PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 21, 1995)
$110,000,000
OKLAHOMA GAS AND
ELECTRIC COMPANY
7.30% SENIOR NOTES, SERIES DUE OCTOBER 15, 2025
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Interest on the 7.30% Senior Notes, Series due October 15, 2025 (the "7.30%
Senior Notes") is payable semi-annually on April 15 and October 15 of each year,
beginning April 15, 1996. The 7.30% Senior Notes will be redeemable at the
option of Oklahoma Gas and Electric Company (the "Company"), as a whole or in
part on any date on or after October 15, 2005, on at least 30 days' notice as
set forth under the caption "DESCRIPTION OF 7.30% SENIOR NOTES -- Redemption
Provisions." The 7.30% Senior Notes will be represented by Global Securities
registered in the name of a nominee of The Depository Trust Company, as
Depository. Beneficial interests in the 7.30% Senior Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depository and its participants. Except as described in the accompanying
Prospectus, 7.30% Senior Notes in certificated form will not be issued in
exchange for the Global Securities. All payments of principal and interest will
be made by the Company in immediately available funds unless the 7.30% Senior
Notes are issued in certificated form. See "BOOK-ENTRY SYSTEM" in the
accompanying Prospectus. The 7.30% Senior Notes will trade in the Depository's
Same-Day Funds Settlement System until maturity or until the 7.30% Senior Notes
are issued in certificated form, and secondary market trading activity will
therefore settle in immediately available funds. See "DESCRIPTION OF 7.30%
SENIOR NOTES -- Same-Day Settlement and Payment."
Until the Release Date (as defined in the accompanying Prospectus), the
7.30% Senior Notes will be secured by the Company's first mortgage bonds issued
and delivered to the Senior Note Trustee. (See "DESCRIPTION OF SENIOR NOTES --
Security; Release Date" in the accompanying Prospectus). ON THE RELEASE DATE,
THE 7.30% SENIOR NOTES WILL CEASE TO BE SECURED BY SUCH FIRST MORTGAGE BONDS,
WILL BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY AND WILL RANK ON A
PARITY WITH OTHER UNSECURED INDEBTEDNESS OF THE COMPANY (UNLESS OTHERWISE
SECURED AS DESCRIBED HEREIN UNDER THE CAPTION "DESCRIPTION OF 7.30% SENIOR NOTES
- -- LIMITATION ON LIENS").
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE 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.
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
Per 7.30% Senior Note.................... 99.222% .971% 98.251%
Total.................................... $109,144,200 $1,068,100 $108,076,100
(1) Plus accrued interest, if any, from October 27, 1995 to date of delivery.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(3) Before deduction of expenses payable by the Company estimated at $280,000.
------------------------
The 7.30% Senior Notes are offered by the several Underwriters, subject to
prior sale, when, as and if issued to and accepted by them, subject to approval
of certain legal matters by counsel for the Underwriters, and by counsel for the
Company and certain other conditions. The Underwriters reserve the right to
withdraw, cancel or modify such offer and to reject orders in whole or in part.
It is expected that delivery of the 7.30% Senior Notes will be made, on or about
October 27, 1995, through the book-entry facilities of The Depository Trust
Company, against payment therefor in immediately available funds.
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MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS
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The date of this Prospectus Supplement is October 23, 1995.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 7.30% SENIOR
NOTES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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CONCURRENT OFFERING OF ADDITIONAL SENIOR NOTES
Concurrently with the offering made by this Prospectus Supplement, the
Company intends to issue and sell in an underwritten public offering
$110,000,000 in principal amount of the Company's 6.250% Senior Notes due
October 15, 2000 (the "6.250% Senior Notes"). The offering of the 6.250% Senior
Notes is being made by a separate prospectus supplement. The sales of the 7.30%
Senior Notes being offered hereby and the 6.250% Senior Notes are separate
transactions, not contingent one upon the other.
USE OF PROCEEDS
The net proceeds from the sale of the 7.30% Senior Notes and, if
consummated, from the 6.250% Senior Notes will be added to the general funds of
the Company and applied to the redemption on or about December 1, 1995, of
$30,000,000 principal amount of the Company's 8 5/8% First Mortgage Bonds, due
January 1, 2000, $75,000,000 principal amount of the Company's 8 3/8% First
Mortgage Bonds, due January 1, 2004, $60,000,000 principal amount of the
Company's 9 1/8% First Mortgage Bonds, due January 1, 2005, and $55,000,000
principal amount of the Company's 8 5/8% First Mortgage Bonds, due January 1,
2006, in each case at principal amount plus the applicable redemption premium,
if any, and accrued interest to the redemption date.
RECENT DEVELOPMENTS
For the twelve months ended September 30, 1995, the Company's consolidated
operating revenues, operating income and net income were $1,299,526,000,
$200,990,000 and $125,317,000, respectively. These amounts are unaudited, but,
in the opinion of the Company, include all adjustments, comprised of only normal
and recurring accruals, necessary to fairly state the results of operations for
the period. The improvement in the Company's results for the twelve months ended
September 30, 1995 as compared to the twelve months ended June 30, 1995, is
primarily attributable to warmer weather and increased electric sales.
DESCRIPTION OF 7.30% SENIOR NOTES
The following description of the particular terms of the 7.30% Senior Notes
supplements the description of the general terms and provisions of the Senior
Notes set forth in the Prospectus under the caption "DESCRIPTION OF SENIOR
NOTES" to which description reference is hereby made. The 7.30% Senior Notes
will be issued as a separate series of Senior Notes under the Senior Note
Indenture, dated as of October 1, 1995, as supplemented by a Supplemental
Indenture dated as of October 16, 1995, between the Company and Boatmen's First
National Bank of Oklahoma, as trustee (the "Supplemental Indenture"). Provisions
of the Senior Note Indenture are more fully described under the caption
"DESCRIPTION OF SENIOR NOTES" in the accompanying Prospectus. At the date of
this Prospectus Supplement, no Senior Notes have been issued under the Senior
Note Indenture. Capitalized words not defined herein are defined in the
accompanying Prospectus.
GENERAL
The 7.30% Senior Notes will mature on October 15, 2025, and will bear
interest at 7.30% per annum. Interest on the 7.30% Senior Notes will accrue from
October 27, 1995, and is to be payable semi-annually on April 15 and October 15,
beginning April 15, 1996. Subject to certain exceptions, the Senior Note
Indenture provides for the payment of interest on the interest payment date only
to persons in whose names the 7.30% Senior Notes are registered on the Record
Date (the March 31 prior to April 15 and the September 30 prior to October 15).
The 7.30% Senior Notes are limited to $110,000,000 in aggregate principal
amount.
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REDEMPTION PROVISIONS
The 7.30% Senior Notes are not redeemable prior to October 15, 2005. On or
after October 15, 2005, the Company, at its option, may redeem all or, from time
to time, any part of the 7.30% Senior Notes on at least 30 days' but not more
than 60 days' notice, mailed to the registered holders thereof at their last
registered address, at the following redemption prices (expressed as a
percentage of the principal amount) during the 12-month periods beginning
October 15, of the years indicated below:
YEAR REDEMPTION PRICE YEAR REDEMPTION PRICE
- --------- ---------------- ----------- ----------------
2005 103.261 % 2011 101.304 %
2006 102.935 2012 100.978
2007 102.609 2013 100.652
2008 102.283 2014 100.326
2009 101.957 2015 and
2010 101.631 thereafter 100.000
If less than all of the 7.30% Senior Notes represented by a Global Security
are to be redeemed, the particular portion thereof to be redeemed will be
selected by the Depository in such manner as the Depository determines. If the
7.30% Senior Notes are not represented by a Global Security and if less than all
of the 7.30% Senior Notes are to be redeemed, the Senior Note Trustee will
select in such manner as it deems appropriate and fair the particular 7.30%
Senior Notes to be redeemed.
If at the time of mailing the notice of redemption, the Company has not
irrevocably directed the Senior Note Trustee to apply funds deposited with the
Senior Note Trustee to redeem the 7.30% Senior Notes called for redemption, such
notice may state that the redemption is subject to the receipt of the redemption
moneys by the Senior Note Trustee before the date fixed for redemption and that
such notice will be of no effect unless such moneys are received before such
redemption date.
SECURITY
Upon the issuance of the 7.30% Senior Notes, the Company will simultaneously
issue and deliver to the Senior Note Trustee, as security for all Senior Notes,
First Mortgage Bonds, Senior Note Series A (the "Series A First Mortgage
Bonds"). The Series A First Mortgage Bonds will have the same interest rate,
interest payment dates, stated maturity date and redemption provisions, and will
be in the same aggregate principal amount, as the 7.30% Senior Notes.
Subject to the provisions of the Senior Note Indenture governing
disbursement of funds following an event of default, payment by the Company to
the Senior Note Trustee of the principal, premium and interest on the Series A
First Mortgage Bonds will be applied by the Senior Note Trustee to satisfy the
Company's obligations with respect to the principal, premium and interest on the
7.30% Senior Notes. As provided in the New Supplemental Indenture setting forth
the terms of the Series A First Mortgage Bonds, the Company's obligations to
make payments with respect to the principal of, premium and/or interest on the
Series A First Mortgage Bonds shall be fully or partially, as the case may be,
satisfied and discharged to the extent that, at the time that any such payment
shall be due, the then due principal of, premium and/or interest on the 7.30%
Senior Notes shall have been fully or partially paid or there shall have been
deposited with the Senior Note Trustee pursuant to the Senior Note Indenture
sufficient available funds to fully or partially pay the then due principal,
premium, if any and/or interest on the 7.30% Senior Notes.
