As filed with the Securities and Exchange Commission on April 29, 1997July 23, 1998
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
----------------
Western Resources, Inc.
(Exact name of registrant as specified in its charter)
Kansas 48-0290150
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
818 Kansas Avenue
Topeka, Kansas 66612
(913)(785) 575-6300
(Address, including zip code, and telephone number, including
area code, of principal executive offices)
----------------
John K. Rosenberg,Richard D. Terrill, Esq. Steven L. Kitchen
Executive Vice President, Law Executive Vice President and
and General CounselCorporate Secretary Chief Financial Officer
Western Resources, Inc. Western Resources, Inc.
818 Kansas Avenue 818 Kansas Avenue
Topeka, Kansas 66612 Topeka, Kansas 66612
(913)(785) 575-6300 (913)(785) 575-6300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.|_| |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
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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)
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CALCULATION OF REGISTRATION FEE
=====================================================================================================================
Title of each class of
securities to be registered Proposed maximum aggregate offering price* Amount of registration fee
=====================================================================================================================
Debt Securities $800,000,000(1) $236,000
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* 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.$800,000,000. 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,$800,000,000, 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.
SUBJECT TO COMPLETION, DATED APRIL 29, 1997
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1997)
$ ,000,000$800,000,000
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 Earnings 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 Additional Bonds may be issued No restrictions
issue additional securities of the only if the Company pledges
same type additional property, deposits
cash with the trustee or retires
other Bonds and if certain
earnings coverage requirements
are met
Limits on Company's ability to Bonds have a first priority lien No restrictions unless
issue securities ranking senior on all Company utility property, specifically set forth in the
plant and equipment, and so are Prospectus Supplement relating to
the 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 debt owed by the
companies combined company and so long as
prior series of Bonds are
outstanding must meet earnings
test
Events of Default:
Failure to pay principal No grace period The Company lets five days go by
without payment of principal
Failure to pay interest The Company lets 30 days go by The Company lets 60 days go by
without paying interest without paying interest
Failure to observe other agreements The Company
fails to observe The Company fails to
observe certain agreements made
concerning the New agreements made
concerning the New Bonds (other than the
promise to Senior Notes (other than the
promise pay) for more than 60 days after
to pay) for more than 90 days after
notice from the Trustee. 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 Series of Series
-------------- --------------
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 person has been
authorizied to give any information or to make any
representations other than those contained in this
Prospectus Supplement and the accompanying Prospectus
in connection with the offer contained in this Western Resources, Inc.
Prospectus Supplement and the accompanying _____________
Prospectus, and, if given or made, such information
or representations must not be relied upon as having $ ,000,000
been authorized by the Company or the Underwriters.
This Prospectus Supplement and the accompanying
Prospectus do not constitute an offer by the Company
or by any underwriter to sell securities in any state
to any person to whom it is unlawful for the Company $ ,000,000
or any Underwriter to sell securities in any state to First Mortgage Bonds
any person to whom it is unlawful for the Company or % 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 $ ,000,000
affairs of the Company since the date hereof. First Mortgage Bonds,
% Convertible Series Due
Convertible into
% Unsecured Senior Notes Due
--------------------
PROSPECTUS SUPPLEMENT
TABLE OF CONTENTS
Page
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....................... 2
Incorporation of Certain Documents
by Reference............................ 2
Information on ADT Limited and
Kansas City Power & Light Company....... 3
The Company................................. 4
Use of Proceeds............................. 5
Description of New Bonds.................... 5
Description of Debt Securities.............. 11
Book-Entry.................................. 18
Plan of Distribution........................ 20
Legal Opinions.............................. 21
Experts..................................... 21
======================================================= ======================================================
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$800,000,000 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 Debt 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, exchange or put terms,
and any other special terms of the Offered Securities. The Debt 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."
The Debt Securities will be effectively subordinated to all secured debt of
the Company, including its First Mortgage Bonds. The Debt Securities will also
be structurally subordinated to all secured and unsecured indebtedness of the
Company's subsidiaries.
----------------------
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 , 1997.1998.
FORWARD-LOOKING STATEMENTS
Certain matters discussed in this Prospectus or in documents incorporated
by reference herein are "forward-looking statements." The Private Securities
Litigation Reform Act of 1995 has established that these statements qualify for
safe harbors from liability. Forward-looking statements may include words like
the Company "believes," "anticipates," "expects" or words of similar meaning.
