipper Cars in empty trains at points on the route-of-movement between
a Destination and an Origin, shall be $279.42 per hour or fraction
thereof.
3. NOTICES
For purposes of this Agreement, the addresses to which notices
should be sent in accordance with Article XIII of the Contract are as
follows:
If to Utilities: Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106-2124
Attention: Manager, Fuels
or
P.O. Box 418679
Kansas City, Missouri 64141-9679
Attention: Manager, Fuels
Exhibit A-1, Page 4 of 6
If To Railroad: Burlington Northern Railroad Company
3700 Continental Plaza
777 Main Street
Fort Worth, Texas 76102
Attention- Vice President, Coal
4. ELECTRONIC INVOICE PAYMENT
A11 payments of electronic invoices for movements to Iatan Station
due hereunder by Utilities to Railroads, or by Railroads to Utilities,
shall be due and payable by mail within 19 calendar days following the
actual shipment date of the train from the mine or within 15 calendar
days following receipt by payor of the payee's invoice therefor,
whichever is the later date. Payments of electronic invoices shall be
deemed made when mailed.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
KANSAS CITY POWER & LIGHT COMPANY
Witness: David M McCoy
By: Douglas M Morglen Vice Predident - Technical Services
Exhibit A-1, Page 5 of 6
EMPIRE DISTRICT ELECTRIC COMPANY
Witness:
By J. H Weitzel Vice President-Production
ST. JOSEPH LIGHT & POWER COMPANY
Witness: Gary Swope
By: D.V. Svuba Vice President- Power Supply
BURLINGTON NORTHERN RAILROAD COMPANY
Witness:
By:John Q. Anderson, Executive Vice President-Coal Business
Group
Exhibit A-1, Page 6 of 6
EXHIBIT B
INDEX OF DEFINED TERNS
Term Defined on Page
Commercial Arbitration Rules of the American
Arbitration Association (AAA Rules) 48
AAR Interchange Rules or Interchange Rules 16
Actual Volume Tendered Exhibit A-Series
Adjusted Net System Deficit Exhibit C
Adjustment Date 19
Adjusted Net System Deficit Exhibit C
Affiliate 52
Agreement Exhibit A-Series
Annual Shipment Plan 5
Annual Target Volume/ Hawthorn (ATV/H) 5
Annual Target Volume/Iatan (ATV/I) 5
Annual Target Volume/LaCygne (ATV/L) 5
Annual Volume Report 4
Bad-Order 36
Base Rates 17, Exhibit A-Series
Base Charges 17, Exhibit A-Series
Beneficiated Coal 57
BN Exhibits A Series
Car Rental Charge 15
Coal 2
Constructive Placement 34
Exhibit B. Page 1 of 4
Contract Exhibit A-Series
Contract Quarter 6
Contract Year 5
Current RCAF-U (CRCAF-U) 19
Deficit Quarter 8, Exhibit C
Deficit Tonnage Exhibit C
Deficit Year 9
Destination 2
Destination Detention Charge 34
Destination Free Time 34
Destination Penalty Time 34
Diversion Fee 26
Effective Date 3
Effective Rates 18
Effective Charges 18
Elapsed Transit Time (ETT) 21
Electronic Data Interchange (EDIT 53
Empire Exhibit A-1
Equipment Obligation 14
Final Volume Deficit 12
Fixed expenses 58
Force Majeure 40
Hawthorn 1, Exhibit A-3
Hawthorn Requirement 4
Holidays 26
Iatan 1, Exhibit A-1
Exhibit B. Page 2 of 4
Initial Volume Deficit 10
Interstate Commerce Commission (ICC) 3
KCPL Exhibit A-Series
KCS Exhibits A-2 and A-3
KGE Exhibit A-2
LaCygne 1, Exhibit A-2
LaCygne Requirement 4
Loading Disability 30
Loading Time 29
Makeup Quarter 8, Exhibit C
Nine Operator 21
Minimum Shipment Weight 24
Minimum Train Size 23
Net Destination Deficit Exhibit C
Net System Deficit Exhibit C
Net System Surplus Exhibit C
Origin 2
Origin Detention Charge 30
Origin Free Time 29
Origin Penalty Time 29
Out-of-Route Movement Charge 38
Performance Standard 22
Placed 21
Prior RCAF-U (PRCAF-U) 19
Pull Charge 33
Quarterly Shipment Plan 6
Exhibit B. Page 3 of 4
Quarterly Target Volume/Hawthorn (QTV/H) 7
Quarterly Target Volume/Iatan (QTV/I) 7
Quarterly Target Volume/LaCygne (QTV/L) 7
Quarterly Volume Requirement (QVR) 7
Rail Car 13
Rail Cost Adjustment Factor,
Unadjusted (RCAF-U) 18
Railroads Exhibit A-Series
Release Charge 31
Rental Cars 15
Replacement Cars 17
Shipper Cars 16
St. Joseph Exhibit A-1
Storage Charge 38
Supplemental Cars 11
Surplus Tonnage Exhibit C
Switching Charge 37
Tendered 3
Total Annual Target Volume (TATV) 5
Track Rental Charge 31
Transportation or Transport 2
Unloading Disability 34
Unloading Time 33
Utilities Exhibit A-Series
Weighing Charge 28
Exhibit B. Page 4 of 4
EXHIBIT
COMPUTATION OF LIQUIDATED DAMAGES FOR
FAILURE TO MEET QUARTERLY SHIPMENT OBLIGATIONS
If Utilities fail to Tender at least 90% of QVR for shipment
during a Quarter(the "Deficit Quarter"), and fail to make up for
the deficit with extra shipments during the next Quarter
(the "Makeup Quarter"), then Utilities shall be obligated to pay
liquidated damages (if any) to Railroads under Article III(D)(1),
computed as follows:
1. For the Deficit Quarter, subtract 90% of each
Destination's QTV from the number of tons of Coal
actually Tendered for shipment to that Destination during
the Quarter. If the resulting number for a Destination is
greater than zero it represents "Surplus Tonnage;" if it is
less than zero (i.e., if Actual Tonnage - (0.9 x QTV) less than 0) it
represents "Deficit Tonnage."
2. Repeat Step #1, above, for the Makeup Quarter.
3. Determine the "Net System Deficit" (or "Net System
Surplus," as the case may be) for the Deficit Quarter by
adding up the Deficit Tonnages for all Destinations for that
Quarter, then adding up the Surplus Tonnages for that
Quarter, then subtracting total Surplus Tonnage from total
Deficit Tonnage.
4. Repeat Step #3, above, for the Makeup Quarter.
5. If there was no Net System Deficit for the Deficit Quarter
("NSD/DQ"), then Utilities met their Quarterly Shipment
Obligation and no damages will be due. If there was a NSD/
DQ, but there was also a Net
Exhibit C, Page 1 of 5
System Surplus for the Makeup Quarter ("NSS/ MQ"), and
NSS/MQ 2 NSD/DQ, then Utilities fully made up for
their shortfall in the Deficit Quarter by shipping extra
amounts in the Makeup Quarter, and again, no damages
swill be due.
6. If 0 < NSS/MQ < NSD/DQ, then NSD/DQ - NSS/ MQ
the "Adjusted Net System Deficit" ("ANSD") for the Deficit
Quarter. Alternatively, if there is no Net System Surplus for
the Makeup Quarter, NSD/DQ - ANSD. In either case,
Utilities owe Railroads liquidated damages for the ANSD,
determined on the basis of the Effective Rates in effect for
the Destinations that generated that Deficit, as detailed in
Steps 7-10 below.
(a) No damages will be attributed to any Destination
that (i) had Surplus Tonnage in the Deficit Quarter
("ST/DQ"), or (ii) had Deficit Tonnage in the Deficit
Quarter ("DT/DQ"), but Surplus Tonnage in the
Makeup Quarter ("ST/MQ"), and ST/MQ 2 DT/DQ.
(b) For any Destination with DT/DQ > ST/ MQ,
damages will be assessed on the basis of DT/DQ
ST/MQ (the "Net Destination Deficit, n or "NDD", for
that Destination).
(c) For any Destination with Deficit Tonnages in
both Quarters, DT/MQ will be ignored, and
damages will be based only upon DT/DQ, i.e.,
NDD - DT/DQ for such a Destination.
8. Add up the NDD's for all Destinations described in 7(b)
or 7(c), above, to produce NDD/(Total).
Exhibit C, Page 2 of 5
9. For each Destination described in 7(b) or 7(c), above,
liquidated damages will be determined under the following
formula:
Dnmnges/(Destination) - 0.25 x Rate/(Destination) x NDD/
(Destination) x ANSD,NDD/(Total)
Where Rate/(Destination) - the Effective Rate determined
under Article VI for Coal shipments to that Destination
during the Deficit Quarter.
10. Total liquidated damages payable to Railroads are the
sum of the damages computed under the preceding
paragraph for each Destination.
Example:
Assume that for the second Quarter of 1996
("2Q96"), QTV's, and actual volumes shipped, were as
follows:
Table 1
QTV's Actual Tonnage
LaCygne 400k 300k
Iatan 500k 370k
Hawthorn 200k 215k
Totals 1,100k (QVR) 885k
Since actual shipments are less than 90% of QVR, there is a
Net System Deficit for 2Q96, i.e., it is a "Deficit Quarter":
90% x 1100k 990k; NSD/DQ - 990k - 885k - 105k. More
specifically, LaCygne has 60k of Deficit Tonnage, Iatan has
80k of Deficit Tonnage, and Hawthorn has 35k of Surplus
Tonnage, all as portrayed in Table 2:
Exhibit C, Page 3 of 5
Table 2
Deficit
Quarter Shipments
QTV Actual 90% of QTV Deficit Surplus
LaCygne 400k 300k 360k 60k 0
Iatan 500k 370k 450k 80k 0
Hawthorn 200k 215k 180k 0 35k
Totals 1100k 885k 990k 140k 35k
Assume now that in 3Q96, the "Makeup Quarter," QTV's,
actual shipments, and Deficit/Surplus Tonnages are as
follows:
Table 3
Deficit
Quarter Shipments
QTV Actual 90% of QTV Deficit SurDlus
LaCygne 360k 360k 324k 0 36k
Iatan 400k 370k 360k 0 10k
Hawthorn 200k 220k 180k 0 40k
Totals 960k 950k 864k 0 86k
Since actual shipments are more than 90% of QVR, there is a
Net System Surplus of 950k 864k - 86k (or, stated differently,
86k - 0), for the Makeup Quarter. Thus, the Adjusted Net
System Deficit for the Deficit Quarter in ANSD equals NSDDQ less
NSSMQ equals 105k less 86k equals l9k. Damages are due Railroads on
this tonnage only, computed as follows:
1. Eliminate Destinations with no DT/DQ, towit:
Hawthorn.
2. Compute damages based upon NDD's for
remaining Destinations:
Exhibit C, Page 4 of 5
NDDI = DT/DQI - ST/MQI = 80k - 10k = 70k
NDDL = DT/DQL - ST/MQL = 60k - 36k = 24k
NDD(total) = 70k + 24k = 94k
Liquidated Damages (total)=DamagesI + DamagesL
= (25percent x RateI x 70k/94k x l9k)+
(25percent x RateL x 24k/94k x l9k)
If RateI = $7.00/ton and RateL = $10.00/ton, Liquidated
Damages total will be ($1.75 x 70/94 x l9k) plus
(2.50 times 24/94 times l9k)
= $24,771.25 + $12,112.50 = $36,883.75
Exhibit C, Page 5 of 5
EXHIBIT D
COMPUTATION OF LIQUIDATED DAMAGES
FOR FAILURE TO MEET ANNUAL VOLUME REQUIREMENTS
In the event that Utilities fail to meet the Annual Volume
Requirement for a Contract Year as set forth in Article III(A)(1),
and incur an obligation to pay liquidated damages pursuant
to Article III(D)(2), such damages shall be calculated separately with
respect to each Destination, in accordance with the following formula:
LD - (TVD - TCT) x (.25 x
WAER)
Where:
LD Liquidated damages due with respect to the Destination in
question.
TVD Total number of tons of Coal received at the Destination
from Origins during the Contract Year.
TCT Total number of tons of Coal (i) Tendered for Transportation
to the Destination under the Agreement during the Contract
Year, (ii) deemed Tendered or Transported under the terms of
the Agreement; and (iii) excused due to events of Force
Majeure in accordance with Article XI.
WAER The weighted average Effective Rate applicable to shipments
to the Destination during the Contract Year, weighted
according to total tons Tendered during each Contract
Quarter, and tons Tendered in aluminum and steel Rail Cars,
respectively.
The liquidated damages calculated separately for each
Destination (if any) shall be added together to determine Utilities'
obligation to Railroads pursuant to Article II(C)(1).
Exhibit D, Page 1 of 1
[ARTICLE] UT
[CIK] 0000086251
[NAME] ST. JOSEPH LIGHT & POWER COMPANY
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 160698000
[OTHER-PROPERTY-AND-INVEST] 1727000
[TOTAL-CURRENT-ASSETS] 28375000
[TOTAL-DEFERRED-CHARGES] 28530000
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 219330000
[COMMON] 16454000
[CAPITAL-SURPLUS-PAID-IN] 380000
[RETAINED-EARNINGS] 64560000
[TOTAL-COMMON-STOCKHOLDERS-EQ] 81394000
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[LONG-TERM-DEBT-NET] 73100000
[SHORT-TERM-NOTES] 0
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0
[LONG-TERM-DEBT-CURRENT-PORT] 0
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] 2512000
[LEASES-CURRENT] 0
[OTHER-ITEMS-CAPITAL-AND-LIAB] 62324000
[TOT-CAPITALIZATION-AND-LIAB] 219330000
[GROSS-OPERATING-REVENUE] 93521000
[INCOME-TAX-EXPENSE] 4559000
[OTHER-OPERATING-EXPENSES] 73249000
[TOTAL-OPERATING-EXPENSES] 77808000
[OPERATING-INCOME-LOSS] 15713000
[OTHER-INCOME-NET] 882000
[INCOME-BEFORE-INTEREST-EXPEN] 16595000
[TOTAL-INTEREST-EXPENSE] 5555000
[NET-INCOME] 11040000
[PREFERRED-STOCK-DIVIDENDS] 0
[EARNINGS-AVAILABLE-FOR-COMM] 11040000
[COMMON-STOCK-DIVIDENDS] 7188000
[TOTAL-INTEREST-ON-BONDS] 5558000
[CASH-FLOW-OPERATIONS] 19300000
[EPS-PRIMARY] 2.83
[EPS-DILUTED] 2.83
</TABLE>
SEVENTEENTH
SUPPLEMENTAL INDENTURE
ST. JOSEPH LIGHT & POWER COMPANY
TO
HARRIS TRUST AND SAVINGS BANK
TRUSTEE
Dated as of February 1, 1991
Creating an Issue of First Mortgage Bonds,
9.44% Series Due 2021
Supplemental to Indenture of Mortgage and Deed
of Trust Dated as of April 1, 1946
Seventeenth Supplemental Indenture, dated as
of the 1st day of February, 1991, between ST.-
JOSEPH LIGHT & POWER COMPANY, a corporation duly
organized and existing under and by virtue of the
laws of the State of Missouri (hereinafter called
the "Company"), party of the first part, and
HARRIS TRUST AND SAVINGS BANK, a corporation duly
organized and existing under and by virtue of the
laws of the State of Illinois, having its
principal place of business in the City of
Chicago, Illinois, as Trustee under the Indenture
hereinafter mentioned, party of the second part
(hereinafter called the "Trustee"):
WHEREAS, the Company has heretofore executed and
delivered to the Trustee (and to Bartlett Boder, of the City of
St. Joseph, Missouri, as Individual Trustee, now deceased without
successor) an Indenture of Mortgage and Deed of Trust (hereinafter
called the "Original Indenture"), dated as of April 1, 1946, to
secure the Company's First Mortgage Bonds, unlimited in aggregate
principal amount except as therein otherwise provided; and
WHEREAS, the Company has heretofore executed and
delivered to the Trustee and said former Individual Trustee
supplemental indentures dated respectively as of April 1, 1946,
April 1, 1947, July 1, 1949, June 1, 1959 and November 1, 1961,
and the Company has heretofore executed and delivered to the
Trustee supplemental indentures dated respectively as of December
1, 1967, June 26, 1970, March 15, 1973, October 1, 1975, May 10,
1976, June 1, 1976, April 1, 1977, July 1, 1978, February 15,
1979, February 1, 1983, and July 1, 1989, said supplemental
indentures creating fifteen series of bonds designated First
Mortgage Bonds and identified in each case as to series by the
interest rate and the reference to the year in which such series
becomes due and providing certain supplements and amendments to
the Original Indenture (for purposes of this Seventeenth
Supplemental Indenture only, the Original Indenture, as
supplemented and amended by said supplemental indentures and this
Seventeenth Supplemental Indenture, is hereinafter referred to as
the "Indenture" and said supplemental indentures, except for the
Tenth Supplemental Indenture, are hereinafter referred to as the
"Supplemental Indentures"); and
WHEREAS, the Company desires in and by this Seventeenth
Supplemental Indenture to create a sixteenth series of bonds to be
issued under the Indenture, to designate or otherwise distinguish
such series, to specify the particulars necessary to describe and
define the same, and to specify such other provisions and
agreements in respect thereof as are in the Indenture provided or
permitted; and<PAGE>
WHEREAS, the Company also desires in and by this
Seventeenth Supplemental Indenture to record the description of,
mortgage, pledge and confirm unto the Trustee, certain property
now subject to the lien of the Indenture not heretofore described
in the Original Indenture or any indenture supplemental thereto;
and
WHEREAS, all conditions and requirements necessary to
make this Seventeenth Supplemental Indenture, when duly executed
and delivered, a valid, binding and legal instrument in
accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and
delivery of this Seventeenth Supplemental Indenture in the form
and with the terms hereof have been in all respects duly
authorized;
NOW THEREFORE, in consideration of the premises and in
further consideration of the sum of One Dollar in lawful money of
the United States of America paid to the Company by the Trustee
at or before the execution and delivery of this Seventeenth
Supplemental Indenture, the receipt whereof is hereby
acknowledged, and for other good and valuable considerations, it
is agreed by and between the Company and the Trustee as follows:
Description of Property
The Company records below the description of, and
hereby mortgages, pledges and confirms unto the Trustee to the
same extent as if set forth in the Original Indenture, the
following described property which is now subject to the lien of
the Indenture in all respects as if originally described therein,
to.wit:
FIRST
The following described real estate located in the
State of Missouri:
ATCHISON COUNTY
All of a tract of land situated and lying in the
Southeast Fourth of the Southwest Quarter of Section Number
Twenty-three (23), Township Number Sixty-four (64) of Range
Number Forty (40) described as follows:
Commencing at the South Quarter of said Section, thence
a distance North of 833.7 feet to the South right of
way line of U.S. Highway 275, thence North 81 39' West
along said right of way line a distance of 272.5 feet
to the point of beginning; thence South 8 21' West a
distance of 75 feet, thence North 81 39' West a distance of
50 feet, thence North 8 21' East a distance of 75 feet to
the South right of way line of U.S.
Highway 275, thence 81 39' East along said right of way
line a distance of 50 feet to the point of beginning.
ALSO:
A tract of land situated and lying in the Northwest
Quarter (NW 1/4) of the Northeast Quarter (NE 1/4) of Section
Thirty-four (34), Township Sixty-five (65) North, Range Forty-
one (41) West of the 5th P.M., more particularly described as
follows:
Beginning at a point 340.3 feet West and 31 feet South
of the Northeast corner of said Section 34, thence
South a distance of 75 feet, thence West a distance of
50 feet, thence North a distance of 75 feet, thence
East a distance of 50 feet to the point of beginning;
the North boundary line of the above described tract
being and the same is the South right of way line of
the existing public road, according to survey completed
on April 7, 1961, by Wheaten E. Elkins, Mo. L. S.-825.
ALSO:
A tract of land situated and lying in the Southeast
Fourth of the Southeast Quarter of Section Number Twenty-two
(22), Township Number Sixty-five (65) of Range Number Forty (40)
described as follows:
Beginning at a point 30 feet West and North no degrees
10 minutes West 1076 feet from the Southeast corner of
said Section thence West 75 feet, thence North 85 feet,
thence South 64 53' East, a distance of 82.8 feet to
the West right of way line of U.S. Highway 59, thence
South no degrees 10 minutes East along said West right
of way line, a distance of 50 feet to the point of
beginning.
SECOND
Electric Transmission and Distribution Lines:
All extensions and additions to electric transmission
and distribution lines heretofore described in the Indenture and
all electric transmission and distribution lines constructed
after the execution and delivery of the Sixteenth Supplemental
Indenture, dated as of July 1, 1989.
THIRD
Franchises, Leases, Easements, etc.:
All franchises and rights to construct, maintain or
operate systems for the transmission and distribution of
electricity, steam or gas, and all additional franchises and
rights of similar character to those described in the Indenture
and renewals of franchises and rights of similar character
granted to the Company after the execution and delivery of said
Sixteenth Supplemental Indenture.
ARTICLE I
First Mortgage Bonds, 9.44% Series Due 2021
SECTION 1. There is hereby created a sixteenth series
of bonds to be issued under and secured by the Indenture, to be
designated, distinguished and known as "First Mortgage Bonds,
9.44% Series due 2021", of the Company (herein called 'Bonds of
Sixteenth Series"). Bonds of Sixteenth Series may be issued in
the aggregate principal amount of up to $22,500,000. Bonds of
Sixteenth Series shall be in the form of registered bonds without
coupons and shall be dated as of the interest payment date next
preceding the authentication thereof by the Trustee, except that
(i) if any Bond of Sixteenth Series shall be authenticated before
February 1, 1991, it shall be dated as of and commence bearing
interest on February 1, 1991; (ii) if any Bond of Sixteenth
Series shall be authenticated on an interest payment date, it
shall be dated such date; and (iii) if the Company shall at the
time of the authentication of a Bond of Sixteenth Series be in
default in the payment of interest upon Bonds of Sixteenth
Series, such Bond of Sixteenth Series shall be dated as of the
date of the beginning of the period for which such interest is so
in default.
All Bonds of Sixteenth Series shall mature February 1,
2021. The rate of interest thereon shall be nine and forty-four
one hundredths per centum (9.448) per annum (based on a year of
360 days consisting of 12 months of 30 days each), payable
semiannually on the first days of February and August of each
year, commencing August 1, 1991; and the terms of redemption
shall be as referred to in Section 2 of this Article I.
Payment of the principal of, and premium, if any, and
interest on, the Bonds of Sixteenth Series shall be made to the
registered owner thereof in funds immediately available on the
date payment is due at the address of the registered owner shown
on the register maintained by the Trustee. Upon the written
request of any institutional investor holding $250,000 or more in
principal amount of the Bonds of Sixteenth Series setting forth a
wire transfer address thereof in the United States, such payments
shall be made by wire transfer of such funds to such wire
transfer address.
Each registered owner of the Bonds of Sixteenth Series,
by acceptance thereof, shall be deemed to agree to make prompt
entry thereon (or, if appropriate, to otherwise duly make prompt
entry in its books and records and to make entry thereon prior to
any transfer thereof) of all payments, prepayments and credits on
account of the principal thereof, whether under any provision of
this Seventeenth Supplemental Indenture or otherwise, to notify
the Trustee of the amount of each such payment, prepayment or
credit and that any such entry has been duly made and to surrender
the Bonds to the Trustee for cancellation when all principal,
premium, if any, and interest thereon shall have been duly paid-or
provided for. Each registered owner of the Bonds of Sixteenth
Series, by acceptance thereof, shall be deemed to agree to
indemnify and hold the Company harmless from and against any loss
or expense occasioned by its failure to make any such notation.
Bonds of Sixteenth Series shall be entitled to the
benefits of the Original Indenture, including the performance and
observance of the covenants, agreements and conditions to be kept,
observed and performed by the Company in the Original Indenture or
in any indenture supplemental thereto, or in any of the bonds
issued thereunder, or in any prior lien or prior lien bonds, but
subject to any applicable requirement that a period of time after
written notice shall have been given elapse before any failure by
the Company to so perform and observe any such covenant, agreement
or condition shall constitute an "event of default" for purposes
of Section 2 of Article IV of the Original Indenture. As used in
this Section 1, the term "period of time after written notice
shall have been given" means a period of sixty days after such
written notice, in lieu of the period of ninety days provided for
in paragraph (e) of Section 2 of Article IX of the Original
Indenture.
The Company covenants and agrees not to offer or pay
any consideration to any registered owner of Bonds of Sixteenth
Series in respect of any amendment or waiver under this
Seventeenth Supplemental Indenture or the Original Indenture
unless such consideration is offered or paid on a pro rata basis
to each such owner.
SECTION 2. Bonds of Sixteenth Series shall be
redeemable prior to maturity, in whole at any time or in part
from time to time, either at the option of the Company or
pursuant to the requirements of the Indenture, on notice given in
the manner and with the effect provided in Article IV of the
Original Indenture and as in this Section 2 provided.
The redemption price of Bonds of Sixteenth Series
redeemed at the option of the Company or otherwise, except
through operation of the Sinking Fund provided for in Article III
hereof, shall equal the sum of (a) the principal amount of Bonds
being redeemed, plus (b) a premium equal to the Make Whole Premium
plus (c) accrued interest on the principal amount of Bonds being
redeemed. As used herein, the term make Whole Premium" shall mean
at any time with respect to any redemption of Bonds (other than
through operation of the Sinking Fund provided for in Article III
hereof), the excess, if any, of (a) the present value of the
principal and interest payments on and in respect of the Bonds
being redeemed that would otherwise become due and payable
discounted at a rate (computed on the basis of a 360-day year of
twelve 30-day months) which is equal to the Reinvestment Rate over
(b) the sum of (i) the aggregate principal amount of the Bonds
then to be redeemed plus (ii) accrued interest on such aggregate
principal amount. To the extent that the Reinvestment Rate at the
time of such redemption is equal to or greater than 9.44%, the
Make Whole Premium shall be zero. Any calculation of the Make
Whole Premium shall be made by the Company on and as of one
business day prior to the date such Make Whole Premium is to be
paid and shall be delivered to the Trustee (and to each
institutional investor which shall have purchased at least
$250,000 aggregate principal amount of the Bonds and furnished the
Company with its telecopy and confirmation numbers and whose Bonds
are to be redeemed in whaler in part), in each case via telecopy
on such date of calculation. As used herein, the term
"Reinvestment Rate" shall mean the Treasury Rate plus .50%. As
used herein, the term "Treasury Rate" shall mean at any time with
respect to Bonds being redeemed (other than through operation of
the Sinking Fund provided for in Article III hereof), the then
existing yield to maturity on the United States Treasury
obligations with a maturity (as compiled by and published in the
most recently published issue of the United States Federal Reserve
Statistical Release designated H.lS(519) or its successor
publication) equal to the weighted average maturity of the Bonds
then outstanding (after giving effect to any subsequent Sinking
Fund requirement but before giving effect to such optional
redemption of Bonds with respect to which the Treasury Rate must
be determined). If no maturity exactly corresponding to such
weighted average maturity shall appear therein, the United States
Treasury obligations with the nearest published maturity occurring
prior thereto and with the nearest published maturity occurring
thereafter shall each be calculated by the Company and the
Treasury Rate shall be interpolated on a straight-line basis based
on the respective yields to maturity of such obligations.
The redemption price of Bonds of Sixteenth Series
redeemed for the Sinking Fund provided for in Article III hereof
shall be 100% of the principal amount thereof plus accrued
interest to the redemption date.
In case the Company shall at any time elect to redeem
all or any part of Bonds of Sixteenth Series, notice of such
redemption shall be mailed by or on behalf of the Company,
postage prepaid, at least thirty and not more than forty-five
days prior to such date of redemption, to the registered owners
of all Bonds of Sixteenth Series to be so redeemed, at their
respective addresses appearing upon the registry books. Any
notice which is mailed as herein provided shall be conclusively
presumed to have been properly and sufficiently given on the date
of such mailing, whether or not the registered owner receives the
notice. In any case, failure to give due notice by mail, or any
defect in the notice, to the registered owner of any Bond of
Sixteenth Series designated for redemption, as a whole or in
part, shall not affect the validity of the proceedings for the
redemption of any other Bond. Such notice of redemption shall
state that the bonds specified therein by distinctive numbers or
specified portions thereof are to be redeemed at the principal
office of the Trustee in the City of Chicago, Illinois, or at the
principal office of any successor in trust, and shall specify the
date on which they shall become due and payable and that on and
after such date interest thereon will cease to accrue.
In case of any redemption of Bonds of Sixteenth Series
by the Trustee pursuant to the provisions of the Indenture,
except for purposes of the Sinking Fund, notice of redemption
shall be given in a similar manner by the Trustee.
