As filed with the Securities and Exchange Commission on November 3, 1994.
Registration No.
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION Washington,ON DECEMBER 18, 1996.
REGISTRATION NO. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form------------------------
FORM S-3
REGISTRATION STATEMENT
UnderUNDER
THE SECURITIES ACT OF 1933
Kansas City Power------------------------
KCPL FINANCING I
KCPL FINANCING II KANSAS CITY POWER & Light CompanyLIGHT
KCPL FINANCING III COMPANY
(Exact name of registrants as (Exact name of registrant as
specified in their Trust Agreements) specified in its charter)
Missouri 44-0308720DELAWARE MISSOURI
(State or other jurisdication (I.R.S. Employerjurisdiction of incorporation or organization)
(To be applied for) (I.R.S. Employer Identification No.Nos.) 44-0308720
Jeanie Sell Latz
Senior Vice President and Chief Legal Officer
1201 Walnut Kansas City Power & Light Company
Kansas City, Missouri 64106-2124 1201 Walnut
(816) 556-2200 Kansas City, Missouri 64106-2124
(Address, including zip code, and (Name, Address, including zip code, and
telephone number including area code, of registrant's prinicipal executive offices)
Jeanie Sell Latz, Vice President-Law and Corporate Secretary
1201 Walnut
Kansas City, Missouri 64106-2124
(816) 556-2936
(Name, address, including zip code, and telephone number including area code, of
code, of registrants' principal agent for service)
Approximate date of commencement of proposed sale to the public: From
time to time after this registration statement becomes effective as determined
by market conditions.executive offices)
PLEASE SEND COPIES OF ALL CORRESPONDENCE TO:
R. Todd Vieregg, P.C.
Sidley & Austin
One First National Plaza
Chicago, IL 60603
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME
TO TIME AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE, AS DETERMINED BY
MARKET CONDITIONS AND OTHER FACTORS.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]/ /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [ X ]
/X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
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- ------------------------------------------------------------------------------------------------------------------------
Proposed
Maximum Proposed maximum
Title of each class of Amount to offering price aggregate offering Amount of
securities to be registered be registered (1) per unit (2) price (2) registration fee
Proposed Proposed
Maximum Maximum
Title of Each Class of Offering Aggregate Amount of- ------------------------------------------------------------------------------------------------------------------------
KCPL Financing I
KCPL Financing II
KCPL Financing III
Preferred Securities............
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Kansas City Power & Light Company
Guarantees with respect to
Preferred Securities to be Amount to be Price per Offering Registration
Registered Registered Unit Price Fee
Medium-Term Notes $125,000,000*(3)........
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Kansas City Power & Light Company
Junior Subordinated Deferrable
Interest Debentures.............
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Total............................. $300,000,000 100%** $125,000,000** $43,104 $300,000,000 $90,909
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* Any Medium-Term Notes(1) There are being registered hereunder a presently indeterminate number of
Preferred Securities of KCPL Financing I, KCPL Financing II and KCPL
Financing III (together with related Guarantees and Junior Subordinated
Deferrable Interest Debentures of Kansas City Power & Light Company, for
which are issued and soldno separate consideration will be securedreceived by any of the Registrants)
all with an aggregate initial public offering price not to exceed
$300,000,000.
(2) Pursuant to Rule 457(n) and (o), the registration fee is calculated on the
basis of the proposed aggregate maximum offering price of the Preferred
Securities.
(3) Includes the rights of holders of the Preferred Securities under the
Guarantee Agreements and certain back-up undertakings as described in the
Registration Statement.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
EXPLANATORY NOTE
This Registration Statement contains a Mortgage Bond havingprospectus and form of
prospectus supplement to be used in connection with the same principaloffer and sale of
Preferred Securities of KCPL Financing I, KCPL Financing II, and KCPL Financing
III, each a Delaware business trust (collectively, the "Trusts").
Kansas City Power & Light Company and the Trusts plan to consummate
from time to time, transactions involving the sale of securities registered
pursuant to this Registration Statement, provided that the proceeds therefrom
will not exceed an aggregate amount of $300,000,000. No decisions have been
made as to which securities will be issued or the timing or size of any offering
of such securities. Such determinations will be made from time to time in the
light of market and terms as the Medium-
Term Notes so issued.
** Estimated solely for purposes of calculation of registration fee.
The registrant hereby amendsother conditions.
Information contained in this registration statement on such date or
dates as may be necessaryprospectus supplement is subject to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) ofcompletion
pursuant to Rule 424 under the Securities Act of 1933 or until the1933. A registration statement
relating to these securities has been declared effective by the Securities and
Exchange Commission pursuant of Rule 415 under the Securities Act of 1933. A
final prospectus supplement will be delivered to purchasers of these securities.
This prospectus supplement and the prospectus shall become effective onnot constitute an offer to
sell or the solicitation of an offer to buy nor shall there by any sale of these
securities in any State in which such date asoffer, solicitation or sale would be
unlawful prior to registration or qualification under the Commission, acting
pursuant to said Section 8(a), may determine.securities laws of
any such State.
SUBJECT TO COMPLETION, DATED ______, 199_
PROSPECTUS $125,000,000SUPPLEMENT
(TO PROSPECTUS DATED ________, 199_)
PREFERRED SECURITIES
% TRUST ORIGINATED PREFERRED SECURITIES-SM- ("TOPrS-SM-")
KCPL FINANCING I
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED BY
KANSAS CITY POWER & LIGHT COMPANY
Secured Medium-Term Notes
Due from 9 months to 30 years from Date-------------------
The % Trust Originated Preferred Securities (the "Preferred Securities")
offered hereby represent undivided preferred beneficial interests in the assets
of Issue
_____________KCPL Financing I, a statutory business trust formed under the laws of the
State of Delaware ("the "Trust"). Kansas City Power & Light Company, (Company) intends to offer from time
to time up to $125,000,000 aggregate principala Missouri
corporation ("KCPL"), will own all of the common securities (the "Common
Securities", and together with the Preferred Securities, the "Trust Securities")
representing undivided beneficial interests in the assets of the Trust. The
Trust exists for the sole purpose of issuing the Trust Securities and investing
the proceeds thereof in an equivalent amount of its Secured Medium-
Term Notes (Notes) having maturities% Junior Subordinated
Deferrable Interest Debentures due ____ (the "Subordinated Debentures") of from 9 monthsKCPL.
The Subordinated Debentures will mature on ,_____, which date may be
shortened to 30 years froma date not earlier than _______________, (such date, the date of issue. The Notes will be issued only"Stated
Maturity"), in fully registered form, in
minimum denominations of $1,000 and integral multiples of $1,000 in excess
thereof. The Notes will bear interest at a fixed rateeach
(continued on next page)
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE S-7 OF THIS PROSPECTUS SUPPLEMENT FOR
CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES,
INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF
DISTRIBUTIONS ON THE PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
Application has been made to be determined bylist the Company at or prior toPreferred Securities on the sale thereof (Fixed Rate Note) or at a floating
rate (Floating Rate Note)New York
Stock Exchange, Inc. (the "New York Stock Exchange"). Interest rates and interest rate formulas may
vary with each Note issued by the Company. Unless otherwise specified in the
applicable Pricing Supplement, the interest payment dates (Interest Payment
Dates) for each Fixed Rate Note will be May 1 and November 1 of each year and
at maturity or if applicable upon redemption at the optionIf so approved, trading
of the Company.
The Interest Payment Dates for each Floating Rate Note will be establishedPreferred Securities on the issue date and will be set forth therein and inNew York Stock Exchange is expected to
commence within a pricing supplement to
this prospectus (Pricing Supplement).
The Notes will be secured by a Bond (Pledged Bond) issued, and pledged
by30-day period after the Company, to the Trustee under the Indenture for the Notes. The
outstanding principal amountinitial delivery of the Pledged Bond will at all times be equal
to the outstanding principal amount of the Notes. The Pledged Bond is payable
in installments, and bears interest, corresponding to the required payments
of principal of and any premium and interest on the Notes. Payments on the
Notes will constitute payments on the Pledged Bond. The Pledged Bond is
secured by a lien on certain property owned by the Company.Preferred
Securities. See "Description
of Bonds."Underwriting."
Each Note will be represented by a Global Note registered in the name
of the Depository Trust Company, as Depositary, or its nominee, unless
otherwise specified in the applicable Pricing Supplement. Beneficial
interests in Global Notes will be shown on, and transfers thereof will be
effected only through, records maintained by the Depositary and its
participants. Global Notes will not be issuable as certificated securities
except under circumstances described herein.
The aggregate principal amount of, interest rate, purchase price,
maturity and redemption, if applicable, and any other material financial
terms not described herein of each issue of Notes will be set forth in the
applicable Pricing Supplement.
____________-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR ANY PRICING SUPPLEMENT HERETO.THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
____________
___________________________________________________________________________
Price to Agents' Proceeds
Public- --------------------------------------------------------------------------------
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INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) CommissionCOMMISSION (2) TRUST (3)(4)
Per Preferred Security $ (3) to Company (2)(4)
___________________________________________________________________________
Per Note ... 100% .125%$
Total $ (3) $
- .750% 99.875%--------------------------------------------------------------------------------
- 99.250%
Total....... $125,000,000 $156,250-$937,500 $124,843,750-$124,062,500
___________________________________________________________________________--------------------------------------------------------------------------------
(1) Unless otherwise indicated in a Pricing Supplement, Notes will be
issued at 100% of their principal amount.Plus accrued distributions, if any, from _________ ____, 199_.
(2) The Company will pay to the Agents a commission ranging from .125% to
.750% of the principal amount of any Note, depending on its stated
maturity, sold through the Agents. The Company also may sell Notes to
the Agents at a discount for resale to one or more investors or other
purchasers at varying prices related to prevailing market prices at the
time of resale, as determined by the Agents. In the case of Notes sold
directly to investors by the Company, no discount will be allowed or
commission paid.
(3) The Company hasTrust and KCPL have agreed to indemnify the Agentsseveral Underwriters
against certain civilliabilities, including liabilities under the Securities Act
of 1933.
(4) Before deduction1933, as amended. See "Underwriting."
(3) In view of expenses payable by the Company estimated at
$92,104.
________________
The Notesfact that the proceeds of the sale of the Preferred
Securities will be offered on a continuing basis byinvested in the Company through
the Agents, each of whichSubordinated Debentures, KCPL has agreed
to use its reasonable effortspay to solicit
purchasersthe Underwriters as compensation (the "Underwriters'
Compensation") for their arranging the investment therein of such proceeds
$ per Preferred Security (or $ in the aggregate); provided,
that such compensation for sales of 10,000 or more Preferred Securities to
a single purchaser will be $ per Preferred Security. Therefore, to
the extent of such sales, the actual amount of Underwriters' Compensation
will be less than the aggregate amount specified in the preceding sentence.
See "Underwriting."
(4) Before deducting expenses of the Notes.offering which are payable by KCPL
estimated at $ .
----------------
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Preferred Securities will be made only in book-entry form
through the facilities of The Depository Trust Company, reserveson or about
,199_.
-------------------
MERRILL LYNCH & CO.
-------------------
The date of this Prospectus Supplement is ________ , 199_.
- -SM-"Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
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(CONTINUED FROM PREVIOUS PAGE)
case subject to satisfying certain conditions. The Subordinated Debentures when
issued will be unsecured obligations of KCPL and will be subordinate and junior
in right of payment to certain other indebtedness of KCPL, as described herein.
Upon an event of default under the Declaration (as defined below), the holders
of Preferred Securities will have a preference over the holders of the Common
Securities with respect to payments of distributions and payments upon
redemption, liquidation and otherwise.
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $25 per
Preferred Security, accruing from the date of original issuance and payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing ("distributions"). The payment of
distributions out of moneys held by the Trust and payments on liquidation of the
Trust or the redemption of Preferred Securities, as set forth below, are
guaranteed by KCPL (the "Preferred Securities Guarantee") to the extent
described herein and under "Description of Preferred Securities Guarantees" in
the accompanying Prospectus. The Preferred Securities Guarantee covers payments
of distributions and other payments on the Preferred Securities if and to the
extent that the Trust has funds available therefor, which will not be the case
unless KCPL has made payments of interest or principal or other payments on the
Subordinated Debentures held by the Trust as its sole asset. The Preferred
Securities Guarantee, when taken together with KCPL's obligations under the
Subordinated Debentures and the Indenture (as defined below) and its obligations
under the Declaration, including its liabilities to pay costs, expenses, debts
and obligations of the Trust (other than with respect to the Trust Securities),
provide a full and unconditional guarantee of amounts due on the Preferred
Securities. See "Risk Factors-Rights Under the Preferred Securities Guarantee"
herein. The obligations of KCPL under the Preferred Securities Guarantee are
subordinate and junior in right of payment to all other liabilities of KCPL and
rank PARI PASSU with the most senior preferred stock issued from time to time by
KCPL. The obligations of KCPL under the Subordinated Debentures are subordinate
and junior in right of payment to all present and future Senior Indebtedness (as
defined herein) of KCPL, which aggregated approximately $ at September 30,
1996, and rank PARI PASSU with KCPL's other general unsecured creditors. The
Subordinated Debentures purchased by the Trust may be subsequently distributed
pro rata to holders of the Preferred Securities and Common Securities in
connection with the dissolution of the Trust.
The distribution rate and the distribution payment date and other payment
dates for the Preferred Securities will correspond to the interest rate and
interest payment date and other payment dates on the Subordinated Debentures,
which will be the sole assets of the Trust. As a result, if principal or
interest is not paid on the Subordinated Debentures, no amounts will be paid on
the Preferred Securities. If KCPL does not make principal or interest payments
on the Subordinated Debentures, the Trust will not have sufficient funds to make
distributions on the Preferred Securities. In such event, the Preferred
Securities Guarantee will not apply to such distributions until the Trust has
funds available therefor.
So long as KCPL is not in default in the payment of interest on the
Subordinated Debentures, KCPL has the right to sell Notes
directlydefer payments of interest on the
Subordinated Debentures by extending the interest payment period on the
Subordinated Debentures at any time for up to purchasers20 consecutive quarters (each, an
"Extension Period"), provided that an Extension Period may not extend beyond the
Stated Maturity of the Subordinated Debentures. If interest payments are
S-5
so deferred, distributions on its own behalf.the Preferred Securities will also be deferred.
During such Extension Period, distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at an annual rate
of % percent per annum compounded quarterly, and during any Extension Period
holders of Preferred Securities will be required to include deferred interest
income in their gross income for United States federal income tax purposes in
advance of receipt of the cash distributions with respect to such deferred
interest payments. There could be multiple Extension Periods of varying lengths
throughout the term of the Subordinated Debentures. See "Description of the
Subordinated Debentures--Option to Extend Interest Payment Period," "Risk
Factors--Option to Extend Interest Payment Period" and "United States Federal
Income Taxation--Interest Income and Original Issue Discount."
The Company also may sell NotesSubordinated Debentures are redeemable by KCPL, in whole or in part,
from time to time, on or after , or, in whole but not in part,
prior to , upon the occurrence of a Tax Event (as defined
herein). If KCPL redeems Subordinated Debentures, the Trust must redeem Trust
Securities on a pro rata basis having an aggregate liquidation amount equal to
the Agents acting asaggregate principal amount of the Subordinated Debentures so redeemed at $25
per Preferred Security plus accrued and unpaid distributions thereon (the
"Redemption Price") to the date fixed for resaleredemption. See "Description of the
Preferred Securities-Tax Event Redemption." The Preferred Securities will be
redeemed upon maturity of the Subordinated Debentures.
KCPL will have the right at any time to one or more purchasers. The
Notesliquidate the Trust and cause the
Subordinated Debentures to be distributed to the holders of the Trust
Securities. If the Subordinated Debentures are distributed to the holders of
the Preferred Securities, KCPL will not beuse its best efforts to have the
Subordinated Debentures listed on any securitiesthe New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed. See "Description of the
Preferred Securities--Termination of the Trust and Distribution of Subordinated
Debentures" and "Description of the Subordinated Debentures."
In the event of the involuntary or voluntary dissolution, winding-up or
termination of the Trust, the holders of the Preferred Securities will be
entitled to receive for each Preferred Security a liquidation amount of $25 plus
accrued and unpaid distributions thereon (including interest thereon) to the
date of payment, unless, in connection with such dissolution, the Subordinated
Debentures are distributed to the holders of the Preferred Securities.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-6
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters.
ABSENCE OF PRIOR PUBLIC MARKET
Prior to this offering, there has been no public market for the Preferred
Securities. Although application has been made to list the Preferred Securities
on the New York Stock Exchange, there can be no assurance that, once listed, an
active trading market will develop for the NotesPreferred Securities or that, if such
market develops, the market price will equal or exceed the public offering price
set forth on the cover page of this Prospectus Supplement.
RANKING OF PREFERRED SECURITIES GUARANTEE AND SUBORDINATED DEBENTURES
KCPL's obligations under the Guarantee are subordinate and junior in right
of payment to all other liabilities of KCPL, including the Subordinated
Debentures, and rank PARI PASSU with the most senior preferred stock issued from
time to time by KCPL. The obligations of KCPL under the Subordinated Debentures
are subordinate and junior in right of payment to all present and future Senior
Indebtedness of KCPL and rank PARI PASSU with obligations to or rights of KCPL's
other general unsecured creditors. No payment may be made of the principal of,
premium, if any, or interest on the Subordinated Debentures, or in respect of
any redemption, retirement, purchase or other acquisition of any of the
Subordinated Debentures, at any time when (i) there is a default in the payment
of principal, premium, interest or any other payment due on any Senior
Indebtedness, or (ii) the maturity of any Senior Indebtedness has been
accelerated because of a default. As of September 30, 1996, Senior Indebtedness
of KCPL aggregated approximately $____ million. There are no terms in the
Preferred Securities, the Subordinated Debentures or the Guarantee that limit
KCPL's ability to incur additional indebtedness, including indebtedness which
ranks senior to the Subordinated Debentures and the Guarantee. See "Description
of the Preferred Securities Guarantees--Status of the Preferred Securities
Guarantees" and "Description of the Subordinated Debentures" in the accompanying
Prospectus, and "Description of the Subordinated Debentures--Subordination"
herein.
RIGHTS UNDER THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will be sold or that therequalified as an indenture under
the Trust Indenture Act. The First National Bank of Chicago will be a secondary
marketact as
indenture trustee under the Preferred Securities Guarantee for the Notes.purposes of
compliance with the provisions of the Trust Indenture Act (the "Guarantee
Trustee"). The Company reservesGuarantee Trustee will hold the Preferred Securities Guarantee
for the benefit of the holders of the Preferred Securities.
The Preferred Securities Guarantee guarantees to the holders of the
Preferred Securities the payment of (i) any accrued and unpaid distributions
that are required to be paid on the Preferred Securities, to the extent the
Trust has funds available therefor, (ii) the Redemption Price, including all
accrued and unpaid distributions with respect to Preferred Securities called for
redemption by the Trust, to the extent the Trust has funds available therefor,
and (iii) upon a voluntary or involuntary dissolution, winding-up or termination
of the Trust (other than in connection with the distribution of Subordinated
Debentures to the holders of Preferred
S-7
Securities or a redemption of all the Preferred Securities), the lesser of (a)
the aggregate of the liquidation amount and all accrued and unpaid distributions
on the Preferred Securities to the date of the payment to the extent the Trust
has funds available therefor or (b) the amount of assets of the Trust remaining
available for distribution to holders of the Preferred Securities in liquidation
of the Trust.
The holders of a majority in liquidation amount of the Preferred
Securities have the right to withdraw, canceldirect the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee or modifyto direct the
offerexercise of any trust or power conferred upon the Guarantee Trustee under the
Preferred Securities Guarantee. Notwithstanding the foregoing, any holder of
Preferred Securities may institute a legal proceeding directly against KCPL to
enforce such holder's rights under the Preferred Securities Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee or
any other person or entity. If KCPL were to default on its obligation to pay
amounts payable on the Subordinated Debentures or otherwise, the Trust would
lack available funds for the payment of distributions or amounts payable on
redemption of the Preferred Securities or otherwise, and, in such event, holders
of the Preferred Securities would not be able to rely upon the Preferred
Securities Guarantee for payment of such amounts. Instead, holders of the
Preferred Securities would rely on the enforcement (1) by the Property Trustee
(as defined herein) of its rights as registered holder of the Subordinated
Debentures against KCPL pursuant to the terms of the Subordinated Debentures or
(2) by such holders of their right against KCPL to enforce payments on the
Subordinated Debentures. See "Description of the Preferred Securities
Guarantees" and "Description of the Subordinated Debentures" in the accompanying
Prospectus. The Declaration provides that each holder of Preferred Securities,
by acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee, including the subordination provisions thereof, and the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default (as defined herein) occurs and is
continuing, then the holders of Preferred Securities would rely on the
enforcement by the Property Trustee of its rights as a holder of the
Subordinated Debentures against KCPL. In addition, the holders of a majority in
liquidation amount of the Preferred Securities will have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Property Trustee or to direct the exercise of any trust or power conferred
upon the Property Trustee under the Declaration, including the right to direct
the Property Trustee to exercise the remedies available to it as a holder of the
Subordinated Debentures. If the Property Trustee fails to enforce its rights
under the Subordinated Debentures, a holder of Preferred Securities may
institute a legal proceeding directly against KCPL to enforce the Property
Trustee's rights under the Subordinated Debentures without first instituting any
legal proceeding against the Property Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing, and such event is attributable to the failure of KCPL to pay
interest or principal on the Subordinated Debentures on the date such interest
or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such holder of the principal of or
interest on the Subordinated Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such holder (a
"Direct Action") on or after the respective due date specified in the
Subordinated Debentures. In connection with such Direct Action, KCPL will be
subrogated to the rights of such holder of
S-8
Preferred Securities under the Declaration to the extent of any payment made hereby without notice.by
KCPL to such holder of Preferred Securities in such Direct Action. The Companyholders
of Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Debentures. See "Description of
the Preferred Securities-Declaration Events of Default."
OPTION TO EXTEND INTEREST PAYMENT PERIOD
KCPL has the right under the Indenture to defer payments of interest on the
Subordinated Debentures by extending the interest payment period at any time,
and from time to time, on the Subordinated Debentures. As a consequence of such
an extension, quarterly distributions on the Preferred Securities would be
deferred (but would continue to accrue, despite such deferral, with interest
thereon compounded quarterly) by the Trust during any such Extension Period.
Such right to extend the interest payment period for the Subordinated Debentures
is limited to a period not exceeding 20 consecutive quarters, but no such
Extension Period may extend beyond the Stated Maturity of the Subordinated
Debentures. During any Extension Period, (a) KCPL may not declare or pay
dividends on, or make a distribution with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of shares of KCPL common stock in
connection with the satisfaction by KCPL of its obligations under any employee
benefit plans or any other contractual obligation of KCPL (other than a
contractual obligation ranking PARI PASSU with or junior to the Subordinated
Debentures), (ii) as a result of a reclassification of KCPL capital stock or the
Agentsexchange or conversion of one class or series of KCPL capital stock for another
class or series of KCPL capital stock or (iii) the purchase of fractional
interests in shares of KCPL capital stock pursuant to the conversion or exchange
provisions of such KCPL capital stock or the security being converted or
exchanged), (b) KCPL may rejectnot make any offerpayment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
KCPL that rank PARI PASSU with or junior to the Subordinated Debentures, and (c)
KCPL may not make any guarantee payments with respect to the foregoing (other
than pursuant to the Preferred Securities Guarantee). Prior to the termination
of any such Extension Period, KCPL may further extend the interest payment
period; provided, that such Extension Period, together with all such previous
and further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the maturity of the Subordinated Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due, KCPL may commence a
new Extension Period, subject to the above requirements. See "Description of
the Preferred Securities-Distributions" and "Description of the Subordinated
Debentures-Option to Extend Interest Payment Period."
Should KCPL exercise its right to defer payments of interest by extending
the interest payment period, each holder of Preferred Securities would be
required to accrue income (as original issue discount ("OID")) in respect of the
interest payable thereafter allocable to its Preferred Securities for United
States federal income tax purposes, which would be allocated but not distributed
to holders of record of Preferred Securities. As a result, each such holder of
Preferred Securities would recognize income for United States federal income tax
purposes in advance of the receipt of cash and would not receive the cash from
the Trust related to such income if such holder disposed of its Preferred
Securities prior to the record date for the date on which distributions of such
amounts were made. See United States Federal Income Taxation -- Interest Income
and Original Issue Discount. KCPL has no current intention of exercising its
right to defer payments of interest by extending the interest payment period on
the Subordinated Debentures. However, should KCPL determine to exercise such
right in the future, the market price of the Preferred Securities is likely to
be affected. A holder that disposes of its Preferred
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Securities during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its Preferred
Securities. In addition, as a result of the existence of KCPL's right to defer
interest payments, the market price of the Preferred Securities (which represent
an undivided beneficial interest in the Subordinated Debentures) may be more
volatile than other securities that do not have such rights. See "United States
Federal Income Taxation--Sales of Preferred Securities."
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
released, which would, among other things, generally deny interest deductions
for United States federal income tax purposes for interest on an instrument,
issued by a corporation, that has a maximum weighted average maturity of more
than 40 years. The Bill would also generally deny interest deductions for
interest on an instrument, issued by a corporation, that has a maximum term of
more than 20 years and that is not shown as indebtedness on the separate balance
sheet of the issuer or, where the instrument is issued to a related party (other
than a corporation), where the holder or some other related party issues a
related instrument that is not shown as indebtedness on the issuer's
consolidated balance sheet. The above-described provisions of the Bill were
proposed to be effective generally for debt instruments issued on or after
December 7, 1995. If either provision were to apply to the Subordinated
Debentures, KCPL would be unable to deduct interest on the Subordinated
Debentures for United States federal income tax purposes. However, on March 29,
1996, the Chairmen of the Senate Finance and House Ways and Means Committees
issued a joint statement to the effect that it was their intention that the
effective date of the President's legislative proposals, if adopted, will be no
earlier than the date of appropriate Congressional action. KCPL believes that,
under current law, it will be able to deduct interest on the Subordinated
Debentures. There can be no assurance, however, that current or future
legislative proposals or final legislation will not affect the ability of KCPL
to deduct interest on the Subordinated Debentures. Such a change could give
rise to a Tax Event, which may permit KCPL to cause a redemption of the
Preferred Securities. See "Description of the Preferred Securities -- Tax Event
Redemption" and "United States Federal Income Taxation -- Possible Tax Law
Changes."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities if a dissolution or liquidation of the Trust were to
occur. Accordingly, the Preferred Securities that an investor may purchase, or
the Subordinated Debentures that the investor may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the investor
paid to purchase Notes,the Preferred Securities offered hereby. Because holders of
Preferred Securities may receive Subordinated Debentures upon the occurrence of
a Tax Event, or in other circumstances, prospective purchasers of Preferred
Securities are also making an investment decision with regard to the
Subordinated Debentures and should carefully review all the information
regarding the Subordinated Debentures and KCPL contained herein and in the
accompanying Prospectus. See "Description of the Preferred Securities -- Tax
Event Redemption" and "Description of the Subordinated Debentures".
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REDEMPTION OR DISTRIBUTION OF THE SUBORDINATED DEBENTURES
KCPL will have the right at any time to terminate the Trust and, after
satisfaction of claims of creditors as provided by applicable law, to cause the
Subordinated Debentures to be distributed to the holders of the Trust
Securities. In certain circumstances, KCPL will have the right to redeem the
Subordinated Debentures, in whole or in part, in which event the Trust will
redeem the Trust Securities on a pro rata basis to the same extent as the
Subordinated Debentures are redeemed by KCPL. See "Description of the Preferred
Securities--Tax Event Redemption" and "United States Federal Income Taxation."
