As filed with the Securities and Exchange Commission on March 28, 1996.
REGISTRATION NO. 33-April 29, 1997
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.DC 20549
-----------------------------
FORM S-3
REGISTRATION STATEMENT
UNDERunder
THE SECURITIES ACT OF 1933
--------------
WESTERN RESOURCES, INC.----------------
Western Resources, Inc.
(Exact name of registrant as specified in its charter)
KANSASKansas 48-0290150
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
818 KANSAS AVENUE
TOPEKA, KANSASKansas Avenue
Topeka, Kansas 66612
(913) 575-6300
(Address, including zip code, and telephone number, including
area code, of principal executive offices)
-----------------------------
JOHN----------------
John K. ROSENBERG, ESQ. STEVENRosenberg, Esq. Steven L. KITCHEN
EXECUTIVE VICE PRESIDENT EXECUTIVE VICE PRESIDENT AND
AND GENERAL COUNSEL CHIEF FINANCIAL OFFICER
WESTERN RESOURCES, INC. WESTERN RESOURCES, INC.
TOPEKA, KANSASKitchen
Executive Vice President Executive Vice President and
and General Counsel Chief Financial Officer
Western Resources, Inc. Western Resources, Inc.
Topeka, Kansas 66612 TOPEKA, KANSASTopeka, Kansas 66612
(913) 575-6300 (913) 575-6300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO
THE PUBLIC:----------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
-----------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_||_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
================================================================================
Title of each class of Proposed maximum aggregate Amount of
securities to be registered offering price* registration fee
- --------------------------------------------------------------------------------
First Mortgage Bonds and
Debt Securities..... $550,000,000(1)(2) $166,667(3)
================================================================================
* Estimated solely for the purpose of calculating the registration fee.
(1) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$550,000,000. If any such securities are issued at an original discount,
then the aggregate initial offering price as so discounted shall not exceed
$550,000,000, notwithstanding that the stated principal amount of such
securities may exceed such amount.
(2) Subject to footnote (1), there are being registered hereunder an
indeterminate principal amount of First Mortgage Bonds and an indeterminate
principal amount of unsecured debt securities ("Debt Securities"), as may
be sold at indeterminate prices, from time to time, by the Registrant.
(3) Of the $166,667 registration fee, $104,167 is being paid herewith. Pursuant
to Rule 429 of the General Rules and Regulations under the Securities Act
of 1933, the Prospectus which is part of this Registration Statement
constitutes a combined Prospectus which also relates to Registration
Statement No. 33-50069, previously filed by the Registrant on Form S-3, as
to which First Mortgage Bonds having an aggregate offering price of
$200,000,000 (for which a registration fee of $62,500 was paid) remain
unsold. This Registration Statement also constitutes Post-Effective
Amendment No. 1 to Registration Statement No. 33-50069. Such Post-Effective
Amendment shall become effective concurrently with the effectiveness of
this Registration Statement in accordance with Section 8(c) of the
Securities Act of 1933.
The registrant hereby amends this registration statement on such date or
dates as may be necessary 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) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
================================================================================
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
CALCULATION OF REGISTRATION FEE
==============================================================================================================
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price per aggregate offering Amount of
securities to be registered registered unit(1) price(1) registration fee
-------------------------------------------------------------------------------------------------------------
Common Stock,
Par Value $5.00 . . . . . . . 10,000,000 Shares $30.063 $300,630,000 $103,665.52
==============================================================================================================
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
[LOGO]
11,175,000 SHARES
WESTERN RESOURCES, INC.
COMMON STOCK
(PAR VALUE $5.00 PER SHARE)
Western Resources, Inc. (the "Company") intends from time to time to issue
up to 11,175,000 shares of its Common Stock, par value $5.00 per share (the
"Common Stock"). For each offering of Common Stock for which this Prospectus is
being delivered (the "Offered Common Stock"), there will be an accompanying
Prospectus Supplement (the "Prospectus Supplement"). The Common Stock will be
offered as set forth under "Plan of Distribution".
The reported last sale price of the Common Stock on the
New York Stock Exchange on March 27, 1996 was $30.625 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.SUBJECT TO COMPLETION, DATED APRIL 29, 1997
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1997)
$ ,000,000
Western Resources, Inc.
$ ,000,000 First Mortgage Bonds, % Convertible Series Due
Convertible at the option of the Company into
$ ,000,000 % Unsecured Senior Notes Due
(Interest payable on _________ and __________)
$ ,000,000 First Mortgage Bonds, % Convertible Series Due
Convertible at the option of the Company into
$ ,000,000 % Unsecured Senior Notes Due
(Interest payable on _________ and _________)
-----------------------
The First Mortgage Bonds % Convertible Series Due (the " Series") mature on
, and will not be redeemable prior to maturity. The First Mortgage Bonds %
Convertible Series Due (the " Series") mature on , and will not be redeemable
prior to maturity. The Series and the Series are sometimes collectively referred
to herein as the "New Bonds." At any time after the New Bonds are outstanding,
the Company may, solely at its option, convert all but not less than all of the
New Bonds of the Series into $ ,000,000 aggregate principal amount of the
Company's % Unsecured Senior Notes Due (the " Senior Notes"), and the New Bonds
of the Series into $ ,000,000 aggregate principal amount of the Company's %
Unsecured Senior Notes Due (the " Senior Notes"). If the Series is converted,
the Senior Notes will mature on , and will not be redeemable prior to maturity.
If the Series is converted, the Senior Notes will mature on , and will not be
redeemable prior to maturity. The Senior Notes and the Senior Notes are
sometimes collectively referred to herein as the "New Senior Notes" (the New
Bonds and New Senior Notes are referred to collectively as the "Offered
Securities"). The financial covenants and events of default pertaining to the
Debt Securities will differ from those pertaining to the New Bonds. The New
Senior Notes will be unsecured general obligations of the Company and junior in
right of payment to the Company's First Mortgage Bonds. As of December 31, 1996,
the Company had $658.9 million of First Mortgage Bonds outstanding (excluding
the KGE Bonds (as defined in the accompanying Prospectus)) and would have had
$1.3 billion of Mortgage Bonds and other secured indebtedness outstanding on a
pro forma basis giving effect to the pending acquisition of Kansas City Power &
Light Company ("KCPL"), in each case without giving effect to the offering made
hereby. See "Description of New Bonds -- Redemption and Purchase of New Bonds"
and " -- Company Conversion Option" and "Description of New Senior Notes" herein
and related information in the accompanying Prospectus.
------------------------
See "Risk Factors" on page S-4 for certain information relevant to an
investment in the New Bonds, including the Company's option to convert
the New Bonds into New Senior Notes.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Underwriting
Price to Discounts and Proceeds to
Public* Commissions+ Company++
Per Bond, Series...................... % % %
Total...................................... $ $ $
Per Bond, Series...................... % % %
Total...................................... $ $ $
* The New Bonds will bear interest from the date of delivery, and no accrual
of interest will be paid on the date of delivery.
+ The Company has agreed to indemnify the Underwriters (as defined herein)
against certain civil liabilities, including liabilities under the
Securities Act of 1933. (See "Underwriting")
++ Before deduction of expenses payable by the Company, estimated at $ .
---------------------------
The New Bonds are being offered by the Underwriters as set forth under
"Underwriting" herein. It is expected that the New Bonds will be ready for
delivery through the facilities of The Depository Trust Company, New York, New
York on or about , 1997, against payment therefor in immediately available
funds. The Underwriters are:
Dillon, Read & Co. Inc. Salomon Brothers Inc
Prudential Securities Incorporated Smith Barney Inc.
Oppenheimer & Co., Inc.
The date of this Prospectus Supplement is ,1997.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NEW BONDS
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
SECURITIES DURING AND AFTER THE OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE "UNDERWRITING."
PROSPECTUS SUPPLEMENT SUMMARY
The following summary information is qualified in its entirety by the
detailed information and financial statements incorporated herein by reference.
The Company
The Company and its divisions and wholly owned subsidiaries include KPL, a
rate-regulated electric and gas division of the Company ("KPL"),Kansas Gas and
Electric Company ("KGE"), a rate-regulated utility and wholly owned subsidiary
of the Company, Westar Capital, Inc.("Westar Capital"), Westar Security,
Inc.("Westar Security"), Westar Energy, Inc., The Wing Group, Ltd., non-utility
subsidiaries, and Mid Continent Market Center, Inc., a regulated gas
transmission service provider ("MCMC"). KGE owns 47% of Wolf Creek Nuclear
Operating Corporation ("WCNOC"), the operating company for the Wolf Creek
Generating Station ("Wolf Creek"). The Company's non-utility subsidiaries market
natural gas primarily to large commercial and industrial customers, provide
electronic security services, engage in international power project development
and provide other energy-related products and services.
The Company is engaged principally in the production, purchase,
transmission, distribution and sale of electricity, and the delivery and sale of
natural gas and the electronic security services. The Company serves
approximately 606,000 electric customers in eastern and central Kansas and
approximately 650,000 natural gas customers in Kansas and northeastern Oklahoma.
On December 12, 1996, the Company and ONEOK, Inc. ("ONEOK") announced a proposed
strategic alliance pursuant to which the Company will contribute its regulated
local natural gas distribution operations, MCMC and Westar Gas Marketing, Inc.,
and will become the largest shareholder of ONEOK. The transaction is anticipated
to be completed during the second half of 1997.
Westar Capital is a private investment company, wholly owned by the
Company, with investments in energy-related and technology-oriented businesses.
Westar Capital owns 38,287,111 shares of ADT Limited ("ADT"), or approximately
25% of the outstanding shares of ADT.
Westar Security is an electronic security services business with over
400,000 customer accounts. On December 31, 1996, the Company acquired all of the
assets of Westinghouse Security Systems, Inc. ("Westinghouse Security"), a
national security system monitoring company and a subsidiary of Westinghouse
Electric Corporation ("Westinghouse"). Westar Security is the third-largest
monitored security company in the United States with offices in many major U.S.
markets and direct access to customers in 44 states.
On February 7, 1997, the Company announced that it had entered into a
merger agreement with KCPL, pursuant to which KCPL will merge with and into the
Company. KCPL is a public utility engaged in the generation, transmission,
distribution and sale of electricity to approximately 430,000 customers in
western Missouri and eastern Kansas.
S-2
The Offering
Securities Offered $ ,000,000 aggregate principal amount of First
Mortgage Bonds % Convertible Series Due , convertible at the
option of the Company into $ ,000,000 ---- aggregate
principal amount of % Unsecured Senior Notes due . ------ $
,000,000 aggregate principal amount of First Mortgage Bonds
% Convertible Series Due , convertible at the option of the
Company into $ ,000,000 ---- aggregate principal amount of
_____% Unsecured Senior Notes due . Interest Payment Dates
Semiannually, on each _____ and _____, beginning __________.
Redemption No redemption prior to maturity
Company Conversion The Company, solely at its option, may at
Option any time convert either or both the Series or the Series,
each only in whole and not in part, into the Senior Notes
and the Senior Notes, respectively.
Use of Proceeds The net proceeds from the sale of the New Bonds
will be used for repayment of short-term indebtedness. In
the past 12 months short-term indebtedness increased as the
result of borrowings for general corporate purposes as well
as to finance a portion of the cost of the acquisition of
Westinghouse Security and the Company's acquisition in 1996
of shares of ADT (see the accompanying the Prospectus and
the information incorporated by reference therein).
The Company currently intends to surrender to the Trustee
any of the New Bonds which have been converted into Senior
Notes to effect the release from the lien of the Company's
First Mortgage of substantially all of the Company's gas
properties in connection with the ONEOK transaction. See
"Use of Proceeds" herein and "Description of New Bonds --
Release and Substitution of New Property" in the
accompanying Prospectus.
S-3
RISK FACTORS
Prospective purchasers of the New Bonds should carefully review the
information contained elsewhere in this Prospectus Supplement and the
accompanying Prospectus and should particularly consider the following:
Loss of Status as Secured Creditor Upon Conversion.
The Company has the right, solely at its option, to convert the New Bonds,
which are secured under the Company's Mortgage, into the New Senior Notes, which
will be unsecured obligations of the Company. The Company may exercise its
conversion right at any time and may do so if, among other things, it is
necessary or desirable in connection with a transaction which requires the
release of property from the lien of the Mortgage. By converting the New Bonds,
the Company will be able to satisfy certain requirements under the Mortgage to
retire Bonds in order to obtain the release of all or substantially all of its
gas properties, which release will be required in order to consummate the ONEOK
Transaction. See "The Company" in the accompanying Prospectus.
As a result of such a conversion, holders of the New Bonds would become
unsecured creditors of the Company as holders of the New Senior Notes. The right
to payment on the New Senior Notes will be junior to the right of payment on any
First Mortgage Bonds outstanding on the Conversion Date. As of December 31,
1996, the Company had $658.9 million of First Mortgage Bonds outstanding
(excluding the KGE Bonds (as defined in the accompanying Prospectus)) and would
have had $1.3 billion of First Mortgage Bonds and other secured indebtedness
outstanding on a pro forma basis giving effect to the consummation of the
pending merger with KCPL. The holders of the New Bonds will not receive any
additional payments or any increase in the rate of interest payable by the
Company as the result of the conversion of the New Bonds into New Senior Notes.
Structural Subordination of New Senior Notes.
Portions of the Company's operations are conducted through subsidiaries.
Therefore, due to structural subordination, the New Senior Notes will be
effectively subordinated to all existing and future indebtedness and other
liabilities and commitments of the Company's subsidiaries. As of December 31,
1996, the Company's subsidiaries had $1.3 billion of indebtedness outstanding.
Possible Effects of Bankruptcy on Holders of New Bonds.
In the event that the Company becomes subject to bankruptcy proceedings at
a time when the New Bonds are outstanding and have not been converted for New
Senior Notes, a court in such proceedings may order or approve the conversion of
New Bonds into New Senior Notes, with the result that holders of New Bonds would
not be entitled to the rights of secured creditors of the Company in such
bankruptcy proceedings. As a further result, among other things, such holders
would not be expected to be entitled to adequate protection of their security or
to interest accruing after the date of commencement of bankruptcy proceedings.
Alternatively, a court in a bankruptcy proceeding with respect to the Company
may decide that, even if the New Bonds cannot be converted for New Senior Notes,
the claims of holders of New Bonds should nevertheless be subordinated to other
secured creditors of the Company under principles of equitable subordination.
USE OF PROCEEDS
The net proceeds from the sale of the New Bonds will be used for repayment
of short-term indebtedness. In the past 12 months short-term indebtedness
increased as the result of borrowings for general corporate purposes as well as
to finance a portion of the cost of the acquisition of Westinghouse Security and
the Company's acquisition in 1996 of shares of ADT (see the accompanying
Prospectus and the information incorporated therein). As of March 31, 1997, such
short-term indebtedness had a weighted average interest rate of approximately
5.78% per annum and maturities of less than a year from the date of issuance.