Notice of redemption of bonds redeemed through the
operation of the Sinking Fund shall be given as provided in
Section 3 of Article III hereof.
Notwithstanding Article IV of the Original Indenture,
whenever the Company shall propose to redeem less than all of the
outstanding Bonds of Sixteenth Series, either at its option or
for the Sinking Fund provided for in Article III hereof, or
otherwise, the Trustee, instead of selecting by lot, shall select
the serial numbers of Bonds of Sixteenth Series to be redeemed
(in whole or in part) by prorating, as nearly as may be, the
aggregate principal amount of Bonds of Sixteenth Series to be
redeemed among the registered owners of Bonds of Sixteenth Series
according to the principal amounts thereof registered in their
respective names. In any such proration, the Trustee shall make
such adjustments, reallocations and eliminations as it shall deem
proper to the end that the principal amount of Bonds of Sixteenth
Series so prorated to any registered owner of Bonds of Sixteenth
Series shall be $1,000 or a multiple thereof, by increasing or
decreasing or eliminating the amount which would be allocable to
any such registered owner on the basis of exact proportion by an
amount not exceeding $1,000. The Trustee in its discretion may
determine the particular Bonds of Sixteenth Series (if there are
more than one) registered in the name of any registered owner
which are to be redeemed, in whole or in part. In any
determination by proration pursuant to this Section 2, Bonds of
Sixteenth Series held by the Company shall not be considered
outstanding and shall be excluded in making the determination of
Bonds of Sixteenth Series to be redeemed.
SECTION 3. The Bonds of Sixteenth Series shall be appropriately
numbered, commencing with R-1.
The form of the Bonds of Sixteenth Series shall be
substantially as follows:
ST. JOSEPH LIGHT & POWER COMPANY
FIRST MORTGAGE BOND, 9.44t SERIES DUE 2021
DUE FEBRUARY 1, 2021
ST. JOSEPH LIGHT & POWER COMPANY (hereinafter called
the "Company"), a corporation of the State of Missouri, for value
received, hereby promises to pay to or registered assigns on
February 1, 2021, the sum of Dollars in lawful money of the
United States of America and to pay interest thereon from the
date hereof at the rate of nine and forty-four one-hundredths per
centum (9.448) per annum (based on a year of 360 days consisting
of 12 months of 30 days each), payable semi-annually on the first
day of February and on the first day of August in each year,
commencing August 1, 1991 (such first interest payment to include
all interest accrued hereon from the date of authentication
hereof), until the Company's obligation with respect to the
payment of such principal sum shall be discharged as provided in
the indentures hereinafter mentioned.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET
FORTH AT THIS PLACE.
This Bond shall not be valid or become obligatory for
any purpose unless and until the certificate of authentication
hereon shall have been executed by the Trustee or its successor
in trust under the within mentioned Indenture.
IN WITNESS WHEREOF, ST. JOSEPH LIGHT & POWER COMPANY
has caused this Bond to be executed in its name by the manual or
facsimile signature of its President or one of its Vice
Presidents and its corporate seal to be impressed or imprinted
hereon and attested by the manual or facsimile signature of its
Secretary or one of its Assistant Secretaries.
Dated:
ST. JOSEPH LIGHT & POWER COMPANY
(SEAL)
By
President
Attest:
Secretary
(FORM OF REVERSE OF BOND)
This Bond is one of the Company's "First Mortgage
Bonds" issued and to be issued in one or more series under and
secured by an Indenture of Mortgage and Deed of Trust dated as of
April 1, 1946 duly executed by the Company to HARRIS TRUST AND
SAVINGS BANK (herein called the "Trustee") and BARTLETT BODER
(deceased and without successor), Trustees, to which Indenture
and all indentures supplemental thereto reference is hereby made
for a description of the property mortgaged and pledged, the
nature and extent of the security, the terms and conditions upon
which the bonds are, and are to be, issued and secured and the
rights of the bearers or registered owners of the bonds and of
the Trustee in respect of such security. As provided in said
Indenture, the bonds may be for various principal sums, are
issuable in series, may mature at different times, may bear
interest at different rates and may otherwise vary as therein
provided. This Bond is one of a series entitled "First Mortgage
Bonds, 9.44% Series due 2021," (herein called "Bonds of Sixteenth
Series") created by the Seventeenth Supplemental Indenture dated
as of February 1, 1991 and limited in aggregate principal amount
to $22,500,000.
To the extent permitted by said Indenture,
modifications or alterations of said Indenture or of any
indenture supplemental thereto and of the rights and obligations
of the Company and of the bearers or registered owners of the
bonds and coupons may be made, and compliance with said Indenture
or any such supplemental indenture may be waived, with the
consent of the Company, by affirmative vote of the bearers or
registered owners of not less than sixty-six and two-thirds per
cent (66-2/3%) in principal amount of the bonds entitled to vote
at a meeting of bondholders called and held as provided in said
Indenture and by like affirmative vote of not less than sixty-six
and two-thirds per cent (66-2/3%) in principal amount of the
bonds entitled to vote of each series affected by such
modification or alteration or waiver in case one or more, but
less than all, of the series of bonds then outstanding under said
Indenture are so affected; provided, however, that no such
modification or alteration shall be made without the consent of
the registered owner hereof which will (a) affect the right of
the registered owner hereof to receive payment of the principal
of, or interest or premium (if any) on, this Bond, or to
institute suit for the enforcement of any such payment on or
after the respective due dates expressed herein, or (b) otherwise
than as permitted by said Indenture, permit the creation of any
lien ranking prior to or on a parity with the lien of said
Indenture with respect to any property covered thereby, or give
to any bond or bonds secured by said Indenture any preference
over any other bond or bonds so secured, or deprive any
bondholder of the security afforded by the lien of said
Indenture, or (c) change the interest rate on this Bond or the
method of determination thereof, or (d) reduce the percentage in
principal amount of the bonds required to authorize any such
modification or alteration or waiver.
Bonds of Sixteenth Series may be redeemed prior to
maturity at the option of the Company, in whole at any time or in
part from time to time, and are also subject to redemption
pursuant to certain provisions of said Indenture and Seventeenth
Supplemental Indenture, otherwise than for purposes of the sinking
fund hereinafter mentioned, at a redemption price equal to the sum
of (a) the principal amount of Bonds being redeemed, plus (b) a
premium equal to the Make Whole Premium plus (c) accrued interest
on the principal amount of Bonds being redeemed. As used herein,
the term "Make Whole Premium" shall mean at any time with respect
to any redemption of Bonds (other than through operation of the
Sinking Fund provided for in the Seventeenth Supplemental
Indenture), the excess, if any, of (a) the present value of the
principal and interest payments on and in respect of the Bonds
being redeemed that would otherwise become due and payable
discounted at a rate (computed on the basis of a 360-day year of
twelve 30-day months) which is equal to the Reinvestment Rate over
(b) the sum of (i) the aggregate principal amount of the Bonds
then to be redeemed plus (ii) accrued interest on such aggregate
principal amount. To the extent that the Reinvestment Rate at the
time of such redemption is equal to or greater than 9.44%, the
Make Whole Premium shall be zero. Any calculation of the Make
Whole Premium shall be made by the Company on and as of one
business day prior to the date such Make Whole Premium is to be
paid and shall be delivered to the Trustee (and to each
institutional investor which shall have purchased at least
5250,000 aggregate principal amount of the Bonds and furnished the
Company with its telecopy and confirmation numbers and whose Bonds
are to be redeemed in whole or in part), in each case via telecopy
on such date of calculation. As used herein, the term
"Reinvestment Rate" shall mean the Treasury Rate plus .50%. As
used herein, the term treasury Rate" shall mean at any time with
respect to Bonds being redeemed (other than through operation of
the Sinking Fund provided for in Article III of the Seventeenth
Supplemental Indenture), the then existing yield to maturity on
the United States Treasury obligations with a maturity (as
compiled by and published in the most recently published issue of
the United States Federal Reserve Statistical Release designated
H.15(519) or its successor publication) equal to the weighted
average maturity of the Bonds then outstanding (after giving
effect to any subsequent Sinking Fund requirement but before
giving effect to such optional redemption of Bonds with respect to
which the Treasury Rate must be determined). If no maturity
exactly corresponding to such weighted average maturity shall
appear therein, the United States Treasury obligations with the
nearest published maturity occurring prior thereto and with the
nearest published maturity occurring thereafter shall each be
calculated by the Company and the Treasury Rate shall be
interpolated on a straight-line basis based on the respective
yields to maturity of such obligations.
Bonds of Sixteenth Series are entitled to the benefit
of a sinking fund, the terms and provisions of which are set
forth in said Seventeenth Supplemental Indenture and, as provided
therein, are subject to redemption through the operation of said
sinking fund in part from time to time on February 1, 2002 and on
each February 1 thereafter to and including February 1, 2020 at
the redemption price of 100% of the principal amount thereof plus
accrued interest to the redemption date.
Notice of any redemption of Bonds of Sixteenth Series
shall be given by mail at least thirty and not more than
fortyfive days prior to the date of redemption, to the registered
owners of all such bonds to be redeemed at the addresses which
shall appear upon the registry books thereof, all as more fully
provided in said Indenture and Seventeenth Supplemental
Indenture. Said Indenture provides, among other things, that
notice of redemption having been duly given, the bonds called for
redemption shall become due and payable upon the redemption date
and, if the redemption price shall have been duly deposited with
the Trustee, interest thereon shall cease to accrue on and after
the redemption date, and that whenever the redemption price
thereof shall have been duly deposited with the Trustee and
notice of redemption shall have been duly given or provision
therefor made as provided in said Indenture and said Seventeenth
Supplemental Indenture, such bonds shall no longer be entitled to
any lien or benefit of said Indenture.
In the event that payment cannot be made on this Bond
in the manner prescribed between the Company and the registered
owner hereof on the date when the principal hereof becomes due,
either at maturity or otherwise or at the date fixed for the
redemption hereof, and the Company shall have on deposit with the
Trustee in trust for the purpose, on the date when this Bond is
so due, funds sufficient to pay the principal of this Bond (and
premium, if any), together with all interest due hereon to the
date of maturity of this Bond or to the date fixed for the
redemption hereof, for the use and benefit of the registered
owner hereof, then all liability of the Company to the registered
owner of this Bond for the payment of the principal hereof and
interest hereon (and premium, if any), shall forthwith cease,
determine and be completely discharged and such registered owner
shall no longer be entitled to any lien or benefit of said
Indenture.
In case an event of default as defined in said
Indenture shall occur, the principal of this Bond may become or
be declared due and payable in the manner, with the effect, and
subject to the conditions provided in said Indenture.
This Bond is transferable by the registered owner
hereof in person, or by attorney duly authorized in writing, at
the principal office of the Trustee in the City of Chicago,
Illinois, or at the principal office of any successor in trust,
upon surrender and cancellation of this Bond, and upon any such
transfer a new registered bond of the same series for the same
aggregate principal amount will be issued to the transferee in
exchange therefor and bonds of this series may, at the option
of the registered owners and upon surrender at said office of
the Trustee (or of any successor in trust), be exchanged for
registered bonds of this series of the same aggregate principal
amount, all without charge (except for any stamp tax or other
governmental charge).
The Company and the Trustee and any paying agent may
deem and treat the person in whose name this Bond is registered as
the absolute owner hereof for the purpose of receiving payment and
for all other purposes, and neither the Company nor the Trustee
nor any paying agent shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the
principal of, or the interest on, this Bond, or for any claim
based hereon or otherwise in respect hereof or of said indenture
or any indenture supplemental thereto, against any incorporator,
stockholder, director or officer, past, present or future, of the
Company or of any predecessor or successor corporation, as such,
either directly or through the Company or any such predecessor or
successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability of incorporators,
stockholders, directors and officers being waived and released by
every owner hereof by the acceptance of this Bond and as part of
the consideration for the issue hereof, and being likewise waived
and released by the terms of said Indenture.
The form of the Trustee's certificate of authentication
to appear on all Bonds shall be substantially as follows:
(FORM OF TRUSTEE'S CERTIFICATE)
This Bond is one of the Bonds of the series designated
therein described in the within mentioned Indenture and
Seventeenth Supplemental Indenture.
HARRIS TRUST AND SAVINGS BANK, as Trustee
By:
Authorized Agent
SECTION 4. Bonds of Sixteenth Series shall be
exchangeable upon surrender thereof at the principal office of
the Trustee in the City of Chicago, Illinois, or at the principal
office of any successor in trust, for registered bonds without
coupons of the same aggregate principal amount, such exchange to
be made without charge (except for any stamp tax or other
governmental charge).
Every bond so surrendered (except where no change in
registered ownership is involved) shall be accompanied by a
proper transfer power duly executed by the registered owner or by
its duly authorized attorney, and the signature to such transfer
power shall be guaranteed to the satisfaction of the Trustee.
All bonds so surrendered shall be forthwith cancelled
and delivered to or upon the order of the Company.
All bonds executed, authenticated and delivered in
exchange for bonds so surrendered shall be valid obligations of
the Company, evidencing the same debt as the bonds surrendered,
and shall be secured by the same lien and be entitled to the same
benefits and protection as the bonds in exchange for which they
are executed, authenticated and delivered.
SECTION 5. Until Bonds in definitive form are ready
for delivery, the Company may execute, and upon its request in
writing the Trustee shall authenticate and deliver in lieu
thereof, Bonds in temporary form as provided in the Original
Indenture. Such Bonds in temporary form may, in lieu of the
statement of the specific redemption prices required to be set
forth in the Bonds in definitive form, include a reference to
this Seventeenth Supplemental Indenture for a statement of such
redemption prices.
SECTION 6. Definitive Bonds may be in the form of
fully engraved bonds, typewritten bonds or bonds printed or
lithographed with steel engraved borders.
ARTICLE II
ISSUE OF BONDS
Bonds of Sixteenth Series may be executed,
authenticated and delivered from time to time as permitted by the
provisions of Article III of the Original Indenture.
ARTICLE III
SINKING FUND FOR BONDS OF SIXTEENTH SERIES
SECTION 1. The Company covenants and agrees that, so
long as any Bonds of Sixteenth Series are outstanding, it will
retire through a Sinking Fund on February 1, 2002, and on each
February 1 thereafter to and including February 1, 2020 (such
dates being hereinafter referred to respectively as the "Sinking
Fund dates"), 5% of the greatest aggregate principal amount at
any time theretofore outstanding of Bonds of Sixteenth Series,
Provided, that if the principal amount of Bonds of Sixteenth
Series outstanding on the particular Sinking Fund date shall be
less than such percentage, the Company will so retire all Bonds
of Sixteenth Series then outstanding.
The principal amount of Bonds of Sixteenth Series
required to be retired by the Company on any Sinking Fund date
shall not be reduced by Bonds of Sixteenth Series theretofore
redeemed at the option of the Company.
SECTION 2. The Company covenants and agrees to pay to
the Trustee on or prior to each Sinking Fund date a sum in cash
equal to the Sinking Fund redemption price of the Bonds of
Sixteenth Series required to be redeemed on such date.
SECTION 3. All cash deposited with the Trustee for the
Sinking Fund, as aforesaid, shall be held in trust for Bonds of
Sixteenth Series and shall be applied by the Trustee to the
redemption of outstanding Bonds of Sixteenth Series on the
Sinking Fund date immediately following such deposit in the
manner herein and in the Original Indenture provided. Such bonds
shall be called for redemption by the Trustee at the Sinking Fund
redemption price.
The Trustee shall determine the bonds so to be redeemed
as provided in Article IV of the Original Indenture but subject
to Section 2 of Article I hereof. The Trustee shall give notice
of the redemption of such bonds for the Sinking Fund by mail
postage prepaid, at least thirty and not more than forty-five
days prior to the date fixed for redemption, to the registered
owners of all bonds of Sixteenth Series to be so redeemed, at
their respective addresses appearing upon the registry books. Any
notice which is mailed as herein provided shall be conclusively
presumed to have been properly and sufficiently given on the date
of such mailing, whether or not the registered owner receives the
notice. In any case, failure to give due notice by mail, or any
defect in the notice, to the registered owner of any Bond of
Sixteenth Series designated for redemption, as a whole or in
part, shall not affect the validity of the proceedings for the
redemption of any other bonds then to be redeemed, and any Bonds
of Sixteenth Series to be so redeemed with respect to which
notice was not given or was defective shall be added to Bonds of
Sixteenth Series to be redeemed, and shall be redeemed, on the
next Sinking Fund date immediately following the date on which
such other bonds are to be redeemed. The notice of redemption of
bonds for the Sinking Fund shall state that the bonds specified
therein by distinctive numbers, or specified portions thereof,
are to be redeemed for the Sinking Fund and shall specify the
date on which they shall become due and payable and the
redemption price thereof and that on and after such date interest
thereon will cease to accrue.
Notice of redemption having been given as aforesaid,
Bonds of Sixteenth Series so called for redemption, or the
specified portions thereof, shall, on the date designated in such
notice, become due and payable at the Sinking Fund redemption
price, and upon payment thereof in the manner prescribed between
the Company and the registered owner thereof on such date, such
bonds or the specified portions thereof shall be paid and
redeemed out of the funds held by the Trustee in the Sinking Fund
as aforesaid, at said redemption price, and on and after said
redemption date interest on said bonds or on the specified
portions thereof shall cease to accrue.
SECTION 4. All Bonds of Sixteenth Series redeemed as
above provided with moneys in the Sinking Fund shall be forthwith
cancelled by the Trustee and delivered to or upon the written
order of the Company. All such bonds so redeemed shall thereafter,
for all purposes of the Indenture, be deemed to have been bonded,
but only so long as any Bonds of Sixteenth Series remain
outstanding, and when no bonds of such series remain outstanding
such bonds redeemed with moneys in the Sinking Fund shall cease to
be bonded.
ARTICLE IV
MAINTENANCE AND REPLACEMENT FUND
SECTION 1. For the purpose of this Article IV, the
definitions contained in and the methods of computation
prescribed by this Section 1 shall be applied, unless the context
otherwise requires:
(a) The "amount of the gross property account" of
the Company at March 31, 1946, shall be deemed to be
$7,483,000. The "amount of the gross property account"
at any subsequent date shall be $7,483,000, plus the
cost to the Company of property additions of the
Company made to such subsequent date, less the amount
of all property retirements made to such subsequent
date. Notwithstanding the definition of "property
retirements" contained in Article I of the Indenture,
(i) property retirements shall be deemed to include
property additions not theretofore bonded,- which shall
have worn out or been retired, discontinued,
or abandoned, whether or not renewed or
replaced (but shall not include any property
only temporarily out of use), or which shall
have been sold or otherwise disposed of or
released, (ii) the amount of all property
retirements consisting of property owned by
the Company at March 31, 1946, shall be
computed at the original cost thereof, and
the amount of all other property retirements
shall be computed at the cost thereof to the
Company, and (iii) the deductions specified
in the second paragraph of said definition of
"property retirements" shall not be made. No
transportation properties shall be included
in property additions or property
retirements.
(b) The "average amount of the gross property
account for the period covered by the Maintenance
Certificate" shall be deemed to be the average of the
amounts of the gross property account at the date of
such Maintenance Certificate and at the date of the
next preceding Maintenance Certificate filed hereunder
(or, in the case of the period covered by the first
Maintenance Certificate, at March 31, 1946).;
(c) The "Maintenance and Replacement Requirement
for the period covered by the Maintenance Certificate"
shall be deemed to be an amount equal to four and one-
tenth percent (4.1%) of the average amount of the
gross property account for the period covered by the
Maintenance Certificate, if such Maintenance
Certificate covers a period of one year, and a
proportionately lesser amount if the Maintenance
Certificate covers a period of less than one year,
except if the Company shall be required to reduce the
percentages of its property accounts charged to
depreciation by order of the Public Service Commission
of the State of Missouri, the four and one-tenth per
cent (4.1%) figure shall be reduced by the amount the
average depreciable mortgaged property, exclusive of
transportation properties, shall be reduced by any
such order or orders.
(d) The "Cumulative Maintenance and Replacement
Requirement" shall be the sum of the Maintenance and
Replacement Requirements for all periods covered by
Maintenance Certificates filed hereunder including the
Maintenance Certificates then being filed.
(e) The "mortgaged property" shall be deemed to
exclude all transportation properties.
SECTION 2. The Company covenants and agrees that, so
long as any Bonds of Sixteenth Series are outstanding, it will
deliver to the Trustee a Maintenance Certificate (1) within four
months after the close of the calendar year 1946, covering the
period beginning April 1, 1946, and ending December 31, 1946,
and (2) within four months after the close of each calendar year
thereafter, covering the period from the date of the next
preceding Maintenance Certificate filed hereunder to the end of
such calendar year (reference being made to the provision of the
last paragraph of this Section 2 as to Maintenance Certificates
for periods prior to the date of this Seventeenth Supplemental
Indenture). The Company may, in addition, at its election, at
any time file a Maintenance Certificate for the period specified
therein, which shall cover the period from the date of the next
preceding Maintenance Certificate filed hereunder to a date
within four months prior to the date when filed. Each
Maintenance Certificate filed hereunder shall be dated the last
day of the period covered thereby, shall be signed by the
President or a Vice-president or the Treasurer of the Company
and shall show the following:
(a) The average amount of the gross property
account for the period covered by the Maintenance
Certificate, the Maintenance and Replacement
Requirement for the period covered by the Maintenance
Certificate and the Cumulative Maintenance and
Replacement Requirement.
(b) The aggregate of expenditures made by the
Company for repairs to and the maintenance of the
mortgaged property beginning April 1, 1946, through
the date of such Maintenance Certificate, showing
separately the amount of such expenditures during the
period covered by such Maintenance Certificate.
(c) The lesser of the cost or fair value (both of
which shall be stated) of property additions (whether
or not theretofore bonded) subsequent to March 31,
1946, to and including the date of such Maintenance
Certificate, in renewal or replacement of, in
substitution for or in lieu of any property
retirements (including therein retirements consisting
of property additions not theretofore bonded) made
subsequent to March 31, 1946, showing separately the
cost or fair value, whichever shall be less, of such
property additions not included in item (c) of any
previous Maintenance Certificate. For this purpose any
property additions shall be deemed to be in
substitution for or in lieu of such property
retirements to the extent that the cost or fair value,
whichever shall be less, of such property additions
does not exceed the amount of such property
retirements irrespective of the kind or character of
the property additions. For the purposes of this item
(c), the amount of such property retirements shall be
computed as specified in the definition of "property
retirements" in Article I of the Indenture except that
(i) the deductions referred to in the second paragraph
of said definition shall not be made, and (ii)
retirements consisting of property additions not
theretofore bonded shall be computed at the cost
thereof to the Company. The fair value of property
additions for the purpose of this item (c) shall be
taken at the date of the Maintenance Certificate in
which such property additions were included in item
(c) for the first time. If any property additions made
the basis of a credit under this item (c) are subject
to any prior lien, then the amount of such credit
otherwise available to the Company shall be reduced by
an amount equal to one hundred sixty-six and two-
thirds per cent (166-2/3%) of the principal amount of
the then outstanding prior lien bonds secured by such
prior lien and not theretofore deducted in connection
with any application under the Indenture for the
authentication and delivery of bonds, the withdrawal
of cash, the reduction of cash, or the release of
property. Property additions-shall not be considered
to be bonded by reason of their utilization under this
item (c).
(d) The aggregate of (1) the amount of any net
property additions not theretofore bonded which the
Company in such Maintenance Certificate elects to make
the basis of a credit under this Article IV, and (2)
the amount of any net property additions utilized
under item (d) of all previous Maintenance
Certificates, but only so far as the net property
additions so utilized have not ceased to be bonded as
permitted by Section 5 of this Article IV at the date
of the Maintenance Certificate then being filed. The
amount of net property additions utilized under item
(d) of a Maintenance Certificate for the first time
shall be separately stated. The fair value of property
additions shall be determined for the purpose of their
inclusion in net property additions under this item
(d) as of the date of the Maintenance Certificate in
which they are included in item (d) for the first
time. In any such case, if any property additions made
the basis of a credit under this item (d) are subject
to any prior lien, then the amount of such credit
otherwise available to the Company shall be reduced by
an amount equal to one hundred sixty-six and two-
thirds per cent (166-2/3%) of the principal amount of
the then outstanding prior lien bonds secured by such
prior lien and not theretofore deducted in connection
with any application under the Indenture for the
authentication and delivery of bonds, the withdrawal
of cash, the reduction of cash, or the release of
property. To the extent that net property additions
are utilized under this item (d) they shall be deemed
to have been bonded for all purposes of the Indenture,
provided, however, the $26,859,511.82 of the net
property additions not theretofore bonded which the
Company elected to make the basis of a credit under
Section 2(d) of Article IV of any of the Supplemental
Indentures in Maintenance Certificates filed for the
periods ended December 31, 1946, through December 31,
1989, shall not be deemed to be bonded by their use as
a credit under this Article IV and said $26,859,511.82
of net property additions shall remain available as a
credit under this Article IV whether or not they shall
remain or be bonded under any other provision of the
Indenture; and to the extent that prior lien bonds are
deducted under this item (d), they shall be deemed to
have been deducted, for all purposes of the Indenture,
in connection with an application for the withdrawal
or reduction of cash.
(e) The aggregate of (1) one hundred per cent
(100%) of the principal amount of prior lien bonds
(or, in the case of prior liens bonds, one hundred
sixty-six and two-thirds per cent (166-2/3%) of the
principal amount whereof has theretofore been deducted
in connection with the reduction or withdrawal of cash
under any provision of the Indenture, then an amount
equal to one hundred sixty-six and two-thirds per cent
(166-2/3%) of the principal amount of such prior lien
bonds) which prior to or simultaneously with the
filing of the Maintenance Certificate shall have been
deposited with the Trustee or paid or redeemed or
reduced or ascertained by final judicial determination
to be invalid, which the Company in such Maintenance
Certificate elects to make the basis of a credit under
this Article IV and which shall not theretofore have
been bonded, and (2) the aggregate amount of credit
based on prior lien bonds utilized under item (e) of
all previous Maintenance Certificates, but only so far
as the prior lien bonds so utilized have not ceased to
be bonded as permitted by Section 5 of this Article IV
at the date of the Maintenance Certificate then being
filed. The amount of prior lien bonds utilized under
item (e) of a Maintenance Certificate for the first
time shall be separately stated. To the extent that
prior lien bonds are utilized under this item (e) they
shall be deemed to have been bonded for all purposes
of the Indenture.
(f) The aggregate of (1) the principal amount of
bonds theretofore authenticated and delivered under
any provision of the Indenture, which after such
delivery and prior to or simultaneously with the
filing of such Maintenance Certificate shall have been
or be surrendered for conversion (if convertible)
except into other bonds, or paid or redeemed or
otherwise surrendered to the Trustee and cancelled
(otherwise than upon exchange of bonds of one
denomination for bonds of another denomination or of
coupon bonds for registered bonds or of registered
bonds for coupon books or upon transfer of registered
bonds or in lieu of lost, mutilated, stolen or
destroyed bonds), and (2) the principal amount of
bonds utilized under item (f) of all previous
Maintenance Certificates then being filed. The amount
of bonds utilized under item (f) of a Maintenance
Certificate for the first time shall be separately
stated. To the extent that bonds are utilized under
this item (f) they shall be deemed to have been bonded
for all purposes of the Indenture.
(g) The amount, if any, of cash previously
deposited by the Company with the Trustee pursuant to
Section 3 of this Article IV and not subsequently
withdrawn pursuant to subdivision (a) of Section 4 of
this Article IV.
(h) The amount if any (hereinafter sometimes
referred to as the "Item (h) Credit"), by which the
aggregate of the foregoing items (b), (c), (d), (e),
(f) and (g) exceeds the Cumulative Maintenance and
Replacement Requirement.
(i) The amount, if any (hereinafter sometimes
referred to as the "Item (i) Deficit"), by which the
aggregate of the amounts of the foregoing items (b),
(c), (d), (e), (f) and (g) fails to equal the
Cumulative Maintenance and Replacement Requirement.
Each Maintenance Certificate shall be accompanied by the
officers' certificate, engineer's certificate and independent
engineer's certificate, opinion of counsel, instruments of
conveyance and transfer and other documents described in Article
III of the Indenture, to the extent that they are pertinent to
establish the facts set forth in the Maintenance Certificate
except that, subject to the provisions of Section 8 of Article
XVII of the Indenture, the Company may incorporate by reference
any such certificates, opinions, instruments or documents
previously filed with the Trustee under this Article IV.