Forward-looking statements describe the Company's future plans, objectives,
expectations or goals. Such statements address future events and conditions
concerning, among other things, capital expenditures, earnings, litigation, rate
and other regulatory matters, possible corporate restructurings, mergers,
acquisitions, dispositions, liquidity and capital resources, interest and
dividend rates, environmental matters, changing weather, nuclear operations and
accounting matters. What happens in each case could vary materially from what
the Company expects because of such matters including, without limitation,
electric utility deregulation, including ongoing state and federal activities;
future economic conditions; constraints on the availability of energy for
purchase; legislative developments; the Company's regulatory and competitive
markets; and other circumstances affecting anticipated operations, revenues and
costs. See the Company's Form 10-K/A and the Form S-4 (each as defined below).
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 Seven7 World Trade
Center, 13th Floor, New York, N.Y. 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, IL. 60661.IL 60661-2511. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and by accessing the
Commission's Web site, http://www.sec.gov. Certain securities of the Company are
listed on the New York Stock Exchange (the "NYSE"), and reports, proxy
statements and other information concerning the Company can be inspected at the
offices of such Exchange,the NYSE, 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
companiesKCPL 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-K10-K/A (File No. 1-3523) for the
year ended December 31, 19961997 (the "Company's 19961997 Form 10-K"10-K/A").
2. The Company's Quarterly Report on Form 10-Q (File No. 1-3523) for the
quarter ended March 31, 1998.
2
3. The Company's Current Reports on Form 8-K (File No. 1-3523) dated
February 10, 1997filed
January 5, 1998, March 23, 1998 and April 2, 1997July 13, 1998 (the "Company's April 2, 1997July 13, 1998
Form 8-K")(in
which KCPL's Annual Report on Form 10-K is included as an exhibit).
3.4. 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,
1997.333-56369)
(the "Form S-4").
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.(785)
575-6300.
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.Company. 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 CompanyCompany's primary business activities are providing electric
generation, transmission and distribution services to approximately 614,000
customers in Kansas; providing security alarm monitoring services to
approximately 1.3 million customers located throughout the United States;
providing natural gas transmission and distribution services to approximately
1.4 million customers in Oklahoma and Kansas through its divisionsownership of a 45%
equity interest in ONEOK Inc. ("ONEOK"); and wholly owned subsidiaries includeinvesting in international power
projects. Rate regulated electric service is provided by KPL, a
rate-regulated electric and gas division of the
Company, ("KPL"),and Kansas Gas and Electric Company ("KGE"), a rate-regulated utility and wholly owned subsidiary
of the Company, Westar Capital, Inc.("Westar Capital"), Westarsubsidiary.
Security services are provided by Protection One, Inc. ("Westar Security"Protection One"), Westar Energy, Inc., The Wing Group, Ltd., non-utility
subsidiaries, and Mid Continent Market Center, Inc., a
regulated gas
transmission service provider ("MCMC").publicly traded, approximately 85%-owned subsidiary. 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.Station.
On February 7, 1997, the Company announced that it had entered into a
merger agreement with KCPL, pursuant to which KCPLthe Company will merge with and into the
Company.acquire KCPL.
KCPL is a public utility engaged in the generation, transmission, distribution
and sale of electricity to approximately 430,000 customers in western Missouri and eastern Kansas. During 1996,On
March 18, 1998, the Company purchased approximately 38 million common sharesand KCPL announced a restructuring of ADT for approximately $589 million. On December 18, 1996their February
7, 1997 merger agreement which will result in the formation of Westar Energy,
Inc., a new electric company ("Westar Energy"). Under the terms of the merger
agreement, the electric utility operations of the Company publicly
announced its intentionwill be transferred to
commence an offer to exchange $22.50 in cashKGE, and sharesKCPL and KGE will be merged into NKC, Inc., which will be renamed
Westar Energy. Following the KCPL Acquisition, the Company will own
approximately 80.1% of the Company'sissued and outstanding common stock for each remaining share of ADT not already
owned byWestar Energy.
The Company will be a holding company conducting all of its business through
subsidiaries. In connection with the consummation of the KCPL Acquisition, up to
$1.9 billion of the outstanding indebtedness of the Company (the "ADT Offer").and KGE will be
assumed by Westar Energy. The valueDebt Securities will not be assumed by Westar
Energy and will remain the obligations of the ADT Offer, assumingCompany and not any of its
subsidiaries upon consummation of 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.KCPL Acquisition.
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)(785) 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 Debt 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 HarrisBankers Trust and Savings Bank,Company, 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.