S-4
SUMMARY FINANCIAL INFORMATION
The summary financial information of the Company set forth below should be
read in conjunction with the financial statements and other financial
information contained or incorporated by reference herein.
For the years ended December 31,
--------------------------------------------------------------------------------------
1996 1995 1994(1) 1993 1992(2)
---------- -------- ------- --------- ---------
(Dollars in Thousands)
Consolidated Income Summary:
Operating Revenues........... $2,046,819 $1,743,300 $1,764,769 $2,028,411 $1,639,422
Operating Income............. 303,993 278,709 275,050 292,360 239,721
Income Before Interest Charges 318,276 303,771 306,364 317,545 263,355
Net Income................... 168,950 181,676 187,447 177,370 127,884
Ratio of this Prospectus is March 28, 1996.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL ON THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
TheEarnings to Fixed
Charges.................. 2.16 2.41 2.65 2.36 2.02
- ----------
(1) After giving effect to the sales of the Company's Missouri gas properties,
effective January 31, 1994 and February 28, 1994.
(2) After giving effect to the acquisition of KGE, effective March 31, 1992.
As of December 31, 1996
-----------------------------------------------
Amount Percent
------ -------
(Dollars in Millions)
Consolidated Capitalization Summary (3):
First mortgage and pollution control bonds (net $1,341 37.2%
of premium/discount and amortization)
Other long-term debt 340 9.4
Preferred and preference stock 75 2.1
Company-obligated mandatorily redeemable
preferred securities of subsidiary trusts
holding solely Company subordinated debentures 220 6.1
Common stock equity 1,625 45.2
----- -----
Total capitalization $3,601 100.0%
====== =====
Short-term debt $981 --
- ----------
(3) Does not reflect the issuance of the New Bonds.
S-5
DESCRIPTION OF NEW BONDS
The following description of the particular terms of the New Bonds offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the New Bonds set forth in
the accompanying Prospectus under the heading "Description of the New Bonds", to
which description reference is hereby made.
Interest, Maturity and Payment. The New Bonds of the Series will mature on
, , and the New Bonds of the Series will mature on , . The
New Bonds will bear interest from at the rates per annum shown in their title,
payable on and of each year, commencing . Interest is payable to holders of
record on the interest payment date. Principal and interest are payable at the
office or agency of the Company in New York City. For so long as the New Bonds
are registered in the name of The Depository Trust Company, New York, New York
("DTC"), or its nominee, the principal and interest due on the New Bonds will be
payable by the Company or its agent to DTC for payment to its Participants (as
defined in the accompanying Prospectus) for subsequent disbursement to the
beneficial owners.
Redemption of New Bonds. The New Bonds will not be redeemable for any
purpose prior to their maturity dates.
Modifications. The Company has amended the Mortgage to provide that the
Mortgage may be modified or altered and the rights of the holders of Bonds may
be affected with the consent of the holders of 60% of the Bonds or, if less than
all series of Bonds are affected, the consent also of the holders of 60% of the
Bonds of each series affected.
Reservation of Rights to Amend the Mortgage. The Company has reserved the
right, subject to appropriate corporate action, but without the consent or other
action of holders of bonds of any series created after January 1, 1997, to amend
the Mortgage to permit, unless an event of default shall have happened and be
continuing, or shall happen as a result of making or granting an application (1)
the release of mortgaged property from the lien of the Mortgage, provided the
fair value to the Company of the mortgaged property subject to such lien
(excluding the mortgaged property to be released) equals or exceeds 10/7ths of
the aggregate principal amount of outstanding bonds under the Mortgage and any
prior lien bonds outstanding at the time of such release and (2) in the event
the Company is unable to obtain a release of property as described in clause
(1), the release from the lien of the Mortgage of mortgaged property if the fair
value to the Company thereof is less than 1/2 of 1% of the aggregate principal
amount of outstanding Bonds under the Mortgage and prior lien Bonds outstanding;
provided that, the property released pursuant to clause (2) in any 12
consecutive calendar months shall not exceed 1% of such bonds and prior lien
bonds; (3) the deletion of the net earnings test which must be met prior to the
issuance of additional bonds; (4) the deletion of the requirement to obtain an
independent engineer's certificate in connection with certain releases of
property from the lien of the Mortgage; and (5) the deletion of a financial test
to be met by another corporation in the event of the consolidation or merger of
the Company into or sale by the Company of its property as an entirety or
substantially as an entirety to such other corporation..
Company Conversion Option. At any time the New Bonds are outstanding, the
Company may, solely at its option, convert either or both of the Series or
Series, each only in whole but not in part, into the Senior Notes and the
Senior Notes, respectively. See "Description of Debt Securities" below and in
the accompanying Prospectus for a summary of the terms of the Debt Securities.
Eacg of the Holders of New Bonds will be entitled to receive $1,000 in principal
amount of New Senior Notes for each $1,000 of principal amount of New Bonds held
by such holder as of the date fixed for Conversion (the "Conversion Date"). In
connection with any such conversion, interest on converted New Bonds which has
accrued but has not been paid as of the Conversion Date will accrue on New
Senior Notes from the date on which interest was last paid on the New Bonds so
converted, provided that accrued interest on New Bonds converted after a record
date, but before the related interest payment date, shall be paid to the holder
of record of such New Bonds on such interest payment date, and the New Senior
Notes into which such New Bonds shall have been converted will begin to accrue
interest from such interest payment date. The rights of the holders of the New
Bonds as bondholders of the Company with respect to the New Bonds converted will
cease and the person or persons entitled to receive the New Senior
S-6
Notes issuable upon Conversion will be treated as the registered holder or
holders of such New Senior Notes from the Conversion Date. New Senior Notes
issued in conversion of New Bonds will be issued in principal amounts of $1,000
and integral multiples thereof. The Company may condition its obligation to
convert New Bonds upon the satisfaction of certain conditions. The Company will
mail to each holder of record of New Bonds to be converted into Senior Notes
written notice of such conversion at least 15 and not more than 120 days prior
to the Conversion Date. DTC will be the only registered holder of the New Bonds.
See "Book-Entry" in the accompanying Prospectus).
As described more fully below under "Description of New Senior Notes,"
following the Conversion Date holders of New Senior Notes will, among other
things, no longer be entitled to the security provided by the Mortgage since the
New Senior Notes will be unsecured obligations of the Company.
DESCRIPTION OF NEW SENIOR NOTES
The New Senior Notes will be identical to the New Bonds with respect to
their respective principal amounts, maturity dates, interest rates, record dates
and interest payment dates. However, holders of New Senior Notes will, among
other things, no longer be entitled to the security provided by the Mortgage,
and the financial covenants and the events of default pertaining to the New
Senior Notes will differ from those pertaining to the New Bonds. See
"Description of Debt Securities" in the accompanying Prospectus for a summary of
the other terms of the indenture under which the New Senior Notes will be
issued.
The following table sets forth certain material differences between the
financial covenants and events of default pertaining to the New Bonds and those
pertaining to the New Senior Notes:
Covenants: New Bonds New Senior Notes
- ---------- --------- ----------------
Limits on Company's ability to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy and information statements, and other
information filed by the Company canAdditional Bonds may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, Room
1024, N.W., Washington, D.C. 20549 and at certain of its Regional Offices at
Seven World Trade Center, Suite 1300, New York, N.Y. 10048 and 500 West Madison
Street, Suite 1400, Chicago, Ill. 60661. 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. Certainissued No restrictions
issue additional securities of the Company
are listed on the New York Stock Exchange, Inc. (the "New York Stock Exchange")
and reports, proxy and information statements and other information concerningonly if the Company can be inspected at the offices of the New York Stock Exchange, 20
Broad Street, New York, N.Y. 10005.
The Company has filedpledges
same type additional property, deposits
cash with the Commissiontrustee or retires
other Bonds and if certain
earnings coverage requirements
are met
Limits on Company's ability to Bonds have a registration statementfirst priority lien No restrictions unless
issue securities ranking senior on Form
S-3 (herein, together with all amendments and exhibits thereto, referred to as
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the informationCompany utility property, specifically set forth in the
Registration Statement, certain parts of whichplant and equipment, and so are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-3523) pursuant to the 1934 Act are incorporated herein by reference as of
their respective dates of filing and shall be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1995 (the "1995 Form 10-K"), which report includes the Annual Report on Form
10-K of Kansas Gas and Electric Company ("KGE") for the year ended December 31,
1995 (the "KGE 1995 Form 10-K").
2. The description of the Company's Common Stock contained in Item 7 of
the Company's Form 10-Q filed for the quarter ended March 31, 1979.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of this offering shall also be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the respective dates
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all documents referred to above which have been or may be incorporated by
reference in this Prospectus (not including exhibits to such incorporated
documents that are not specifically incorporated by reference into such
documents). Requests for such copies should be directed to Richard D. Terrill,
Esq., Secretary of the Company, 818 Kansas Avenue, Topeka, Kansas 66612, (913)
575-6322.
2
THE COMPANY
GENERAL
The Company and its wholly owned subsidiaries include KPL, a
rate-regulated electric and gas division of the Company, KGE, a rate-regulated
utility and wholly owned subsidiary of the Company, the Westar companies, non-
utility subsidiaries, and Mid Continent Market Center, Inc., a regulated gas
transmission service provider. KGE owns 47% of Wolf Creek Nuclear Operating
Corporation, the operating company for Wolf Creek Generating Station.
The Company is an investor owned holding company. The Company is engaged
principally in the production, purchase, transmission, distribution and sale of
electricity and the delivery and sale of natural gas. The Company serves
approximately 601,000 electric customers in eastern and central Kansas and
approximately 648,000 natural gas customers in Kansas and northeastern Oklahoma.
The Company's non-utility subsidiaries market natural gas primarily to large
commercial and industrial customers, provide electronic security services and
provide other energy-related products and services.
The Company was incorporated under the laws of the State of Kansas in
1924. The Company's corporate headquarters is located at 818 Kansas Avenue,
Topeka, Kansas 66612 and its telephone number is (913) 575-6300.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Common Stock will be added
to the general funds of the Company to be used for repayment of short-term
indebtedness, to refinance certain long-term indebtedness and for general
corporate purposes. Further information concerning the use of proceeds from the
sale of the Offered Common Stock will be set forth in the Prospectus Supplement relating to
such sale.
DESCRIPTION OF CAPITAL STOCK
Thethe Company's most senior ranked an issuance of New Senior Notes
securities
Limits on the ability of the Must meet specified limits on the No special tests
Company to combine with other amount of authorized capital stock of the Company is 95,600,000
shares, of which 85,000,000 shares are Common Stock, par value $5.00 per share,
4,000,000 shares are Preference Stock without par value, 600,000 shares are
Preferred Stock, par value $100.00 per share (the "Par Value Preferred Stock")
and 6,000,000 shares are preferred stock without par value (the "No Par Value
Preferred Stock"). The Par Value Preferred Stock and the No Par Value Preferred
Stock are referred to herein together as the "Preferred Stock".
COMMON STOCK
As of December 31, 1995, the Company had 62,855,961 shares of Common Stock
issued and outstanding. The holders of Common Stock and the Preferred Stock,
voting as one class, are entitled to one vote per share on all matters requiring
stockholder action (except for the election of directors) subject to the special
voting rights of holders of Preferred Stock and Preference Stock described
below. In all elections for directors, each holder of Preferred Stock or Common
Stock has the right to cast as many votes in the aggregate as equals the number
of shares held by him multiplieddebt owed by the
number of directors to be elected;
provided, however, that if the holders of the Preferred Stock are entitled to
vote separately as a class for the election of certain directors or the
Preferred Stock and the Preference Stock are each entitled to vote separately as
a class for the election of certain directors, the holders of the Common Stock
shall be entitled to vote separately as a class for the remaining directors. The
holders of Preferred Stock are entitled to elect a majority of the board of
directors if,companies combined company and so long as
dividends payable onprior series of Bonds are
outstanding Preferred Stock
are in default in an amount equalmust meet earnings
test
Events of Default:
Failure to four or more quarterly dividends, whether
or not consecutive.pay principal No grace period The holders of Preference Stock are entitled to elect two
directors if, and so long as, dividends payable on outstanding Preference Stock
are in default in an amount equal to six or more quarterly dividends, whether or
not consecutive. The holders of the Common Stock participate ratably in
liquidation, subject to the payment to the
3
holders of the Preferred Stock and Preference Stock of the preferential amounts
to which they are respectively entitled.
Dividends on the Common Stock may be declared and paid only out of surplus
or net profits legally available for theCompany lets five days go by
without payment of dividends and only when the
full dividends on the Preferred Stock and the Preference Stock have been paid or
declared and a sum sufficient for the payment thereof shall have been set apart.
In addition, the Company's Restated Articles of Incorporation contain further
restrictions on the dividends which may be paidprincipal
Failure to holders of the Common Stock.
In the event the Capitalization Ratio (as defined below) is less than 20%,
dividends (including the proposed payment) on the Common Stock and the
Preference Stock during the twelve month period ending with and including the
date of the proposed payment of such dividends may not exceed 50% of the net
income available for dividends during the twelve calendar month period ending
with and including the second calendar month immediately preceding the date of
the proposed payment of dividends on such shares of capital stock. Similarly, if
the Capitalization Ratio is 20% or more, but less than 25%, then the payment of
dividends on the Common Stock and the Preference Stock (including the proposed
payment) during the twelve month period ending with and including the date of
the proposed payment of such dividends may not exceed 75% of the net income of
the Company available for dividends for the twelve calendar months ending with
and including the second calendar month immediately preceding the date of the
proposed payment of dividends on such shares of capital stock. Except as
permitted by the provisions of the Company's Restated Articles of Incorporation
summarized in this paragraph, the Company may not pay dividends on the Common
Stock and the Preference Stock which would reduce the Capitalization Ratio to
less than 25%. "Capitalization Ratio" is defined to mean the ratio of the
capital represented by the Common Stock and the Preference Stock, including
premiums on the capital stock of the Company, plus the surplus accounts of the
Company, to the total capital of the Company, plus the surplus accounts of the
Company, at the end of the second calendar month immediately preceding the date
of the proposed payment of dividends, adjusted to reflect the proposed payment
of dividends.
PREFERRED STOCKinterest The Company is authorizedlets 30 days go by The Company lets 60 days go by
without paying interest without paying interest
Failure to issue 6,600,000 shares of Preferred Stock,
which may be issued from timeobserve other agreements The Company
fails to time in one or more series, each such seriesobserve The Company fails to
have such distinctive designation or title as may be fixed byobserve certain agreements made
concerning the Board priorNew agreements made
concerning the New Bonds (other than the
promise to Senior Notes (other than the
issuance of any shares thereof. Each series may differ from each other
series already outstanding as may be declared from time to time by the Board in
the following respects: (i) the rate of dividend; (ii) the amount per share, if
any, which the Preferred Stock shall be entitled to receive upon redemption,
liquidation, distribution or sale of assets, dissolution or winding up of the
Company; (iii) terms and conditions of conversion, if any; and (iv) terms of
sinking fund, redemption or purchase account, if any. As of December 31, 1995,
the Company had three series of Par Value Preferred Stock outstanding, the 4
1/2% Series (138,576 shares outstanding), the 4 1/4% Series (60,000 shares
outstanding) and the 5% Series (50,000 shares outstanding), and no shares of No
Par Value Preferred Stock were outstanding.