Any Maintenance Certificate filed under the provisions
of Article IV of any of the Supplemental Indentures shall be
deemed to have been filed under the provisions of this Article
IV whether filed before or after the execution of this
Seventeenth Supplemental Indenture, and insofar as a Maintenance
Certificate filed under the provisions of Article IV of any of
the Supplemental Indentures contains the same information and is
accompanied by the same certificates, opinions and other
documents as are required by this Article IV, it shall be deemed
to fulfill the requirements of this Article IV as though filed
pursuant to the provisions of this Article IV, and compliance by
the Company with the provisions of Article IV of any of the
Supplemental Indentures, shall be deemed to be compliance with
Article IV of this Seventeenth Supplemental Indenture.
SECTION 3. In case any Maintenance Certificate shows
an Item (i) Deficit, the Company covenants that it will,
concurrently with the filing of such certificate, deposit with
the Trustee an amount in cash equal to the amount of such
deficit.
SECTION 4. Any cash deposited with the Trustee under
this Article IV shall be held by the Trustee as further security
for the bonds, but may be withdrawn by the Company as follows:
(a) Any such cash may at any time be withdrawn by the
Company in an amount equal to the Item (h) Credit stated in the
last filed Maintenance Certificate, upon filing with the
Trustee of an officers' certificate requesting such withdrawal
and stating that such withdrawal is made against the
utilization of such Item (h) Credit.
(b) Any such cash may also be withdrawn by the Company
upon compliance with the provisions of subdivisions (b) and (c)
of Section 1 of Article VIII of the Indenture.
The Company shall also have the right at all times and from
time to time to direct the Trustee to apply any moneys deposited with it
under this Article IV toward the purchase or redemption of bonds or prior
lien bonds in the manner provided in Section 2 of Article VIII of the
Indenture.
Any moneys deposited with the Trustee under this Article IV
which shall not have been withdrawn by the Company or applied by the
Trustee at the direction of the Company to the purchase or redemption of
bonds or prior lien bonds within five years from the date of deposit
thereof shall be applied by the Trustee, if in excess of fifty thousand
dollars ($50,000), toward the purchase or redemption of bonds or prior
lien bonds in the manner provided in Section 2 of Article VIII of the
Indenture, except that the Company shall not be required to provide the
Trustee with any amount by which the price at which such bonds or prior
lien bonds are purchased or redeemed exceeds the principal amount thereof
and shall not be entitled to receive from the Trustee the amount by which
said price is less than said principal amount.
SECTION 5. Any net property additions, bonds or prior lien
bonds which have become bonded by being included under item (d), (e), or
(f) of any Maintenance Certificate filed with the Trustee under this
Article IV may subsequently cease to be bonded on utilizing the Item (h)
Credit, if any, stated in the last filed Maintenance Certificate, but
only in an amount not exceeding (1) in the case of such net property
additions, the cost or then fair value thereof to the Company, whichever
is greater, and (2) in the case of bonds or prior lien bonds, the
amount with respect thereto included under item (e) or (f) at the time of
the utilization thereof in any Maintenance Certificate; and thereupon any
prior lien bonds deducted under item (d) in respect of such net property
additions shall no longer be deemed to have been deducted for the
purposes of any subsequent application under the Indenture for the
authentication and delivery of bonds, the release of property, the
withdrawal of cash or the reduction of cash. Such changes shall become
effective upon the filing with the Trustee of an officers' certificate
stating that the bonded net property additions, bonds or prior lien bonds
referred to therein are to cease to be bonded upon the utilization of an
amount, specified therein and determined as aforesaid, of the Item (h)
Credit stated in the last filed Maintenance Certificate, and describing
any bonded net property additions included therein and stating their cost
and then fair value to the Company, and describing any prior lien bonds
theretofore deducted in respect of such net property additions.
Whenever any Item (h) Credit, or any part thereof, has been
utilized as hereinabove in this Article IV stated, such Item (h) Credit
shall be diminished to the extent so utilized for all future purposes.
SECTION 6. Whenever all Bonds of Sixteenth Series are paid or
redeemed, the Company shall be entitled to any remaining moneys received
by the Trustee and then held undisposed of under the provisions of this
Article IV, and all net property additions, bonds and prior lien bonds,
which have become bonded by being included in any Maintenance Certificate
filed under this Article IV, shall thereupon cease to be bonded; and, for
the purposes of any subsequent application under the Indenture for the
authentication and delivery of bonds, the release of property, the
withdrawal of cash or the reduction of cash, prior lien bonds which shall
have been deducted under item (d) of Section 2 of this Article IV shall
no longer be deemed to have been deducted as provided in said item (d).
ARTICLE V
THE TRUSTEE
The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of the Seventeenth
Supplemental Indenture or the due execution hereof by the Company, or for
or in respect of the recitals and statements contained herein, all of
which recitals and statements are made solely by the Company.
Except as herein otherwise provided, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of the Seventeenth Supplemental
Indenture other than as set forth in the
Indenture; and this Seventeenth Supplemental Indenture is
executed and accepted on behalf of the Trustee, subject to all
the terms and conditions set forth in the Indenture, as fully to
all intents as if the same were herein set forth at length.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Except insofar as herein otherwise expressly provided,
all the provisions, terms and conditions of the Original
Indenture shall be deemed to be incorporated in, and made a part
of, this Seventeenth Supplemental Indenture; and the Original
Indenture as supplemented by the Supplemental Indentures, the
Tenth Supplemental Indenture and this Seventeenth Supplemental
Indenture shall be read, taken and construed as one and the same
instrument.
Nothing in this Seventeenth Supplemental Indenture is
intended, or shall be construed, to give to any person or
corporation, other than the parties hereto and the holders of
bonds issued and to be issued under and secured by the Indenture,
any legal or equitable right, remedy or claim under or in respect
of this Seventeenth Supplemental Indenture, or under any
covenant, condition or provision herein contained, all the
covenants, conditions and provisions of the Seventeenth
Supplemental Indenture being intended to be, and being, for the
sole and exclusive benefit of the parties hereto and of the
holders of bonds issued and to be issued under the Indenture and
secured thereby.
All covenants, promises and agreements in this
Seventeenth Supplemental Indenture contained by or on behalf of
the Company shall bind its successors and assigns whether so
expressed or not.
This Seventeenth Supplemental Indenture may be executed
in any number of counterparts, and each of such counterparts when
so executed shall be deemed to be an original; but all such
counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, ST. JOSEPH LIGHT & POWER COMPANY
has caused this Seventeenth Supplemental Indenture to be executed
by its President and its corporate seal to be hereunto affixed
duly attested by its Secretary and HARRIS TRUST AND SAVINGS BANS,
as Trustee as aforesaid, has caused the same to be executed by
one of its Vice Presidents and its corporate seal to be hereunto
affixed, duly attested by one of its Assistant Secretaries, all
as of the day and year first above written.
ST. JOSEPH LIGHT & POWER COMPANY,
(CORPORATE SEAL)
Terry Steinbecker
President
Attest:
G L. MYERS
Secretary
Signed, sealed, acknowledged and delivered
by St. Joseph Light & Power Company in
the presence of:
RALPH B.MAYER
LARRY J. STOLL
HARRIS TRUST AND SAVINGS BANK,
as Trustee,
(CORPORATE SEAL)
By
J.BARTOLINI
Vice President
Attest:
F.A. PIERSON
Assistant Secretary
Signed, sealed, acknowledged and delivered
by Harris Trust and Savings Bank in the
presence of:
N. ONISCHAK
D. DONOVAN
STATE OF MISSOURI
COUNTY OF BUCHANAN
On this 28th day of January,
A.D. 1991, before me a notary public in
and for said county personally appeared
TERRY F. STEINBECKER, to me personally
known, who, being by me duly sworn, did
say that he is the President of ST. JOSEPH
LIGHT & POWER COMPANY, a Missouri
corporation, one of the corporations
described in and which executed the
foregoing instrument, and that the seal
affixed to the foregoing instrument is the
corporate seal of said corporation, and
that said instrument was signed and sealed
in behalf of said corporation by authority
of its board of directors and said TERRY
F. STEINBECKER acknowledged said
instrument to be the free and voluntary
act and deed of said corporation by it
voluntarily executed.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal in the county and state aforesaid the
day and year first above written.
(NOTARIAL SEAL)
Jennifer L. McDonald
My commission expires:
STATE OF ILLINOIS )
) ss:
COUNTY OF COOK )
On this 25th day of January, A.D. 1991, before me a
notary public in and for said county personally appeared J.
BARTOLINI, to me personally known, who, being by me duly sworn,
did say that she is a Vice President of HARRIS TRUST AND SAVINGS
BANK, an Illinois corporation, one of the corporations described
in and which executed the foregoing instrument, and that the seal
affixed to the foregoing instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed in
behalf-of said corporation by authority of its board of directors,
and said J. BARTOLINI acknowledged said instrument to be the free
and voluntary act and deed of said corporation by it voluntarily
executed.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal in the county and state aforesaid the
day and year first above written.
(NOTARIAL SEAL)
T. Muzquiz
My commission expires:
MEDIUM-TERM NOTES
ISSUING AND PAYING AGENCY AGREEMENT
THIS ISSUING AND PAYING AGENCY AGREEMENT, dated as of November
19, 1993 (the "Agreement"), is entered into by and between St. Joseph
Light & Power Company, a Missouri corporation (the "Company"), and
Harris Trust and Savings Bank, as issuing and paying agent (the "Issuing
and Paying Agent").
W I T N E S S E T H:
SECTION 1. Appointment of Issuing and Paying Agent. The
Company proposes to issue and sell, from time to time, medium-term notes
having terms from one year to thirty years from their dates of issue
(the Notes or, where referred to individually, the "Note"), and has
appointed Dean Witter Reynolds Inc. as the placement agent for such
Notes (the "Placement Agent"). Initially and unless notification is
given by the Company to the Issuing and Paying Agent in writing, the
Company intends to issue an aggregate principal amount of Notes equal to
US $45,000,000. The Company hereby appoints and authorizes the Issuing
and Paying Agent to act, on the terms and conditions specified herein,
as issuing and paying agent for the Notes. The Issuing and Paying Agent
hereby accepts such appointment subject to the terms of this Agreement.
SECTION 2. Note Form: Signature. The Company shall from time
to time furnish the Issuing and Paying Agent with an adequate supply of
registered Notes, without coupons, serially numbered, which shall have
the following information left blank: the principal amount, date of
original issue, maturity date, interest payment dates, if any, regular
record dates, if any, initial redemption date, if any, initial
redemption percentage, if any, annual redemption percentage reduction,
if any, holder's optional repayment dates, if any, and rate of interest
and, such additional terms as may be set forth in the Notes as
hereinafter designated by the Company, and, the name and address of the
Registered Holder (as hereinafter defined) and other applicable terms
which may be specified with respect to such Notes. Each Note shall bear
interest at a fixed rate from the date of original issue at the rate
specified therein, such interest calculated as provided in Section 6.
The interest rate borne by any particular Note may vary as against the
rate borne by any other Note issued hereunder. Any such variation in the
interest rate with respect to a particular Note shall not affect the
rate of interest borne by any other Note issued hereunder. Each Note
shall be signed manually or by facsimile signature by an Authorized
Representative (as hereinafter defined). The Notes shall be
substantially in the form of Exhibit A hereto or such
additional forms as may hereinafter be designated by the Company,
shall have maturities of not less than one year nor more than
thirty years from their respective dates of issue, and shall be
issued in the respective order of the serial numbers imprinted
thereon in denominations of US $100,000 and any larger
denominations in integral multiples of US $1,000. The Issuing and
Paying Agent shall take steps to assure the safekeeping of the
blank Notes in accordance with its customary practice.
SECTION 3. Authorized Representatives and Instructing
Representatives. From time to time the Company shall furnish the
Issuing and Paying Agent with a certificate of the Company, in
the form attached hereto as Exhibit B. certifying the incumbency
and specimen signatures of officers or agents of the Company
authorized to (i) execute the Notes on behalf of the Company by
manual or facsimile signature (each officer or agent,
individually, an Authorized Representative") and (ii) give
instructions and notices on behalf of the Company to the Issuing
and Paying Agent (each such officer or agent, individually, an
Reinstructing Representative"). Until the Issuing and Paying
Agent receives a subsequent incumbency certificate signed by a
duly authorized officer in the form of Exhibit B. the Issuing and
Paying Agent shall be entitled to rely on the last such
certificate delivered to it for purposes of determining who is an
Authorized Representative or an Instructing Representative, as
the case may be. The Issuing and Paying Agent shall have no
responsibility to the Company to determine (i) by whom or by what
means a facsimile signature may have been affixed on the Notes,
or (ii) whether any facsimile or manual signature is genuine and
if such facsimile or manual signature reasonably resembles the
specimen signatures contained in the last certificate furnished
pursuant hereto to the Issuing and Paying Agent by the Company,
or (iii) whether any instructions were authorized by the Company.
Any Note bearing the manual or facsimile signature of a person
who is an Authorized Representative on the date such signature is
affixed to such Note shall bind the Company upon the completion
and authentication thereof by the Issuing and Paying Agent,
notwithstanding that such person may have ceased to be an
Authorized Representative on the date such Note is completed,
authenticated or delivered by the Issuing and Paying Agent.
SECTION 4. Issuance Instructions. Completion.
Authentication and Delivery of Notes.
(a) Not later than 3:00 p.m., Chicago time, on the
second Business Day (as hereinafter defined) next
preceding the Business Day on which any Note is to be
delivered (the "Settlement Date"), instructions with
respect to the preparation and delivery of such Note
shall be given to the Issuing and Paying Agent (1) by
facsimile transmission signed by an
Authorized Representative or by an Instructing Representative
receipt of which shall be confirmed in writing or (2) if
possible, by direct input by the Company onto the Issuing and
Paying Agent's computerized note issuance system pursuant to the
terms of an electronic link agreement. Such instructions shall be
transmitted to one of the duly authorized representatives of the
Issuing and Paying Agent named in Exhibit C hereto or their
successors which may be named by the Issuing and Paying Agent (of
which the Company shall be notified in writing) from time to time
(each, a "Responsible Employee") and the Issuing and Paying Agent
may rely on such instructions received by it. Such instructions,
with respect to the Notes, shall include:
(i) Exact name of the person in whose name
a Note is to be registered (the
"Registered Holder");
(ii) Exact address of the Registered Holder;
(iii) Exact address of the Registered Holder
for delivery of Notes, notices and
payments of principal and interest
(including the location and account
number of any bank account designated by
the Registered Holder to receive
payments) if different from (ii) above;
(iv) Taxpayer identification number of the
Registered Holder;
(v) Principal amount of each Note;
(vi) Sale date;
(vii) Settlement Date (original issue date);
(viii) Maturity date;
(ix) Interest payment dates;
(x) Regular record dates;
(xi) Interest rate;
(xii) Redemption provisions, if any:
(a) initial redemption date;
(b) initial redemption percentage;
(c) annual redemption percentage reduction;
(xiii) Holder's optional repayment dates,
if any;
(xiv) other terms, if any;
(xv) (a) Issue Price, if other than 100e;
(b) Proceeds net of commission;
(c) Placement Agent's commission; and
(xvi) Cusip Number or private placement
number, if any.
(b) Upon receipt of the information set forth in
subsection (a) above, the Issuing and Paying Agent shall confirm
by telephone to the Vice President - Finance of the Company, or
if such information was received by direct input by the Company
onto the Issuing and Paying Agent's computerized note issuance
system, then, if possible, by direct input on such system from
the Issuing and Paying Agent to the Company, the principal amount
of all Notes issued on or prior to such date hereunder after
giving effect to such transaction and to all other transactions
of which the Company through an Instructing Representative has
given instructions to the Issuing and Paying Agent but which have
not yet been settled.
(c) Subject to Section 4(d) hereof, upon receipt of
written instructions or instructions transmitted pursuant to the
Issuing and Paying Agent's computerized note issuance system, in
each case as provided in subsection (a) above, the Issuing and
Paying Agent in accordance with such instructions shall:
(i) complete each Note with the information
specified in Section 4(a) above, as applicable;
(ii) record each Note in the Note Register (as
defined in Section 14 hereof);
(iii) cause each Note to be manually
countersigned by any one of the officers or employees
of the Issuing and Paying Agent duly authorized for
such purpose;
(iv) deliver each Note (A) to the Placement Agent
or its designated consignee, as applicable, no later
than the Business Day prior to the Settlement Date,
which delivery shall be against a date and time-stamped
receipt from the Placement Agent or its designated
consignee, as applicable, or (B) upon instructions of
an Instructing Representative of the Company, to the
Registered Holder; and
(v) retain one copy of each Note for its records
and send a copy of each such Note to the Company and
the Placement Agent.
(d) Instructions regarding the completion of a Note
given via the Issuing and Paying Agent's computerized note
issuance system shall be entered as prescribed in the user
documentation provided by the Issuing and Paying Agent, and all
instructions, whether delivered by the Issuing and Paying Agent's
computerized note issuance system, by telephone confirmed in
writing, by facsimile transmission or in writing must be received
by the Issuing and Paying Agent not later than 3:00 P.M., Chicago
time, on the second Business Day next preceding the Settlement
Date. As used in this Agreement, the term business Day" shall
mean any day, other than a Saturday or a Sunday or a day on which
banking institutions in The City of New York, New York or
Chicago, Illinois are generally authorized or obligated by law or
executive order to close. Telephone instructions regarding
completion of a Note shall be confirmed promptly in writing, by
facsimile or other electronic transmission on the same day as
given; provided, however, that the Issuing and Paying Agent is
not required to delay in taking any action pending receipt of
such written instructions.
(e) Once the Issuing and Paying Agent has delivered
Notes to the Placement Agent or its designated consignee against
a date and time-stamped receipt for payment, the Company shall
bear the risk that the Placement Agent or designated consignee
fails to remit payment for the Notes or return the same to the
Issuing and Paying Agent. It is further understood that each
delivery of Notes hereunder shall be subject to the rules of the
New York Clearing House in effect at the time of such delivery.
SECTION 5. Proceeds of Sale of the Notes. The Issuing
and Paying Agent shall deliver the Notes to the Placement Agent
on the Settlement Date as provided in Section 4(c)(iv) hereof.
All proceeds which may be received by the Issuing and Paying
Agent in payment for the Notes shall be transferred by wire
transfer in immediately available funds or Clearing House
(nextday) Funds, as applicable, and shall be credited to such
account as the Company shall designate in writing.
SECTION 6. Payments. Subject to the receipt of funds as
provided in Section 11 hereof, interest payments shall be made,
in the case of a Note, on each April 1 and October 1, unless
otherwise specified on the face of such Note (in each case, an
"Interest Payment Date"), commencing on the first such date
following the issue date of the Note except as provided below,
and, in each case, on the date of redemption or repayment, if
any, and at maturity. If any Interest Payment Date, maturity date
or date of redemption or repayment for any Note falls on a day
that is not a Business Day, the related payment of principal,
premium (if any) or interest shall be made on the next succeeding
Business Day with the same force and effect as if made on the
date such payment was due, and no interest shall accrue with
respect to the amount so payable for the period from and after
such Interest Payment Date, maturity date or date of redemption
or repayment, as the case may be. All such interest payments
(other than interest due on the date of redemption or repayment,
if any, or at maturity) shall be paid to the Registered Holder of
such Note (or in respect of any particular Note, any Note
evidencing all or a portion of the same debt evidenced by such
particular Note, including any Note authenticated and delivered
under Section 16 in lieu of a lost, stolen, mutilated or
destroyed Note, any Note so evidencing the same debt being herein
called a "Predecessor Note") at the close of business on the
March 15 or September 15, as the case may be (whether or not a
Business Day), immediately preceding the Interest Payment Date
(each, a "Regular Record Date"). The Regular Record Date with
respect to any Interest Payment Date other than April 1 or
October 1 shall be the day specified (whether or not a Business
Day) on the face of such Note. Notwithstanding the foregoing, if
a Note is issued between a Regular Record Date next preceding an
Interest Payment Date and such Interest Payment Date, the first
payment of interest on such Note shall be made on the next
succeeding Interest Payment Date following the next succeeding
Regular Record Date to the Registered Holder on the Regular
Record Date immediately succeeding such first Interest Payment
Date.
Each Note shall accrue interest from and including the
most recent Interest Payment Date to which interest has been paid
or duly provided for or, if no interest has been paid, from and
including its original issue date until the principal amount
thereof has been paid or otherwise made available for payment.
Interest on Notes (including payments for partial
periods) shall be computed and paid on the basis of a 360-day
year consisting of twelve 30-day months. All interest payments on
any Note (other than interest due on the date of redemption or
repayment, if any, or at maturity) shall be made by check of the
Issuing and Paying Agent mailed by the Issuing and Paying Agent
to the Registered Holder of such Note (or a Predecessor Note) as
of the immediately preceding Regular Record Date at the address
of such Registered Holder set forth in the Note Register;
provided, however, that upon receipt by the Issuing and Paying
Agent of written instructions from the Registered Holder of Notes
in an aggregate principal amount equal to or exceeding five
million dollars (US $5,000,Q00) having the same Interest Payment
Date, not less than fifteen (15) calendar days prior to an
Interest Payment Date, the Issuing and Paying Agent shall make
such interest payment by the transfer of immediately available
funds to such account at a bank as the Registered Holder of such
Notes shall have designated, provided that such bank has
appropriate facilities therefor. If required by applicable law or
instructed by the Company or any governmental agency that taxes
or other governmental charges should be withheld, the Issuing and
Paying Agent shall withhold any such taxes or other governmental
charges on any payments made in connection with the Notes.
SECTION 7. Payment of Principal. Upon the earlier of
the date of redemption or repayment, if any, or maturity of any
Note, the Issuing and Paying Agent shall pay, subject to the
receipt of funds as provided in Section 11 hereof, and against
presentation and surrender of such Note by the Registered Holder
thereof at the office of the Issuing and Paying Agent, 311 West
Monroe, 12th Floor, Chicago, Illinois 60606, attention Indenture
Trust Division, the principal amount of such Note, together with
accrued interest, if any, and premium, if any, due on the date of
redemption or repayment or at maturity. Such payment shall be
made in immediately available funds; provided, however, that if
such payment is to be made by wire transfer, the Issuing and
Paying Agent shall have received, at least two Business Days
prior to such payment date, appropriate wire transfer
instructions in writing from the Registered Holder. The Issuing
and Paying Agent shall forthwith (i) cancel and may destroy each
such Note, (ii) make appropriate entries in its records, and
(iii) send the Company a certificate of any such destruction on
the date such canceled Note is destroyed.
The Issuing and Paying Agent shall solicit from
Registered Holders information or other reports or returns
necessary or required by law or regulation in connection with any
federal or, at the direction of the Company, state requirement to
report information or withhold for taxes.
SECTION 8. Designation of Accounts to Receive Payment.
A bank account of a Registered Holder may be designated to the
Issuing and Paying Agent to receive payments of interest,
premium, if any, and principal under Sections 6 and 7 hereof
either (i) by an Authorized Representative or Instructing
Representative in the authorization instructions given by it to
the Issuing and Paying Agent under Section 4(a) hereof in respect
of a particular purchase of Notes, or (ii) in the event that the
authorization instructions make no designation, or that the
Registered Holder wishes to change a designation previously made,
by written notice from such Registered Holder to the Issuing and
Paying Agent. To be effective for any payment date, such written
notice must be provided to the Issuing and Paying Agent not later
than two Business Days prior to any payment date.
SECTION 9. Information Regarding Amounts Due on
Interest Payment Dates_and at Maturity. The Issuing and Paying
Agent shall, within five Business Days after the applicable
Regular Record Date, furnish the Company with a list of interest
payments to be made on the next Interest Payment Date for each
Note and in total on all of the Notes (the "Record Date
Statement") and the Issuing and Paying Agent shall provide to the
Company by the fifteenth day of any month preceding a month in
which any Note will mature a list of the principal, premium, if
any, and accrued interest to be paid on the Notes maturing in the
next succeeding month indicating, for each such Note the
principal amount thereof, premium, if any, and accrued interest
thereon to be paid at maturity and a list of the principal amount
of each Note outstanding as of the date of such list (the
"Maturity Schedule").
SECTION 10. Other Information Regarding the Notes. If
on any day on which Notes are issued or mature or are
to be redeemed, the Issuing and Paying Agent's
computerized note issuance system, if any, should be
inoperative, the Issuing and Paying Agent shall prepare
and forward by facsimile transmission to the Company as
of the close of business on such day a written
statement indicating by Note serial number and
principal amount the Notes issued on such day and the
aggregate principal amount of Notes outstanding at the
close of business on such day. In all other instances,
the Company, if possible, shall have access to such
information via the Issuing and Paying Agent's
computerized note issuance system.
SECTION 11. Deposit of Funds. The Company shall, on
each Interest Payment Date, pay to the Issuing and
Paying Agent an amount in immediately available funds
sufficient to pay all interest due on Notes for such
Interest Payment Date and shall, on each date of
redemption or repayment, if any, or maturity date of
any Note, pay to the Issuing and Paying Agent an amount
in immediately available funds sufficient to pay the
principal of any such Note, and accrued and unpaid
interest and premium, if any, to the date of redemption
or repayment or the maturity date, as the case may be.
SECTION 12. Optional Redemption. In the event that any
Note or Notes permit the Company to redeem such Note or Notes at
its option and the Company elects to redeem such Note or Notes,
in whole or in part, the Company shall give written notice to the
Issuing and Paying Agent of the principal amount, the redemption
date and the redemption price of the Note or Notes to be so
redeemed not less than 45 days nor more than 65 days prior to
such redemption date. The Issuing and Paying Agent shall cause
notice of redemption to be given not less than 30 nor more than
60 days prior to each redemption date in the name of and at the
expense of the Company in the manner provided in the Note or
Notes. Whenever less than all the Notes at any time outstanding
are to be redeemed, the terms of the Notes to be so redeemed
shall be selected by the Company, and the Company shall notify
the Issuing and Paying Agent in writing of the terms of the Notes
to be redeemed. If less than all the Notes of identical terms at
any time outstanding are to be redeemed, the Notes to be so
redeemed shall be selected by the Issuing and Paying Agent by lot
or in any usual manner approved by it.
SECTION 13. Optional Repayment. In the event that any
Note or Notes permit the Registered Holder thereof to have such
Note or Notes repaid by the Company at the Registered Holder's
option and the Registered Holder elects to have such Note or
Notes repaid, in whole or in part, the Note or Notes must be
received, with a duly completed form entitled "Option to Elect
Repayment," by the Issuing and Paying Agent at 311 West Monroe,
12th Floor, Chicago, Illinois 60606, attention Indenture Trust
Division, or such other address as the Company shall from time to
time notify the Registered Holders of the Notes, not more than 60
nor less than 30 days prior to a Holder's Optional Repayment Date
(as defined in the Notes). Exercise of such repayment option by
the Registered Holder of a Note or Notes shall be irrevocable
with respect to such Note or Notes for which such repayment
election is made.
SECTION 14. Registration: Transfer.
(a) The Issuing and Paying Agent shall maintain the
definitive record on its own internal record keeping system in
which it shall record the names, addresses, addresses for payment
and taxpayer identification numbers of Registered Holders of
Notes and details with respect to the issuance, transfer and
exchange of Notes as appropriate (the "Note Register"). It is
understood that the Note Register may be maintained on the
Issuing and Paying Agent's computerized note issuance system, if
available. At least monthly and upon request of the Company, the
Issuing and Paying Agent shall forward a printed copy of the Note
Register to the Company.
(b) If any resale or other transfer of a Note is
proposed to be made (i) to a "Qualified Institutional Buyer" as
defined in Rule 144A ("Rule 144A") promulgated under the
Securities Act of 1933, as amended (the "1933 Act"), in a
transaction which meets the requirements of Rule 144A, (ii)
outside of the United States of America, its territories and
possessions in an "offshore transaction" that meets the
requirements of Regulation S promulgated under the 1933 Act, or
(iii) to an institutional accredited investor that is an
"accredited investor" as defined in Rule 501(a)(1)-(3)
promulgated under the 1933 Act (each such institutional
accredited investor, an Institutional Accredited Investor"), the
Issuing and Paying Agent shall not register the transfer of such
Note unless (i) the Registered Holder thereof and the prospective
purchaser have duly completed the Certificate of Transfer
contained in such Note or a Bond Power substantially in the form
of Exhibit C to the most recent Private Placement Memorandum of
the Company relating to the offer and sale of the Notes (the
"Bond Power") and (ii) the Issuing and Paying Agent has received
the Note (and a Certificate of Transfer or Bond Power) at its
offices at Harris Trust and Savings Bank, 311 West Monroe, 12th
Floor, Chicago Illinois 60606, Attention: Indenture Trust
Division or other such address which the Company shall from time
to time notify the Registered Holders of the Notes.