4
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
senior, unsecured and unsubordinated debt of the Company, but will rank junior to the Company's
First Mortgage Bonds.outstanding secured indebtedness. The Debt Securities will be senior to allany
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 Indenture of Mortgage and Deed of Trust, dated July
1, 1939, to Harris Trust and Savings Bank, as Trustee, as supplemented and
amended, under which the Company's First Mortgage Bonds are outstanding. See "Descriptionoutstanding (the
"Mortgage"). Following consummation of New Bonds."
11
the KCPL Acquisition, the Company's First
Mortgage Bonds will be assumed by Westar Energy and substantially all of the
fixed properties and franchises of Westar Energy will be subject to the lien of
the Mortgage.
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");interest; (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 or any third party including any sinking fund; (9) the terms of
any conversion or exchange right;exchange; (10) the terms of any redemption at the option of
Holders or put by the 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)
5
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:
6
(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 thesuch series when the same becomes due and
payable at maturity or upon redemption, acceleration or otherwise and such
defaultDefault 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 asuch 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)
7
"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, premium or interest) if itthe Trustee determines that withholding
notice is in theirthe interest of such Securityholders. (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)defined in the Indenture) 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 Debt Security, (3) change the fixed maturity
of any Debt Security, (4) reduce the principal of any non-Discounted Security or
reduce the amount of the principal of any Discounted Debt Security that would be
due on acceleration thereof, (5) change the currency in which the principal or
interest on a Debt Security is payable, (6) make any change that materially
adversely affects the right to convert any Debt Security, or (7) waive any
Default in payment of interest on or principal of a Debt 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)
8
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 Debt 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 theany 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 anany agency or 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
HarrisBankers Trust and Savings BankCompany 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.
9
BOOK-ENTRY
DTCThe Depository Trust Company ("DTC") will act as securities depository for
the Debt Securities. The Debt 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 Debt
Securities representing the aggregate principal amount of the Debt 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,Act. 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.,NYSE, 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.Commission.
Purchases of the Debt Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debt Securities
on DTC's records. The ownership interest of each actual purchaser of each Debt
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 interestinterests in the Debt 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
interestinterests in Debt Securities except in the event that use of the book-entry
system for the Debt Securities is discontinued.
The laws of some jurisdictions may require that certain purchasers of the
Debt Securities take physical delivery of such Debt Securities in definitive
form. Accordingly, the ability to transfer interests in the Debt Securities
represented by a global certificate to such persons may be limited. In addition,
because DTC can act only on behalf of its Participants, which in turn act on
behalf of persons who hold interests through the Participants, the ability of a
person having an interest in the Debt Securities represented by a global
certificate to pledge or transfer such interest to persons or entities that do
not participate in DTC's system, or to otherwise take actions in respect of such
interest, may be affected by the lack of a physical definitive certificate in
respect of such interest.
10
The deposit of the Debt 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 Debt Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such Debt
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 shallwill be sent to Cede & Co. If less than all of the Debt
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 Debt
Securities. Under its usual procedures.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 Debt Securities are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest on the Debt 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
Indenture 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 Debt 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 Debt 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 Debt 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 Debt Securities, or with respect to
payments or providing of notice to the Direct Participants, the Indirect
Participants or the Beneficial Owners.
11
So long as Cede & Co. is the registered owner of the Debt Securities, as
nominee of DTC, references herein to holders of the Debt Securities shall mean
Cede & Co. or DTC and shall not mean the Beneficial Owners of the Debt
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 TrusteesIndenture Trustee or the
underwriters take any responsibility for the accuracy or completeness thereof.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities in any of the following ways: (i)
through one or more 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 Debt Securities, including the names
of any underwriters or agents, the purchase price of such Debt 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 Debt Securities may be listed.
If one or more underwriters are used in the sale, Debt Securities will be
acquired by the
underwritersthem 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 Debt
Securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or by one or more underwriters
without a syndicate. Unless otherwise set forth in the applicable Prospectus
Supplement, the obligations of the
underwriters to purchase such Debt Securities
will be subject to certain conditions precedent, and the underwriters will be
obligated to purchase all of such Debt Securities if any of such Debt 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 Debt Securities offered thereby.
Debt 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 Debt 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 Debt Securities,
the Company will authorize agents, underwriters or dealers to solicit offers by
certain institutions to purchase such Debt 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 Debt 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 ContractsCon-
12
tracts will not be subject to any conditions except that (i) the purchase by an
institution of the Debt 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 Debt Securities are
being sold to underwriters, the Company shall have sold to such underwriters the
total principal amount of the Debt 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 Debt Securities, the Company
will sell such Debt Securities to the dealers, as principal. Any dealer may then
resell such Debt 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
Debt Securities being offered thereby.