The Preferred Stock has special voting rights which are triggered when
dividends on the stock are in default in an amount equal to four or more
quarterly dividends, whether or not consecutive. If dividends are not paidpromise pay) for
four or more dividend periods on all series of Preferred Stock then outstanding,
the holders of the Preferred Stock are entitled to elect the smallest number of
directors necessary to constitute a majority of the full Board until such unpaid
dividends shall be paid. In addition, the Company may not, without the consent
of the holders of at least two-thirds of the Preferred Stock then outstanding,
voting as a class, (i) define or specify preferences, qualifications,
limitations or other rights for authorized but unissued shares of Preferred
Stock superior to those of outstanding shares of such stock (except for
differences described in items (i) through (iv) in the previous paragraph) or
amend, alter, change or repeal any of the express terms or provisions of the
then outstanding Preferred Stock in a manner substantially prejudicial to the
holders thereof, or (ii) issue or sell any Preferred Stock or any class of stock
ranking prior to or on a parity with the Preferred Stock other than in exchange
for or for the purpose of effecting the retirement of not less than a like
number of shares of Preferred Stock or shares of stock ranking prior to or on a
4
parity therewith or securities convertible into not less than a like number of
such shares unless (a) aggregate capital applicable to Common Stock and
Preference Stock plus surplus equals the involuntary liquidation preference of
all Preferred Stock and any such other stock ranking prior thereto or on a
parity therewith and (b) the Company's net earnings (as defined) for a period of
12 consecutive calendar months within the 15 calendar months preceding the date
of issuance, available for the payment of dividends, shall be at least two times
the annual dividend requirements on the Preferred Stock and on any such other
stock ranking prior thereto or on a parity therewith after giving effect to the
proposed issuance, and the net earnings (as defined), for the same period,
available for payment of interest shall be at least one and one-half times the
sum of annual interest requirements and dividend requirements on Preferred Stock
and such other stock ranking prior thereto or on a parity therewith after giving
effect to the proposed issuance.
The Restated Articles of Incorporation of the Company also provide that
without the consent of the holders of at least a majority of the Preferred Stock
then outstanding, voting as a class, or if more than one-third shall vote
negatively,60 days after
to pay) for more than 90 days after
notice from the Company shall not: (i) merge or consolidate with or into any
other corporation; (ii) sell, lease or exchange all or substantiallyTrustee. notice from the
Trustee.
S-7
UNDERWRITING
Subject to the terms and conditions set forth in the Purchase Agreement,
the underwriters named below (the "Underwriters") have severally agreed to
purchase from the Company the principal amounts of New Bonds set forth opposite
their names. The nature of the Underwriters' obligation is such that they are
severally committed to purchase and pay for all of the New Bonds if any are
purchased.
Underwriter Principal Amount Principal Amount
of its
property or assets unless the fair valueSeries of the net assets of the Company after
completion of such transaction shall at least equal the liquidation value of all
outstanding shares of Preferred Stock; or (iii) reacquire or pay any dividends
or make any other distribution upon shares of the Preference Stock or the Common
StockSeries
-------------- --------------
Dillon, Read & Co. Inc........................... $ $
Salomon Brothers Inc ............................
Prudential Securities Incorporated...............
Smith Barney Inc.................................
Oppenheimer & Co., Inc...........................
------------------------- -------------------------
Totals........................ $ ,000,000 $ ,000,000
============ ============
The Underwriters have advised the Company that the New Bonds will
initially be offered to the public by the Underwriters at the public offering
prices set forth on the cover hereof under "Price to Public," and to certain
dealers at such prices less a concession of % and % of the principal amount of
the Series and the Series, respectively. The Underwriters may allow, and such
dealers may reallow, a concession not exceeding % and % of the principal amount
of the Series and the Series, respectively, on sales to certain other dealers.
After the initial public offering, the offering prices, the concessions and the
reallowances may be changed by the Underwriters.
The offering of the New Bonds is made for delivery when, as and if accepted
by the Underwriters and subject to prior sale and to withdrawal, cancellation or
modification of the offer without notice. The Underwriters reserve the right to
reject any order for the purchase of the New Bonds.
The Company has agreed in the Purchase Agreement to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments made or required to be made
by the Underwriters with respect to such liabilities.
The Underwriters have rendered certain financial advisory services and
other related services to the Company for which they have received customary
fees.
The Company does not intend to apply for the listing of the New Bonds on
any national securities exchange. The Company has been advised by the
Underwriters that they intend to make a market in the New Bonds. The
Underwriters are under no obligation to do so and may discontinue, at any time
and without notice, any such market making in which it may engage. The Company
cannot predict the liquidity of any trading market for New Bonds.
In connection with the sale to the public of the New Bonds, certain of the
Underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the New Bonds. Specifically, the Underwriters may bid for
and purchase the New Bonds in the open market to stabilize the price of the New
Bonds. The Underwriters may also
S-8
overallot the New Bonds, creating a syndicate short position, and may bid for
and purchase the New Bonds in the open market to cover the syndicate short
position. In addition, the Underwriters may bid for and purchase the New Bonds
in market making transactions. These activities may stabilize or maintain the
market price of the New Bonds above market levels that may otherwise prevail.
The Underwriters are not required to engage in these activities, and may end
these activities at any time.
EXPERTS AND LEGALITY
The financial statements of Western Resources, Inc. included in or
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
The financial statements included in KCPL's Annual Report on Form 10-K for
the year ended December 31, 1996 incorporated by reference in this Prospectus
and in the Registration Statement as an Exhibit to the Company's April 2, 1997
Form 8-K, have been audited by Coopers & Lybrand L.L.P., independent public
accountants, as indicated in their reports with respect thereto, and are
included herein, in reliance upon the authority of said firm as experts in
giving said reports.
For further information, see "Legal Opinions" and "Experts" in the
accompanying Prospectus.
S-9
======================================================= ======================================================
No dealer, salesman or any other class of the stock of the Company over which the Preferred
Stockperson has preference with respectbeen
authorizied to the payment of dividendsgive any information or the
distribution of assets, unless afterto make any
such action the sum of (a) the capital
of the Company represented by the outstanding Preference Stock, Common Stock orrepresentations other stock over which the Preferred Stock has preference, (b) the Company's
earned surplus, and (c) any capital surplus of the Company, shall not be less
than the sum of $10,500,000 plus an amount equal to twice the annual dividend
requirement on all outstanding shares of the Preferred Stock and on any such
other stock ranking prior thereto or on a parity therewith.
For consideration at the Company's 1996 Annual Shareholders' Meeting is a
proposal to amend the Company's Restated Articles of Incorporation by removing
certain voting rights of the holders of Preferred Stock relating to the issuance
of unsecured indebtedness. The Company's Restated Articles of Incorporation
currently provides that so long as any shares of Preferred Stock are
outstanding, the Company shall not, without the consent of the holders of a
majority of the Preferred Stock then outstanding, voting together as a class, or
if more than one-third of such shares vote negatively, issue or assume any
unsecured indebtedness (except for refunding outstanding unsecured securities or
redeeming or retiring shares of outstanding Preferred Stock) unless, immediately
after such issuance or assumption, the total principal amount of all outstanding
unsecured indebtedness would not exceed 15% of the total principal amount of all
secured indebtedness, issued or assumed by the Company, then to be outstanding,
plus capital and surplus of the Company. The proposed amendment would eliminate
such limitation on the Company's issuance of unsecured debt.
PREFERENCE STOCK
The Company is authorized to issue 4,000,000 shares of Preference Stock,
which may be issued from time to timethose contained in one or more series, each such series to
have such distinctive designation or title as may be fixed by the Board prior to
the issuance of any shares thereof. Each series may differ from each other
series already outstanding, as may be declared from time to time by the Board,
in the following respects: (i) the rate of dividend; (ii) whether shares of
Preference Stock are subject to redemption, and if so, the amount or amounts per
share which the shares of such series would be entitled to receive in case of
redemption,this
Prospectus Supplement and the terms on which such shares may be redeemed; (iii) the
amounts payable in the case of the liquidation, distribution or sale of assets,
dissolution or winding up of the Company; (iv) terms and conditions of
conversion, if any; (v) terms of sinking fund, redemption or purchase account,
if any; and (vi) any designations, preferences and relative participating,
optional or other special rights and qualifications, limitations or restrictions
thereof. As of December 31, 1995, the Company had two series of Preference Stock
outstanding: the 7.58% Series, of which 500,000 shares were outstanding; and the
8.50% Series, of which 1,000,000 shares were outstanding.
5
The Preference Stock has voting rights which are triggered when dividends
on the stock are in default in an amount equal to six or more quarterly
dividends, whether or not consecutive. If dividends are not paid for six or more
dividend periods, the holders of the Preference Stock are entitled to elect two
directors to the Board until such unpaid dividends shall be paid. In addition,
the Company may not, without the consent of the holders of at least two-thirds
of the Preference Stock then outstanding, voting as a class, (i) amend, alter,
change or repeal any of the express terms and conditions of the then outstanding
Preference Stock in a manner substantially prejudicial to the holders thereof,
or (ii) create any class of stock ranking prior to the Preference Stock as to
dividends or upon liquidation, or securities convertible into shares ranking
prior to the Preferred Stock in such respects; provided, no such consent shall
be required with respect to the taking of any such action relating to the
Preferred Stock.
TRANSFER AGENTS AND REGISTRARS
The Transfer Agents for the Common Stock are Western Resources, Inc.,
Topeka, Kansas, and Continental Stock Transfer and Trust Company, New York, New
York. The Registrars for the Common Stock are Western Resources, Inc., Topeka,
Kansas, and Continental Stock Transfer and Trust Company, New York, New York.
ANTI-TAKEOVER CONSIDERATIONS
Article XVII of the Company's Restated Articles of Incorporation requires
the affirmative vote of the holders of not less than 80% of the outstanding
shares of Common and Preferred Stock entitled to vote and the affirmative vote
of the holders of not less than a majority of the outstanding shares of stock
entitled to vote held by any stockholders other than any stockholder, together
with its affiliates and associates, which becomes the beneficial owner of 10% or
more of the outstanding shares entitled to vote (an "Interested Stockholder"),
to approve or authorize certain "Business Combinations" (including any merger,
consolidation, self-dealing transaction, recapitalization or reclassification or
issuance of stock) with an Interested Stockholder. This Article does not apply
to any Business Combination with an Interested Stockholder (i) that has been
approved by a majority of the directors of the Company who were members of the
Board immediately prior to the time an Interested Stockholder involved in a
Business Combination became an Interested Stockholder, or (ii) in which the cash
or fair market value of the consideration offered in such Business Combination
is not less than the highest price per share paid by the Interested Stockholder
in acquiring any of its holdings of each class of the Company's stock.
The Preferred Stock is also entitled to supermajority voting rights with
respect to certain mergers, consolidations, sales, leases or exchanges of all or
substantially all of the assets of the Company, issuance or assumption of
unsecured indebtedness or distributions of dividends or assets to stockholders.
See "Description of Capital Stock -- Preferred Stock".
The Company's Restated Articles of Incorporation provide for a classified
board of directors consisting of not less than seven nor more than fifteen
directors. The directors are divided into three classes as nearly equal in
number as may be. Voting for directors is on a cumulative basis, and directors
are elected to serve a term of three years. Under the By-laws, directors may be
removed only for cause as set forth therein. Provisions in the By-laws relating
to the classified board of directors and removal of directors may only be
amended, altered or repealed by the affirmative vote of at least 80% of the
outstanding shares entitled to vote in any election.
PLAN OF DISTRIBUTION
The Company may sell the Common Stock in any of the following ways: (i)
through underwriters or dealers; (ii) directly to one or more purchasers; or
(iii) through agents. The applicableaccompanying Prospectus Supplement will set forth the
terms of the offering of any of the Common Stock, including the names of any
underwriters or agents, the purchase price of such Common Stock and the proceeds
to the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price, any
discounts or
6
concessions allowed or reallowed or paid to dealers and any securities exchanges
on which such Common Stock may be listed.
If underwriters are used in the sale, the Common Stock will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. Such Common
Stock may be offered to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise set forth in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase such Common Stock will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all of such Common Stock if any of such Common Stock is purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time. Only underwriters named in a
Prospectus Supplement are deemed to be underwriters
in connection with the Common Stock offered thereby.
The Common Stock may alsooffer contained in this Western Resources, Inc.
Prospectus Supplement and the accompanying _____________
Prospectus, and, if given or made, such information
or representations must not be sold directlyrelied upon as having $ ,000,000
been authorized by the Company or through
agents designatedthe Underwriters.
This Prospectus Supplement and the accompanying
Prospectus do not constitute an offer by the Company
from timeor by any underwriter to time. Any agent involvedsell securities in the
offer or sale of the Common Stock will be named, and any commissions payable bystate
to any person to whom it is unlawful for the Company $ ,000,000
or any Underwriter to such agent will be set forthsell securities in the applicable Prospectus
Supplement. Unless otherwise indicated in the applicable Prospectus Supplement,
any such agent will act on a best efforts basis for the period of its
appointment.
If so indicated in a Prospectus Supplement with respectstate to the Common
Stock, the Company will authorize agents, underwriters or dealersFirst Mortgage Bonds
any person to solicit
offers by certain institutions to purchase such Common Stock from the Company at
the public offering price set forth in the Prospectus Supplement pursuant to
Delayed Delivery Contracts ("Contracts") providing for payment and delivery on
the date or dates stated in the Prospectus Supplement. Each Contract will be for
an amount not less than the respective amounts stated in the Prospectus
Supplement. Institutions with whom the Contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions, and other
institutions, but will in all cases be subject to the approval of the Company.
The Contracts will not be subject to any conditions except (i) the purchase by
an institution of the Common Stock covered by its Contract shall not at the time
of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institutionit is subject, and (ii) if the Common Stock is
being sold to underwriters, the Company shall have sold to such underwriters the
amount of Common Stock less the number of shares covered by the Contracts. The
underwriters will not have any responsibility in respect of the validity or
performance of the Contracts.
If dealers are utilized in the sale of any Common Stock, the Company will
sell such Common Stock to the dealers, as principals. Any dealer may then resell
such Common Stock to the public at varying prices to be determined by such
dealer at the time of resale. The name of any dealer and the terms of the
transaction will be set forth in the Prospectus Supplement with respect to the
Common Stock being offered thereby.