Under current United States federal income tax law, a distribution of
Subordinated Debentures upon the dissolution of the Trust would not be a taxable
event to holders of the Preferred Securities. If, however, the Trust is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time of dissolution of the Trust, the
distribution of the Subordinated Debentures would be a taxable event to holders
of Preferred Securities. Moreover, the redemption of the Subordinated
Debentures upon occurrence of a Tax Event, or a dissolution of the Trust in
which holders of the Preferred Securities receive cash would be a taxable event
to such holders. See "United States Federal Income Taxation -- Receipt of
Subordinated Debentures or Cash Upon Liquidation of the Trust."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities if a dissolution or liquidation of the Trust were to
occur. Accordingly, the Preferred Securities or the Subordinated Debentures may
trade at a discount to the price that the investor paid to purchase the
Preferred Securities offered hereby. Because holders of Preferred Securities may
receive Subordinated Debentures, prospective purchasers of Preferred Securities
are also making an investment decision with regard to the Subordinated
Debentures and should carefully review all the information regarding the
Subordinated Debentures contained herein and in the accompanying Prospectus.
See "Description of the Preferred Securities--Tax Event Redemption" and
"Description of the Subordinated Debentures-General."
SHORTENING THE STATED MATURITY OF THE SUBORDINATED DEBENTURES
KCPL will have the right at any time to shorten the maturity of the
Subordinated Debentures to a date not earlier than ____________, ____________.
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and will
not be entitled to vote to appoint, remove or replace, or to increase or
decrease the number of, KCPL Trustees, which voting rights are vested
exclusively in the holder of the Common Securities. See "Description of
Preferred Securities--Voting Rights."
TRADING PRICE OF PREFERRED SECURITIES
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder of Preferred Securities who uses the accrual
method of accounting for tax purposes (and a cash method holder, if the
Subordinated Debentures are deemed to have been issued with OID) and
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who disposes of such Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Subordinated Debentures through the date of disposition in income as
ordinary income (i.e., interest or possibly OID), and to add such amount to the
adjusted tax basis in its pro rata share of the underlying Subordinated
Debentures deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which will include, all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes. See United States Federal Income
Taxation -- Interest Income and Original Issue Discount" and "-- Sales of
Preferred Securities."
CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION
The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction, including a change of control, or other similar transactions
involving KCPL that may adversely affect such holders. See "Description of the
Subordinated Debentures."
KANSAS CITY POWER & LIGHT COMPANY
Kansas City Power & Light Company, a Missouri corporation, is a medium-size
electric utility, headquartered in downtown Kansas City, which generates and
distributes electricity to over 430,000 customers in a 4,700-square mile area
located in 23 counties in western Missouri and eastern Kansas. Customers
include 380,000 residences, 50,000 commercial firms, and over 3,000 industries,
municipalities and other electric utilities. About two-thirds of total Kwh
sales and revenue are from Missouri customers and the remainder from Kansas
customers. The address of the principal executive office is 1201 Walnut, Kansas
City, Missouri 64106-2124 (Telephone: (816) 556-2200.
THE TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to the filing of a certificate of trust with the Delaware Secretary of State on
December __, 1996. The business of the Trust is defined in a declaration of
trust executed by KCPL, as sponsor (the "Sponsor"), and the Trustees (as defined
herein). Such declaration will be amended and restated in its entirety (as so
amended and restated, the "Declaration") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus Supplement and
the accompanying Prospectus form a part. The Declaration will be qualified as
an indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). Upon issuance of the Preferred Securities, the purchasers
thereof will own all of the Preferred Securities. See "Plan"Description of Distributionthe
Preferred Securities-Book-Entry Only Issuance-The Depository Trust Company."
KCPL will acquire Common Securities in an aggregate liquidation amount equal to
approximately 3 percent of Notes.the total capital of the Trust. The Trust exists for
the exclusive purposes of (i) issuing the Trust Securities representing
undivided beneficial interests in the assets of the Trust, (ii) investing the
gross proceeds of the Trust Securities in the Subordinated Debentures and (iii)
engaging in only those other activities necessary or incidental thereto. The
Trust has a term of 45 years, but may terminate earlier as provided in the
Declaration.
Pursuant to the Declaration, the number of the Trustees of the Trust will
initially be four. Two of the Trustees (the "Regular Trustees") will be persons
who are employees or officers of,
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or who are affiliated with, KCPL. A third trustee will be a financial
institution that is unaffiliated with KCPL, which trustee will serve as property
trustee under the Declaration and as indenture trustee for the purposes of
compliance with the provisions of the Trust Indenture Act (the "Property
Trustee"). The fourth Trustee will be either a legal entity with its principal
place of business in Delaware or an individual resident in Delaware, which will
serve for the limited purpose of satisfying certain Delaware laws (the "Delaware
Trustee"). Initially, The First National Bank of Chicago will be the Property
Trustee and First Chicago Delaware Inc. will be the Delaware Trustee until
removed or replaced by the holder of the Common Securities. For purposes of
compliance with the provisions of the Trust Indenture Act, The First National
Bank of Chicago will act as trustee (the "Preferred Guarantee Trustee") under
the Preferred Securities Guarantee. The First National Bank of Chicago will act
as Debt Trustee (as defined herein) under the Indenture. See "Description of
the Preferred Securities Guarantees" in the accompanying Prospectus and
"Description of the Preferred Securities-Voting Rights" herein.
The Property Trustee will hold title to the Subordinated Debentures for the
benefit of the holders of the Trust Securities and will have the power to
exercise all rights, powers and privileges under the Indenture as the holder of
the Subordinated Debentures. In addition, the Property Trustee will maintain
exclusive control of a segregated non-interest bearing bank account (the
"Property Account") to hold all payments made in respect of the Subordinated
Debentures for the benefit of the holders of the Trust Securities. The Property
Trustee will make payments of distributions and payments on liquidation,
redemption and otherwise to the holders of the Trust Securities out of funds
from the Property Account. The Preferred Guarantee Trustee will hold the
Preferred Securities Guarantee for the benefit of the holders of the Preferred
Securities. KCPL, as the direct or indirect holder of all the Common
Securities, will have the right to appoint, remove or replace any Trustee and to
increase or decrease the number of Trustees. KCPL will pay all fees and
expenses related to the Trust and the offering of the Trust Securities. See
"Description of the Subordinated Debentures-Miscellaneous."
________________
Merrill LynchThe rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."
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SELECTED FINANCIAL DATA
KANSAS CITY POWER & Co. Smith Barney Inc.
________________
TheLIGHT COMPANY
Income Statement Information
Twelve Months
Year Ended December 31, Ended
------------------------------- Sept. 30, 1996
--------------
1993 1994 1995 (Unaudited)
---- ---- ----
(Thousands)
(Thousands)
Operating revenues. . . . . . . .$857,450 $868,272 $885,955 $907,105
Operating income. . . . . . . . .$156,302 $149,691 $167,048 $179,636
Net income. . . . . . . . . . . .$105,772 $104,775 $122,586 $111,753
RECENT DEVELOPMENTS
[ To be completed
as of the date of
the Prospectus Supplement]
CAPITALIZATION OF KCPL
The following table sets forth the capitalization of KCPL at September 30,
1996, and KCPL's capitalization as of such date as adjusted to reflect the sales
of the Preferred Securities but does not reflect any portion of the $398 million
principal amount of Medium-Term Notes which are being offered by the Company for
sale from time to time through agents pursuant to separate properties. In the
fourth quarter of 1996, $98 million of these Notes have been issued. The table
should be read in conjunction with KCPL's consolidated financial statements and
notes thereto included in the documents incorporated by reference herein. See
"Incorporation of Certain Documents by Reference" in the accompanying
Prospectus.
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September 30, 1996
-------------------------
(Millions)
Actual Adjusted
(unaudited)
Long-term debt(1):
Bonds $ 762 762
Subsidiary Obligations 119 119
------ ------
Total Long-term debt 881 881
Preferred Stock 90 90
Company Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust 300
Common equity 917 917
------ ------
Total $1888 $2188
------ ------
------ ------
(1) Includes long-term debt included in current liabilities.
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated into KCPL's
consolidated financial statements, with the Preferred Securities treated as
minority interest and shown in KCPL's balance sheet as "Company-obligated
mandatorily redeemable preferred securities of subsidiary trust holding solely
Company subordinated debt securities." The financial statement footnotes of
KCPL will reflect that the sole asset of the Trust will be the Subordinated
Debentures. See "Capitalization."
USE OF PROCEEDS
The Trust will use the proceeds of the sale of the Trust Securities to
acquire Subordinated Debentures from KCPL. KCPL intends to add the net proceeds
from the sale of the Subordinated Debentures to the general funds of KCPL for
use for corporate purposes, which may include capital expenditures,
acquisitions, refinancing or repurchase of outstanding long-term debt, preferred
and common securities, investments in subsidiaries, and repayment of short-term
debt and other business opportunities.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee will act as the indenture trustee for
purposes of compliance with the provisions of the Trust Indenture Act. The
terms of the Preferred Securities will include those stated in the
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Declaration and those made part of the Declaration by the Trust Indenture Act.
The following summary of the principal terms and provisions of the Preferred
Securities, which supplements and to the extent inconsistent, replaces, the
description set forth under the caption "Description of the Preferred
Securities" in the accompanying Prospectus, does not purport to be complete and
is subject to, and qualified in its entirety by reference to, the Declaration, a
copy of the form of which is filed as an exhibit to the Registration Statement
of which this Prospectus forms a part, the Trust Act and the Trust Indenture
Act.
GENERAL
The Declaration authorizes the Regular Trustees, on behalf of the Trust, to
issue the Preferred Securities, which represent preferred undivided beneficial
interests in the assets of the Trust, and the Common Securities, which represent
common undivided beneficial interests in the assets of the Trust. All of the
Common Securities will be owned by KCPL. The Common Securities rank PARI PASSU,
and payments will be made thereon on a pro rata basis, with the Preferred
Securities, except that upon the occurrence and during the continuation of a
Declaration Event of Default, the rights of the holders of the Common Securities
to receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights to payment of the
holders of the Preferred Securities. The Declaration does not permit the
issuance by the Trust of any securities other than the Trust Securities or the
incurrence of any indebtedness by the Trust. Pursuant to the Declaration, the
Property Trustee will own and hold the Subordinated Debentures for the benefit
of the holders of the Trust Securities. The payment of distributions out of
money held by the Trust, and payments upon redemption of the Preferred
Securities or liquidation of the Trust, are guaranteed by KCPL to the extent
described under "Description of the Preferred Securities Guarantees" in the
accompanying Prospectus. The Guarantee Trustee will hold the Preferred
Securities Guarantee for the benefit of the holders of the Preferred Securities.
The Preferred Securities Guarantee does not cover payment of distributions on
the Preferred Securities when the Trust does not have sufficient available funds
in the Property Account to make such distributions. In such event, the remedy
of a holder of Preferred Securities is to vote to direct the Property Trustee to
enforce the Property Trustee's rights under the Subordinated Debentures except
in the limited circumstances in which the holder may take Direct Action. See
"Voting Rights" and "Declaration Events of Default."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of _____% of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears will bear interest at the same per annum rate (to the
extent permitted by applicable law). The term "distributions" as used herein
includes any such interest payable unless otherwise stated. Distributions on
the Preferred Securities will be cumulative, will accrue from the date of the
initial issuance of the Preferred Securities and will be payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year
commencing _______, when, as and if available for payment by the Property
Trustee, except as otherwise described below. The amount of distributions
payable for any full quarterly period will be computed on the basis of a 360-day
year of twelve 30 day months, and for any period shorter than a full quarter, on
the basis of the actual number of days elapsed in such a 90-day quarter.
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KCPL has the right under the Indenture to defer payments of interest on the
Subordinated Debentures by extending the interest payment period from time to
time on the Subordinated Debentures issued thereunder which, if exercised, would
defer quarterly distributions on the Preferred Securities (though such
distributions would continue to accrue interest since interest would continue to
accrue on the Subordinated Debentures) during any such extended interest payment
period. In the event that KCPL exercises this right, then (a) KCPL may not
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase or make a liquidation payment with respect to, any of its
capital stock, other than (i) purchases or acquisitions of shares of KCPL common
stock in connection with the satisfaction by KCPL of its obligations under any
employee benefit plans or any other contractual obligation of KCPL (other than a
contractual obligation ranking PARI PASSU with or junior to the Subordinated
Debentures), (ii) as a result of a reclassification of KCPL capital stock or the
exchange or conversion of one class or series of KCPL capital stock for another
class or series of KCPL capital stock or (iii) the purchase of fractional
interests in shares of KCPL capital stock pursuant to the conversion or exchange
provisions of such KCPL capital stock or the security being converted or
exchanged), (b) KCPL may not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities (including
guarantees) issued by KCPL which rank PARI PASSU with or junior to the
Subordinated Debentures, and (c) KCPL may not make any guarantee payments with
respect to the foregoing (other than pursuant to the Preferred Securities
Guarantee). This prohibition effectively requires that any Extension Period
with respect to any series of Subordinated Debentures will also apply to each
other series of subordinated debentures issued under the Indenture to other
trusts similar to the Trust. Prior to the termination of any such Extension
Period, KCPL may further extend the interest payment period, provided that such
Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters or extend beyond the maturity of
the Subordinated Debentures. Upon the termination of any Extension Period and
the payment of all amounts then due, KCPL may select a new Extension Period as
if no Extension Period had previously been declared, subject to the above
requirements. See " -- Voting Rights" and "Description of the Subordinated
Debentures -- Interest" and "-- Option to Extend Interest Payment Period." If
distributions are deferred, the deferred distributions and accrued interest
thereon shall be paid to holders of record of the Preferred Securities, if funds
are available therefor, as they appear on the books and records of the Trust on
the record date next following the termination of such Extension Period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received under the Subordinated Debentures. See "Description of the
Subordinated Debentures." The payment of distributions out of moneys held by the
Trust is guaranteed by KCPL to the extent set forth under "Description of the
Preferred Securities Guarantee."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
only form, will be one Business Day (as defined herein) prior to the relevant
payment dates, which payment dates correspond to the interest payment dates on
the Subordinated Debentures. Such distributions will be paid through the
Property Trustee, which will hold amounts received in respect of the
Subordinated Debentures in the Property Account for the benefit of the holders
of the Trust Securities. Subject to any
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applicable laws and regulations and the provisions of the Declaration, each such
payment will be made as described under "-Book-Entry Only Issuance -- The
Depository Trust Company" below. In the event the Preferred Securities do not
continue to remain in book-entry only form, the Regular Trustees will have the
right to select relevant record dates which will be at least one Business Day,
but less than 60 Business Days, prior to the relevant payment dates. In the
event that any date on which distributions are to be made on the Preferred
Securities is not a Business Day, then payment of the distributions payable on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment will
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date. A "Business Day" means any day other
than a day on which banking institutions in Chicago, Illinois or New York, New
York are authorized or required by law to close.
REDEMPTION
The Subordinated Debentures will mature on _________ __, ____ and may be
redeemed, in whole or in part, at any time on or after __________ __, ____, or
at any time in certain circumstances upon the occurrence of a Tax Event. Upon
the repayment of the Subordinated Debentures, whether at maturity or upon
acceleration, redemption or otherwise, the proceeds from such repayment or
payment will simultaneously be applied to redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debentures so repaid or redeemed at the Redemption Price; provided
that, except in the case of payments upon maturity, holders of Trust Securities
will be given not less than 30 nor more than 60 days notice of such redemption.
See "Description of the Subordinated Debentures." In the event that fewer than
all of the outstanding Preferred Securities are to be redeemed, the Preferred
Securities will be redeemed pro rata as described under "-- Book-Entry Only
Issuance-- The Depository Trust Company" below.
TAX EVENT REDEMPTION
"Tax Event" means that the Regular Trustees shall have received an opinion
from independent tax counsel experienced in such matters (a "Redemption Tax
Opinion") to the effect that, on or after the date of this Prospectus
Supplement, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein or (b) any amendment to, or change in, an interpretation or application
of such laws or regulations by any legislative body, court, governmental agency
or regulatory authority, which amendment or change is enacted, promulgated,
issued or announced or which interpretation or pronouncement is issued or
announced or which action is taken, in each case on or after the date of this
Prospectus Supplement, there is more than an insubstantial risk that interest
payable to the Trust on the Subordinated Debentures would not be deductible in
whole or in part by KCPL for United States federal income tax purposes, which
change or amendment becomes effective on or after the date of this Prospectus
Supplement.
If at any time a Tax Event has occured and is continuing with respect to
the Trust or the Preferred Securities, the Trust may, upon not less than 30 nor
more than 60 days notice, redeem the Subordinated Debentures in whole or in
part for cash within 90 days following the occurrence of such Tax Event, and,
following such redemption, Trust Securities with an
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aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debentures so redeemed will be redeemed by the Trust at the
Redemption Price on a pro rata basis; provided, however, that, if at the time
there is available to KCPL or the Trust the opportunity to eliminate, within
such 90-day period, the Tax Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar reasonable
measure which has no adverse effect on the Trust, KCPL or the holders of the
Trust Securities, KCPL or the Trust will pursue such measure in lieu of
redemption.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Preferred
Securities of the Trust unless all accrued and unpaid distributions have been
paid on all Trust Securities for all quarterly distribution periods terminating
on or prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred
Securities of the Trust (which notice will be irrevocable), 1994.then by 12:00 noon,
New York City time, on the redemption date, provided that KCPL has paid to the
Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Subordinated Debentures, the Trust will
irrevocably deposit with the depositary funds sufficient to pay the applicable
Redemption Price and will give the depositary irrecovable instructions and
authority to pay the Redemption Price to the holders of the Preferred
Securities. See "-- Book-Entry Only Issuance -- The Depository Trust Company."
If notice of redemption has been given and funds deposited as required, then
immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue and all rights of holders of such Preferred
Securities so called for redemption will cease, except the right of the holders
of such Preferred Securities to receive the Redemption Price, but without
interest on such Redemption Price. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day. In
the event that payment of the Redemption Price in respect of Preferred
Securities is improperly withheld or refused and not paid either by the Trust or
by KCPL pursuant to the Preferred Securities Guarantee, distributions on such
Preferred Securities will continue to accrue, from the original redemption date
to the actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities
are to be redeemed, the Preferred Securities will be redeemed pro rata as
described under "-- Book-Entry Only Issuance -- The Depository Trust Company"
below.
Subject to the foregoing and to applicable law (including, without
limitation, United States federal securities laws), KCPL or its affiliates may,
at any time and from time to time, purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
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DISSOLUTION; DISTRIBUTION OF SUBORDINATED DEBENTURES
In the event of any voluntary dissolution, winding-up or termination of the
Trust, the holders of the Preferred Securities at that time will be entitled to
receive out of the assets of the Trust, after satisfaction of liabilities to
creditors of the Trust, distributions in an amount equal to the aggregate of the
stated liquidation amount of $25 per Preferred Security plus accrued and unpaid
distributions thereon to the date of payment (the "Liquidation Distribution"),
unless, in connection with such dissolution, winding-up or termination,
Subordinated Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions, on the Preferred Securities have been distributed on a pro
rata basis to the holders of Preferred Securities in exchange for such Preferred
Securities.
If upon any such dissolution the Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities shall be paid on a pro rata basis. The
holders of the Common Securities will be entitled to receive distributions upon
any such dissolution pro rata with the holders of the Preferred Securities,
except that if a Declaration Event of Default has occurred and is continuing,
the Preferred Securities shall have a preference over the Common Securities.
Pursuant to the Declaration, the Trust will terminate (i) on________ 20 ___
[45 years], the expiration of the term of the Trust, (ii) upon the bankruptcy of
KCPL, (iii) upon the filing of a certificate of dissolution or its equivalent
with respect to KCPL, the filing of a certificate of cancellation with respect
to the Trust, or the revocation of the charter of KCPL and the expiration of 90
days after the date of revocation without a reinstatement thereof, (iv) upon the
entry of a decree of judicial dissolution of KCPL or the Trust, (v) upon the
redemption of all of the Trust Securities, (vi) upon the dissolution of the
Trust in accordance with the terms of the Trust Securities pursuant to which all
Subordinated Debentures shall have been distributed to the holders of the Trust
Securities, or (vii) at any time at the option of KCPL upon its written
direction to the Property Trustee to dissolve the Trust and distribute the
Subordinated Debentures to the holders of the Trust Securities.
If Subordinated Debentures are distributed to the holders of the Preferred
Securities, KCPL will use its best efforts to have the Subordinated Debentures
listed on the New York Stock Exchange or on such other exchange as the Preferred
Securities are then listed.
After the date for any distribution of Subordinated Debentures upon
dissolution of the Trust, (i) the Preferred Securities and Preferred Securities
Guarantees will no longer be deemed to be outstanding, (ii) the depositary or
its nominee, as the record holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Subordinated
Debentures to be delivered upon such distribution and (iii) any certificates
representing Preferred Securities and Preferred Securities Guarantees not held
by the depositary or its nominee will be deemed to represent Subordinated
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the distribution rate
of, and accrued and unpaid interest equal to accrued and unpaid distributions
on, such Preferred Securities, until such certificates are presented to KCPL or
its agent for transfer or reissuance.
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There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for the Preferred Securities if a dissolution and liquidation of the Trust were
to occur. Accordingly, the Preferred Securities that an investor may purchase,
or the Subordinated Debentures that the investor may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the investor
paid to purchase the Preferred Securities offered hereby.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
(see "Description of the Subordinated Debentures -- Indenture Events of
Default") constitutes an event of default under the Declaration with respect to
the Trust Securities (a "Declaration Event of Default"), provided that pursuant
to the Declaration, the holder of the Common Securities will be deemed to have
waived any Declaration Event of Default with respect to the Common Securities or
its consequences until all Declaration Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated. Until
such Declaration Events of Default with respect to the Preferred Securities have
been so cured, waived or otherwise eliminated, the Property Trustee will be
deemed to be acting solely on behalf of the holders of the Preferred Securities
and only the holders of the Preferred Securities will have the right to direct
the Property Trustee with respect to certain matters under the Declaration, and
therefore under the Indenture.
If the Property Trustee fails to enforce its rights under the Subordinated
Debentures after a holder of Preferred Securities has made a written request,
such holder may institute a legal proceeding against KCPL to enforce the
Property Trustee's rights under the Subordinated Debentures without first
instituting any legal proceeding against the Trustee or any other person or
entity. Notwithstanding the foregoing, if a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of KCPL
to pay interest or principal on the Subordinated Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, the
redemption date), then a holder of Preferred Securities may institute a Direct
Action for enforcement of payment to such holder directly of the principal of,
or interest on, Subordinated Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such holder on or
after the respective due date specified in the Subordinated Debentures. In
connection with such Direct Action, KCPL will be subrogated to the rights of
such holder of Preferred Securities under the Declaration to the extent of any
payment made by KCPL to such holder of Preferred Securities in such Direct
Action. The holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Subordinated
Debentures.
Upon the occurrence of a Declaration Event of Default, the Property
Trustee, as the sole holder of the Subordinated Debentures, will have the right
under the Indenture to declare the principal of, and interest on, the
Subordinated Debentures to be immediately due and payable. KCPL and the Trust
are each required to file annually with the Property Trustee an officers'
certificate as to its compliance with all conditions and covenants under the
Declaration.
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VOTING RIGHTS
Except as provided below, under the Trust Act, the Trust Indenture Act and
under "Description of the Preferred Securities Guarantee -- Amendments and
Assignment" in the accompanying Prospectus and as otherwise required by law and
the Declaration, the holders of the Preferred Securities will have no voting
rights. In the event that KCPL elects to defer payments of interest on the
Subordinated Debentures as described above under" -- Distributions," the holders
of the Preferred Securities do not have the right to appoint a special
representative or trustee or otherwise act to protect their interests.
The holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or to direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as the holder
of the Subordinated Debentures, to (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debt Trustee under the
Indenture with respect to the Subordinated Debentures, (ii) waive any past
Indenture Event of Default which is waivable under the Indenture, (iii) exercise
any right to rescind or annul a declaration that the principal of all the
Subordinated Debentures shall be due and payable, or (iv) consent to any
amendment, modification or termination of the Indenture or the Subordinated
Debentures, where such consent shall be required; provided, however, that where
a consent under the Indenture would require the consent of the holders of more
than a majority in principal amount of Subordinated Debentures affected thereby
(a "Super-Majority"), only the holders of at least the proportion in liquidation
amount of the Preferred Securities which the relevant Super-Majority represents
of the aggregate principal amount of the Subordinated Debentures may direct the
Property Trustee to give such consent. If the Property Trustee fails to enforce
its rights under the Declaration, a holder of Preferred Securities may institute
a legal proceeding directly against any person to enforce the Property Trustee's
rights under the Declaration without first instituting any legal proceeding
against the Property Trustee or any other person or entity. The Property
Trustee will notify all holders of the Preferred Securities of any notice of
default received from the Debt Trustee with respect to the Subordinated
Debentures. Such notice will state that such Indenture Event of Default also
constitutes a Declaration Event of Default. The Property Trustee will not take
any action described in clauses (i), (ii), (iii) or (iv) above unless the
Property Trustee has obtained an opinion of independent tax counsel to the
effect that, as a result of such action, the Trust will not be classified as
other than a grantor trust for United States federal income tax purposes.
In the event the consent of the Property Trustee, as the holder of the
Subordinated Debentures, is required under the Indenture for any amendment,
modification or termination of the Indenture, the Property Trustee will request,
and act only in accordance with, the direction of the holders of a majority in
liquidation amount of the Preferred Securities and, if no Declaration Event of
Default has occurred and is continuing, the holders of a majority in liquidation
amount of the Common Securities, voting together as separate classes, provided
that where a consent under the Indenture would require the consent of a Super-
Majority, the Property Trustee may only give such consent at the direction of
the holders of at least the proportion in liquidation amount of the Preferred
Securities and Common Securities, respectively, which the relevant Super-
Majority represents of the aggregate principal amount of the Subordinated
Debentures outstanding. The Property Trustee will not take any such action in
accordance with the directions of the holders of the Trust Securities unless the
Property Trustee has obtained an
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opinion of independent tax counsel to the effect that, as a result of such
action, the Trust will not be classified as other than a grantor trust for
United States federal income tax purposes.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may
be given at a separate meeting of holders of Preferred Securities convened for
such purpose, at a meeting of all of the holders of the Trust Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be mailed to each holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the holder of
Preferred Securities will be required for the Trust to redeem and cancel
Preferred Securities or distribute Subordinated Debentures in accordance with
the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, neither KCPL nor any
entity directly or indirectly controlling or controlled by, or under direct or
indirect common control with, KCPL, will be entitled to vote or consent with
respect to any Preferred Securities which at such time are owned by KCPL or any
such entity, and such Preferred Securities will, for purposes of such vote or
consent, be treated as if they were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "-- Book-entry only Issuance -- The
Depository Trust Company."
Holders of the Preferred Securities will have no rights to appoint or
remove the Trustees, who may be appointed, removed or replaced solely by KCPL,
as the direct or indirect holder of all the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be amended or modified if approved and executed by a
majority of the Regular Trustees, provided that if any proposed amendment
provides for, or the Regular Trustees otherwise propose to effect, (i) any
action that would adversely affect the powers, preferences or special rights of
the Trust Securities, whether by way of amendment to the Declaration or
otherwise or (ii) the dissolution, winding up or termination of the Trust other
than pursuant to the terms of the Declaration, then the holders of the Trust
Securities as a single class will be entitled to vote on such amendment or
proposal and such amendment or proposal will not be effective except with the
approval of the holders of at least 66-2/3 per cent in liquidation amount of the
Trust Securities affected thereby, provided that if any amendment or proposal
referred to in clause (i) above would adversely affect only the Preferred
Securities or the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
will not be effective except with the approval of the holders of 66-2/3 per cent
in liquidation amount of such class of Trust Securities.