It has not been determined whether any series of Debt 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 Debt Securities.
Any underwriters, dealers or agents participating in the distribution of
Debt Securities may be deemed to be underwriters, and any discounts or
commissions received by them on the sale or resale of Debt 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 serviceservices for, the Company or its affiliates in the
ordinary course of business.
LEGAL OPINIONS
The statements as to matters of law and legal conclusions (except matters
relating to KCPL and the Internal Revenue Code of 1986, as amended) set forth in
this Prospectus and in the documents incorporated by reference herein have been
reviewed by Richard D. Terrill, Esq., Vice President, Law and 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,July 21, 1998, Mr. Terrill owned directly
and/or beneficially 11901,519 shares of Common Stock of the Company and had been
granted, pursuant to and subject to the terms of the Company's long-term
incentive programs, 376
performance shares andprogram, stock options exercisable for 45008,000 shares of Common Stock.Stock of
the Company.
Certain legal matters in connection with the Debt Securities will be passed
upon by Richard D.Mr. 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.Mr. Terrill Esq. as to matters of Kansas law.
13
EXPERTS
The consolidated 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
includedincorporated by reference 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, 19961997 incorporated by reference in this Prospectus
and in the Registration Statement as an Exhibitexhibit to the Company's April 2, 1997July 13, 1998
Form 8-K, have been audited by Pricewaterhouse Coopers & Lybrand L.L.P.,LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
includedincorporated by reference herein, in reliance upon the authority of said firm as
experts in giving said reports.
2114
====================================================== ===============================================
====================================================== ===============================================
No person is authorized to give any information
or to make any representations other than those
contained in this Prospectus, including any
Prospectus Supplement in connection with the
offer of the New Bonds or Debt Securities, and, if given or made,
such information or representations must not be Western Resources, Inc.
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 in
any circumstance in which such offer or
solicitation is unlawful. Neither the delivery of
this Prospectus nor any sale made hereunder
shall, under any circumstances, create any
implication that there has been no ----------
change in the
affairs of the Company since the PROSPECTUS
date hereof
or that the information contained or ----------
incorporated by __________
reference herein is correct as of any time
subsequent to the date of this Prospectus. PROSPECTUS
----------
--------------------
TABLE OF CONTENTS
Page
Forward-Looking Statements.................. 2
Available Information....................... 2
Incorporation of Certain Documents Debt Securities
by Reference.............................. 2
Information on ADT Limited and
Kansas City
Power & Light Company.........Company..................... 3 First Mortgage Bonds
The Company................................. 4
and Debt Securities
Use of Proceeds............................. 5
Description of New Bonds.................... 54
Description of Debt Securities.............. 114 , 1998
Book-Entry.................................. 1810
Plan of Distribution........................ 2012
Legal Opinions.............................. 21 , 199713
Experts..................................... 2114
====================================================== ===============================================
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.............................. 900,000fee......... $236,000
Trustee's fees and expenses............................ 30,000
Printing............................................... 30,000expenses................................. 15,000
Printing.................................................... 80,000
Legal fees and expenses ............................... 300,000.................................... 175,000
Accountants' fees and expenses......................... 35,000expenses.............................. 75,000
Rating agencies fees................................... 235,000
Blue Sky expenses ..................................... 10,000fees........................................ 350,000
Miscellaneous expenses................................. 22,333
--------expenses...................................... 20,000
Total .............................. $ 1,775,000*................................... $951,000*
===========
- -----------------
* 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.
II-1
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 PagesPage 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.
II-2
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 29th22d day of April, 1997.July, 1998.
WESTERN RESOURCES, INC.
(Registrant)
By:/s/ /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.,
David C. Wittig, 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-
effectivepost-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
Signature Title Date
/s/ John E. Hayes, Jr. Chairman of the Board July 22, 1998
- ----------------------------
John E. Hayes, Jr.