(c) If any resale or other transfer of a Note is
proposed to be made to the Placement Agent or to the Company, a
duly completed Certificate of Transfer or Bond Power is not
required to be submitted to the Issuing and Paying Agent and the
Issuing and Paying Agent shall register the transfer of such Note
upon receipt of written instructions from the Placement Agent or
the Company, as the case may be, to effect such resale or other
transfer.
(d) All Notes presented for the registration of
transfer shall be duly endorsed or shall be accompanied by a
written instrument of transfer, in form satisfactory to the
Company and the Issuing and Paying Agent, duly executed by the
Registered Holder thereof or his attorney duly authorized in
writing. Subject to the conditions stated in this Section 14, the
Issuing and Paying Agent shall register the transfer of any Note
and complete, countersign and deliver, in the name of the
designated transferee or transferees, one or more new Notes of
any authorized denominations having the same aggregate principal
amount and the same terms and provisions as the Note(s)
surrendered for transfer, provided, however, that the Issuing and
Paying Agent shall not be required to register the transfer of
any Note or any portion thereof (i) which has been called for
redemption or repayment during a period beginning at the opening
of business fifteen (15) calendar days before the day of mailing
of a notice of such redemption or repayment and ending at the
close of business on the day of such mailing.
(e) If a Note is presented for transfer other than
between a Regular Record Date and a corresponding Interest
Payment Date, the new Note shall be dated as of the last Interest
Payment Date. If a Note is presented for transfer between a
Regular Record Date and a corresponding Interest Payment Date,
the new Note shall be dated as of such Interest Payment Date. If
a Note is presented for transfer on an Interest Payment Date, the
new Note shall be dated as of such Interest Payment Date. If no
interest has been paid on a Note, the Note to be issued upon
transfer shall be dated as of the date of the Note presented for
transfer. If interest is overdue on a Note, the Note to be issued
upon transfer shall be dated as of the last Interest Payment Date
to which interest has been paid or duly provided for.
(f) In the event of redemption under Section 12 hereof
or repayment under Section 13 hereof of a Note in part only, a
new Note for the unredeemed or unpaid portion thereof shall be
issued by the Issuing and Paying Agent in the name of the
Registered Holder thereof upon the surrender of the Note being
redeemed or repaid in part.
(g) In connection with any registration of transfer of
Notes, the Company and the Issuing and Paying agent may require
payment by the transferor of a sum sufficient to cover any
applicable tax or other governmental charge.
(h) The Company agrees (i) to make available such
information required by Rule 144A under the 1933 Act to enable
resales of each Note to be made pursuant to Rule 144A and (ii) it
will otherwise use all reasonable efforts to ensure that such
exemption remains available with respect to such Note. Further,
the restrictions upon resales and other transfers of each Note,
as set forth on such Note, may be modified from time to time,
without the consent of but upon notice to the Registered Holder
thereof, (x) to reflect any change in applicable law or
regulation (or the interpretation thereof) or practices relating
to the resale or other transfer of restricted securities
generally and (y) to accommodate the issuance, if any, of Notes
in book-entry form and matters related thereto.
SECTION 15. Persons Deemed Owners. The Company, the
Issuing and Paying Agent and any agent of the Company
or the Issuing and Paying Agent may deem and treat the
Registered Holder of any Note as the absolute owner of
such Note for the purpose of receiving payment of
principal and premium, if any, and interest on such
Note and for all other purposes whatsoever, whether or
not such Note be overdue, and neither the Company, the Issuing
and Paying Agent nor any agent of the Company or the Issuing and
Paying Agent, except as provided in this Section 15, shall be
affected by any notice to the contrary.
SECTION 16. Mutilated, LostL Stolen or Destroyed Notes.
In case any Note shail become mutilated, destroyed, lost or
stolen, and upon the satisfaction by the applicant of the
requirements of this Section for a substituted Note, the Company
in its discretion may, upon the written request of the Registered
Holder of such Note, execute, and upon the Company's request the
Issuing and Paying Agent shall complete, countersign and deliver,
a new Note having identical terms and provisions and a serial
number not then outstanding, payable in the same principal
amount, of like tenor, dated the same date in exchange and in
substitution for the mutilated Note or in lieu of and in
substitution for the Note destroyed, lost or stolen. In each such
case, the applicant for a substituted Note shall furnish to the
Company and to the Issuing and Paying Agent such security or
indemnity as may be required by them to save each of them
harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and to the Issuing
and Paying Agent evidence to their satisfaction of the
destruction, loss or theft of such Note and of the ownership
thereof. In the case of the mutilation of a Note, the applicant
for a substituted Note shall surrender such mutilated Note to the
Company or to the Issuing and Paying Agent for cancellation
thereof. The Issuing and Paying Agent is authorized to complete
and countersign any such substitute Note and deliver the same
upon the written request or authorization of any Instructing
Representative. Upon the issuance of any substitute Note, the
Company and the Issuing and Paying Agent may require the payment
by the Registered Holder thereof of a sum sufficient to cover any
fees and expenses in connection therewith. In case any Note shall
become mutilated or be destroyed, lost or stolen after the stated
maturity date thereof or within 30 calendar days of the stated
maturity date thereof or the date of redemption or repayment
thereof, the Company may, instead of issuing a substitute Note,
pay or authorize the payment of the same (without surrender
thereof except in the case of a mutilated Note) upon compliance
by the Registered Holder thereof with the provisions of this
Section 16. All applications under this Section shall be
processed by the Issuing and Paying Agent and the Issuing and
Paying Agent shall record on the Note Register the cancellation
of any original Notes (whether or not physically surrendered to
the Issuing and Paying Agent) and the reissuance of Notes in
substitution therefor due to mutilation, destruction, loss or
theft.
SECTION 17. Return of Unclaimed Funds. Any moneys
deposited by the Company with the Issuing and Paying Agent for
the payment of the principal of, or interest or premium, if any,
on any Notes, and remaining unclaimed at the end of 90 calendar
days after such principal, interest or premium shall have become
due and payable (whether at maturity or upon call for redemption
or upon repayment or otherwise) shall then be repaid to the
Company by the Issuing and Paying Agent, and upon such repayment
all liability of the Issuing and Paying Agent with respect to
such moneys shall thereupon cease, without, however, limiting in
any way any obligation which the Company may have to pay the
principal of or interest or premium, if any, on any Notes as the
same shall become due. The Registered Holder of any Notes to
which such deposit related shall, after repayment to the Company
of such deposit pursuant to this Section 17, look only to the
Company for the payment of principal, interest or premium, if
any, to which such deposit shall have related.
SECTION 18. Resignation or Removal of Issuing and
Paying Agent. The Issuing and Paying Agent may at any time resign
as such agent by giving written notice to the Company of such
intention on its part, specifying the date on which its
resignation shall become effective; provided, however, that such
date shall not be less than 90 days after receipt of such notice
by the Company. The Issuing and Paying Agent may be removed at
any time without cause by written notice delivered to the Issuing
and Paying Agent signed by an Instructing Representative and
specifying such removal and the date when such removal is
intended to become effective; provided, however, that such date
shall not be less than 90 days after receipt of such notice by
the Issuing and Paying Agent. Such resignation or removal shall
take effect on the date of the appointment by the Company of a
successor agent and the acceptance of such appointment by such
successor Issuing and Paying Agent. Upon the effectiveness of
such resignation or removal, the Issuing and Paying Agent shall
transfer to the successor Issuing and Paying Agent any moneys and
unissued Notes held by it. In the event of resignation by the
Issuing and Paying Agent, if a successor agent has not been
appointed by the Company by the date as of which the resignation
of the Issuing and Paying Agent is to be effective, as set forth
in the resignation notice referred to above, the Issuing and
Paying Agent may, at the expense of the Company, petition any
court of competent jurisdiction for appointment of a successor
Issuing and Paying Agent. Any successor Issuing and Paying Agent
so appointed by such court shall immediately and without further
act be superseded by any successor Issuing and Paying Agent
appointed as provided above within one year from the date of the
appointment by such court.
SECTION 19. Reliance on Instructions. The Issuing and
Paying Agent shall incur no liability to the Company in acting
hereunder upon any instructions, notices, requests, directions,
certificates, consents, reports, statements or other instrument,
paper, document or communication contemplated hereby which the
Issuing and Paying Agent believed in good faith to have been
properly given.
SECTION 20. Cancellation of Unissued Notes. Promptly
upon the written request of the Company, the Issuing and Paying
Agent shall cancel and destroy all unissued Notes in its
possession and issue a certificate of destruction to the Company.
SECTION 21. Representations and Warranties of the
Company. Each instruction given to the Issuing and Paying Agent
in accordance with Section 4 hereof shall constitute a
representation and warranty to the Issuing and Paying Agent by
the Company that the issuance and delivery of the Notes have been
duly and validly authorized by the Company and that the Notes,
when completed, executed, countersigned and delivered pursuant
hereto, will constitute the valid and legally binding obligations
of the Company enforceable against the Company in accordance with
their respective terms, except to the extent enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by the effect of general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
SECTION 22. Fees. The Company agrees to pay the
compensation of the Issuing and Paying Agent at such rates as
shall be agreed upon from time to time in writing and to
reimburse the Issuing and Paying Agent for its out-of-pocket
expenses (including reasonable legal fees and expenses),
disbursements and advances incurred or made in accordance with
any provisions of this Agreement. The obligations of the Company
to the Issuing and Paying Agent pursuant to this Section shall
survive the resignation or removal of the Issuing and Paying
Agent and the satisfaction or termination of this Agreement.
SECTION 23. Notices.
(a) All communications by or on behalf of the Company
relating to the issuance, transfer, exchange,
completion, delivery or payment of the Notes or
interest thereon shall be directed to the Issuing and
Paying Agent at its address set forth in subsection
(b)(ii) hereof. The Company shall send all Notes to be
completed, countersigned and delivered by the Issuing
and Paying Agent to such address (or such other address
as the Issuing and Paying Agent shall specify in
writing to the Company). The Issuing and Paying Agent
shall advise the Company from time to time of the
individuals generally responsible for
the administration of this Agreement.
(b) Notices and other communications hereunder shall
(except to the extent otherwise expressly provided) be in writing
and shall be deemed to have been duly given, if mailed by first
class mail, postage prepaid, three days after deposit in the U.S.
mail, or, if transmitted by facsimile or other similar means,
upon confirmation of receipt. Notice and other communications
shall be addressed as follows, or to such other address as the
party receiving such notice shall have previously specified:
(i) If to the Company:
St. Joseph Light & Power Company
520 Francis Street
P.O. Box 998
St. Joseph, MO 64502-0998
Attention: Vice President-Finance
Telephone: (816) 233-8888
Facsimile: (816) 387-6332
(ii) If to the Issuing and Paying Agent:
Harris Trust and Savings Bank
311 West Monroe Street
12th Floor
Chicago, Illinois 60606
Attention: Indenture Trust Division
Facsimile: (312) 461-3525
SECTION 24. Information Furnished by the Issuing and
Paying Agent. The Issuing and Paying Agent shall provide the
Company, on any day on which a Note is issued, notification of
all issuances of Notes on such day. The Issuing and Paying Agent
shall send by first-class mail to the Company, at its address set
forth in Section 23 hereof, a copy of each Note issued on such
day. In addition, upon the reasonable request of the Company,
given at any time and from time to time, the Issuing and Paying
Agent shall promptly provide the Company with information with
respect to the Notes issued hereunder to the extent such
information is reasonably available.
SECTION 25. Certain Notices. Promptly upon its becoming
aware of (i) the occurrence and continuance of an event of
default under the Notes (after any applicable grace period) and
(2) if applicable, the curing of such event of default, the
Company shall instruct the Issuing and Paying Agent to notify the
Registered Holders of the Notes as to such occurrence. Upon
receipt of such written instructions in respect of the occurrence
of such event of default, the Issuing and Paying Agent shall
promptly mail to all Registered Holders of Notes, at the
addresses of such Registered Holders as they appear in the Note
Register, notice of such event of default, unless the Company
shall have notified the Issuing and Paying Agent that such event
of default shall have been cured before the giving of such notice
by the Issuing and Paying Agent. Nothing herein shall be
construed as obligating the Issuing and Paying Agent to
investigate the occurrence or existence of any event of default
or curing thereof.
SECTION 26. Liability.
(a) Neither the Issuing and Paying Agent nor its
directors, officers or employees shall be liable to the Company
for any act or omission hereunder except in the case of gross
negligence or willful misconduct. The duties and obligations of
the Issuing and Paying Agent, its directors, officers and
employees shall be determined by the express provisions of this
Agreement, and they shall not be liable, except for the gross
negligence or willful misconduct in the performance, or failure
to perform, of such duties and obligations as are specifically
set forth herein, and no implied covenants shall be read into
this Agreement against them. Neither the Issuing and Paying Agent
nor its directors, officers or employees shall be required to
ascertain whether any issuance or sale of Notes (or any amendment
or termination of this Agreement) has been duly authorized
(provided that the Issuing and Paying Agent in good faith has
determined that the facsimile or manual signature of the
Authorized Representative or Instructing Representative
reasonably resembles the specimen signatures filed with the
Issuing and Paying Agent) or is in compliance with any other
agreement to which the Company is a party (whether or not the
Issuing and Paying Agent is also a party to such other agreement)
and the Issuing and Paying Agent and each of its officers and
employees shall be entitled to rely upon any instructions,
notices, requests, directions, certificates, consents, reports,
statements, or other instrument, paper, document or communication
reasonably believed (in accordance with Section 19 hereof) by the
Issuing and Paying Agent and its officers and employees to be
given on behalf of the Company by an Authorized Representative or
by an Instructing Representative, whether or not in fact given by
the Authorized Representative or such an Instructing
Representative.
(b) In acting under this Agreement, and in connection
with the Notes, the Issuing and Paying Agent is acting solely as
agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any of the owners or
holders of the Notes.
(c) The Issuing and Paying Agent may, upon approval by
the Company, which approval shall not be unreasonably withheld,
consult with counsel satisfactory to it, and the advice of such
counsel shall be full and complete authorization and protection
in respect of any action taken or omitted to be taken or suffered
by it hereunder in good faith and in accordance with the advice
of such counsel.
(d) The Issuing and Paying Agent shall be protected
and shall incur no liability for or in respect of any action
taken or thing suffered by it in reliance upon any Note, notice,
direction, consent, certificate, affidavit, statement or other
paper or document reasonably believed by it to be genuine and to
have been signed by the proper parties.
(e) The Issuing and Paying Agent shall not incur any
liability with respect to the validity of any of the Notes.
(f) The Issuing and Paying Agent shall not be under
any obligation to take any action hereunder which may tend to
involve it in any expense or liability, the payment of which
within a reasonable time is not, in its reasonable opinion,
assured to it.
SECTION 27. Indemnification. The Company agrees to
indemnify and hold harmless the Issuing and Paying Agent, its
directors, officers, employees and agents from and against all
liabilities (including liability for penalties), losses, claims,
damages, actions, suits, judgments, costs, demands and expenses
(including reasonable legal fees and expenses) relating to or
arising out of their actions or inactions taken or omitted to be
taken by the Issuing and Paying Agent in good faith in connection
with its performance under this Agreement or the issuance,
delivery, payment or non-payment of any Note or interest or
premium thereon, or other receipt or other funds for the payment
of the Notes or interest or premium thereon except to the extent
they are caused by the gross negligence or willful misconduct of
the Issuing and Paying Agent, its officers or employees, in which
case, the Issuing and Paying Agent shall be liable for any
liabilities (including liabilities for penalties), losses,
claims, damages, actions, suits, judgments, costs, demands and
expenses (including reasonable legal fees and expenses) in
connection therewith. This indemnity shall survive the
resignation or removal of the Issuing and Paying Agent and the
satisfaction or termination of this Agreement.
Each indemnified party shall give prompt notice to the
Company of any action commenced against it in respect of which
indemnity may be sought hereunder. An indemnifying party shall
have no liability for indemnity hereunder with respect to an
action commenced against an indemnified party where such
indemnified party failed to give notice to an indemnifying party
of such action; provided, however, failure so to notify the
Company shall not relieve the Company from any liability which it
may have otherwise than on account of this indemnity agreement.
The Company shall be entitled to assume the defense of any such
action with counsel satisfactory to the indemnified party,
provided the indemnified party shall have the right prior to the
employing of any counsel by the Company in connection with its
assumption of such defense to consent to any such counsel, which
consent shall not be unreasonably withheld, and provided further
that if any indemnified party is advised in an opinion of counsel
for such indemnified party that there may be legal defenses
available to such indemnified party which are adverse to or in
conflict with those available to the Company, the Company shall
not have the right to assume the defense of such action, but
shall be responsible for the reasonable fees and expenses of
counsel retained by the indemnified party and consented to by the
Company, which consent shall not be unreasonably withheld. The
Company may participate at its own expense in the defense of such
action. In no event shall the Company be liable for the fees and
expenses of more than one counsel (in addition to any local
counsel) for all indemnified parties in connection with any one
action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances. Notwithstanding anything herein to the contrary,
the Company shall not be liable for any settlement of any action
without its consent, which consent shall not be unreasonably
withheld.
SECTION 28. Benefit of Agreement. This Agreement is
solely for the benefit of the parties hereto and the Registered
Holders of Notes and their successors and assigns and no other
person shall acquire or have any rights under or by virtue
hereof.
SECTION 29. Federal Income Taxes. The Issuing and
Paying Agent shall comply with all Federal income tax information
reporting and withholding requirements (including, without
limitation, obtaining appropriate certification and remitting the
same to the Company) with respect to payments of interest
(including original issue discount) on the Notes. At the time of
the original issuance of any Note, the Company shall provide the
Issuing and Paying Agent with all information required to comply
with this Section 29, including the amount of original issue
discount, if any, for each Note.
SECTION 30. Governing Law. This Agreement is to be
delivered and performed in, and shall be construed and enforced
in accordance with, and the rights of the parties shall be
governed by, the laws of the State of Illinois applicable to
contracts made and performed in said State.
SECTION 31. Notes Held by the Issuing and Paying
Agent. The Issuing and Paying Agent, in its individual or other
capacity, may become the owner or pledgee of the Notes with the
same rights it would have if it were not acting as the Issuing
and Paying Agent.
SECTION 32. Amendments. This Agreement may be amended
from time to time by any instrument signed by the parties hereto,
but any such amendment (other than amendments permitted by
Section 14(h)) will not adversely affect the rights of a
Registered Holder of Notes issued prior to the date of any such
amendment.
In addition, the Issuing and Paying Agent hereby
agrees, for the benefit of the Company and the Placement Agent,
that it shall enter into such amendments or supplements to this
Agreement, and shall consent to such amendments or supplements to
the Notes, as the Company may reasonably request in order to
effect the changes contemplated in the Company's Private
Placement Memorandum dated November 19, 1993 with respect to the
Notes concerning (1) changes in applicable law, regulation or
practice regarding the restrictions on and procedures for resales
and other transfers of the Notes or (2) to accommodate the
issuance, if any, of the Notes in book entry form; provided that
the form of all such amendments or supplements shall be
reasonably satisfactory to the Agent.
SECTION 33. Counterparts. This Agreement may be
executed by the parties hereto in any number of counterparts, and
by each of the parties hereto in separate counterparts, each of
which counterpart, when so executed and delivered, shall be
deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
SECTION 34. Merger. Consolidation or Sale of Business
by the Issuing and Paying Agent. Any corporation into which the
Issuing and Paying Agent may be merged or consolidated, or any
corporation resulting from any merger or consolidation to which
the Issuing and Paying Agent may be a party, or any corporation
to which the Issuing and Paying Agent may sell or otherwise
transfer all or substantially all of its assets and business,
shall, to the extent permitted by applicable law, become the
Issuing and Paying Agent under this Agreement without the
execution or filing of any paper or any further act by the
parties hereto. Notice in writing of any such merger,
consolidation or sale shall be given to the Company.
SECTION 35. Complete Agreement. This Agreement
embodies the entire understanding between the parties
hereto and supersedes all prior arrangements and
understandings relating to the subject matter hereof.
SECTION 36. Successors and Assigns. All covenants and
agreements contained in this Agreement by or on behalf of any of
the parties hereto shall bind the respective successors and
assigns of the parties hereto, whether so expressed or not;
provided, however, this Section 36 shall not by itself authorize
any delegation of duties by the Issuing and Paying Agent or any
assignment other than any assignment expressly permitted by the
terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on their behalf by their officers duly
authorized thereunto, as of the day and year first above written.
ST. JOSEPH LIGHT & POWER COMPANY
By:
Name:
HARRIS TRUST AND SAVINGS BANK,
As Issuing and Paying Agent
By: Larry J. Stoll
Title: Vice-President of Finance
Harris Trust and Savings Bank
As Issuing and Paying Agent
C. Potter
Assistant Vice President
Exhibit A
FORM OF FIXED RATE MEDIUM TERM NOTE
THIS MEDIUM-TERM NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND SALES HEREOF MAY BE
MADE ONLY TO INSTITUTIONAL ACCREDITED INVESTORS THAT ARE
"ACCREDITED INVESTORS" AS DEFINED IN RULE 501(a)(1)-(3)
PROMULGATED UNDER THE 1933 ACT ("INSTITUTIONAL ACCREDITED
INVESTORS") APPROVED BY DEAN WITTER REYNOLDS INC. (THE "PLACEMENT
AGENT") AND ST. JOSEPH LIGHT & POWER COMPANY (THE "COMPANY").
THIS NOTE WILL INITIALLY BEAR LEGENDS ("RESTRICTIVE LEGENDS")
SETTING FORTH THE FOLLOWING REPRESENTATIONS AND RESTRICTIONS ON
RESALES AND OTHER TRANSFERS OF THIS NOTE. BY ITS ACCEPTANCE OF
THIS NOTE BEARING A RESTRICTIVE LEGEND, THE PURCHASER WILL BE
DEEMED (A) TO HAVE REPRESENTED TO THE COMPANY AND THE PLACEMENT
AGENT THAT IT IS AN INSTITUTIONAL ACCREDITED INVESTOR AND IS
ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT
OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS
ALSO MUST BE INSTITUTIONAL ACCREDITED INVESTORS UNLESS THE
PURCHASER IS A BANK ACTING IN ITS FIDUCIARY CAPACITY) FOR
INVESTMENT AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, THE DISTRIBUTION THEREOF, AND (B) TO HAVE AGREED
THAT, SO LONG AS THIS NOTE BEARS A RESTRICTIVE LEGEND, ANY RESALE
OR OTHER TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WILL BE
MADE ONLY (i) TO THE PLACEMENT AGENT, (ii) TO A "OUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A ("RULE 144A")
PROMULGATED UNDER THE 1933 ACT IN A TRANSACTION THAT MEETS THE
REQUIREMENTS OF RULE 144A, (iii) OUTSIDE OF THE UNITED STATES OF
AMERICA, ITS TERRITORIES AND POSSESSIONS IN AN "OFFSHORE
TRANSACTION" THAT MEETS THE REQUIREMENTS OF REGULATION S
PROMULGATED UNDER THE 1933 ACT ("REGULATION S"), (iv) TO THE
COMPANY OR (v) IN ALL OTHER CASES, TO AN INSTITUTIONAL ACCREDITED
INVESTOR. ANY RESALE OR OTHER TRANSFER DESCRIBED IN CLAUSE (ii),
(iii) OR (v) REQUIRES THE SUBMISSION TO THE ISSUING AND PAYING
AGENT REFERRED TO HEREIN OF A DULY COMPLETED CERTIFICATE OF
TRANSFER INCLUDED IN THIS NOTE OR A BOND POWER IN THE FORM
ATTACHED AS EXHIBIT C TO THE MOST RECENT PRIVATE PLACEMENT
MEMORANDUM OF THE COMPANY RELATING TO THE OFFER AND SALE OF THE
COMPANY'S MEDIUM-TERM NOTES. ANY RESALE OR OTHER TRANSFER, OR
ATTEMPTED RESALE OR OTHER TRANSFER, OF THIS NOTE OR ANY INTEREST
HEREIN WHICH IS NOT MADE IN COMPLIANCE WITH THE RESTRICTIONS SET
FORTH HEREIN WILL NOT BE RECOGNIZED BY THE COMPANY. SUBJECT TO
THE RIGHT OF THE COMPANY TO REQUIRE AN OPINION OF THE HOLDER'S
COUNSEL, SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH
RESTRICTIONS ARE NO LONGER REQUIRED UNDER THE 1933 ACT, A NOTE
WHICH IS NO LONGER SUBJECT TO THE RESTRICTIONS ON RESALES OR
OTHER TRANSFERS ARISING UNDER THE 1933 ACT WITH RESPECT TO
PRIVATELY PLACED SECURITIES (WHETHER BY VIRTUE OF RULE 144
PROMULGATED UNDER THE 1933 ACT OR OTHERWISE) MAY BE SURRENDERED
TO THE ISSUING AND PAYING AGENT FOR A NEW NOTE OR NOTES NOT
BEARING A RESTRICTIVE LEGEND.
THIS NOTE AND RELATED DOCUMENTATION (INCLUDING, WITHOUT
LIMITATION, THE ISSUING AND PAYING AGENCY AGREEMENT REFERRED TO
HEREIN) MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, WITHOUT
THE CONSENT OF BUT UPON NOTICE TO THE REGISTERED HOLDER OF THIS
NOTE SENT TO SUCH HOLDER'S REGISTERED ADDRESS, (i) TO MODIFY THE
RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF
THIS NOTE TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION,
INCLUDING RULE 144A AND REGULATION S (OR THE INTERPRETATION
THEREOF), OR IN PRACTICES RELATING TO THE RESALE OR OTHER TRANSFER
OF RESTRICTED SECURITIES GENERALLY AND (ii) TO ACCOMMODATE THE
ISSUANCE, IF ANY, OF THIS NOTE IN BOOK-ENTRY FORM THROUGH THE
FACILITIES OF THE DEPOSITORY TRUST COMPANY OR OTHERWISE. EACH
HOLDER OF THIS NOTE SHALL BE DEEMED, BY ITS ACCEPTANCE OF THIS
NOTE, TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT (EACH OF
WHICH SHALL BE CONCLUSIVE AND BINDING ON SUCH HOLDER AND ALL
FUTURE HOLDERS OF THIS NOTE AND ANY NOTE OR NOTES ISSUED IN
EXCHANGE OR SUBSTITUTION FOR THIS NOTE WHETHER OR NOT ANY NOTATION
THEREOF IS MADE HEREON).
ST. JOSEPH LIGHT & POWER COMPANY
Medium Term Note
(Fixed Rate)
ST. JOSEPH LIGHT & POWER COMPANY, a Missouri corporation
(the "Company", which term includes any successor corporation
permitted by the terms hereof), for value received, hereby
promises to pay to , or registered assigns, the principal amount
specified above on the Stated Maturity Date specified above
(except to the extent redeemed or repaid prior to the Stated
Maturity Date) and to pay interest thereon at the Interest Rate
per annum specified above, until the principal hereof is paid or
duly made available for payment.
Unless otherwise specified on the face hereof, the
Company shall pay interest on each Interest Payment Date specified
above commencing on the first Interest Payment Date next
succeeding the Original Issue date specified above, unless the
Original Issue Date occurs between a Regular Record Date specified
above and the next succeeding Interest Payment Date, in which case
commencing on the Interest Payment Date following the next Regular
Record Date to the Registered Holder (as defined below) of this
Note on such next Regular Record Date, and on the Stated Maturity
Date, or any Redemption Date or Holder's Optional Repayment Date
(in each case as defined on the reverse hereof) (each such stated
Maturity Date, Redemption Date and Holder's Optional Repayment
Date being referred to hereinafter as a "Maturity Date" with
respect to principal repayable on such date). Interest on this
Note shall accrue from and including the most recent Interest
Payment Date to which interest has been paid or duly provided for
or, if no interest has been paid, from and including the Original
Issue Date specified above, until the principal amount hereof has
been paid or otherwise made available
for payment. If a Maturity Date or an Interest Payment Date falls
on a day that is not a Business Day (as defined below), principal,
premium, if any, or interest payable with respect to such Maturity
Date or Interest Payment Date shall be paid on the next succeeding
Business Day with the same force and effect as if made on the date
on which such payment was due, and no interest shall accrue with
respect to the amount so payable for the period from and after
such Maturity Date or Interest Payment Date, as the case may be.
The interest so payable or duly provided for on any Interest
Payment Date shall be paid to the person in whose name this Note
(or one or more predecessor Notes) is registered (the "Reaistered
Holder") at the close of business on the Regular Record Date for
such Interest Payment Date. The "Reaular Record Date" with respect
to any April 1 or October 1 Interest Payment Date shall be the
March 15 or September 15 (whether or not a Business Day)
immediately preceding such Interest Payment Date. The "Regular
Record Date" with respect to any Interest Payment Date other than
April 1 or October 1 shall be the day specified above (whether or
not a Business Day), as the case may be, immediately preceding
such Interest Payment Date; Drovided, however, that interest
payable on any Maturity Date shall be payable to the person to
whom the principal hereof shall be payable. As used herein,
"Business Dav" means any day other than a Saturday or Sunday or a
day on which banking institutions in The City of New York, New
York or Chicago, Illinois are generally authorized or obligated by
law or executive order to close.