Any underwriters, dealers or agents participating in the distribution of
the Common Stock may be deemed to be underwriters and any discounts or
commissions received by them on the sale or resale of the Common Stock may be
deemed to be underwriting discounts and commissions under the Securities Act of
1933 (the "Securities Act"). Agents and underwriters may be entitled under
agreements entered into with the Company to indemnification by the Company
against certain liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments that the agents or underwriters may be
required to make in respect thereof. Agents and underwriters may be customers
of, engaged in transactions with, or perform servicesunlawful for the Company or its
affiliates% Convertible Series Due ,
such Underwriter to make such offer in such state. Convertible into
Neither the delivery of this Prospectus Supplement % Unsecured Senior Notes Due
and the accompanying Prospectus nor any sale made
hereunder shall, under any circumstances, create any
implication that there has been no change in the ordinary course of business.
7
LEGAL OPINIONS
The statements as to matters of law and legal conclusions set forth in
this Prospectus and in the documents incorporated by reference herein have been
reviewed by John K. Rosenberg, Esq., Executive Vice President and General
Counsel$ ,000,000
affairs of the Company and are set forth or incorporated by reference herein in
reliance uponsince the opinion of Mr. Rosenberg. At December 31, 1995, Mr. Rosenberg
owned directly and/or beneficially 2,900 shares of Common Stock and had been
granted pursuant to and subject to the terms of the Company's Long-Term
Incentive Program 999 performance shares.
Certain legal matters in connection with the Common Stock will be passed
upon by John K. Rosenberg, Esq., Executive Vice President and General Counsel of
the Company, and by Cahill Gordon & Reindel, a partnership including a
professional corporation, counsel for the Company. Cahill Gordon & Reindel will
not pass upon the incorporation of the Company and will rely upon the opinion of
John K. Rosenberg, Esq. as to matters of Kansas law.
EXPERTS
The financial statements and schedules included in or incorporated by
reference in Western Resources' 1995 Annual Report on Form 10-K have been
audited by Arthur Andersen LLP, independent public accountants, as set forth in
their reports. Since 1993, Arthur Andersen LLP has audited both the Company and
KGE. The financial statements and supporting schedules referred to above have
been incorporated herein in reliance upon the authority of Arthur Andersen LLP
as experts in giving said reports.
8
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THISdate hereof. First Mortgage Bonds,
% Convertible Series Due
Convertible into
% Unsecured Senior Notes Due
--------------------
PROSPECTUS INCLUDING ANY
PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE
OFFER OF THE COMMON STOCK, AND, IF GIVEN OR WESTERN RESOURCES, INC.
MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN ----------
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER,
DEALER, OR AGENT. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER BY THE COMPANY OR BY ANY 11,175,000 SHARES
UNDERWRITER, DEALER OR AGENT TO SELL
SECURITIES IN ANY STATE TO ANY PERSON TO WHOM COMMON STOCK
IT IS UNLAWFUL FOR THE COMPANY OR ANY
UNDERWRITER, DEALER OR AGENT TO MAKE SUCH
OFFER IN SUCH STATE. NEITHER THE DELIVERY OF (PAR VALUE $5.00 PER SHARE)
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF.
[LOGO]
TABLE OF CONTENTS
-------------
PAGEPage
Prospectus Supplement
Prospectus Supplement Summary............... S-2 , 1997
Risk Factors................................ S-4
Use of Proceeds............................. S-4
Summary Financial Information............... S-5 Dillon, Read & Co. Inc.
Description of New Bonds.................... S-6 Salomon Brothers Inc
Description of New Senior Notes............. S-7 Prudential Securities Incorporated
Underwriting................................ S-8 Smith Barney Inc.
Experts and Legality........................ S-9 Oppenheimer & Co., Inc.
Prospectus
Available Information................Information....................... 2
Incorporation of Certain Documents
by Reference.............Reference............................ 2
PROSPECTUSInformation on ADT Limited and
Kansas City Power & Light Company....... 3
The Company.......................... 3Company................................. 4
Use of Proceeds...................... 3Proceeds............................. 5
Description of Capital Stock......... 3New Bonds.................... 5
Description of Debt Securities.............. 11
Book-Entry.................................. 18
Plan of Distribution................. 6Distribution........................ 20
Legal Opinions....................... 8 -------------
Experts..............................Opinions.............................. 21
Experts..................................... 21
======================================================= ======================================================
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED APRIL 29, 1997
$550,000,000
Western Resources, Inc.
First Mortgage Bonds
and Debt Securities
----------------------
Western Resources, Inc. (the "Company") intends from time to time to issue
up to $550,000,000 aggregate principal amount of its First Mortgage Bonds (the
"New Bonds"), senior, unsecured debt securities (the "Debt Securities") or any
combination thereof (the New Bonds and Debt Securities are referred to herein,
collectively, as the "Securities"), in one or more series, on terms to be
determined at the time or times of sale. At each time that Securities (the
"Offered Securities") are offered for which this Prospectus is being delivered,
there will be an accompanying Prospectus Supplement (the "Prospectus
Supplement") that sets forth the series designation, aggregate principal amount,
maturity or maturities, rate or rates and times of payment of interest,
redemption terms, any sinking fund terms, any conversion terms, and any other
special terms of the Offered Securities. The Securities will be offered as set
forth under "Plan of Distribution." If described in a Prospectus Supplement, New
Bonds of any series may be converted, solely at the option of the Company, in
their entirety into Debt Securities with the same aggregate principal amount,
maturity date, interest rate and interest payment dates as the New Bonds so
converted. The financial covenants, events of default and certain other terms
pertaining to the Debt Securities will differ from those pertaining to the New
Bonds. See "Description of New Bonds -- Company Conversion Option" and
"Description of Debt Securities."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy and information statements, and other
information filed by the Company, can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at certain of its Regional Offices at Seven World
Trade Center, 13th Floor, New York, N.Y. 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, IL. 60661. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and by accessing the
Commission's Web site, http://www.sec.gov. Certain securities of the Company are
listed on the New York Stock Exchange (the "NYSE"), and reports, proxy
statements and other information concerning the Company can be inspected at the
offices of such Exchange, 20 Broad Street, New York, N.Y. 10005. Each of ADT
Limited ("ADT") and Kansas City Power & Light Company ("KCPL") has securities
listed on the NYSE, and in addition ADT has securities listed on the London
Stock Exchange, the Frankfurt Stock Exchange and the Bermuda Stock Exchange, and
KCPL has securities listed on the Chicago Stock Exchange (the "CSE"). Because
each of ADT and KCPL is also subject to the informational requirements of the
1934 Act and has securities listed on the NYSE, information concerning such
companies is available from the same sources as given above with respect to the
Company. Furthermore, information concerning KCPL only is available at the
offices of the CSE, 440 South LaSalle Street, Chicago, Illinois 60605.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated herein
by reference as of their respective dates of filing and shall be deemed to be a
part hereof:
1. The Company's Annual Report on Form 10-K (File No. 1-3523) for the year
ended December 31, 1996 (the "Company's 1996 Form 10-K").
2. The Company's Current Reports on Form 8-K (File No. 1-3523) dated
February 10, 1997 and April 2, 1997 (the "Company's April 2, 1997 Form 8-K")(in
which KCPL's Annual Report on Form 10-K is included as an exhibit).
3. The information under the captions "Prospectus Summary," "Risk Factors,"
"Reasons for the Offer," "Litigation," "The Offer" and "The Amalgamation" set
forth in Amendment No. 4 to the Company's Registration Statement on Form S-4
(File No. 333-18097) filed by the Company as declared effective on March 14,
1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14,
or 15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of this offering shall also be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
2
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all documents referred to above which have been or may be incorporated by
reference in this Prospectus (not including exhibits to such incorporated
information that are not specifically incorporated by reference into such
information). Requests for such copies should be directed to Richard D. Terrill,
Esq., Secretary of the Company, 818 Kansas Avenue, Topeka, Kansas 66612, (913)
575-6322.
INFORMATION ON
ADT LIMITED AND KANSAS CITY POWER & LIGHT COMPANY
While the Company has included or incorporated in this Prospectus by
reference information concerning ADT and KCPL insofar as it is known or
reasonably available to the Company, KCPL is not affiliated with the Company,
and ADT has not to date permitted access by the Company to ADT's books and
records for the purpose of preparing this Prospectus. Therefore, information
concerning ADT which has not been made public was not available to the Company
for the purpose of preparing this Prospectus. Although the Company has no
knowledge that would indicate that statements relating to ADT or KCPL contained
or incorporated by reference in this Prospectus in reliance upon publicly
available information are inaccurate or incomplete, the Company was not involved
in the preparation of such information and statements and, for the foregoing
reasons, is not in a position to verify any such information or statements. See
"The Company."
Pursuant to Rule 409 promulgated under the Securities Act of 1933, the
Company has requested that Coopers & Lybrand provide to the Company the
information required for complete disclosure concerning the business,
operations, financial condition and management of ADT. Neither ADT nor Coopers &
Lybrand has yet provided any information in response to such request and
therefore such information cannot be obtained without unreasonable effort or
expense. The Company will include any and all information which it receives from
ADT or Coopers & Lybrand prior to the expiration of the ADT Offer (as defined
below) and the termination of this offering which the Company deems material,
reliable and appropriate in a subsequently prepared amendment or supplement
hereto or in a document filed with the Commission and incorporated by reference
in this Prospectus.
3
THE COMPANY
General
The Company and its divisions and wholly owned subsidiaries include KPL, a
rate-regulated electric and gas division of the Company ("KPL"), Kansas Gas and
Electric Company ("KGE"), a rate-regulated utility and wholly owned subsidiary
of the Company, Westar Capital, Inc.("Westar Capital"), Westar Security, Inc.
("Westar Security"), Westar Energy, Inc., The Wing Group, Ltd., non-utility
subsidiaries, and Mid Continent Market Center, Inc., a regulated gas
transmission service provider ("MCMC"). KGE owns 47% of Wolf Creek Nuclear
Operating Corporation ("WCNOC"), the operating company for the Wolf Creek
Generating Station ("Wolf Creek"). The Company's non-utility subsidiaries market
natural gas primarily to large commercial and industrial customers, provide
electronic security services, engage in international power project development
and provide other energy-related products and services.
The Company is engaged principally in the production, purchase,
transmission, distribution and sale of electricity, the delivery and sale of
natural gas and electronic security services. The Company serves approximately
606,000 electric customers in eastern and central Kansas and approximately
650,000 natural gas customers in Kansas and northeastern Oklahoma. On December
12, 1996, the Company and ONEOK, Inc. ("ONEOK") announced a proposed strategic
alliance pursuant to which the Company will contribute its regulated local
natural gas distribution operations, MCMC and Westar Gas Marketing, Inc.
("Westar Gas Marketing"), and will become the largest shareholder of ONEOK. This
transaction is scheduled to be completed during the second half of 1997.
Westar Capital is a private investment company, wholly owned by the
Company, with investments in energy-related and technology-oriented businesses.
Westar Capital owns 38,287,111 shares of ADT, or approximately 25% of the
outstanding shares of ADT. ADT is engaged in the electronic security services
business providing continuous monitoring of commercial and residential security
systems for customers in North America and abroad.
Westar Security is a rapidly growing electronic security services business
with over 400,000 customer accounts. On December 31, 1996, the Company acquired
all of the assets of Westinghouse Security Systems, Inc. ("Westinghouse
Security"), a national security system monitoring company and a subsidiary of
Westinghouse Electric Corporation ("Westinghouse"). Westar Security is the
third-largest monitored security company in the United States with offices in
many major U.S. markets and direct access to customers in 44 states.
On February 7, 1997, the Company announced that it had entered into a
merger agreement with KCPL, pursuant to which KCPL will merge with and into the
Company. KCPL is a public utility engaged in the generation, transmission,
distribution and sale of electricity to approximately 430,000 customers in
western Missouri and eastern Kansas.
During 1996, the Company purchased approximately 38 million common shares
of ADT for approximately $589 million. On December 18, 1996 the Company publicly
announced its intention to commence an offer to exchange $22.50 in cash and
shares of the Company's common stock for each remaining share of ADT not already
owned by the Company (the "ADT Offer"). The value of the ADT Offer, assuming the
Company's average stock price prior to closing is above $29.75 per common share,
is approximately $3.5 billion, including the Company's existing investment in
ADT. A registration statement covering the proposed ADT Offer was declared
effective by the Commission on March 14, 1997, and the Company commenced the ADT
Offer on March 17, 1997. The ADT Offer will be subject to the approval of ADT
and Company shareholders and certain
4
regulatory authorities. On March 17, 1997, it was announced that ADT and
Tyco International Ltd. ("Tyco") had entered into a definitive agreement
pursuant to which Tyco would effectively buy ADT. As described in the Company's
1996 Form 10-K incorporated herein, the Company is in litigation with regard to
ADT.
The Company was incorporated under the laws of the State of Kansas in 1924.
The Company's principal executive offices are located at 818 Kansas Avenue,
Topeka, Kansas 66612, and its telephone number is (913) 575-6300.
USE OF PROCEEDS
The net proceeds from the sale of the Securities will be added to the
general funds of the Company to be used for repayment of indebtedness and
general corporate purposes. Information concerning the use of proceeds from the
sale of each series of the Securities will be set forth in the Prospectus
Supplement relating to such series.
DESCRIPTION OF NEW BONDS
The New Bonds are to be issued under and secured by the Mortgage and Deed
of Trust, dated July 1, 1939 (the "Original Indenture"), between the Company and
Harris Trust and Savings Bank, as Trustee (the "Trustee"), as supplemented and
amended by thirty-two supplemental indentures and as to be supplemented and
amended by a new supplemental indenture or indentures providing for the series
of New Bonds to be issued (the Original Indenture as so supplemented and amended
being herein called the "Mortgage"). The Mortgage has been filed as an exhibit
to the Registration Statement of which this Prospectus is a part, and the bonds
of any series issued under the Mortgage are referred to herein as "Bonds" or
"First Mortgage Bonds." The following is a brief summary of certain provisions
contained in the Mortgage. Such summary does not purport to be complete and is
qualified in its entirety by express reference to the Mortgage.
If the Supplemental Indenture under which a series of New Bonds are issued
so provides, at any time such New Bonds are outstanding, the Company may, solely
at its option, convert the New Bonds, in whole but not in part, into Debt
Securities. Such Debt Securities will be identical to the series of New Bonds
with respect to the maturity date, interest rate and interest payment dates;
however, holders of Debt Securities will, among other things, no longer be
entitled to the security provided by the Mortgage since the Debt Securities will
be unsecured obligations of the Company, and the financial covenants, the events
of default and certain other terms pertaining to the Debt Securities will differ
from those pertaining to the New Bonds. See "--Company Conversion Option" and
"Description of Debt Securities."