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Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified as other than a grantor trust, for purposes of United States
federal income tax purposes, (ii) reduce or otherwise adversely affect the
powers of the Property Trustee or (iii) cause the Trust to be deemed to be an
"investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described below. The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the holders of the Trust Securities, the
Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge with or
into, or be replaced by a trust organized as such under the laws of any State;
provided, that (i) such successor entity either (x) expressly assumes all of the
obligations of the Trust with respect to the Trust Securities or (y) substitutes
for the Trust Securities other securities having substantially the same terms as
the Trust Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Trust Securities in priority with respect to
distributions and payments upon liquidation, redemption, maturity and otherwise,
(ii) KCPL expressly acknowledges a trustee of such successor entity which
possesses the same powers and duties as the Property Trustee as the holder of
the Subordinated Debentures, (iii) the Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, or any national securities exchange or other
organization on which the Preferred Securities are then listed, (iv) such
merger, consolidation, amalgamation or replacement does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (vi) such successor entity
has a purpose identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation or replacement, KCPL has received an opinion from
independent counsel to the Trust experienced in such matters to the effect that
(A) such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of the holders' interest in the new entity),
and (B) following such merger, consolidation, amalgamation or replacement,
neither the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (viii) KCPL guarantees the obligations
of such successor entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee. Notwithstanding the foregoing,
the Trust will not, except with the consent of the holders of 100% in
liquidation amount of the Trust Securities, consolidate, amalgamate, merge with
or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the Trust or the
successor entity to be classified for United States federal income tax purposes
as other than a grantor trust.
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BOOK-ENTRY ONLY ISSUANCE - THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary for
the Preferred Securities. The Preferred Securities will be issued only as fully
registered securities registered in the name of Cede & Co. (DTC's nominee). One
or more fully registered global Preferred Securities certificates will be
issued, representing in the aggregate the total number of Preferred Securities,
and will be deposited with DTC ("Global Certificates").
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in a global Preferred
Security.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "Clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
Preferred Securities ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Preferred securities, except in the event that use
of the book-entry system for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities deposited
by Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Preferred Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Preferred Securities. DTC's records reflect
only the identity of the Direct Participants to whose accounts such Preferred
Securities are credited, which may or may not be the Beneficial Owners. The
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Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Preferred Securities represented thereby for all
purposes under the Declaration and the Preferred Securities. No beneficial
owner of an interest in a Global Certificate will be able to transfer that
interest except in accordance with DTC's applicable procedures, in addition to
those provided for under the Declaration.
DTC has advised KCPL that it will take any action permitted to be taken by
a holder of Preferred Securities (including the presentation of Preferred
Securities for exchange as described below) only at the direction of one or more
Participants to whose account the DTC interests in the Global Certificates are
credited and only in respect of such portion of the aggregate liquidation amount
of Preferred Securities as to which such Participant or Participants has or have
given such direction. However, if there is a Declaration Event of Default under
the Preferred Securities, DTC will exchange the Global Certificates for
certificated Preferred Securities, which it will distribute to its Participants.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices will be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, DTC will reduce pro rata the amount of
the interest of each Direct Participant in the Preferred Securities to be
redeemed; provided that if, as a result of such pro rata redemption, Direct
Participants would hold fractional interests in the Preferred Securities, DTC
will adjust the amount of the interest of each Direct Participant to be redeemed
to avoid such fractional interests.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by participants to Beneficial Owners will be governed by
standing instructions and customary practices, as in the case with securities
held for the account of customers in bearer form or registered in "street name,"
and will be the responsibility of such Participant and not of DTC, the Trust,
any trustee or KCPL, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of distributions to DTC is the
responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.
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Except as provided herein, a Beneficial Owner in a global Preferred
Security will not be entitled to receive physical delivery of Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Preferred Securities.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC, DTC
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither KCPL, the Trust nor
any Trustee will have any responsibility for the performance by DTC or its
Direct Participants or Indirect Participants under the rules and procedures
governing DTC. DTC may discontinue providing its services as securities
depositary with respect to the Preferred Securities at any time by giving
reasonable notice to the Trust. Under such circumstances, in the event that a
successor securities depositary is not obtained, Preferred Securities
certificates are required to be printed and delivered. Additionally, the
Regular Trustees (with the consent of KCPL) may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depositary) with
respect to the Preferred Securities. In that event, certificates for the
Preferred Securities of such Trust will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that KCPL and the Trust believe to be reliable,
but KCPL and the Trust assume no responsibility for the accuracy thereof.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities and after the curing of all such defaults that may have
occurred, undertakes to perform only such duties as are specifically set forth
in the Declaration and, after default, shall exercise the same degree of care as
a prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the request of any
holder of Preferred Securities unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby; but the foregoing shall not relieve the Property Trustee, upon the
occurrence of a Declaration Event of Default, from exercising the rights and
powers vested in it by the Declaration. The Property Trustee also serves as
trustee under the Preferred Securities Guarantee. KCPL and its officers and
directors have no material relationship with the Property Trustee except that
(a) the Property Trustee is a dealer in commercial paper issued by KCPL, (b) the
Property Trustee is trustee and remarketing agent for certain governmental
revenue bonds which are payable with amounts paid by KCPL to the issuer of such
bonds, and (c) KCPL and its principal subsidiary maintain lines of credit with
the Property Trustee.
REGISTRAR AND TRANSFER AGENT
In the event that the Preferred Securities do not remain in book-entry only
form, the Property Trustee will act as paying agent and may designate an
additional or substitute paying agent at any time. Registration of transfers of
Preferred Securities will be effected without charge by or on behalf of the
Trust, but upon payment (with the giving of such indemnity as the Regular
Trustees may require) in respect of any tax or other governmental charges which
may be imposed in relation to it. The Trust will not be required to register or
cause to be registered
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the transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust
in such a way so that the Trust will not be deemed to be an "investment company"
required to be registered under the 1940 Act or characterized for United States
Federal income tax purposes as other than a grantor trust. KCPL is authorized
and directed to conduct its affairs so that the Subordinated Debentures will be
treated as indebtedness of KCPL for United States federal income tax purposes.
In this connection, the Regular Trustees and KCPL are authorized to take any
action, not inconsistent with applicable law, or the corporate charter of KCPL,
that each of the Regular Trustees and KCPL determines in their discretion to be
necessary or desirable for such purposes, as long as such action does not
materially and adversely affect the interests of the holders of the Preferred
Securities.
Holders of Preferred Securities will have no preemptive or similar rights.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Pursuant to the Preferred Securities Guarantee, KCPL will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full to the
holders of the Preferred Securities issued by the Trust, the Guarantee Payments
(as defined in the accompanying Prospectus) except to the extent paid by the
Trust, as and when due, regardless of any defense, right of setoff or
counterclaim which the Trust may have or assert. KCPL's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
KCPL to the holders of Preferred Securities or by causing the Trust to pay such
amounts to such holders. The Preferred Securities Guarantee will be qualified
as an indenture under the Trust Indenture Act. The First National Bank of
Chicago will act as Guarantee Trustee. The terms of the Preferred Securities
Guarantee will be those set forth in such Guarantee and those made part of such
Preferred Securities Guarantee by the Trust Indenture Act. The Preferred
Securities Guarantee will be held by the Guarantee Trustee for the benefit of
the holders of the Preferred Securities. A summary description of the Preferred
Securities Guarantee appears in the accompanying Prospectus under the caption
"Description of the Preferred Securities Guarantees."
DESCRIPTION OF THE SUBORDINATED DEBENTURES
Set forth below is a description of the specific terms of the Subordinated
Debentures in which the Trust will invest the proceeds from the issuance and
sale of the Trust Securities. This description supplements the description of
the general terms and provisions of the Subordinated Debentures set forth in the
accompanying Prospectus under the caption "Description of the
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Subordinated Debentures". The following description does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the description in the accompanying Prospectus and the Indenture, dated as of
, between KCPL and The First National Bank of
Chicago, as Trustee (the "Debt Trustee"), as supplemented by a Supplemental
Indenture dated as of (said Indenture, as so
supplemented, is hereinafter referred to as the "Indenture"), the forms of which
are filed as Exhibits to the Registration Statement of which this Prospectus
Supplement and the accompanying Prospectus form a part. Certain capitalized
terms used herein are defined in the Indenture.
KCPL will have the right at any time to liquidate the Trust and cause the
Subordinated Debentures to be distributed to the holders of the Trust
Securities. If the Subordinated Debentures are distributed to the holders of
the Preferred Securities, KCPL will use its best efforts to have the
Subordinated Debentures listed on the New York Stock Exchange or on such other
national securities exchange or similar organization on which the Preferred
Securities are then listed or quoted.
GENERAL
The Subordinated Debentures will be issued as unsecured indebtedness of
KCPL under the Indenture. The Subordinated Debentures will be limited in
aggregate principal amount to approximately $ , such amount being
the sum of the aggregate stated liquidation amount of the Trust Securities.
The Subordinated Debentures are not subject to a sinking fund provision.
The entire principal amount of the Subordinated Debentures will mature and
become due and payable, together with any accrued and unpaid interest thereon
including Compound Interest (as defined herein) and Additional Interest (as
defined herein), if any, on , subject to the right of
KCPL to shorten the maturity date to a date no earlier than .
If Subordinated Debentures are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, such
Subordinated Debentures will initially be issued as a Global Security (as
defined herein). As described herein, Subordinated Debentures may be issued in
certificated form in exchange for a Global Security. See "Book-Entry and
Settlement" and "The Depositary" below. In the event that Subordinated
Debentures are issued in certificated form, such Subordinated Debentures will be
in denominations of $25 and integral multiples thereof and may be transferred or
exchanged at the offices described below. Payments on Subordinated Debentures
issued as a Global Security will be made to DTC, a successor depositary or, in
the event that no depositary is used, to a Paying Agent for the Subordinated
Debentures. In the event Subordinated Debentures are issued in certificated
form, principal and interest will be payable, the transfer of the Subordinated
Debentures will be registrable and Subordinated Debentures will be exchangeable
for Subordinated Debentures of other denominations of a like aggregate principal
amount, at the corporate trust office of the Debt Trustee in New York, New York;
provided, that payment of interest may be made at the option of KCPL by check
mailed to the address of the holder entitled thereto or by wire transfer to an
account appropriately designated by the holder entitled thereto.
Notwithstanding the foregoing, so long as the holder of any Subordinated
Debentures is the Property Trustee, the payment of principal and interest on the
Subordinated Debentures held by the Property Trustee will be made at such place
and to such account as may be designated by the Property Trustee.
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The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction or other similar transaction involving KCPL that may adversely
affect such holders.
SUBORDINATION
The Indenture provides that the Subordinated Debentures are subordinated
and junior in right of payment to all Senior Indebtedness of KCPL, whether now
existing or hereafter incurred. Senior Indebtedness may include Indebtedness of
KCPL which is subordinated to other Indebtedness of KCPL but nevertheless senior
to the Subordinated Debentures. No payment of principal of (including
redemption payments, if any), premium, if any, or interest on, the Subordinated
Debentures may be made if (a) there is a default in the payments of principal,
premium, interest or any other payment due on any Senior Indebtedness, or (b)
the maturity of any Senior Indebtedness has been accelerated because of a
default. Upon any distribution of assets of KCPL to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
all principal of, premium, if any, and interest due or to become due on, all
Senior Indebtedness must be paid in full before the holders of the Subordinated
Debentures are entitled to receive or retain any payment. The rights of the
holders of the Subordinated Debentures will be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions applicable
to such Senior Indebtedness until all amounts owing on the Subordinated
Debentures are paid in full.
The term "Senior Indebtedness" means (i) any payment in respect of (a)
indebtedness of KCPL for money borrowed and (b) indebtedness evidenced by
securities, debentures, bonds, notes or other similar instruments issued by KCPL
including, without limitation, indebtedness evidenced by securities issued
pursuant to its General Mortgage Indenture and Deed of Trust dated as of
December 1, 1986, between KCPL and UMB Bank, N.A., as supplemented, and pursuant
to other indentures with various trustees (other than the Indenture); (ii) all
capital lease obligations of KCPL; (iii) all obligations of KCPL issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of KCPL and all of its obligations under any title retention
agreement (but excluding trade accounts payable arising in the ordinary course
of business); (iv) all obligations of KCPL for the reimbursement on any letter
of credit, banker's acceptance, security purchase facility or similar credit
transaction; (v) all obligations of the type referred to in clauses (i) through
(iv) above of other Persons for the payment of which KCPL is responsible or
liable as obligor, guarantor or otherwise; and (vi) all obligations of the type
referred to in clauses (i) through (v) above of other Persons secured by any
lien on any property or asset of KCPL (whether or not such obligation is assumed
by KCPL), except for (1) any such indebtedness that is by its terms subordinated
to or PARI PASSU with the Subordinated Debentures, as the case may be, including
all other debt securities and guarantees in respect of those debt securities,
issued to any other trusts, partnerships or other entity affiliated with KCPL
which is a financing vehicle of KCPL in connection with the issuance of
preferred securities by such entity or other securities which rank PARI PASSU
with, or junior to, the Preferred Securities, and (2) any indebtedness between
or among KCPL and its affiliates. Such Senior Indebtedness will continue to be
Senior Indebtedness and be entitled to the benefits of the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
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The Indenture does not limit the aggregate amount of Senior Indebtedness
which may be issued by KCPL. As of September 30, 1996, Senior Indebtedness of
KCPL aggregated approximately $________ million.
OPTIONAL REDEMPTION
KCPL will have the right to redeem the Subordinated Debentures, in whole or
in part, from time to time, on or after _____________ __, ____, or at any time
in certain circumstances upon the occurrence of a Tax Event as described under
"Description of the Preferred Securities -- Tax Event Redemption" herein, upon
not less than 30 nor more than 60 days' notice, at a Redemption Price equal to
100% of the principal amount to be redeemed plus any accrued and unpaid
interest, including Additional Interest, if any, to the redemption date. If a
partial redemption of the Preferred Securities resulting from a partial
redemption of the Subordinated Debentures would result in the delisting of the
Preferred Securities, KCPL may only redeem the Subordinated Debentures in whole.
OPTION TO CHANGE MATURITY DATE
KCPL will have the right at any time to shorten the maturity of the
Subordinated Debentures to a date not earlier than _____________ __, ____.
INTEREST
Each Subordinated Debenture will bear interest at the rate of ___% per
annum from the original date of issuance, payable quarterly in arrears on March
31, June 30, September 30 and December 31 of each year (each, an "Interest
Payment Date"), commencing ________ __, _____, to the person in whose name such
Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment Date.
If the Subordinated Debentures do not continue to remain in book-entry only
form, KCPL will have the right to select record dates which may not be less
than fifteen days prior to each Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period will be computed on the basis of
the actual number of days elapsed in such 90-day quarter. In the event that any
date on which interest is payable on the Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
KCPL will have the right at any time, and from time to time, during the
term of the Subordinated Debentures, to defer payments of interest by extending
the interest payment period for a period not exceeding 20 consecutive quarters,
at the end of which Extension Period, KCPL will pay all interest then accrued
and unpaid (including any Additional Interest, together with the interest
thereon compounded quarterly at the rate specified for the Subordinated
Debentures
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to the extent permitted by applicable law); provided, that, during any such
Extension Period, (a) KCPL may not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of KCPL common stock in connection with the
satisfaction by KCPL of its obligations under any employee benefit plans or any
other contractual obligation of KCPL (other than a contractual obligation
ranking PARI PASSU with or junior to the Subordinated Debentures), (ii) as a
result of a reclassification of KCPL capital stock or the exchange or conversion
of one class or series of KCPL capital stock for another class or series of KCPL
capital stock or (iii) the purchase of fractional interests in shares of KCPL
capital stock pursuant to the conversion or exchange provisions of such KCPL
capital stock or the security being converted or exchanged), (b) KCPL may not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by KCPL
which rank PARI PASSU with or junior to the Subordinated Debentures to which
such Extension Period applies and (c) KCPL may not make any guarantee payments
with respect to the foregoing (other than pursuant to the Preferred Securities
Guarantee). This covenant effectively requires that any Extension Period with
respect to payment of interest on any series of Subordinated Debentures will
also apply to each other series of subordinated debentures issued under the
Indenture to other trusts similar to the Trust. Prior to the termination of any
such Extension Period, KCPL may further defer payments of interest by extending
the interest payment period, provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity of the Subordinated Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due,
KCPL may select a new Extension Period, as if no Extension Period had previously
been declared, subject to the above requirements. No interest during an
Extension Period, except at the end thereof, will be due and payable, KCPL has
no present intention of exercising its rights to defer payments of interest by
extending the interest payment period on the Subordinated Debentures. If the
Property Trustee is the sole holder of the Subordinated Debentures, KCPL will
give the Regular Trustees and the Property Trustee notice of its selection of
such Extension Period one Business Day prior to the earlier of (i) the next
succeeding date on which distributions on the Preferred Securities are payable
or (ii) the date the Trust is required to give notice to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of the
Preferred Securities on the record date or the date such distribution is
payable, but in any event not less than one Business Day prior to such record
date. The Regular Trustees will give notice of KCPL's selection of such
Extension Period to the holders of the Preferred Securities. If the Property
Trustee is not the sole holder of the Subordinated Debentures, KCPL will give
the holders of the Subordinated Debentures notice of its selection of such
Extension Period ten Business Days prior to the earlier of (i) the next Interest
Payment Date or (ii) the date KCPL is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Subordinated Debentures affected thereby on the record or payment date of
such related interest payment, but in any event at least two Business Days
before such record date.
ADDITIONAL INTEREST
If at any time the Trust is required to pay any taxes, duties, assessments
or governmental charges of whatever nature (other than withholding taxes)
imposed by the United States, or any other taxing authority, then, in any such
case, KCPL will pay as additional interest ("Additional Interest") such
additional amounts as shall be required so that the net amounts received and
retained by the Trust after paying any such taxes, duties, assessments or other
governmental
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charges will be equal to the amounts the Trust would have received had no such
taxes, duties, assessments or other governmental charges been imposed.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"),
the revenue portion of President Clinton's budget proposal, was released. The
Bill would, among other things, generally deny interest deductions for United
States federal income tax purposes for interest on an instrument, issued by a
corporation, that has a maximum weighted average maturity of more than 40 years.
The Bill would also generally deny interest deductions for interest on an
instrument, issued by a corporation, that has a maximum term of more than 20
years and that is not shown as indebtedness on the separate balance sheet of the
issuer, or where the instrument is issued with a related instrument that is not
shown as indebtedness on the issuer's consolidated balance sheet. The above-
described provisions of the Bill were proposed to be effective generally for
instruments issued on or after December 7, 1995. If either provision were to
apply to the Subordinated Debentures, KCPL would be unable to deduct interest on
the Subordinated Debentures for United States federal income tax purposes.
However, on March 29, 1996, the Chairmen of the Senate Finance and House Ways
and Means Committees issued a joint statement to the effect that it was their
intention that the effective date of the President's legislative proposals, if
adopted, will be no earlier than the date of appropriate Congressional action.
KCPL believes, that, under current law, it will be able to deduct interest on
the Subordinated Debentures. There can be no assurance, however, that current
or future legislative proposals or final legislation will not be enacted which
may affect the ability of KCPL to deduct interest on the Subordinated
Debentures. Such a change could give rise to a Tax Event, which may permit KCPL
to cause a redemption of the Preferred Securities. See "Description of the
Preferred Securities -- Tax Event Redemption or Distribution" in the
accompanying Prospectus. Such a tax law change would not alter the United
States federal income tax consequences of the purchase, ownership and
disposition of Preferred Securities to holders thereof.
INDENTURE EVENTS OF DEFAULT
If any Indenture Event of Default has occured and is continuing, the
Property Trustee, as the holder of the Subordinated Debentures, will have the
right to declare the principal of and the interest on the Subordinated
Debentures (including any Compound Interest and Additional Interest, if any) and
any other amounts payable under the Indenture to be forthwith due and payable
and to enforce its other rights as a creditor with respect to the Subordinated
Debentures. See "Description of Subordinated Debentures -- Indenture Events of
Default" in the accompanying Prospectus for a description of Indenture Events of
Default. An Indenture Event of Default also constitutes a Declaration Event of
Default. The holders of Preferred Securities in certain circumstances have the
right to direct the Property Trustee to exercise its rights as a holder of
Subordinated Debentures. See "Description of the Preferred Securities --
Declaration Events of Default" and "Voting Rights." Notwithstanding the
foregoing, if an Indenture Event of Default has occurred and is continuing and
is attributable to the failure of KCPL to pay interest or principal on the
Subordinated Debentures on the date such interest or principal is otherwise
payable, KCPL acknowledges that a holder of Preferred Securities may then
institute a Direct Action for payment on or after the respective due date
specified in the Subordinated Debentures. Notwithstanding any payments made to
such holder of Preferred Securities by KCPL in connection with a Direct Action,
KCPL will remain obligated to pay the principal of or interest on the
Subordinated Debentures held by the Trust or the Property Trustee, and KCPL
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will be subrogated to the rights of the holder of such Preferred Securities with
respect to payments on the Preferred Securities to the extent of any payments
made by KCPL to such holder in any Direct Action. The holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of Subordinated Debentures.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of the Trust,
the Subordinated Debentures will be issued in the form of one or more global
certificates (each a "Global Security") registered in the name of the depositary
or its nominee. Except under the limited circumstances described below,
Subordinated Debentures represented by the Global Security will not be
exchangeable for, and will not otherwise be issuable as, Subordinated Debentures
in definitive form. The Global Securities described above may not be
transferred except by the depositary to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the depositary
or to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a Global
Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Subordinated
Debentures in definitive form and will not be considered the holders (as defined
in the Indenture) thereof for any purpose under the Indenture, and no Global
Security representing Subordinated Debentures will be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee. Accordingly, each beneficial owner must rely on the procedures of the
Depositary or, if such person is not a Participant on the procedures of the
Participant through which such person owns its interest, to exercise any rights
of a holder of Subordinated Debentures under the Indenture.
THE DEPOSITARY
If Subordinated Debentures are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, DTC will act
as securities depositary for the Subordinated Debentures. For a description of
DTC and the specific terms of the depositary arrangements, see "Description of
the Preferred Securities -- Book-Entry Only Issuance - the Depository Trust
Company" As of the date of this Prospectus Supplement, the description therein
of DTC's book-entry system and DTC's practices as they relate to purchases,
transfers, notices and payments with respect to the Preferred Securities apply
in all material respects to any Subordinated Debentures represented by one or
more Global Securities. KCPL may appoint a successor to DTC or any successor
depositary in the event DTC or such successor depositary is unable or unwilling
to continue as a depositary for the Global Securities.
None of KCPL, the Trust, the Property Trustee, any paying agent or any
other agent of KCPL or the Debt Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Security for Subordinated
Debentures or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
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A Global Security will be exchangeable for Subordinated Debentures
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies KCPL that it is unwilling or unable to continue
as a depositary for such Global Security and no successor depositary shall have
been appointed, (ii) the Depositary, at any time, ceases to be a clearing agency
registered under the Exchange Act at which time the Depositary is required to be
so registered to act as such depositary and no successor depositary shall have
been appointed, (iii) KCPL, in its sole discretion, determines that such Global
Security will be so exchangeable or (iv) there has occurred an Indenture Event
of Default with respect to such Subordinated Debentures. Any Global Security
that is exchangeable pursuant to the preceding sentence will be exchangeable for
Subordinated Debentures registered in such names as the Depositary shall direct.
It is expected that such instructions will be based upon directions received by
the Depositary from its Participants with respect to ownership of beneficial
interests in such Global Security.
If the Subordinated Debentures are not represented by one or more
Global Securities, certificates evidencing the Subordinated Debentures may be
presented for registration of transfer (with the form of transfer endorsed
thereon duly executed) or exchange, at the office of the Debenture Registrar or
at the office of any transfer agent designated by KCPL for such purpose with
respect to the Subordinated Debentures, without service charge and upon payment
of any taxes and other governmental charges as described in the Indenture. Such
transfer or exchange will be effected upon the Debenture Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. KCPL has appointed the Debt
Trustee as Debenture Registrar with respect to the Subordinated Debentures.
KCPL may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer agent acts,
except that KCPL will be required to maintain a transfer agent at the place of
payment. KCPL may at any time designate additional transfer agents with respect
to the Subordinated Debentures.
In the event of any redemption of only a part of the Subordinated
Debentures, KCPL will not be required to (i) issue, exchange or register the
transfer of Subordinated Debentures during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of less
than all of the Subordinated Debentures and ending at the close of business on
the date of such mailing and (ii) register the transfer of or exchange any
Subordinated Debentures so selected for redemption, in whole or in part, except
the unredeemed portion of any Subordinated Debentures being redeemed in part.
GOVERNING LAW
The Indenture and the Subordinated Debentures will be governed by, and
construed in accordance with, the internal laws of the State of New York.
MISCELLANEOUS
The Indenture will provide that KCPL will pay all fees and expenses related
to (i) the offering of the Trust Securities and the Subordinated Debentures,
(ii) the organization, maintenance and dissolution of the Trust, (iii) the
retention of the Trustees and (iv) the enforcement by the Property Trustee of
the rights of the holders of the Preferred Securities. The payment of such fees
and expenses will be fully and unconditionally guaranteed by KCPL.
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KCPL will have the right at all times to assign any of its respective
rights or obligations under the Indenture to a direct or indirectly wholly-owned
subsidiary of KCPL; provided that, in the event of any such assignment, KCPL
will remain liable for all of such obligations. Subject to the foregoing, the
Indenture will be binding upon and inure to the benefit of the parties thereto
and their respective successors and assigns. The Indenture provides that it may
not otherwise be assigned by the parties thereto.
EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED DEBENTURES
AND THE PREFERRED SECURITIES GUARANTEE
As set forth in the Declaration, the sole purposes of the Trust are to (i)
issue Trust Securities, (ii) invest the proceeds thereof in the Subordinated
Debentures and (iii) engage in only those other activities necessary or
incidental thereto.
As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover distributions
and payments due on the Trust Securities primarily because (i) the aggregate
principal amount of Subordinated Debentures will be equal to the sum of the
aggregate stated liquidation amount of the Trust Securities; (ii) the interest
rate and interest and other payment dates on the Subordinated Debentures will
match the distribution rate and distribution and other payment dates for the
Preferred Securities; (iii) KCPL will pay for all costs and expenses of the
Trust; and (iv) the Declaration provides that the Trustees may not cause or
permit the Trust to, among other things, engage in any activity that is not
consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by KCPL as and to the extent set forth under
"Description of the Preferred Securities Guarantee" in the accompanying
Prospectus. If KCPL does not make interest payments on the Subordinated
Debentures purchased by the Trust, it is expected that the Trust will not have
sufficient funds to pay distributions on the Preferred Securities. The
Preferred Securities Guarantee is a full and unconditional guarantee from the
time of its issuance, but does not apply to any payment of distributions unless
and until the Trust has sufficient funds for the payment of such distributions.
If KCPL fails to make interest or other payments on the Subordinated
Debentures when due (taking into account any Extension Period), the Declaration
provides a mechanism whereby the holders of the Preferred Securities, using the
procedures described in "Description of the Preferred Securities -- Voting
Rights" in this Prospectus Supplement, may direct the Property Trustee to
enforce its rights under the Subordinated Debentures, including proceeding
directly against KCPL to enforce the Subordinated Debentures. If the Property
Trustee fails to enforce its rights under the Subordinated Debentures, a holder
of Preferred Securities may, after a period of 30 days has elapsed from such
holder's written request to the Property Trustee to enforce such rights,
institute a legal proceeding directly against KCPL to enforce the Property
Trustee's rights under the Subordinated Debentures without first instituting any
legal proceeding against the Property Trustee or any other person or entity,
including the Trust.
If KCPL fails to make payments under the Preferred Securities Guarantee,
the Preferred Securities Guarantee provides a mechanism whereby the holders of
the Preferred Securities may direct the Guarantee Trustee to enforce its rights
thereunder. If the Guarantee Trustee fails to
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enforce the Preferred Securities Guarantee, any holder of Preferred Securities
affected thereby may institute a legal proceeding directly against KCPL to
enforce the Guarantee Trustee's rights under the Preferred Securities Guarantee,
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The above mechanisms and obligations, taken together, are equivalent to a
full and unconditional guarantee by KCPL of payments due on the Preferred
Securities. See "Description of the Preferred Securities Guarantees -- General"
in the accompanying Prospectus.