Payment of the principal of, interest on and premium,
if any, with respect to this Note shall be made in such coin or
currency of the United States of America as at the time of
payment is legal tender for the payment of public and private
debts.
The principal of, and premium, if any, and interest on
this Note which is due on any Maturity Date, will be paid against
presentation of this Note by the Registered Holder hereof at the
office of the Issuing and Paying Agent (as defined below), Harris
Trust and Savings Bank, 311 West Monroe Street, 12th Floor,
Chicago, Illinois 60606, Attention: Indenture Trust Division, or
at such other office or agency as shall be designated in writing
to the Registered Holder hereof. The Registered Holder will be
entitled to payment in immediately available funds, provided this
Note is presented to the Issuing and Paying Agent in accordance
with the procedures set forth on the reverse hereof under the
caption Presentation of Note for Payment".
Payment of interest on any Interest Payment Date other
than a Maturity Date will be made by check mailed to the address
of the Registered Holder hereof as of the immediately preceding
Regular Record Date at such address as shall appear in the Note
Register (as defined on the reverse hereof); Drovided, however,
that upon receipt by the Issuing and Paying Agent of written
instructions from the Registered Holder hereof of an aggregate
principal amount of Notes, including this Note, equal to or
exceeding $5,000,000 having the same Interest Payment Date, not
less than fifteen (15) calendar days prior to such Interest
Payment Date, the Issuing and Paying Agent shall make such
payment of interest by the transfer of immediately available
funds to such account at such bank as the Registered Holder
hereof shall have designated, provided that such bank has
appropriate facilities therefor. The Issuing and Paying Agent
has agreed to comply with all Federal income tax information
reporting and withholding requirements (including, without
limitation, obtaining appropriate certifications and remitting
the same to the Company) with respect to payments of interest
(including original issue discount) on this Note.
Neither the Company nor the Issuing and Paying Agent
shall be obligated to register any transfer of this
Note not made in compliance with the restrictions set
forth above, on the reverse hereof and in the Issuing
and Paying Agency Agreement referred to on the reverse
hereof.
Reference is hereby made to the further provisions of
this Note set forth on the reverse hereof.
Unless the certificate of authentication hereon has been
executed by the Issuing and Paying Agent under the Issuing and
Payment Agency Agreement referred to on the reverse hereof by the
manual signature of one of its authorized officers, this Note
shall not be entitled to any benefit under the Issuing and Paying
Agency Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed, manually or by facsimile.
AT. JOSEPH LIGHT & POwER COMPANY
By:
Authorized Signatory
CERTIFICATE OF AUTHENTICATION: This
is one of the Notes issued under the
Issuing and Paying Agency Agreeme
referred to on the reverse hereof.
Dated:
Harris Trust and Savings Bank,
as Issuing and Paying Agent
By:
Authorized Officer
FORM OF REVERSE
ST. JOSEPH LIGHT & POWER COMPANY
MEDIUM TERM NOTE
(fixed rate)
This Note is one of a duly authorized issue of the
Company's Medium-Term Notes with a Stated Maturity Date of one
year to 30 years from the date of issue (the "Notes"). The Notes
are to be issued under the Issuing and Paying Agency Agreement,
dated as of November 19, 1993 (the "Issuing and Paying Aaency
Agreement"), between the Company and Harris Trust and Savings
Bank, as Issuing and Paying Agent (the "Issuina and Patina Agent,
n which term includes any successor Issuing and Paying Agent under
the Issuing and Paying Agency Agreement). Reference is hereby
made to such Issuing and Paying Agency Agreement and all
amendments thereto for a statement of the respective rights
thereunder of the Company, the Issuing and Paying Agent and the
Registered Holders of the Notes and the terms upon which the
Notes are, and are to be, authenticated and delivered. The
Issuing and Paying Agency Agreement may be amended or replaced
after the Original Issue Date specified above from time to time
in accordance with the terms thereof, but any such amendment or
replacement shall not affect the rights of the Registered Holder
hereof. In acting under the Issuing and Paying Agency Agreement,
the Issuing and Paying Agent is acting solely as agent of the
Company and does not assume any obligation or relationship of
agency or trust for any of the beneficial owners or Registered
Holders of Notes, except that any funds held by the Issuing and
Paying Agent for payment on this Note shall be held in trust as
provided in the Issuing and Paying Agency Agreement. The terms of
individual Notes may vary with respect to interest rates, issue
dates, maturity dates, redemption, repayment and otherwise.
This Note has been issued by the Issuing and Paying
Agent on behalf of the Company pursuant to the Issuing and Paying
Agency Agreement. Copies of the Issuing and Paying Agency
Agreement and related documents are on file at the office of the
Issuing and Paying Agent specified on the face hereof and are
available for inspection during normal business hours at such
office.
This Note shall not be subject to any sinking fund and,
unless otherwise provided on the face hereof in accordance with
the following provisions, shall not be redeemable or repayable
prior to its Stated Maturity Date.
If so provided on the face of this Note, this Note may
be redeemed by the Company on any date on and after the Initial
Redemption Date, if any, specified on the face hereof. If no
Initial Redemption Date is set forth on the face hereof, this Note
may not be redeemed at the option of the Company prior to the
Stated Maturity Date. On and after the Initial Redemption Date, if
any, this Note may be redeemed at any time in whole or from time
to time in part in increments of $1,000 principal amount (provided
that any remaining principal hereof shall be at least $100,000) at
the option of the Company at the applicable Redemption Price (as
defined below), together with accrued and unpaid interest hereon
at the Interest Rate specified on the face hereof, to, but
excluding, the date of redemption (each such date, a "Redemption
Date"), on written notice given by the Company to the Registered
Holder not less than 30 nor more than 60 calendar days prior to
the Redemption Date. Whenever less than all the Notes at any time
outstanding are to be redeemed, the Notes to be so redeemed shall
be selected by the Company. If less than all the Notes of
identical terms at any time outstanding are to be redeemed, the
Notes to be so redeemed shall be selected by the Issuing and
Paying Agent by lot or in any usual manner approved by it. In the
event of redemption of this Note in part only, a new Note for the
unredeemed portion hereof shall be issued in the name of the
Registered Holder hereof upon the surrender hereof.
The "Redemption Price" shall initially be the Initial
Redemption Percentage, if any, specified on the face hereof, of
the principal amount of this Note to be redeemed and shall decline
at each anniversary of the Initial Redemption Date, shown on the
face hereof, by the Annual Redemption Percentage Reduction, if
any, specified on the face hereof, of the principal amount to be
redeemed until the Redemption Price is 100% of such principal
amount.
This Note may be subject to repayment at the option of
the Registered Holder hereof on any Holder's Optional Repayment
Date(s), if any, specified on the face hereof. If no Holder's
Optional Repayment Date or Dates are set forth on the face hereof,
this Note may not be so repaid at the option of the Registered
Holder hereof prior to the Stated Maturity Date. On any Holder's
Optional Repayment Date, this Note shall be repayable in whole or
in part in increments of S1, ooo principal amount (provided that
any remaining principal hereof shall be at least $100,000) at the
option of the Registered Holder hereof at a repayment price equal
to 100% of the principal amount to be repaid, together with
accrued and unpaid interest hereon at the Interest Rate specified
on the face hereof, to, but excluding, the date of repayment. For
this Note to be repaid in whole or in part at the option of the
Registered Holder hereof, this Note must be received, with the
duly completed form below entitled "Option to Elect Repayment," by
the Issuing and Paying Agent at Harris Trust and Savings Bank, 311
West Monroe Street, 12th Floor, Chicago, Illinois 60606,
Attention: Indenture Trust Division, or such other address as the
Company shall from time to
time notify the Registered Holders of the Notes, not less than 30
nor more than 60 calendar days prior to a Holder's optional
Repayment Date. Exercise of such repayment option by the
Registered Holder hereof shall be irrevocable. In the event of
repayment of this Note in part only, a new Note for the unpaid
portion hereof shall be issued in the name of the Registered
Holder hereof upon the surrender hereof.
Interest on this Note shall be computed and paid on the
basis of a 360-day year consisting of twelve 30-day
months.
This Note, and any Note or Notes issued upon transfer
or-exchange hereof, may be issued only in fully
registered form, without coupons, in minimum
denominations of $100,000 principal amount at the
Stated Maturity Date and in integral multiples of
$1,000 in excess thereof.
The Issuing and Paying Agent shall maintain the Note
Register on its own internal registration record-keeping system.
The term "Note Register" shall mean the definitive record in which
shall be recorded the names, addresses, addresses for payment and
taxpayer identification numbers of Registered Holders of the Notes
and details with respect to the issuance, transfer and exchange of
Notes as appropriate. If any resale or other transfer of this Note
is proposed to be made (i) to a Qualified Institutional Buyer" as
defined in Rule 144A ("rule 144A") promulgated under the
Securities Act of 1933, as amended (the "1933 Act"), in a
transaction which meets the requirements of Rule 144A, (ii)
outside of the United States of America, its territories and
possessions in an "offshore transaction" that meets the
requirements of Regulation S promulgated under the 1933 Act, or
(iii) to an institutional accredited investor that is an
"accredited investor" as defined in Rule 501(a)(1)-(3) promulgated
under the 1933 Act (each such institutional accredited investor,
an "Institutional Accredited Investor"), the Issuing and Paying
Agent shall not register the transfer of this Note unless the
Registered Holder hereof and the prospective purchaser have duly
completed the Certificate of Transfer below or a Bond Power
substantially in the form of Exhibit C to the most recent Private
Placement Memorandum of the Company relating to the offer and sale
of the Notes (the "Bond Power") and the Issuing and Paying Agent
has received this Note (and a Certificate of Transfer or Bond
Power) at its offices at Harris Trust and Savings Bank, 311 West
Monroe Street, 12th Floor, Chicago, Illinois 60606, Attention:
Indenture Trust Division, or such other address as the Company
shall from time to time notify the Registered Holders of the
Notes. If any resale or other transfer of this Note is proposed to
be made to Dean Witter Reynolds Inc. (the "Placement Agent") or to
the Company, a duly completed Certificate of Transfer or Bond
Power is not required to be submitted to the Issuing and Paying
Agent and the Issuing and Paying Agent shall register the transfer
of this Note upon receipt of written instructions from the
Placement Agent or the Company, as the case may be, to effect
such resale or other
transfer.
The Company agrees (i) to make available upon request of
the Registered Holder hereof or any prospective transferee, such
information required by Rule 144A under the 1933 Act to enable
resales of this Note to be made pursuant to Rule 144A and (ii) it
shall otherwise use reasonable efforts to ensure that such
exemption remains available with respect to this Note. Further,
the restrictions on and procedures for resales and other transfers
of this Note, as set forth on this Note, may be modified from time
to time, without the consent of but upon notice to the Registered
Holder hereof, (i) to reflect any change in applicable law or
regulation, including Rule 144A and Regulation S (or the
interpretation thereof), or in practices relating to the resale or
other transfer of restricted securities generally and (ii) to
accommodate the issuance, if any, of this Note in book-entry form.
The holder of this Note shall be deemed, by its acceptance of this
Note, to have agreed to any such modification (each of which shall
be conclusive and binding on such holder and all future holders of
this Note and any Note or Notes issued in exchange or substitution
for this Note whether or not any notation thereof is made hereon).
In the event that a depositary provides for book-entry settlements
and clearance for privately placed medium-term notes, the Company
may elect, upon not less than 30 days' prior written notice mailed
to the Registered Holder hereof at its registered address, to
permit such holder to exchange this Note for Notes in book-entry
form. The manner of any such exchange will be described in such
notice.
This Note, if presented for registration of transfer,
shall be duly endorsed or shall be accompanied by a written
instrument of transfer, in form satisfactory to the Company and
the Issuing and Paying Agent, duly executed by the Registered
Holder hereof or its attorney duly authorized in writing. Subject
to the conditions stated herein, the Issuing and Paying Agent
shall register the transfer of this Note and complete, countersign
and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations
having the same aggregate principal amount and the same terms and
provisions as set forth herein; provided, however, that the
Issuing and Paying Agent shall not be required to register the
transfer of this Note or any portion hereof that has been called
for redemption or repayment during a period beginning at the
opening of business fifteen (15) calendar days before the day of
mailing of a notice of such redemption or repayment and ending at
the close of business on the day of such mailing. If this Note is
presented for transfer other than between a Regular Record Date
and a corresponding Interest Payment Date, the new Note shall be
dated as of the last Interest Payment Date. If this Note is
presented for transfer between a Regular Record Date
and a corresponding Interest Payment date, the new Note shall be
dated as of such Interest Payment Date. If this Note is presented
for transfer on an Interest Payment Date, the new Note shall be
dated as of such Interest Payment Date. If no interest has been
paid on this Note, the Note to be issued upon transfer shall be
dated as of the Original Issue Date of this Note. If interest is
overdue on this Note, the Note to be issued upon transfer shall
be dated as of the last Interest Payment Date to which interest
has been paid or duly provided for.
In connection with any registration of transfer of this
Note, the Company and the Issuing and Paying Agent may
require payment by the Registered Holder hereof of a
sum sufficient to cover any applicable tax or other
governmental charge.
The Company and the Issuing and Paying Agent may deem
and treat the Registered Holder hereof as the absolute
owner of this Note for the purpose of receiving
payments of the principal of and premium, if any, and
interest on this Note and for all other purposes
whatsoever, whether or not this Note shall be overdue,
and neither the Company nor the Issuing and Paying
Agent, except as provided herein, shall be affected by
notice to the contrary.
In case this Note shall become mutilated, destroyed,
lost or stolen, the Company in its discretion may, upon the
written request of the Registered Holder hereof, execute and, upon
the Company's request, the Issuing and Paying Agent shall
complete, countersign and deliver, a new Note having identical
terms and provisions and a serial number not then outstanding,
payable in the same principal amount, of like tenor, dated the
same date in exchange and in substitution for the mutilated Note
or in lieu of and in substitution for the Note destroyed, lost or
stolen. In each such case, the applicant for a substituted Note
shall furnish to the Company and the Issuing and Paying Agent such
security or indemnity as may be required by them to save each of
them harmless, and, in every case of destruction, loss or theft,
the applicant shall also furnish to the Company and the Issuing
and Paying Agent evidence to their satisfaction of the
destruction, loss or theft of this Note and of the ownership
hereof. The Issuing and Paying Agent is authorized to complete and
countersign any such substituted Note and deliver the same upon
written request or authorization of any authorized representative
of the Company or person designated in writing to issue
instructions by such authorized representative of the Company.
Upon the issuance of any substituted Note, the Company and the
Issuing and Paying Agent may require the payment by the Registered
Holder hereof of a sum sufficient to cover any fees and expenses
connected therewith. In case this Note shall become mutilated or
be destroyed, lost or stolen, after the Stated Maturity Date
hereof or within 30 calendar days of redemption or any Maturity
Date hereof, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of the same
(without surrender hereof except in the case of a mutilated Note)
upon compliance by the Registered Holder hereof with the
provisions herein. The Issuing and Paying Agent shall record on
the Note Register the cancellation of any original Notes (whether
or not physically surrendered to the Issuing and Paying Agent)
and the reissue of Notes in substitution therefor due to
mutilation, destruction, loss or theft.
So long as this Note is outstanding, the Company shall
not consolidate with or merge with or into, or transfer all or
substantially all of its assets to, any person unless (i) either
the Company shall be the resulting or surviving entity or the
resulting or surviving entity is a corporation organized and
existing under the laws of the United States of America, a state
thereof or the District of Columbia that expressly assumes all of
the obligations of the Company under the Notes (in which case all
such obligations of the Company under the Notes shall terminate
upon the assumption of such obligations by such successor), and
(ii) immediately before and immediately after giving effect to
such transaction (and treating any indebtedness which becomes an
obligation of the resulting or surviving entity as a result of
such transaction as having been incurred by the resulting or
surviving entity at the time of such transaction) no event of
default (as defined below) shall have occurred and be continuing
which with the passing of time or the giving of notice or both
would allow the Registered Holder of any Note to accelerate the
maturity of such Note.
The Registered Holder of this Note may, by notice in
writing to the Company, accelerate the maturity of this Note upon
the occurrence of one or more of the following events:
(a) default in the payment of any interest upon any of
the Notes as and when the same becomes due and payable and
continuance of such default for a period of 60 calendar days; or
(b) default in the payment of the principal of or
premium, if any, on any of the Notes as and when the same shall
become due and payable either at maturity or otherwise and
continuance of such default for a period of two Business Days; or
(c) a decree or order by a court having jurisdiction
shall have been entered adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization of the Company under the Bankruptcy Code (Title
11, U.S. Code) or any other similar applicable Federal or state
law, and such decree or order shall have continued undischarged
and unstayed for a period of 120 calendar days; or a decree or
order of a court having jurisdiction for the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or its property, or for the winding up
or liquidation of its affairs, shall have been entered, and such
decree or order shall have continued undischarged and unstayed
for a period of 120 calendar days; or
(d) the Company shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to
the filing of a bankruptcy proceeding against the
Company, or shall file a petition or answer or consent
seeking reorganization under the Bankruptcy Code
(Title 11, U.S. Code) or any other similar applicable
Federal or state law, or shall consent to the filing
of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of the Company or
of its property, or shall make an assignment for the
benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become
due; or
(e) the Company shall fail to perform or observe any
other term, covenant or agreement contained in such
Note to be performed or observed by it and any such
failure shall continue and remain unremedied for at
least 60 calendar days after written notice, specifying
such failure and requesting the Company to remedy such
failure, shall have been received by the Company from
the Registered Holders of at least 25% in aggregate
principal amount of the Notes outstanding affected
thereby; or
(f) the Company shall default in the payment when due
(subject to any applicable grace period), whether at stated
maturity or otherwise, of any principal of or interest on
(howsoever designated) any indebtedness for borrowed money of, or
guaranteed by, the Company in the aggregate principal amount of
$10 million or more, whether such indebtedness now exists or shall
hereafter be created, which default shall result in such
indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable;
provided, however, that if any such acceleration shall
subsequently be rescinded or annulled (including through the
discharge of the accelerated indebtedness) prior to the obtaining
of any judgment or decree for the payment of any money due on such
Note or the actual payment of money due on such Note, any
acceleration of such Note consequent solely on such other
acceleration shall likewise be deemed rescinded or annulled
without further action on the part of the Registered Holder.
Upon the occurrence of any event described above (subject to any
applicable grace period) (an "event of default"), the Company
shall promptly instruct the Issuing and Paying Agent in writing
to notify the Registered Holder of this Note as to such
occurrence. Upon receipt of any such written instruction in
respect of the occurrence of any such event of default, the
Issuing and Paying Agent shall promptly mail to all Registered
Holders of Notes such written notice of such event of default,
unlesss in the case of any such event of default the Company shall
have notified the Issuing and Paying Agent in writing that such
event of default shall have been cured before the mailing of such
written notice by the Issuing and Paying Agent.
All notices to the Company under this Note shall be in
writing and addressed to the Company at 520 Francis Street, P.O.
Box 998, St. Joseph, MO 64502-0998, Attention: Vice
PresidentFinance or to such other address as the Company may
notify the Registered Holder of this Note.
Any action by the Registered Holder of this Note shall
bind all future Registered Holders of thin Note, and
of any Note or Notes issued in exchange or
substitution herefor or in place hereof, in respect of
anything done or permitted by the Company or the
Issuing and Paying Agent in pursuance of such action.
Any moneys deposited by the Company with the Issuing
and Paying Agent for the payment of the principal of,
or interest or premium, if any, on any Notes, and
remaining unclaimed at the end of 90 calendar days
after such principal, interest or premium shall have
become due and payable (whether at maturity or upon
call for redemption or upon repayment or otherwise)
shall then be repaid to the Company by the Issuing and
Paying Agent, and upon such repayment all liability of
the Issuing and Paying Agent with respect to such
moneys shall thereupon cease, without, however,
limiting in any way any obligation which the Company
may have to pay the principal of or interest or
premium, if any, on this Note as the same shall become
due. The Registered Holder of any Notes to which such
deposit related shall, after repayment to the Company
of such deposit, look only to the Company for the
payment of principal, interest or premium, if any, to
which such deposit shall have related.
No provision of this Note or of the Issuing and Paying
Agency Agreement shall alter or impair the obligation of the
Company which is absolute and unconditional, to pay the principal
of, premium, if any, and interest on this Note at the time, place,
and rate, and in the manner and the coin or currency, herein
prescribed.
The Issuing and Paying Agency Agreement shall be
governed by and construed in accordance with the laws of the
State of Illinois applicable to agreements made and performed in
Illinois and this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to
instruments entered into and performed in New York.
All terms not otherwise defined herein which are defined
in the Issuing and Paying Agency Agreement shall have the meanings
assigned to them in the Issuing and Paying Agency Agreement.
A-14
PRESENTION OF NOTE FOR PAYMENT
Presentation
of Note at
Maturity or
upon
Redemption
The principal amount of, and premium, if any, and
interest on this Note due at the Stated Maturity Date,
or upon earlier redemption hereof, will be paid
against presentation of this Note by the Registered
Holder hereof at the offices of the Issuing and Paying
Agent at:
Harris Trust and Savings Bank 311
West Monroe Street, 12th Floor
Chicago, Illinois 60606 Attention:
Indenture Trust Division
The Registered Holder shall not be entitled to receive
such payment in immediately available funds unless the
following conditions are met:
(1) the Registered Holder has provided in writing wire transfer
instructions to the Issuing and Paying Agent at the
address specified above or by telecopy at 312/461-3525;
Attention: Indenture Trust Division;
(2) the wire transfer instructions are received by the Issuing and
Paying Agent no later than the second Business Day
prior to the date any such payment is due; and
(3) the bank specified to receive such transfer has appropriate
facilities therefor.
Presentation of Note for Holder's Optional Repayment
This Note must be presented to the Issuing and Paying
Agent at its address set forth above not less than 30 nor more
than 60 calendar days prior to the Holder's Optional Repayment
Date, if any, specified on the face hereof with the "Option to
Elect Repayment" form below duly completed. The Registered Holder
may receive payment for this Note in immediately available fund,
provided that the conditions set forth above have been satisfied.
Alternate Manner for Delivering Note
The Registered Holder hereof may deliver this Note to
Harris Trust Company of New York (the "Drop Agent") (or at such
other office or agency of the Company as the Company shall
designate in writing to the Registered Holder of this Note) for
forwarding to the Issuing and Paying Agent at the address of the
Drop Agent set forth below:
Harris Trust Company of New York
77 Water Street, 4th Floor New
York, New York 10005 Attention:
Drop Facility
To provide for timely presentation of this Note to the
Issuing and Paying Agent, a Registered Holder must
deliver this Note to the Drop Agent no later than 12:00
noon (New York City time), two Business Days prior to
the date it must be received by the Issuing and Paying
Agent. Payment on this Note, if subsequently presented
to the Drop Agent, will be made on the second Business
Day following the Drop Agent's receipt of this Note.
For the purposes of the preceding sentence, any Note
received by the Drop Agent later than 12:00 noon (New
York City time) on any Business Day will be treated as
having been received on the following Business Day.
THE DROP AGENT IS NOT A PAYING AGENT FOR THIS NOTE AND ITS SOLE
RESPONSIBILITY SHALL BE TO FORWARD THIS NOTE TO THE ISSUING AND
PAYING AGENT. THIS NOTE MUST BE RECEIVED BY THE ISSUING AND
PAYING AGENT BEFORE ANY PAYMENT HEREON WILL BE MADE. WHETHER OR
NOT THIS NOTE IS DELIVERED TO THE DROP AGENT AT THE TIMES
SPECIFIED ABOVE, NEITHER THE ISSUING AND PAYING AGENT NOR THE
DROP AGENT SHALL BE LIABLE UNDER ANY CIRCUMSTANCES FOR ANY
UNTIMELY PRESENTATION OF THIS NOTE TO THE ISSUING AND PAYING
AGENT.
The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as
though they were written out in full according to applicable laws
or regulations.
TEN COM--as tenants in common
UNIF TRANSFERS MIN ACT--, as Custodian for
minor
Under Uniform Transfers to Minors Act
.................................
(State)
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in
the above list.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and
instruct(s) the Company to repay this Note (or portion hereof
specified below) pursuant to its terms at a price equal to 100%
of the principal amount hereof to be repaid, together with
accrued and unpaid interest hereon payable to but excluding the
repayment date, to the undersigned, at
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of this Note is
to be repaid, specify the portion hereof (which shall be
increments of $1,000) which the undersigned elects to have repaid
and specify the denomination or denominations (which shall be a
minimum of $100,000 at the Stated Maturity Date or an integral
multiple of $1,000 in excess of $100,000) of the Notes to be
issued to the undersigned for the portion of this Note not being
repaid (in the absence of any such specification, one such Note
will be issued for the portion not being repaid).
Principal amount to be repaid: $
(if less than the entire
principal amount hereof)
No. of Notes Denomination(s)
Reissuance Instructions:
(if needed)
Dated:
.
NOTICE: The signature on this
Option to Elect Repayment must
correspond with the name as
written upon the face of this
Note in every particular,
without alteration or
enlargement or any change
whatsoever.
CERTIFICATE OF TRANSFER
(Not required for resales or other transfers to the Company or
the Placement Agent)
FOR VALUE RECEIVED, the undersigned Registered Holder
hereby sell(s), assign(s) and transfer(s) unto:
PLEASE INSERT TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE
(Please print or typewrite name and address, including zip code,
of Assignee)
the accompanying Note (Registered No. FX- ) and all rights
thereunder, hereby irrevocably constituting and appointing
attorney to transfer sand Note on the books of the Company, with
full power of substitution in the premises.
In connection with any resale or other transfer of this
Note occurring prior to the time the legend originally set forth
on the face of this Note (or one or more predecessor Notes)
restricting resales and other transfers hereof has been removed
in accordance with the procedures set forth in the Issuing and
Paying Agency Agreement referred to in this Note (other than a
resale or other transfer made (i) to the Company or (ii) to the
Placement Agent referred to in such legend), the undersigned
confirms that without utilizing any general solicitation or
general advertising:
[Check one]
[ ] (a) This Note is being transferred by the undersigned to a
"qualified institutional buyer" as defined in Rule 144A
promulgated under the Securities Act of 1933, as
amended, pursuant to the exemption from registration
under the Securities Act of 1933, as amended, provided
by Rule 144A promulgated thereunder.
Or
[ ] (b) This Note is being transferred by the undersigned in an
"Offshore Transaction" as defined in Regulation S under
the Securities Act of 1933, as amended, pursuant to the
exemption from registration under the Securities Act of
1933, as amended, provided by Regulation S thereunder.
or
[ ] (c) This Note is being transferred by the undersigned to an
institutional accredited investor that is an "accredited
investor" as defined in Rule 501(a)(1)-(3) promulgated under
the Securities Act of 1933, as amended, and that the
undersigned has been advised by the undersigned prospective
transferee that it intends to hold such Note for investment
and not for distribution.
If none of the foregoing boxes is checked, then, so long as this Note
shall bear a legend on its face restricting resales and other transfers
hereof (except in the case of a resale or other transfer made (i) to
the Company or (ii) to the Placement Agent referred to in such legend),
the Issuing and Paying Agent shall not register this Note in the name
of any person other than the Registered Holder of this Note unless and
until the conditions to any such registration of transfer set forth in
this Note, on the face hereof and in the Issuing and Paying Agency
Agreement shall have been satisfied.
Dated: NOTICE: The signature of the Registered Holder to this
assignment must correspond with the
name as written upon the face of the
within Note in every particular,
without alteration or enlargement or
any change whatsoever.
TO BE COMPLETED BY TRANSFEREE IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that (i) it is a
"qualified institutional buyer" as defined in Rule 144A promulgated
under the Securities Act of 1933, as amended, and acknowledges that it
has received such information regarding the Company as the undersigned
has requested pursuant to Rule 144A or has determined not to request
such information, (ii) this instrument has been executed on behalf of
the undersigned by one of its executive officers, and (iii) it is aware
that the Registered Holder of this Note is relying upon the
undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an
executive officer.
EXHIBIT B
CERTIFICATE
The undersigned, being the Secretary of St. Joseph
Light & Power Company, a Missouri corporation (the
"Company"), does hereby certify that each of the persons
named herein holds the office set forth opposite his or her
name, that the signature of each such officer is genuine and
that each such officer has been appointed an Unauthorized
Representative" or an "Instructing Representative," as such
terms are defined in that certain Issuing and Paying Agency
Agreement dated as of November 19, 1993 by and between the
Company and Harris Trust and Savings Bank.