General
The New Bonds will be issued only in the form of registered bonds without
coupons in denominations of $1,000 and multiples thereof. New Bonds will be
exchangeable for other New Bonds of the same series in equal aggregate principal
amounts without charge to the holders except for any applicable tax or
governmental charge. The Company intends that the New Bonds will be issued in
the form of one or more fully registered global certificates representing the
aggregate principal amount of the New Bonds and will be deposited with The
Depository Trust Company ("DTC"). See "Book-Entry."
The Prospectus Supplement for each series of New Bonds will set forth the
issue date, maturity date, interest rate, and interest payment dates applicable
to such series and whether such series of New Bonds will be
5
convertible at the Company's option for Debt Securities, as well as the terms
thereof. Subject to certain exceptions provided in the Mortgage, interest is
payable at either the office of the Trustee in Chicago, Illinois, or of the
Paying Agent, Harris Trust and Savings Bank, New York, New York, to the persons
in whose names the New Bonds are registered at the close of business on the
tenth day prior to the interest payment date (the "Record Date") or, at the
option of the Company, may be paid by checks mailed to such persons at their
registered addresses. Principal of the New Bonds is to be payable at either of
the agencies of the Company mentioned above.
There will be no improvement or maintenance fund for the New Bonds. The
applicable Prospectus Supplement will set forth any sinking fund provided for a
particular series of New Bonds.
The Company maintains routine banking relationships with the Bank of
Montreal, the parent of the Trustee. The Trustee is also Indenture Trustee under
the Indenture pursuant to which the Debt Securities will be issued. The Bank of
Montreal had a $49.5 million participation in the Company's revolving credit
facilities as of February 28, 1997.
Redemption Provisions
The Prospectus Supplement for each series of New Bonds will set forth the
redemption provisions, if any, of such New Bonds.
Issuance of Additional Bonds
Additional Bonds ranking equally with the Bonds of other series then
outstanding may be issued having such dates, maturities, interest rates,
redemption prices and other terms as may be determined by the Board of
Directors. Additional Bonds may be issued in principal amounts not exceeding:
(1) 60% (so long as Bonds issued prior to January 1, 1997 remain outstanding,
and thereafter 70%) of the net bondable value of property additions not subject
to an unfunded prior lien; (2) the principal amount of Bonds retired or to be
retired (except out of trust moneys); and (3) the amount of cash deposited with
the Trustee for such purpose, which may thereafter be withdrawn upon the same
basis that additional Bonds are issuable under (1) or (2) above. Additional
Bonds may not be issued on the basis of property additions subject to an
unfunded prior lien. (Mortgage, Article III; Twenty-Sixth, Twenty-Eighth,
Twenty-Ninth, Thirtieth, Thirty-First and Thirty-Second Supplemental Indentures,
Article V.)
As of December 31, 1996, the Company had approximately $1.0 billion of net
bondable property additions not subject to unfunded prior liens (the KGE
Mortgage described under "Priority and Security" below constitutes such an
unfunded prior lien in respect of certain properties of the Company) enabling it
to issue approximately $618 million principal amount of additional Bonds on such
date. As of December 31, 1996, the Company may also issue up to approximately $3
million of additional Bonds on the basis of Bonds which have been retired. The
New Bonds may be issued against the principal amount of Bonds retired or to be
retired.
So long as Bonds issued prior to January 1, 1997 remain outstanding,
additional Bonds may not be issued unless net earnings of the Company available
for interest, depreciation and property retirements for a period of any 12
consecutive months during the period of 15 calendar months immediately preceding
the first day of the month in which the application for authentication and
delivery of additional Bonds is made shall have been not less than the greater
of two times the annual interest charges on, or 10% of the principal amount of,
all Bonds then outstanding, all additional Bonds then applied for, all
outstanding prior lien bonds and all prior lien bonds, if any, then being
applied for. Bonds cancelled at or prior to the time application is made for the
issuance of New Bonds are not deemed to be outstanding for purposes of
calculating interest charges in determining whether the net
6
earnings test is met for the issuance of additional Bonds. Bonds or prior lien
bonds for which moneys sufficient for the payment thereof have been deposited
are not considered outstanding for this purpose. The net earnings test referred
to need not be satisfied to issue additional Bonds (i) on the basis of property
additions subject to an unfunded prior lien which simultaneously will become a
funded prior lien, if application for the issuance of the additional Bonds is
made at any time after a date two years prior to the date of the maturity of the
Bonds secured by the prior lien and (ii) on the basis of the payment at maturity
of Bonds theretofore issued by the Company, or the redemption, conversion or
purchase of Bonds after a date two years prior to the date on which such Bonds
mature. Based on the Company's results for the year ended December 31, 1996, the
Company could issue approximately $772 million principal amount of additional
Bonds (7.75% interest rate assumed, without giving effect to the issuance of the
New Bonds offered hereby). (Mortgage, Article III, Sections 3, 4, and 6;
Twenty-Sixth, Twenty-Eighth, Twenty-Ninth, Thirtieth, Thirty-First and
Thirty-Second Supplemental Indentures, Article V.) The Company has reserved the
right and intends to amend the Mortgage to eliminate the foregoing requirement
once all Bonds issued prior to January 1, 1997 are no longer outstanding. See
"Modification of the Mortgage."
Release and Substitution of Property
The Mortgage provides that, subject to various limitations, property may be
released from the lien thereof upon the basis of cash deposited with the
Trustee, Bonds or purchase money obligations delivered to the Trustee, prior
lien bonds delivered to the Trustee, or unfunded net property additions
certified to the Trustee. (Mortgage, Article VII.) The Mortgage also in effect
permits the withdrawal of cash against the certification to the Trustee of gross
property additions at 100%, or the net bondable value of property additions at
60% (so long as Bonds issued prior to January 1, 1997 remain outstanding and
thereafter 70%), or the deposit with the Trustee of Bonds acquired by the
Company. (Mortgage, Article VIII; Sections 1-3; Twenty-Sixth, Twenty-Eighth,
Twenty-Ninth, Thirtieth, Thirty-First and Thirty-Second Supplemental Indentures,
Article V.)
The Mortgage contains special provisions with respect to the release of all
or substantially all of the Company's gas properties or its electric properties.
(Twenty-Sixth, Twenty-Eighth, Twenty-Ninth, Thirtieth, Thirty-First and
Thirty-Second Supplemental Indentures, Article IV, Sections 2 and 3.) The
Company currently intends to tender the converted New Bonds to the Trustee to
effect the release of substantially all of its gas properties in connection with
the closing of the ONEOK Transaction. See "The Company." To the extent not so
used, converted New Bonds may be used by the Company to provide for the issuance
of additional Bonds under the Mortgage in substitution of such New Bonds.
(Mortgage, Article III, Section 6). The Company has reserved the right and
intends to amend the Mortgage to change the release and substitution provisions.
See "Modification of the Mortgage."
Priority and Security
In the opinion of Richard D. Terrill, Esq., Corporate Secretary and
Associate General Counsel of the Company, the New Bonds, with the qualifications
described in the last two paragraphs under this "Priority and Security" caption
relating to the lien of the KGE Mortgage (as defined below), will be secured,
equally and ratably with all of the Bonds now outstanding or hereafter issued
under the Mortgage, by the lien on substantially all of the Company's fixed
property and franchises purported to be conveyed by the Mortgage, subject to the
exceptions referred to below, to certain minor leases and easements, permitted
liens and to the exceptions and reservations in the instruments by which the
Company acquired title to its property and to the prior lien of the Trustee for
compensation, expenses and liability.
7
In the opinion of Mr. Terrill, the Mortgage constitutes a lien on
after-acquired property of the character intended to be mortgaged property.
Excepted from the lien of the Mortgage are: cash and accounts receivable;
contracts or operating agreements; securities not pledged under the Mortgage;
electric energy, gas, water, materials and supplies held for consumption in
operation or held in advance of use for fixed capital purposes; and merchandise,
appliances and supplies held for resale or lease to customers. There is further
expressly excepted any property of any other corporation, all the securities of
which may be owned or later acquired by the Company. (Granting Clauses of the
Mortgage.) The lien of the Mortgage does not apply to property of KGE so long as
KGE remains a wholly owned subsidiary of the Company, or to the stock of KGE
owned by the Company.
The Mortgage permits the consolidation or merger of the Company with or the
conveyance of its property to any other corporation, provided that the successor
corporation assumes the due and punctual payment of the principal and interest
on the Bonds of all series then outstanding under the Mortgage and assumes the
due and punctual performance of all the covenants and conditions of the
Mortgage. (Mortgage, Article XII, Section 1.)
KGE has outstanding first mortgage bonds (the "KGE Bonds") which are
secured by a lien on substantially all of KGE's fixed property and franchises
purported to be conveyed by the Mortgage and Deed of Trust and the various
Supplemental Indentures creating the KGE Bonds (collectively, the "KGE
Mortgage"). In the event that KGE combines with the Company, the after-acquired
property clauses of the Mortgage would cause the lien of the Mortgage to attach
(but in a subordinate position to the prior lien of the KGE Mortgage) to the
property of KGE owned by KGE at the date of combination. All property subject to
the after-acquired property clause of the Mortgage acquired by the Company after
the effective date of combination of KGE with the Company would be subject to
the first lien of the Mortgage, with the exception of (a) betterments,
extensions, improvements and additions to the property formerly owned by KGE,
(b) property made the basis for the issuance of new KGE Bonds or property
acquired with insurance or eminent domain proceeds relating to the former KGE
property or (c) property acquired to comply with the covenants contained in the
KGE Mortgage, on all of which property the KGE Mortgage would continue to
constitute a first, and the Mortgage a subordinate, lien. The Company may not
issue additional Bonds on the basis of property additions subject to the prior
lien of the KGE Mortgage. There is no certainty as to whether or when such a
combination would occur or as to the terms and conditions thereof.
KCPL has outstanding first mortgage bonds (the "KCPL Bonds") which are
secured by a lien on substantially all of KCPL's fixed property and franchises
purported to be conveyed by the General Mortgage Indenture and Deed of Trust and
the various Supplemental Indentures creating the KCPL Bonds (collectively, the
"KCPL Mortgage"). If the Company consummates its planned merger with KCPL, the
Company, as the successor corporation to such merger, would be required pursuant
to the terms of the KCPL Mortgage to confirm the liens thereunder and to keep
the mortgaged property with respect thereto as far as practicable identifiable.
In the absence of an express grant, however, the KCPL Mortgage will not
constitute or become a lien on any property or franchises owned by the Company
prior to such merger or on any property or franchises which may be purchased,
constructed or otherwise acquired by the Company except for such as form an
integral part of the mortgaged property under the KCPL Mortgage. Upon
consummation of the merger with KCPL, the after-acquired property clauses of the
Company's Mortgage would cause the lien of the Mortgage to attach (but in a
subordinate position to the prior lien of the KCPL Mortgage) to the property of
KCPL at the date of combination.
8
Modification of the Mortgage
The Mortgage may be modified or altered, subject to the rights and
obligations of the Company and the rights of Bondholders thereunder, by the
affirmative vote of the holders of at least 80% in principal amount of the
Bonds; provided, that no action may be taken which would affect less than all
series of Bonds without, in addition, the affirmative vote of the holders of at
least 80% in principal amount of the Bonds of each series so affected. The
Company intends upon the next issuance of Bonds under the Mortgage to exercise
the right it has reserved to amend the Mortgage to provide that the Mortgage may
be modified or altered and the rights of the holders of Bonds may be affected
with the consent of the holders of 60% of the Bonds and, if less than all series
of Bonds are affected, the consent also of the holders of 60% of the Bonds of
each series affected. No modification or alteration may be made which will
permit the extension of the time or times of payment of the principal of or
interest on any Bond or a reduction in the rate of interest thereon, or
otherwise affect the terms of payment of the principal of or interest on any
Bond or a reduction in the rate of interest thereon or reduce the percentages
required for the taking of any action thereunder. Bonds owned by the Company or
any affiliated corporation are excluded for the purpose of any vote,
determination of a quorum or consent. (Mortgage, Article XV; Section 6;
Twenty-Sixth, Twenty-Eighth, Twenty-Ninth, Thirtieth, Thirty-First and
Thirty-Second Supplemental Indentures, Article V, Sections 3 and 4.)
The Mortgage also provides that no modification or alteration of the
Mortgage may be made, without the consent of the holder of any Bond issued
thereunder, which would impair or affect the right of such holder to receive
payment of the principal of, and interest on, such Bond, on or after the
respective due date expressed in such Bond, or to institute suit for the
enforcement of any such payment on or after such respective dates. (Mortgage,
Article XXII, Section 2.)
The Company intends upon the next issuance of Bonds under the Mortgage to
reserve the right, subject to appropriate corporate action but without the
consent or other action of holders of Bonds of any series created after January
1, 1997, to amend the Mortgage to permit, unless an event of default shall have
happened and be continuing, or shall happen as a result of making or granting an
application, (1) the release of mortgaged property from the lien of the Mortgage
provided the fair value to the Company of the mortgaged property subject to such
lien (excluding the mortgaged property to be released) equals or exceeds 10/7ths
of the aggregate principal amount of outstanding Bonds under the Mortgage and
any prior lien bonds outstanding at the time of such release; (2) in the event
the Company is unable to obtain a release of property as described in clause
(1), the release from the lien of the Mortgage of mortgaged property if the fair
value to the Company thereof is less than 1/2 of 1% of the aggregate principal
amount of Bonds and prior lien bonds outstanding; provided that, the property
released pursuant to clause (2) in any 12 consecutive calendar months shall not
exceed 1% of such Bonds and prior lien bonds; (3) the deletion of the net
earnings test which must be met prior to the issuance of additional bonds; (4)
the deletion of the requirement to obtain an independent engineer's certificate
in connection with certain releases of property from the lien of the Mortgage;
and (5) the deletion of a financial test to be met by another corporation in the
event of the consolidation or merger of the Company into or sale by the Company
of its property as an entirety or substantially as an entirety to such other
corporation.
Events of Default
An event of default under the Mortgage includes: (a) default in the payment
of the principal of any Bond when the same shall become due and payable, whether
at maturity or otherwise; (b) default continuing for 30 days in the payment of
any installment of interest on any Bond or in the payment or satisfaction of any
sinking fund obligation; (c) default in performance or observance of any other
covenant, agreement or condition in the Mortgage continuing for a period of 60
days after written notice to the Company thereof by the Trustee or by the
holders of not less than 15% of the aggregate principal amount of all Bonds then
outstanding; (d) failure to
9
discharge or stay within 30 days a final judgment against the Company for the
payment of money in excess of $100,000; and (e) certain events in bankruptcy,
insolvency or reorganization. (Mortgage, Article IX, Section 1.)