Reference is made to "DESCRIPTION OF SENIOR NOTES -- Security; Release Date"
in the Prospectus for a description of the circumstances under which all or part
of the Senior Note Mortgage Bonds will cease to be held by the Senior Note
Trustee as security for the Senior Notes. As explained in the Prospectus, the
Senior Notes will cease to be secured by the Senior Note Mortgage Bonds on the
Release Date and will become unsecured general obligations of the Company.
However, the Senior Notes can become secured by certain property of the Company
from and after the Release Date as explained below under the caption
"Limitations on Liens."
LIMITATIONS ON LIENS. The Supplemental Indenture provides that, from and
after the Release Date and so long as any of the 7.30% Senior Notes or the
6.250% Senior Notes are outstanding, the Company may
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not issue, assume or guarantee any debt for money borrowed ("Debt") that is
secured by any mortgage, security interest, pledge or lien ("mortgage") of or
upon any Operating Property of the Company, whether owned at the date of the
Senior Note Indenture or thereafter acquired, and will not permit to exist any
Debt secured by any such mortgage created on or prior to the Release Date,
without in any case effectively securing the 7.30% Senior Notes and the 6.250%
Senior Notes (together with, if the Company shall so determine, any other Senior
Notes or indebtedness of the Company ranking senior to, or equally with, the
Senior Notes) with such Debt equally and ratably, except that this restriction
will not apply to: (1) mortgages on any property existing at the time of its
acquisition; (2) mortgages on property of a corporation existing at the time
such corporation is merged into or consolidated with, or disposes of
substantially all its properties (or those of a division) to, the Company; (3)
mortgages to secure the cost of acquisition, construction, development or
substantial repair, alteration or improvement of property or to secure
indebtedness incurred to provide funds for any such purpose or for reimbursement
of funds previously expended for any such purpose, provided such mortgages are
created or assumed contemporaneously with, or within 18 months after, such
acquisition or completion of substantial repair or alteration, construction,
development or substantial improvement or within six months thereafter pursuant
to a commitment for financing arranged with a lender or investor within such 18
month period; (4) mortgages in favor of the United States of America or any
State thereof, or for the benefit of holders of securities issued by any such
entity, or any department, agency or instrumentality or political subdivision of
the United States of America or any State thereof, to secure any Debt incurred
for the purpose of financing all or any part of the purchase price or the cost
of substantially repairing or altering, constructing, developing or
substantially improving the property subject to such mortgages; or (5) any
extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any mortgage referred to in clauses (1)
through (4), provided, however, that the principal amount of indebtedness
secured thereby and not otherwise authorized by said clauses (1) to (4),
inclusive, shall not exceed the principal amount of indebtedness, plus any
premium or fee payable in connection with any such extension, renewal or
replacement, so secured at the time of such extension, renewal or replacement.
However, the foregoing restriction does not apply to the issuance, assumption or
guarantee by the Company of Debt secured by a mortgage which would otherwise be
subject to the foregoing restrictions up to an aggregate amount which, together
with all other secured Debt of the Company (not including secured Debt permitted
under the foregoing exceptions) and the Value (as defined below) of Sale and
Lease-Back Transactions (as defined below) existing at such time (other than
Sale and Lease-Back Transactions the proceeds of which have been applied to the
retirement of certain indebtedness, Sale and Lease-Back Transactions in which
the property involved would have been permitted to be mortgaged under the
foregoing exceptions and Sale and Lease-Back Transactions that are permitted by
the first sentence of "Limitations on Sale and Lease-Back Transactions" below),
does not exceed the greater of 10% of Net Tangible Assets (as defined below) or
10% of Capitalization (as defined below). (Section 4.01 of Supplemental
Indenture).
LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS. The Supplemental Indenture
provides that, from and after the Release Date and for so long as any 7.30%
Senior Notes or 6.250% Senior Notes are outstanding, the Company may not enter
into any Sale and Lease-Back Transaction with respect to any Operating Property
and will not permit to remain in effect any Sale and Lease-Back Transaction with
respect to any Operating Property entered into on or prior to the Release Date
(except in each case, for transactions involving leases for a term, including
renewals, of not more than 48 months), if the purchaser's commitment is obtained
more than 18 months after the later of the acquisition or completion or the
placing in operation of such Operating Property or of such Operating Property as
constructed or developed or substantially repaired, altered or improved. This
restriction will not apply if (a) the Company would be entitled pursuant to the
provisions described in the first sentence under "Limitations on Liens" above to
issue, assume or guarantee Debt secured by a mortgage on such Operating Property
without equally and ratably securing the 7.30% Senior Notes and the 6.250%
Senior Notes, (b) after giving effect to such Sale and Lease-Back Transaction,
the Company could incur pursuant to the provisions described in the second
sentence under "Limitation of Liens," additional Debt secured by mortgages, or
(c) the Company applies within 180 days an amount equal to, in the case of a
sale or transfer for cash, the net proceeds (not exceeding the net book value),
and, otherwise, an amount equal to the fair value (as determined by its Board of
Directors) of the
S-4
Operating Property so leased to the retirement of Senior Notes or other Debt of
the Company ranking senior to, or equally with, the Senior Notes, subject to
reduction as set forth in the Supplemental Indenture in respect of Senior Notes
and such Debt retired during such 180-day period otherwise than pursuant to
mandatory sinking fund or prepayment provisions and payments at stated maturity.
(Section 4.02 of Supplemental Indenture).
DEFINITIONS. The term "Capitalization" shall mean the total of all the
following items appearing on, or included in, the balance sheet of the Company:
(i) liabilities for indebtedness maturing more than 12 months from the date of
determination; and (ii) common stock, preferred stock, premium or capital stock,
capital surplus, capital in excess of par value, and retained earnings, less to
the extent not otherwise deducted, the cost of shares of capital stock of the
Company held in its treasury.
The term "Net Tangible Assets" shall mean the amount shown as total assets
on the balance sheet of the Company, less the following: (i) intangible assets
including, but without limitation, such items as goodwill, trademarks, trade
names, patents and unamortized debt discount and expense carried as an asset on
said balance sheet; and (ii) appropriate adjustments, if any, on account of
minority interests.
The term "Operating Property" shall mean (i) any interest in real property
owned by the Company and (ii) any asset owned by the Company that is depreciable
in accordance with generally accepted accounting principles.
The term "Sale and Lease-Back Transaction" shall mean any arrangement with
any person providing for the leasing to the Company of any Operating Property
(except for temporary leases for a term, including any renewal thereof, of not
more than 48 months), which Operating Property has been or is to be sold or
transferred by the Company to such person.
The term "Value" shall mean, with respect to a Sale and Lease-Back
Transaction, as of any particular time, the amount equal to the greater of (i)
the net proceeds to the Company from the sale or transfer of the property leased
pursuant to such Sale and Lease-Back Transaction or (ii) the net book value of
such property, as determined in accordance with generally accepted accounting
principles by the Company at the time of entering into such Sale and Lease-Back
Transaction, in either case multiplied by a fraction, the numerator of which
shall be equal to the number of full years of the term of the lease that is part
of such Sale and Lease-Back Transaction remaining at the time of determination
and the denominator of which shall be equal to the number of full years of such
term, without regard, in any case, to any renewal or extension options contained
in such lease.
GLOBAL SECURITIES
The 7.30% Senior Notes will be issued in the form of Global Securities
deposited with, or on behalf of, the Depository and registered in the name of a
nominee of the Depository. Except under the limited circumstances described in
the Prospectus under the caption "BOOK-ENTRY SYSTEM," owners of beneficial
interests in the Global Securities will not be entitled to physical delivery of
the 7.30% Senior Notes in certificated form. The Global Securities may not be
transferred except as a whole by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any nominee to a successor of the Depository
or a nominee of such successor.
A further description of the Depository's procedures with respect to the
Global Securities is set forth in the Prospectus under the caption "BOOK-ENTRY
SYSTEM."
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the 7.30% Senior Notes will be made by the Underwriters in
immediately available funds. So long as the 7.30% Senior Notes are issued in the
form of Global Securities, all payments of principal of, premium, if any, and
interest on the 7.30% Senior Notes will be made by the Company in immediately
available funds to the Depository or its nominee.
Secondary trading in long-term notes, debentures and bonds of corporate
issuers is generally settled in clearinghouse or next-day funds. In contrast,
the 7.30% Senior Notes will trade in the Depository's Same-
S-5
Day Funds Settlement System until maturity or until the 7.30% Senior Notes are
issued in certificated form, and secondary market trading activity in the 7.30%
Senior Notes will therefore be required by the Depository to settle in
immediately available funds. No assurance can be given as to the effect, if any,
of settlement in immediately available funds on trading activity in the 7.30%
Senior Notes.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), the Company has agreed to sell to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc. and Lehman
Brothers Inc. (the "Underwriters"), and the Underwriters have severally agreed
to purchase from the Company, the principal amounts of the 7.30% Senior Notes
set forth opposite their names below. The Underwriting Agreement provides that
the obligations of the Underwriters are subject to certain conditions precedent
and that the Underwriters will be obligated to purchase all of the 7.30% Senior
Notes if any are purchased.
