1
PROSPECTUS
- ----------
LACLEDE GAS COMPANY
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
1,000,000 SHARES OF
COMMON STOCK
$1 PAR VALUE
PER SHARE
--------------------------
Laclede Gas Company ("Company") is offering through its Dividend
Reinvestment and Stock Purchase Plan ("Plan"), a convenient and economical
method of purchasing additional shares of Laclede Gas Company common stock, par
value $1 per share (the "Common Stock") through the reinvestment of cash
dividends and, at the option of a participant in the Plan, through the
investment of optional cash payments. The Plan, which was formerly known as the
Laclede Gas Company Dividend Reinvestment Program, was amended effective
February 11, 1994 primarily to allow for optional cash payments and the use of
newly issued and treasury stock. The Plan is set forth in this Prospectus. This
Prospectus relates to one million shares of Common Stock available for issuance
under the Plan and one million related Common Stock purchase rights attached to
the Common Stock available for issuance under the Plan. See pages 11-18 of this
Prospectus for a description of the Company's Common Stock and of certain
purchase rights related thereto (the "Rights"). This Prospectus should be
retained for future reference.
Common Stock offered through the Plan may be purchased either: (a) on any
securities exchange where the Common Stock is traded, in the over-the-counter
market or through any negotiated transactions; or (b) directly from the Company
in the form of newly issued or treasury shares; at the discretion of the
Company.
The price to Participants of shares of the Common Stock purchased on the
open market or through negotiated transactions will be the weighted average of
the actual cost per share. The price of newly issued or treasury shares of
Common Stock purchased with reinvested dividends or optional cash payments will
be the closing sale price of the Common Stock as reported on the New York Stock
Exchange's report of composite transactions on the cash dividend payment date.
--------------------------
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 COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------
THE DATE OF THIS PROSPECTUS IS SEPTEMBER 1, 1998 AND REPRESENTS A RESTATEMENT
AND UPDATE OF THE PROSPECTUS DATED FEBRUARY 22, 1994.
2
TABLE OF CONTENTS
PAGE
----
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Laclede Gas Company Dividend Reinvestment and Stock Purchase Plan.......... 4
Purpose................................................................ 4
Administration......................................................... 4
Participation.......................................................... 4
Purchases.............................................................. 6
Costs.................................................................. 6
Optional Cash Payments................................................. 6
PAGE
----
Reports to Participants................................................ 7
Certificates for Shares................................................ 7
Withdrawal............................................................. 8
Other Information...................................................... 9
Tax Responsibility..................................................... 10
Use of Proceeds............................................................ 11
Description of Common Stock and Rights..................................... 11
Legal Matters.............................................................. 18
Experts.................................................................... 18
Indemnification of Directors and Officers.................................. 18
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission ("SEC"). Such reports and other information can be inspected and
copied at the public reference facilities maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.; 7 World Trade
Center, 13th Floor, New York, New York; and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois. The SEC maintains a Web
site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants such as the Company.
Copies of this material can also be obtained at prescribed rates from the
Public Reference Section of the SEC at its principal office at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. The Common Stock and Rights are
listed on the New York and Chicago Stock Exchanges. Reports, proxy statements
and other information concerning the Company can also be inspected and copied
at the offices of such Exchanges at: 20 Broad Street, New York, New York; and
440 South LaSalle Street, Chicago, Illinois, respectively.
Shareholders of the Company are furnished copies of an Annual Report to
Shareholders containing financial statements as of the end of the most recent
fiscal year audited and reported upon (with an opinion expressed) by
independent certified public accountants.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC pursuant to the Exchange Act are
incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended
September 30, 1997.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1997; March 31, 1998; and June 30, 1998.
2
3
3. The Company's Form 8-A Registration Statement dated April 3, 1996.
In addition, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination
of this offering shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents
(such documents, and the documents enumerated above, being hereinafter referred
to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE INCORPORATED DOCUMENTS,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS. REQUESTS SHOULD BE DIRECTED TO MS. MARY
C. KULLMAN, SECRETARY AND ASSOCIATE COUNSEL, LACLEDE GAS COMPANY, 720 OLIVE
STREET, ST. LOUIS, MISSOURI 63101, TELEPHONE NUMBER: (314) 342-0503. THE
INFORMATION RELATING TO THE COMPANY CONTAINED IN THIS PROSPECTUS DOES NOT
PURPORT TO BE COMPREHENSIVE AND SHOULD BE READ TOGETHER WITH THE INFORMATION
CONTAINED IN THE INCORPORATED DOCUMENTS.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE SPECIFICALLY
OFFERED HEREBY, NOR AN OFFER OR SOLICITATION OF THE SECURITIES OFFERED HEREBY
OR THEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH AN OFFER OR SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF SUCH PROSPECTUS.
THE COMPANY
The Company, which is subject to the jurisdiction of the Missouri Public
Service Commission, is a public utility engaged in the retail distribution and
transportation of natural gas. It serves the City of St. Louis, St. Louis
County, the City of St. Charles and parts of St. Charles County, the town of
Arnold, and parts of Jefferson, Franklin, St. Francois, Ste. Genevieve, Iron,
Madison and Butler Counties, all in Missouri. As an adjunct to its natural gas
distribution and transportation business, the Company operates underground
natural gas storage fields and is engaged in the transportation and storage of
liquid propane. Since 1968, the Company has also made investments in other
nonutility businesses as part of a diversification program.
The Company's principal executive office is located at 720 Olive Street,
St. Louis, Missouri 63101. Its telephone number is 314-342-0500.