/s/ David C. Wittig President and Chief Executive Officer July 22, 1998
- ---------------------------- (Principal Executive Officer)
David C. Wittig
/s/ Steven L. Kitchen Executive Vice President and Chief July 22, 1998
- ---------------------------- Financial Officer (Principal Financial
Steven L. Kitchen and Accounting Officer)
II-4
/s/ Frank J. Becker Director July 22, 1998
- ----------------------------
Frank J. Becker
/s/ C.Q. Chandler Director July 22, 1998
- ----------------------------
C. Q. Chandler
/s/ Thomas R. Clevenger Director July 22, 1998
- ----------------------------
Thomas R. Clevenger
/s/ John C. Dicus Director July 22, 1998
- ----------------------------
John C. Dicus
/s/ David H. Hughes Director July 22, 1998
- ----------------------------
David H. Hughes
/s/ Russell W. Meyer, Jr. Director July 22, 1998
- ----------------------------
Russell W. Meyer, Jr.
/s/ Louis W. Smith Director July 22, 1998
- ----------------------------
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
II-5
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Page
1 -- Standard Purchase Agreement (1)
2(a) -- Agreement and Plan of Merger between Western Resources, Inc. and Kansas City
Power & Light Company, dated as of February 10, 1997 (2)
4(a) -- Mortgage and Deed of Trust dated July 1, 1939 between the Company and Harris
Trust and Savings Bank, Trustee (2)
4(b) -- Twenty-Sixth Supplemental Indenture dated February 15, 1990 (2)
4(c) -- Twenty-Eighth Supplemental Indenture dated July 1, 1992 (2)
4(d) -- Twenty-Ninth Supplemental Indenture dated as of August 20, 1992 (2)
4(e) -- Thirtieth Supplemental Indenture dated as of February 1, 1993 (2)
4(f) -- Thirty-First Supplemental Indenture dated as of April 15, 1993 (2)
4(g) -- Thirty-Second Supplemental Indenture dated as of April 15, 1994(2)
4(h) -- Form of Supplemental Indenture for New Bonds (1)
4(i) -- Form of Indenture for Debt Securities (1)
4(j) -- Form of Securities Resolution (1)
5 -- Opinion of Richard D. Terrill, Esq. (1)
10(a) -- Agreement between Western Resources, Inc. and ONEOK, Inc. dated as of December
12, 1996 (2)
12 -- Computation of Ratio of Earnings to Fixed Charges (2)
23(a) -- Consent of Richard D. Terrill, Esq. (contained in Exhibit 5) (1)
23(b) -- Consent of Arthur Andersen LLP (1)
23(c) -- Consent of Coopers & Lybrand L.L.P.(1)
24 Power of Attorney (set forth on the signature page of this Registration
Statement)
25(a) -- Statement of Eligibility of Trustee regarding Form of Supplemental Indenture
(1)
25(b)Sequentially
Exhibit Numbered
Number Exhibit Page
- ------ ------- ----
1 -- Standard Purchase Agreement (1)
2 -- Agreement and Plan of Merger between Western Resources, Inc.,
Kansas Gas and Electric Company, NKC, Inc. and Kansas City
Power & Light Company, dated as of March 18, 1998 (2)
4(a) -- Form of Indenture for Debt Securities (1)
4(b) -- Form of Securities Resolution (1)
5 -- Opinion of Richard D. Terrill, Esq. (1)
12 -- Computation of Ratio of Earnings to Fixed Charges (2)
23(a) -- Consent of Richard D. Terrill, Esq. (contained in
Exhibit 5) (1)
23(b) -- Consent of Arthur Andersen LLP (1)
23(c) -- Consent of Pricewaterhouse Coopers LLP(1)
24 -- Power of Attorney (set forth on the signature page of
this Registration Statement)
25 -- Statement of Eligibility of Trustee regarding Form of
Indenture of Debt Securities(1)
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(1) Filed herewith.
(2) Incorporated by reference to exhibits previously filed with the SECCommission
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(a) 33-21739*
4(b) 4(m) Form 10-K, Year ended December 31, 1989**
4(c) 4(o) Form 10-K, Year ended December 31, 1992**
4(d) 4(p) Form 10-K, Year ended December 31, 1992**
4(e) 4(q) Form 10-K, Year ended December 31, 1992**
4(f) 4(r) 33-50069*
4(g) 4(s) Form 10-K, Year ended December 31, 1995
10(a) 99.2 Form 8-K, dated December 18, 1996**
12 12 Form 10-K, Year ended December 31, 1996*Exhibit Number
In this Registration Former Exhibit File
Statement Reference Reference
2 99 Form 8-K, dated March 23, 1998**
12 12 Form 10-Q, Quarter ended
March 31, 1998**
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(*) Registration Statements under the Securities Act of 1933.
(**) File No. 1-3523 under the Securities Exchange1934 Act of 1934.
.
E-1