UNITED STATES FEDERAL INCOME TAXATION
The following is a summary of certain of the material United States federal
income tax consequences of the purchase, ownership and disposition of Preferred
Securities. Unless otherwise stated, this summary deals only with Preferred
Securities held as capital assets by holders that purchase the Preferred
Securities upon original issuance. This summary does not address all the tax
consequences that may be relevant to holders that may be subject to special tax
treatment such as, for example, banks, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
tax-exempt investors, persons whose functional currency is other than the United
States dollar, persons who hold Preferred Securities as part of a straddle,
hedging or conversion transaction or, except as specifically described herein,
foreign taxpayers. In addition, this summary does not address any aspects of
state, local, or foreign laws. This summary is based on the Internal Revenue
Code of 1986, as amended, Treasury regulations promulgated thereunder and
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change, possibly on a retroactive basis. Each holder
should consult its tax advisor as to its particular tax consequences of
acquiring, holding, and disposing of the Preferred Securities, including the tax
consequences under state, local, and foreign laws.
CLASSIFICATION OF THE SUBORDINATED DEBENTURES
It is a condition to the issuance of the Preferred Securities that Sidley &
Austin render its opinion generally to the effect that, under then current
United States federal income tax law and assuming full compliance with the terms
of the Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Subordinated Debentures held by the
Trust will be classified for United States federal income tax purposes as
indebtedness of KCPL. Accordingly, corporate holders of Preferred Securities
will not be entitled to a dividends-received deduction with respect to any
income recognized with respect to the Preferred Securities.
CLASSIFICATION OF THE TRUST
It is a condition to the issuance of the Preferred Securities that Sidley &
Austin render its opinion generally to the effect that, under then current
United States federal income tax law and assuming full compliance with the terms
of the Declaration and the Indenture (and certain other documents), and based on
certain facts and assumptions contained in such opinion, the Trust will be
classified for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation. Accordingly, for United States
federal income tax purposes, each holder of Preferred Securities will generally
be considered the owner of an undivided interest in the Subordinated Debentures,
and each holder will be required to include
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in its gross income any interest or original issue discount ("OID") accrued with
respect to its allocable share of those Subordinated Debentures. Investors
should be aware that the foregoing opinions of Sidley & Austin have not been
confirmed by the Internal Revenue Service (the "Service"), by private ruling or
otherwise, and are not binding on the Service or the courts.
KCPL, the Trust, and, by its acceptance of a Preferred Security or a
beneficial interest therein, the holder of, and any person that acquires a
beneficial interest in, such Preferred Security agree to treat such Preferred
Security and the Subordinated Debentures consistently with the foregoing
opinions.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Unless the Subordinated Debentures are issued with OID, stated interest on
the Subordinated Debentures will be taxable to a holder as ordinary income at
the time such interest is paid (if the holder uses the cash method of accounting
for tax purposes) or accrued (if the holder uses the accrual method of
accounting for tax purposes). Under regulations of the U.S. Treasury
Department, the Subordinated Debentures will not be considered issued with OID
if the likelihood of KCPL exercising its right to defer interest (as described
under "Description of the Subordinated Debentures--Option to Extend Interest
Payment Period") is considered a "remote" contingency at the time the
Subordinated Debentures are issued. KCPL believes that such likelihood is
remote, because exercise of its right to defer interest would prevent KCPL from
declaring dividends on its capital stock. Accordingly, KCPL intends to take the
position that the Subordinated Debentures will not be issued with OID. However,
the definition of the term "remote" in the regulations has not yet been
addressed in any rulings or other interpretations by the Service, and it is
possible that the Service would assert that the Subordinated Debentures were
issued with OID. Assuming the Subordinated Debentures continue to remain in
book-entry only form, a determination that the Subordinated Debentures were
issued with OID would not result in substantially different United States
federal income tax consequences to accrual method taxpayers or to cash-method
taxpayers whose taxable year is the calendar year. Holders not described in the
preceding sentence, if any, would recognize the acceleration of up to three
months' interest income.
If, notwithstanding KCPL's current belief, it does exercise its right to
defer interest payments, the Subordinated Debentures would be treated as if they
were retired and then reissued with OID at such time. In such case, the amount
of OID would generally be equal to the interest payable thereafter.
If the Subordinated Debentures are treated as having been issued or
reissued with OID (either because KCPL exercises its right to defer interest
payments or because the likelihood of exercise of such right is not considered a
remote contingency at the time of issuance), holders would include that interest
in income on an economic accrual basis, regardless of their method of tax
accounting. The amount of OID that accrued in any quarter would approximately
equal the amount of interest that accrued on the Subordinated Debentures in that
quarter at the stated interest rate. If interest payments were received later
than the taxable year in which the interest accrued, OID treatment would have
the effect of accelerating the reporting of income for holders who otherwise use
a cash method of tax reporting.
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MARKET DISCOUNT AND PREMIUM
Holders of Preferred Securities other than holders that purchased the
Preferred Securities upon original issuance may be considered to have acquired
their undivided interest in the Subordinated Debentures with market discount,
amortizable bond premium or acquisition premium as such terms are defined for
United States federal income tax purposes. Such holders are advised to consult
their tax advisors as to the income tax consequences of the acquisition,
ownership and disposition of the Preferred Securities.
RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under the caption "Description of
the Preferred Securities -- Dissolution; Distribution of Subordinated
Debentures," Subordinated Debentures may be distributed to holders in exchange
for Preferred Securities and in liquidation of the Trust. Under current United
States federal income tax law, such a redemption would be treated as a non-
taxable event to each holder, and each holder would have an aggregate tax basis
in the Subordinated Debentures equal to such holder's aggregate tax basis in its
Preferred Securities. A holder's holding period in the Subordinated Debentures
so received in liquidation of the Trust would include the period during which
the Preferred Securities were held by such holder.
Under certain circumstances, as described under the captions "Description
of the Preferred Securities--Redemption," "Description of the Preferred
Securities--Tax Event Redemption," and "Description of the Subordinated
Debentures--Optional Redemption," the Subordinated Debentures may be redeemed
for cash and the proceeds of such redemption distributed to holders in
redemption of their Preferred Securities. Under current United States federal
income tax law, such a redemption would be a taxable event, and a holder would
recognize gain or loss as if such holder sold such redeemed Preferred Securities
for cash. See "Sales of Preferred Securities" below.
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities will recognize gain or loss equal
to the difference between such holder's adjusted tax basis in the Preferred
Securities and the amount realized on the sale of such Preferred Securities
(other than with respect to accrued and unpaid interest which has not yet been
included in income, which will be treated as ordinary income). A holder's
adjusted tax basis in the Preferred Securities will generally be the initial
purchase price increased by OID (if any) previously includible in such holder's
gross income to the date of disposition and decreased by payments received on
the Preferred Securities. Such gain or loss will generally be a capital gain or
loss and will generally be a long-term capital gain or loss if the Preferred
Securities have been held for more than one year.
The Preferred Securities may trade at prices that do not accurately reflect
the value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder who uses the accrual method of accounting for
tax purposes (and a cash method holder if the Subordinated Debentures are deemed
to have been issued with OID) and that disposes of Preferred Securities between
record dates for payments of distributions thereon will be required to include
accrued but unpaid interest on the Subordinated Debentures through the date of
disposition in income as ordinary income, and to add such amount to such
holder's adjusted tax basis in the pro rata share of the underlying Subordinated
Debentures deemed disposed of. To
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the extent that the selling price is less than the holder's adjusted tax basis
(so determined) a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a nonresident alien individual, a foreign
partnership, or a foreign estate or trust. This discussion assumes that income
with respect to the Preferred Securities is not effectively connected with a
trade or business in the United States in which the United States Alien Holder
is engaged.
Under current United States federal income tax law, and subject to the
discussion of backup withholding in the following section: (1) payments with
respect to principal and interest (including any OID) by the Trust or any of its
paying agents to any holder of a Preferred Security that is a United States
Alien Holder will not be subject to withholding of United States federal income
tax; provided that, in the case of interest, (a) the beneficial owner of the
Preferred Security does not actually or constructively own 10% of more of the
total combined voting power of all classes of stock of KCPL entitled to vote,
(b) the beneficial owner of the Preferred Security is not a controlled foreign
corporation that is related, directly or indirectly, to KCPL through stock
ownership, and (c) either (A) the beneficial owner of the Preferred Security
certifies to the Trust or its agent, under penalties of perjury, that it is a
United States Alien Holder and provides its name and address or (B) a securities
clearing organization, bank or other financial institution that holds customer'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Preferred Securities in such capacity, certifies to
the Trust or its agent, under penalties or perjury, that such statement has been
received from the beneficial owner by it or by a Financial Institution between
it and the beneficial owner and furnishes the Trust or its agent with a copy
thereof, and (2) a United States Alien Holder of a Preferred Security will
generally not be subject to withholding of United States federal income tax on
any gain realized upon the sale or other disposition of a Preferred Security.
On April 15, 1996, proposed Treasury Regulations (the "1996 Proposed
Regulations") were issued which, if adopted in final form, could affect the
United States taxation of United States Alien Holders. The 1996 Proposed
Regulations are generally proposed to be effective for payments after December
31, 1997, regardless of the issue date of the instrument with respect to which
such payments are made, subject to certain transition rules. It cannot be
predicted at this time whether the 1996 Proposed Regulations will become
effective as proposed or what, if any, modifications may be made to them.
Prospective investors are urged to consult their tax advisors with respect to
the effect the 1996 Proposed Regulations may have if adopted.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Under current United States federal income tax law, information reporting
requirements apply to interest (including OID) and principal payments made to,
and to the proceeds of sales before maturity by, certain non-corporate persons.
In addition, a 31% backup withholding tax applies if a non-corporate person (i)
fails to furnish such person's Taxpayer Identification Number ("TIN") (which,
for an individual, would be his or her Social Security Number) to the payor in
the manner required, (ii) furnishes an incorrect TIN and the payor is so
notified by the Service, (iii) is notified by the Service that such person has
failed properly to report payments
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of interest and dividends or (iv) in certain circumstances, fails to certify,
under penalties of perjury, that such person has not been notified by the
Service that such person is subject to backup withholding for failure properly
to report interest and dividend payments. Backup withholding does not apply
with respect to payments made to certain exempt recipients, such as corporations
and tax-exempt organizations.
In the case of a United States Alien Holder, backup withholding and
information reporting do not apply to payments of principal and interest with
respect to a Preferred Security with respect to which such Holder has provided
the required certification under penalties of perjury that such Holder is a
United States Alien Holder or has otherwise established an exemption, provided
that certain conditions are satisfied.
In general, (i) principal or interest payments with respect to a Preferred
Security collected outside the United States by a foreign office of a custodian,
nominee or other agent acting on behalf of a beneficial owner of a Preferred
Security and (ii) payments on the sale, exchange or retirement of a Preferred
Security to or through a foreign office of a broker are not subject to backup
withholding or information reporting. However, if such custodian, nominee,
agent or broker is a United States person, a controlled foreign corporation for
United States tax purposes, or a foreign person 50% of more of whose gross
income is effectively connected with the conduct of a United States trade or
business for a specified three-year period, such custodian, nominee, agent or
broker may be subject to certain information reporting (but not backup
withholding) requirements with respect to such payments.
Backup withholding tax is not an additional tax. Rather, any amounts
withheld from a payment to a person under the backup withholding rules are
allowed as a refund or a credit against such person's United States federal
income tax, provided that the required information is furnished to the Service.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"),
the revenue portion of President Clinton's budget proposal, was released. The
Bill would, among other things, generally deny interest deductions for United
States federal income tax purposes for interest on an instrument, issued by a
corporation, that has a maximum weighted average maturity of more than 40 years.
The Bill would also generally deny interest deductions for interest on an
instrument, issued by a corporation, that has a maximum term of more than 20
years and that is not shown as indebtedness on the separate balance sheet of the
issuer, or where the instrument is issued with a related instrument that is not
shown as indebtedness on the issuer's consolidated balance sheet. The above-
described provisions of the Bill proposed were to be effective generally for
instruments issued on or after December 7, 1995. If either provision were to
apply to the Subordinated Debentures, KCPL would be unable to deduct interest on
the Subordinated Debentures for United States federal income tax purposes.
However, on March 29, 1996, the Chairmen of the Senate Finance and House Ways
and Means Committees issued a joint statement to the effect that it was their
intention that the effective date of the President's legislative proposals, if
adopted, will be no earlier than the date of appropriate Congressional action.
KCPL believes that, under current law, it will be able to deduct interest on the
Subordinated Debentures. There can be no assurance, however, that current or
future legislative proposals or final legislation will not be adopted which may
affect the ability of KCPL to deduct interest on the Subordinated Debentures.
Such a change could give rise to a Tax Event, which
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may permit KCPL to cause a redemption of the Preferred Securities. See
"Description of the Preferred Securities -- Tax Event Redemption." Such a tax
law change would not alter the United States federal income tax consequences of
the purchase, ownership and disposition of Preferred Securities to holders
thereof.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PREFERRED
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
S-42
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Trust has agreed to sell to each of the Underwriters
named below, and each of the Underwriters, for whom Merrill Lynch, Pierce,
Fenner & Smith Incorporated are acting as representative (the "Representative"),
has severally agreed to purchase the number of Preferred Securities set forth
opposite its name below. In the Purchase Agreement, the several Underwriters
have agreed, subject to the terms and conditions set forth therein, to purchase
all the Preferred Securities offered hereby if any of the Preferred Securities
are purchased. In the event of default by an Underwriter, the Purchase
Agreement provides that, in certain circumstances, the purchase commitments of
the non-defaulting Underwriters may be increased or the Purchase Agreement may
be terminated.
NUMBER OF PREFERRED
UNDERWRITERS SECURITIES
Merrill Lynch, Pierce, Fenner & Smith
Incorporated .....................................
---------------------
---------------------
The Underwriters propose to offer the Preferred Securities, in part,
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and, in part, to certain securities
dealers at such price less a concession of $ per Preferred Security. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of $ per Preferred Security to certain brokers and dealers. After the
Preferred Securities are released for sale to the public, the offering price and
other selling terms may from time to time be varied by the Representative.
In view of the fact that the proceeds of the sale of the Preferred
Securities will ultimately be used to purchase the Subordinated Debentures of
KCPL, the Purchase Agreement provides that KCPL will pay as compensation
("Underwriters' Compensation") to the Underwriters arranging the investment
therein of such proceeds, an amount in immediately available funds of $
per Preferred Security (or $ in the aggregate) for the accounts of the
several Underwriters; provided that, such compensation for sales of 10,000 or
more Preferred Securities to any single purchaser will be $ per Preferred
Security. Therefore, to the extent of such sales, the actual amount of
Underwriters' Compensation will be less than the aggregate amount specified in
the preceding sentence.
During a period of 30 days from the date of this Prospectus Supplement,
neither the Trust nor KCPL will, without the prior written consent of the
Representative, directly or indirectly, sell, offer to sell, grant any option
for sale of, or otherwise dispose of, any Preferred Securities, any security
convertible into or exchangeable into or exercisable for Preferred Securities or
S-43
Subordinated Debentures or any debt securities substantially similar to the
Subordinated Debentures or equity securities substantially similar to the
Preferred Securities (except for the Subordinated Debentures and the Preferred
Securities offered hereby).
Application has been made to list the Preferred Securities on the New York
Stock Exchange. If so approved, trading of the Preferred Securities on the New
York Stock Exchange is expected to commence within a 30-day period after the
initial delivery of the Preferred Securities. The Representative has advised
the Trust that it intends to make a market in the Preferred Securities prior to
the commencement of trading on the New York Stock Exchange. The Representatives
will have no obligation to make a market in the Preferred Securities, however,
and may cease market making activities, if commenced, at any time.
Prior to this offering there has been no public market for the Preferred
Securities. In order to meet one of the requirements for listing the Preferred
Securities on the New York Stock Exchange, the Underwriters will undertake to
sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial
holders.
The Trust and KCPL have agreed to indemnify the Underwriters against, or
contribute to payments that the Underwriters may be required to make in respect
of, certain liabilities, including liabilities under the Securities Act of 1933,
as amended.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, KCPL and its subsidiaries in the ordinary
course of business.
S-44
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sales of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED DECEMBER __, 1996
KCPL FINANCING I
KCPL FINANCING II
KCPL FINANCING III
PREFERRED SECURITIES
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
KANSAS CITY POWER & LIGHT COMPANY
--------------------
KCPL Financing I, KCPL Financing II, and KCPL Financing III, each a
statutory business trust formed under the laws of the State of Delaware (each, a
"Trust" and, collectively, the "Trusts") may severally offer, from time to time,
their respective preferred securities (the "Preferred Securities") representing
preferred undivided beneficial interests in the assets of each Trust. Kansas
City Power & Light Company, a Missouri corporation ("KCPL"), will be the sole
owner of the undivided common beneficial interests in such assets represented by
common securities (the "Common Securities", together with the Preferred
Securities herein referred to as the "Trust Securities") of each Trust. The
payment of periodic cash distributions ("distributions") with respect to the
Preferred Securities and payments on liquidation or redemption with respect to
such Preferred Securities will be each guaranteed by KCPL in the case of each
Trust (a "Preferred Guarantee"), in each case only out of funds held by such
Trust. KCPL's obligations under the Preferred Security Guarantee will be
subordinate and junior in right of payment to all other liabilities of KCPL and
will rank PARI PASSU with the most senior preferred stock issued by KCPL.
Concurrently with the issuance by a Trust of its Preferred Securities, such
Trust will invest the proceeds thereof in KCPL's junior subordinated deferrable
interest debentures (the "Subordinated Debentures") having terms corresponding
to such Trust's Preferred Securities. The Subordinated Debentures will be
unsecured and subordinated indebtedness of KCPL issued under an indenture dated
as of __________, 199_ between the Company and The First National Bank of
Chicago, as Trustee (such indenture, as the same may be supplemented or amended
from time to time, herein referred to as the "Indenture"). The Subordinated
Debentures held by each Trust will be its sole assets, and the payments of
principal of and interest on such Subordinated Debentures will be its only
revenues. The Subordinated Debentures purchased by a Trust may be subsequently
distributed pro rata to holders of Preferred Securities and Common Securities in
connection with the dissolution of such Trust. In addition, upon the
occurrence of certain events, KCPL may redeem the Subordinated Debentures and
cause the redemption of the Preferred Securities.
The Preferred Securities may be offered in amounts, at prices and on terms
to be determined at the time of offering, provided, however, that the aggregate
initial public offering price of all Preferred Securities issued pursuant to the
Registration Statement of which this Prospectus forms a part will not exceed
$300,000,000. Certain specific terms of each Trust's Preferred Securities in
respect of which this Prospectus is being delivered will be set forth in an
accompanying Prospectus Supplement, including, where applicable and to the
extent not set forth herein, the identity of the Trust, the specific title, the
aggregate amount, the distribution rate (or the method for determining such
rate), the stated liquidation amount, redemption provisions, other rights, the
initial public offering price and any other special terms, as well as any
planned listing on a securities exchange, of such Preferred Securities.
The Preferred Securities may be sold in a public offering to or through
underwriters or dealers designated from time to time. See "Plan of
Distribution." The names of any of the underwriters or dealers involved in the
sale of the Preferred Securities in respect of which this Prospectus is being
delivered, the number of Preferred Securities to be purchased by any such
underwriters or dealers, any applicable commissions or discounts and the net
proceeds to each Trust will be set forth in the applicable Prospectus
Supplement.
Each Prospectus Supplement will also contain information concerning certain
United States federal income tax considerations applicable to the Preferred
Securities offered thereby.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is ___________, 199_.
AVAILABLE INFORMATION
The CompanyKCPL is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (Exchange Act)(the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (Commission)(the "Commission"). KCPL and the Trusts have
filed with the Commission a registration statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Preferred Securities offered hereby and
certain related securities. This Prospectus does not contain all of the
information set forth in the Registration Statement and reference is hereby made
to the Registration Statement and the exhibits thereto for further information
with respect to KCPL and the Preferred Securities offered hereby. Such
reports, proxy statements, Registration Statement and exhibits and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the following regional offices of the Commission: New
Yorkits Northeast Regional Office located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and ChicagoMidwest Regional Office located
at Citicorp Center, 500 W.West Madison Street, 14th floor,Suite 1400, Chicago, Illinois
60661, and copies60661-2511. Copies of such material can be obtained at prescribed rates from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. In addition, such20549. KCPL is subject to the electronic filing requirements of the
Commission. Accordingly, pursuant to the rules and regulations of the
Commission, certain documents, including annual and quarterly reports and proxy
statements, filed by KCPL with the Commission have been filed electronically.
The Commission also maintains a World Wide Web site that contains reports, proxy
and information statements and other information concerningregarding registrants
(including KCPL) that file electronically with the Company canCommission at (http://
www.sec.gov). Certain of KCPL's securities are listed on the New York Stock
Exchange and such reports, proxy statements and other information may also be
inspected at the offices of the New York Stock Exchange, and the Midwest Stock Exchange, on which
Exchanges certain securitiesInc., 20 Broad Street,
New York, New York 10005.
No separate financial statements of the CompanyTrusts are listed.included herein.
KCPL considers that such financial statements would not be material to holders
of the Preferred Securities because: (i) all of the Common Securities of the
Trusts are owned by KCPL, a reporting company under the Exchange Act; (ii) the
Trusts have no independent operations; but exist for the sole purpose of issuing
the Trust Securities and holding the Subordinated Debentures as trust assets;
and (iii) the obligations of the Trusts under the Preferred Securities, to the
extent funds are available therefor, are fully and unconditionally guaranteed to
the extent set forth herein by KCPL.
The Trusts are not currently subject to the information reporting
requirements of the Exchange Act. The Trusts will become subject to such
requirements upon the effectiveness of the Registration Statement, although they
intend to seek and expect to receive exemptions therefrom.
INCORPORATION OF CERTAIN INFORMATIONDOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission pursuant
to the Exchange Act are hereby incorporated in this Prospectus by reference
and made a part hereof:
1. The Company's Annual Report of KCPL on Form 10-K, as amended, for the fiscal year ended
December 31, 1993.
2. The Company's1995, the Quarterly Reports of KCPL on FormsForm 10-Q for the quartersperiods
ended March 31, 1994,1996, June 30, 1994,1996 and September 30, 1994.
3. The Company's1996, and the Current
ReportReports of KCPL on Form 8-K dated February 11, 1994.May 22, 1996, May 28, 1996, and September 19,
1996, are incorporated by reference into this Prospectus. All documents filed
with the Commission by the CompanyKCPL pursuant to SectionSections 13(a), 13(c), 14 or 15(d) of the Exchange Act
aftersubsequent to the date of this Prospectus and prior to the termination of the
2
offering of the NotesPreferred Securities contemplated hereby shall be deemed to be
incorporated inby reference into this Prospectus by reference and to be made a part hereof from
the daterespective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference in this
Prospectusherein shall be
deemed to be modified or superseded for purposes of the Registration Statement
and this Prospectus to the extent that a statement contained herein, in thisthe
applicable Prospectus Supplement or in any other subsequently-filedsubsequently filed document which
also is or is deemed to be incorporated by reference in this Prospectusherein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or this Prospectus.
The CompanyKCPL hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, including any beneficial
owner, upon the written or oral request of any such person, a copy of any or all
of the documents referred to above which have been or may be incorporated in
this Prospectus by reference, other than certain exhibits to such documents.
Requests should be directed to Corporate Secretary, Kansas City Power & Light
Company, 1201 Walnut, Kansas City, Missouri 6410664106-2124 (Telephone: (816) 556-2053)556-
2053).
THEKANSAS CITY POWER & LIGHT COMPANY
TheKansas City Power & Light Company, a Missouri corporation, is a
medium-size electric utility, headquartered in downtown Kansas City, which
generates and distributes electricity to over 419,000430,000 customers in a 4,700-square4,700-
square mile area located in 23 counties in western Missouri and eastern Kansas.
Customers include 368,000380,000 residences, 49,00050,000 commercial firms, and over 2,0003,000
industries, municipalities and other electric utilities. About two-thirds of
total Kwh sales and revenue are from Missouri customers and the remainder from
Kansas.Kansas customers. The address of the Company'sits principal executive office is 1201 Walnut,
Kansas City, Missouri 6410664106-2124 (Telephone: (816) 556-2200).
SELECTED FINANCIAL INFORMATION
Income Statement Information
Twelve Months
Ended
Year Ended December 31, Sept. 30, 1994
1991 1992 1993 (Unaudited)
(Thousands)
Operating revenues...... $825,101 $802,668 $857,450 $877,002
Operating income........ $171,308 $140,574 $156,302 $148,117
Net income.............. $103,893 $ 86,334 $105,772 $104,087
Ratios
Twelve
Months
Ended
Year Ended December 31, Sept. 30, 1994
Ratios of Earnings to 1989 1990 1991 1992 1993 (Unaudited)
Fixed Charges 2.92 2.96 3.22 3.12 3.80 4.01
Capitalization Summary
September 30, 1994
(Thousands)
(Unaudited)
Long-term debt*..................................... $ 754,686
Preferred stock..................................... 90,596
Common equity....................................... 879,104
Total......................................... $1,724,386
*Excluding current maturities of long-term debt included in current
liabilities.
APPLICATION OF PROCEEDS
The net proceeds from the saleTHE TRUSTS
Each of the Notes offered herebyTrusts is a statutory business trust formed under Delaware
law pursuant to the filing of a certificate of trust with the Delaware Secretary
of State on December __, 1996. The business of each Trust is defined in a
Declaration of Trust, executed by KCPL as sponsor (the "Sponsor"), and the
Trustees (as defined herein). The Declaration of Trust of each Trust will be
added toamended and restated in its entirety (as so amended and restated, the
general funds of"Declaration") substantially in the Company and used to refund maturing long-
term indebtedness and for other general corporate purposes.
DESCRIPTION OF NOTES
The following statements are a summary only, do not purport to be
complete, and are subject to the detailed provisions of the Note Indenture
(the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus isforms a part), to which reference is hereby made. This
summary incorporates by reference certain Articles and Sectionspart. The Declaration will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Upon issuance of the Note
Indenture specifically enumerated below and is qualified in its entirety by
such reference. CertainPreferred Securities, the
purchasers thereof will own all of the terms used below are used herein withPreferred Securities. KCPL will acquire
all of the meanings ascribedCommon Securities in an aggregate liquidation amount equal to
such termsapproximately 3% of the total capital of each Trust. Each Trust exists for the
exclusive purposes of (i) issuing the Trust Securities representing undivided
beneficial interests in the assets of the Trust, (ii) investing the gross
proceeds of the Trust Securities in the Subordinated Debentures and (iii)
engaging in only those other activities necessary or incidental thereto. Each
Trust has a term of approximately 45 years, but may terminate earlier as
provided in the applicable Declaration.
Each Trust's business and affairs will be conducted by the Note Indenture.
Generaltrustees
(the "Trustees") appointed by KCPL, as holder of the Common Securities. The
Notesduties and obligations of the
3
Trustees will be issuedgoverned by the Declaration. Pursuant to the Declaration, the
number of Trustees will initially be four. Two of the Trustees (the "Regular
Trustees") will be persons who are employees or officers of or affiliated with,
KCPL. The third Trustee will be a corporation which maintains a principal place
of business in the State of Delaware that will serve for the sole purpose of
complying with certain Delaware laws (the "Delaware Trustee"). The fourth
Trustee will be a financial institution unaffiliated with KCPL which will serve
as property trustee under anthe Declaration and as indenture trustee for purposes
of the Trust Indenture datedAct (the "Property Trustee"). First Chicago Delaware
Inc. ("First Chicago Delaware") will act as of November 1,
1994 Note Indenture), between the CompanyDelaware Trustee and The First
National Bank of New York,Chicago will act as Trustee (Note Trustee). The Notes are the only securities which may be
issued under the Note Indenture.
The Notes are limited to a maximum aggregate principal amount of
$125,000,000, which may be reduced by the Company (Note Indenture Section
2.03).
Each Note will be issued initially as a Book-Entry Note or a
Certificated Note in fully registered form in minimum denominations of $1,000
and integral multiples of $1,000 in excess thereof (Note Indenture Section
2.04).