3
4
LACLEDE GAS COMPANY
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Note: All references in the following questions and answers to
"Participants" refer only to those participants who are shareholders of
record (i.e. those who own their shares in their own names). Shareholders whose
shares are registered in names other than their own (for example, in the names
of brokers or bank nominees) ("Beneficial Shareholders") may participate in
the Plan; and they should contact the persons in whose names the shares are
held for information concerning participation in the Plan.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The Laclede Gas Company Dividend Reinvestment and Stock Purchase Plan
("Plan") offers shareholders of Laclede Gas Company Common Stock
("Shareholders") a convenient and economical method of increasing their
ownership of Common Stock. Once a Shareholder is enrolled in the Plan, cash
dividends and any optional cash payments made by the Shareholder will be used
to purchase additional shares of Common Stock on each cash dividend payment
date. The Company shall, at its sole option, direct that Common Stock be
purchased from time to time from the Company or in the market. To the extent
that such shares are purchased from the Company, the Company will receive funds
which will be used for investment in plant or for other general corporate
purposes.
Full reinvestment of dividend funds is possible under the Plan because the
Plan permits fractions of shares, as well as full shares, to be credited to
Participants' accounts. Dividends on such fractions of, as well as on full,
shares will be credited to Participants' accounts. Under the Plan, the Company,
and not the Participants, will pay any brokerage fees or commissions associated
with purchases in the market.
ADMINISTRATION
2. WHO WILL ADMINISTER THE PLAN?
The Company will administer the Plan. UMB Bank, National Association
(hereinafter the "Agent") will serve, effective September 1, 1998, as agent
for the Participants, performing such functions as keeping a continuing record
of Participants' accounts, purchasing all shares for the Participants, advising
them of purchases, and performing other duties related to the Plan. The Common
Stock purchased for the accounts of the Participants will be registered in the
name of the Agent as custodian for Participants in the Plan. If the Agent
ceases to serve as agent and custodian, its successor will be designated by the
Company. Information on how to contact the Agent is set forth in the response
to Question 24.
PARTICIPATION
3. WHO IS ELIGIBLE TO PARTICIPATE?
All Shareholders of Laclede Gas Company Common Stock are eligible to
participate in the dividend reinvestment feature and the optional cash payment
feature of the Plan. Beneficial Shareholders who want to participate in the
Plan should contact their broker or bank for information concerning
participation. To
4
5
participate in the optional cash feature of the Plan, a Shareholder must also
participate in the dividend reinvestment feature.
4. MUST A SHAREHOLDER PARTICIPATE IN THE DIVIDEND REINVESTMENT FEATURE OF THE
PLAN WITH ALL CASH DIVIDENDS PAID ON ALL COMMON SHARES OWNED OF RECORD?
Yes. A Shareholder electing to participate in the Plan must participate
with all cash dividends paid on all Common Stock that the Shareholder owns.
After enrolling to participate in the Plan, all cash dividends on shares held
by a Participant in certificate form and registered in the Participant's name
and all cash dividends on shares held under the Plan, including all shares
acquired through optional cash payments made by a Participant and all shares
acquired under the Plan's dividend reinvestment feature, will be used to
purchase additional shares under the Plan.
5. HOW DO ELIGIBLE PERSONS PARTICIPATE?
A Shareholder of record may join the Plan at any time by completing an
Authorization Form and returning it to the Agent. Authorization Forms may be
obtained at any time by written request to the Agent or by telephoning the
Agent at the appropriate address or toll free number listed in the response to
Question 24.
Beneficial Shareholders should contact their broker or bank for information
concerning participation.
6. WHEN MAY AN ELIGIBLE PERSON JOIN THE PLAN?
A Shareholder may join the Plan at any time.
With regard to Shareholders of record, if the Agent receives a properly
completed Authorization Form for dividend reinvestment before the record date
for the payment of the next cash dividend, then the dividend will be used to
purchase additional shares of Common Stock on the next cash dividend payment
date. If such Authorization Form is received on or after the record date for
the next cash dividend but on or before the applicable cash dividend payment
date, dividend reinvestments will not start until the payment of the next
following cash dividend. Dividends are currently paid on or about January 2,
April 1, July 1 and October 1. The record dates will normally be around the
eleventh day of the month prior to the dividend payment dates.
Optional cash payments may be received by the Agent no earlier than 28 days
and no later than three business days prior to the next cash dividend payment
date. Optional cash payments received before or after such dates will be
returned to the Participants. No interest will be paid on optional cash
payments held by the Agent pending investment.
7. WHAT DOES AN AUTHORIZATION FORM AUTHORIZE?
An Authorization Form authorizes the Agent, on behalf of the Participant,
to receive all cash dividends on the shares of Common Stock registered in the
Participant's name and on those shares of Common Stock acquired for the
Participant in the Plan, and to use these cash dividends to purchase shares of
Common Stock on each dividend payment date; and to use any timely received
optional cash payments to purchase shares of Common Stock on the next cash
dividend payment date. Any such authorization shall continue until it is
withdrawn by the Participant.
5
6
PURCHASES
8. HOW MANY SHARES OF COMMON STOCK WILL BE PURCHASED FOR PARTICIPANTS?
The number of shares purchased will depend on the amount of a Participant's
cash dividend, optional cash payment and the purchase price of the shares. Each
Participant's account will be credited with that number of shares, including
fractions computed to four decimal places, equal to the total amount invested
divided by the purchase price.
