As filed with the Securities and Exchange Commission on February 14, 2006
Registration No. 333-131429
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No.1 to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
KEYSPAN CORPORATION
(Exact name of registrant as specified in its charter)
--------------
New York 11-3431358
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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JOHN J. BISHAR, ESQ.
ONE METROTECH CENTER, BROOKLYN, NEW YORK 11201 (718) 403-3320
175 EAST OLD COUNTRY ROAD, HICKSVILLE, NEW YORK 11801 (516) 545-6096
(Address and telephone number of principal executive offices and agent for
service)
Approximate date of commencement of proposed sale to the public: From time
to time after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.[ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.[X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
If this Form is a registration statement pursuant to General Instruction I.D. or
a post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. [ ]
If this form is a post effective amendment to a registration statement filed
pursuant to General Instruction I.D. filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the Securities
Act, check the following box.[ ]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Each Amount Maximum Maximum Amount of
Class of Securities To Be Offering Price Aggregate Registration
To Be Registered Registered Per Unit* Offering Price* Fee**
- --------------- ---------- --------- --------------- -------
Common Stock,
par value 5,000,000 Shares $36.217 $181,085,000 $19,376.10
$0.01 per share
* Estimated solely for the purpose of calculating the registration fee pursuant
to Rule 457(o), on the basis of the estimated maximum aggregate offering price
of the registrant's Common Stock.
**$19,376.10 previously paid by the Registrant in connection with the initial
filing on January 31, 2006.
EXPLANATORY NOTE
The purpose of this Amendment to the Registration Statement on Form S-3
initially filed on January 31, 2006 (the "Registration Statement"), is to amend
and restate (1) the section of the prospectus entitled "Incorporation of
Documents by Reference" and (2) Item 17 of Part II of the Registration
Statement.
TABLE OF CONTENTS
PART I - Information Required in Prospectus.......................................................................1
KEYSPAN INVESTOR PROGRAM PROSPECTUS.........................................................................1
PART II - Information Not Required in Prospectus.................................................................26
Other Expenses of Issuance and Distribution.............................................................26
Indemnification of Directors and Officers...............................................................26
List of Exhibits........................................................................................27
Undertakings............................................................................................27
Signatures..............................................................................................30
Exhibit Index...........................................................................................32
KEYSPAN
KeySpan Corporation
INVESTOR PROGRAM
Common Stock,
$0.01 par value, per share
5,000,000 shares
ONE METROTECH CENTER, BROOKLYN, NEW YORK 11201
175 EAST OLD COUNTRY ROAD, HICKSVILLE, NEW YORK 11801
(718) 403-1000 (BROOKLYN)
(516) 755-6650 (HICKSVILLE) (Address
and telephone number of principal executive offices)
Our Common Stock is primarily listed on the New York Stock Exchange under the
symbol KSE. Investing in KeySpan's Common Stock involves risks associated with
market fluctuations. Further discussion of risks associated with market
fluctuations can be found on page 3 of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS ANY SUCH
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus is dated as of February 14, 2006.
KEYSPAN INVESTOR PROGRAM PROSPECTUS
TABLE OF CONTENTS
PROSPECTUS SUMMARY..............................................................................3
RISK FACTORS....................................................................................3
PROFILE OF KEYSPAN CORPORATION..................................................................7
DESCRIPTION OF THE PROGRAM......................................................................8
SUMMARY.........................................................................................8
QUESTIONS AND ANSWERS..........................................................................10
Purpose .............................................................................10
Advantages and Disadvantages..........................................................10
Program Administration................................................................11
Eligibility...........................................................................12
Enrollment Procedures...............................................................12
Common Stock Purchases................................................................15
Stock Certificates and Safe Keeping..............................................17
Sale of Shares........................................................................18
Transfer of Shares..................................................................19
Option Changes and Discontinuation of Reinvestment..................................19
Reports to Participants...............................................................20
Federal Income Taxes..................................................................21
Other Information.....................................................................22
USE OF PROCEEDS................................................................................24
PLAN OF DISTRIBUTION...........................................................................24
LEGAL OPINIONS.................................................................................24
EXPERTS........................................................................................24
INCORPORATION OF DOCUMENTS BY REFERENCE........................................................24
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES....................................................................................25
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PROSPECTUS SUMMARY
We are pleased to offer you the opportunity to participate in the KeySpan
Investor Program (the "Program"), a direct stock purchase and dividend
reinvestment plan. The Program is designed to provide you with:
o A convenient and inexpensive way to purchase and sell shares of KeySpan
Common Stock ("Common Stock").
o The chance to purchase additional shares of Common Stock, and to reinvest
all or a portion of your cash dividends.
o The opportunity to make additional cash purchases of Common Stock by check,
money order or automatic deduction from your checking or savings account at
a U.S. bank or financial institution.
o An option to own and transfer shares of Common Stock without the need for
holding stock certificates.