The Notes will be offered on a continuing basis and will mature from
nine months to thirty years from the Original Issue Date, as selected by the
initial purchaser and agreed to by the Company. Each Note will bear interest
at (a) a fixed rate or (b) a floating rate determined by reference to a Base
Rate (as defined below) which may be adjusted by a Spread or Spread
Multiplier (each as defined below).
The Pricing Supplement relating to the Notes will describe the
following terms (a) the purchase price of such Notes (Issue Price) which may
be expressed as a percentage of the principal amount at which such Notes will
be issued; (b) the date on which such Notes will be issued (Original Issue
Date); (c) the date on which the principal of such Notes will become due and
payable (Maturity Date); (d) whether such Notes are Fixed Rate Notes or
Floating Rate Notes; (e) if such Notes are Fixed Rate Notes, the rate per
annum at which such Notes will bear interest; (f) if such Notes are Floating
Rate Notes, the terms relating to the particular method of calculating the
interest rate for such Notes; (g) the date or dates from which any such
interest shall accrue and the date or dates on which any such interest shall
be payable (Interest Payment Dates); (h) the terms for redemption, if any;
(i) whether the Notes will be issued as a Book-Entry or Certificated Notes;
and (j) any other terms of such Notes (Note Indenture Section 2.05).
The Notes will not have any conversion rights.
The Note Indenture does not provide any protection for holders of Notes
in the event of a highly leveraged transaction.
The Notes may be presented for registration of transfer or exchange at
the office of the NoteProperty Trustee, in The City of New York, and the Note Trustee
will perform certain other duties with respect to the Notes.
Payment of Principal and Interest
Principal of and interest on Book-Entry Notes will be paid in
immediately available funds in the manner described below under "Book-Entry
Notes." Interest on Certificated Notes will be paid at the Company's optioneach case until
removed or replaced by check mailed or by wire transfer to the registered holder thereof on the
Record Date for such interest. The principal of and interest at maturity on
all Notes will be paid in immediately available funds at the office of the
Note Trustee, in The City of New York, to the holder of recordthe Common Securities. The First National
Bank of such Notes
onChicago will also act as indenture trustee under the datePreferred
Securities Guarantee (the "Guarantee Trustee"). See "Description of such payment, provided that the
Notes are presentedPreferred Securities Guarantee."
The Property Trustee will hold title to the Note Trustee in time for the Note Trustee to make such payments in such funds
in accordance with its normal procedures (Note Indenture Section 2.04).
Interest payments will be made onSubordinated Debentures
held by each Interest Payment Date commencing
with the first Interest Payment Date following the Original Issue Date;
provided, however, that the first payment of interest on any Note originally
issued between a Record Date and an Interest Payment Date will occur on the
second Interest Payment Date following the Original Issue Date.
Redemption
The Notes may be redeemable, in whole or in part, at the general
redemption prices set forth in the Pricing Supplement for all redemptions.
If at the time notice of redemption is given the redemption moneys are not on
deposit with the Note Trustee, the redemption may be subject to their deposit
with the Note Trustee on or before the date fixed for redemption and such
notice shall be of no effect unless such moneys are so received.
Record Date
Unless otherwise indicated in the Pricing Supplement, the Record Date
for Fixed Rate Notes and Floating Rate Notes will be the fifteenth day
preceding each Interest Payment Date (Note Indenture Section 1.02).
Fixed Rate Notes
The Fixed Rate Notes will bear interest from the later of the Original
Issue Date or the most recent date to which any interest has been paid or
duly provided for at the fixed rate per annum specified therein and in the
applicable Pricing Supplement, until the principal of such Notes is paid or
made available for payment. Interest on Fixed Rate Notes will be payable
semi-annually each May 1 and November 1 (unless otherwise indicated in the
applicable Pricing Supplement) and at maturity or redemption, if applicable.
Each payment of interest will include interest accrued to but excluding the
Interest Payment Date. Interest on Fixed Rate Notes will be computed on the
basis of a 360-day year of twelve 30-day months (Note Indenture Section
2.04).
Floating Rate Notes
Interest on Floating Rate Notes will be determined by reference to a
"Base Rate", which shall be the "Commercial Paper Rate" (Commercial Paper
Rate Notes), "LIBOR" (LIBOR Notes), or the "Treasury Rate" (Treasury Rate
Notes), each as defined below, based upon the Index Maturity and adjusted by
a Spread or Spread Multiplier, if any, as specified in the applicable Pricing
Supplement. The "Index Maturity" is the period to maturity of the instrument
or obligation from which the Base Rate is calculated. The "Spread" is the
number of basis points above or below the Base Rate applicable to such
Floating Rate Note, and the "Spread Multiplier" is the percentage of the Base
Rate applicable to the interest rate for such Floating Rate Notes. The
Spread, Spread Multiplier, Index Maturity and other variable terms of the
Floating Rate Notes are subject to change by the Company from time to time,
but no such change will affect any Floating Rate Notes theretofore issued or
as to which an offer has been accepted by the Company.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semiannually or annually, as specified in the
applicable Pricing Supplement. The "Interest Reset Date" will be, in the case
of Floating Rate Notes which reset (a) daily, each Business Day; (b) weekly,
the Wednesday of each week (with the exception of weekly reset Treasury Rate
Notes which reset the Tuesday of each week, except as specified below); (c)
monthly, the third Wednesday of each month; (d) quarterly, the third
Wednesday of March, June, September and December; (e) semiannually, the third
Wednesday of the two months specified in the applicable Pricing Supplement;
and (f) annually, the third Wednesday of the month specified in the
applicable Pricing Supplement. If any Interest Reset Date for any Floating
Rate Note would otherwise be a day that is not a Business Day, such Interest
Reset Date shall be postponed to the next succeeding day that is a Business
Day, except that in the case of a LIBOR Note, if such Business Day is in the
next succeeding calendar month, such Interest Reset Date shall be the next
preceding Business Day and provided, that if in the case of a Treasury Rate
Note, an Interest Reset Date shall fall on a day on which the Treasury
auctions Treasury bills, then such Interest Reset Date shall instead be the
first Business Day following such auction.
The interest rate applicable to each Interest Accrual Period commencing
on an Interest Reset Date will be the rate determined as of the "Interest
Determination Date" and will be calculated either on such Interest
Determination Date or on or prior to the applicable Calculation Date (as
hereinafter defined). The Interest Determination Date with respect to
Commercial Paper Rate Notes will be the second Business Day preceding the
Interest Reset Date. The Interest Determination Date with respect to LIBOR
Notes will be the second London Banking Day preceding the Interest Reset
Date. The Interest Determination Date with respect to Treasury Rate Notes
will be the day of the week in which the Interest Reset Date falls on which
Treasury bills normally would be auctioned; provided, however, that if as a
result of a legal holiday an auction is held on the Friday of the week
preceding the Interest Reset Date, the related Interest Determination Date
shall be such preceding Friday.
A Floating Rate Note may also have either or both of the following: (a)
a maximum limit (Maximum Interest Rate), or ceiling, on the rate of interest
which may accrue during any Interest Accrual Period; and (b) a minimum limit
(Minimum Interest Rate), or floor, on the rate of interest which may accrue
during any Interest Accrual Period. In addition to any Maximum Interest Rate
which may be applicable to any Floating Rate Notes pursuant to the above
provisions, the interest rate on the Floating Rate Notes will in no event be
higher than the maximum rate permitted by applicable state law, as the same
may be modified by United States law of general application.
The applicable Pricing Supplement will specify each variable term with
respect to the Floating Rate Notes, including the following: Initial Interest
Rate, Interest Reset Dates, Interest Payment Dates, Index Maturity, Maturity,
Maximum Interest Rate and Minimum Interest Rate, if any, the Spread or Spread
Multiplier, if any, and terms of redemption, if any.
The Floating Rate Notes will bear interest from the date of issue at
the rates determined as described below until the principal thereof is paid
or otherwise made available for payment. Except as provided below, interest
will be payable on their Interest Payment Date, which shall be, in the case
of Floating Rate Notes which reset (a) daily, weekly or monthly: the third
Wednesday of each month or the third Wednesday of March, June, September and
December of each year as specified in the applicable Pricing Supplement; (b)
quarterly: the third Wednesday of March, June, September and December of
each year; (c) semiannually: the third Wednesday of the two months of each
year specified in the applicable Pricing Supplement; (d) annually: the third
Wednesday of the month specified in the applicable Pricing Supplement; and,
in each case, at maturity or earlier redemption.
If any Interest Payment Date (other than at maturity or earlier
redemption) for any Floating Rate Note would fall on a day that is not a
Business Day with respect to such Note, such Interest Payment Date will be
the following day that is a Business Day with respect to such Note, except
that, in the case of a LIBOR Note, if such Business Day is in the next
succeeding calendar month, such Interest Payment Date shall be the
immediately preceding day that is a Business Day with respect to such LIBOR
Note. If the maturity date or date of redemption of any Floating Rate Note
would fall on a day that is not a Business Day, the payment of interest and
principal (and premium, if any) shall be made on the next succeeding Business
Day, and no interest on such payment shall accrue for the period from and
after the maturity date or date of redemption.
Unless otherwise specified in the Pricing Supplement, interest payments
shall be the amount of interest accrued from the Original Issue Date or from
the last date to which interest has been paid to, but excluding, the Interest
Payment Date. In the case of a Floating Rate Note on which interest is reset
daily or weekly, interest payments shall be the amount of interest accrued
from the Original Issue Date or from the last date to which interest has been
paid, as the case may be, to, and including, the Record Date immediately
preceding such Interest Payment Date, except that at maturity, the interest
payable will include interest accrued to, but excluding, the Maturity Date.
With respect to a Floating Rate Note, accrued interest is calculated by
multiplying the face amount of such Floating Rate Notes by an Accrued
Interest Factor. Such Accrued Interest Factor is computed by adding the
Interest Factor calculated for each day from the date of issue, or from the
last date to which interest has been paid, to the date for which Accrued
Interest is being calculated. The Interest Factor for each such day is
computed by dividing the interest rate applicable to such day by 360 in the
case of Commercial Paper Rate Notes and LIBOR Notes or by the actual number
of days in the year in the case of Treasury Rate Notes.
All percentages resulting from any calculation on Floating Rate Notes
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or
.0987655)), and all dollar amounts used in or resulting from such calculation
on Floating Rate Notes will be rounded to the nearest cent (with one-half
cent being rounded upward).
Unless otherwise provided for in the applicable Pricing Supplement, The
Bank of New York will be the "Calculation Agent." Upon the request of the
registered holder of any Floating Rate Note, the Calculation Agent will
provide the interest rate then in effect and, if determined, the interest
rate that will become effective as a result of a determination made for the
next Interest Reset Date with respect to such Floating Rate Note. The
Company, or the Calculation Agent, will notify the Trustee of each
determination of the interest rate applicable to any such Floating Rate Note
promptly after such determination is made. The "Calculation Date", where
applicable, pertaining to any Interest Determination Date will be the tenth
calendar day after such Interest Determination Date, or, if any such day is
not a Business Day, the next succeeding Business Day.
The interest rate in effect with respect to a Floating Rate Note from
the date of issue to the first Interest Reset Date (the "Initial Interest
Rate") will be specified in the applicable Pricing Supplement. The interest
rate for each subsequent Interest Reset Date will be determined by the
Calculation Agent as follows:
Commercial Paper Rate Notes
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread or
Spread Multiplier, if any) specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Interest Determination
Date relating to a Commercial Paper Rate Note (a Commercial Paper Rate
Interest Determination Date), the Money Market Yield (as defined below) on
such date of the rate for commercial paper having the Index Maturity
specified in the applicable Pricing Supplement, as such rate shall be
published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication (H.15(519)), under the heading "Commercial Paper." In the event
that such rate is not published prior to 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Commercial Paper Rate Interest
Determination Date, then the Commercial Paper Rate shall be the Money Market
Yield on such Commercial Paper Rate Interest Determination Date of the rate
for commercial paper of the specified Index Maturity as published by the
Federal Reserve Bank of New York in its daily statistical release "Composite
3:30 P.M. Quotations for U.S. Government Securities", or any successor
publication (Composite Quotations) under the heading "Commercial Paper." If
by 3:00 P.M., New York City time, on such Calculation Date such rate is not
published in either H.15(519) or Composite Quotations, then the Commercial
Paper Rate for such Commercial Paper Rate Interest Determination Date shall
be calculated by the Calculation Agent and shall be the Money Market Yield of
the arithmetic mean of the offered rates as of 11:00 A.M., New York City
time, on such Commercial Paper Rate Interest Determination Date of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper of the specified Index Maturity placed
for an industrial issuer whose bond rating is "AA", or the equivalent, from
a nationally recognized rating agency; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as set forth
above, the Commercial Paper Rate will be the Commercial Paper Rate in effect
on such Commercial Paper Rate Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360
Money Market Yield = ------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the Interest Accrual Period for which interest is
being calculated.
Unless otherwise indicated in the applicable Pricing Supplement, the
interest rate determined with respect to a Commercial Paper Rate Interest
Determination Date will become effective on and as of the next succeeding
Interest Reset Date; provided, however, that the interest rate in effect for
the period from the date of issue to the first Interest Reset Date will be
the Initial Interest Rate and the interest rate in effect for the ten days
immediately prior to the maturity date (or any date of redemption) will be
that in effect on the tenth day preceding such maturity date (or any date of
redemption).
LIBOR Notes
LIBOR Notes will bear interest at the interest rates (calculated with
reference to LIBOR and the Spread or Spread Multiplier, if any) specified in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR
with respect to any Interest Determination Date relating to a LIBOR Note (a
LIBOR Interest Determination Date) will be the rate determined on the basis
of the offered rates for deposits (in United States dollars and in a
principal amount equal to an amount of not less than $1,000,000 that is
representative for a single transaction in such market at such time for the
period of the Index Maturity specified in the applicable Pricing Supplement),
commencing on the second London Banking Day immediately following such LIBOR
Interest Determination Date, which appears as of 11:00 A.M., London time, on
the Reuters Screen LIBO Page on the Reuters Monitor Rates Service on the
LIBOR Interest Determination Date. If at least two such offered rates appear
on the Reuters Screen LIBO Page, LIBOR for such LIBOR Interest Determination
Date will be the arithmetic mean (rounded, if necessary, to the nearest one
hundred-thousandth of a percent) of such offered rates as determined by the
Calculation Agent. If fewer than two such offered rates appear, the
Calculation Agent shall request the principal London office of four major
banks in the London interbank market selected by the Calculation Agent to
provide the Calculation Agent with a quotation of their offered rates for
deposits (in United States dollars for the period of the applicable Index
Maturity and in a principal amount equal to an amount of not less than
$1,000,000 that is representative for a single transaction in such market at
such time) at approximately 11:00 A.M., London time, on such LIBOR Interest
Determination Date commencing on the second London Banking Day immediately
following such LIBOR Interest Determination Date. If at least two such
quotations are provided, LIBOR for such LIBOR Interest Determination Date
will equal the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR for such LIBOR Interest Determination Date
will equal the arithmetic mean of the rates quoted by three major banks in
The City of New York, as selected by the Calculation Agent, at approximately
11:00 A.M., New York City time, on such LIBOR Interest Determination Date for
loans to leading European banks (in United States dollars for the period of
the applicable Index Maturity and in a principal amount equal to an amount of
not less than $1,000,000 that is representative for a single transaction in
such market at such time) commencing on the second London Banking Day
following such LIBOR Interest Determination Date; provided, however, that if
the banks selected as aforesaid by the Calculation Agent are not quoting as
set forth above, LIBOR will be LIBOR in effect on such LIBOR Interest
Determination Date.
Unless otherwise indicated in the applicable Pricing Supplement, the
interest rate determined with respect to a LIBOR Interest Determination Date
will become effective on and as of the next succeeding Interest Reset Date;
provided, however, that the interest rate in effect for the period from the
date of issue to the first Interest Reset Date will be the Initial Interest
Rate and the interest rate in effect for the ten days immediately prior to
the maturity date (or any date of redemption) will be that in effect on the
tenth day preceding such maturity date (or any date of redemption).
Treasury Rate Notes
Treasury Rate Notes will bear interest at the interest rates
(calculated with reference to the Treasury Rate and the Spread or Spread
Multiplier, if any) specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Treasury Rate" means, with respect to any Interest Determination Date
relating to a Treasury Rate Note (a Treasury Rate Interest Determination
Date), the rate applicable to the most recent auction of direct obligations
of the United States (Treasury bills) having the Index Maturity specified in
the applicable Pricing Supplement, as such rate is published in H.15(519)
under the heading "Treasury bills-auction average (investment)" or, if not so
published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Treasury Rate Interest Determination Date, the auction
average rate (expressed as a bond equivalent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) as otherwise announced
by the United States Department of the Treasury. Treasury bills are usually
sold at auction on Monday of each week unless that day is a legal holiday, in
which case the auction is usually held on the following Tuesday, except that
such auction may be held on the preceding Friday. In the event that the
results of the auction of Treasury bills having the specified Index Maturity
are not reported as provided by 3:00 P.M., New York City time, on such
Calculation Date, or if no such auction is held in a particular week, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be
a yield to maturity (expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on such Treasury Rate Interest Determination Date,
of three leading primary United States government securities dealers selected
by the Calculation Agent, for the issue of Treasury bills with a remaining
maturity closest to the applicable Index Maturity; provided, however, that if
the dealers selected as aforesaid by the Calculation Agent are not quoting as
set forth above, the Treasury Rate will be the Treasury Rate in effect on
such Treasury Rate Interest Determination Date.
Unless otherwise indicated in the applicable Pricing Supplement, the
interest rate determined with respect to a Treasury Rate Interest
Determination Date will become effective on and as of the next succeeding
Interest Reset Date; provided, however, that the interest rate in effect for
the period from the date of issue to the first Interest Reset Date will be
the Initial Interest Rate and for the ten days immediately prior to the
maturity date (or any date of redemption) will be that in effect on the tenth
day preceding such maturity date (or any date of redemption).
Security
The payment of the principal of and any premium and interest on the
Notes will be secured by the Pledged Bond issued, pledged and delivered by
the Company to the Note TrusteeTrust for the benefit of the holders of the Notes
(NoteTrust Securities issued
by such Trust and will have the power to exercise all rights, powers and
privileges under the Indenture Article Four). The outstanding principal amount(as defined herein) as the holder of such
Subordinated Debentures. In addition, the Property Trustee will maintain
exclusive control of a segregated non-interest bearing bank account for each
Trust (the "Property Account") to hold all payments made in respect of the
Pledged BondSubordinated Debentures held by such Trust for the benefit of the holders of the
Trust Securities issued by such Trust. The Property Trustee will at all times be equalmake payments
of distributions and payments on liquidation, redemption and otherwise to the
outstanding principal amountholders of the Notes.Trust Securities issued by each Trust out of funds from the
Property Account of such Trust. The Pledged Bond is payable in installments,Guarantee Trustee will hold each Preferred
Securities Guarantee for the benefit of the holders of the Preferred Securities.
KCPL, as the holder of all the Common Securities, will have the right to
appoint, remove or replace any Trustee and bears
interest, correspondingto increase the number of Trustees,
provided that the number of Trustees will be at least four, two of which will be
Regular Trustees. KCPL will pay all fees and expenses related to the required paymentsTrust, the
offering of principalthe Preferred Securities and the issuance of and any
premium and interest on the Notes. Payments on the Notes will constitute
payments on the Pledged Bond. The Pledged Bond is secured by a lien on
certain property owned by the Company.Subordinated
Debentures. See "Description of Bonds -the Subordinated Debentures -- Miscellaneous."
The rights of the holders of the Preferred Securities of each Trust,
including economic rights, rights to information and voting rights, are as set
forth in the Declaration for such Trust, the Delaware Business Trust Act, as
amended (the "Trust Act"), and the Trust Indenture Act. See "Description of the
Preferred Securities."
The Property Trustee for each Trust is The First National Bank of
Chicago, One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126.
The principal place of business of each Trust shall be c/o Kansas City Power &
Light Company, 1201 Walnut, Kansas City, Missouri 64106-2124 (telephone number
816/556-2200).
Copies of the above documents (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference into such
documents) may be obtained upon written or oral request without charge from
KCPL, 1201 Walnut, Kansas City, Missouri 64106-2124 (telephone number 816/556-
2200).
4
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
FIXED CHARGES AND PREFERRED DIVIDEND REQUIREMENTS
Year Ended December 31,
Twleve Months Ended ----------------------------------------------
September 30, 1996 1995 1994 1993 1992 1991
------------------- ----------------------------------------------
(Thousands)
Ratio of earnings to fixed charges 3.37 3.94 4.07 3.80 3.12 3.22
------------------- ---------------------------------------------
Ratio of earnings to combined fixed
charges and preferred dividend
requirements 3.12 3.59 3.69 3.51 2.90 2.85
------------------- ---------------------------------------------
(1) For the purpose of computing the ratio of earnings to fixed charges,
"earnings" consist of net income plus interest charges, income taxes and
the estimated interest component of rents. "Fixed charges" consists of
interest charges and the estimated interest component of rents.
(2) For the purpose of computing the ratio of earnings to fixed charges plus
preferred dividend requirements, "earnings" consist of net income plus
interest charges, income taxes and the estimated interest component of
leased property. "Fixed charges" consists of interest charges and the
estimated interest component of leased property. "Preferred dividend
requirements" consists of the calculated pre-tax preferred dividend
requirement.
USE OF PROCEEDS
Each Trust will use the proceeds of the sale of the Trust Securities
to acquire Subordinated Debentures from KCPL. Unless otherwise indicated in the
applicable Prospectus Supplement, KCPL intends to add the net proceeds from the
sale of the Subordinated Debentures to the general funds of KCPL for use for
corporate purposes, which may include capital expenditures, acquisitions,
refinancing or repurchase of outstanding long-term debt, preferred and common
securities, investments in subsidiaries, and repayment of short-term debt and
other business opportunities.
DESCRIPTION OF THE PREFERRED SECURITIES
The Declaration of each Trust authorizes the Regular Trustees of such
Trust to issue on behalf of such Trust only one series of Preferred Securities
having terms described in the Prospectus Supplement relating thereto. The
Declaration will be qualified as an indenture under the Trust Indenture Act.
The Property Trustee will act as Indenture Trustee for purposes of the Trust
Indenture Act. The Preferred Securities will have such terms, including
distributions, redemption, voting, liquidation rights and such other preferred,
deferred or other special rights or such restrictions as will be set forth in
the Declaration or made part of the Declaration by the Trust Indenture Act and
which will mirror the terms of the Subordinated Debentures held by the Trust and
described in the Prospectus Supplement relating thereto. Reference is made to
the Prospectus Supplement relating to the Preferred Securities of each Trust for
specific terms, including (i) the distinctive designation of such Preferred
Securities; (ii) the number of Preferred Securities issuable by such Trust;
(iii) the annual distribution rate (or method of determining such rate) for
Preferred Securities issued by such Trust and the date or dates upon which such
distributions will
5
be payable; (iv) whether distributions on Preferred Securities issued by such
Trust will be cumulative, and, in the case of Preferred Securities having such
cumulative distribution rights, the date or dates or method of determining the
date or dates from which distributions on Preferred Securities issued by such
Trust will be cumulative; (v) the amount or amounts which will be paid out of
the assets of such Trust to the holders of Preferred Securities of such Trust
upon voluntary or involuntary dissolution, winding-up or termination of such
Trust; (vi) the obligation, if any, of such Trust to purchase or redeem
Preferred Securities issued by such Trust and the price or prices at which, the
period or periods within which, and the terms and conditions upon which
Preferred Securities issued by such Trust will be purchased or redeemed, in
whole or in part, pursuant to such obligation; (vii) the voting rights, if any,
of holders of Preferred Securities issued by such Trust in addition to those
required by law, including the number of votes per Preferred Security and Priority."
Events Of Default
Events of Default with respect toany
requirement for the Notes are defined in the Note
Indenture as including: (a) default for 30 days in the payment of any
interest installment due on the Notes; (b) default for one day in the payment
of principal of or any premium on the Notes; (c) default in performance of
any other covenant in the Note Indenture for 60 days after notice to the
Company by the Note Trustee or to the Company and the Note Trusteeapproval by the holders of at least 25%such Preferred Securities, or of
Preferred Securities issued by one or more Trusts, or of both, as a condition to
specified action or amendments to the Declaration of such Trust; (viii) the
terms and conditions, if any, upon which the Subordinated Debentures owned by
such Trust may be distributed to holders of Preferred Securities of such Trust;
(ix) if applicable, any securities exchange upon which the Preferred Securities
of such Trust will be listed; and (x) any other relevant rights, preferences,
privileges, limitations or restrictions of Preferred Securities issued by such
Trust not inconsistent with the Declaration of such Trust or with applicable
law. All Preferred Securities offered hereby will be guaranteed by KCPL to the
extent set forth below under "Description of the principal amountPreferred Securities
Guarantees." Certain United Stated federal income tax considerations applicable
to any offering of Preferred Securities will be described in the Prospectus
Supplement relating thereto.
Each Trust will issue one series of Common Securities in connection
with the issuance of Preferred Securities. The Declaration of each Trust
authorizes the Regular Trustees of such Trust to issue on behalf of such Trust
one series of Common Securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as will be set forth
therein. Except for voting rights, the terms of the outstanding Notes; (d)
certain events of bankruptcy, insolvency and reorganizationCommon Securities issued by
a Trust will be substantially identical to the terms of the Company;Preferred Securities
issued by such Trust and (e)such Common Securities will rank PARI PASSU, and
payments will be made thereon pro rata, with such Preferred Securities except
that, upon an event of Default (as defineddefault under the Declaration, the rights of the holders
of such Common Securities to payment in respect of distributions and payments
upon liquidation, redemption and otherwise will be subordinated to the Mortgage Indenture pursuantrights of
the holders of the Preferred Securities. Except in certain limited
circumstances, the Common Securities of a Trust will also carry the right to
whichvote to appoint, remove or replace any of the Pledged Bond has been issued) occurs andTrustees of such Trust. All of
the principalCommon Securities of all
Mortgage Bonds (including the Pledged Bond) has been declared and become due
and payable in the manner and with the effect provided in the Mortgage
Indenture.each Trust will be directly or indirectly owned by
KCPL.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
If an Event of Default under a Declaration of a Trust occurs and is
continuing, the Note Trustee
orthen the holders of at leastPreferred Securities of such Trust would rely on
the enforcement by the Property Trustee of its rights as a majorityholder of the
principal amountapplicable series of the
outstanding Notes may declare all of the Notes to be due and payable
immediately, subject to the right ofSubordinated Debentures against KCPL. In addition, the
holders of a majority of the
principalin liquidation amount of the outstanding Notes (i) to waive certain defaults prior
to such declaration, and (ii) to waive such default and rescind such
declaration in certain circumstances (Note Indenture Sections 8.01 and 8.08).
The Note Indenture entitles the Note Trustee, subject to the duty of
the Note Trustee during default to act with the required standard of care, to
be indemnified by the holders of the Notes before proceeding to exercise at
the requestPreferred Securities of such
holders anyTrust will have the right or power under the Note Indenture (Note
Indenture Section 8.04). The Note Indenture also provides that the holders
of a majority of the principal amount of the outstanding Notes mayto direct the time, method and place of conducting any
proceeding for any remedy available to the NoteProperty Trustee or exercisingto direct the
exercise of any trust or power conferred upon the Property Trustee under the
applicable Declaration, including the right to direct such Property Trustee to
exercise the remedies available to it as a holder of Subordinated Debentures.