9. WHAT IS THE PRICE OF THE SHARES PURCHASED UNDER THE PLAN?
When the Agent purchases shares of Common Stock from the Company, the price
per share of shares purchased for the Plan on the applicable cash dividend
payment date will be the closing sales price for the Common Stock on the New
York Stock Exchange report of composite transactions on the applicable cash
dividend payment date (or the previous trading day if the dividend payment date
is not a day on which Common Stock was traded). In each case, the price will be
calculated to four decimal places. No shares will be sold by the Company for
less than the par value thereof.
If the Company, at its option, directs the Agent to purchase part or all of
the Common Stock in the open market instead of from the Company, the price per
share will be based on the weighted average price carried to four decimal
places of the actual purchase price of the shares then being acquired on the
open market by the Agent, exclusive of brokerage commissions and expenses. The
Company will pay any such brokerage commissions and expenses.
It should be recognized that, since investment prices are determined as of
specified dates, a Participant loses any advantage which might otherwise be
available from being able to select more precisely the timing of the
Participant's investment.
COSTS
10. ARE ANY FEES OR EXPENSES INCURRED BY PARTICIPANTS IN THE PLAN?
The Company will pay all administrative costs of the Plan. Participants
will pay no brokerage commissions, expenses or service charges under the Plan
in connection with purchases under the Plan. When shares are sold by the Agent
for a Participant, however, the Participant will be responsible for any
brokerage commissions or service charges incurred on the sale of shares.
OPTIONAL CASH PAYMENTS
11. HOW ARE OPTIONAL CASH PAYMENTS MADE?
Participants may make optional cash payments of not more than $30,000 in
any calendar year (with a minimum of $100 per payment). Optional cash payments
must be received by the Agent no earlier than 28 days and no later than three
business days prior to a cash dividend payment date. Cash payments received
before or after such dates will be returned to the Participants. Each optional
cash payment by a Participant shall be made by check or money order payable to
the Agent and mailed to the Agent WITH A REMITTANCE FORM FOR OPTIONAL CASH
PAYMENTS FURNISHED FOR THAT PURPOSE, except that when enrolling in the Plan an
optional cash payment may be made by the Participant by enclosing a check or
money order with the Authorization Form. The same
6
7
amount of money need not be sent each time, subject to the minimum and maximum
payment levels, and there is no obligation to make optional cash payments.
A Participant may withdraw the amount of any optional cash payment prior to
investment if written notice of the intent to withdraw is received by the Agent
NO LATER THAN THE CLOSE OF BUSINESS ON THE THIRD BUSINESS DAY preceding the
next cash dividend payment date. No interest will be paid on optional cash
payments held by the Agent pending investment. Participants should not send
cash.
REPORTS TO PARTICIPANTS
12. WHAT KIND OF REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?
Each Participant will receive a statement of account each quarter showing
amounts invested, purchase prices, number of shares purchased and other
information for that quarter. Participants will also receive written notice of
any changes in the Plan.
In addition, each Participant will receive all communications sent to every
holder of Common Stock, including the Company's annual report to shareholders,
the notices of meetings of shareholders, the proxy statement and proxies.
CERTIFICATES FOR SHARES
13. HOW DOES SHARE SAFEKEEPING WORK?
At the time of enrollment in the Plan, or at any later time, Participants
may use the Plan's "share safekeeping" service to deposit Common Stock
certificates in their possession with the Agent. Shares deposited will be
credited to the Participant's account under the Plan. Thereafter, such shares
will be treated in the same manner as shares purchased under the Plan, and
dividends on such shares will be reinvested until the shares are sold or
withdrawn from the Plan.
Participants who wish to deposit their Common Stock certificates with the
Agent must complete and return to the Agent, by registered, insured mail, the
Common Stock certificates to be deposited along with a properly completed Share
Safekeeping Form. The certificates should not be endorsed. Share Safekeeping
Forms are available from the Agent.
Dividends received by the Agent on shares represented by the certificates
deposited with the Agent will be reinvested in additional shares. A stock
certificate representing such shares may be withdrawn at any time by notifying
the Agent in writing, but such withdrawal will not affect the reinvestment of
dividends on those shares or result in the Participant's withdrawal from the
Plan unless notice of termination is provided by the Participant.
14. WILL CERTIFICATES BE ISSUED FOR THE COMMON STOCK PURCHASED FOR THE
PARTICIPANTS IN THE PLAN?
Normally, certificates for Common Stock purchased under the Plan will not
be issued to Participants in their names but will be registered in the name of
the Agent and credited to the Participants' Plan accounts. However, upon a
Participant's written request, certificates for any number of whole shares
credited to the Participant's account will be issued in the Participant's name,
and delivered to the Participant.
7
8
Requests for certificates shall be handled without charge to Participants.
After such a delivery of certificates, a Participant must continue to
participate in the Plan with shares represented by such certificates until such
time as the shares are sold or otherwise transferred or until the Participant
terminates participation in the Plan. Any remaining fractional or whole shares
will continue to be credited to the Participant's Plan account.
Certificates for fractions of shares will not be issued to a Participant.
Common Stock credited to the account of a Participant under the Plan may
not be pledged. A Participant who wishes to pledge Common Stock must request
that certificates for such Common Stock be issued in his or her name, or by
purchasing shares in his or her name. Pledged, certificated shares registered
in the name of a Participant, like all other certificated shares so registered,
will be and remain in the dividend reinvestment feature of the Plan.
Certificates for whole shares purchased under the Plan will be accompanied
by the same common stock purchase rights ("Rights") as shall accompany the
same number of shares purchased outside the Plan, and the shares in the
Participant's Plan account shall also include such Rights.