As used in this prospectus and any prospectus supplement or term sheet,
"KeySpan" generally means KeySpan Corporation, together with its subsidiaries.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement or term sheet. KeySpan has not
authorized anyone else to provide you with different information. KeySpan is not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate as of any date other than the date on the front of these
documents.
RISK FACTORS
Before purchasing shares of our Common Stock, investors should carefully
consider the following risk factors together with the other information
incorporated by reference or provided in this prospectus in order to evaluate an
investment in our Common Stock.
We are a holding company, and we and our subsidiaries are subject to
federal and/or state regulation which limits our financial activities, including
the ability of our subsidiaries to pay dividends and make distributions to us.
We currently are a holding company registered under the Public Utility
Holding Company Act of 1935, as amended ("PUHCA 1935"). Congress has acted to
repeal the Public Utility Holding Company Act of 1935 and replace it with the
Public Utility Holding Company Act of 2005 ("PUHCA 2005"), which becomes
effective on February 8, 2006 and transfers holding company oversight
responsibilities from the Securities and Exchange Commission ("SEC") to the
Federal Energy Regulatory Commission ("FERC"). Collectively, PUHCA 1935 and
PUHCA 2005 are referred to herein as "PUHCA". We have no business operations or
sources of income of our own. We conduct all of our operations through our
subsidiaries and depend on the earnings and cash flow of, and dividends or
distributions from, our subsidiaries to provide the funds necessary to meet our
debt and contractual obligations and to pay dividends on our Common Stock. A
substantial portion of our consolidated assets, earnings and cash flow is
derived from the operation of our regulated utility subsidiaries, whose legal
authority to pay dividends or make other distributions to us is subject to
regulation by the utility regulatory commissions of New York, Massachusetts and
New Hampshire.
3
Our gas distribution and electric services businesses may be adversely affected
by changes in federal and state regulation.
The regulatory environment applicable to our gas distribution and our
electric services businesses has undergone substantial changes in recent years,
on both the federal and state levels. These changes have significantly affected
the nature of the gas and electric utility and power industries and the manner
in which their participants conduct their businesses. Moreover, existing
statutes and regulations may be revised or reinterpreted, new laws and
regulations may be adopted or become applicable to us or our facilities, and
future changes in laws and regulations may affect our gas distribution and our
electric services businesses in ways that we cannot predict.
Proposals to re-regulate the wholesale power market have been made at the
federal level. These proposals, and legislative and other attention to the
electric power industry could have a material adverse effect on our strategies
and results of operations for our electric services business and our financial
condition. In particular, we sell power and energy from our Ravenswood
generating facility into the New York Independent System Operator ("NYISO")
energy market at market based rates, subject to mitigation measures approved by
FERC. The pricing for both energy sales and services to the NYISO energy market
is still evolving and some of the FERC's price mitigation measures are subject
to rehearing and possible judicial review.
Our Risk Mitigation Techniques Such as Hedging and Purchase of Insurance May Not
Adequately Provide Protection
To mitigate our financial exposure related to commodity price fluctuations,
KeySpan routinely enters into contracts to hedge a portion of our purchase and
sale commitments, weather fluctuations, electricity sales, natural gas supply
and other commodities. However, we do not always cover the entire exposure of
our assets or our positions to market price volatility and the coverage will
vary over time. To the extent we have unhedged positions or our hedging
procedures do not work as planned, fluctuating commodity prices could cause our
sales and net income to be volatile.