If the Property Trustee fails to enforce its right under the Subordinated
Debentures held by a Trust, a holder of Preferred Securities of such Trust may
institute a legal proceeding directly
6
against KCPL to enforce the Property Trustee's rights under the Subordinated
Debentures without first instituting any legal proceeding against the Property
Trustee or any other person or entity. Notwithstanding the foregoing, if an
Event of Default under the Declaration of a Trust has occurred and is continuing
and such event is attributable to the failure of KCPL to pay interest or
principal on the Noteapplicable series of Subordinated Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a holder of Preferred Securities of such Trust may
directly institute a proceeding for enforcement of payment to such holder of the
principal of or interest on such Subordinated Debentures having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such holder (a "Direct Action") on or after the respective due date specified in
such Subordinated Debentures. In connection with such Direct Action, KCPL will
be subrogated to the rights of such holder of Preferred Securities under the
applicable Declaration to the extent of any payment made by KCPL to such holder
of Preferred Securities in such Direct Action.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantees which will be executed and delivered by KCPL for the
benefit of the holders from time to time of the Preferred Securities under each
Trust. Each Preferred Securities Guarantee will be qualified as an indenture
under the Trust Indenture Act. The Guarantee Trustee will act as the Guarantee
Trustee. The terms of each Preferred Securities Guarantee will be those set
forth therein and those made a part thereof by the Trust Indenture Act. The
following summary of the material terms of the Preferred Securities Guarantee
does not purport to be complete and is subject in all respects to the provisions
of, and is qualified in its entirety by reference to, the form of the Preferred
Securities Guarantee, which is filed as an exhibit to the Registration Statement
of which this Prospectus forms a part, and the Trust Indenture Act. Each
Preferred Securities Guarantee will be held by the Guarantee Trustee for the
benefit of the holders of the Preferred Securities of the applicable Trust.
GENERAL
Pursuant to each Preferred Securities Guarantee with respect to a
Trust, KCPL will irrevocably and unconditionally agree, to the extent set forth
therein, to pay in full, to the holders of the Preferred Securities issued by
such Trust, the Guarantee Payments (as defined herein) (without duplication of
amounts theretofore paid by such Trust), as and when due regardless of any
defense, right of set-off or counterclaim which such Trust may have or assert.
The following payments or distributions with respect to the Notes (NotePreferred Securities
of a Trust, to the extent not paid or made by such Trust, (the "Guarantee
Payments") will be subject to the Preferred Securities Guarantee with respect to
such Trust (without duplication):(i) any accrued and unpaid distributions which
are required to be paid on the Preferred Securities, to the extent such Trust
has funds available therefor, (ii) the redemption price, including all accrued
and unpaid distributions to the date of the redemption (the "Redemption Price"),
to the extent such Trust has funds available therefor, with respect to any
Preferred Securities called for redemption by such Trust and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of such Trust
(other than in connection with the distribution of Subordinated Debentures held
by such Trust to the holders of Preferred Securities issued by such Trust in
exchange for such Preferred Securities or redemption of all such Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on such Preferred Securities to the date of
7
payment to the extent such Trust has funds available therefor and (b) the amount
of assets of such Trust remaining available for distribution to holders of such
Preferred Securities in liquidation of such Trust. The redemption price and
liquidation amount will be fixed at the time the Preferred Securities are
issued. KCPL's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by KCPL to the holders of Preferred
Securities issued by a Trust or by causing such Trust to pay such amounts to
such holders.
The Preferred Securities Guarantee for a Trust will not apply to any
payment of distributions except to the extent such Trust has funds available
therefor. If KCPL does not make interest payments on the Subordinated
Debentures purchased by a Trust, such Trust will not pay distributions on the
Preferred Securities issued by such Trust and will not have funds available
therefor.
The Preferred Securities Guarantee for a Trust, when taken together
with KCPL's obligations under the applicable Subordinated Debentures, the
Indenture Section 8.08).
The Note Indenture containsand the applicable Declaration, including its obligation to pay costs,
expenses, debt, and liabilities of such Trust (other than with respect to its
Trust Securities), will be a full and unconditional guarantee, on a subordinated
basis, by KCPL of payments due on the Preferred Securities issued by such Trust
from the time of issuance of such Preferred Securities, but will not apply to
the payment of distributions and other payments on such Preferred Securities
when the Property Trustee does not have sufficient funds in the Property Account
of such Trust to make such distributions or other payments. If KCPL does not
make interest payments on the Subordinated Debentures held by the Property
Trustee for a Trust, such Trust will not make distributions on the Preferred
Securities issued by such Trust and will not have funds available therefor. See
"Description of the Subordinated Debentures -- Certain Covenants."
CERTAIN COVENANTS OF KCPL
In the Preferred Securities Guarantee for a Trust, KCPL will covenant
that, so long as any Preferred Securities issued by such Trust remain
outstanding, if there shall have occurred and be continuing any event that would
constitute an event of default under such Preferred Securities Guarantee or the
Company will file
annuallyDeclaration of such Trust, then (a) KCPL may not declare or pay any dividend on,
or make any distribution of such Trust with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of shares of KCPL common stock in
connection with the Notesatisfaction by KCPL of its obligations under any employee
benefit plans or any other contractual obligation of KCPL (other than a
contractual obligation ranking PARI PASSU with or junior to the Subordinated
Debentures), (ii) as a result of a reclassification of KCPL capital stock or the
exchange or conversion of one class or series of KCPL capital stock for another
class or series of KCPL capital stock or (iii) the purchase of fractional
interests in shares of KCPL capital stock pursuant to the conversion or exchange
provisions of such KCPL capital stock or the security being converted or
exchanged), (b) KCPL may not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities (including
guarantees) issued by KCPL which rank PARI PASSU with or junior to the
Subordinated Debentures and (c) KCPL may not make any guarantee payments with
respect to the foregoing (other than pursuant to the Preferred Stock
Guarantees).
AMENDMENTS AND ASSIGNMENT
8
Except with respect to any changes which do not materially adversely
affect the rights of holders of Preferred Securities issued by a Trust (in which
case no vote will be required), the Preferred Securities Guarantee for such
Trust may be amended only with the prior approval of the holders of not less
than 66-2/3% in liquidation amount of the outstanding Preferred Securities
issued by such Trust. The manner of obtaining any such approval of holders of
Preferred Securities will be set forth in the applicable Prospectus Supplement.
All guarantees and agreements contained in each Preferred Securities Guarantee
will bind the successors, assigns, receivers, trustees and representatives of
KCPL and will inure to the benefit of the Preferred Guarantee Trustee and the
holders of the Preferred Securities of the applicable Trust then outstanding.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEE
Each Preferred Securities Guarantee for a certificate stating thatTrust will terminate and be
of no further force and effect as to the Preferred Securities issued by such
Trust upon full payment of the Redemption Price of all such Preferred
Securities, or upon distribution of the Subordinated Debentures held by such
Trust to the holders of the Trust Securities of such Trust, and will terminate
completely upon full payment of the amounts payable upon liquidation of such
Trust. See "Description of the Subordinated Debentures -- Indenture Events of
Default" for a description of the events of default has
occurredand enforcement rights of
the holders of Subordinated Debentures. Each Preferred Securities Guarantee for
a Trust will continue to be effective or will be reinstated, as the case may be,
if at any time any holder of Preferred Securities issued by such Trust must
repay to such Trust or KCPL, or their successors, any sums paid to them under
such Preferred Securities or Preferred Securities Guarantee.
EVENTS OF DEFAULT
An event of default under each Preferred Securities Guarantee will
occur upon the failure of KCPL to perform any of its payment or other
obligations thereunder.
The holders of a majority in liquidation amount of the Preferred
Securities issued by a Trust will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of the Preferred Securities Guarantee for such
Trust or to direct the exercise of any trust or power conferred upon the
Preferred Guarantee Trustee under such Preferred Securities Guarantee. If the
Preferred Guarantee Trustee fails to enforce the Preferred Securities Guarantee
for a Trust, any holder of related Preferred Securities may institute a legal
proceeding directly against KCPL to enforce the Preferred Guarantee Trustee's
rights under such Preferred Securities Guarantee, without first instituting a
legal proceeding against such Trust, the Preferred Guarantee Trustee or any
other person or entity.
STATUS OF THE PREFERRED SECURITIES GUARANTEE
KCPL's obligations under the Note Indenture,Preferred Securities Guarantee to make
the Guarantee Payments will constitute unsecured obligations of KCPL and will
rank (i) subordinate and junior in right of payment to all other liabilities of
KCPL, including the Subordinated Debentures, except those liabilities of KCPL
made PARI PASSU or ifsubordinate by their terms, (ii) PARI PASSU with the most
senior preferred stock now or hereafter issued by KCPL and with any
such default has occurred,9
guarantee now or hereafter entered into by KCPL in respect of any preferred or
preference stock of any affiliate of KCPL, and (iii) senior to KCPL common
stock. The terms of the Preferred Securities provide that each holder of
Preferred Securities issued by the a certificate specifying such default and its nature and status. The Company
is obligated to giveTrust, by acceptance thereof, agrees to
the Notesubordination provisions and other terms of the Preferred Securities
Guarantee relating thereto.
Each Preferred Securities Guarantees will constitute guarantee of
payment and not of collection (that is, the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under such
Preferred Securities Guarantee without instituting a legal proceeding against
any other person or entity). Each Preferred Securities Guarantee will be
deposited with the Guarantee Trustee written noticeto be held for the benefit of the holders
of the related Preferred Securities. Except as otherwise noted herein, the
Guarantee Trustee has the right to enforce each Preferred Securities Guarantee
on behalf of the holders of the related Preferred Securities. The Preferred
Securities Guarantee for a Trust will not be discharged except by payment of the
Guarantee Payments in full (without duplication of amounts theretofore paid by
such Trust).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with
respect to a Preferred Securities Guarantee and after the curing of all such
defaults that may have occurred, undertakes to perform only such duties as are
specifically set forth in each Preferred Securities Guarantee and, after
default, will exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to such provisions,
the Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Preferred Securities Guarantee for a Trust at the request of
any holder of Preferred Securities issued by such Trust, unless offered
reasonable indemnity against the costs, expenses and liabilities which might be
incurred thereby; but the foregoing shall not relieve the Guarantee Trustee,
upon the occurrence of an event of default under such Preferred Securities
Guarantee, from exercising the rights and powers vested in it by such Preferred
Securities Guarantee. The Guarantee Trustee also serves as Property Trustee.
KCPL and its officers and directors have no material relationship with
the Guarantee Trustee except that (a) the Guarantee Trustee is a dealer in
commercial paper issued by KCPL, (b) the Guarantee Trustee is trustee and
remarketing agent for certain governmental revenue bonds which are payable with
amounts paid by KCPL to the issuer of such bonds, and (c) KCPL and its principal
subsidiary maintain lines of credit with the Guarantee Trustee.
GOVERNING LAW
The Preferred Securities Guarantee will be governed by, and construed
in accordance with, the internal laws of the State of New York.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
Set forth below is a description of the terms of the Subordinated
Debentures which each of the Trusts will hold as trust assets. The following
description does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, the indenture
10
("Indenture"), dated as of _________________, between KCPL and The First
National Bank of Chicago, as Trustee (the "Debt Trustee"), as supplemented by
the Supplemental Indenture creating each series of Subordinated Debentures. The
Indenture and the form of Supplemental Indenture are filed as exhibits to the
Registration Statement of which this Prospectus forms a part. The terms each
series of Subordinated Debentures will include those stated in the Indenture and
the related Supplemental Indenture and those made a part of the Indenture by
reference to the Trust Indenture Act. Certain capitalized terms used herein are
defined in the Indenture and the related Supplemental Indenture.
Under certain circumstances involving the dissolution of a Trust
following the occurrence of a Special Event as defined in the applicable
Prospectus Supplement, Subordinated Debentures held by a Trust may be
distributed to the holders of Trust Securities issued by such Trust in
liquidation of such Trust. See "Description of the Preferred Securities --
Dissolution; Distribution of Subordinated Debentures" in the applicable
Prospectus Supplement.
If any Subordinated Debentures are distributed to the holders of Trust
Securities, KCPL will use its best efforts to have such Subordinated Debentures
listed on the New York Stock Exchange or on such other exchange as the related
Preferred Securities are then listed.
GENERAL
The Indenture provides for the issuance of Subordinated Debentures in
an unlimited amount from time to time. Each series of Subordinated Debentures
will constitute a separate series under the Indenture, will be in a principal
amount equal to the aggregate stated Liquidation Amount of the Preferred
Securities issued by the Trust which will hold such Subordinated Debentures plus
KCPL's concurrent investment in the Common Securities of such Trust and will
rank PARI PASSU with all other series of Subordinated Debentures.
The entire principal amount of the Subordinated Debentures held by a
Trust will mature and become due and payable, together with any accrued and
unpaid interest thereon, including Additional Interest (as defined), if any, on
the date set forth in the applicable Prospectus Supplement.
Reference is made to the Prospectus Supplement relating to the
particular Subordinated Debentures being offered thereby for the following
terms: (1) the designation of such Subordinated Debentures; (2) the aggregate
principal amount of such Subordinated Debentures; (3) the date or dates on which
such Subordinated Debentures will mature and the right, if any, to shorten such
date or dates; (4) the rate or rates; if any, per annum, at which such
Subordinated Debentures will bear interest, or the method of determination of
such rate or rates; (5) the date or dates from which such interest will accrue,
the interest payment dates on which such interest will be payable or the manner
of determination of such interest payment dates and the record dates for the
determination of holders to whom interest is payable on any such interest
payment dates; (6) the right, if any, to extend the interest payment periods and
the duration of such extensions; (7) provisions for a sinking, purchase or other
analogous fund; (8) the period or periods, if any, within which, the price or
prices of which, and the terms and conditions upon which such Subordinated
Debentures may be redeemed, in whole or in part, at the option of KCPL or the
holder; (9) the form of such Subordinated Debentures; and (10) any other
specific terms of such Subordinated Debentures. Principal, premium, if any, and
interest, if any, will be payable, and the Subordinated Debentures offered
hereby will be transferable, at the corporate trust office
11
of the Debt Trustee in New York, New York, provided that payment of interest, if
any, may be made at the option of KCPL by check mailed to the address of the
person entitled thereto as it appears in the Security Register.
If a Prospectus Supplement specifies that a series of Subordinated
Debentures is denominated in a currency or currency unit other than United
States dollars, such Prospectus Supplement will also specify the denomination in
which such Subordinated Debentures will be issued and the coin or currency in
which the principal, premium, if any, and interest, if any, on such Subordinated
Debentures will be payable, which may be United States dollars based upon the
exchange rate for such other currency or currency unit existing on or about the
time a payment is due.
The covenants contained in the Indenture would not necessarily afford
protection to holders of the Subordinated Debentures in the event of a decline
in credit quality resulting from takeovers, recapitalizations or similar
restructurings of KCPL.
If Subordinated Debentures held by a Trust are distributed to holders
of its Preferred Securities in liquidation of such holders' interests in such
Trust, such Subordinated Debentures will initially be issued as a Global
Security (as defined below). As described herein, under certain limited
circumstances, Subordinated Debentures may be issued in certificated form in
exchange for a Global Security. See "--Book Entry and Settlement." In the event
Subordinated Debentures are issued in certificated form, such Subordinated
Debentures will be in denominations as specified in the applicable Prospectus
Supplement and integral multiples thereof and may be transferred or exchanged at
the offices described therein. Payments on Subordinated Debentures issued as a
Global Security will be made to the depositary for the Subordinated Debentures.
In the event Subordinated Debentures are issued in certificated form, principal
and interest will be payable, the transfer of the Subordinated Debentures will
be registrable and Subordinated Debentures will be exchangeable for Subordinated
Debentures of other denominations of a like aggregate principal amount at the
corporate trust office of the Debt Trustee in New York, New York; provided, that
payment of interest may be made at the option of KCPL by check mailed to the
address of the persons entitled thereto.
The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction involving KCPL.
SUBORDINATION
The Indenture provides that the Subordinated Debentures are
subordinated and junior in right of payment to all Senior Indebtedness of KCPL,
whether now existing or hereafter incurred. Senior Indebtedness may include
Indebtedness of KCPL which is subordinated to other Indebtedness of KCPL but
nevertheless senior to the Subordinated Debentures. No payment of principal of
(including redemption payments, if any), premium, if any, or interest on, the
Subordinated Debentures may be made if (a) there is any default in the payment
of principal, premium, interest or any other payment due on any Senior
Indebtedness, or (b) the maturity of any Senior Indebtedness has been
accelerated because of a default. Upon any distribution of assets of KCPL to
creditors upon any dissolution, winding-up, liquidation or reorganization,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all principal of, premium, if any, and interest due or to
become due on, all Senior Indebtedness must be paid in full before the holders
of the Subordinated Debentures are entitled to receive or retain
12
any payment. The rights of the holders of the Subordinated Debentures will be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions applicable to such Senior Indebtedness until all
amounts owing on the Subordinated Debentures are paid in full.
The term "Senior Indebtedness" means (i) any payment in respect of (a)
indebtedness of KCPL for money borrowed and (b) indebtedness evidenced by
securities, debentures, bonds, notes or other similar instruments issued by KCPL
including, without limitation, indebtedness evidenced by securities issued
pursuant to its General Mortgage Indenture and Deed of Trust dated as of
December 1, 1986, between KCPL and UMB Bank, N.A., as supplemented, and pursuant
to indentures with various trustees (other than the Indenture); (ii) all capital
lease obligations of KCPL; (iii) all obligations of KCPL issued or assumed as
the deferred purchase price of property, all conditional sale obligations of
KCPL and all of its obligations under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of business);
(iv) all obligations of KCPL for reimbursement on any letter of credit, banker's
acceptance, security purchase facility or similar credit transaction; (v) all
obligations of the type referred to in clauses (i) through (iv) above of other
Persons for the payment of which KCPL is responsible or liable as obligor,
guarantor or otherwise; and (vi) all obligations of the type referred to in
clauses (i) through (v) above of other Persons secured by any lien on any
property or asset of KCPL (whether or not such obligation is assumed by KCPL),
except for (1) any such indebtedness that is by its terms subordinated to or
PARI PASSU with the Subordinated Debentures, as the case may be, including all
other debt securities and guarantees in respect of those debt securities, issued
to any other trusts, partnerships or other entity affiliated with KCPL which is
a financing vehicle of KCPL in connection with the issuance of preferred
securities by such entity or other securities which rank PARI PASSU with, or
junior to, the Preferred Securities, and (2) any indebtedness between or among
KCPL and its affiliates. Such Senior Indebtedness will continue to be Senior
Indebtedness and be entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.
The Indenture does not limit the aggregate amount of Senior
Indebtedness which may be issued by KCPL.
CERTAIN COVENANTS
If (i) there has occurred any event that would constitute an
Indenture Event of Default within five daysor (ii) KCPL is in default with respect to its
payment of it becoming awareany obligations under any Preferred Securities, then (a) KCPL may not
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase or make a liquidation payment with respect to, any of its
capital stock, (other than (i) purchases or acquisitions of shares of KCPL
common stock in connection with the satisfaction by KCPL of its obligations
under any employee benefit plans or any other contractual obligation of KCPL
(other than a contractual obligation ranking PARI PASSU with or junior to the
Subordinated Debentures), (ii) as a result of a reclassification of KCPL capital
stock or the exchange or conversion of one class or series of KCPL capital stock
for another class or series of KCPL capital stock or, (iii) the purchase of
fractional interests in shares of KCPL capital stock pursuant to the conversion
or exchange provisions of such occurrence
(NoteKCPL capital stock or the security being
converted or exchanged), (b) KCPL may not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by KCPL which rank PARI PASSU with or junior to the
Subordinated Debentures and (c) KCPL may
13
not make any guarantee payments with respect to the foregoing (other than
pursuant to the Preferred Securities Guarantees).
If KCPL has given notice of its election of an Extension Period as
provided in the Indenture Section 6.04)and such period, or any extension thereof, is
continuing, then (a) KCPL may not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or make a liquidation payment
with respect to, any of its capital stock, (other than (i) purchases or
acquisitions of shares of KCPL common stock in connection with the satisfaction
by KCPL of its obligations under any employee benefit plans or any other
contractual obligation of KCPL (other than a contractual obligation ranking PARI
PASSU with or junior to the Subordinated Debentures), (ii) as a result of a
reclassification of KCPL capital stock or the exchange or conversion of one
class or series of KCPL capital stock for another class or series of KCPL
capital stock or, (iii) the purchase of fractional interests in shares of KCPL
capital stock pursuant to the conversion or exchange provisions of such KCPL
capital stock or the security being converted or exchanged) (b) KCPL may not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by KCPL
which rank PARI PASSU with or junior to the Subordinated Debentures and (c) KCPL
may not make any guarantee payments with respect to the foregoing (other than
pursuant to the Preferred Securities Guarantees).
ModificationFor so long as the Trust Securities under a Trust remain outstanding,
KCPL will covenant (i) to directly or indirectly maintain 100% direct or
indirect ownership of the NoteCommon Securities of such Trust; provided, however,
that any permitted successor of KCPL under the Indenture may succeed to KCPL's
ownership of such Common Securities, (ii) not to cause, as sponsor of such
Trust, or to permit, as holder of such Common Securities, the dissolution or
winding-up of such Trust, except in connection with a distribution of the
Subordinated Debentures held by such Trust as provided in the Declaration for
such Trust and in connection with certain mergers, consolidations or
amalgamations and (iii) to use its reasonable efforts to cause such Trust (a) to
remain a statutory business trust, except in connection with the distribution of
Subordinated Debentures to the holders of Trust Securities of such Trust in
liquidation of such Trust, the redemption of all such Trust Securities, or
certain mergers, consolidations or amalgamations, each as permitted by such
Declaration, and (b) to otherwise continue to be classified as a grantor trust
for United States federal income tax purposes.
OPTIONAL REDEMPTION
KCPL will have the right to redeem the Subordinated Debentures of each
series, in whole or in part, from time to time, on or after the date set forth
in the applicable Prospectus Supplement or at any time in certain circumstances
upon the occurrence of a Tax Event as described under "Description of the
Preferred Securities -- Tax Event Redemption" in the applicable Prospectus
Supplement, upon not less than 30 nor more than 60 days' notice, at a Redemption
Price equal to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest, including Additional Interest, if any, to the redemption date.
If a partial redemption of the Preferred Securities of a Trust resulting from a
partial redemption of the Subordinated Debentures held by such Trust would
result in the delisting of such Preferred Securities, KCPL may only redeem such
Subordinated Debentures in whole.
INTEREST
14
Each Subordinated Debenture will bear interest at the rate set forth
in the applicable Prospectus Supplement from the original date of issuance,
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year (each, an "Interest Payment Date"), to the person in whose name
such Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment Date.
In the event the Subordinated Debentures do not continue to remain in book-entry
only form, KCPL will have the right to select record dates which may be not less
than fifteen days prior to each Interest Payment Date.
The Noteamount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. The amount of interest payable
for any period shorter than a full quarterly period will be computed on the
basis of the actual number of days elapsed in such 90-day quarter. In the event
that any date on which interest is payable on the Subordinated Debentures is not
a Business Day, then payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Except to the extent set forth in the applicable Prospectus
Supplement, KCPL will have the right at any time, and from time to time, during
the term of any series of Subordinated Debentures, to defer payments of interest
by extending the interest payment period for a period not exceeding 20
consecutive quarters, at the end of which Extension Period, KCPL will pay all
interest then accrued and unpaid (including any Additional Interest, together
with interest thereon at the rate specified for such Subordinated Debentures to
the extent permitted by applicable law); provided, that, during any such
Extension Period, (a) KCPL may not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock, (other than (i)
purchases or acquisitions of shares of KCPL common stock in connection with the
satisfaction by KCPL of its obligations under any employee benefit plans or any
other contractual obligation of KCPL (other than a contractual obligation
ranking PARI PASSU with or junior to the Subordinated Debentures), (ii) as a
result of a reclassification of KCPL capital stock or the exchange or conversion
of one class or series of KCPL capital stock for another class or series of KCPL
capital stock or, (iii) the purchase of fractional interests in shares of KCPL
capital stock pursuant to the conversion or exchange provisions of such KCPL
capital stock or the security being converted or exchanged) or make any
guarantee payments with respect to the foregoing (b) KCPL may not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees) issued by KCPL which rank PARI
PASSU with or junior to the Subordinated Debentures to which such Extension
Period applies and (c) KCPL will not make any guarantee payments with respect to
the foregoing (other than pursuant to the Preferred Securities Guarantees).
This covenant effectively requires that any Extension Period with respect to
payment of interest on a series of Subordinated Debentures will also apply to
each other series of subordinated debentures issued under the Indenture permitsto other
trusts similar to the CompanyTrust. Prior to the termination of any such Extension
Period for a series of Subordinated Debentures, KCPL may further defer payments
of interest on such Subordinated Debentures, by extending the interest payment
period, provided that such Extension Period together with all such previous and
further
15
extensions thereof for such series of Subordinated Debentures may not exceed 20
consecutive quarters or extend beyond the maturity of such series of
Subordinated Debentures.
Upon the termination of any Extension Period for a series of
Subordinated Debentures, and the Notepayment of all amounts then due, KCPL may
select a new Extension Period for such series of Subordinated Debentures, as if
no Extension Period had previously been declared, subject to the above
requirements. No interest on a series of Subordinated Debentures during an
Extension Period, except at the end thereof, will be due and payable on such
series of Subordinated Debentures.
KCPL has no present intention of exercising its rights to defer
payments of interest by extending the interest payment period on any
Subordinated Debentures.
If the Property Trustee is the sole holder of a series of Subordinated
Debentures, KCPL will give the Regular Trustees and the Property Trustee notice
of its selection of such Extension Period for such series of Subordinated
Debentures one Business Day prior to the earlier of (i) the next succeeding date
on which distributions on the related Preferred Securities are payable or (ii)
the date the applicable Trust is required to give notice to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of such
Preferred Securities on the record date or the date such distribution is
payable, but in any event not less than one Business Day prior to such record
date. The Regular Trustees shall give notice of KCPL's selection of such
Extension Period to the holders of such Preferred Securities. If the Property
Trustee is not the sole holder of a series of Subordinated Debentures, KCPL will
give the holders of such Subordinated Debentures notice of its selection of such
Extension Period ten Business Days prior to the earlier of (i) the Interest
Payment Date or (ii) the date KCPL is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
such Subordinated Debentures on the record or payment date of such related
interest payment, but in any event at least two Business Days before such record
date.
ADDITIONAL INTEREST
If at any time a Trust is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, KCPL will pay as additional interest ("Additional Interest") such
additional amounts as shall be required so that the net amounts received and
retained by such Trust after paying any such taxes, duties, assessments or other
governmental charges will be equal to the amounts such Trust would have received
had no such taxes, duties, assessments or other governmental charges been
imposed.
INDENTURE EVENTS OF DEFAULT
In case any Indenture Event of Default occurs and is continuing with
respect to a series of Subordinated Debentures, the Property Trustee, as the
holder of such Subordinated Debentures, will have the right to declare the
principal of and the interest on such Subordinated Debentures (including
Additional Interest, if any) and any other amounts payable under the Indenture
to be forthwith due and payable and to enforce its other rights as a creditor
with respect to such Subordinated Debentures.
16
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to any series of the Subordinated Debentures:
(a) failure for 30 days to pay interest on the Subordinated
Debentures of such series, including any Additional Interest in respect
thereof, when due; provided, however, that a valid extension of the
interest payment period by KCPL will not constitute a default in the
payment of interest for this purpose; or
(b) failure to pay principal of or premium, if any, on the
Subordinated Debentures of such series when due whether at maturity, upon
redemption or otherwise; or
(c) failure to observe or perform any other covenant (other than
those specifically relating solely to one or more other series of
Subordinated Debentures) contained in the Indenture for 90 days after
written notice to KCPL from the Debt Trustee or the holders of at least 25%
in principal amount of the outstanding Subordinated Debentures; or
(d) certain events of bankruptcy, insolvency or reorganization of
KCPL; or
(e) the voluntary or involuntary dissolution, winding-up or
termination of the applicable Trust, except in connection with the
distribution of Subordinated Debentures to the holders of Trust Securities
of such Trust in liquidation of such Trust, the redemption of all
outstanding Trust Securities of such Trust and certain mergers,
consolidations or amalgamations permitted by the Declaration.
The holders of a majority in aggregate outstanding principal amount of
the Subordinated Debentures of such series have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debt Trustee. Either the Debt Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Subordinated Debentures of such
series may declare the principal of such series due and payable immediately on
default, but the holders of a majority in aggregate outstanding principal amount
of such series may annul such declaration and waive such default if such default
has been cured and a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration and any applicable premium has
been deposited with the Debt Trustee.