WITHDRAWAL
15. HOW DOES A PARTICIPANT WITHDRAW FROM THE PLAN?
A Participant may withdraw from the Plan by sending a written request to
withdraw to the Agent. When a Participant withdraws from the Plan, the
Participant has two options: A Participant may elect (i) to receive a
certificate for ALL of the whole shares credited to the Participant's Plan
account and receive a cash payment for any fraction of a share, or (ii) to have
the Agent sell ALL of the Participant's Plan shares and receive a check for the
proceeds less any related brokerage commissions and transfer taxes. In order to
take advantage of economies inherent in bulk sales, sales of whole and
fractional shares will be accumulated; sales transactions will, however,
normally occur at least every 7 days. Cash payments for whole and fractional
shares will be based on the actual sales price of the shares on the sale date.
It should be recognized that if the Participant elects to have the Agent sell
his or her stock, the Participant loses any advantage which might otherwise be
available from being able to select more precisely the timing of the sale of
his or her shares.
16. WHEN MAY PARTICIPANTS WITHDRAW FROM THE PLAN?
A Participant may withdraw from the Plan at any time, upon written
notification to the Agent.
A notice of withdrawal is normally effective when it is received by the
Agent. However, if the notice is received on or after the ex-dividend date and
before the related cash dividend payment date, the notice will be effective
after that dividend payment date. The dividend paid on that date and any
optional cash payments received will be invested under the Plan. The notice
will be processed after the Participant's account has been credited with the
shares purchased. The Participant will then receive, depending upon his or her
election in the request to withdraw, a certificate for all of the whole shares
in his or her Plan account and a check for any fractional share, or a check for
the proceeds of all of his or her shares, whole and fractional, credited to his
or her Plan account less any related brokerage commissions and transfer taxes.
All subsequent dividends will be paid directly to the Participant unless he or
she re-enrolls in the Plan.
Death of a Participant will not constitute termination of participation in
or withdrawal from the Plan. To terminate participation and withdraw from the
Plan on behalf of the estate of a deceased Participant, the Agent
8
9
must receive written notice of the death, accompanied by payment instructions
and evidence satisfactory to the Agent of the authority of the person
communicating with the Agent to act on behalf of such estate.
17. WHEN MAY FORMER PARTICIPANTS REJOIN THE PLAN?
Generally, a former Participant may again become a Participant at any time.
However, the Company reserves the right to reject any Authorization Form from a
previous Participant on grounds of excessive joining and termination. Such
reservation is intended to minimize unnecessary administrative expense and to
encourage use of the Plan as a long-term investment service.
OTHER INFORMATION
18. WHAT HAPPENS TO THE PARTICIPANT'S PLAN ACCOUNT IF THE COMPANY ISSUES A
STOCK DIVIDEND OR DECLARES A STOCK SPLIT?
Any stock dividends or split shares distributed by the Company on Common
Stock held in the Plan for a Participant will be credited to the Participant's
Plan account.
19. HOW WILL PARTICIPANTS' COMMON STOCK BE VOTED AT MEETINGS OF SHAREHOLDERS?
For each meeting of Shareholders, Participants will receive proxies which
will enable them to vote shares of Common Stock credited to the Participants'
accounts. No shares credited to a Participant's account will be voted unless a
proxy from the Participant has been received for the shares.
20. MAY THE PLAN BE CHANGED OR DISCONTINUED?
The Company reserves the right to suspend, modify or terminate the Plan at
any time. Notice of any such suspension, material modification or termination
of the Plan will be sent to all Participants. Termination of the Plan will have
the same effect and be accomplished as to each Participant in the same manner
as if the Participant had completely withdrawn from participation in the Plan.
21. WHO INTERPRETS AND REGULATES THE PLAN?
The Company reserves the right to interpret and regulate the Plan as it
deems desirable or necessary. Neither the Company nor the Agent, in
administering the Plan, will be liable for any act done in good faith or for
any omission to act in good faith, including, without limitation, any act
giving rise to a claim of liability arising from (i) failure to terminate a
Participant's account upon such Participant's death prior to the receipt of
written notice of such death as set forth in the response to Question 16; (ii)
the times and prices at which shares are purchased or sold for a Participant's
account; or (iii) fluctuations in the market price of the Company's common
shares.
A Participant should recognize that neither the Company nor the Agent can
assure a profit or protect against a loss on the Common Stock purchased under
the Plan.
9
10
TAX RESPONSIBILITY
22. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?
Dividends that are reinvested for a Participant are subject to income taxes
as if they had been paid directly to the Participant in cash. In addition, the
Internal Revenue Service has issued a private ruling on an arrangement similar
to this Plan to the effect that any brokerage commissions paid by the Company
on a Participant's behalf are to be treated as dividend income to the
Participant.
Accordingly, the Agent will send each Participant a year-end statement
showing dividends invested, service charges and any brokerage commissions paid
on the Participant's behalf, and the Participant should retain this statement
for the Participant's tax records.
The price at which shares are purchased will be determined as described in
the response to Question 9. The Internal Revenue Service private ruling also
stated that any brokerage commissions may be added to the cost basis of the
shares purchased for a Participant's account. Participants will need to know
this information to compute taxable gains or losses upon a sale of the shares.
A Participant will not realize any federal taxable income solely by reason
of the receipt of certificates for whole shares of Common Stock previously
credited to the Participant's account, whether upon request, withdrawal from
the Plan, or the Company's termination thereof. However, gain or loss will be
realized when shares, whether whole or fractional, are sold for the Participant
and the Participant receives a check for the proceeds of such sale. The amount
of the gain or loss and its character will depend upon the circumstances of
each Participant.