Authorized Representatives:
Instructing Representatives:
IN WITNESS WHEREOF, the undersigned has executed
this Certificate as of the day of , 19 _.
Secretary
EXHIBIT C
Judy Bartolini
Carolyn Potter
Dan Donovan
Marian Onischak
ST. JOSEPH LIGHT & POWER COMPANY
Long-Term Incentive Plan
1. Purpose. The purpose of the St. Joseph Light & Power Company (the
"Company") Long-Term Incentive Plan (the "Plan") is to aid the
Company in retaining qualified and competent management
personnel and to encourage significant contributions by such
personnel to the success of the Company by providing
additional incentive to those employees who contribute to the
successful and profitable operations of the Company.
Aggressively pursuing cost savings and expense reductions
where appropriate are integral parts of a successful operation
and translate into significant benefits for customers and
shareholders alike. It is believed that these purposes will be
furthered through granting to officers and key employees
common stock of the Company ("Stock Awards"), as provided
herein, so that such officers and employees will be encouraged
and enabled to acquire a larger personal interest in the
continued success of the Company.
2. Eligibility. Officers of the Company shall be granted Stock Awards
in accordance with Section 5 of this Plan. In addition, grants
of Stock Awards may be made by the Compensation Committee (the
"Committee") of the Board of Directors of the Company (the
"Board") to key employees in accordance with Section 5 of this
Plan. A Stock Award may only be granted to an employee of the
Company.
3. General Administration. The Committee shall have full power and
authority to administer and interpret the Plan, subject to the
provisions of the Plan and as to such matters as are reserved
under the Plan to the Board. Any interpretation of the Plan or
other act of the Committee in administering the Plan shall be
final and binding on all employees. The Committee may adopt
such procedures as it deems necessary or appropriate in
administering the Plan. No member of the Committee shall be
liable for any action or determination made in good faith with
respect to the Plan or any Stock Award granted under the Plan.
4. Shares subject to the Plan. The total number of shares of common
stock of the Company ("Common Stock") available for Stock Awards on
and after May 18, 1994, shall not exceed one hundred sixty
thousand (160,000). Shares reserved under the Plan shall be
appropriately adjusted as provided in Section 11. Shares
subject to Stock Awards under the Plan may be either
authorized and unissued shares or issued shares which are
reacquired by the Company and held in its treasury.
5. Management Incentive.
(a) Definitions.
(i) "Performance Cycle" shall mean three consecutive calendar years.
Performance Cycles shall overlap (for example,
Performance Cycle 1 shall be January 1, 1994 to December
31, 1996 while Performance Cycle 2 shall be January 1,
1995 to December 31, 1997 and so on).
(ii) "Peer Group Utilities" shall mean all the companies contained in
the "EEI 100 Index of Investor-Owned Electrics. "
(iii)"Total Shareholder Return" shall mean Common Stock market
price appreciation/depreciation and dividends.
(b) Threshold Goal Formula.
(i) Stock Awards shall be granted as of the first day of a
Performance Cycle. The Threshold level of a Stock Award
shall be determined as a percent of the annual
compensation base rate as follows:
Percent of Annual
Compensation
Participants Base
Rate
President 30%
Other Officers 20%
All Others To be
determined by the
Committee but not to exceed
20%
The respective Threshold percentage of the annual
compensation base rate shall be applied to the
participant's annual compensation base rate as of
the first day of a Performance Cycle; provided,
however, the Committee may, in its discretion, affix
a day different from the first day of a Performance
Cycle for this purpose for a newly hired or promoted
employee. This product shall be translated into a
number of shares of Common Stock by dividing this
product by the closing price of the Common Stock as
of the first business day of the Performance Cycle.
This amount expressed in shares for each respective
participant shall be that participant's Threshold
Goal.
(c) Performance Criterion.
(i) Subject to Section 6, a participant shall earn a Stock Award as of the end
of the Performance Cycle applicable to such award based upon performance
against a "Total Shareholder Return" criterion. A Total Shareholder
Return for the universe of Peer Group Utilities referenced above shall
be examined at the end of a Performance Cycle in comparison to the Total
Shareholder Return of the Company for that same period. The amount of
Stock Award which is earned shall be determined based on the Company's
percentile ranking as measured against the Peer Group Utilities as
follows:
Percentile Award as a %
Performance of Threshold Goal
Up To But
From Excluding
0% 50% 0%
50% 55% 100%
55% 60% 112%
60% 65% 126%
65% 70% 141%
70% 75% 159%
75% 80% 178%
80% or higher 200%
(ii) A prorated Stock Award shall be earned in accordance with
Section 5(c)(i) prior to the end of such award's Performance
Cycle in the event of a participant's death, total disability
or retirement under the early or normal provisions of any
defined benefit pension plan sponsored by the
Company in which the participant participates ("Retirement"). Such
terminations of employment are referred to individually or collectively
as a Triggering Event. In order to make an award determination, the
Committee shall calculate the Peer Group Utilities' performance for the
applicable Performance Cycles to date (using the beginning of each
respective Performance Cycle through the date of the Triggering Event)
and compare the Company's performance to that of the Peer Group
Utilities'. The Committee shall prorate the respective Stock Awards
applicable to each Performance Cycle rounded to the nearest month.
Acknowledging that the performance of the Peer Group Utilities may be
difficult to ascertain at a particular point in time, the Committee shall
use the most recent data available with respect to the Triggering Event.
iii) A Stock Award shall be earned in accordance with
Section 5(c)(i) prior to the end of such award's
Performance Cycle in the event of a Change of
Control, as defined in Section 8. The Committee
shall use the same methodology as outlined in
5(c)(ii) above with the event of Change of Control
treated in the same manner as a Triggering Event. No
proration, however, shall be applied.
(iv) A Stock Award, or portion thereof, may also be
earned in accordance with Section 5(c)(i) prior to
the end of such award's Performance Cycle in the
event of a participant's voluntary termination of
employment (other than by reason of total disability
or Retirement). If the Committee chooses to make
such an award, it shall use the same methodology as
outlined in 5(c)(ii) above with the event of
voluntary termination treated in the same manner as
a Triggering Event. Any Stock Award made under this
provision shall be in the absolute discretion of the
Committee.
(v) Notwithstanding anything herein to the contrary, no Stock Award,
or portion thereof, shall be earned for a Performance
Cycle in which the Total Shareholder Return for the
Performance Cycle is not positive.
6. Earning of stock Awards. No Stock Award shall be earned until the
Committee by resolution, written consent or other appropriate
action makes such determination with respect to a particular
employee (the "Grantee") and a Restricted Stock Agreement is
executed by the Company and the Grantee setting forth the terms
and conditions of the Stock Award.
7. Stock Awards.
(a) Restrictions on Transfer. A certificate or certificates
representing the shares earned with respect to a Stock Award
shall be issued in accordance with Section 10. Such shares of
Common Stock shall be subject to such terms and conditions as
the Committee determines to be appropriate including, without
limitation, restrictions on the sale or other disposition of
such shares. Except as herein provided, such shares shall be
subject to restrictions against transfer and shall not be
sold, transferred, assigned or otherwise disposed of by the
Grantee. However, the Grantee may, with the written consent of
the Board, tender such shares for sale or exchange in the
event of any tender offer within the meaning of Section 14(d)
of the Securities Exchange Act of 1934. Except as described in
Section 7(b)(ii) and
(iii) or as may be expressly provided otherwise in a
written agreement approved by the Committee between the
Company and the Grantee, in the event of the termination
of full-time employment with the Company prior to the
termination date of restrictions pertaining to the Stock
Award, the shares then subject to restrictions shall be
forfeited by the Grantee and shall become the property of
the Company.
All restrictions applicable to a Stock Award shall also
apply to any shares resulting from a stock dividend, stock
split or other distribution of shares of the Company with
respect to the Stock Award and shall also apply to any
securities issuable upon any change or any exchange of
stock referred to in Section 11, effective as of the grant
date of such Stock Award.
(b) Termination of Restrictions. The restrictions imposed
under Section 7(a) shall lapse, expire or terminate upon
the earliest to occur of:
(i) The third anniversary of the date as of which the Stock Award
is earned; or
(ii) Upon termination of the Grantee's employment with the
Company because of death, total disability or Retirement;
or
(iii)In the event of a Change of Control.
8. Change of Control. A "Change of Control" of the Company shall
mean:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
(the "Exchange Act"), of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act, of
20 percent or more of the then outstanding shares of Common
Stock (the "Outstanding Common Stock"); provided that the
following acquisitions shall not constitute a Change of
Control: (A) any acquisition directly from the Company
(excluding any acquisition resulting from the exercise of a
conversion or exchange privilege in respect of outstanding
convertible or exchangeable securities), (B) any acquisition
by the Company, (C) any acquisition by an employee benefit plan
(or related trust) sponsored or maintained by the Company or
any corporation controlled by the Company, (D) any acquisition
by any corporation pursuant to a reorganization, merger or
consolidation involving the Company, if, immediately after such
reorganization, merger or consolidation, each of the conditions
described in clauses (i), (ii) and (iii) of<PAGE>
subsection (3) of this Section 8 shall be satisfied; and
provided further, that for purposes of clause (B), if any
Person (other than the Company or any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company) shall become the
beneficial owner of 20 percent or more of the Outstanding
Common Stock by reason of an acquisition by the Company, and
such Person shall, after such acquisition by the Company,
become the beneficial owner of any additional shares of the
Outstanding Common Stock and such beneficial ownership is
publicly announced, such additional beneficial ownership shall
constitute a Change of Control;
(2) individuals who, immediately after the Company's 1994
Annual Meeting of Shareholders, constitute the Board of
Directors (the "Incumbent Board"), cease for any reason to
constitute at least a majority of the Board; provided that any
individual who becomes a director subsequent to the date of the
Company's 1994 Annual Meeting of Shareholders whose election,
or nomination for election by the Company's shareholders, was
approved by the vote of at least 66-2/3 percent of the
directors then comprising the Incumbent Board shall be deemed
to have been a member of the Incumbent Board; and provided
further, that no individual who was initially elected as a
director as a result of an actual or threatened election
contest, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf
of any Person other than the Board shall be deemed to have been
a member of the Incumbent Board;
(3) approval by the shareholders of the Company of a
reorganization, merger or consolidation unless, in any such
case, immediately after such reorganization, merger or
consolidation, (i) more than 60 percent of the then outstanding
shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and more than 60
percent of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals
or entities who were the beneficial owners, respectively, of
the Outstanding Common Stock immediately prior to such
reorganization, merger or consolidation and in substantially
the same proportions relative to each other as their ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding Common Stock, (ii) no Person
other than the Company, any employee benefit plan (or related
trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company)
and any Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or
indirectly, 20 percent or more of the Outstanding Common Stock)
beneficially owns, directly or indirectly, 20 percent or more
of the then outstanding shares of common stock of such
corporation or 20 percent or more of the combined voting power
of the then outstanding securities of such corporation entitled
to vote generally in the election-of directors and (iii) at
least a majority of the members of the board of directors of
the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time
of the execution of the initial agreement or action of the
Board of Directors providing for such reorganization, merger
or consolidation; or
(4) approval by the shareholders of the Company of (i) a
plan of complete liquidation or dissolution of the Company or
(ii) the sale or other disposition of all or substantially all
of the assets of the Company other than to a corporation with
respect to which, immediately after such sale or other
disposition, (A) more than 60 percent of the then outstanding
shares of common stock thereof and more than 60 percent of the
combined voting power of the then outstanding securities
thereof entitled to vote generally in the election of directors
is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Common
Stock immediately prior to such sale or other disposition and
in substantially the same proportions relative to each other
as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Common Stock, (B) no Person
other than the Company, any employee benefit plan (or related
trust) sponsored or maintained by the Company or such
corporation (or any corporation controlled by the Company) and
any Person which beneficially owned, immediately prior to such
sale or other disposition, directly or indirectly, 20 percent
or more of the Outstanding Common Stock beneficially owns,
directly or indirectly, 20 percent or more of the then
outstanding shares of common stock thereof or 20 percent or
more of the combined voting power of the then outstanding
securities thereof entitled to vote generally in the election
of director and (C) at least a majority of the members of the
board of directors thereof were members of the Incumbent Board
at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition.
9. Taxes. The Company shall have the right to require, prior to the
delivery of any shares of Common Stock, payment by a Grantee
of federal, state, local or other taxes which may be required
to be withheld or paid in connection with a Stock Award.
10. Stockholder and Employment Rights. Effective as of the date on which
all or a portion of a Stock Award is earned in accordance with Section
5(c), a certificate or certificates representing the earned shares shall
be registered on the Company's books in the name of the Grantee;
however, the certificates shall be held by the Company for the account
of the Grantee and the Grantee shall deliver to the Company a stock
power or powers executed in blank, covering such shares. Except as
otherwise provided, the Grantee shall have all the rights of a
stockholder including the right to receive dividends and to vote the
shares. As and when restrictions terminate, the certificates
representing such shares shall be released to the Grantee. While in its
possession, the Company reserves the right to place a legend on the
certificates restricting their transferability and referring to the
terms and conditions (including forfeitures) applicable to the shares
represented by the certificate.
Each Stock Award shall be subject to the requirement that if at any time
the Company determines that the listing, registration or qualification of
the shares of Common Stock subject to such award upon any securities
exchange or under any law, the consent or approval of any governmental
body, or the taking of any other action is necessary or desirable as a
condition of, or in connection with, the issuance of shares or the release
of certificates representing such shares, such shares shall not be issued
or such certificates released unless such listing, registration,
qualification, consent, approval or other action shall have been effected
or obtained, free of any conditions not acceptable to the Company.
Nothing in the Plan or in any Stock Award granted pursuant to the Plan
shall confer on any individual any right to be or to continue in the employ
of the Company or any of its subsidiaries or shall interfere in any way
with the right of the Company or any of its subsidiaries to terminate the
employment of any individual at any time.
11. Change in Stock, Adjustments, Etc. If the outstanding shares of Common
Stock shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Company or of another
corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise), or in the event of a stock dividend, stock split or other
distribution to shareholders (other than a regular cash dividend) in
which the participant does not participate, the Committee shall make
payment adjustments, in its sole discretion, to the number and kind of
securities reserved for the purposes of the Plan and the number and kind
of securities subject to each outstanding Stock Award. If any adjustment
would result in a fractional security being subject to a Stock Award,
the Company shall pay the Grantee thereof an amount in cash determined
by multiplying the fraction of such security (rounded to the nearest
hundredth) by the fair market value of a share of Common Stock, as
determined in the Committee's sole discretion.
12. Amendment and Termination. The Board shall have complete power
and authority to amend or terminate the Plan at any time;
provided, however, that (a) an amendment or termination of
Section 5 of this Plan shall be adopted only at the regularly
scheduled March Board meeting and shall be effective as of the
beginning of the new Performance Cycle in which such amendment
or termination was adopted and no other action throughout the
Performance Cycle shall change the benefits or performance
criteria or goals with respect to an outstanding Performance
Cycle and (b) the category of officers to be granted Stock
Awards, the date of grant of a Stock Award to such officers,
the formula for determining the amount of a Stock Award earned
by such officers during a Performance Cycle (including
applicable performance levels), and other provisions of this
Plan which affect eligibility for, and the amount, price and
timing of, Stock Awards granted to such officers, shall not be
amended more than once every six months other than to comport
with changes in the Internal Revenue Code and the Employee
Retirement Income Security Act of 1974 and the rules
thereunder; provided, further, that no amendment shall be made
without shareholder approval if such amendment would (a)
increase the maximum number of shares of Common Stock available
under this Plan (subject to Section 11), or (b) require the
approval of shareholders under applicable law or regulation.
No termination or amendment of the Plan may, without the
consent of the Grantee of any Stock Award, adversely affect the
rights of such Grantee with respect to any outstanding Stock
Award. This Plan shall continue after its effective date unless
terminated earlier by the Board. The termination of the Plan
shall not affect restrictions on Stock Awards outstanding or
existing at the time of such termination.
13. Governmental Regulations and Construction. The obligation of the
Company to deliver shares of Common Stock under Stock Awards
granted pursuant to the Plan shall be subject to all
applicable laws, rules and regulations and to such approvals
by any governmental agencies as may be required. The Plan
shall be interpreted and construed in accordance with the laws
of the State of Missouri.
14. Effect on Other Benefits. The value of any Stock Awards (either
on the date granted or at the time restrictions on shares are
terminated) shall not be included as compensation or earnings
for purposes of the calculation of benefits under any other
benefit plan offered by the Company.
15. Effective Date. This Plan shall be submitted to the
shareholders of the Company at the 1994 Annual Meeting of
Shareholders for approval, and, if approved, shall be
effective for Performance Cycle 1 beginning January 1, 1994.
gim\ltincent
15
SELECTED FINANCIAL DATA
(In Thousands Except Per Share Data and Percentages)
The following table sets forth financial data regarding St.
Joseph Light & Power Company's financial position and operating
results. This information should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and
Results of Operations, and the Financial Statements and Notes
thereto, appearing elsewhere in this Annual Report.
1995 1994 1993 1992 1991
Operating
revenues $93,521 $90,782 $88,539 $82,555 $89,580
Net income $11,040 $11,066 $ 7,922 $ 8,958 $ 9,790
Total
assets $219,330 $199,699 $191,690 $178,743 $170,893
Long-term debt
(excluding current
maturities)
$73,100 $53,100 $53,100 $51,215 $53,038
Common stock data:
Average shares outstanding
3,907 3,942 4,008 4,019 4,019
Earnings per average
common
share $2.83 $2.81 $1.98 $2.23 $2.44
Dividends per common
share $1.84 $1.80 $1.76 $1.72 $1.66
Market price per
common
share at
year-end $35.50 $28.50 $29.00 $34.25 $33.88
Book value per
common share at
year-end $20.84 $19.86 $19.07 $18.84 $18.37
Return on average
common
equity 13.9% 14.4% 10.4% 12.0% 13.5%
Liquidity and capital resources data:
Construction
Expenditures, excluding
AFUDC $21,781 $12,224 $12,483 $ 9,301 $11,581
Percent of expenditures financed
internally from
operations 58% 77% 86% 100% 76%
AFUDC as a percent of
net income 4% 2% 3% 3% 2%
Capitalization ratios
Common
equity 53% 59% 59% 59% 57%
Long-term
debt 47% 41% 41% 41% 43%
Common Stock Market Prices
High Low
1994 First Quarter $30.25 $28.00
Second Quarter 30.125 26.50
Third Quarter 29.00 25.00
Fourth Quarter 29.00 25.75
1995 First Quarter $33.875 $27.875
Second Quarter 31.50 27.75
Third Quarter 31.00 27.125
Fourth Quarter 36.50 29.75
Dividends Paid on Common Stock
1994 First Quarter $.45
Second Quarter .45
Third Quarter .45
Fourth Quarter .45
$1.80
1995 First Quarter $.46
Second Quarter .46
Third Quarter .46
Fourth Quarter .46
$1.84
16
Management's Discussion and Analysis of Financial
Condition and Results of Operations
GENERAL
St. Joseph Light & Power Company (the Company or
Light & Power) is a public utility engaged primarily
in the generation and distribution of electric
energy. It also sells natural gas in 15 communities
in the northern part of its service area and
industrial steam to six customers in St. Joseph.
As illustrated by the Segments of Business, Note 8 in
the Notes to Financial Statements, the electric
segment represents 93% of pretax operating income,
99% of utility plant expenditures and 95% of
identifiable assets. Since the electric segment is
the major portion of the Company's business, the
following discussion focuses primarily on it.
The Company is in the last year of three-year
agreements with its physical and clerical bargaining
units. The agreements, effective August 1, 1993,
cover approximately two thirds of the Company's
nearly 350 employees.
RESULTS OF OPERATIONS
1995 vs. 1994
Earnings
Earnings per share totaled $2.83 in 1995,
compared with 1994 earnings of $2.81. Several factors
combined during the year which resulted in the
earnings per share increase: weather extremes, a
rate-design change, a full year of an electric price
increase and the gain on the sale of the unit trains
which deliver coal to the Iatan plant.
The 1994 earnings were boosted by a one-time
adjustment ordered by the Missouri Public Service
Commission (PSC) that reduced pension expense (refer
to Note 2 in the Notes to Financial Statements). Net
income totaled $11.0 million in 1995, compared with
$11.1 million in 1994.
Electric Revenues 1995 electric operating revenues
were $82.0 million, an increase of 4% from 1994. The
growth in 1995 revenues resulted from several
factors:
. weather extremes during both summer and winter
increased sales, especially to residential customers;
. the less-than-full-year impact of a rate-design change,
ordered by the PSC in July 1995, which increased summer and
reduced winter prices to reflect seasonal production costs;
. allocation case increase of $500,000 in annual revenues;
effective June 15, 1995, and
. a full-year's contribution from the electric price increase of
3% implemented in June 1994.
Retail sales totaled 1,480,033 megawatt-hours (MW-h) in 1995, a
4% increase from the 1,425,174 MW-h reported in 1994, while
sales revenues increased 8%. Sales to all three customer classes
increased residential, 6%; commercial, 3%, and industrial 2%.
Sales to industrial customers were impacted by the closing
during 1995 of an industrial plant which also was a steam
customer.
Sales for resale and related purchased power expense decreased
due to fewer transactions with regional utilities in 1995.
Industrial Steam Revenues Industrial steam sales in 1995
remained relatively stable despite the plant closing mentioned
above, while revenues increased 3% from 1994's level. The
revenue increase reflects a full year of the November 1994 price
adjustment. Partially offsetting the increase was a $550,000
allocation case reduction ordered by the PSC, effective June 15,
1995.
Natural Gas Revenues Gas sales remained relatively stable in
1995. Revenues were down 8% from 1994 primarily due to lower
unit gas prices which are passed on to customers through the
Purchased Gas Adjustment. Partially offsetting the reduction
were increased transportation services to industrial customers
and a June 15, 1995, allocation case price increase of $50,000.
Fuel and Purchased Power Costs Total energy costs (generation
and purchased power for system energy and for resale) were $24.9
million for 1995, $3.2 million less than the 1994 expense. This
decrease was the result of lower fuel costs and fewer sales for
resale transactions. The amortization in 1994 of ash disposal
expense at the Lake Road plant also contributed to the decline
in costs in 1995.
Unit fuel costs were lower in 1995 at 108.7 cents per million
British thermal units (Btu), down from 120.4 cents per million
Btu in 1994. The 1995 decrease resulted from lower prices for
coal and gas.
Of the total fuel burned in 1995, 91% was coal, similar to the
pattern of recent years. The cost of coal burned decreased from
the 113.9 cents per million Btu in 1994 to 101.4 cents per
million Btu in 1995.
A Wyoming mine supplies low-sulfur coal for the Iatan unit under
a 20-year contract, now in its 12th year. The coal is delivered
by the Burlington Northern Railroad Company under terms of a
1986 agreement which was renegotiated in 1995 to extend through
2000. The agreement provides for a reduction in the delivery
costs for Iatan coal.
17
The Iatan delivered unit price was $14.65 per ton in 1995,
compared with $15.17 in 1994. The unit price was lower in 1995
due to favorable spot market purchases and reduced freight
expense. The older steel unit trains, which delivered coal to
Iatan, were replaced through a lease agreement in 1995 with
aluminum cars which are lighter and more efficient, thereby
reducing freight costs.
The Iatan unit provided approximately 56% of the Company's
overall energy needs in 1995, a decrease from 61% in 1994.
Light & Power met 35% of its energy needs through purchased
power arrangements in 1995 compared to 24% in 1994. Purchased
power fixed charges were $1.1 million for 1995 and $1.7 million
for 1994.
The Lake Road units supplied the remainder of the Company's
energy needs.
Other Operations Expenses of other operations for 1995 increased
$5.3 million in comparison to 1994. The increase was primarily due
to a June 1994 PSC order that resulted in a one-time adjustment which
reduced pension expense (refer to Note 2 in the Notes to
Financial Statements).
Maintenance Maintenance expense for 1995 was $1.5 million more
than for 1994. Expenses at the Lake Road plant increased $1.4
million, primarily for work on the plant's main generating unit.
In December 1994, a severe ice storm disrupted service to about
25% of the Company's customers. Costs incurred to resume service
and repair damages resulting from the ice storm were $1.3
million. These unusual costs were recorded by the Company as a
regulatory asset based upon the accounting authority order
received in January 1995 from the PSC. The order authorized the
Company to amortize these costs over a five-year period which
began in March 1995. The Company intends to seek recovery of the
amortization of this deferral in its next general rate
proceeding.
Income Tax Expense Income tax expense decreased $.7 million
from 1994 primarily as a result of adjustments required by the
1994 order (refer to Note (c) in the Statements of Taxes).
Partially offsetting the rate adjustment was an increase in
pretax income.
Other Income and Deductions Other income increased over 1994
primarily due to a gain on the sale of the unit trains which
deliver coal to Iatan. The gain from the sale was about $.5
million, net of income taxes. Gains on the sales of securities
and increased interest on investment of available proceeds from
the issuance of $20 million of medium-term notes in March 1995
also contributed to the increase.
Interest Charges Interest expense on long-term debt reflects
an increase of about $1.3 million from 1994. This increases is
the result of the issuance in March of $20 million of medium-
term notes.
1994 vs. 1993
Earnings Earnings per share in 1994 totaled $2.81, an increase
of 83 cents over 1993. The increase resulted from a one-time
adjustment ordered by the PSC that reduced pension expense.
Electric Revenues 1994 electric operating revenues were $79.0
million, an increase of 4% from 1993. The growth in 1994
revenues reflects a 3% price increase in mid-June. In addition,
sales for resale were higher in 1994 than in 1993.
Retail sales totaled 1,425,174 MW-h in 1994, a decrease from the
1,428,433 MW-h reported in 1993. While more moderate
temperatures led to lower sales to the residential class, strong
sales to commercial customers largely offset the decrease. Sales
to the commercial class increased 4%. Sales to industrial
customers were 4% lower, reflecting the closing of two large
industrial customers in 1993. The first closing, in August, was
flood-related; the other customer, citing economic reasons,
closed in December.
Industrial Steam Revenues In 1994, industrial steam sales and
revenues decreased 18% and 17%, respectively, from 1993's
levels. The 1994 decrease in sales was primarily the result of a
large industrial customer that discontinued operations in St.
Joseph at the end of 1993. The decrease in revenues, reflecting
the loss of this customer, was partially offset by two months of
an $800,000 annual price increase which became effective
November 2, 1994.
Natural Gas Revenues In the natural gas segment, retail sales
revenues in 1994 increased 5%, compared to 1993. Revenues
reflect a full year of an annual rate increase of $275,000 which
was effective in April 1993. Retail sales were 9% lower,
primarily the result of warmer winter temperatures.
18
Fuel and Purchased Power Costs Total costs were $28.1 million
for 1994, $1.1 million more than for 1993. This increase was the
result of higher sales for resale transactions expense which was
partially offset by lower fuel costs.
Unit fuel costs were lower in 1994 at 120.4 cents per million
Btu, down from 127.4 cents per million Btu in 1993. The 1994
decrease resulted from lower prices for coal and gas and the
increased use of the more efficient Iatan unit.
Approximately 91% of the total fuel burned in 1994 was coal. The
cost of coal burned decreased from the 119.1 cents per million
Btu in 1993 to 113.9 cents per million Btu in 1994. The higher
cost in 1993 was due to increased use of the Lake Road facility
during the flood and the Iatan plant maintenance outage.
The Iatan unit provided 61% of the Company's overall energy
needs in 1994, an increase from the 45% the unit provided in
1993. The low figure for 1993 reflects the reduced Iatan unit
availability during the summer flood and extended fall outage in
1993. The Iatan delivered unit coal price was $15.17 per ton in
1994 compared to $16.33 in 1993. The unit price was lower in
1994 due to favorable spot market purchases and reduced freight
expense.
In 1993, the Company was adversely affected by flooding along
the Missouri River and its tributaries. As a result, the Company
lost the services of the Iatan generating plant and discontinued
service, for safety reasons, to more than 1,000 customers,
mostly residential. When Iatan returned to service after ten
days, its production was limited due to coal delivery problems.
The Company's Lake Road plant continued to operate during this
period.
The incremental cost of purchased power and other expenses
associated with the flood significantly exceeded the Company's
normal cost of service. These cost of about $1.1 million were
deferred in accordance with a PSC order and are being amortized
over five years (refer to Note 6 in the Notes to Financial
Statements). These costs are currently being recovered in rates
charged to customers.
Light & Power met 24% of its energy needs through purchased
power arrangements in 1994, compared with 37% in 1993. Purchased
power fixed charges for firm and peaking capacity were $1.7
million for 1994 and $1.5 million for 1993.