The holders of a majority in aggregate outstanding principal amount of
a series of Subordinated Debentures affected thereby may, on behalf of the
holders of all such Subordinated Debentures, waive any past default, except (i)
a default in the payment of principal, premium, if any, or interest (unless such
default has been cured and a sum sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration and any applicable
premium has been deposited with the Debt Trustee) or (ii) a default in the
covenant of KCPL not to declare or pay dividends on, or make distributions with
respect to, or redeem, purchase or acquire any of its capital stock during an
Extension Period. An Indenture Event of Default also constitutes a Declaration
Event of Default. The holders of Preferred Securities in certain circumstances
described in the applicable Prospectus Supplement may have the right to direct
the Property Trustee to exercise its rights as the holder of the Subordinated
Debentures.
PAYMENT AND PAYING AGENTS
17
Payment of principal of and premium (if any) on Subordinated
Debentures will be made only against surrender to the Paying Agent of the
Subordinated Debentures. Principal of and any premium and interest, if any, on
Subordinated Debentures will be payable, subject to any applicable laws and
regulations, at the office of such Paying Agent or Paying Agents as KCPL may
designate from time to time, except that at the option of KCPL payment of any
interest may be made by check mailed to the address of the person entitled
thereto as such address appears in the Debenture Register with respect to the
Subordinated Debentures. Payment of interest on the Subordinated Debentures on
any Interest Payment Date will be made to the person in whose name the
Subordinated Debenture (or predecessor security) is registered at the close of
business on the Regular Record Date for such interest payment.
The Debt Trustee will act as Paying Agent with respect to the
Subordinated Debentures. KCPL may at any time designate additional Paying
Agents or rescind the designation of any Paying Agent or approve a change in the
office through which any Paving Agent acts, except that KCPL will be required to
maintain a Paying Agent at the place of payment.
All moneys paid by KCPL to a Paying Agent for the payment of the
principal of or premium or interest, if any, on any Subordinated Debentures
which remain unclaimed at the end of two years after such principal, premium, if
any, or interest shall have become due and payable will be repaid to KCPL and
the holder of such Subordinated Debentures will thereafter look only to KCPL for
payment thereof.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting KCPL and the Debt
Trustee, with the consent of the holders of at least 50% of thenot less than a majority in
principal amount of the outstanding Notes,Subordinated Debentures, to execute supplemental indentures adding any provisions
to or changing or eliminating any ofmodify the provisions of the Note Indenture or
any supplemental indenture or modifying the
rights of the holders of Notes,
exceptthe Subordinated Debentures, and the holders of not
less than a majority in principal amount of the Subordinated Debentures of a
particular series to modify the supplemental indenture affecting that series;
provided that no such supplemental indenturemodification may, without the consent of the holder of
each outstanding Subordinated Debenture affected thereby, (i) changeextend the fixed
maturity of any
Note,such Subordinated Debentures, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of any interest on any
Note; or change the method of calculating interest, for any of the terms used
in the calculation of interest, or the period for which interest is payable,
on any Note;thereon,
or reduce the principal amount of any Note or any premium thereon; or changepayable upon the currency of payment of any Note; or changeredemption thereof, without the date on
which any Note may be redeemed; or adversely affect the rightsconsent
of the holder of any Note to institute suitthe Subordinated Debentures so affected or (ii) reduce the
percentage of Subordinated Debentures, the holders of which are required for
the enforcement of any payment of principal
of or any premium or interest on such Note, in each caseconsent, without the consent of the holder of each such Note soSubordinated Debenture
then outstanding and affected including Notes for which any
offer has been accepted bythereby.
In addition, KCPL and the Company, or (ii) reduce the aforesaid
percentage of the principal amount of Notes, the holders of which are
required to consent to any such supplemental indenture,Debt Trustee may execute, without the
consent of the holders of the Subordinated Debentures, any supplemental indenture
for certain other usual purposes including the creation of any new series of
Subordinated Debentures.
CONSOLIDATION, MERGER AND SALE
The Indenture does not contain any covenant which restricts the
ability of any Trust or KCPL to merge or consolidate with or into any other
corporation, sell or convey all outstanding Notes (Noteor substantially all of its assets to any
person, firm or corporation or otherwise engage in restructuring transactions.
18
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, Section 13.02).
Defeasance and Discharge
The Note Indenture provides that the CompanyKCPL will be discharged from any and
all obligations in respect of the Notes and the Note Indentureany series of Subordinated Debentures (except in
each case for certain obligations with respect to denominations and provisions
for payment of such asSubordinated Debentures and obligations to register the
transfer or exchange of Notes,such Subordinated Debentures, replace stolen, lost or
mutilated Notes, andSubordinated Debentures, maintain paying agencies)agencies and thereafter the holders of Notes shall look only to the
Note Trusteehold moneys for
payment from the deposit in trust hereinafter described,trust) if the Company irrevocablyKCPL (i) deposits with the NoteDebt Trustee, in trust, for the
benefit of holders of Notes, moneymoneys
or U.S. GovernmentGovernmental Obligations, or any
combination thereof, which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in an amount sufficient to makepay all payments ofthe principal
of, and any premium and
interest on, the Notessuch Subordinated Debentures on the dates such payments are
due in accordance with the terms of such Subordinated Debentures and (ii)
delivers to the NoteDebt Trustee an opinion of counsel to the effect that, based
upon KCPL's receipt from, or the publication by, the Internal Revenue Service of
a ruling, or a change in law, the holders of the Subordinated Debentures of such
series will not recognize income, gain or loss for United States Federal income
tax purposes as a result of the deposit, defeasance and discharge and will be
subject to United States Federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit,
defeasance or discharge had not occurred.
GOVERNING LAW
The Indenture and the Notes, provided that the Note Trustee
shall have been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to the payment of such principal of and any
premium and interest on the Notes (Note Indenture Section 5.01).
Book-Entry Notes
Unless otherwise specified in the applicable Pricing Supplement, the
NotesSubordinated Debentures will be issuedgoverned by, and
construed in whole or in part in book-entry form (Book-Entry
Notes). Upon issuance, all such Book-Entry Notes having identical terms and
provisions will be represented by a single global security (each, a Global
Note). Unless otherwise specified in a Pricing Supplement, each Global Note
representing Book-Entry Notes will be depositedaccordance with, or on behalf of, The
Depository Trust Company (the Depositary), and registered in the name of a
nominee of the Depositary. Except as set forth below, a Global Note may not
be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or any nominee to a successor of the Depositary or
a nominee of such successor (Note Indenture Section 2.12).
The Depositary has advised the Company and the Agents that it is a
limited-purpose trust company organized under theinternal laws of the State of New York,York.
INFORMATION CONCERNING THE DEBT TRUSTEE
The Debt Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default, will
exercise the same degree of care as a memberprudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Debt Trustee
is under no obligation to exercise any of the Federal Reserve System, a "clearing corporation" withinpowers vested in it by the
meaningIndenture at the request of any holder of Subordinated Debentures, unless
offered reasonable indemnity by such holder against the Uniform Commercial Codecosts, expenses and
a "clearing agency" registered
pursuantliabilities which might be incurred thereby; but the foregoing will not relieve
the Debt Trustee, upon the occurrence of an Indenture Event of Default, from
exercising the rights and powers vested in it by the Indenture. The Debt
Trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the provisions of Section 17A of the Securities Exchange Act of
1934, as amended. The Depositary was created to hold securitiesperformance of its participants andduties if the Debt
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to facilitateit.
MISCELLANEOUS
KCPL will have the clearance and settlementright at all times to assign any of securities
transactions among its participantsrights or
obligations under the Indenture to a direct or indirect wholly-owned subsidiary
of KCPL; provided that, in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the
need for physical movement of securities certificates. The Depositary's
participants include securities brokers and dealers (including the Agents),
banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available
to others, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a participant, either
directly or indirectly. Persons who are not participants may beneficially
own securities held by the Depositary only through participants.
Upon the issuance of Book-Entry Notes by the Company represented by a
Global Note, the Depositary will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Book-Entry Notes
represented by such Global Note to the accounts of participants. The
accounts to be credited shall be designated by the Agent through or by which
such Book-Entry Notes are sold. Ownership of beneficial interests in a
Global Note will be limited to participants or persons that may hold
interests through participants. In addition, ownership of beneficial
interests by participants in a Global Note will be evidenced only by, and the
transferevent of any such ownership interestassignment, KCPL will remain
liable for all of such obligations. Subject to the foregoing, the Indenture
will be effected only through,
records maintainedbinding upon and inure to the benefit of the parties thereto and their
respective successors and assigns. The Indenture provides that it may not
otherwise be assigned by the Depositary or its nominee for such Global Note.
Ownershipparties thereto.
The Indenture will provide that KCPL will pay all fees and expenses
related to (i) the offering and sale of beneficial interests in such a Global Note by persons that hold
through participants will be evidenced only by,the Trust Securities and the
transferSubordinated Debentures, (ii) the
19
organization, maintenance and dissolution of any such
ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
certificated form. Such limits and such laws may impaireach Trust, (iii) the ability to
transfer beneficial interests in a Global Note.
So long as the Depositary, or its nominee, is the registered owner of
a Global Note, the Depositary or its nominee, as the case may be, will be
considered the sole owner or holderretention of
the Book-Entry Notes representedTrustees and (iv) the enforcement by such Global Note for all purposes under the Note Indenture dated as of
November 1, 1994. Except as provided below, owners of beneficial interests
in a Global Note representing Book-Entry Notes will not be entitled to have
such Book-Entry Notes registered in their names, will not receive or be
entitled to receive physical delivery of Notes in certificated form and will
not be considered the owners or holders thereof under the Indenture.
Accordingly, each person owning a beneficial interest in a Global Note must
rely on the proceduresProperty Trustee of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person
owns its interests, to exercise any rights of a holder under the Indenture or
such Global Note. The Company understands that, under existing industry
practice, in the event that the Company requests any action of
holders of Book-Entry NotesPreferred Securities.
EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED DEBENTURES
AND THE PREFERRED SECURITIES GUARANTEE
As set forth in the Declaration for each Trust, the sole purposes of
each Trust are to (i) issue Trust Securities, (ii) invest the proceeds thereof
in the Subordinated Debentures and (iii) engage in only those other activities
necessary or an ownerincidental thereto.
As long as payments of interest and other payments are made when due
on a beneficialseries of Subordinated Debentures, such payments will be sufficient to
cover distributions and payments due on the related Trust Securities primarily
because (i) the aggregate principal amount of such Subordinated Debentures will
be equal to the sum of the aggregate stated liquidation amount of such Trust
Securities; (ii) the interest in a Global Note
desires to take any actionrate and interest and other payment dates on such
Subordinated Debentures will match the distribution rate and distribution and
other payment dates for such Preferred Securities; (iii) KCPL will pay for all
costs and expenses of each Trust; and (iv) the Declaration provides that the
Depositary,Trustees may not cause or permit the Trust to, among other things, engage in any
activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available)
and other payments due on the Preferred Securities (to the extent funds therefor
are available) are guaranteed by KCPL as and to the extent set forth under
"Description of the Preferred Securities Guarantee". If KCPL does not make
interest payments on the Subordinated Debentures purchased by a Trust, it is
expected that such Trust will not have sufficient funds to pay distributions on
such Preferred Securities. The Preferred Securities Guarantee for a Trust is a
full and unconditional guarantee from the time of its issuance, but does not
apply to any payment of distributions unless and until such Trust has sufficient
funds for the payment of such distributions.
If KCPL fails to make interest or other payments on the Subordinated
Debentures held by a Trust when due (taking into account any Extension Period),
the Declaration for such Trust provides a mechanism whereby the holders of the
Preferred Securities of such Trust, using the procedures described in
"Description of the Preferred Securities -- Voting Rights" in the applicable
Prospectus Supplement may direct the Property Trustee to enforce its rights
under such Subordinated Debentures, including proceeding directly against KCPL
to enforce the Subordinated Debentures. If the Property Trustee fails to
enforce its rights under such Subordinated Debentures, a holder of such
Global
Note, is entitledPreferred Securities may, after a period of 30 days has elapsed from such
holder's written request to take, the Depositary would authorizeProperty Trustee to enforce such rights,
institute a legal proceeding directly against KCPL to enforce the participantsProperty
Trustee's rights under such Subordinated Debentures without first instituting
any legal proceeding against the Property Trustee or any other person or entity,
including such Trust.
If KCPL fails to takemake payments under a Preferred Securities Guarantee
for a Trust, such actionPreferred Securities Guarantee provides a mechanism whereby
the holders of the Preferred Securities of such Trust may direct the Guarantee
Trustee to enforce its rights thereunder. If the Guarantee Trustee fails to
enforce such Preferred Securities Guarantee, any holder of such Preferred
Securities may institute a legal proceeding directly against KCPL to enforce the
20
Guarantee Trustee's rights under such Preferred Securities Guarantee, without
first instituting a legal proceeding against such Trust, the Guarantee Trustee
or any other person or entity.
The above mechanisms and that the participants would authorize beneficial owners
owning through such participantsobligations, taken together, are equivalent
to take such action or would otherwise act
upon the instructionsa full and unconditional guarantee by KCPL of beneficial owners owning through them.
Payments of principal, interest and premium, if any,payments due on the Book-Entry
Notes represented byPreferred
Securities. See "Description of the Preferred Securities Guarantees --
General."
PLAN OF DISTRIBUTION
KCPL and the Trusts may offer and sell the Preferred Securities in any
of three ways: (i) through agents; (ii) through underwriters or dealers; or
(iii) directly to one or more Global Notespurchasers. The Prospectus Supplement with
respect to any of the Preferred Securities will be made byset forth the Company
throughterms of the
Trusteeoffering of such Preferred Securities, including the name or names of any
underwriters or agents, the purchase price of such Preferred Securities, the
proceeds to the Depositary,applicable Trust from such sale, any underwriting discounts or
its nominee, asagency fees and other items constituting underwriters' or agents' compensation,
the caseinitial public offering price, any discounts or concessions allowed or
reallowed or paid to dealers, and any securities exchanges on which such
Preferred Securities may be as
the registered owner of such Global Note or Notes. Neither the Company nor
the Trustee will have any responsibility or liability for any aspectlisted.
The distribution of the records relating to or payments made on account of beneficial ownership
interests. The Company expects that the Depositary, upon receipt of any
payment of principal, interest and premium, if any, in respect of a Global
Note, will credit immediately the accounts of the related participants with
payment in amounts proportionate to their respective holdings in principal
amount of beneficial interests in such Global Note as shown on the records of
the Depositary. The Company also expects that payments by participants to
owners of beneficial interests in a Global Note willPreferred Securities may be governed by standing
customer instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name", and will be the responsibility of such participants.
The Company will issue Notes in certificated form in exchange for
Global Notes representing Book-Entry Notes only if (a) the Depositary is at
any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, (b) the Company at
any time determines not to have Book-Entry Notes represented by one or more
Global Notes, or (c) an event of default under the Note Indenture has
occurred and is continuing. In any such instance, an owner of a beneficial
interest in any Global Note will be entitled to physical delivery of Notes in
certificated form which are equal in principal amount to such beneficial
interest and to have such Notes registered in its name. Such Notes so issued
will be issued in registered form only without coupons and in denominations
of $1,000 and integral multiples of $1,000 in excess thereof (Note Indenture
Section 2.12).
Concerning the Note Trustee
The Note Trustee is the trustee for the Company's $___________
principal amount of currently outstanding Medium-Term Notes issued under
Indentures dated April 1, 1991, February 15, 1992, and November 15, 1992.
DESCRIPTION OF BONDS
The Pledged Bond is one of the Mortgage Bonds (Bonds) issued under a
General Mortgage Indenture and Deed of Trust, dated as of December 1, 1986,
as supplementedeffected from time
to time (Mortgage Indenture), executed by the
Company to UMB Bank, N.A. (formerly United Missouri Bank of Kansas City,
n.a.) as Trustee (Mortgage Trustee). The Pledged Bond is the only Bond in the series designated "Mortgage Bond, Medium-Term Series E"one or more transactions at a fixed price or prices, which is issued
under the Tenth Supplemental Indenture to the Mortgage Indenture; the other
series of outstanding Bonds are Mortgage Bond, Medium-Term Series B securing
$122,750,000 principal amount of outstanding Medium-Term Notes; Mortgage
Bond, Medium-Term Series C securing $150,000,000 principal amount of
outstanding Medium-Term Notes; Mortgage Bond, Medium-Term Series D securing
$__________ principal amount of outstanding Medium Term Notes; Mortgage Bond
Series 1992 securing $31,000,000 State Environmental Improvement and Energy
Resources Authority of the State of Missouri Environmental Improvement
Revenue Refunding Bonds (Kansas City Power & Light Company Project) Series
1992; Mortgage Bond Series 1993A securing $12,366,000 State of Missouri
Environmental Improvement Revenue Refunding Bonds Series 1993; Mortgage Bond
Series 1993B securing $79,480,000 City of Burlington, Kansas, Environmental
Improvement Revenue Refunding Bonds; and Mortgage Bond Series 1994 securing
$35,922,500 City of La Cygne, Kansas, Environmental Improvement Revenue
Refunding Bonds which are outstanding.
The following statements are an outline only, do not purport to be
complete, and are subject to the detailed provisions of the Mortgage
Indenture (copies of which are filed as exhibits to the Registration
Statement of which this Prospectus is a part), to which reference is hereby
made. This outline incorporates by reference certain Articles and Sections
of the Mortgage Indenture specifically enumerated below and is qualified in
its entirety by such reference. Certain of the terms used below are used
herein with the meanings ascribed to such terms by the Mortgage Indenture.
The Pledged Bond is issued to the Note Trustee and may not be
transferred except to a successor Note Trustee under the Note Indenture.
Payment of principal of and any premium and interest on the Notes will
constitute payments of principal of and any premium and interest on the
Pledged Bond.
Security and Priority
The Company's principal plants and properties, insofar as they
constitute real estate, are owned in fee; certain other facilities of the
Company are located on premises held by the Company under leases, permits or
easements; and the Company's electric transmission and distribution lines and
systems (which constitute a substantial portion of the Company's investment
in physical property) are for the most part located over or under highways,
streets, other public places or property owned by others for which permits,
grants, easements, licenses or franchises (deemed satisfactory but without
examination of underlying land titles) have been obtained.
The Mortgage Indenture constitutes a first mortgage lien upon
substantially all of the fixed property and franchises of the Company,
consisting principally of electric generating plants, electric transmission
and distribution lines and systems, and buildings, subject to Permissible
Encumbrances (Mortgage Indenture Section 1.03 (ff)). The Mortgage Indenture
subjects to the lien thereof property, of the character initially mortgaged,
which is acquired by the Company subsequent to December 1, 1986. Such after-
acquired property may be
subject to Prior Liens which secure debt outstandingchanged, at a market price prevailing at the time of sale, at prices related to
such acquisitionprevailing market prices or at negotiated prices.
Underwriters, dealers and agents may be entitled, under agreements
entered into with KCPL to indemnification by KCPL against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters, dealers or agents may be
required to make in an amount notrespect thereof. Such underwriters, dealers and agents, and
affiliates thereof, may be customers of, engage in excess of 75% of the Costtransactions with, or Fair Value, whichever is less, of such after-acquired property at such
time (Mortgage Indenture Section 1.03 (ff)(xv)).
The property excepted from the lien of the Mortgage Indenture consists
principally of: cashperform
services for KCPL and securities (unless deposited with the Mortgage
Trustee); contracts, accounts receivable, leases and operating agreements;
equipment, spare parts, tools, materials, supplies and fuel held for sale or
leaseits affiliates in the ordinary course of business orbusiness.
All Preferred Securities will be new issues of securities with no
established trading market. Any underwriters to whom Preferred Securities are
sold by a Trust for use or consumptionpublic offering and sale may make a market in orsuch Preferred
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given concerning the operation of, any properties of, or for the benefitliquidity of the Company, or held
in advance of use thereoftrading market for maintenance or fixed capital purposes;
electricity, gas, steam, water, ice and other materials, products or services
for sale, distribution or use; vehicles; leasehold interests and leasehold
improvements; minerals and mineral rights; nuclear fuel, cores and materials;
and other real and personal property which is not an integral part of the
electric and any steam generating, transmission and distribution operations
of the Company (Mortgage Indenture Section 1.03 (s)).
The Bonds will rank equally and ratably (except as to sinking funds and
other analogous funds established for the exclusive benefit of a particular
series) with all Bonds, regardless of series, from time to time issued and
outstanding under the Mortgage Indenture.
The Mortgage Indenture provides that the Mortgage Trustee shall have a
lien on the Mortgaged Property, prior to the Bonds, for the payment of its
reasonable compensation and expenses and for indemnity against certain
liabilities (Mortgage Indenture Section 14.09).
Issuance of Additional Bonds
The maximum principal amount of Bonds which may be issued under the
Mortgage Indenture is not limited. Bonds of any series may be issued from
time to time in principal amounts equal to:
(1) 75% of the lesser of the Cost or Fair Value of Unbonded Bondable
Property, after deducting 133 1/3% of the principal amount of all
Prior Lien Bonds which are (a) outstanding and secured by a Prior
Lien on Bondable Property owned by the Company at December 1,
1986, and (b) outstanding and secured by a Prior Lien, other than
due solely to an after acquired property clause, on Bondable
Property at the date of its acquisition by the Company after such
date;
(2) the principal amount of Bonds and Prior Lien Bonds which have
been retired or purchased or acquired by the Company since the
date of the Mortgage Indenture or are then being retired or
purchased or acquired by the Company, and which have not
theretofore been Bonded; or
(3) the amount of cash deposited with the Mortgage Trustee for such
purpose.
(Mortgage Indenture Articles III, IV, V and VI)
Bondable Property includes: the Company's electric and any steam
generating, transmission and distribution properties; construction work in
progress; property in the process of purchase to which the Company has legal
title; fractional and undivided interests of the Company in property;
engineering, financial, economic and legal and other surveys, data processing
equipment and software associated with the acquisition or construction of
property; paving, grading and other improvements to property owned by others
but used by the Company; and certain property owned by the Company located on
property owned by others, including governments (Mortgage Indenture Section
1.03 (h)).
The amount of Bondable Property is the lesser of its Cost or Fair Value
determined in accordance with Generally Accepted Accounting Principles in
effect at December 1, 1986 or, at the option of the Company, at the date of
their determination (Mortgage Indenture Section 1.03 (h)). In determining
Generally Accepted Accounting Principles, the Company may conform to
accounting orders from any governmental regulatory commission (Mortgage
Indenture Section 1.03 (u)).
It is expected that the Mortgage Bond will be issued on the basis of
the deposit of cash. At September 30, 1994, the Company had approximately
$2,065,535,000 of Unbonded Bondable Property and $246,902,000 of retired
Bonds and Prior Lien Bonds entitling it, in accordance with the limitations
described above, to issue approximately $1,796,053,000 of Bonds.
Withdrawal of Certain Cash
Cash deposited with the Mortgage Trustee as a basis for the issue of
additional Bonds may be withdrawn by the Company in the amount of:
(1) 75% of the lesser of Cost or Fair Value of Unbonded Bondable
Property, after deducting 133 1/3% of the principal amount of all
Prior Lien Bonds which are (a) outstanding and secured by a Prior
Lien on such Bondable Property owned by the Company at December
1, 1986, and (b) outstanding and secured by a Prior Lien, other
than due solely to the after acquired property clause, on
Bondable Property at the date of its acquisition by the Company
after such date; or
(2) the principal amount of Bonds and Prior Lien Bonds which have
been retired or purchased or acquired by the Company since the
date of the Mortgage Indenture or are then being retired or
purchased or acquired by the Company, and which have not
theretofore been Bonded.
(Mortgage Indenture Article XI)
Release and Substitution of Property
Mortgaged Property may be released from the lien of the Mortgage
Indenture:
(1) if after such release the Fair Value of the remaining Mortgaged
Property equals or exceeds a sum equal to 133 1/3% of the
aggregate principal amount of Bonds and Prior Lien Bonds
outstanding; or
(2) if, with some limitations, the Fair Value of the Mortgaged
Property to be released is less than 1/2 of 1% of the principal
amount of Bonds and Prior Lien Bonds outstanding, provided that
the aggregate Fair Value of Mortgaged Property released in this
manner in any period of 12 consecutive calendar months shall not
exceed 1% of the aggregate principal amount of the Outstanding
Bonds and Prior Lien Bonds outstanding; or
(3) on the basis of (a) the deposit of cash or Governmental
Obligations, (b) Unbonded Bondable Property to be acquired by the
Company with the proceeds of, or otherwise in connection with,
such release, or (c) a waiver of the right to issue Bonds on the
basis of Bonds or Prior Lien Bonds which have been retired or
purchased or acquired by the Company after December 1, 1986, and
have not theretofore been Bonded (Mortgage Indenture Article X).
Modification of the Mortgage Indenture
In general, modifications or alterations of the Mortgage Indenture and
indentures supplemental thereto and of the rights or obligations of the
Company and of the Bondholders, as well as waivers of compliance with the
Mortgage Indenture (including indentures supplemental thereto) may be made,
with the consent of the holders of a majority in principal amount of the
Outstanding Bonds, if approved by the Company. Provisions relating to such
modifications or alterations and waivers of compliance are subject to certain
restrictions designed to safeguard the positions of the Bondholders and the
Mortgage Trustee with respect to certain matters of basic importance,
including payment of principal of and interest and premium (if any) on Bonds
and creation of liens ranking prior to or on a parity with the lien of the
Mortgage Indenture as to any Mortgaged Property (Mortgage Indenture Section
12.24 and Article XV).
Concerning the Mortgage Trustee
The Company and its officers and directors have no material
relationships with the Mortgage Trustee except that (a) the Mortgage Trustee
is transfer agent and registrar for the Company's outstanding common and
preferred stock, (b) the Mortgage Trustee is trustee of the Company's
management pension fund and management health and welfare fund, and Employee
Savings Plus Plan, (c) the Mortgage Trustee is one of the investment managers
for the Company's management and union pension funds and health and welfare
funds, and (d) the Company maintains general banking accounts with the
Mortgage Trustee. The Mortgage Indenture provides that the holders of a
majority in principal amount of the Outstanding Bonds have the right to
require the Mortgage Trustee to take certain action on behalf of the
Bondholders, but under certain circumstances the Mortgage Trustee may decline
to follow such directions or to exercise certain of its powers (Mortgage
Indenture Section 12.05). Prior to taking any such action the Mortgage
Trustee is entitled to indemnity satisfactory to the Mortgage Trustee against
costs, expenses and liabilities which may be incurred in the course of such
action (Mortgage Indenture Section 12.16). This right does not, however,
impair the absolute right of any holder of Bonds to enforce payment of the
principal of, premium, if any, and interest on such Bonds when due (Mortgage
Indenture Section 12.23). The Company has the right to remove the Mortgage
Trustee and appoint a successor Mortgage Trustee not more frequently than
once in any ten-year period (Mortgage Indenture Section 14.18).
Events of Default
The Mortgage Indenture provides generally that a Default occurs upon:
failure for ninety (90) days to pay interest when due on any Bonds; failure
to pay when due the principal of, and premium, if any, on any Bonds issued
under the Mortgage Indenture or the principal of, premium, if any, or
interest on any outstanding Prior Lien Bonds, beyond any specified grace
period; failure to perform or observe for ninety (90) days after notice of
such failure any other of the covenants or conditions of the Company in the
Mortgage Indenture, indentures supplemental thereto, or any of the Bonds
issued thereunder; and the occurrence of insolvency, bankruptcy, receivership
or similar events. In case of Default, the Mortgage Trustee or the holders
of a majority in principal amount of the Outstanding Bonds may declare the
principal of and interest on all Bonds to be immediately due and payable, but
the holders of a majority in principal amount of the Outstanding Bonds may
rescind such declaration if such Default has been cured (Mortgage Indenture
Sections 12.02 and 12.04).