PARTICIPANTS SHOULD CONSULT THEIR PERSONAL TAX ADVISORS FOR MORE SPECIFIC
INFORMATION, PARTICULARLY SINCE INTERPRETATIONS AND LAWS, REGULATIONS AND
RULINGS MAY CHANGE OVER TIME.
23. WHAT PROVISION IS MADE FOR FOREIGN SHAREHOLDERS SUBJECT TO UNITED STATES
INCOME TAX WITHHOLDING?
In the case of foreign Shareholders who elect to have their dividends
reinvested and whose dividends are subject to United States income tax
withholding, the Agent will invest in shares of Common Stock an amount equal to
the dividends of such foreign Participants less the amount of tax required to
be withheld. The quarterly statement of account confirming purchases made by
the Agent for such foreign Participants will indicate the net dividend payment
invested and the amount of tax withheld.
Optional cash payments received from foreign Shareholders must be in United
States dollars and will be invested in the same way as optional cash payments
from other Participants.
24. WHERE SHOULD CORRESPONDENCE REGARDING THE PLAN BE DIRECTED?
UMB Bank, National Association
Securities Transfer Division
P. O. Box 410064
Kansas City, Missouri 64141-0064
or
Telephone at: 1-800-884-4225
10
11
USE OF PROCEEDS
One million shares of additional authorized but unissued and treasury
Common Stock have been registered for sale under the Plan. The net proceeds
from the sale of the Common Stock sold pursuant to the Plan will be applied
toward investment in plant and other general corporate purposes. The Company
does not know either the number of shares of Common Stock that will ultimately
be sold pursuant to the Plan or the prices at which such shares will be sold.
DESCRIPTION OF COMMON STOCK AND RIGHTS
GENERAL
The Company is authorized by its Articles of Incorporation, as amended (the
"Articles"), to issue 50 million shares of Common Stock ($1 par value), of
which 17,627,987 shares were issued and outstanding as of the date of this
Prospectus.
The outstanding Common Stock is traded on the New York Stock Exchange and
Chicago Stock Exchange under the symbol LG.
The following are summaries relating to the Common Stock and Rights (the
terms of which Rights are hereinafter summarized under the caption "Common
Stock Purchase Rights"), and of certain features of the Company's $25 par
value, 5% Series B Preferred Stock, and $25 par value, 4.56% Series C Preferred
Stock (all shares of Preferred Stock, regardless of series, being referred to
collectively as the "Preferred Stock"); and of certain provisions of the
Articles, the General and Business Corporation Law of Missouri, and the
Company's Mortgage and Deed of Trust dated as of February 1, 1945 as
supplemented and amended (the "Mortgage"). This summary of certain rights and
privileges of the holders of Common Stock and Rights does not purport to be
complete and is qualified in its entirety by reference to the Articles, the
laws of the State of Missouri, the Mortgage and, with respect to the Rights,
the Rights Agreement dated as of April 3, 1996, between the Company and
Boatmen's Trust Company, to which UMB is the successor as Rights Agent.
DIVIDEND RIGHTS
After payment in full of cumulative dividends on the preferred stock of all
series, the Board of Directors may declare dividends upon the Common Stock out
of funds legally available therefor, subject to the following dividend
restrictions:
Each series of the Preferred Stock is entitled, in preference to the Common
Stock, to receive cumulative cash dividends at its respective designated rate
payable quarterly on March 31, June 30, September 30, and December 31 of each
year when and as declared by the Board of Directors out of funds legally
available therefor. Dividends on the Preferred Stock are cumulative.
Under the terms of the Company's Mortgage so long as any of the bonds of
the 8 1/2% Series due November 15, 2004, or the 8 5/8% Series due May 15, 2006,
or the 7 1/2% Series due November 1, 2007, or the 6 1/4% Series due May 1,
2003, or the 6 1/2% Series due November 15, 2010, or the 6 1/2% Series due
October 15, 2012, are outstanding, the Company will not declare or pay any
dividends on Common Stock (other than dividends in Common Stock) or purchase,
redeem or otherwise acquire or retire for value Common Stock, if the aggregate
net amount expended for such dividends, acquisitions, and the like, after
September 30, 1953, would exceed: (a) the net income available for Common Stock
for the period beginning October 1, 1953, and ending with the last
11
12
day of the calendar quarter immediately preceding the declaration of such
dividend, or ordering of such distribution, or the taking of such other action;
plus (b) $8,000,000. The aggregate net amount of the dividends and other
restricted payments shall be determined by deducting from the aggregate amount
thereof the total amount of cash payments received by the Company after
September 30, 1953, for any shares of Common Stock sold by the Company after
that date.
As of the date of this Prospectus, the availability for distribution of the
Company's retained earnings was not impaired to any material extent by the
restriction described in the immediately preceding paragraph.
Under the Company's Articles, if the stated capital represented by all
stock junior to the Preferred Stock plus paid-in and capital surplus and
retained earnings is less than 25% of the total capitalization (such percentage
was approximately 59% at June 30, 1998), no dividends (other than stock
dividends) will be paid on such junior stock unless (i) such dividend is not
more than 75% of the net earnings of the Company after provision for dividends
on the Preferred Stock outstanding earned during the fiscal year in which such
dividend is declared and before the end of the quarter in which such dividend
is declared or (ii) such dividend together with all dividends on stock junior
to the Preferred Stock declared or paid since the earliest date of issue of any
of the then outstanding Preferred Stock aggregate not more than 75% of the net
earnings of the Company after provision for dividends on the Preferred Stock
outstanding earned between said earliest date of issue and the end of the
quarter in which such dividend is declared.