The Lake Road units supplied the remainder of the Company's
energy needs.
Other Operations Expenses of other operations for 1994
decreased $9.7 million in comparison to 1993. The decrease was
primarily due to a June 1994 PSC order which eliminated a
regulatory liability established by the June 1993 PSC order and
resulted in 1994 pension expense being $10.6 million less than
reported in the same period in 1993.
Income Tax Expense Income tax expense totaled $5.2 million in
1994, an increase of $6.8 million from 1993. This increase
primarily was the result of adjustments required by the 1994 and
1993 rate orders (refer to Note (c) in the Statements of Taxes).
Interest Charges The 1994 long-term interest expense reflects
a decrease of about $97,000 from 1993. The decrease resulted
from the retirement of long-term debt under the Company's
sinking fund obligations and a reduction in interest as a result
of the refinancing of existing debt in November 1993. Proceeds
from medium-term notes were used to refund existing first
mortgage bonds with higher interest rates.
FUTURE OUTLOOK
Liquidity and Capital Resources The Company has a total
authorized level of 25 million shares of common stock, four
million shares of cumulative preferred stock and two million
shares of preference stock.
At year-end, the Company had $6.5 million in cash and temporary
investments, in addition to $3.9 million in unused committed
lines of credit and $7.5 million of other unused borrowing
facilities.
Common equity was 53% of total capitalization in 1995 and 59%
for 1994 and 1993. The Company has an open market repurchase
program under which management is authorized to purchase up to
an additional 260,000 shares of common stock as of December 31,
1995.
On December 1, 1995, Light & Power changed its Dividend
Reinvestment Plan to allow the option of using either treasury
shares, original issue shares or open market purchases to
fulfill plan requirements.
Late in 1993, the Company issued $25 million of new debt under a
medium-term note arrangement at interest
19
rates ranging from 5.77% to 7.33% and in maturities ranging from
1998 through 2023. The proceeds were used to refund existing
first mortgage bonds with interest rates ranging from 7% to 9
1/8% and for other general corporate purposes.
In March 1995, the Company issued $20 million of new debt under
a medium-term note arrangement at 8.36% due in 2005. The
proceeds were used to reduce short-term debt with the remainder
temporarily invested for future capital requirements and general
corporate purposes.
In June 1995, the Company replaced the 7 3/8% pollution control
revenue bonds with 5.85% unsecured pollution control revenue
bonds, both with maturities of 2013.
The Company projects capital expenditures (net of allowance for
funds used during construction [AFUDC]) of about $14.2 million
for 1996. Construction expenditures, net of AFUDC, were $21.8
million in 1995, $12.2 million in 1994 and $12.5 million in
1993. Construction expenditures, net of AFUDC, for the five-year
period ending 2000 are projected to be approximately $76.3
million. The Company expects to finance these expenditures
through internally generated funds and the issuance of short-
term debt and common equity.
Financial coverages are at levels in excess of those required
for issuance of debt and preferred stock. In June 1995, Standard
& Poors returned the unsecured debt rating of the Company to A-
after lowering it to BBB+ in December 1994. The firm lowered the
Company's rating for secured debt from A to A- in December 1994.
While still investment grade, the cut was attributed to a heavy
future construction program for capacity additions and
compliance with environmental regulations, an increasing
reliance on purchased power and strict Missouri regulatory
oversight. Light & Power, however, is not alone in this
situation as uncertainties created by a more competitive
environment have negatively impacted the outlook for the
electric utility industry as a whole. As noted under "Capacity",
the Company is reviewing options which may not result in a heavy
construction program for additional capacity.
Management believes the nature of these challenges has been
overstated. Challenges and change create opportunities and
management believes the Company's strong balance sheet and
competitive prices make it well positioned for the future. The
equity ratio of 53% positions the Company well and allows for
supplemental borrowings as future needs dictate.
Cash generated from operations is strong. Over the last three
years, operating cash flows have been $19.3 million, $17.0
million and $17.9 million, respectively. The Company's earnings
before income taxes to fixed charge coverage ratio was 3.78 for
1995.
Impact of Inflation Under the ratemaking practices followed by
the PSC, only historical costs are recoverable in revenues.
Assuming adequate and timely rate relief, the Company will
recover the increases in costs of service caused by inflation.
Impact of Accounting Standards Changes In 1995, the Financial
Accounting Standards Board issued SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of and SFAS No. 123, Accounting for Stock-Based
Compensation. Neither of these two pronouncements is expected to
have a material impact on the Company's financial statements.
For a complete discussion, refer to Note 1 in the Notes to
Financial Statements.
There were no accounting changes in 1994 that had a material
impact on the financial statements.
Two accounting standards were adopted by the Company in
1993 SFAS No. 109, Accounting for Income Taxes, and SFAS No.
106, Employer's Accounting for Postretirement Benefits Other
Than Pensions. For a complete discussion of the effect of the
changes, refer to Note (a) in the Statements of Taxes and Note 2
in the Notes to Financial Statements, respectively.
Customer Additions/Losses Two of the Company's industrial
customers announced expansion plans in 1995. A researcher and
manufacturer of animal pharmaceuticals has begun work on its $50
million expansion which will make its facility a world-class
research facility. A battery plant has renegotiated its labor
agreement to allow for continuous shift operation, clearing the
way for a major expansion of the plant. The $10 million
expansion is expected to add about 250 jobs.
20
Two other industrial concerns closed their St. Joseph operations
in 1995. The first, a chemical and adhesive manufacturer which
was both an electric and industrial steam customer, began
phasing out its St. Joseph operation early in the year. Then in
December, a clothing manufacturer closed its plant.
In 1993, the Company lost two other industrial customers. One, a
manufacturer of medical supplies, sustained substantial flood
damage and decided not to reopen. In an action unrelated to the
flood, a large electric and industrial steam customer, a pork
processing plant, discontinued its operations in late December
1993.
Environmental Issues The Company is subject to various
environmental regulations, including those related to air and
water quality, polychlorinated biphenyl (PCB),
ash removal, underground storage tanks and asbestos. Routine
testing and maintenance programs have been put in place to
comply with these regulations.
The Clean Air Act Amendments (CAAA) of 1990 established
standards for electric utilities to reduce certain emissions
from coal-fired generating stations. Final compliance with this
legislation becomes effective in 2000. Missouri's air quality
law is in compliance with and does not contain requirements that
are more stringent than the federal legislation.
The Iatan plant, which provides the majority of the Company's
energy, will not be significantly impacted by this legislation.
However, substantial investments will be required at the Lake
Road plant to meet the CAAA Phase II emission regulations
effective in 2000.
In 1995, the electrostatic precipitator at the Lake Road plant
was enlarged and a continuous emission monitor was installed at
a cost of $4.2 million to comply with part of the requirements.
In addition, the Company is reviewing the possibility of "opting
in" a boiler, presently not covered by the legislation. By
switching this boiler to a blend of low-sulfur western coal and
making some additional coal and ash system modifications, the
Company would earn additional allowances required to more fully
utilize plant capacity. Another alternative is to purchase
options.
The above modifications would require capital investments
totaling about $11.4 million in 1996 through 1999. These costs
include estimated expenditures for NOx compliance.
In 1996, the Company plans to upgrade the rail transportation
facilities and modify the ash handling system to handle ash from
low-sulfur coal at a cost of $2.8 million. Management intends to
seek to recover the costs incurred as a result of the CAAA
legislation through higher rates as the capital investments are
made.
Capacity Light & Power has taken steps to serve its customers'
growing load requirements.
The Company purchased 35 MW of capacity from a regional utility
in 1995. The Company also has contracts to purchase 40 MW in
1996, 50 MW in 1997, 55 MW in 1998 and 60 MW in 1999. This
provides Light & Power with the ability to economically provide
for the growing demand in its service territory. Additional
peaking purchases in these years are still under consideration.
In September 1995, the Company issued a request for proposal to
supply about 100 MW to meet its energy needs for the year 2001
and beyond. Fourteen proposals were received. The proposals will
be reviewed and a decision made in spring 1996.
Prior to the request for bids, the Company had participated in
discussions for possible base-load capacity in the proposed
Iatan 2, a new coal-fired unit at the Iatan 1 site. The Company,
however, decided that the bidding process provided an
opportunity to learn about all the low-cost options available,
including those which provide more flexibility than long-term
ownership.
Rate Matters The Company currently applies SFAS No. 71,
Accounting for the Effects of Certain Types of Regulation, and,
accordingly, has recorded regulatory assets when appropriate.
Management believes the Company will continue to have its rates
approved and regulated by the PSC for the foreseeable future.
These rates are designed to enable the Company to recover its
service costs and also allow an opportunity for the Company to
earn a return on its investment. Changes within the industry and
a movement toward deregulation of some or all aspects of the
Company's business may require the Company to discontinue the
application of SFAS No. 71 at a future date. The Company
periodically reviews the criteria specified in SFAS No. 71 and
believes this standard will continue to be applicable for at
least the next several years.
21
Competition/Deregulation The Company is committed to meeting
the increasing competition within the industry. The Company's
prices are among the lowest in the state and region; Light &
Power continues to monitor costs in an effort to remain a low-
cost energy provider. With its low prices, transmission assets
and multiple power pool memberships, the Company is in an
excellent position to maintain its customer base.
In early 1996, the Company's management concluded an extensive
review of its strategic plan. The plan focuses on customer-
oriented activities designed to provide high levels of customer
satisfaction.
The Company's competitive industrial price structure became more
attractive during 1995 as a result of the rate-design case.
Following that case, the Company implemented seasonal and time
of day pricing.
While state law prohibits competing with Rural Electric
Cooperatives (REC) for existing customers, competition remains
for new customers, especially industrial, in the rural areas of
the state. To meet that competition, the Company has an economic
development rate.
Under an open retail environment, Light & Power could make
inroads in securing business from RECs since the Company's low
prices could attract both industrial and residential customers.
Although natural gas has long been the dominant home-heating
source in the area, the Company is making significant inroads in
making electricity the preferred source for heating. For
instance, 93% of total square footage of all new residential
units built in the Company's service area in 1995 use electric
heat, compared to the national average of 29%.
At present, there are no customer-owned co-generation projects
on Light & Power's system. The Company's very favorable energy
prices do not make co-generation projects attractive. The
Company's price structure results primarily from the use of coal
at Iatan and Lake Road and favorable prices from regional energy
suppliers. The Company does not anticipate energy prices
increasing in the near future to a level which would make co-
generation projects attractive.
Transmission Access Current and future efforts to encourage
wholesale competition ('opening up' the nation's transmission
system) as a result of the National Energy Policy Act of 1992
are expected to increase the size of the market from which Light
& Power buys and sells firm and non-firm (wholesale) energy.
This will increase the Company's options available for meeting
its customers' electric needs, as well as increase its options
for expanding markets. It also is management's belief that
increased transmission access, being available to others besides
Light & Power, will increase the demand for the available
wholesale energy supply, and possibly result in higher purchased
energy costs for the Company.
Light & Power currently has no full-requirement wholesale
customers. As a result, wholesale competition, as being
implemented today (no retail wheeling) is not expected to place
the Company's retail customers at risk.
Even if retail wheeling were to be implemented, Light & Power
believes that its current low prices and the excellent power
supply options available to the Company to meet future
requirements, will permit the Company to remain competitive in
comparison to other regional suppliers.
It is management's belief that maintaining its position as
a low-cost provider of electricity, through a balance of
capacity additions and purchased power, will allow Light & Power
to remain a competitive supplier of electric energy and retain
its customer base.
- -22-
Statements of Income
Years ended December 31
1995 1994 1993
Operating revenues (Note 1):
Electric - Retail sales
and other $80,942,000 $75,309,000 $74,261,000
Sales for
resale 1,052,000 3,661,000 1,429,000
Other 11,527,000 11,812,000 12,849,000
$93,521,000 $90,782,000 $88,539,000
Operating expenses:
Production
fuel $14,539,000 $17,470,000 $16,388,000
Purchased power - System
energy 9,594,000 7,448,000 9,569,000
Resale 792,000 3,210,000 1,062,000
Gas purchased for
resale 2,746,000 3,296,000 3,017,000
Other operations
(Note 2) 19,435,000 14,153,000 23,833,000
Maintenance 9,788,000 8,262,000 8,186,000
Depreciation
(Note 1) 10,022,000 9,834,000 9,514,000
Taxes (See Statements):
General 6,333,000 6,360,000 6,284,000
Income 4,559,000 5,211,000 (1,562,000)
$77,808,000 $75,244,000 $76,291,000
Operating
income $15,713,000 $15,538,000 $12,248,000
Other income and deductions:
Allowance for equity funds used
during
construction $139,000 $117,000 $136,000
Other - net 743,000 (129,000) (5,000)
$882,000 $(12,000) $131,000
Income before interest
charges $16,595,000 $15,526,000 $12,379,000
Interest charges, net:
Long-term
debt $5,558,000 $4,261,000 $4,358,000
Interest on bank
notes 118,000 182,000 102,000
Allowance for borrowed funds used
during
construction (269,000) (90,000) (72,000)
Other 148,000 107,000 69,000
$5,555,000 $4,460,000 $4,457,000
Net income $11,040,000 $11,066,000 $7,922,000
Weighted average common shares
outstanding 3,906,686 3,942,146 4,008,192
Earnings per average common
share $2.83 $2.81 $1.98
The accompanying Notes to Financial Statements are an integral
part of these statements.
23-
Balance Sheets
December 31 1995 1994
ASSETS
Utility plant, at original cost (Note 1):
Electric $283,959,000 $269,284,000
Other 9,625,000 9,472,000
$293,584,000 $278,756,000
Less - Reserves for
depreciation 140,391,000 135,415,000
$153,193,000 $143,341,000
Construction work in
progress 7,505,000 4,951,000
$160,698,000 $148,292,000
Other investments $1,727,000 $2,346,000
Current assets:
Cash and cash
equivalents $287,000 $407,000
Temporary
investments 6,202,000 990,000
Accounts receivable, net of reserve
of $324,000 and $339,000
7,568,000 6,986,000
Accrued utility revenue
(Note 1) 3,595,000 3,523,000
Fuel, at average
cost 4,015,000 3,832,000
Materials and supplies, at
average cost 5,500,000 5,324,000
Prepayments and
other 1,208,000 1,233,000
$28,375,000 $22,295,000
Deferred charges:
Debt expense (being amortized over
term of debt) $1,668,000 $1,393,000
Lease payments
receivable 3,536,000 3,660,000
Prepaid pension
expense 8,836,000 7,691,000
Regulatory assets 14,126,000 13,395,000
Other 364,000 627,000
$28,530,000 $26,766,000
$219,330,000 $199,699,000
CAPITALIZATION AND LIABILITIES
Capitalization (See Statements):
Common stock $33,816,000 $33,816,000
Retained earnings 64,560,000 60,708,000
Other paid-in
capital 380,000 380,000
Less - treasury
stock (17,362,000) (17,312,000)
$81,394,000 $77,592,000
Long-term debt 73,100,000 53,100,000
$154,494,000 $130,692,000
Current liabilities:
Outstanding checks in excess of cash
balances $2,523,000 $2,803,000
Accounts payable 7,935,000 7,299,000
Notes payable 0 6,300,000
Accrued income and general
taxes 722,000 838,000
Accrued interest 1,961,000 1,526,000
Accrued vacation 1,123,000 1,170,000
Other 395,000 372,000
$14,659,000 $20,308,000
Non-current liabilities and deferred credits:
Capital lease
obligations $2,512,000 $2,527,000
Deferred income
taxes 29,304,000 27,186,000
Investment tax
credit 4,911,000 5,323,000
Accrued claims and
benefits 1,699,000 1,590,000
Deferred revenues 2,490,000 2,609,000
Regulatory
liabilities 7,287,000 7,985,000
Other 1,974,000 1,479,000
$50,177,000 $48,699,000
Commitments and Contingencies (Notes 1 and 3)
$219,330,000 $199,699,000
The accompanying Notes to Financial Statements are an integral
part of these statements.
24-
Statements of Capitalization
December 31 1995 1994
Common Stock and retained earnings
Common stock - authorized 25,000,000 shares, without
par value; issued 4,626,374
shares (a) $33,816,000 $33,816,000
Retained earnings 64,560,000 60,708,000
Other paid-in capital (principally gain on
reacquired
preferred stock) 380,000 380,000
Less - treasury stock, at cost, 720,005 and
718,483 shares,
respectively (17,362,000) (17,312,000)
$81,394,000 $77,592,000
Long-term debt (d):
First Mortgage Bonds-
9.44% Series due
February 1, 2021 $22,500,000 $22,500,000
Pollution Control Revenue Bonds-
7-3/8% series due
February 1, 2013 - 5,600,000
$22,500,000 $28,100,000
Unsecured pollution control
revenue bonds-
5.85% series due
February 1, 2013 $ 5,600,000 $ -
Medium-term Notes
5.77% due
December 8, 1998 $5,000,000 $5,000,000
7.13% due
November 29, 2013 1,000,000 1,000,000
7.16% due
November 29, 2013 9,000,000 9,000,000
7.17% due
December 1, 2023 7,000,000 7,000,000
7.33% due
November 30, 2023 3,000,000 3,000,000
8.36% due
March 15, 2005 20,000,000 -
$45,000,000 $25,000,000
$73,100,000 $53,100,000
Total capitalization $154,494,000$130,692,000
Notes:
(a) Common Stock:
The St. Joseph Light & Power Company (the Company) has an
Automatic Dividend Reinvestment and Optional Cash Payment Plan.
Under this Plan common shares may be newly issued, reissued or
purchased on the open market. At December 31, 1995, the Company
had 418,632 shares of common stock reserved for this Plan, a
suspended employee stock purchase plan, and a terminated
employee stock ownership plan.
As of December 31, 1995, the Company had issued 4,626,374 common
stock purchase rights (Rights) with 3,906,369 Rights
outstanding. There were 3,907,891 Rights outstanding at December
31, 1994.
The Rights were issued in November 1986 as a dividend to holders
of the common stock at the rate of one Right for each share of
common stock outstanding. Such Rights expire on December 4,
1996. Each Right entitles the holder thereof to buy one-third
(1/3) of a share of common stock at an exercise price of $70.00.
The holders of these Rights do not have any voting
rights. These rights are redeemable, at the option of the
Company, at a price of $0.01 per Right prior to the twentieth
business day after the public announcement that any person has
acquired beneficial ownership of at least 20% of the common
stock. The Rights are evidenced by the common stock certificates
and are not exercisable, or transferable apart from the common
stock, until ten days after a public announcement that a person
acquires 20% or more of the Company or makes a tender offer
The accompanying Notes to Financial Statements are an integral
part of these statements.
25
for 30% or more of the Company's common stock. In the event the
Company is acquired in a merger or other business transaction
(including one in which the Company is the surviving
corporation), it is provided that each Right will entitle its
holder to purchase, at the then current exercise price of the
Right, that number of shares of common stock of the surviving
Company which at the time of such transaction would have a
market value of two times the exercise price of the Right.
(b) Cumulative Preferred Stock:
The authorized level of cumulative preferred stock is 4,000,000
shares without par value.
(c) Preference Stock:
The authorized level of preference stock is 2,000,000 shares
without par value.
(d) Long-Term Debt:
In March 1995, the Company issued $20 million of new debt under
a medium-term note arrangement. The proceeds were used to reduce
short-term debt with the remainder temporarily invested for
future capital requirements and general corporate purposes. In
June 1995, the Company replaced the secured pollution control
revenue bonds with unsecured pollution control revenue bonds.
The remaining series of first mortgage bonds is secured equally
and ratably by a direct lien on substantially all fixed property
and franchises now owned or hereafter acquired. The combined
aggregate amount of maturities and unfulfilled sinking fund
requirements for the next five years is $5 million for the
retirement of the 5.77% medium-term note.
Statements of Retained Earnings
Years ended December 31 1995 1994 1993
Balance at beginning of
year $60,708,000 $56,745,000 $55,877,000
Net income 11,040,000 11,066,000 7,922,000
$71,748,000 $67,811,000 $63,799,000
Less-
Dividends on
Common stock of $1.84, $1.80 and $1.76
per share, 7,188,000 7,103,000 7,054,000
Balance at
end of year $64,560,000 $60,708,000 $56,745,000
The accompanying Notes to Financial Statements are an integral
part of these statements.
- -26-
Statements of Cash Flows
Years ended
December 31 1995 1994 1993
Cash flows from operating activities:
Net income $11,040,000 $11,066,000$7,922,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 10,022,000 9,834,000 9,514,000
Gain from sale of
unit coal trains (806,000) - -
Pension expense (950,000) (6,700,000) 4,043,000
Other postretirement
benefits 46,000 452,000 838,000
Deferred taxes and investment tax credit
(457,000) 2,418,000 (4,757,000)
Allowance for equity funds used during construction
(139,000) (117,000) (136,000)
Net changes in working capital items
not considered elsewhere:
Accounts receivable and accrued
utility revenue (654,000) 429,000 (768,000)
Fuel (183,000) (1,002,000)2,233,000
Accounts payable and outstanding
checks 356,000 840,000 2,403,000
Accrued income and general
taxes (116,000) (49,000) (470,000)
Other, net 715,000 (288,000) (1,291,000)
Net changes in regulatory assets and liabilities
278,000 157,000 (1,781,000)
Net changes in other assets and liabilities
148,000 (80,000) 119,000
Net cash provided by operating
activities $19,300,000 $16,960,000 $17,869,000
Cash flows from investing activities:
Gross additions to
plan $(22,359,000) $(13,325,000) $(12,196,000)
Allowance for borrowed funds used during construction
269,000 90,000 72,000
Investments (4,593,000) 39,000 1,109,000
Proceeds from sale of unit coal trains
931,000 - -
Other (130,000) 27,000 64,000
Net cash used in investing activities
$(25,882,000) $(13,169,000) $(10,951,000)
Cash flows from financing activities:
Notes payable (decrease)
increase $(6,300,000) $6,300,000 $ -
Long-term debt
reacquired (5,600,000) - (24,941,000)
Long-term debt
issued 25,600,000 - 25,000,000
Treasury stock (purchased)
issued (50,000) (2,851,000) 67,000
Dividends paid (7,188,000) (7,103,000)(7,054,000)
Net cash provided by (used in) financing
activities $6,462,000 $(3,654,000) $(6,928,000)
Net increase (decrease) in cash and cash equivalents
$(120,000) $137,000 $(10,000)
Cash and cash equivalents at beginning
of year $407,000 $270,000 $280,000
Cash and cash equivalents at end
of year $287,000 $407,000 $270,000
Supplemental disclosure of cash flow information
Cash paid during year:
Interest $5,275,000 $4,146,000 $5,100,000
Income tax $5,257,000 $3,484,000 $3,794,000
For purposes of the Statements of Cash Flows, the Company
considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash
equivalents.
The accompanying Notes to the Financial Statements are an
integral part of these statements.
- -27-
Statements of Taxes
Years ended
December 31 1995 1994 1993
Components of Income tax expense:
Taxes payable currently
Federal $4,838,000 $2,441,000 $2,982,000
State 766,000 397,000 273,000
$5,604,000 $2,838,000 $3,255,000
Provisions for deferred taxes (a) (f)
Depreciation and other plant-related differences (b)
$(80,000) $105,000 $(163,000)
Rate case adjustments (c)
0 0 (2,747,000)
Pensions (c) 429,000 2,787,000 (1,778,000)
Other (394,000) (53,000) 371,000
$(45,000) $2,839,000 $(4,317,000)
Investment tax
credit $(412,000) $(422,000) $(440,000)
Total income tax
expense $5,147,000 $5,255,000 $(1,502,000)
Less income tax applicable to nonutility operations (d)
(588,000) (44,000) (60,000)
Income tax expense charged to utility operations
$4,559,000 $5,211,000 $(1,562,000)
Reconciliation of income tax rates:
Statutory federal income
tax rate 35.0% 34.0% 34.0%
Timing differences flowed through as required
by regulators (2.2) (2.1) (.6)
Amortization of investment
tax credit (2.6) (2.6) (6.9)
Amortization of excess deferred
taxes (1.0) (1.0) (4.0)
State income taxes, net of federal income tax benefit
3.1 3.1 0
Rate case
adjustment 0 0 (42.8)
Other (.5) .8 (3.1)
Effective income tax rate (e)
31.8% 32.2% (23.4)%
Components of general tax expense:
Real estate and personal
property $2,506,000 $2,630,000 $2,652,000
City license tax 2,658,000 2,549,000 2,503,000
Social Security and
Medicare 1,037,000 1,050,000 1,006,000
Other 132,000 131,000 123,000
Total general tax
expense $6,333,000 $6,360,000 $6,284,000
Notes:
(a) The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 109, Accounting for Income Taxes, in the
first quarter of 1993, which requires the use of the liability
method of accounting for income taxes. Under the liability
method, deferred income taxes are established for the tax
consequences of temporary differences by applying the expected
tax rate to differences between the financial statement carrying
amount and the tax basis of the Company's assets and
liabilities. Such temporary differences are the result of
provisions in the income tax law that either require or permit
certain items to be reported on the income tax return in a
different period than they are reported in the financial
statements.
The adoption of SFAS 109 resulted in the establishment of
additional deferred income taxes and regulatory balances.
Initial application of the statement was reflected as a
cumulative effect of a change in accounting principle and had no
material impact on the Company's Results of Operations.
(b) The Company has elected, for tax purposes, various
accelerated depreciation methods allowed by the Internal Revenue
Code.
(c) The Missouri Public Service Commission (PSC) issued a
Report and Order dated June 25, 1993, that required the Company
to change its recognition of the tax effects of certain
temporary differences from a normalized to a flow-through basis.
As a result, a one-time addition to earnings was recorded of
approximately $2.7 million to adjust deferred income taxes and
record a regulatory asset for amounts which will be recovered in
rates in future periods. Income tax expense related to these
items has been recorded pursuant to the accounting treatment
specified in the 1993 order.
Deferred income taxes previously provided for basis differences
in the Company's prepaid pension asset of approximately $1.8
million were reversed when a different method to recover pension
costs was required by the 1993 order (refer to Note 2 in the
Notes to the Financial Statements). Other minor adjustments to
deferred tax balances were also required. The total tax effect
of the 1993 order was to decrease deferred income taxes by about
$4.6 million.
The 1994 Report and Order required the Company to change its
method of recognition of pension expense. In response to the
rate order, the Company recorded a one-time adjustment reducing
pension expense and eliminating a regulatory liability
established as a result of the 1993 order. The tax effect was to
increase deferred income taxes by $2.6 million.
(d) The tax effect of items applicable to nonutility operations
is included in Other Income and Deductions.
(e) The effective income tax rate is computed by dividing total
income tax expense on these statements by the sum of tax expense
and net income.
(f) The principal components of the Company's deferred income
tax balances at December 31, 1995 and 1994, consist of the
following:
1995 1994
Accelerated depreciation and
other plant-related
differences $22,146,000 $21,742,000
Unamortized investment
tax credit (3,317,000) (3,441,000)
Regulatory assets 12,179,000 11,170,000
Regulatory
liabilities (3,970,000) (4,544,000)
Other, net 2,266,000 2,259,000
Total deferred tax
liabilities $29,304,000 $27,186,000
The accompanying Notes to Financial Statements are an integral
part of these statements.
- -28-
NOTES TO FINANCIAL STATEMENTS
1 STATEMENT OF ACCOUNTING POLICIES
Utility Plant Utility plant is stated at original cost. These
costs include payroll-related costs such as taxes, pensions and
other fringe benefits and an allowance for funds used during
construction (AFUDC).
Depreciation Provisions for depreciation have been computed on
a straight-line basis by applying rates approved by the PSC to
the classified account balances. The Company's annual composite
rate was 3.6% for 1995, and 1994 and 3.8% for 1993.
Improvement to units of property are capitalized. Property units
retired are charged to accumulated depreciation together with
any related removal costs, net of salvage. Maintenance costs and
replacements of assets which do not constitute units of property
are expensed as incurred.
Jointly Owned Iatan Plant The Company has an agreement with
Kansas City Power and Light Company and The Empire District
Electric Company for joint ownership of a coal-burning
generating plant at Iatan, Missouri. The amounts below represent
the Company's 18% interest in the 670-megawatt unit. The
Company's share of operating expenses for Iatan is included in
operating expenses in the Statements of Income.
December 31
1995 1994
Utility plant $60,534,000 $62,180,000
Reserve for
depreciation $29,667,000 $29,331,000
Revenue Recognition Revenues relating to service rendered but
unbilled are recognized in the period the service is provided.
Commitments Refer to Note 7 regarding lease agreements.
The Company's capital budget for 1996 approximates $14,784,000.