The Trustee is required, within 90 days after the occurrence thereof, to
give to the holders of the Bonds notice of all defaults known to the Trustee
unless such defaults shall have been cured before the giving of such notice (the
term "defaults" for such purposes being defined to be the events specified
above, not including any periods of grace); provided, however, that except in
the case of default in the payment of the principal of or interest on any of the
Bonds, or in the payment or satisfaction of any sinking or purchase fund
installment, the Trustee shall be protected in withholding such notice if and so
long as the Trustee in good faith determines that the withholding of such notice
is in the interests of the holders of the Bonds and, in the case of any default
specified in (c) above, no notice shall be given until at least 60 days after
the occurrence thereof. (Mortgage, Article XIX, Section 3.) The Trustee is under
no obligation to defend or initiate any action under the Mortgage which would
result in the incurring of non-reimbursable expenses unless one or more of the
holders of Bonds issued under the Mortgage, including the New Bonds, furnishes
the Trustee with reasonable indemnity against such expenses. In the event of
default, the Trustee is not required to act unless requested to act by holders
of at least 25% in aggregate principal amount of the Bonds then outstanding.
(Mortgage, Article IX, Sections 1 and 4, Article XIII, Section 2 and Article
XXI, Section 6.) In addition, a majority of the Bondholders have the right to
direct all proceedings under the Mortgage, provided the Trustee is indemnified
to its satisfaction. (Mortgage, Article IX, Section 11.)
Company Conversion Option
If the Supplemental Indenture under which a series of New Bonds are issued
so provides, the Company may, solely at its option, convert such series of New
Bonds, in whole but not in part, into the Debt Securities. The Debt Securities
would be identical to such series of New Bonds with respect to the maturity
date, interest rate and interest payment dates; however, holders of Debt
Securities will, among other things, no longer be entitled to the security
provided by the Mortgage since the Debt Securities will be unsecured obligations
of the Company and the financial covenants, the events of default and certain
other terms pertaining to the Debt Securities will differ from those pertaining
to such series of New Bonds. See "Description of the Debt Securities" below for
a summary of the terms of the Debt Securities. Holders of New Bonds so converted
will be entitled to receive an equal principal amount of Debt Securities for the
principal amount of New Bonds held by such holder as of the date fixed for
Conversion (the "Conversion Date"). In connection with any such conversion,
interest on converted New Bonds which has accrued but has not been paid as of
the Conversion Date will accrue on Debt Securities from the date on which
interest was last paid on the New Bonds so converted, provided that accrued
interest on New Bonds converted after a record date, but before the related
interest payment date, shall be paid to the holder of record of such New Bonds
on such interest payment date, and the Debt Securities into which such New Bonds
shall have been converted will begin to accrue interest from such interest
payment date. The rights of the holders of the New Bonds as bondholders of the
Company with respect to the Bonds converted will cease, and the person or
persons entitled to receive the Debt Securities issuable upon Conversion will be
treated as the registered holder or holders of such Debt Securities from the
Conversion Date. Debt Securities issued in conversion of New Bonds will be
issued in principal amounts of $1,000 and integral multiples thereof. The
Company may condition its obligation to convert New Bonds upon the satisfaction
of certain conditions. The Company will mail to each holder of record of New
Bonds to be converted into Debt Securities written notice thereof at least 15
and not more than 120 days prior to the Conversion Date. The notice must state
(i) the Conversion Date, (ii) the place or places where certificates for New
Bonds may be surrendered for conversion into Debt Securities, (iii) that
interest on the Debt Securities will accrue from the date on which interest on
the New Bonds was last paid (except in the case of a Conversion Date after a
record date, but before the related interest payment date, in which case
interest will accrue from the interest payment date next following such record
date), (iv) the conditions to conversion, if any,
10
required to be satisfied concurrent with or prior to the Conversion Date; and
(v) that whether or not certificates for New Bonds are surrendered for
conversion on such Conversion Date, holders of the New Bonds will be treated as
holders of Debt Securities from and after the Conversion Date, which each holder
of the Bonds by its acceptance of the issue thereof agrees to. It is anticipated
that the only holder of record of the New Bonds will be DTC. See "Book-Entry"
In the event that the Company becomes subject to bankruptcy proceedings at
a time when the New Bonds are outstanding and have not been converted for Debt
Securities, a court in such proceedings may order or approve the conversion of
New Bonds into Debt Securities, with the result that holders of New Bonds would
not be entitled to the rights of secured creditors of the Company in such
bankruptcy proceedings. As a further result, among other things, such holders
would not be expected to be entitled to adequate protection of their security or
to interest accruing after the date of commencement of bankruptcy proceedings.
Alternatively, a court in a bankruptcy proceeding with respect to the Company
may decide that, even if the New Bonds cannot be converted for Debt Securities,
the claims of holders of New Bonds should nevertheless be subordinated to other
secured creditors of the Company under principles of equitable subordination.
If, by reason of the Company's merger with KCPL, or for any other reason,
properties of KCPL become subject to the Mortgage, and within the applicable
preference period thereafter the Company becomes the subject of federal
bankruptcy proceedings, the security interests of holders of New Bonds in such
newly acquired properties may be voidable as preferences. The applicable
preference period, generally, is 90 days for holders of New Bonds who are not
"insiders" of the Company and one year for holders of New Bonds who are
"insiders" of the Company, as that term is defined in the federal bankruptcy
code.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued in one or more series under an Indenture
(the "Indenture") between the Company and Harris Trust and Savings Bank, as
Indenture Trustee, the form of which is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture do not
purport to be complete and are qualified in their entirety by express reference
to the Indenture and the Securities Resolutions or the indentures supplemental
thereto (copies of which have been or will be filed with the Commission).
Capitalized terms used in this section without definition have the meanings
given such terms in the Indenture.
General
The Indenture does not limit the amount of Debt Securities that can be
issued thereunder and provides that the Debt Securities may be issued from time
to time in one or more series pursuant to the terms of one or more Securities
Resolutions or supplemental indentures creating such series. As of the date of
this Prospectus, there were no Debt Securities outstanding under the Indenture.
The Debt Securities will be unsecured and will rank on a parity with all other
unsecured and unsubordinated debt of the Company, but will rank junior to the
Company's First Mortgage Bonds. The Debt Securities will be senior to all
indebtedness of the Company which by its terms is made subordinate to the Debt
Securities. Although the Indenture provides for the possible issuance of Debt
Securities in other forms or currencies, the only Debt Securities covered by
this Prospectus will be Debt Securities denominated in U.S. dollars in
registered form without coupons.
Substantially all of the fixed properties and franchises of the Company are
subject to the lien of the Mortgage under which the Company's Bonds are
outstanding. See "Description of New Bonds."
11
Terms
Reference is made to the Prospectus Supplement for the following terms, if
applicable, of the Debt Securities offered thereby: (1) the designation,
aggregate principal amount, currency or composite currency and denominations;
(2) the price at which such Debt Securities will be issued and, if an index
formula or other method is used, the method for determining amounts of principal
or interest; (3) the maturity date and other dates, if any, on which principal
will be payable; (4) the interest rate (which may be fixed or variable), if any;
(5) the date or dates from which interest will accrue and on which interest will
be payable, and the record dates for the payment of interest (see "Description
of New Bonds -- Company Conversion Option"); (6) the manner of paying principal
and interest; (7) the place or places where principal and interest will be
payable; (8) the terms of any mandatory or optional redemption by the Company
including any sinking fund; (9) the terms of any conversion or exchange right;
(10) the terms of any redemption at the option of Holders; (11) any tax
indemnity provisions; (12) if the Debt Securities provide that payments of
principal or interest may be made in a currency other than that in which Debt
Securities are denominated, the manner for determining such payments; (13) the
portion of principal payable upon acceleration of a Discounted Security (as
defined below); (14) whether and upon what terms Debt Securities may be
defeased; (15) whether the covenant referred to below under "Certain
Covenants--Limitations on Liens" applies, and any events of default or
restrictive covenants in addition to or in lieu of those set forth in the
Indenture; (16) provisions for electronic issuance of Debt Securities or for
Debt Securities in uncertificated form; and (17) any additional provisions or
other special terms not inconsistent with the provisions of the Indenture,
including any terms that may be required or advisable under United States or
other applicable laws or regulations, or advisable in connection with the
marketing of the Debt Securities. (Section 2.01)
Debt Securities of any series may be issued as registered Debt Securities,
bearer Debt Securities or uncertificated Debt Securities, and in such
denominations as specified in the terms of the series. (Section 2.01)
In connection with its original issuance, no bearer Security will be
offered, sold or delivered to any location in the United States, and a bearer
Security in definitive form may be delivered in connection with its original
issuance only upon presentation of a certificate in a form prescribed by the
Company to comply with United States laws and regulations. (Section 2.04)
Registration of transfer of registered Debt Securities may be requested
upon surrender thereof at any agency of the Company maintained for that purpose
and upon fulfillment of all other requirements of the agent. (Sections 2.03 and
2.07)
Securities may be issued under the Indenture as Discounted Debt Securities
to be offered and sold at a substantial discount from the principal amount
thereof. Special United States federal income tax and other considerations
applicable thereto will be described in the Prospectus Supplement relating to
such Discounted Debt Securities. "Discounted Debt Security" means a Security
where the amount of principal due upon acceleration is less than the stated
principal amount. (Section 2.10)
Certain Covenants
The Debt Securities will not be secured by any properties or assets and
will represent unsecured debt of the Company. As indicated under "General"
above, substantially all of the fixed properties and franchises of the Company
are subject to the lien of the Mortgage securing the Company's First Mortgage
Bonds.
As discussed below, the Indenture includes certain limitations on the
Company's ability to create liens which will apply only if the Securities
Resolution establishing the terms of a series of Debt Securities so provides
12
(in which event the Prospectus Supplement will so state). If applicable, the
limitations are subject to a number of qualifications and exceptions. The
Indenture does not limit the Company's ability to issue additional First
Mortgage Bonds or to enter into sale and leaseback transactions. In addition,
the Indenture does not limit the ability of the Company's subsidiaries to issue
debt, and the Debt Securities will be effectively subordinated to all existing
and future indebtedness and other liabilities and commitments of the Company's
subsidiaries.
Unless otherwise indicated in a Prospectus Supplement, such covenants, if
applicable, does not afford holders of the Debt Securities protection in the
event of a highly leveraged or other transaction involving the Company that may
adversely affect holders of the Debt Securities.
Issuance of Additional First Mortgage Bonds
If the Securities Resolution establishing the terms of a series of Debt
Securities so provides (in which event the Prospectus Supplement will so state),
the following provision of the Indenture will be applicable so long as there
remain outstanding any Debt Securities of any series to which this covenant
applies, and subject to termination upon defeasance as referred to above. The
Company will not (i) issue any additional First Mortgage Bonds under the
Mortgage, or any mortgage bonds (such additional First Mortgage Bonds and
mortgage bonds being hereafter referred to as "Mortgage Bonds") under any
additional mortgage which it may enter into or the obligations of which it may
assume (collectively, the "Restricted Mortgages") except (A) to replace any
mutilated, lost, destroyed or stolen Mortgage Bonds or to effect exchanges and
transfers of Mortgage Bonds or (B) to issue Mortgage Bonds in connection with
any refinancing of Mortgage Bonds, or any security for which Mortgage Bonds
provide collateral, having the same or lesser aggregate principal amount at
maturity and the same or earlier maturity date, but with such other terms as the
Company may determine or (ii) subject to the lien of any Restricted Mortgage,
any property which is excepted and excluded under such Restricted Mortgage and
the lien and operation thereof by the terms of such Restricted Mortgage, unless
concurrently with the issuance of such Mortgage Bonds or subjection of any such
property to such lien, the Company issues to the Trustee under the Indenture a
Mortgage Bond or Bonds in the same aggregate principal amount and having the
same interest rate or rates, maturity date or dates, redemption provisions and
other terms as the Debt Securities then outstanding and thereby gives to the
holders of all outstanding Debt Securities the benefit of the security of such
First Mortgage Bond or Bonds, provided, that the obligation of the Company to
make payments with respect to the principal of and interest on any such Mortgage
Bond or Bonds issued under a Restricted Mortgage to the Trustee shall be fully
or partially, as the case may be, satisfied or discharged to the extent that, at
the time that any such payment shall be due, the then due principal of and
interest on the Debt Securities shall have been fully or partially paid. For
purposes of this provision the merger or combination of the Company with another
entity having Mortgage Bonds outstanding under a Restricted Mortgage on the date
such a transaction is consummated shall not constitute an issuance of additional
Mortgage Bonds and therefore, Mortgage Bonds shall not be required to be issued
under such Restricted Mortgage in connection with the consummation of such a
transaction.
At such time as the Trustee under the Indenture is the only holder of
Mortgage Bonds outstanding under a Restricted Mortgage, the Trustee will
surrender such Mortgage Bonds to the Company for cancellation and such
Restricted Mortgage will be discharged and defeased. (Section 4.08).
Limitation on Liens
If the Securities Resolution establishing the terms of a series so provides
(in which event the Prospectus Supplement will so state), the following
provisions of the Indenture will be applicable so long as there remain
outstanding any Debt Securities of any series to which this limitation applies,
and subject to termination upon defeasance as referred to above, the Company
will not create or suffer to be created or to exist any mortgage,
13
pledge, security interest or other lien (collectively, "Lien") on any of its
properties or assets, owned as of the date such series is issued or hereafter
acquired to secure any indebtedness, without making effective provision whereby
the Debt Securities of such series shall be equally and ratably secured with any
and all such indebtedness and with any other indebtedness similarly entitled to
be equally and ratably secured. This restriction does not apply to, or prevent
the creation or existence of: (1) the Mortgage securing the Company's First
Mortgage Bonds or any indenture supplemental thereto subjecting any property to
the Lien thereof or confirming the Lien thereof upon any property, whether owned
before or acquired after the date of the Indenture; (2) the Lien of any
Restricted Mortgage; (3) Liens on property existing at the time of the
acquisition or construction of such property (or created within two years after
completion of such acquisition or construction), whether by purchase, merger,
construction or otherwise, or to secure the payment of all or any part of the
purchase price or construction cost thereof, including the extension of any such
Liens to repairs, renewals, replacements, substitutions, betterments, additions,
extensions and improvements then or thereafter made on the property subject
thereto; (4) a Lien securing any bank indebtedness now or hereafter incurred or
assumed by the Company; (5) any extensions, renewals or replacements (or
successive extensions, renewals or replacements), in whole or in part, of Liens
(including, without limitation, the Restricted Mortgages) permitted by the
foregoing clauses (1), (2), (3) and (4); (6) the pledge of any bonds or other
securities at any time issued under any of the Liens permitted by clause (1),
(2), (3), (4) or (5) above; or (7) Permitted Encumbrances. (Section 4.07)
"Permitted Encumbrances" includes, among other items: (a) the pledge or
assignment in the ordinary course of business of electricity, gas (either
natural or artificial), steam, fuel (including nuclear fuel) whether or not
consumable in the operation of the mortgaged property, accounts receivable or
customers' installment paper; (b) Liens affixing to property of the Company at
the time a person consolidates with or merges into, or transfers all or
substantially all of its assets to, the Company, provided that in the opinion of
the Board of Directors of the Company or Company management (evidenced by a
certified Board resolution or an Officers' Certificate delivered to the Trustee)
the property acquired pursuant to the consolidation, merger or asset transfer is
adequate security for such Lien; (c) Liens or encumbrances not otherwise
permitted if, at the time of incurrence thereof and after giving effect thereto,
the aggregate of all obligations of the Company secured thereby does not exceed
10% of Tangible Net Worth (as defined below); (d) Liens on securities held by
the Company; and (e) Liens or encumbrances affixing to the property of a
Subsidiary.