PRINCIPAL
UNDERWRITER AMOUNT
- -------------------------------------------------------------------------------------- --------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................................ $ 36,700,000
Bear, Stearns & Co. Inc............................................................... 36,650,000
Lehman Brothers Inc................................................................... 36,650,000
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Total............................................................................... $ 110,000,000
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The Underwriters have advised the Company that they propose initially to
offer the 7.30% Senior Notes to the public at the public offering price set
forth on the cover page of this Prospectus Supplement, and to certain dealers at
such price less a concession not in excess of .5% of the principal amount of the
7.30% Senior Notes. The Underwriters may allow, and such dealers may reallow, a
discount not in excess of .25% of the principal amount of the 7.30% Senior Notes
to certain other dealers. After the initial public offering of the 7.30% Senior
Notes, the public offering price, concession and discount may be changed.
The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments the Underwriters
may be required to make in respect thereof.
The 7.30% Senior Notes will not be listed on any securities exchange, and
there can be no assurance that there will be a secondary market for the 7.30%
Senior Notes. The Underwriters have advised the Company that they intend to make
a market in the 7.30% Senior Notes; however, such market making may be
discontinued at any time. Accordingly, no assurance can be given as to the
liquidity of, or trading markets for, the 7.30% Senior Notes.
The Underwriters perform investment banking and other financial services for
the Company and certain of its affiliates in the ordinary course of business.
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PROSPECTUS
OKLAHOMA GAS AND ELECTRIC COMPANY
FIRST MORTGAGE BONDS
SENIOR NOTES
------------------
Oklahoma Gas and Electric Company, an Oklahoma corporation (the "Company"),
may offer from time to time up to $220,000,000 aggregate principal amount of its
first mortgage bonds or senior notes (collectively, the "Securities"), in one or
more series on terms to be determined at the time or times of sale. The specific
terms of each issue of Securities, together with the terms of the offering of
such issue, will be set forth in an accompanying prospectus supplement (a
"Prospectus Supplement"). The applicable Prospectus Supplement will set forth
with regard to the particular Securities being offered (the "Offered
Securities"), the designation or designations, aggregate principal amount, rate
or rates (or method of calculation) and times and place of any payment of
interest, maturity or maturities, offering price, any sinking fund or other
redemption terms and other specific terms of such Offered Securities.
The Securities will be represented either by Global Securities registered in
the name of The Depository Trust Company ("DTC"), as depository ("Depository"),
or its nominee, or by securities in certificated form issued to the registered
owners thereof, as set forth in the applicable Prospectus Supplement. Interests
in Global Securities will be shown on, and transfers thereof will be effected
only through, records maintained by the Depository and its participants. Global
Securities will not be issuable as certificated securities except in
circumstances described herein or in the applicable Prospectus Supplement.
The Company may sell the Securities through underwriters or dealers,
directly to a limited number of institutional purchasers or through agents. See
"PLAN OF DISTRIBUTION." The applicable Prospectus Supplement will set forth the
names of such underwriters, dealers or agents, if any, any applicable
commissions or discounts and the net proceeds to the Company from such sale. See
"PLAN OF DISTRIBUTION" for possible indemnification arrangements for
underwriters, dealers, agents and purchasers.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS SEPTEMBER 21, 1995.
OKLAHOMA GAS AND ELECTRIC COMPANY
Oklahoma Gas and Electric Company, an Oklahoma corporation (the "Company")
incorporated in 1902 under the laws of the Territory of Oklahoma, is an electric
public utility company with its principal executive offices located at 101 North
Robinson, P.O. Box 321, Oklahoma City, Oklahoma 73101-0321. Telephone (405)
553-3000.
The Company is the largest operating electric utility in Oklahoma. The
Company owns and operates an interconnected electric production, transmission
and distribution system which includes eight active generating stations with a
total capability of 5,637,300 kilowatts. The Company's wholly-owned subsidiary,
Enogex Inc., owns and operates more than 3,000 miles of natural gas transmission
and gathering pipeline and, through its wholly-owned subsidiaries, has interests
in four gas processing plants, markets natural gas and natural gas products and
invests in the exploration and production of natural gas. (See "Restructuring"
below.) The Company furnishes retail electric service in 270 communities and
contiguous rural and suburban territories in Oklahoma and western Arkansas
(population served estimated by the Company at 1,400,000). It also sells
electric energy at wholesale for resale in six communities and to two rural
electric cooperatives in those states. The area served by the Company embraces
approximately 30,000 square miles, which includes Oklahoma City, the largest
city in Oklahoma, and the section of Arkansas in the general area of Ft. Smith,
the second largest city in Arkansas. Of the total 276 communities served, 247
are located in Oklahoma and 29 in Arkansas. Approximately 91% of the Company's
electric operating revenues for the year ended December 31, 1994, was derived
from sales in Oklahoma and approximately 9% from sales in Arkansas.
RESTRUCTURING
The Company has proposed a corporate restructuring (the "Restructuring")
under which it will become the subsidiary of a newly-formed holding company (the
"Holding Company"), and the Company's Common Stock will be exchanged on a
share-for-share basis for Common Stock of the Holding Company. Following the
Restructuring, Enogex Inc. will become a direct subsidiary of the Holding
Company and will cease to be a subsidiary of the Company. The Company's Current
Report on Form 8-K dated August 3, 1995, filed with the Securities and Exchange
Commission (the "Commission") and incorporated by reference in this Prospectus,
includes pro forma financial information for the Company as of June 30, 1995 and
December 31, 1994, and for the six months ended June 30, 1995 and each of the
three years in the period ended December 31, 1994, after giving effect to the
Restructuring and the transfer by the Company of Enogex Inc. and its
subsidiaries ("Enogex") to the Holding Company as if they had occurred on
January 1, 1992. The Restructuring is subject to certain conditions, including
shareowner approval and the receipt of regulatory approvals. The Securities and
other outstanding indebtedness of the Company will not be transferred or
exchanged in the Restructuring and, following the Restructuring, will remain
direct obligations of the Company with the same terms as in effect immediately
prior to the Restructuring.
INFORMATION INCORPORATED BY REFERENCE
The following documents, as filed by the Company with the Commission, are
incorporated herein by reference: (i) Form 10-K Annual Report of the Company for
the year ended December 31, 1994 as amended by the Form 10-K/A filed April 27,
1995 and the Form 10-K/A-2 filed May 22, 1995; (ii) Form 10-Q Quarterly Reports
of the Company for the quarters ended March 31, 1995 and June 30, 1995 and (iii)
Form 8-K Current Reports of the Company dated July 26, 1995 and August 3, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference in this Prospectus from the respective dates of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference in this Prospectus shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained in this Prospectus or in any other
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subsequently filed document which also is or is deemed to be incorporated by
reference in this Prospectus modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person
(including any beneficial owner) to whom this Prospectus has been delivered, on
the request of any such person, a copy of any or all of the documents referred
to above which have been or may be incorporated in this Prospectus by reference,
other than certain exhibits to such documents. Written or telephone requests for
such copies should be directed to Ms. Irma B. Elliott, Secretary, Oklahoma Gas
and Electric Company, 101 North Robinson, P.O. Box 321, Oklahoma City, Oklahoma
73101-0321, (405) 553-3196.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports,
proxy statements and other information with the Commission. Such reports, proxy
statements and other information on file can be inspected and copied at the
public reference offices of the Commission currently at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Chicago, Illinois
60661; and 7 World Trade Center, New York, New York 10045; and copies of such
material can be obtained from the Public Reference Section of the Commission at
its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, reports, proxy material and other information
concerning the Company may be inspected at the Library of the New York Stock
Exchange, 20 Broad Street, New York, New York 10015, and at the offices of the
Pacific Stock Exchange, 301 Pine Street, San Francisco, California 94104 and 618
South Spring Street, Los Angeles, California 90014, on which exchanges the
Company's Common Stock is listed. The Company is not required to, and does not,
provide annual reports to holders of its debt securities unless specifically
requested by a holder.
The Company has filed with the Commission registration statements on Form
S-3 (herein, together with all amendments and exhibits, referred to collectively
as the "Registration Statement") under the Securities Act of 1933, as amended.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Securities will be used (i) in connection with the payment at maturity or the
redemption, refunding, refinancing or purchase of certain currently outstanding
first mortgage bonds of the Company (the "Prior Securities") and (ii) for
general corporate purposes (including payment of short-term debt incurred to
finance construction expenditures and for issuance costs). The specific
allocation of the net proceeds of a particular series of Offered Securities and
information relating to the particular Prior Securities, if any, to be paid at
maturity, redeemed, refunded, refinanced or purchased will be described in the
Prospectus Supplement related thereto. Any Prior Securities purchased will be
purchased at a price not in excess of the then-current redemption price
applicable to such securities. In case of the redemption, refunding or purchase
of Prior Securities, proceeds of the Offered Securities may be applied to pay
any redemption premium or purchase price in excess of the principal amount.