The Company has contracts to purchase generating capacity from
regional suppliers of 40 megawatts (MW) in 1996, 50 MW in 1997,
55 MW in 1998 and 60 MW in 1999 for annual fixed charges of
$1,259,000, $1,683,000, $1,829,000 and $1,993,000 respectively.
Reclassifications Certain reclassifications have been made in
the financial statements to enhance comparability.
Accounting Policies In March 1995, the Financial Accounting
Standards Board (FASB) issued SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of. The statement standardizes when and how long-lived
assets will be reviewed for possible impairment. The Company
will adopt this standard on January 1, 1996. The adoption is not
expected to have a material impact on the Company's financial
position or results of operations. In October 1995, the FASB
issued SFAS No. 123, Accounting for Stock-Based Compensation,
effective for the fiscal year 1996. The statement encourages,
but does not require, a fair-value based method of accounting
for stock-based compensation. It also permits companies to
continue to measure compensation costs under Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, subject to certain limitations, but requires pro
forma disclosures of net income and earnings per share as if the
fair-value based method of accounting had been applied. While
the Company is still evaluating the statement, adoption in 1996
is not expected to have a significant impact.
2 BENEFIT PLANS
Pension Plans The Company has two non-contributory defined-
benefit pension plans, one for bargaining and one for non-
bargaining employees, covering all employees with one year or
more of continuous service. Benefits for both plans are based on
years of service and compensation, utilizing the final average
pay plan benefit formula. The Company's funding policy is to
comply with the minimum funding requirements of the Employee
Retirement Income Security Act.
In 1993, the PSC issued a Report and Order that required pension
expenses be recognized on a funding basis for ratemaking
purposes rather than the accrual recognition required under
generally accepted accounting principles. In 1993,
29
the Company recorded the difference in expense recognition on
the balance sheet as a regulatory liability.
In 1994, the PSC issued a Report and Order that eliminated the
regulatory liability established by the 1993 Order. The Company
is now required to recognize pension expense on an accrual
basis. In 1994, the Company eliminated the regulated liability
recorded in 1993.
Net pension (credit) costs, including amounts capitalized, are:
1995 1994 1993
Service cost-benefits earned
during this
period $755,000 $765,000 $739,000
Interest cost on projected
benefit
obligation $2,000,000 $1,913,000 $1,926,000
Less: Actual return on
plan assets (10,619,000) 319,000 (4,418,000)
Amortization of transition
asset (431,000) (431,000) (431,000)
Amortization of prior
service cost 134,000 134,000 134,000
Deferred gain (loss)
on plan assets 7,016,000 (4,369,000) 609,000
Regulatory
adjustments 0 (6,022,000) 6,022,000
Net pension (credits)
costs $(1,145,000) $(7,691,000) $4,581,000
Less: amounts credited
(charged) to
construction 195,000 991,000 (538,000)
Net pension (credits) costs
included in operating
expenses $(950,000) $(6,700,000) $4,043,000
Assumed discount
rate 7.75% 7.75% 7.5%
Assumed average increase
in future
compensation 4.3% 4.3% 4.3%
Assumed rate of return
on assets 9.0% 9.0% 9.0%
The funded status of the pension plans at December 31, 1995 and
1994 is shown below.
1995 1994
Actuarial present value of
Accumulated plan benefits:
Vested $22,140,000 $21,286,000
Non-vested 737,000 702,000
Accumulated benefit
obligation $22,877,000 $21,988,000
Plan assets at fair market
value $48,987,000 $40,215,000
Less: projected benefit
obligation (26,884,000) (25,729,000)
Plan assets in excess of
projected benefit obligation $22,103,000 $14,486,000
Less: unrecognized transition
asset (2,587,000) (3,018,000)
Unrecognized prior service cost 1,323,000 1,457,000
Less: unrecognized net gain (12,003,000) (5,234,000)
Accrued pension asset $8,836,000 $7,691,000
The assets of the plans consist primarily of common stocks,
corporate bonds, United States government securities, collective
investment trust funds and commingled employee benefit trust
funds.
Retirement Savings Plan The Company has a Retirement Savings
Plan under Section 401(k) of the Internal Revenue Code. The plan
covers all regular full-time employees with one year or more of
service. Under this plan, eligible employees may defer and
contribute a portion of current compensation in order to provide
retirement benefits. The Company makes a matching contribution
of 25%, up to 6% of compensation, made by the employee on a
monthly basis. Discretionary matching contributions up to an
additional 25% may be made based on an incentive formula. The
Company made contributions of $369,000 for 1995, $366,000 for
1994 and $353,000 for 1993.
Postretirement Benefit Plan In addition to providing pension
benefits, the Company provides certain postretirement health and
life insurance benefits. Substantially all of the Company's
employees become eligible for these benefits if they reach
retirement age while working for the Company and have 10 years
of service. Employees hired after December 31, 1992, are not
eligible for postretirement life insurance benefits.
The Company adopted SFAS No. 106, Employers' Accounting for
Postretirement Benefits other than Pensions, effective January
1993. This method of accounting for other postemployment
benefits (OPEB) accrues the actuarially determined costs for
life insurance and medical benefits during an employee's period
of service. The Company elected to amortize the estimated
30
unfunded accumulated obligation at January 1, 1993, of
$7,761,000 (transition obligation) over 20 years. The 1993 order
required that OPEB expense be accounted for on a pay-as-you-go
basis by the PSC for ratemaking purposes rather than the accrual
recognition required under SFAS No. 106. The 1993 order did not
comply with the accounting requirements for establishing
regulatory assets. As a result, the Company continued recording
OPEB expense in accordance with SFAS No. 106 even though current
revenues did not reflect a recovery of these expenses.
The PSC ordered the Company in the 1994 order to account for
OPEB costs on an accrual basis for ratemaking purposes. The
ruling did not change the Company's financial policy of
accounting for OPEB expenses on an accrual basis as required
under SFAS No. 106. However, the ruling permits the accrual
level of expenses to be recoverable in revenues.
The 1994 order required the Company to externally fund the
obligation. The Company established Voluntary Employees'
Beneficiary Association trusts in October 1994 which cover both
active and retired employees.
The following table summarizes the status of the Company's
postretirement benefit plan and the related amounts included in
the Balance Sheet at December 31, 1995 and 1994:
1995 1994
Accumulated postretirement
benefit obligation:
Retirees $4,413,000 $4,093,000
Other fully
eligible
participants 1,496,000 1,253,000
Other active
participants 3,228,000 2,525,000
Total benefit
obligation $9,137,000 $7,871,000
Less: plan assets at
fair market value (1,198,000) (448,000)
Unrecognized
transition
obligation (6,597,000) (6,985,000)
Unrecognized
net (gain) loss (448,000) 570,000
Accrued postretirement
benefit cost $894,000 $1,008,000
The following table summarizes the net postretirement benefit
cost for 1995, 1994 and 1993:
1995 1994 1993
Service cost-benefits
earned during the
period $167,000 $179,000 $158,000
Interest cost on accumulated
postretirement benefit
obligation 608,000 656,000 620,000
Less: return on plan
assets (103,000) (4,000) 0
Amortization of
transition
obligation 388,000 388,000 388,000
Deferred gain on plan
assets 7,000 4,000 0
Net postretirement
benefit costs $1,067,000 $1,223,000 $1,166,000
Less: amounts charged
to construction (182,000) (212,000) (132,000)
Net postretirement
benefit costs included
in operating
expenses $885,000 $1,011,000 $1,034,000
Assumed discount
rate 7.75% 7.75% 7.5%
Assumed rate of
return on assets 9.0% 9.0% 9.0%
For measurement purposes, a 9 percent annual rate of increase in
the per-capita cost of covered health care benefits was assumed
for 1996; the rate was assumed to decrease gradually to 6
percent by 2019 and remain at that level thereafter. Increasing
the assumed health care cost trend rates by 1 percentage point
in each year would increase the accumulated postretirement
benefit obligation as of December 31, 1995, by $1,373,000 and
increase the net periodic postretirement benefit cost for the
year then ended by $172,000.
3 CONTINGENCIES
Certain legal actions are pending which may impact the Company.
In management's opinion, the ultimate resolution of these
matters is not expected to materially affect the Company's
financial position or operating results.
4 SHORT-TERM BORROWINGS
At December 31, 1995, the Company had bank credit arrangements
of $3,850,000 in conventional lines of credit.
No borrowings were outstanding under the agreements. At December
31, 1994, the Company had borrowings of $6,300,000 with weighted
average interest rate of 6.5%.
31
5 FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the
fair value of each class of financial instruments for which it
is practicable to estimate that value:
Cash and Temporary Investments The fair value of these
investments is estimated based on quoted market prices for the
same or similar issues and approximate the carrying amount.
Other Investments The balance includes an investment in a
business park, community betterment projects and a retirement
trust. The fair value of the investment in the business park
and the community betterment projects are stated at the original
cost of $500,000 and $43,000, respectively, due to the
impracticability of estimating the market value. The fair value
of the underlying instruments of the retirement trust is
estimated based on quoted market prices for the same or similar
issues. The investment in the trust is offset by a corresponding
liability for future obligations in Other Non-Current
Liabilities.
Notes Payable Because of the short-term variable rates of
these borrowings, the carrying value approximates the fair
value. Refer to Note 4 regarding short-term borrowings.
The Company had no notes payable outstanding at December 31,
1995.
Long-Term Debt Most of the Company's long-term debt is not
publicly traded, therefore, a market price does not exist for
these bonds. The fair value of long-term debt is estimated based
upon market prices for comparable securities with similar
maturities.
The difference in carrying amounts and fair values of financial
instruments is not expected to result in a material impact on
the Company's financial position or results of operations. Under
the ratemaking principles followed by the PSC, any gain or loss
on early refinancing of the Company's long-term debt would be
used to reduce or increase the Company's rates over a prescribed
amortization period.
Carrying Fair
Amounts Values
1995
Cash and temporary
investments $6,489,000 $6,489,000
Other
investments $1,727,000 $1,837,000
Long-term debt $73,100,000 $80,837,000
1994
Cash and temporary
investments $1,397,000 $1,400,000
Other
investments $2,346,000 $2,300,000
Notes payable $6,300,000 $6,300,000
Long-term debt $53,100,000 $50,309,000
6 RATE MATTERS
The Company is subject to rate regulation by the PSC. Rates are
established to enable the Company to recover its service costs
and also to allow the Company an opportunity to earn a return on
its investment. The Company currently applies SFAS No. 71,
Accounting for the Effects of Certain Types of Regulation, which
recognizes the economic effects of rate regulation. Accordingly,
the Company has recorded regulatory assets of $14.1 million and
$13.4 million and regulatory liabilities of $7.3 million and
$8.0 million at December 31, 1995 and 1994, respectively. The
Company continually assesses the recoverability of its
regulatory assets.
In 1993, the PSC approved annual increases of $275,000 in
natural gas revenues and $876,000 in electric revenues,
effective April 5, 1993 and July 5, 1993, respectively. Included
in the 1993 order was a change in the accounting policies for
pension, OPEB and deferred income tax expenses. Refer to Note 2
regarding pension and OPEB expenses and Note (c) in the
Statements of Taxes regarding deferred income tax treatment.
In July and August 1993, the Company incurred approximately $1.1
million in costs as a result of flood conditions on the Missouri
River and its tributaries. With PSC approval, the Company began
amortizing these charges in November 1993 over a five-year
period.
32
The Company expended approximately $1.1 million for the disposal
of existing fly ash residue at the Lake Road facility. In
accordance with the rate order issued by the PSC, these
expenditures were deferred and expensed in 1993 and 1994.
In June 1994, the PSC ruled on an electric rate request
increasing annual revenues by approximately $2.15 million
(3.1%), effective June 15, 1994. The 1994 order required the
Company to change its regulatory accounting policies for pension
and OPEB expenses. Refer to Note 2 for discussion of accounting
for pension and OPEB expenses.
The PSC approved an industrial steam rate request in October
1994, which increased annual revenues by $800,000 (12.2%),
effective November 2, 1994.
The Company incurred approximately $1.3 million in costs to
restore service to customers following an ice storm in December
1994. The PSC approved a request to defer and amortize the
expenses over a five-year period, beginning in March 1995.
In February 1995, the PSC approved a stipulated agreement
regarding the allocation of investments and expenses among the
Company's three business segments. Revenue neutral to the
Company, the agreement will annually reduce industrial steam
revenue by $550,000 and increase electric and natural gas
revenues by $500,000 and $50,000, respectively. In addition,
electric rates were restructured among various classes. As a
result, summer rates were increased to reflect higher seasonal
production costs in the summer months, while winter rates were
lowered. These revised tariffs were implemented on June 15,
1995.
7 LEASES
In April 1992, the Company entered into a 50-year capital lease
agreement (36.4-year amortization) with six other regional
utilities for a transmission line and related facilities.
Utility Plant-Electric as of December 31, 1995, includes
$2,512,000 for the net leased joint facilities.
The future minimum lease payments under the capital lease
together with the present value of the net lease payments
(obligations under the capital lease) are:
1996 $215,000
1997 215,000
1998 215,000
1999 215,000
2000 215,000
Later years 5,934,000
Total minimum lease
payments $7,009,000
Less: Amount representing
interest 4,497,000
Present value of obligations
under capital leases $2,512,000
The Company also entered into 50-year direct financing lease
agreements (with amortizations ranging from 31 to 36.4 years)
for terminal and associated leased joint facilities. The future
minimum lease payments receivable together with the present
value of net receivables under the leases are:
1996 $123,000
1997 123,000
1998 123,000
1999 123,000
2000 123,000
Later years 2,921,000
Total minimum lease payments
receivable $3,536,000
Less: Amount representing
interest 2,490,000
Present value of net
receivables $1,046,000
33
8 SEGMENTS OF BUSINESS
The Company is a public utility engaged primarily in the
business of generating and distributing electric energy in a 10-
county area in Northwest Missouri. The Company also is engaged
in the limited sale of natural gas and industrial steam. The
following table sets forth certain information regarding the
Company's segments of business.
1995 1994 1993
Operating Information (Years Ended December 31)
Operating Revenues:
Electric $81,994,000 $78,970,000 $75,690,000
Other 11,527,000 11,812,000 12,849,000
$93,521,000 $90,782,000 $88,539,000
Pretax Operating Income:
Electric $18,931,000 $20,248,000 $10,496,000
Other 1,341,000 501,000 190,000
$20,272,000 $20,749,000 $10,686,000
Other Information:
Depreciation Expense
Electric $9,526,000 $9,228,000 $8,922,000
Other 496,000 606,000 592,000
$10,022,000 $9,834,000 $9,514,000
Utility Plant Expenditures
Electric $22,032,000 $12,950,000 $11,391,000
Other 327,000 375,000 805,000
$22,359,000 $13,325,000 $12,196,000
Asset Information (at December 31)
Identifiable:
Electric $196,936,000$182,457,000 $174,053,000
Other 10,550,000 10,481,000 9,855,000
$207,486,000$192,938,000 $183,908,000
Assets Not
Allocated (a) 11,844,000 6,761,000 7,782,000
$219,330,000$199,699,000 $191,690,000
(a) Principally includes investments, cash, prepayments and
deferred charges.
9 QUARTERLY FINANCIAL DATA (UNAUDITED)
First Second Third Fourth
Quarter Quarter Quarter Quarter
1995
Operating
revenues $22,800,000 $20,425,000 $29,743,000 $20,553,000
Operating
income $3,585,000 $2,814,000 $7,530,000 $1,784,000
Net income $2,804,000 $1,505,000 $6,218,000 $513,000
Weighted average
common shares
outstanding $3,907,891 $3,906,369 $3,906,369 $3,906,369
Earnings per average
common share $.72 $.39 $1.59 $.13
1994
Operating
revenues $22,814,000 $22,701,000 $24,027,000$21,240,000
Operating income $3,022,000 $5,530,000 $4,488,000 $2,498,000
Net income $2,002,000 $4,427,000 $3,365,000 $1,272,000
Weighted average
common shares
outstanding $3,988,229 $3,955,358 $3,917,108 $3,907,891
Earnings per average
common share $.50 $1.12 $.86 $.33
The quarterly data reflect seasonal variations common to the
utility industry. The 1994 second quarter reflects the PSC rate
order adjustment (refer to Note 2). The 1995 third and fourth
quarters reflect the rate-design change ordered by the PSC
(refer to Note 6) and a hotter than normal summer affected the
third quarter.
34
Summary of Financial Data
(unaudited)
1995 1994 1993 1992
STATEMENTS OF INCOME (Thousands)
Operating
Revenues $93,521 $90,782 $88,539 $82,555
Operating
Expenses 77,808 75,244 76,291 69,150
Operating
Income $15,713 $15,538 $12,248 $13,405
Other Income and
Deductions 882 (12) 131 234
Income Before Interest
Charges $16,595 $15,526 $12,379 $13,639
Interest
Charges 5,555 4,460 4,457 4,681
Net Income $11,040 $11,066 $7,922 $8,958
Preferred Stock Dividend
Requirements 0 0 0 0
Earnings Available for
Common Stock $11,040 $11,066 $7,922 $8,958
COMMON STOCK DATA (Adjusted to reflect three-for-two split in
June 1987)
Earnings Per Share
Common Share $2.83 $2.81 $1.98 $2.23
Dividends Paid
Per Share $1.84 $1.80 $1.76 $1.72
Shares Outstanding -
Average 3,906,686 3,942,146 4,008,192 4,018,978
Return on Average Common
Equity (Percent) 13.9% 14.4% 10.4% 12.0%
Book Value Per
Share $20.84 $19.86 $19.07 $18.84
Market Price at
Year-End $35.500 $28.500 $29.000 $34.250
CAPITALIZATION (Percent)
Long-Term Debt 47.32 40.63 40.98 41.28
Preferred
Stock 0 0 0 0
Common Equity 52.68 59.37 59.02 58.72
Total 100.00 100.00 100.00 100.00
COVERAGE RATIOS
Pretax Interest 3.78 4.59 2.42 3.82
After Tax Interest
and Preferred
Dividend 2.90 3.43 2.75 2.88
MISCELLANEOUS FINANCIAL DATA (Thousands)
Construction Expenditures,
Excluding AFUDC $21,781 $12,224 $12,483 $9,301
Utility Plant at
Original Cost $300,966 $283,637 $276,376 $267,075
Summary of Operating Statistics Electric
SALES REVENUES (Thousands)
Residential $36,001 $32,791 $31,630 $28,334
Commercial 24,847 23,556 22,768 22,266
Industrial 18,352 17,325 18,286 18,312
Other 849 705 689 699
Total Retail Sales
Revenue $80,049 $74,377 $73,373 $69,611
Sales for Resale
Revenue $1,052 $3,661 $1,429 $412
SALES (MW-H)
Residential 593,881 562,148 564,885 505,047
Commercial 433,189 418,915 402,760 387,013
Industrial 440,176 431,468 447,859 438,230
Other 12,787 12,643 12,929 13,007
Total Retail
Sales 1,480,033 1,425,174 1,428,433 1,343,297
Sales for
Resale 68,769 222,185 91,645 27,355
RESIDENTIAL CUSTOMER DATA (Average)
Number of
Customers 53,900 53,424 53,250 53,037
Annual KW-h
Sales 11,018 10,522 10,608 9,523
Revenue Cents
Per KW-h 6.06 5.83 5.60 5.61
SYSTEM DATA
System Requirements
(MW-h) 1,585,624 1,526,088 1,532,022 1,445,880
Load Factor
(Percent) 52.5 55.0 52.5 52.8
Net Peak Load(MW)345 317 333 312
System Capability
at Peak (MW) 417 439 434 422
35
Summary of Financial Data
(unaudited)
1991 1990 1989 1988
STATEMENTS OF INCOME (Thousands)
Operating
Revenues $89,580 $84,178 $83,917 $77,643
Operating
Expenses 74,888 69,977 69,297 62,788
Operating
Income $14,692 $14,201 $14,620 $14,855
Other Income and
Deductions (46) 147 467 613
Income Before Interest
Charges $14,646 $14,348 $15,087 $15,468
Interest
Charges 4,856 4,133 4,409 4,756
Net Income $9,790 $10,215 $10,678 $10,712
Preferred Stock Dividend
Requirements 0 0 0 0
Earnings Available for
Common Stock $9,790 $10,215 $10,678 $10,712
COMMON STOCK DATA (Adjusted to reflect three-for-two split in
June 1987)
Earnings Per Share
Common Share $2.44 $2.48 $2.45 $2.34
Dividends Paid
Per Share $1.66 $1.60 $1.52 $1.40
Shares Outstanding -
Average 4,018,997 4,125,637 4,350,649 4,585,007
Return on Average Common
Equity (Percent) 13.5% 14.2% 14.6% 14.6%
Book Value Per
Share $18.37 $17.62 $17.13 $16.51
Market Price at
Year-End $33.875 $28.250 $23.875 $20.250
CAPITALIZATION (Percent)
Long-Term Debt 42.61 38.55 39.85 41.30
Preferred
Stock 0 0 0 0
Common Equity 57.39 61.45 60.15 58.70
Total 100.00 100.00 100.00 100.00
COVERAGE RATIOS
Pretax Interest
4.05 4.71 4.67 4.34
After Tax Interest and Preferred
Dividend 2.99 3.42 3.39 3.23
MISCELLANEOUS FINANCIAL DATA (Thousands)
Construction Expenditures, Excluding
AFUDC $11,581 $12,144 $12,557 $6,476
Utility Plant at Original
Cost $256,962 $245,834 $234,757 $221,610
Summary of Operating Statistics - Electric
SALES REVENUES (Thousands)
Residential $31,154 $29,285 $28,079 $28,666
Commercial 22,487 22,138 21,842 21,296
Industrial 17,871 17,470 17,096 16,041
Other 687 684 696 702
Total Retail Sales
Revenue $72,199 $69,577 $67,713 $66,705
Sales for Resale
Revenue $5,439 $4,426 $4,835 $785
SALES (MW-H)
Residential 558,614 518,563 498,613 506,059
Commercial 394,647 386,117 383,071 369,761
Industrial 427,728 418,671 410,493 381,538
Other 12,804 12,796 13,027 13,238
Total Retail
Sales 1,393,793 1,336,147 1,305,204 1,270,596
Sales for
Resale 395,293 306,572 339,900 47,288
RESIDENTIAL CUSTOMER DATA (Average)
Number of
Customers 52,701 52,396 51,860 51,456
Annual KW-h
Sales 10,600 9,897 9,615 9,835
Revenue - Cents
Per KW-h 5.58 5.65 5.63 5.66
SYSTEM DATA
System
Requirements(MW-h)1,498,202 1,430,518 1,407,757 1,372,358
Load Factor
(Percent) 52.6 50.4 51.8 48.4
Net Peak Load(MW)325 324 310 323
System Capability
at Peak(MW) 416 391 381 361
Summary of Financial Data
(unaudited)
1987 1986 1985
STATEMENTS OF INCOME (Thousands)
Operating
Revenues $77,400 $79,470 $77,463
Operating
Expenses 62,608 63,973 63,002
Operating
Income $14,792 $15,497 $14,461
Other Income and
Deductions 912 806 976
Income Before Interest
Charges $15,704 $16,303 $15,437
Interest
Charges 5,011 5,279 5,639
Net Income $10,693 $11,024 $9,798
Preferred Stock Dividend
Requirements 13 235 560
Earnings Available for
Common Stock $10,680 $10,789 $9,238
COMMON STOCK DATA (Adjusted to reflect three-for-two split in
June 1987)
Earnings Per Share
Common Share $2.31 $2.33 $2.02
Dividends Paid
Per Share $1.30 $1.22-1/3 $1.14-2/3
Shares Outstanding -
Average 4,626,601 4,626,761 4,570,706
Return on Average Common
Equity (Percent) 15.1% 16.4% 15.3%
Book Value Per
Share $15.74 $14.74 $13.65
Market Price at
Year-End $19.250 $24.625 $15.625
CAPITALIZATION (Percent)
Long-Term Debt 43.06 45.46 48.15
Preferred
Stock 0 1.37 3.12
Common Equity 56.94 53.17 48.73
Total 100.00 100.00 100.00
COVERAGE RATIOS
Pretax Interest
4.47 4.81 4.11
After Tax Interest and Preferred
Dividend 3.11 2.93 2.48
MISCELLANEOUS FINANCIAL DATA (Thousands)
Construction Expenditures, Excluding
AFUDC $5,639 $7,456 $7,798
Utility Plant at Original
Cost $215,533 $211,263 $209,108
Summary of Operating Statistics Electric
SALES REVENUES (Thousands)
Residential $28,711 $29,833 $28,969
Commercial 21,778 22,672 21,803
Industrial 15,973 16,175 16,126
Other 1,392 1,299 1,305
Total Retail Sales
Revenue $67,854 $69,979 $68,203
Sales for Resale
Revenue $1,294 $1,332 $182
SALES (MW-H)
Residential 464,656 455,259 445,741
Commercial 350,284 344,171 328,668
Industrial 352,382 330,138 328,546
Other 13,655 14,238 14,403
Total Retail
Sales 1,180,977 1,143,806 1,117,358
Sales for
Resale 88,112 93,042 9,756
RESIDENTIAL CUSTOMER DATA (Average)
Number of
Customers 51,205 51,137 50,992
Annual KW-h
Sales 9,074 8,903 8,741
Revenue Cents
Per KW-h 6.18 6.55 6.50
SYSTEM DATA
System
Requirements(MW-h)1,300,870 1,275,971 1,238,020
Load Factor
(Percent) 49.7 52.0 52.0
Net Peak Load(MW)299 280 272
System Capability
at Peak (MW) 342 368 368
36
Responsibility for Financial Statements
The management of St. Joseph Light & Power Company is
responsible for the preparation and presentation of the
financial information in this Annual Report. The following
financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied
and reflect management's best estimates and informed judgments
as required.
To fulfill these responsibilities, management has developed and
maintains a comprehensive system of internal operating,
accounting and financial controls. These controls provide
reasonable assurance that the Company's assets are safeguarded,
transactions are properly recorded and resulting financial
statements are reliable. An internal audit function assists
management in monitoring the effectiveness of the controls.
The Report of Independent Accountants on the financial
statements by Arthur Andersen LLP appears on this page. The
responsibility for the independent auditors is limited to the
audit of financial statements presented and the expression of an
opinion as to their fairness.
The Board of Directors maintains oversight of the Company's
financial situation through its monthly review of operations and
financial condition and its selection of the independent
auditors. The Audit Committee, comprised of board members who
are not employees or officers of the Company, also meets
periodically with the independent auditors and the Company's
internal audit staff. The auditors have complete access to and
meet with the Audit Committee, without management
representatives present, to review accounting, auditing and
financial matters. Pertinent items discussed at the meetings are
reviewed with the full Board of Directors.
Terry F. Steinbecker
President and chief executive officer
Larry J. Stoll
Vice president Finance, treasurer and assistant secretary
Report of Independent Public Accountants
To the Shareholders of St. Joseph Light & Power Company:
We have audited the accompanying balance sheets and statements
of capitalization of St. Joseph Light & Power Company (a
Missouri corporation) as of December 31, 1995 and 1994, and the
related statements of income, retained earnings, taxes and cash
flows for each of the three years in the period ended December
31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion of these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of St. Joseph Light & Power Company as of December 31, 1995 and
1994, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1995,
in conformity with generally accepted accounting principles.
As explained in the notes to the statement of taxes and footnote
two of the financial statements, effective January 1, 1993, the
Company changed its methods of accounting for income taxes and
postretirement benefits other than pensions.
ARTHUR ANDERSEN LLP
Kansas City, Missouri
January 26, 1996
- -38
Corporate information
CORPORATE OFFICES
520 Francis Street
Post Office Box 998
St. Joseph, Missouri 64502 0998
(816) 233 6434
(816) 387 6332 (fax)
1 800 367 4562
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
1500 Commerce Tower
Kansas City, Missouri 64199
STOCK LISTING AND PRINCIPAL MARKET
New York Stock Exchange
Eleven Wall Street
New York, New York 10005
Symbol: SAJ
COMMON STOCK TRANSFER AGENTS
AND REGISTRARS
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60690
ANNUAL SHAREHOLDERS MEETING
The annual meeting of shareholders will be at 9 a.m., Wednesday,
May 15, 1996, at the Albrecht Kemper Museum of Art, 2818
Frederick Boulevard, St. Joseph, Missouri.
A proxy statement will be mailed to each shareholder
approximately one month prior to the meeting, requesting the use
of proxies at this meeting.
This report and financial statements contained herein are
submitted for the general information of the security holders of
St. Joseph Light & Power Company, and are not in connection
with, or to induce, any sale or offer to sell or to buy any
securities of the Company, or in connection with preliminary
negotiations for such sale or purchase.