The Company is required to file with the Mortgage Trustee such
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of the Mortgage Indenture as may be
required by the rules and regulations of the Commission (Mortgage Indenture
Section 17.02). The Company is not required to furnish any statement as to
the absence of any Default.Preferred
Securities.
21
EXPERTS
The financial statements and schedules included in the Company'sKCPL's Annual Report on Form 10-K
for the year ended December 31, 1993,1995, incorporated by reference in this
Prospectus and in the Registration Statement, have been audited by Coopers &
Lybrand L.L.P., independent public accountants, as indicated in their reports
with respect thereto, and are included herein, in reliance upon the authority of
said firm as experts in giving said reports.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of the
Preferred Securities will be passed upon on behalf of each Trust by Pepper,
Hamilton & Scheetz, special Delaware counsel to each Trust. Legal matters with
respect to the NotesSubordinated Debentures offered hereby and the Pledged
BondPreferred
Securities Guarantees will be passed upon for the CompanyKCPL by Jeanie Sell Latz, Senior
Vice President - - Law of the Company,and Chief Legal Officer, and for the AgentsUnderwriters by Sidley &
Austin, One First National Plaza, Chicago, Illinois 60603. Sidley & Austin will
rely for purposes of their opinions upon the opinion of Ms. Latz as to matters
of Missouri law. Certain United States federal income taxation matters will be
passed upon by Sidley & Austin. At September 30, 1994,1996, Ms. Latz owned
beneficially 1,4951,945 shares of the Company'sKCPL's Common Stock; she also receivedhas options to
purchase 7,37515,375 shares of the Company'sKCPL's Common Stock at the fair market value on the
dates of the grants. Sidley & Austin occasionally performs legal services for
the Company.KCPL.
The statements herein under "Description of Bonds"Subordinated Debentures"
and "Description of Notes,Preferred Securities Guarantees," as to the matters of law
and legal conclusions, have been prepared under the supervision of and reviewed
by, and are made on the authority of Ms. Latz, who has given her opinion that
such statements as to such matters and conclusions are correct.
PLAN OF DISTRIBUTION OF NOTES
The Notes are being offered on a continuing basis by the Company
through the Agents, which have agreed to use their reasonable efforts to
solicit purchases of the Notes. The Company will pay to the Agents a
commission of from .125% to .750% of the principal amount of each Note,
depending on its maturity, sold through the Agents. The Company has reserved
the right to appoint other agents from time to time on substantially similar
terms; any such other agents will be named in the appropriate Pricing
Supplement. The Company will have the sole right to accept offers to
purchase Notes and may reject any such offer, in whole or in part. The
Agents will have the right, in their discretion reasonably exercised, without
notice to the Company, to reject any offer to purchase Notes received by
them, in whole or in part.
In addition, the Agents may offer the Notes they have purchased as
principal to other dealers. The Agents may sell Notes to any dealer at a
discount and, unless otherwise specified in the applicable Pricing
Supplement, such discount allowed to any dealer will not be in excess of
66 2/3% of the discount to be received by such Agent from the Company.
Unless otherwise indicated in the applicable Pricing Supplement, any Note
sold to an Agent as principal will be purchased by such Agent at a price
equal to 100% of the principal amount thereof less a percentage equal to the
commission applicable to any agency sale of a Note of identical maturity, and
may be resold by the Agent to investors and other purchasers from time to
time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale or may be resold to certain dealers as described above. After the
initial public offering of Notes to be resold to investors and other
purchasers on a fixed public offering price basis, the public offering price,
concession and discount may be changed.
The Notes may also be sold by the Company directly to purchasers.
Payment of the purchase price of Notes will be required to be made in
funds immediately available in The City of New York.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933 (the 1933 Act). The Company has agreed to indemnify
the Agents against and contribute toward certain liabilities, including
liabilities under the 1933 Act. The Company has agreed to reimburse the
Agents for certain expenses.
The Agents will not be obligated to make a market in the Notes. The
Company cannot predict the activity of trading in, or liquidity of, the
Notes.
The Agents have in the past performed, and in the future may perform,
various services for the Company in the ordinary course of business.22
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No dealer, salesman or other person has beenis authorized to give any information or to make any representation notrepresentations,
other than those contained or incorporated by reference in this Prospectus
Supplement and
with respect to particular securities, the Prospectus, Supplement relating thereto,in connection with the offer contained herein,
and, if given or made, such other information or representationrepresentations must not be
relied upon as having been authorized by the CompanyKCPL, the Trust or any agent, underwriter or dealer.
Neither this Prospectus nor any Prospectus
Supplement constitutes an offer to sell or a
solicitation of any offer to buy any of the
securities offered hereby or thereby in any
jurisdiction to any person to whom it is unlawful to
make such offer in such jurisdiction.Underwriters. Neither the delivery of this Prospectus or anySupplement and the
Prospectus
Supplement nor any sale made hereunder or thereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of the CompanyKCPL since the
date hereof or
thereof or that the information contained or
incorporated by reference herein or therein is
correct as of which information is given in this Prospectus Supplement and the
Prospectus. This Prospectus Supplement and the Prospectus do not constitute an
offer or solicitation by any time subsequentperson in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to its date.do so or to any person to whom it is unlawful
to make such offer or solicitation.
________________________
TABLE OF CONTENTS
PAGE
Available Information........................
Incorporation of Certain
Information by Reference...................
The Company..................................
Selected Financial Information...............
Application of Proceeds......................
Description of Notes.........................
Description of Bonds.........................
Experts......................................
Legal Opinions...............................
Plan of Distribution of Notes................
$125,000,000
Kansas City
Power & Light
Company
____________
SECURED
MEDIUM-TERM NOTES
____________
PROSPECTUS
November __, 1994
Merrill Lynch & Co.
Smith Barney Inc.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expense of Issuance and Distribution.
An estimate of such expense, other than underwriting commissions, is as
follows:
Securities and Exchange Commission registration fee. . . . . . .$ 43,104
Printing, including preparation of securities. . . . . . . . . . 5,000
Trustee's fees and expenses. . . . . . . . . . . . . . . . . . . 4,000
Legal feesPage
----
Prospectus Supplement
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Blue Sky and legal investment expenses . . .
. . . . . . . . . . 5,000
Accountant's fees and expensesKansas City Power & Light Company . . . . . . . . . . . . . . . . . 5,000
Miscellaneous.. . .
The Trust . . . . . . . . . . . . . . . . . . . . . . . . . 5,000. . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . .
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of KCPL. . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . .
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of the Preferred Securities Guarantee . . . . . . . . . . . .
Description of the Preferred Securities . . . . . . . . . . . . . . . . .
Description of the Subordinated Debentures . . . . . . . . . . . . . . .
Effect of Obligations under the Junior Subordinated
Debt Securities and the Preferred Securities
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States Federal Income Taxation . . . . . . . . . . . . . . . . . .
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROSPECTUS
Available Information
Incorporation of Certain Documents by Reference
Kansas City Power & Light Company
The Trusts
Ratios of Earnings to Fixed Charges and Earnings
to Fixed Charges and Preferred Dividend Requirements
Use of Proceeds
Description of the Preferred Securities
Description of the Preferred Securities Guarantee
Description of the Subordinated Debentures
Effect of Obligations Under the Subordinated
Debentures and the Preferred Securities Guarantee
Plan of Distribution
Experts
Legal Opinions
--------------------
--------------------
PREFERRED SECURITIES
KCPL Financing I
KCPL Financing II
KCPL Financing III
____% TRUST ORIGINATED
PREFERREDSECURITIES_
("TOPRS_)
FULLY AND UNCONDITIONALLY
GUARANTEED BY
KANSAS CITY
POWER & LIGHT
COMPANY
---------------------
PROSPECTUS SUPPLEMENT
---------------------
MERRILL LYNCH & CO.
, 199_
---------------------
---------------------
23
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSE OF ISSUANCE AND DISTRIBUTION
An estimate of such expense, other than underwriting commissions, is as
follows:
Securities and Exchange Commission filing fee . . . . . . . $90,909
New York Stock Exchange listing fee . . . . . . . . . . . 45,000
Rating Agency fees . . . . . . . . . . . . . . . . . . . . 77,000
Trustees' expenses . . . . . . . . . . . . . . . . . . . . 15,000
Printing and engraving fees . . . . . . . . . . . . . . . . 30,000
Accounting fees and expenses. . . . . . . . . . . . . . . . 10,000
Legal fees and expenses . . . . . . . . . . . . . . . . . 125,000
Blue Sky expenses . . . . . . . . . . . . . . . . . . . . 1,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 6,091
Total . . . . . . . . . . . . . . . . . . . . . . . . . .$ 92,104
Item$400,000
--------
--------
ITEM 15. Indemnification of Officers and Directors.INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 351.355 RSMoR.S.Mo. (1986) provides as follows:
1. A corporation created under the laws of this state may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, other than an action by or in the
right of the corporation, by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses, including attorneys' fees, judgements, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interestinterests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contenderecontenders or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in an manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
2. The corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including attorneys' fees,
and amounts paid in settlement actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner he reasonably believed to be in or
II-1
not opposed to the best interests of the corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only to
the extent that the court in which the action or suit was brought determines
upon application that, despite the adjudication of liability and in view of all
the circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
3. To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in subsections 1 and 2 of this section,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the action, suit or proceeding.
4. Any indemnification under subsections 1 and 2 of this section,
unless ordered by a court, shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in this section. The determination
shall be made by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to the action, suit, or proceeding,
or if such a quorum is not obtainable, or even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or by the shareholders.
5. Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of the action, suit, or proceeding as authorized by the board of directors in
the specific case upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this section.
6. The indemnification provided by this section shall be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under the articles of incorporation or bylaws or any agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
7. A corporation created under the laws of this state shall have the
power to give any further indemnity, in addition to the indemnity authorized or
contemplated under other subsections of this section, including subsection 6, to
any person who is or was a director, officer, employee or agent, or to any
person who is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, provided such further indemnity is either (i)
authorized, directed, or provided for in the articles of incorporation of the
corporation or any duly adopted amendment thereof or (ii) is authorized,
directed, or provided for in any bylaw or agreement of the corporation which has
been adopted by a vote of the shareholders of the corporation, and provided
further that no such indemnity shall indemnify any person from or on account of
such person's conduct which was finally adjudged to have been knowingly
fraudulent, deliberately dishonest or willful misconduct.
II-2
Nothing in this subsection shall be deemed to limit the power of the corporation
under subsection 6 of this section to enact bylaws or to enter into agreements
without shareholder adoption of the same.
8. The corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this section.
9. Any provision of this chapter to the contrary notwithstanding,
the provisions of this section shall apply to all existing and new domestic
corporations, including but not limited to banks, trust companies, insurance
companies, building and loan associations, savings bank and safe deposit
companies, mortgage loan companies, corporations formed for benevolent,
religious, scientific or educational purposes and nonprofit corporations.
10. For the purpose of this section, references to "the
corporation"include all constituent corporations absorbed in a consolidation or
merger as well as the resulting or surviving corporation so that any person who
is or was a director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position under
the provisions of this section with respect to the resulting or surviving
corporation as he would if he had served the resulting or surviving corporation
in the same capacity.
11. For purposes of this section, the term "other enterprise" shall
include employee benefit plans; the term "fines" shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and the term
"serving at the request of the corporation" shall include any service as a
director, officer, employee, or agent of the corporation which imposes duties
on, or involves services by, such director, officer, employee, or agent with
respect to an employee benefit plan, its participants, or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this section.
The officers and directors of the CompanyKCPL (the "Company") have entered into
indemnification agreements with the CompanyKCPL indemnifying such officers and directors to
the extent allowed under the above Section 351.355 RSMo (1986). Article XIII of
the Restated Articles of Consolidation of the CompanyKCPL provides as follows:
ARTICLE THIRTEENTH. (a) Right to Indemnification. Each person who
was or is made a party or is threatened to be made a party to any action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she is or was a director or officer of the Company
or is or was an employee of the Company acting within the scope and course of
his or her employment or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust
II-3
or other enterprise, including service with respect to employee benefit plans,
shall be indemnified and held harmless by the Company to the fullest extent
authorized by The Missouri General and Business Corporation Law, as the same
exists or may hereafter be amended, against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid to or to be paid in settlement) actually and reasonably
incurred by such person in connection therewith. The Company may in its
discretion by action of its Board of Directors provide indemnification to agents
of the Company as provided for in this ARTICLE THIRTEENTH. Such indemnification
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of his or her heirs, executors and
administrators.
(b) Rights Not Exclusive. The indemnification and other rights provided
by this ARTICLE THIRTEENTH shall not be deemed exclusive of any other rights to
which a person may be entitled under any applicable law, By-laws of the Company,
agreement, vote of shareholders or disinterested directorsDirectors or otherwise, both as
to action in such person's official capacity and as to action in any other
capacity while holding the office of directorDirector or officer, and the Company is
hereby expressly authorized by the shareholders of the Company to enter into
agreements with its directorsDirectors and officers which provide greater indemnification
rights than that generally provided by The Missouri General and Business
Corporation Law; provided, however, that no such further indemnity shall
indemnify any person from or on account of such director'sDirector's or officer's conduct
which was finally adjudged to have been knowingly fraudulent, deliberately
dishonest or willful misconduct. Any such agreement providing for further
indemnity entered into pursuant to this ARTICLE THIRTEENTH after the date of
approval of this ARTICLE THIRTEENTH by the Company's shareholders need not be
further approved by the shareholders of the Company in order to be fully
effective and enforceable.
(c) Insurance. The Company may purchase and maintain insurance on behalf
of any person who was or is a director, officer, employee or agent of the
Company, or was or is serving at the request of the Company as a director,Director,
officer, employee or agent of another company, partnership, joint venture, trust
or other enterprise against any liability asserted against or incurred by such
person in any such capacity, or arising out of his or her status as such,
whether or not the Company would have the power to indemnify such person against
such liability under the provisions of this ARTICLE THIRTEENTH.
(d) Amendment. This ARTICLE THIRTEENTH may be hereafter amended or
repealed; however, no amendment or repeal shall reduce, terminate or otherwise
adversely affect the right of a person entitled to obtain indemnification or an
advance of expenses with respect to an action, suit or proceeding that pertains
to or arises out of actions or omissions that occur prior to the later of (a)
the effective date of such amendment or repeal; (b) the expiration date of such
person's then current term of office with, or service for, the Company (provided
such person has a stated term of office or service and completes such term); or
(c) the effective date such person resigns his or her office or terminates his
or her service (provided such person has a stated term of office or service but
resigns prior to the expiration of such term).
The formEach Declaration of Trust provides that no Trustee, affiliate of any
Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives, or agents of any Trustee, or any employee or agent of the Distribution Agreement filedTrust
or its affiliates (each an "Indemnified Person") shall be liable, responsible or
accountable in Exhibit 1damages or otherwise to this
Registration Statement include provisions requiring the Agents to indemnify
directors and officersTrust or any employee or
II-4
agent of the CompanyTrust or its affiliates for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such Indemnified Person in
certain circumstances.
Itemgood faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by the Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's gross negligence or willful misconduct with respect to
such act or omission. Each Declaration of Trust also provides that, to the
fullest extent permitted by applicable law, KCPL shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by such Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence or willful misconduct with respect to such act or omission. The
Declaration of Trust further provides that, to the fullest extent permitted by
applicable law, expenses (including legal fees) incurred by an Indemnified
Person in defending any claim, demand, action, suit or proceeding shall, from
time to time, be advanced by KCPL prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by KCPL of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified for the
underlying cause of action as authorized by such Declaration.
ITEM 16. Exhibits.
Exhibit Description of
Number DocumentEXHIBITS
The following exhibits are filed herewith. Documents indicated by an
asterisk (*) are incorporated by reference by the File No. indicated.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
1 Form of Distribution Agreement relating to the Notes.purchase agreement for offering of Preferred Securities.
4-a *General Mortgage Indenture and DeedCertificate of Trust dated as of December 1, 1986,KCPL Financing I, (The Certificate of
Trust for each other Trust are identical except for the name, and
will be filed upon request).
4-b Form of Amended and Restated Declaration of Trust of KCPL
Financing I. (The Declaration of Trust for each other Trust are
identical except for the name, and will be filed upon request).
4-c Indenture between the CompanyKCPL and United MissouriThe First National Bank of Kansas City, n.a. (Exhibit 4-bb to Registration
Statement, Registration No. 33-12737).
4-b *ThirdChicago, as
Trustee.
4-d Form of Supplemental Indenture dated asto be used in connection with the
issuance of April 1, 1991, to
General Mortgage Indenture and Deedeach series of Trust dated asSubordinated Debentures.
4-e Form of December 1, 1986, between the Company and United Missouri
BankPreferred Security (included in 4-b).
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4-f Form of Kansas City, N.A. (Exhibit 4-aa to Registration
Statement No. 33-42187).
4-c *Fourth Supplemental Indenture dated as of February 15, 1992,
to General Mortgage Indenture and Deed of Trust dated as of
December 1, 1986, between the Company and United Missouri
Bank, n.a. (Exhibit 4-aa to Registration Statement No. 33-
45736).
4-d *Fifth Supplemental Indenture dated as of September 15, 1992,
to General Mortgage Indenture and Deed of Trust dated as of
December 1, 1986, between the Company and United Missouri
Bank, n.a. (Exhibit 4-a to Form 10-Q dated September 30,
1992).
4-e *Sixth Supplemental Indenture dated as November 1, 1992, to
General Mortgage Indenture and Deed of Trust dated as of
December 1, 1986, between the Company and United Missouri
Bank, n.a. (Exhibit 4-z to Registration Statement No. 33-
54196).
4-f *Seventh Supplemental Indenture dated as of October 1, 1993,
to General Mortgage Indenture and Deed of Trust dated as of
December 1, 1986, between the Company and United Missouri
Bank, n.a. (Exhibit 4-a to Form 10-Q dated September 30,
1993)Subordinated Debenture (included in 4-d).
4-g *Eighth Supplemental Indenture dated as of December 1, 1993,
to General Mortgage Indenture and Deed of Trust dated as of
December 1, 1986, between the Company and United Missouri
Bank, n.a (Exhibit 4 to Registration Statement No. 33-51799).
4-h *Ninth Supplemental Indenture dated as of February 1, 1994,
to General Mortgage Indenture and Deed of Trust dated as of
December 1, 1986, between the Company and United Missouri
Bank, n.a. (Exhibit 4-h to Form 10-K dated December 31,
1993).
4-i Form of Tenth Supplemental Indenture dated as of November 1,
1994, to GeneralPreferred Securities Guarantee Agreement.
4-h *General Mortgage Indenture and Deed of Trust dated as of December 1, 1986,
between the Company and UMB Bank, N.A. creating(formerly United Missouri
Bank of Kansas City, N.A.), Trustee (Exhibit 4-bb to Form 10-K
for the Pledged Bondyear ended December 31, 1986).
4-i *Third Supplemental Indenture dated as of April 1, 1991, to
secure the Notes.Indenture dated as of December 1, 1986 (Exhibit 4-aq to
Registration Statement, Registration No. 33-42187).
4-j *Fourth Supplemental Indenture dated as of February 15, 1992, to
Indenture dated as of December 1, 1986 (Exhibit 4-y to From 10-K
for year ended December 31, 1991).
4-k *Fifth Supplemental Indenture dated as of September 15, 1992, to
Indenture dated as of December 1, 1986 (Exhibit 4-a to Form 10-Q
dated September 30, 1992).
4-l *Sixth Supplemental Indenture dated as of NoteNovember 1, 1992, to
Indenture dated as of December 1, 1986 (Exhibit 4-z to
Registration Statement, Registration No. 33-54196).
4-m *Seventh Supplemental Indenture dated as of October 1, 1993, to
Indenture dated as of December 1, 1986 (Exhibit 4-a to Form 10-Q
dated September 30, 1993).
4-n *Eighth Supplemental Indenture dated as of December 1, 1993, to
Indenture dated as of December 1, 1986 (Exhibit 4 to Registration
Statement, Registration No. 33-51799).
4-o *Ninth Supplemental Indenture dated as of February 1, 1994, to
Indenture dated as of December 1, 1986 (exhibit 4-h to Form 10-K
for year ended December 31, 1993).
4-p *Tenth Supplemental Indenture dated as of November 1, 1994, to
Indenture dated as of December 1, 1986 (Exhibit 4-i to Form 10-K
for year ended December 31, 1994).
4-q *Note Indenture dated as of November 1, 1994, between the Company
and Thethe Bank of New York creating the Notes.
4-kNotes (Exhibit 4-j to
Registration Statement, Registration No. 33-56309).
4-r *Note Indenture dated as of November 15, 1992, between the
Company andan The Bank of New York creating the Notes.
4-lNotes (Exhibit 4-aa
to Registration Statement, Registration No. 33-54196).
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4-s *Note Indenture dated as of February 15, 1992, between the
Company and The Bank of New York (Exhibit 4-bb to Registration
Statement, Registration No. 33-45736).
4-m4-t *Note Indenture dated as of April 1, 1991, between the Company
and The Bank of New York (Exhibit 4-bb to Registration Statement,
Registration No. 33-43187)33-42187).
4-n4-u *Form of Note Indenture dated as of December 1, 1996, between the
Company and The Bank of New York creating the Notes.
4-v *Resolution of Board of Directors Establishing 3.80% Cumulative
Preferred Stock (Exhibit 2-R to Registration Statement,
Registration No. 2-40239)2-402339).
4-o4-w *Resolution of Board of Directors Establishing 4% Cumulative
Preferred Stock (Exhibit 2-S to Registration Statement,
Registration No. 2-40239).
4-p4-x *Resolution of Board of Directors Establishing 4.50% Cumulative
Preferred Stock (Exhibit 2-T to Registration Statement,
Registration No. 2-40239).
4-q4-y *Resolution of Board of Directors Establishing 4.20% Cumulative
Preferred Stock (Exhibit 2-U to Registration Statement,
Registration No. 2-40239).
4-r4-z *Resolution of Board of Directors Establishing 4.35% Cumulative
Preferred Stock (Exhibit 2-V to Registration Statement,
Registration No. 2-40239).
4-s4-aa *Certificate of Designation of Board of Directors Establishing
the $50,000,000 Cumulative No Par Preferred Stock, Auction Series
A (Exhibit 4-a to Form 10-Q dated March 31, 1992).
55-a Opinion of J. S.Pepper, Hamilton & Scheetz re legality of Preferred
Securities.
5-b Opinion of J.S. Latz, Senior Vice President - Law, forand Chief Legal
Officer of KCPL, re legality of Subordinated Debentures and the
Company.Preferred Securities Guarantees.
8 Opinion of Sidley & Austin re tax matters.
12 Statement re Computation of Ratios of Earnings to Fixed Charges.Charges
and Ratios of Earnings to Fixed Charges and Preferred Dividend
Requirements.
23-a Consent of Independent Public Accountants.Accountants -- Coopers & Lybrand L.L.P.
23-b Consent of Counsel.Pepper, Hamilton & Scheetz (included in 5-a).
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23-c Consent of J.S. Latz (included in 5-b).
23-d Consent of Sidley & Austin (included in 8).
24 Powers of Attorney.attorney.
25-a Statement of eligibility and qualification on Form T-1 of UMBThe
First National Bank N.A.of Chicago, as Debt Trustee under the
Indenture.
25-b StatementStatements of eligibility and qualification on Form T-1Eligibility of The First National Bank of New York.
CopiesChicago
as Trustee under the Amended and Restated Declaration of Trust of
KCPL Financing I and under the Preferred Security Guarantee of
KCPL for the benefit of the documents listed aboveholders of Preferred Securities of
KCPL Financing I.
25-c Statements of Eligibility of The First National Bank of Chicago
as Trustee under the Amended and Restated Declaration of Trust of
KCPL Financing II and under the Preferred Security Guarantee of
KCPL for the benefit of the holders of Preferred Securities of
KCPL Financing II.
25-d Statements of Eligibility of The First National Bank of Chicago
as Trustee under the Amended and Restated Declaration of Trust of
KCPL Financing III and under the Preferred Security Guarantee of
KCPL for the benefit of the holders of Preferred Securities of
KCPL Financing III.
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
1. To file, during any period in which offers or sales are identified with an
asterisk have heretofore beenbeing made, a
post-effective amendment to this registration statement:
a. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
b. To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; and
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c. To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such at that time shall be deemed to be the initial bona fide
offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Provided, however, that (1)(a) and (1)(b) do not apply if the
information required to be included in a post-effective amendment by those items
is contained in periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Commission as exhibits to prior Registrations Statements andAct of 1934 that are incorporated herein by
reference and made a part hereof. The exhibit number and file
number of the documents so filed, and incorporated herein by reference, are
stated in parenthesis in the description of such exhibit.
Item 17. Undertakings.
(a)to this registration statement.
The undersigned registrantregistrants hereby undertakesundertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant'sKCPL's annual report pursuant to sectionSection 13(a) or sectionSection 15(d) of the
Securities and Exchange Act of 1934 that is incorporated by reference in the
registration statementRegistration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
atas that time shall be deemed to be the initial bona fide offering thereof.
(b)
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrantregistrants pursuant to the provisions described inunder Item 15 above, or
otherwise, the registrant hasregistrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrantregistrants of expenses incurred or paid by a director, officer or
controlling person of the registrantregistrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrantregistrants will, unless
in the opinion of itstheir counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by itthem is against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Kansas City
Power & Light Company, on behalf of each of the registrantRegistrants, certifies that it
has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this registration statement or amendment thereto to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Kansas City, and State of Missouri on the 3rdas of this 17th day of November, 1994.December, 1996.
KANSAS CITY POWER & LIGHT COMPANY
By /s/Drue Jennings
------------------------------
(Drue Jennings)
Chairman of the Board and
PresidentChief Executive Officer
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Each person whose signature appears below hereby constitutes and appoints
Drue Jennings and _______________, or either of them, acting alone, as his true
and lawful attorney-in-fact, with full power and authority to execute in the
name, place and stead of each such person in any and all capacities and to file,
an amendment or amendments to the Registration Statement (and all exhibits
thereto) and any documents relating thereto, which amendments may make such
changes in the Registration Statement as said officer or officers so acting
deem(s) advisable.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendmentRegistration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chairman of the Board and )
/s/Drue Jennings and PresidentChief Executive )
- ----------------------------- Officer (Principal Executive )
(Drue Jennings) Executive Officer) )
)
Senior Vice President-
)
/s/B. J. Beaudoin FinanceExecutive Vice President )
- ----------------------------- and BusinessChief Financial Officer )
(B. J. Beaudoin) Development (Principal ) Financial Officer) )
)
/s/Neil Roadman Controller (Principal )
(Neil Roadman)- ----------------------------- Accounting Officer) )
(Neil Roadman )
David)
*David L. Bodde*Bodde Director )
- ----------------------------- )
(David L. Bodde) )
)
William*William H. Clark*Clark Director )
- ----------------------------- )
(William H. Clark) )
)
Robert*Robert J. Dineen*Dineen Director ) December 17, 1996
- ----------------------------- )
(Robert J. Dineen) )
November 3, 1994
)
Arthur*Arthur J. Doyle*Doyle Director )
- ----------------------------- )
(Arthur J. Doyle) )
)
W.*W. Thomas Grant II*II Director )
- ----------------------------- )
(W. Thomas Grant II) )
)
George*George E. Nettels, Jr.* Director )
- ----------------------------- )
(George E. Nettels, Jr.) )
)
Linda*Linda Hood Talbott*Talbott Director )
- ----------------------------- )
(Linda Hood Talbott) )
)
Robert*Robert H. West*West Director )
- ----------------------------- )
(Robert H. West) )
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*By /s/Drue Jennings
---------------------
(Drue Jennings)
Attorney-in-fact
KCPL FINANCING I
(Registrant)
By: /s/ Andrea F. Bielsker
-----------------------------
Trustee
KCPL FINANCING II
(Registrant)
By: /s/ Andrea F. Bielsker
-----------------------------
Trustee
KCPL FINANCING III
(Registrant)
By: /s/ Andrea F. Bielsker
-----------------------------
Trustee
II-12