RATIO OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31,
12 MONTHS ENDED ------------------------------------------
JUNE 30, 1995 1994 1993 1992 1991
--------------- --------- --------- --------- ---------
Consolidated Ratio of Earnings to Fixed Charges.............. 3.36 3.57 3.30 3.01 3.62
Pro Forma Ratio of Earnings to Fixed Charges................. 3.43 3.75 3.35 2.98 3.63
1990
---------
Consolidated Ratio of Earnings to Fixed Charges.............. 3.85
Pro Forma Ratio of Earnings to Fixed Charges................. 4.02
3
For purposes of these ratios, "Earnings" consist of the aggregate of net
income, taxes on income, investment tax credit (net) and "fixed charges." "Fixed
charges" consist of interest on long-term debt, related amortization, interest
on short-term borrowings and a calculated portion of rents considered to be
interest. The pro forma ratios (which exclude the results of Enogex) give effect
to the Restructuring and the transfer by the Company of Enogex to the Holding
Company as if they occurred at January 1, 1990.
The annual interest requirements on the long-term debt of the Company and
its subsidiaries outstanding at June 30, 1995, was $58,218,282. On a pro forma
basis, the annual interest requirements on the Company's long-term debt
outstanding at June 30, 1995 was $54,676,902.
SELECTED CONSOLIDATED AND PRO FORMA FINANCIAL INFORMATION
The following table presents selected financial information of the Company
on a consolidated basis and pro forma basis. The pro forma income summary gives
effect to the Restructuring described under the caption "OKLAHOMA GAS AND
ELECTRIC COMPANY -- Restructuring" and the transfer of Enogex to the new Holding
Company, as if they had occurred at January 1, 1992. The pro forma
capitalization summary gives effect to the Restructuring and the transfer of
Enogex as if they had occurred at June 30, 1995. The following financial
information is presented in thousands, except percentages:
YEAR ENDED DECEMBER 31,
-------------------------------------------
1994 1993 1992
12 MONTHS ENDED ------------- ------------- -------------
JUNE 30, 1995
---------------
(UNAUDITED)
Income Summary:
Operating Revenues............................... $ 1,275,189 $ 1,355,168 $ 1,447,252 $ 1,314,984
Operating Income................................. 190,562 200,466 195,153 177,004
Net Income....................................... 114,600 123,785 114,277 99,712
Pro Forma Income Summary (unaudited)(1)(2):
Operating Revenues............................... $ 1,143,800 $ 1,196,898 $ 1,282,816 $ 1,193,993
Operating Income................................. 169,747 180,824 175,997 157,569
Net Income....................................... 102,909 113,795 104,730 88,293
AS OF JUNE 30, 1995
------------------------------------------------------
(UNAUDITED)
ACTUAL PRO FORMA(1)(2)
-------------------------- --------------------------
AMOUNT % AMOUNT %
------------- ----------- ------------- -----------
Capitalization Summary:
Long-Term Debt (excluding current maturities)............ $ 731,215 43.76% $ 725,115 46.45%
Preferred Stock.......................................... 49,973 2.99 49,973 3.20
Common Stock Equity...................................... 889,745 53.25 786,037 50.35
------------- ----------- ------------- -----------
$ 1,670,933 100.00% $ 1,561,125 100.00%
------------- ----------- ------------- -----------
------------- ----------- ------------- -----------
<FN>
- ------------------------
1. Enogex's assets, liabilities, equity and results of operations have been
eliminated from consolidated Company amounts to reflect the transfer of
ownership and control of Enogex from the Company to the Holding Company.
2. After the transaction, the Company will not retain ownership of Enogex.
Consequently, intercompany transactions between the Company and Enogex have
not been eliminated in the pro forma financial statements.
The most significant intercompany transactions are transmission fees and
related charges to the Company from Enogex, whose core business has been to
transport natural gas to the Company power plants. The amount of these
charges were $44.6 million for the 12 months ended June 30, 1995; $44.8
million for the year ended December 31, 1994; $54.9 million for the year
ended December 31, 1993; and $55.0 million for the year ended December 31,
1992.
4
SECURITIES
The Securities may be issued in one or more series as (i) first mortgage
bonds or (ii) notes or debentures secured by the Company's first mortgage bonds
or, in the circumstances described under the caption "DESCRIPTION OF SENIOR
NOTES -- Security; Release Date," as unsecured notes or debentures (such notes
and debentures are herein referred to as "Senior Notes"). On the Release Date
(as defined below), any outstanding Senior Notes secured by the Company's first
mortgage bonds when issued, will cease to be secured and will become unsecured
general obligations of the Company. Senior Notes will be issued under an
indenture (the "Senior Note Indenture"), the form of which is an exhibit to the
Registration Statement, between the Company and Boatmen's First National Bank of
Oklahoma, as trustee (the "Senior Note Trustee"), and are described below under
the caption "DESCRIPTION OF SENIOR NOTES". First mortgage bonds (the "New
Bonds") will be issued under the Trust Indenture dated February 1, 1945 as
heretofore supplemented and amended by supplemental trust indentures and a new
supplemental trust indenture for each such series of New Bonds, all from the
Company to Boatmen's First National Bank of Oklahoma, as successor trustee (such
Trust Indenture, as supplemented and as to be supplemented, is herein referred
to as the "First Mortgage Indenture"). The New Bonds are described below under
the caption "FIRST MORTGAGE BONDS AND FIRST MORTGAGE INDENTURE."
There is no requirement, under either the Senior Note Indenture or the First
Mortgage Indenture (collectively, the "Indentures"), that future issues of debt
securities of the Company be issued under the Indentures, and the Company will
be free to employ other indentures or documentation, containing provisions
different from those included in the Indentures or applicable to one or more
issues of Securities, in connection with future issues of such other debt
securities.
DESCRIPTION OF SENIOR NOTES
GENERAL
The following summaries of certain provisions of the Senior Note Indenture
do not purport to be complete and are subject to, and qualified in their
entirety by, all of the provisions of the Senior Note Indenture which is
incorporated herein by this reference and the form of which is an exhibit to the
Registration Statement of which this Prospectus is a part. References to Section
numbers under this caption are references to the Section numbers of the Senior
Note Indenture.
Until the Release Date (as defined below), the Senior Notes will be secured
by one or more series of the Company's first mortgage bonds issued and delivered
by the Company to the Senior Note Trustee. See "Security; Release Date." ON THE
RELEASE DATE, THE SENIOR NOTES WILL CEASE TO BE SECURED BY FIRST MORTGAGE BONDS,
WILL BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY AND WILL RANK ON A
PARITY WITH OTHER UNSECURED INDEBTEDNESS OF THE COMPANY. The Senior Note
Indenture provides that, in addition to the Senior Notes offered hereby,
additional Senior Notes may be issued thereunder, without limitation as to
aggregate principal amount, provided that, prior to the Release Date, the amount
of Senior Notes that may be issued cannot exceed the amount of first mortgage
bonds that the Company is able to issue under its First Mortgage Indenture. See
"FIRST MORTGAGE BONDS AND FIRST MORTGAGE INDENTURE -- Issuance of Additional
Bonds." At June 30, 1995, the Company could issue more than $700 million of
additional first mortgage bonds at an assumed 8.5% interest rate.
The Senior Note Indenture provides that the Senior Notes will be issued in
one or more series, may be issued at various times, may have differing maturity
dates and may bear interest at differing rates. The Prospectus Supplement
applicable to each issue of Senior Notes will specify: (1) the designation and
aggregate principal amount of such Senior Notes; (2) the date on which such
Senior Notes will mature; (3) the interest rate or rates, or method of
calculation of such rate or rates, on such Senior Notes, and the date from which
such interest shall accrue; (4) the dates on which such interest will be
payable; (5) the record dates for payments of interest; (6) any redemption
terms; (7) the period or periods within which, the price or prices at which and
the terms and conditions upon which such Senior Notes may be repaid, in whole or
in part, at the option of the holder thereof; and (8) other
5
specific terms applicable to such Senior Notes. Unless otherwise indicated in
the applicable Prospectus Supplement, the Senior Notes will be denominated in
United States currency in minimum denominations of $1,000 and integral multiples
thereof, except that the denomination of any Senior Note issued in the form of a
Global Security will not exceed $200,000,000 without the approval of the
Depository.
Unless otherwise indicated in the applicable Prospectus Supplement, there
are no provisions in the Senior Note Indenture or the Senior Notes that require
the Company to redeem, or permit the holders to cause a redemption of, the
Senior Notes or that otherwise protect the holders in the event that the Company
incurs substantial additional indebtedness, whether or not in connection with a
change in control of the Company. However, any change in control transaction
that involves the incurrence of additional long-term indebtedness (as notes,
first mortgage bonds or otherwise) by the Company in such a transaction would
require approval of state utility regulatory authorities and, possibly, of
federal utility regulatory authorities. (See "OKLAHOMA GAS AND ELECTRIC COMPANY
- -- Restructuring.") Management believes that such approvals would be unlikely in
any transaction that would result in the Company, or a successor to the Company,
having a highly leveraged capital structure.