"Tangible Net Worth" means (i) common stockholders' equity appearing on the
most recent balance sheet of the Company (or consolidated balance sheet of the
Company and its Subsidiaries if the Company then has one or more consolidated
Subsidiaries) prepared in accordance with generally accepted accounting
principles, less (ii) intangible assets (excluding intangible assets recoverable
through rates as prescribed by applicable regulatory authorities).
"Subsidiary" of any person means (i) a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by such
person or by one or more other Subsidiaries of such person or by such person and
one or more Subsidiaries thereof; or (ii) any other person (other than a
corporation) in which such person, or one or more Subsidiaries of such person or
such person and one or more Subsidiaries thereof, directly or indirectly, has at
least a majority ownership and power to direct the policy, management and
affairs thereof. (Section 4.06)
Further, this restriction will not apply to or prevent the creation or
existence of leases made, or existing on property acquired, in the ordinary
course of business. (Section 4.07)
Other Covenants
14
Any other restrictive covenants which may apply to a particular series of
Debt Securities will be described in the Prospectus Supplement relating thereto.
Successor Obligor
The Indenture provides that, unless otherwise specified in the Securities
Resolution establishing a series of Debt Securities, the Company shall not
consolidate with or merge into, or transfer all or substantially all of its
assets to, any person in any transaction in which the Company is not the
survivor, unless: (1) the person is organized under the laws of the United
States or a State thereof or is organized under the laws of a foreign
jurisdiction and consents to the jurisdiction of the courts of the United States
or a State thereof; (2) the person assumes by supplemental indenture all the
obligations of the Company under the Indenture, the Debt Securities and any
coupons; (3) all required approvals of any regulatory body having jurisdiction
over the transaction shall have been obtained; and (4) immediately after the
transaction no Default (as defined) exists. The successor shall be substituted
for the Company, and thereafter all obligations of the Company under the
Indenture, the Debt Securities and any coupons shall terminate. (Section 5.01)
Exchange of Debt Securities
Registered Debt Securities may be exchanged for an equal aggregate
principal amount of registered Debt Securities of the same series and date of
maturity in such authorized denominations as may be requested upon surrender of
the registered Debt Securities at an agency of the Company maintained for such
purpose and upon fulfillment of all other requirements of such agent. (Section
2.07)
Default and Remedies
Unless the Securities Resolution establishing the series otherwise provides
(in which event the Prospectus Supplement will so state), an "Event of Default"
with respect to a series of Debt Securities will occur if:
(1) the Company defaults in any payment of interest on any Debt
Securities of such series when the same becomes due and payable and the
Default continues for a period of 60 days;
(2) the Company defaults in the payment of the principal and premium,
if any, of any Debt Securities of the series when the same becomes due and
payable at maturity or upon redemption, acceleration or otherwise and such
default shall continue for five or more days;
(3) the Company defaults in the payment or satisfaction of any sinking
fund obligation with respect to any Debt Securities of a series as required
by the Securities Resolution establishing such series and the Default
continues for a period of 60 days;
(4) the Company defaults in the performance of any of its other
agreements applicable to the series and the Default continues for 90 days
after the notice specified below;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
15
(C) consents to the appointment of a Custodian for it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian for the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 60 days; or
(7) there occurs any other Event of Default provided for in such
series. (Section 6.01)
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or a similar official under any Bankruptcy Law.
(Section 6.01)
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default. A Default under subparagraph (4) above is not an
Event of Default until the Trustee or the Holders of at least 33-1/3% in
principal amount of the series notify the Company of the Default and the Company
does not cure the Default within the time specified after receipt of the notice.
(Section 6.01) The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Debt Securities of the series. (Section 7.01)
Subject to certain limitations, Holders of a majority in principal amount of the
Debt Securities of the series may direct the Trustee in its exercise of any
trust or power with respect to such series. (Section 6.05) Except in the case of
Default in payment on a series, the Trustee may withhold from Securityholders of
such series notice of any continuing Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in their
interest (Section 7.04) The Company is required to furnish the Trustee annually
a brief certificate as to the Company's compliance with all conditions and
covenants under the Indenture. (Section 4.04)
The failure to redeem any Debt Securities subject to a Conditional
Redemption (as defined) is not an Event of Default if any event on which such
redemption is so conditioned does not occur and is not waived before the
scheduled redemption date. (Section 6.01)
The Indenture does not have a cross-default provision. Thus, a default by
the Company on any other debt, including any other series of Debt Securities,
would not constitute an Event of Default.
Amendments and Waivers
The Indenture and the Debt Securities or any coupons of the series may be
amended, and any default may be waived as follows: Unless the Securities
Resolution otherwise provides (in which event the Prospectus Supplement will so
state), the Debt Securities and the Indenture may be amended with the consent of
the Holders of a majority in principal amount of the Debt Securities of all
series affected voting as one class. (Section 10.02) Unless the Securities
Resolution otherwise provides (in which event the Prospectus Supplement will so
state), a
16
Default on a particular series may be waived with the consent of the Holders of
a majority in principal amount of the Debt Securities of the series. (Section
6.04) However, without the consent of each Securityholder affected, no amendment
or waiver may (1) reduce the amount of Debt Securities whose Holders must
consent to an amendment or waiver, (2) reduce the interest on or change the time
for payment of interest on any Security, (3) change the fixed maturity of any
Security, (4) reduce the principal of any non-Discounted Security or reduce the
amount of the principal of any Discounted Security that would be due on
acceleration thereof, (5) change the currency in which the principal or interest
on a Security is payable, (6) make any change that materially adversely affects
the right to convert any Security, or (7) waive any Default in payment of
interest on or principal of a Security. (Sections 6.04 and 10.02) Without the
consent of any Securityholder, the Indenture or the Debt Securities may be
amended: to cure any ambiguity, omission, defect or inconsistency; to provide
for assumption of Company obligations to Securityholders in the event of a
merger or consolidation requiring such assumption; to provide that specific
provisions of the Indenture shall not apply to a series of Debt Securities not
previously issued; to create a series and establish its terms; to provide for a
separate Trustee for one or more series; or to make any change that does not
materially adversely affect the rights of any Securityholder. (Section 10.01)
Legal Defeasance and Covenant Defeasance
Debt Securities of a series may be defeased in accordance with their terms
and, unless the Securities Resolution establishing the terms of the series
otherwise provides, as set forth below. The Company at any time may terminate as
to a series all of its obligations (except for certain obligations, including
obligations with respect to the defeasance trust and obligations to register the
transfer or exchange of a Security, to replace destroyed, lost or stolen Debt
Securities and coupons and to maintain paying agencies in respect of the Debt
Securities) with respect to the Debt Securities of the series and any related
coupons and the Indenture ("legal defeasance"). The Company at any time may
terminate as to a series its obligations with respect to the Debt Securities and
coupons of the series under the covenant described under "Certain
Covenants--Limitations on Liens" and any other restrictive covenants which may
be applicable to a particular series ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, a series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, a series may
not be accelerated by reference to the covenant described under "Certain
Covenants--Limitations on Liens" or any other restrictive covenants which may be
applicable to a particular series. (Section 8.01)
To exercise either defeasance option as to a series, the Company must (i)
irrevocably deposit in trust (the "defeasance trust") with the Trustee or
another trustee money or U.S. Government Obligations, deliver a certificate from
a nationally recognized firm of independent accountants expressing their opinion
that the payments of principal and interest when due on the deposited U.S.
Government Obligations, without reinvestment, plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay the principal and interest when due on all Debt Securities of
such series to maturity or redemption, as the case may be, and (ii) comply with
certain other conditions. In particular, the Company must obtain an opinion of
tax counsel that the defeasance will not result in recognition of any gain or
loss to holders for Federal income tax purposes. "U.S. Government Obligations"
means direct obligations of the United States or an instrumentality of the
United States, the payment of which is unconditionally guaranteed by the United
States, which, in either case, have the full faith and credit of the United
States of America pledged for payment and which are not callable at the issuer's
option, or certificates representing an ownership interest in such obligations.
(Section 8.02)
17
Regarding the Trustee
Harris Trust and Savings Bank will act as Indenture Trustee and Registrar
for Debt Securities issued under the Indenture and, unless otherwise indicated
in a Prospectus Supplement, the Indenture Trustee will also act as Transfer
Agent and Paying Agent with respect to the Debt Securities. (Section 2.03) The
Company may remove the Indenture Trustee with or without cause if the Company so
notifies the Indenture Trustee three months in advance and if no Default occurs
during the three-month period. (Section 7.07) The Indenture Trustee is also
Trustee under the Mortgage for the Company's First Mortgage Bonds, including the
New Bonds, and provides services for the Company and certain affiliates, as a
depository of funds, registrar, trustee under other indentures and similar
services.
BOOK-ENTRY
DTC will act as securities depository for the Securities. The Securities
will be issued only as fully registered securities registered in the name of
Cede & Co. (DTC's partnership nominee). One or more fully registered global
certificates will be issued for the Securities representing the aggregate
principal amount of the Securities and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act, as
amended, DTC holds securities that its participants (the "Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Direct
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly (the "Indirect Participants," and
together with the Direct Participants, the "Participants"). The rules applicable
to DTC and its Participants are on file with the SEC.
Purchases of the Securities within the DTC system must be made by or
through Direct Participants which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each Security
(a "Beneficial Owner") will in turn be recorded on the Direct and Indirect
Participants' respective records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interest in the Securities will be effected by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interest in
Securities except in the event that use of the book-entry system for the
Securities is discontinued.
The deposit of the Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Securities; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Securities are
credited, which
18
may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other direct communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Securities of an issue are being redeemed, DTC's practice will determine by lot
the amount of the interest of each Direct Participant in such series to be
redeemed.
In the event of a Conversion of New Bonds into Debt Securities, notice
thereof shall be sent to Cede & Co. After the Conversion Date, DTC or its
nominee, as the record holder of the New Bonds, will receive a registered global
certificate or certificates representing the Debt Securities and will deliver
the global certificate or certificates representing the New Bonds to the Trustee
for cancellation.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Securities. Under its usual procedures. DTC mails an omnibus proxy (an "Omnibus
Proxy") to the Participants as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest on the Securities will be paid to
DTC. DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment on such
payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in
"street-name," and will be the responsibility of such Participant and not of
DTC, the underwriters, or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal,
premium, if any, and interest to DTC is the responsibility of the Company or the
Trustee. Disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Securities at any time by giving reasonable notice to the
Company. Under such circumstances and in the event that a successor securities
depository is not obtained, certificates for the Securities are required to be
printed and delivered. In addition, the Company may decide to discontinue use of
the system of book-entry transfers through DTC (or any successor securities
depository). In that event, certificates for the Securities will be printed and
delivered.
The Company will not have any responsibility or obligation to Participants
or to the persons for whom they act as nominees with respect to the accuracy of
the records of DTC, its nominees or any Direct or Indirect Participant with
respect to any ownership interest in the Securities, or with respect to payments
or providing of notice to the Direct Participants, the Indirect Participants or
the Beneficial Owners.
So long as Cede & Co. is the registered owner of the Securities, as nominee
of DTC, references herein to holders of the Securities shall mean Cede & Co. or
DTC and shall not mean the Beneficial Owners of the Securities.
19
The information in this section concerning DTC and DTC's book-entry system
has been obtained from DTC. None of the Company, the Trustees or the
underwriters take any responsibility for the accuracy or completeness thereof.
PLAN OF DISTRIBUTION
The Company may sell Securities in any of the following ways: (i) through
underwriters or dealers; (ii) directly to one or more purchasers; or (iii)
through agents. The applicable Prospectus Supplement will set forth the terms of
the offering of any Securities, including the names of any underwriters or
agents, the purchase price of such Securities and the proceeds to the Company
from such sale, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price, any discounts or
concessions allowed or reallowed or paid to dealers and any securities exchanges
on which such Securities may be listed.
If underwriters are used in the sale, Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. Such Securities may
be offered to the public either through underwriting syndicates represented by
managing underwriters or by underwriters without a syndicate. Unless otherwise
set forth in the applicable Prospectus Supplement, the obligations of the
underwriters to purchase such Securities will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase all of such
Securities if any of such Securities are purchased. Any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time. Only underwriters named in a Prospectus
Supplement are deemed to be underwriters in connection with the Securities
offered thereby.
Securities may also be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of Securities will be named, and any commissions payable by the Company to
such agent will be set forth in the applicable Prospectus Supplement. Unless
otherwise indicated in the applicable Prospectus Supplement, any such agent will
act on a best efforts basis for the period of its appointment.
If so indicated in a Prospectus Supplement with respect to Securities, the
Company will authorize agents, underwriters or dealers to solicit offers by
certain institutions to purchase such Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the date
or dates stated in the Prospectus Supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of the Securities sold
pursuant to the Contracts shall be not less nor more than, the respective
amounts stated in the Prospectus Supplement. Institutions with whom the
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions, but will in all cases be
subject to the approval of the Company. The Contracts will not be subject to any
conditions except (i) the purchase by an institution of the Securities covered
by its Contract shall not at the time of delivery be prohibited under the laws
of any jurisdiction in the United States to which such institution is subject,
and (ii) if the Securities are being sold to underwriters, the Company shall
have sold to such underwriters the total principal amount of the Securities less
the principal amount thereof covered by the Contracts. The underwriters will not
have any responsibility in respect of the validity or performance of the
Contracts.
If dealers are utilized in the sale of any Securities, the Company will
sell such Securities to the dealers, as principal. Any dealer may then resell
such Securities to the public at varying prices to be determined by such
20
dealer at the time of resale. The name of any dealer and the terms of the
transaction will be set forth in the Prospectus Supplement with respect to such
Securities being offered thereby.
It has not been determined whether any series of Securities will be listed
on a securities exchange. Underwriters will not be obligated to make a market in
any series of Securities. The Company cannot predict the level of trading
activity in, or the liquidity of, any series of Securities.
Any underwriters, dealers or agents participating in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
received by them on the sale or resale of Securities may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933. Agents
and underwriters may be entitled under agreements entered into with the Company
to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act of 1933, or to contribution with respect to
payments that the agents or underwriters may be required to make in respect
thereof. Agents and underwriters may be customers of, engaged in transactions
with, or perform service for, the Company or its affiliates in the ordinary
course of business.