The Series B Preferred Stock provides for a sinking fund designed to retire
6,400 shares in each year commencing in 1962 and the Series C Preferred Stock
provides for such a fund designed to retire 4,000 shares annually commencing in
1968. If the sinking fund requirements are not met, the Company may not pay
dividends on or acquire any Common Stock. However, to the extent that net
earnings (as defined) after preferred dividends are less than the sinking fund
requirement, the sinking fund payment may be reduced and such reduction for
such year is deemed an excused failure. No dividends may be paid on Common
Stock for the twelve months following an excused failure unless the amount in
default is set aside in full.
VOTING RIGHTS
Except as hereinafter stated, the holders of the Common Stock are entitled
to one vote for each share of such Common Stock held of record at all
stockholder meetings, and such holders have the sole voting rights.
No shares of any series of Preferred Stock are entitled to vote at any
meeting of stockholders or election of Directors of the Company except that
whenever six quarterly dividends payable thereon shall be in default, then
until no dividends on any Preferred Stock are in default, the holders of the
Preferred Stock of all series, voting as a class, will have the right to elect
the minimum number of Directors required to constitute a majority of the full
board, with the minority of the full Board being elected by the holders of
Common Stock, voting as a separate class.
Cumulative voting (determined in accordance with the procedure set forth
under Missouri law) is applicable to all elections of Directors.
The Company's Articles and By-Laws provide that the Board of Directors be
classified into three classes, with one class to be elected each year, and with
each class to be elected for a term of three years, and to be of a size as
nearly equal to the other classes as possible. Article IV of the Company's
Articles also provides that a change in the number of members of the Board to a
number less than nine or more than twelve, or a change in
12
13
classification of the Board, requires the affirmative vote of holders of at
least two-thirds of the shares outstanding and entitled to vote thereon; and
that the entire Board could be removed, with or without cause, by the
affirmative vote of holders of at least two-thirds of the shares outstanding
and entitled to vote thereon. Furthermore, less than the entire Board could be
removed, with or without cause, by a vote of holders of at least two-thirds of
the shares outstanding and entitled to vote thereon, except that no Director
may be removed by shareholders if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the class
of directors of which he is a member. Article IV of the Articles may be amended
or repealed only upon the affirmative vote of holders of at least two-thirds of
the shares outstanding and entitled to vote thereon. In addition to the
foregoing description relating to removal by shareholder action, a director may
also be removed, under Missouri law, by a majority of the board for failure to
meet qualifications for his election set forth in a corporation's articles or
by-laws, or for breach of any contract relating to his service as a director or
employee.
LIQUIDATION RIGHTS
Upon any dissolution, liquidation or winding up of the Company resulting in
a distribution to its stockholders, the holders of the Common Stock are
entitled to receive all assets remaining after the requisite payments have been
made to the holders of the Preferred Stock.
PREEMPTIVE OR OTHER SUBSCRIPTION RIGHTS
The Company's shares of Common Stock have limited preemptive rights.
Article III-B of the Company's Articles provides, in substance, that holders of
shares of the Company's Common Stock shall have no preemptive right to acquire
any shares of capital stock (or any securities convertible into shares of
capital stock) issued for money or other consideration unless the Board of
Directors of the Company determines to sell Common Stock (or securities
convertible into Common Stock) solely for money and other than: (1) by a public
offering; (2) through underwriters who will promptly make a public offering; or
(3) pursuant to an authorization by a majority of outstanding common shares
entitled to vote.
OTHER PROVISIONS
All of the outstanding shares of Common Stock are, when issued and paid
for, fully paid and non-assessable.
On July 24, 1997, the Company's Board of Directors amended the Company's
By-laws, effective at the close of business on July 24, 1997, by adding to
Article III thereof a new Section 8, relating to the nomination by shareholders
of persons to stand for election as directors, and a new Section 9, relating to
proposals by shareholders. Under these By-law provisions, notice of shareholder
proposals or nominations for annual meetings must, among other things, normally
be submitted in writing to the Corporate Secretary not less than sixty (60) nor
more than ninety (90) days prior to the anniversary date of the prior year's
annual meeting of shareholders, and must contain certain specified items of
pertinent information. A copy of the By-laws will be sent to any shareholder
upon written request to the Company's Secretary.
13
14
TRANSFER AGENT AND REGISTRAR
The registrar, transfer agent, and dividend disbursing agent for the
Company's Common Stock and the Preferred Stock is UMB Bank, National
Association, Securities Transfer Division, P. O. Box 410064, Kansas City,
Missouri 64141-0064.
MISSOURI TAKEOVER STATUTES
Under Missouri law, a person (or persons acting as a group) who acquires
20% or more of the outstanding stock of an "issuing public corporation" will
not have voting rights, unless: (i) such acquiring person satisfies certain
statutory disclosure requirements, and (ii) the restoration of voting rights to
such acquiring person is approved by the issuing public corporation's
shareholders. Additional shareholder approval is required to restore voting
rights when an acquiring person has acquired one-third and a majority,
respectively, of the outstanding stock of the issuing public corporation.
Missouri law also regulates a broad range of "business combinations"
between a "resident domestic corporation" and an "interested shareholder."