REGISTRATION, TRANSFER AND EXCHANGE
Senior Notes of any series will be exchangeable for other Senior Notes of
the same series of any authorized denominations and of a like aggregate
principal amount and tenor. (Section 2.06)
Unless otherwise indicated in the applicable Prospectus Supplement, Senior
Notes may be presented for registration of transfer (duly endorsed or
accompanied by a duly executed written instrument of transfer), at the office of
the Senior Note Trustee and maintained for such purpose with respect to any
series of Senior Notes and referred to in the applicable Prospectus Supplement,
without service charge and upon payment of any taxes and other governmental
charges as described in the Senior Note Indenture. Such transfer or exchange
will be effected upon being satisfied with the documents of title and indemnity
of the person making the request. (Section 2.06 and 2.07)
In the event of any redemption of Senior Notes of any series, the Trustee
will not be required to exchange or register a transfer of any Senior Notes of
such series selected, called or being called for redemption except, in the case
of any Senior Note to be redeemed in part, the portion thereof not to be so
redeemed. (Section 2.06) See "BOOK-ENTRY SYSTEM."
PAYMENT AND PAYING AGENTS
Principal of and interest and premium, if any, on Senior Notes issued in the
form of Global Securities will be paid in the manner described below under the
caption "BOOK-ENTRY SYSTEM." Unless otherwise indicated in the applicable
Prospectus Supplement, interest on Senior Notes that are in the form of
certificated securities will be paid by check mailed to the person entitled
thereto at such person's address at it appears in the register for the Senior
Notes maintained by the Senior Note Trustee; however, a holder of Senior Notes
of one or more series under the Senior Note Indenture in the aggregate principal
amount of $10,000,000 or more having the same interest payment dates will be
entitled to receive payments of interest on such series by wire transfer of
immediately available funds to a bank within the continental United States if
appropriate wire transfer instructions have been received by the Senior Note
Trustee on or prior to the applicable regular record date. (Section 2.12) Unless
otherwise indicated in the applicable Prospectus Supplement, the principal of,
and interest at maturity and premium, if any, on Senior Notes in the form of
certificated securities will be payable in immediately available funds at the
office of the Senior Note Trustee. (Section 2.12)
All monies paid by the Company to a paying agent for the payment of
principal of, interest or premium, if any, on any Senior Note which remain
unclaimed at the end of two years after such principal, interest or premium
shall have become due and payable will be repaid to the Company and the holder
of such Senior Note will thereafter look only to the Company for payment
thereof. (Section 5.04)
6
SECURITY; RELEASE DATE
Until the Release Date (as defined below), the Senior Notes will be secured
by one or more series of the Company's first mortgage bonds ("Senior Note
Mortgage Bonds") issued and delivered by the Company to the Senior Note Trustee
(see "FIRST MORTGAGE BONDS AND FIRST MORTGAGE INDENTURE"). Upon the issuance of
a series of Senior Notes prior to the Release Date, the Company will
simultaneously issue and deliver to the Senior Note Trustee, as security for all
Senior Notes, a series of Senior Note Mortgage Bonds that will have the same
stated rate or rates of interest (or interest calculated in the same manner),
interest payment dates, stated maturity date and redemption provisions, and will
be in the same aggregrate principal amount as the series of the Senior Notes
being issued. Payment by the Company to the Senior Note Trustee of principal of,
premium and interest on, a series of Senior Note Mortgage Bonds will be applied
by the Senior Note Trustee to satisfy the Company's obligations with respect to
principal of, premium and interest on, the Senior Notes (Section 4.11). THE
RELEASE DATE WILL BE THE DATE THAT ALL FIRST MORTGAGE BONDS ("FIRST MORTGAGE
BONDS") OF THE COMPANY ISSUED AND OUTSTANDING UNDER THE FIRST MORTGAGE
INDENTURE, OTHER THAN SENIOR NOTE MORTGAGE BONDS, HAVE BEEN RETIRED (AT, BEFORE
OR AFTER THE MATURITY THEREOF) THROUGH PAYMENT, REDEMPTION OR OTHERWISE
(INCLUDING THOSE FIRST MORTGAGE BONDS DEEMED TO BE PAID WITHIN THE MEANING OF
THE FIRST MORTGAGE INDENTURE). ON THE RELEASE DATE, THE SENIOR NOTE TRUSTEE WILL
DELIVER TO THE COMPANY FOR CANCELLATION ALL SENIOR NOTE MORTGAGE BONDS AND THE
COMPANY WILL CAUSE THE SENIOR NOTE TRUSTEE TO PROVIDE NOTICE TO ALL HOLDERS OF
SENIOR NOTES OF THE OCCURRENCE OF THE RELEASE DATE. AS A RESULT, ON THE RELEASE
DATE, THE SENIOR NOTE MORTGAGE BONDS SHALL CEASE TO SECURE THE SENIOR NOTES, AND
THE SENIOR NOTES WILL BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY.
(Section 4.11) Each series of Senior Note Mortgage Bonds will be a series of
First Mortgage Bonds of the Company, all of which are secured by a lien on
certain property owned by the Company. In certain circumstances prior to the
Release Date, the Company is permitted to reduce the aggregate principal amount
of a series of Senior Note Mortgage Bonds held by the Senior Note Trustee, but
in no event to an amount lower than the aggregate outstanding principal amount
of the series of Senior Notes initially issued contemporaneously with such
Senior Note Mortgage Bonds. (Section 4.08) Following the Release Date, the
Company will cause the First Mortgage Indenture to be closed and the Company
will not issue any additional First Mortgage Bonds under the First Mortgage
Indenture. (Section 4.11) While the Company will be precluded after the Release
Date from issuing additional First Mortgage Bonds, the Company will not be
precluded under the Senior Note Indenture or Senior Notes from issuing or
assuming other secured debt, or incurring liens on its property, unless
otherwise indicated in the applicable Prospectus Supplement.
EVENTS OF DEFAULT
The following constitute events of default under the Senior Note Indenture:
(a) default in the payment of principal of and premium, if any, on any Senior
Note when due and payable and continuance of such default for five days; (b)
default in the payment of interest on any Senior Note when due which continues
for 30 days; (c) default in the performance or breach of any other covenant or
warranty of the Company in the Senior Note Indenture and the continuation
thereof for 90 days after written notice to the Company as provided in the
Senior Note Indenture; (d) prior to the Release Date, the occurrence of a
Completed Default (hereinafter defined) under the First Mortgage Indenture, of
which the First Mortgage Trustee (hereinafter defined), the Company or the
holders of at least 25% in aggregate principal amount of the outstanding Senior
Notes have given written notice thereof to the Senior Note Trustee; and (e)
certain events of bankruptcy, insolvency or reorganization of the Company.