LEGAL OPINIONS
The statements as to matters of law and legal conclusions set forth in this
Prospectus and in the documents incorporated by reference herein have been
reviewed by Richard D. Terrill, Esq., Corporate Secretary and Associate General
Counsel of the Company, and are set forth or incorporated herein in reliance
upon the opinion of Mr. Terrill. At April 24, 1997, Mr. Terrill owned directly
and/or beneficially, 1190 shares of Common Stock and had been granted, pursuant
to and subject to the terms of the Company's long-term incentive programs, 376
performance shares and stock options exercisable for 4500 shares of Common
Stock.
Certain legal matters in connection with the Securities will be passed upon
by Richard D. Terrill, Esq., Corporate Secretary and Associate General Counsel
of the Company, by Cahill Gordon & Reindel, a partnership including a
professional corporation, counsel for the Company, and by Sidley & Austin
counsel for the underwriters, dealers, purchasers or agents. Cahill Gordon &
Reindel and Sidley & Austin will not pass upon the incorporation of the Company
and will rely upon the opinion of Richard D. Terrill, Esq. as to matters of
Kansas law.
EXPERTS
The financial statements of Western Resources, Inc. included in or
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
The financial statements included in KCPL's Annual Report on Form 10-K for
the year ended December 31, 1996 incorporated by reference in this Prospectus
and in the Registration Statement as an Exhibit to the Company's April 2, 1997
Form 8-K, have been audited by Coopers & Lybrand L.L.P., independent public
accountants, as indicated in their reports with respect thereto, and are
included herein, in reliance upon the authority of said firm as experts in
giving said reports.
21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An estimate of expenses,
====================================================== ===============================================
No person is authorized to give any information or to
make any representations other than underwriting discount, follows:
Securities and Exchange Commission registration fee................$103,665.52
New York Stock Exchange listing fee................................ 39,100.00
Printing........................................................... 150,000.00
Legal fees and expenses............................................ 60,000.00
Accountants' fees and expenses..................................... 20,000.00
Blue sky expenses.................................................. 5,000.00
Transfer agent fees................................................ 5,000.00
Miscellaneous expenses ............................................ 27,234.48
--------
Total ...............................................$410,000.00*
========
* All expenses, except the Securities and Exchange Commission registration
fee, are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article XVIII of the Registrant's Restated Ar icles of Incorporation,
as amended, provides that a director of the Registrant shall not be personally
liable to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director except for liability (i) forthose contained in
this Prospectus, including any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for paying a dividend or approving a stock
repurchase in violation of the Kansas General Corporation Law or (iv) for any
transaction from which the director derived an improper personal benefit. This
provision is specifically authorized by Section 17-6002(b)(8) of the Kansas
General Corporation Law.
Section 17-6305 of the Kansas General Corporation Law (the
"Indemnification Statute") provides for indemnification by a corporation of its
corporate officers, directors, employees and agents. The Indemnification Statute
provides that a corporation may indemnify such persons who have been, are, or
may become a party to an action, suit or proceeding due to his or her status as
a director, officer, employee or agent of the corporation. Further, the
Indemnification Statute grants authority to a corporation to implement its own
broader indemnification policy. Article XVIII of the Registrant's Restated
Articles of Incorporation, as amended, requires the Registrant to indemnify its
directors and officers to the fullest extent provided by Kansas law. Further, as
is provided for in Article XVIII, the Registrant has entered into
indemnification agreements with its directors, which provide indemnification
broader than that available under Article XVIII and the Indemnification Statute.
The form of Standard Purchase Agreement filed as Exhibit 1 to the
Registration Statement includes provisions requiring underwriters to indemnify
the Registrant and its directors and officers who signed this Registration
Statement, and its controlling persons, against certain civil liabilities,
including liabilities under the Securities Act of 1933, in certain
circumstances.
II-1
ITEM 16. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Exhibit
Index on Page E-1 of this Registration Statement, which Index is incorporated
herein by reference.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in 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% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
(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 securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling personSupplement
in connection with the offer of the New Bonds or Debt
Securities, and, if given or made, such information
or representations must not be relied upon as having Western Resources, Inc.
been authorized. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to
buy such securities being
registered,in any circumstance in
which such offer or solicitation is unlawful.
Neither the Registrant will, unlessdelivery of this Prospectus nor any
sale made hereunder shall, under any circumstances,
create any implication that there has been no ----------
change in the opinionaffairs of its counsel the matter
has been settledCompany since the PROSPECTUS
date hereof or that the information contained or ----------
incorporated by controlling precedent, submit to
II-2
a courtreference herein is correct as of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-3
SIGNATURES
Pursuantany time subsequent to the requirementsdate of thethis Prospectus.
--------------------
TABLE OF CONTENTS
Page
Available Information....................... 2
Incorporation of Certain Documents
by Reference.............................. 2
Information on ADT Limited and
Kansas City Power & Light Company......... 3 First Mortgage Bonds
The Company................................. 4 and Debt Securities
ActUse of 1933, Western
Resources, Inc.Proceeds............................. 5
Description of New Bonds.................... 5
Description of Debt Securities.............. 11
Book-Entry.................................. 18
Plan of Distribution........................ 20
Legal Opinions.............................. 21 , the Registrant, certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Topeka, State of Kansas
on the 28th day of March, 1996.
WESTERN RESOURCES, INC.
(Registrant)
By /s/JOHN E. HAYES, JR.
---------------------------
John E. Hayes, Jr.
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/JOHN E. HAYES, JR.
- ---------------------------
John E. Hayes, Jr. Chairman of the March 28, 1996
Board and Chief
Executive Officer
(Principal Executive
Officer)
/s/STEVEN L. KITCHEN
- ---------------------------
Steven L. Kitchen Executive Vice March 28, 1996
President and
Chief Financial Officer
(Principal Financial
and Accounting Officer)
/s/FRANK J. BECKER
- ---------------------------
Frank J. Becker Director March 28, 1996
/s/GENE A. BUDIG
- ---------------------------
Gene A. Budig Director March 28, 1996
/s/C. Q. CHANDLER
- ---------------------------
C. Q. Chandler Director March 28, 1996
II-4
/s/THOMAS R. CLEVENGER
- --------------------------
Thomas R. Clevenger Director March 28, 1996
/s/JOHN C. DICUS
- --------------------------
John C. Dicus Director March 28, 1996
/s/DAVID H. HUGHES
- --------------------------
David H. Hughes Director March 28, 1996
/s/RUSSELL W. MEYER, JR.
- --------------------------
Russell W. Meyer, Jr. Director March 28, 1996
/s/JOHN H. ROBINSON
- --------------------------
John H. Robinson Director March 28, 1996
/s/LOUIS W. SMITH
- --------------------------
Louis W. Smith Director March 28, 1996
/s/SUSAN M. STANTON
- --------------------------
Susan M. Stanton Director March 28, 1996
/s/KENNETH J. WAGNON
- --------------------------
Kenneth J. Wagnon Director March 28, 1996
/s/DAVID C. WITTIG
- --------------------------1997
Experts..................................... 21
====================================================== ===============================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
An estimate of expenses, other than underwriting discount, follows:
Securities and Exchange Commission registration fee.... $166,667
State commission fees ................................. 46,000
Mortgage Registration Tax.............................. 900,000
Trustee's fees and expenses............................ 30,000
Printing............................................... 30,000
Legal fees and expenses ............................... 300,000
Accountants' fees and expenses......................... 35,000
Rating agencies fees................................... 235,000
Blue Sky expenses ..................................... 10,000
Miscellaneous expenses................................. 22,333
--------
Total .............................. $ 1,775,000*
===========
- -----------------
* All expenses, except the Securities and Exchange Commission registration
fee, are estimated.
Item 15. Indemnification of Directors and Officers.
Article XVIII of the Registrant's Restated Articles of Incorporation, as
amended, provides that a director of the Registrant shall not be personally
liable to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for paying a dividend or approving a stock
repurchase in violation of the Kansas General Corporation Law or (iv) for any
transaction from which the director derived an improper personal benefit. This
provision is specifically authorized by Section 17-6002(b)(8) of the Kansas
General Corporation Law.
Section 17-6305 of the Kansas General Corporation Law (the "Indemnification
Statute") provides for indemnification by a corporation of its corporate
officers, directors, employees and agents. The Indemnification Statute provides
that a corporation may indemnify such persons who have been, are, or may become
a party to an action, suit or proceeding due to his or her status as a director,
officer, employee or agent of the corporation. Further, the Indemnification
Statute grants authority to a corporation to implement its own broader
indemnification policy. Article XVIII of the Company's Restated Articles of
Incorporation, as amended, requires the Company to indemnify its directors and
officers to the fullest extent provided by Kansas law. Further, as is provided
for in Article XVIII the Company has entered into indemnification agreements
with its directors, which provide indemnification broader than that available
under Article XVIII and the Indemnification Statute.
The Standard Purchase Agreement filed as Exhibit 1 to the Registration
Statement includes provisions requiring underwriters to indemnify the Company as
well as its directors and officers who signed this Registration
Statement, as well as its controlling persons, against certain civil
liabilities, including liabilities under the Securities Act of 1933, in certain
circumstances.
Item 16. Exhibits.
The Exhibits to this Registration Statement are listed in the Exhibit Index
on Pages E-1 and E-2 of this Registration Statement, which Index is incorporated
herein by reference.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment that contains a
form of prospectus shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Western
Resources, Inc., the Registrant, certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunder duly authorized, in the City of Topeka, State of Kansas
on the 29th day of April, 1997.
WESTERN RESOURCES, INC.
(Registrant)
By:/s/ John E. Hayes, Jr.
-------------------------
John E. Hayes, Jr.
Chairman of the Board and Chief
Executive Officer
Each person whose signature appears below appoints John E. Hayes, Jr.,
Steven L. Kitchen, John K. Rosenberg and Richard D. Terrill and each of them,
any of whom may act without the joinder of the other, as his or her true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities to sign any and all amendments (including post-
effective amendments) to this Registration Statement on Form S-3 and to file
the same, with all exhibits thereto and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by each of the following persons,
in the capacities and on the dates indicated.
Signature Title Date
Chairman of the Board and April 29, 1997
/s/ John E. Hayes, Jr. Chief Executive Officer
- ------------------------- (Principal Executive Officer)
John E. Hayes, Jr.
Executive Vice President and April 29, 1997
Chief Financial Officer
/s/ Steven L. Kitchen (Principal Financial and
- ------------------------- Accounting Officer)
Steven L. Kitchen
/s/ Frank J. Becker Director April 29, 1997
- -------------------------
Frank J. Becker
/s/ Gene A. Budig Director April 29, 1997
- -------------------------
Gene A. Budig
II-4
/s/ C. Q. Chandler Director April 29, 1997
- -------------------------
C. Q. Chandler
/s/ Thomas R. Clevenger Director April 29, 1997
- -------------------------
Thomas R. Clevenger
/s/ John C. Dicus Director April 29, 1997
- -------------------------
John C. Dicus
/s/ David H. Hughes Director April 29, 1997
- -------------------------
David H. Hughes
/s/ Russell W. Meyer, Jr. Director Aprial 29, 1997
- -------------------------
Russell W. Meyer, Jr
/s/ John H. Robinson Director April 29, 1997
- -------------------------
John H. Robinson
/s/ Louis W. Smith Director April 29, 1997
- -------------------------
Louis W. Smith
/s/ Susan M. Stanton Director April 29, 1997
- -------------------------
Susan M. Stanton
/s/ Kenneth J. Wagnon Director April 29, 1997
- -------------------------
Kenneth J. Wagnon
/s/ David C. Wittig Director April 29, 1997
- -------------------------
David C. Wittig Director March 28, 1996
II-5
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Page
1 -- Form of Standard Purchase Agreement (1)
2(a) -- Agreement and Plan of Merger between Western Resources, Inc. and Kansas City
Power & Light Company, dated as of February 10, 1997 (2)
4(a) -- Restated ArticlesMortgage and Deed of Incorporation ofTrust dated July 1, 1939 between the Company as amended May 25, 1988and Harris
Trust and Savings Bank, Trustee (2)
4(b) -- Certificate of Correction to Restated Articles of
IncorporationTwenty-Sixth Supplemental Indenture dated February 15, 1990 (2)
4(c) -- Amendment to the Restated Articles of Incorporation,
as amended May 5,Twenty-Eighth Supplemental Indenture dated July 1, 1992 (2)
4(d) -- Amendments to the Restated ArticlesTwenty-Ninth Supplemental Indenture dated as of Incorporation
of the CompanyAugust 20, 1992 (2)
4(e) -- By-lawsThirtieth Supplemental Indenture dated as of the CompanyFebruary 1, 1993 (2)
4(f) -- Thirty-First Supplemental Indenture dated as of April 15, 1993 (2)
4(g) -- Thirty-Second Supplemental Indenture dated as of April 15, 1994(2)
4(h) -- Form of Supplemental Indenture for New Bonds (1)
4(i) -- Form of Indenture for Debt Securities (1)
4(j) -- Form of Securities Resolution (1)
5 -- Opinion of John K. Rosenberg,Richard D. Terrill, Esq. (1)
10(a) -- Agreement between Western Resources, Inc. and ONEOK, Inc. dated as of December
12, 1996 (2)
12 -- Computation of Ratio of Earnings to Fixed Charges (2)
23(a) -- Consent of John K. Rosenberg,Richard D. Terrill, Esq. (contained in Exhibit 5) (1)
23(b) -- Consent of Arthur Andersen LLP (1)
23(c) -- Consent of Coopers & Lybrand L.L.P.(1)
24 Power of Attorney (set forth on the signature page of this Registration
Statement)
25(a) -- Statement of Eligibility of Trustee regarding Form of Supplemental Indenture
(1)
25(b) -- Statement of Eligibility of Trustee regarding Form of Indenture of Debt
Securities(1)
- --------------
(1) Filed herewith.
(2) Incorporated by reference to exhibits previously filed with the SEC as
follows:
Exhibit Number
In this Registration Former Exhibit File
Statement Reference Reference
- -------------------- -------------- ----------------------- --------- ---------
1 1 33-48470*
2(a) 99 Form 8-K, dated February 10, 1997**
4(a) 4 33-23022*4(a) 33-21739*
4(b) 3(b)4(m) Form 10-K, Year Endedended December 31, 1991*1989**
4(c) Filed electronically
4(d) 3 Form 10-Q
Quarter Ended June 15, 1994**
4(e) 3(e)4(o) Form 10-K, Year Endedended December 31, 1995*1992**
- -------4(d) 4(p) Form 10-K, Year ended December 31, 1992**
4(e) 4(q) Form 10-K, Year ended December 31, 1992**
4(f) 4(r) 33-50069*
4(g) 4(s) Form 10-K, Year ended December 31, 1995
10(a) 99.2 Form 8-K, dated December 18, 1996**
12 12 Form 10-K, Year ended December 31, 1996**
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(*) Registration Statements under the Securities Act of 1933.
(**) File No. 1-3523 under the Securities Exchange Act of 1934.