"Business combination" is defined to include, among other things, mergers,
consolidations, share exchanges, asset sales, issuances of stock or rights to
purchase stock and certain related party transactions. "Interested
shareholder" is defined as a person who: (i) beneficially owns, directly or
indirectly, 20% or more of the outstanding voting stock of a resident domestic
corporation or (ii) is an affiliate of a resident domestic corporation and at
any time within the last five years has beneficially owned 20% or more of the
voting stock of such corporation. Missouri law prohibits a resident domestic
corporation from engaging in a business combination with an interested
shareholder for a period of five years following the date on which the person
became an interested shareholder, unless the Board of Directors approved the
business combination before the person became an interested shareholder.
Business combinations after the five-year period following the stock
acquisition date are permitted only if: (i) the Board of Directors approved the
acquisition of the stock prior to the acquisition date, (ii) the business
combination is approved by the holders of a majority of the outstanding voting
stock (other than the interested shareholder), and (iii) the consideration to
be received by shareholders meets certain statutory requirements with respect
to form and amount.
The Company is both an "issuing public corporation" and a "resident
domestic corporation" subject to the Missouri takeover statutes described
above. Missouri law defines each type of entity as including a Missouri
corporation having: (i) one hundred or more shareholders, (ii) its principal
place of business, principal office or substantial assets in Missouri, and
(iii) certain prescribed percentages of stock ownership by Missouri residents.
BUSINESS COMBINATION PROVISION IN ARTICLES
Under Article VII of the Company's Articles, certain Business Combinations
(as defined in Article VII) involving the Company and any beneficial owner
directly or indirectly of 10% or more of the outstanding voting shares of the
Company (a Substantial Shareholder) would normally require approval by the
affirmative vote of the GREATER of: (i) 80% of all of the Company's Common
Stock; or (ii) a majority of all such Common Stock not owned directly or
indirectly by the Substantial Shareholder, PLUS all of such Common Stock then
owned directly or indirectly by the Substantial Shareholder (the greater of
clauses (i) and (ii) being hereinafter called the "Special Vote"). However,
only a two-thirds ( 2/3) affirmative vote would be required if: (1) the
transaction is approved by a majority of those directors who were in office at
the time the Substantial Shareholder became such, or certain of their
successors, (collectively, the Continuing Directors); or (2) the shareholders
receive
14
15
consideration in a Business Combination not less than the GREATEST of: (a) the
highest per share price paid by the Substantial Shareholder in acquiring any of
the Substantial Shareholder's shares; or (b) the Fair Market Value (as defined
in Article VII) on the date the merger or consolidation is approved by the
Board; or (c) the highest price then being offered per share in any other bona
fide offer outstanding on the date the Business Combination is approved by the
Board; and certain proscribed dividend actions have not occurred.
Article VII may be subsequently amended (the "Subsequent Proposal") only
by the Special Vote, unless: (a) there is no Substantial Shareholder, and the
Subsequent Proposal has been approved by a majority of the Company's Board; or
(b) there is a Substantial Shareholder and the Subsequent Proposal has been
approved by a majority of the Continuing Directors. In such latter two
instances, only the affirmative vote of holders of a majority of the Common
Stock would be required for its adoption.
Under Article VII the following terms are respectively defined as follows:
A "Substantial Shareholder" is defined generally as anyone who is the
beneficial owner of more than 10% of the outstanding shares of the Company
entitled to vote in an election of directors. The term "beneficial owner"
includes, without limitation, persons directly and indirectly owning or having
the right to acquire, vote or dispose of the stock. The Company is not aware of
the existence of any shareholder or group of shareholders which would be a
Substantial Shareholder, or which has indicated any intention of becoming a
Substantial Shareholder.
A "Continuing Director" includes any member of the Board who is not
affiliated with a Substantial Shareholder and who was a director prior to the
time the Substantial Shareholder became such, and any successor of a Continuing
Director who is not an affiliate of a Substantial Shareholder and was
recommended or elected to succeed a Continuing Director by a majority of
Continuing Directors.
A "Business Combination" includes generally the following types of
transactions: (a) a merger or consolidation of the Company or any subsidiary
with a Substantial Shareholder; (b) the sale or other disposition by the
Company or a subsidiary of assets of $10 million or more if a Substantial
Shareholder is a party to the transaction; (c) the adoption of any plan or
proposal for the liquidation or dissolution of the Company proposed by or on
behalf of a Substantial Shareholder; or (d) any reclassification of securities,
recapitalization, merger with a subsidiary or other transaction which has the
effect, directly or indirectly, of increasing the proportionate share of the
outstanding equity or convertible securities of the Company or a subsidiary
owned by a Substantial Shareholder.
"Fair Market Value" means: (a) as to stock, the highest closing sale
price per share during the thirty (30) days prior to approval of the Business
Combination by the Board, as reported by the stock exchange where listed; or,
if not listed, the highest closing bid quotation during such period; or, if
there is no reported sale or bid price, then the fair market value on the
approval date as determined by a majority of the Continuing Directors; and (b)
as to property or securities other than cash or stock, the fair market value on
the approval date as determined by a majority of the Continuing Directors.
COMMON STOCK PURCHASE RIGHTS
On May 1, 1996, the Company distributed a dividend distribution of one
Common Stock Purchase Right (the "Rights") for each outstanding share of
Common Stock of the Company (other than shares held in the Company's treasury)
to shareholders of record at the close of business on May 1, 1996. Except as
set forth
15
16
below, each Right entitles the registered holder to purchase from the Company
one share of Common Stock at a price of $60 per share, subject to adjustment
(the "Purchase Price"). The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement") between the Company and
Boatmen's Trust Company, who has been succeeded by UMB Bank, National
Association, as Rights Agent (the "Rights Agent").