(Section 8.01)
If an event of default occurs and is continuing, either the Senior Note
Trustee or the holders of a majority in principal amount of the outstanding
Senior Notes may declare the principal amount of all Senior Notes to be due and
payable immediately. Upon such acceleration of the Senior Notes, the Senior Note
Trustee is empowered to cause the mandatory redemption of the Senior Note
Mortgage Bonds. At any time after an acceleration of the Senior Notes has been
declared, but before a judgment or decree of the immediate payment of the
principal amount of the Senior Notes has been obtained
7
and so long as all First Mortgage Bonds have not been accelerated, if the
Company pays or deposits with the Senior Note Trustee a sum sufficient to pay
all matured installments of interest and the principal and any premium which has
become due otherwise than by acceleration and all defaults shall have been cured
or waived, then such payment or deposit will cause an automatic rescission and
annulment of the acceleration of the Senior Notes. (Section 8.01)
The Senior Note Indenture provides that the Senior Note Trustee generally
will be under no obligation to exercise any of its rights or powers under the
Senior Note Indenture at the request or direction of any of the holders unless
such holders have offered to the Senior Note Trustee indemnity acceptable to the
Senior Note Trustee. (Section 9.02) The holders of a majority in principal
amount of the outstanding Senior Notes generally will have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Senior Note Trustee, or of exercising any trust or power conferred on the
Senior Note Trustee, with respect to the Senior Notes. (Section 8.07) Each
holder of any Senior Note has the right to institute a proceeding with respect
to the Senior Note Indenture, but such right is subject to certain conditions
precedent specified in the Senior Note Indenture. (Section 8.04) The Senior Note
Indenture provides that the Senior Note Trustee, within 90 days after the
occurrence of a default with respect to the Senior Notes, is required to give
the holders of the Senior Notes notice of such default, unless cured or waived,
but, except in the case of default in the payment of principal of, or premium,
if any, or interest on any Senior Notes, the Senior Note Trustee may withhold
such notice if it determines in good faith that it is in the interest of such
holders to do so. (Section 8.08) The Company is required to deliver to the
Senior Note Trustee each year a certificate as to whether or not, to the
knowledge of the officers signing such certificate, the Company is in compliance
with the conditions and covenants under the Senior Note Indenture. (Section
6.06)
MODIFICATION
Modification and amendment of the Senior Note Indenture may be effected by
the Company and the Senior Note Trustee with the consent of the holders of a
majority in principal amount of the outstanding Senior Notes affected thereby,
provided that no such modification or amendment may, without the consent of the
holder of each outstanding Senior Note affected thereby, (a) change the maturity
date of any Senior Note; (b) reduce the rate or extend the time of payment of
interest on any Senior Note; (c) reduce the principal amount of, or premium
payable on, any Senior Note; (d) change the coin or currency of any payment of
principal of, or any premium or interest on, any Senior Note; (e) change the
date on which any Senior Note may be redeemed or adversely affect the rights of
a holder to institute suit for the enforcement of any payment on or with respect
to any Senior Note; (f) impair the interest of the Senior Note Trustee in the
Senior Note Mortgage Bonds held by it or, prior to the Release Date, reduce the
principal amount of any series of Senior Note Mortgage Bonds securing the Senior
Notes to an amount less than the principal amount of the related series of
Senior Notes or alter the payment provisions of such Senior Note Mortgage Bonds
in a manner adverse to the holders of the Senior Notes; or (g) modify the
foregoing requirements or reduce the percentage of outstanding Senior Notes
necessary to modify or amend the Senior Note Indenture or to waive any past
default to less than a majority. Modification and amendment of the Senior Note
Indenture may be effected by the Company and the Senior Note Trustee without the
consent of the holders (a) to add to the covenants of the Company for the
benefit of the holders or to surrender a right conferred on the Company in the
Senior Note Indenture; (b) to add further security for the Senior Notes; or (c)
to make certain other modifications, generally of a ministerial or immaterial
nature. (Sections 13.01 and 13.02)
DEFEASANCE AND DISCHARGE
The Senior Note Indenture provides that the Company will be discharged from
any and all obligations in respect to the Senior Notes and the Senior Note
Indenture (except for certain obligations such as obligations to register the
transfer or exchange of Senior Notes, replace stolen, lost or mutilated Senior
Notes and maintain paying agencies) if, among other things, the Company
irrevocably deposits with the Senior Note Trustee, in trust for the benefit of
holders of Senior Notes, money or
8
certain United States government obligations, or any combination thereof, which
through the payment of interest thereon and principal thereof in accordance with
their terms will provide money in an amount sufficient, without reinvestment, to
make all payments of principal of, and any premium and interest on, the Senior
Notes on the dates such payments are due in accordance with the terms of the
Senior Note Indenture and the Senior Notes; provided that, unless all of the
Senior Notes are to be due within 90 days of such deposit by redemption or
otherwise, the Company shall also have delivered to the Senior Note Trustee an
opinion of counsel to the effect that the holders of the Senior Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance or discharge of the Senior Note Indenture. Thereafter, the
holders of Senior Notes must look only to such deposit for payment of the
principal of, and interest and any premium on, the Senior Notes. (Section 5.01)
CONSOLIDATION, MERGER AND SALE OR DISPOSITION OF ASSETS
The Company will not consolidate with or merge into any other corporation or
sell, transfer or otherwise dispose of all or substantially all its assets
unless the successor or transferee corporation assumes by supplemental indenture
the due and punctual payment of the principal and premium and interest on all
the Senior Notes and the performance of every covenant of the Senior Note
Indenture to be performed or observed by the Company and, prior to the Release
Date, unless the successor or transferee corporation assumes the Company's
obligations under the First Mortgage Indenture with respect to the Senior Note
Mortgage Bonds. Upon any such consolidation, merger, sale, transfer or other
disposition of all or substantially all of the assets of the Company, the
successor corporation formed by such consolidation or into which the Company is
merged or to which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under the Senior
Note Indenture with the same effect as if such successor corporation had been
named as the Company therein and the Company will be released from all
obligations under the Senior Note Indenture. The Senior Note Indenture defines
all or substantially all of the assets of the Company as being 50% or more of
the total assets of the Company as shown on the balance sheet of the Company as
of the end of the prior year and specifically permits any such sale, transfer or
other disposition during a calendar year of less than 50% of total assets
without the consent of the holders of the Senior Notes. (Sections 12.01 and
12.02)
VOTING OF SENIOR NOTE MORTGAGE BONDS HELD BY SENIOR NOTE TRUSTEE
The Senior Note Trustee, as a holder of Senior Note Mortgage Bonds, will
attend any meeting of bondholders under the First Mortgage Indenture as to which
it receives due notice, or, at its option, will deliver its proxy in connection
therewith. Either at such meeting, or otherwise where the consent of holders of
first mortgage bonds issued under the First Mortgage Indenture is sought without
a meeting, the Senior Note Trustee will vote all of the Senior Note Mortgage
Bonds held by it, or will consent with respect thereto, as directed by the
holders of a majority in aggregate principal amount of the outstanding Senior
Notes; provided, however, the Senior Note Trustee may not vote the Senior Note
Mortgage Bonds of any particular series in favor of, or give consent to, any
action which, in the Senior Note Trustee's opinion, would materially adversely
affect such series of Senior Note Mortgage Bonds in a manner not shared
generally by all other Senior Note Mortgage Bonds, except upon notification by
the Senior Note Trustee to the holders of the related series of Senior Notes of
such proposal and consent thereto of the holders of a majority in principal
amount of the outstanding Senior Notes of such series.
RESIGNATION OR REMOVAL OF NOTE TRUSTEE
The Senior Note Trustee may resign at any time upon written notice to the
Company specifying the day upon which the resignation is to take effect and such
resignation will take effect immediately upon the later of the appointment of a
successor Senior Note Trustee and such specified day. (Section 9.10)
The Senior Note Trustee may be removed at any time by an instrument or
concurrent instruments in writing filed with the Senior Note Trustee and signed
by the holders, or their attorneys-in-
9
fact, of at least a majority in principal amount of the then outstanding Senior
Notes. In addition, so long as no event of default or event which, with the
giving of notice or lapse of time or both, would become an event of default has
occurred and is continuing, the Company may remove the Senior Note Trustee upon
notice to the holder of each Senior Note outstanding and the Senior Note
Trustee, and appointment of a successor Senior Note Trustee. (Section 9.10)
CONCERNING THE SENIOR NOTE TRUSTEE
Boatmen's First National Bank of Oklahoma is the Senior Note Trustee under
the Senior Note Indenture. The Company maintains banking relationships with the
Senior Note Trustee in the ordinary course of business. The Senior Note Trustee
also acts as trustee for the Company's First Mortgage Bonds.
FIRST MORTGAGE BONDS AND FIRST MORTGAGE INDENTURE
GENERAL
The New Bonds, including any series of Senior Note Mortgage Bonds issued as
security for Senior Notes, will be a series of First Mortgage Bonds issued under
the First Mortgage Indenture and a new supplemental trust indenture for such
series of New Bonds (the "New Supplemental Indenture"), all from the Company to
Boatmen's First National Bank of Oklahoma, as successor Trustee (the "First
Mortgage Trustee") to The First National Bank and Trust Company of Oklahoma
City. Copies of the First Mortgage Indenture, the supplemental indentures and
the form of the New Supplemental Indenture are filed as exhibits to the
Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the First Mortgage Indenture do not purport
to be complete and are subject to, and qualified in their entirety by, the
detailed provisions of the First Mortgage Indenture which are incorporated
herein by this reference. References to Article and Section numbers under this
caption are references to Article and Section numbers of the First Mortgage
Indenture unless otherwise indicated. Unless the context indicates otherwise,
words or phrases defined in the First Mortgage Indenture are capitalized and
used with the same meanings herein. Excluding the New Bonds, as of June 30,
1995, 13 series of First Mortgage Bonds in an aggregate principal amount of
$653.5 million currently are outstanding under the First Mortgage Indenture.
TERMS OF NEW BONDS
The New Bonds will be issued initially as fully registered bonds in
denominations of a multiple of $1,000 each. New Bonds may be issued in temporary
form if, for any reason, the Company is unable to deliver New Bonds in
definitive form. Principal and interest are to be payable in Oklahoma City, New
York City or Chicago. The New Bonds will be interchangeable in the manner
provided in Article II of the New Supplemental Indenture. No charge will be made
for any exchange or transfer of New Bonds, other than for any taxes or other
governmental charges.
Principal of and interest and premium, if any, on the New Bonds issued in
the form of Global Securities will be paid in the manner described below under
the caption "BOOK-ENTRY SYSTEM."
Reference is made to the applicable Prospectus Supplement for the following
terms and other information with respect to the series of New Bonds being
offered thereby: (1) the designation and aggregate principal amount of such New
Bonds; (2) the date on which the New Bonds will mature; (3) the rate per annum
(or method of calculation) at which such New Bonds will bear interest and the
date from which such interest shall accrue; (4) the dates on which such interest
will be payable; (5) the record dates for payments of interest; (6) any
redemption terms; (7) the period or periods within which, the price or prices at
which and the terms and conditions upon which New Bonds may be repaid, in whole
or in part, at the option of the holder thereof; and (8) other specific terms
applicable to New Bonds.
10
SECURITY FOR NEW BONDS
In the opinions of counsel for the Company, the New Bonds, when issued, will
be secured by the First Mortgage Indenture, which constitutes a first mortgage
lien, subject only to Permissible Encumbrances, upon all the property of the
Company (except as summarized in the following paragraph) for the equal pro rata
security of each series of First Mortgage Bonds, subject to the provisions
related to any sinking fund or similar fund for the benefit of First Mortgage
Bonds of any particular series. The opinion does not cover title to easements or
rights-of-way as counsel believes the expense of examination would exceed the
cost of acquiring, by condemnation or purchase, any easements or rights-of-way
held under defective titles.
There are excepted from the lien of the First Mortgage Indenture certain
securities, cash, contracts, receivables, motor vehicles, merchandise, equipment
and supplies, and certain non-utility real property. (Granting Clause of the
First Mortgage Indenture.) The First Mortgage Indenture is not a lien on the
properties of any subsidiary of the Company, nor is the stock of any such
subsidiary pledged under the First Mortgage Indenture.
The First Mortgage Indenture contains provisions for subjecting to the lien
thereof (subject to the limitations in Article XV in the case of consolidation
or merger) all property acquired by the Company after the date of the First
Mortgage Indenture other than property of the kind mentioned in the preceding
paragraph. (Granting Clause of the First Mortgage Indenture.) Such provisions
might not be effective as to property acquired within the 90-day period
immediately preceding or acquired subsequent to the filing of a case with
respect to the Company under the United States Bankruptcy Code.
MAINTENANCE PROVISIONS
As a Maintenance Fund for the First Mortgage Bonds, the Company covenants to
pay to the First Mortgage Trustee annually on May 1 an amount equal to 15% of
its Gross Operating Revenues for the preceding calendar year, after deducting
from such revenues (i) cost of electricity purchased for resale and (ii) rentals
paid for utility property, less credits at the Company's option for (a)
maintenance, (b) property retirements offset by Permanent Additions, (c)
retirements of First Mortgage Bonds, (d) Amounts of Established Permanent
Additions and (e) 15% of the portion of Gross Operating Revenues during such
calendar year attributable to increases since January 6, 1975, in the Company's
cost of fuel used in electric generation. Withdrawals from the Maintenance Fund
may be made on the basis of retirements of First Mortgage Bonds and Amounts of
Established Permanent Additions, but cash in excess of $100,000 remaining on
deposit in the Maintenance Fund for more than two years must be used for the
retirement of First Mortgage Bonds. Any such retirement through redemption would
be at the applicable regular redemption price of the First Mortgage Bonds to be
redeemed and subject to any restriction on the redemption of such First Mortgage
Bonds. (Article IX, Section 3.03 of Supplemental Indenture dated March 1, 1952,
and Section 1.01 of Supplemental Indenture dated September 14, 1976.)
The Company has covenanted to maintain its properties in adequate repair,
working order and condition. The First Mortgage Indenture contains provisions
for a periodic inspection of the Company's properties and report by an
independent engineer as to compliance with this covenant. (Section 8.06.)
SINKING FUND PROVISIONS
As an annual sinking fund for each series of First Mortgage Bonds, the
Company covenants to pay to the First Mortgage Trustee annually on December 1 an
amount sufficient to redeem, on the following February 1, for sinking fund
purposes, 1 1/4% of the highest principal amount at any time outstanding of
First Mortgage Bonds of the series for which the sinking fund is applicable.
Sinking fund payments may be offset by (a) application of Amounts of Established
Permanent Additions equal to 166 2/3% of the principal amount of First Mortgage
Bonds which would otherwise be required to be retired by the sinking fund and
(b) retirement or delivery to the First Mortgage Trustee of First Mortgage Bonds
of the series for which the sinking fund is applicable. The First Mortgage
Trustee is
11
required to apply sinking fund money to the purchase or redemption of First
Mortgage Bonds of the series for which such funds are applicable. (Article XII
and Section 3.01 of Supplemental Indenture dated February 1, 1980.)
ISSUANCE OF ADDITIONAL BONDS
Additional First Mortgage Bonds secured by the First Mortgage Indenture may
be issued on the basis of (a) 60% of the Cost or Fair Value, whichever is less,
of net Permanent Additions (which become available upon proper certification by
the Company), after making the required deductions on account of Retired
Property (Article V); (b) an equal principal amount of retired First Mortgage
Bonds, the retirement whereof has not been otherwise used under the First
Mortgage Indenture (Article VI); and (c) deposit of an equal amount of cash with
the First Mortgage Trustee, which cash may be withdrawn by applying Amounts of
Established Permanent Additions equal to 166 2/3% of such cash to be withdrawn
or by retirement of First Mortgage Bonds (Article VII and Section 3.04 of
Supplemental Indenture dated March 1, 1952). No additional First Mortgage Bonds
may be issued on basis (a), basis (b) under specified conditions or basis (c),
unless the Earnings Applicable to Bond Interest for a specified twelve-month
period are equal to twice the annual interest requirements on the First Mortgage
Bonds including those about to be issued. (Sections 5.03, 6.01 and 7.01).
Earnings Applicable to Bond Interest for the twelve months ended June 30, 1995,
would be 4.4 times the annual interest requirement on the First Mortgage Bonds
of the Company at an assumed 8.5% interest rate. Additional First Mortgage Bonds
may vary from the New Bonds as to maturity, interest rate, redemption prices,
sinking fund and in certain other respects. (Article II.) The New Bonds will be
issued under (a) and/or (b) above. At June 30, 1995, the amount of net Permanent
Additions which may be used for the issuance of First Mortgage Bonds was
approximately $1.1 billion. At June 30, 1995, the amount of retired First
Mortgage Bonds which may be used for the issuance of First Mortgage Bonds was
$267 million.
PROVISIONS OF FIRST MORTGAGE INDENTURE LIMITING DIVIDENDS ON COMMON STOCK
The Company covenants that, so long as any First Mortgage Bonds are
outstanding, earned surplus (retained earnings) equal to the sum of (1) the
amount by which the aggregate of (a) provisions for retirement and depreciation
and (b) expenditures for maintenance, during the period from June 1, 1955, to
the last date for which a statement of income is available, is less than 15% of
Gross Operating Revenues (after deducting cost of electricity and/or gas
purchased for resale, rentals paid for utility property and the portion of gross
operating revenues attributable to increases since January 6, 1975, in the
Company's cost of fuel used in electric generation) for that period and (2) the
amount, if any, by which all of the consideration paid by the Company in
acquiring any shares of its Common Stock during the above period exceeds
$217,301,128 plus any consideration received by the Company from the sale after
September 30, 1991 of its Common Stock, shall not be available for the payment
of cash dividends on Common Stock; and that the Company shall not acquire shares
of its Common Stock for a valuable consideration if after such acquisition the
sum of (1) and (2) above would exceed its then earned surplus (retained
earnings). (Section 3.01 of Supplemental Indenture dated January 1, 1957,
Section 1.01 of Supplemental Indenture dated September 14, 1976 and Section 1.01
of Supplemental Indenture dated December 9, 1991.)
RELEASE PROVISIONS
The First Mortgage Indenture contains provisions permitting the release from
its lien of any property upon depositing or pledging cash or certain other
property of comparable Fair Value (Fair Value being defined in substance as the
current value of the property as certified by an engineer, appraiser or similar
expert). The First Mortgage Indenture also contains provisions for the
cancellation, change or alteration of leases, rights-of-way and easements, and
for the surrender and modification of any franchise or governmental consent
subject to certain restrictions, in each case without any release or consent by
the First Mortgage Trustee or accountability thereto for any consideration
received by the Company. (Article XI.)
12
MODIFICATION OF THE FIRST MORTGAGE INDENTURE
With the consent of the Company, the provisions of the First Mortgage
Indenture may be changed by the affirmative vote of the holders of 70% in
principal amount of the First Mortgage Bonds then outstanding except, among
other things, the maturity of a First Mortgage Bond may not be extended, the
interest rate reduced nor the terms of payment of principal or interest changed
without the consent of the holder of such First Mortgage Bond. (Article XVIII.)
CONCERNING THE FIRST MORTGAGE TRUSTEE
Boatmen's First National Bank of Oklahoma is the First Mortgage Trustee
under the First Mortgage Indenture. The Company maintains banking relationships
in the ordinary course of business with the First Mortgage Trustee. The First
Mortgage Trustee also serves as trustee for the Senior Notes.
In case of a Completed Default under the First Mortgage Indenture (see "--
Events of Default" below), the First Mortgage Trustee may, and upon request of
the holders of a majority in principal amount of the First Mortgage Bonds shall,
declare the First Mortgage Bonds due and payable. In case of a Completed
Default, it is obligatory upon the First Mortgage Trustee to take the action or
actions provided in the First Mortgage Indenture to enforce payment of the First
Mortgage Bonds and for the enforcement of the lien of the First Mortgage
Indenture upon being requested to do so by the holders of a majority in
principal amount of the First Mortgage Bonds and upon being indemnified against
the costs, expenses and liabilities to be incurred therein or thereby without
negligence or bad faith. (Sections 13.01, 13.04 and 13.15.)