Until the earlier of (i) the close of business on the tenth business day
following the public announcement or the date that a person or group of
affiliated or associated persons (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company) (an "Acquiring Person")
has acquired, or obtained the right to acquire, 20% or more of the outstanding
shares of Common Stock of the Company without the prior express written consent
of the Company executed on behalf of the Company by a duly authorized officer
of the Company following express approval by action of at least a majority of
the members of the Board of Directors then in office (the "Stock Acquisition
Date"), or (ii) the close of business on the tenth business day (or such later
date as determined by the Board of Directors but not later than the Stock
Acquisition Date) following the commencement of a tender offer or exchange
offer, without the prior written consent of the Company, by a person (other
than the Company, any subsidiary of the Company or any employee benefit plan of
the Company) which, upon consummation, would result in such party's control of
more than 20% or more of the Company's voting stock (the earlier of the dates
in clause (i) or (ii) above being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Company's Common Stock
certificates outstanding as of May 1, 1996 (other than shares held in the
Company's treasury), by such Common Stock certificates. The Rights Agreement
provides that, until the Distribution Date, the Rights will be transferred with
and only with the Company's Common Stock. Until the Distribution Date (or
earlier redemption, exchange, or expiration of the Rights), new Common Stock
certificates issued after May 1, 1996, upon transfer, new issuance or issuance
from the Company's treasury of the Company's Common Stock, will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption, exchange or expiration of the
Rights), the surrender for transfer of any of the Company's Common Stock
certificates outstanding as of May 1, 1996 will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Company's Common Stock as of the close of business on the
Distribution Date and such separate certificates alone will then evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on May 1, 2006, unless earlier redeemed or exchanged by the Company, as
described below.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Common
Stock, (ii) upon the issuance of Common Stock or rights to subscribe for shares
of Common Stock or securities convertible into Common Stock at less than the
then current market price of the Common Stock, or (iii) upon the distribution
to holders of Common Stock of securities (other than those described in (ii)
above), evidences of indebtedness or assets (excluding regular periodic cash
dividends out of earnings or retained earnings).
If any person or group (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company) acquires 20% or more of
the Company's outstanding voting stock without the prior written consent of the
Board of Directors, each Right, except those held by such persons, would
entitle each
16
17
holder of a Right to acquire such number of shares of the Company's Common
Stock as shall equal the result obtained by multiplying the then current
Purchase Price by the number of shares of Common Stock for which a Right is
then exercisable and dividing that product by 50% of the then current per-share
market price of Company Common Stock.
If any person or group (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company) acquires more than 20% but
less than 50% of the outstanding Company Common Stock without prior written
consent of the Board of Directors, each Right, except those held by such
persons, may be exchanged by the Board of Directors for one share of Company
Common Stock.
If the Company were acquired in a merger or other business combination
transaction where the Company is not the surviving corporation or where Company
Common Stock is exchanged or changed or 50% or more of the Company's assets or
earnings power is sold in one or several transactions without the prior written
consent of the Board of Directors, each Right would entitle the holders thereof
(except for the Acquiring Person) to receive such number of shares of the
acquiring company's common stock as shall be equal to the result obtained by
multiplying the then current Purchase Price by the number of shares of Company
Common Stock for which a Right is then exercisable and dividing that product by
50% of the then current market price per share of the common stock of the
acquiring company on the date of such merger or other business combination
transaction.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent in such Purchase Price. No fractional shares will be issued. In lieu of
fractional shares, an adjustment in cash will be made based on the market price
of the Common Stock on the last trading date prior to the date of exercise.
The Rights can be redeemed by the Board of Directors for $.01 per Right at
any time prior to the tenth business day following the Stock Acquisition Date
(as defined above). Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights, the Company shall make announcement
thereof, and the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the redemption price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including, but not
limited to, an amendment to lower certain thresholds described above to not
less than the greater of: (i) any percentage greater than the largest
percentage of the Voting Power (as defined in the Rights Agreement) of the
Company then known by the Company to be beneficially owned by any person or
group of affiliated or associated persons (other than an excepted person); and
(ii) 10%; except that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person no such amendment
may adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
April 3, 1996. A copy of the Rights Agreement is available to shareholders free
of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
17
18
MISCELLANEOUS
The Company reserves the right to increase, decrease or reclassify its
authorized capital stock, or any class or series thereof, and to amend or
repeal any provisions in the Articles or in any amendment thereto in the manner
now or hereafter prescribed by law, subject to the limitations in the Articles;
and all rights conferred on the holders of Common Stock in the Articles or any
amendment thereto are subject to this reservation.
The high, low and closing prices on August 25, 1998 for the Company's
Common Stock as reported in a summary of composite transactions in stock listed
on the New York Stock Exchange (the principal market for the Common Stock) were
$23.00, $22.75 and $22.75 per share, respectively.
LEGAL MATTERS
The legality of the additional Common Stock was passed upon by Donald L.
Godiner, who was the Company's Senior Vice President, General Counsel and
Secretary at the date of the registration of the shares of Common Stock for
sale and issuance under the Plan.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Company's most recent
Annual Report on Form 10-K have been audited by Deloitte & Touche, independent
auditors, as stated in their reports, which are incorporated by reference
herein, and have been so incorporated in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles and Missouri Statutes provide for indemnification of
the Company's officers and directors under certain circumstances, which may
include liabilities under the Securities Act of 1933. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is therefore
unenforceable.
18
19
[LACLEDE GAS COMPANY LOGO]
LACLEDE GAS
COMPANY
PROSPECTUS FOR
DIVIDEND REINVESTMENT
AND
STOCK PURCHASE PLAN
DATED SEPTEMBER 1, 1998