EVENTS OF DEFAULT
The following is a summary of events defined in the First Mortgage Indenture
as "Completed Defaults": (a) failure to pay principal of any First Mortgage Bond
when due and payable, (b) failure to pay interest on any First Mortgage Bond
within 30 days after it becomes due and payable, (c) failure to meet any payment
to the sinking fund on any First Mortgage Bond within 10 days after same is
payable, (d) the expiration of 30 days after (1) the adjudication of the Company
as a bankrupt or (2) the entry of an order approving a petition filed against
the Company seeking reorganization of the Company, unless during such period
such adjudication or order shall be vacated, (e) the expiration of 90 days
following the appointment of a receiver unless during such period such
appointment shall be vacated, (f) the filing by the Company of a voluntary
petition in bankruptcy or the making of a general assignment for the benefit of
creditors or the consent by the Company to the appointment of a receiver or the
filing by the Company of a petition or answer seeking reorganization or the
filing by the Company of a petition to take advantage of any insolvency act and
(g) failure to perform any other covenant or agreement contained in the First
Mortgage Indenture or First Mortgage Bonds within 60 days following the mailing
by the First Mortgage Trustee or by the holders of at least 15% in principal
amount of the First Mortgage Bonds then Outstanding of a written demand that
such failure be cured. (Section 13.01 and Section 4.01 of Supplemental Indenture
dated February 1, 1980.)
By Section 16.07 of the First Mortgage Indenture, the First Mortgage Trustee
is required to give notice to bondholders (1) within 90 days after the
occurrence of a default known to the First Mortgage Trustee within such period,
or (2) if a default be not known to the First Mortgage Trustee within such
period, within 30 days after such default shall be known to the First Mortgage
Trustee, unless such default shall have been cured before the giving of such
notice; provided that, except in the case of a default resulting from the
failure to make any payment of principal of or interest on any First Mortgage
Bonds or to make any sinking fund or purchase fund payment, the First Mortgage
Trustee may withhold such notice upon determination in good faith by the board
of directors, the executive committee or a trust committee of directors and/or
responsible officers of the First Mortgage Trustee that the withholding of such
notice is in the interest of the bondholders.
13
BOOK-ENTRY SYSTEM
Each series of Securities may be issued in the form of one or more Global
Securities representing all or part of such series of Securities and which will
be deposited with or on behalf of the Depository and registered in the name of
the Depository or a nominee of the Depository.
The following is based solely on information furnished by DTC:
Unless otherwise specified in the Prospectus Supplement, DTC will act as
Depository for those Securities issued as Global Securities. The Global
Securities will be issued as fully-registered securities registered in the name
of Cede & Co. (DTC's partnership nominee). 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 Securities Exchange Act of 1934. DTC holds securities that
its participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. "Direct Participants" include securities
brokers and dealers, banks, trust companies, clearing corporations, and certain
other organizations. DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants"). The
rules applicable to DTC and its Participants are on file with the Commission.
Purchases of the Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on DTC's
records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmation 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
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in the
Securities, except in the event that use of the book-entry system for the
Securities is discontinued.
To facilitate subsequent transfers, all Securities deposited by Participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The
deposit of the Securities with DTC and their registration in the name of Cede &
Co. effect no change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Securities; DTC's records reflect only the identity of
the Direct Participants to whose accounts such Securities are credited, which
may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of the holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
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.
If the Global Securities are redeemable, redemption notices shall be sent to
Cede & Co. If less than all of the Global Securities are being redeemed, DTC's
practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
14
Neither DTC nor Cede & Co. will consent or vote with respect to the
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Company as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Principal, interest and any premium payments on the Securities will be made
to DTC. DTC's practice is to credit Direct Participants' accounts on payable
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 payable date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as in the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of DTC, the applicable
Trustee or the Company, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal, interest and any
premium to DTC is the responsibility of the Company or the applicable Trustee,
disbursement of such payments to Direct Participants shall be the responsibility
of DTC, and disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to a series of Securities at any time by giving reasonable notice to the
Company or the applicable Trustee. Under such circumstances, if a successor
securities depository is not obtained, certificates for such series of
Securities are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository) for any series of
Securities. In that event, certificates for such series of Securities will be
printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from DTC, and the Company and any underwriters, dealers or
agents take no responsibility for the accuracy thereof.
The underwriters, dealers or agents of any Offered Securities may be Direct
Participants of DTC.
NONE OF THE COMPANY, THE SENIOR NOTE TRUSTEE, THE FIRST MORTGAGE TRUSTEE OR
ANY AGENT FOR PAYMENT ON OR REGISTRATION OF TRANSFER OR EXCHANGE OF THE GLOBAL
SECURITY WILL HAVE ANY RESPONSIBILITY OR LIABILITY FOR ANY ASPECT OF THE RECORDS
RELATING TO OR PAYMENTS MADE ON ACCOUNT OF BENEFICIAL INTERESTS IN SUCH GLOBAL
SECURITY OR FOR MAINTAINING, SUPERVISING OR REVIEWING ANY RECORDS RELATING TO
SUCH BENEFICIAL INTERESTS.
LEGAL OPINIONS
Legal opinions relating to the Securities will be rendered by Rainey, Ross,
Rice & Binns, First National Center, Oklahoma City, Oklahoma, Chisenhall,
Nestrud & Julian, P.A., First Commercial Bank Building, Little Rock, Arkansas,
and Gardner, Carton & Douglas, 321 North Clark Street, Chicago, Illinois,
counsel for the Company, and by Jones, Day, Reavis & Pogue, 77 West Wacker
Drive, Chicago, Illinois, counsel for any underwriters, dealers or agents named
in the Prospectus Supplement. As to matters involving conformity to local laws,
the other counsel will rely upon the opinion of Rainey, Ross, Rice & Binns with
respect to laws of Oklahoma and upon the opinion of Chisenhall, Nestrud &
Julian, P.A., with respect to laws of Arkansas.
The statement contained in this Prospectus under the subcaption "Security
for New Bonds" under the caption "FIRST MORTGAGE BONDS AND FIRST MORTGAGE
INDENTURE" is the opinion of Rainey, Ross, Rice & Binns, counsel for the
Company, to the extent that such statement pertains to Oklahoma law and is the
opinion of Chisenhall, Nestrud & Julian, P.A., to the extent that such statement
pertains to Arkansas law. As of July 31, 1995, attorneys with Rainey, Ross, Rice
& Binns owned beneficial interests in an aggregate of 5,492 shares of Common
Stock of the Company, of which Mr. William J. Ross, a partner in that firm,
owned a beneficial interest in 4,658 shares of such Common Stock.
15
EXPERTS
The consolidated financial statements of the Company included in the
Company's Form 10-K Annual Report for the fiscal year ended December 31, 1994,
to the extent and for the periods indicated in their reports included in said
Form 10-K, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
PLAN OF DISTRIBUTION
The Company may sell the Securities (i) through underwriters or dealers;
(ii) directly to one or more institutional purchasers; or (iii) through agents.
The Prospectus Supplement with respect to each series of Securities will set
forth the terms of the offering of such Securities, including the name or names
of any underwriters, the purchase price of such Securities and the proceeds to
the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which said Securities may be listed.
If underwriters are used in the sale, the Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The Securities may be
offered to the public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more of such firms. The
specific managing underwriter or underwriters, if any, will be set forth in the
Prospectus Supplement relating to the Securities together with the members of
the underwriting syndicate, if any. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase the Securities
offered thereby will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all such Securities if any are
purchased.
Securities may be sold directly by the Company or through agents designated
by the Company from time to time. The Prospectus Supplement will set forth the
name of any agent involved in the offer or sale of the Securities in respect of
which the Prospectus Supplement is delivered and any commission payable by the
Company to such agent. Unless otherwise indicated in the Prospectus Supplement,
any such agent is acting on a best efforts basis for the period of its
appointment.
Any underwriters, dealers or agents participating in the distribution of the
Securities may be deemed to be underwriters and any discounts or commissions
received by them on the sale or resale of the Securities may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933, as
amended. Agents and underwriters may be entitled, under agreements entered into
which the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933, as amended,
and to contribution with respect to payments which the agents or underwriters
may be required to make in respect thereof. Agents and underwriters may engage
in transactions with or perform services for the Company in the ordinary course
of business.
Any underwriter of the Senior Notes or New Bonds may be required under
Oklahoma law to pay a mortgage registration tax in an amount estimated by the
Company to be .097% of the principal amount of Senior Notes or New Bonds
purchased.
16
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
---------
Concurrent Offering of Additional
Senior Notes........................ S-2
Use of Proceeds...................... S-2
Recent Developments.................. S-2
Description of 7.30% Senior Notes.... S-2
Underwriting......................... S-6
PROSPECTUS
Oklahoma Gas and Electric Company.... 2
Information Incorporated by
Reference........................... 2
Available Information................ 3
Use of Proceeds...................... 3
Ratio of Earnings to Fixed Charges... 3
Selected Consolidated and Pro Forma
Financial Information............... 4
Securities........................... 5
Description of Senior Notes.......... 5
First Mortgage Bonds and First
Mortgage Indenture.................. 10
Book-Entry System.................... 14
Legal Opinions....................... 15
Experts.............................. 16
Plan of Distribution................. 16
$110,000,000
OKLAHOMA GAS AND ELECTRIC COMPANY
7.30% SENIOR NOTES
DUE OCTOBER 15, 2025
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PROSPECTUS SUPPLEMENT
---------------------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS
OCTOBER 23, 1995
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