In addition, our business is subject to many hazards from which our
insurance may not adequately provide coverage. An unexpected outage of
Ravenswood, especially in the significant summer period, could materially impact
our financial results. Damage to pipelines, equipment, properties and people
caused by natural disasters, accidents, terrorism or other damage by third
parties could exceed our insurance coverage. Although we do have insurance to
protect against many of these contingent liabilities, this insurance is capped
at certain levels, has self-insured retentions and does not provide coverage for
all liabilities.
SEC Rules for Exploration and Production Companies May Require Us to Recognize a
Non-Cash Impairment Charge at the End of Our Reporting Periods
Our investments in natural gas and oil consist of our ownership of KeySpan
Exploration and Production and Seneca-Upshur. We use the full cost method for
KeySpan Exploration and Production and Seneca-Upshur. Under the full cost
method, all costs of acquisition, exploration and development of natural gas and
oil reserves are capitalized into a full cost pool as incurred, and properties
in the pool are depleted and charged to operations using the unit-of-production
method based on production and proved reserve quantities. To the extent that
these capitalized costs, net of accumulated depletion, less deferred taxes
exceed the present value (using a 10% discount rate) of estimated future net
cash flows from proved natural gas and oil reserves and the lower of cost or
fair value of unproved properties, those excess costs are charged to operations.
If a write-down is required, it would result in a charge to earnings but would
not have an impact on cash flows. Once incurred, an impairment of gas properties
is not reversible at a later date, even if gas prices increase.
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Our operating results may fluctuate on a seasonal and quarterly basis.
Our gas distribution business is a seasonal business and is subject to
weather conditions. We receive most of our gas distribution revenues in the
first and fourth quarters when demand for natural gas usually increases due to
colder weather conditions. As a result, we are subject to seasonal variations in
working capital because we purchase most of our natural gas supplies in the
second and third quarters and must increase our borrowings in these periods to
finance these purchases. Accordingly, our results of operations in the future
will fluctuate substantially on a seasonal basis. In addition, our New
England-based gas distribution subsidiaries do not benefit from weather
normalization tariffs, and results from our Ravenswood generating facility are
directly correlated to the weather as the demand and price for the electricity
it generates increases during the summer. As a result, fluctuations in weather
between years may have a significant effect on our results of operations for
these subsidiaries.
A substantial portion of our revenues are derived from our agreements with the
Long Island Power Authority ("LIPA") and no assurances can be made that these
arrangements will not be discontinued at some point in the future. Furthermore,
KeySpan and LIPA recently announced their intentions to enter into certain new
agreements that are not yet effective and accordingly, KeySpan is unable to
predict when or if these proposed agreements will become effective.
We derive a substantial portion of our revenues in our electric services
segment from a series of agreements with LIPA pursuant to which we manage LIPA's
transmission and distribution system and supply the majority of LIPA's
customers' electricity needs.
On December 14, 2005, KeySpan and LIPA announced their intention to enter
into certain agreements (collectively referred to herein as the "Proposed
Agreements"). The effectiveness of each of these Proposed Agreements is
conditioned upon, among other things, successful negotiation and execution of
definitive documentation of the Proposed Agreements and receipt of all required
governmental approvals. Furthermore, the effectiveness of each Proposed
Agreement is conditioned upon all Proposed Agreements becoming effective.
Pursuant to the Proposed Agreements, KeySpan and LIPA, among other changes,
contemplate a five year extension of the Management Services Agreement (MSA)
through December 31, 2013, whereby KeySpan would continue to perform day-to-day
operation and maintenance services and capital improvements on LIPA's T&D
System. KeySpan and LIPA also contemplate entering into a new Option and
Purchase and Sale Agreement that will grant LIPA the option during the period
January 1, 2006 to December 31, 2006 to purchase only KeySpan's Far Rockaway
and/or E.F. Barrett Generating Stations (and certain related assets) at a price
equal to the net book value of each facility.
A decline or an otherwise negative change in the ratings or outlook on our
securities could have a materially adverse impact on our ability to secure
additional financing on favorable terms.
The rating agencies that rate our securities regularly review our financial
condition and results of operations. We can provide no assurances that the
ratings or outlook on our securities will not be reduced or otherwise negatively
changed. A negative change in the ratings or outlook on our securities could
have a materially adverse impact on our ability to secure additional financing
on favorable terms.
Our costs of compliance with environmental laws are significant, and the cost of
compliance with future environmental laws could adversely affect us.
5
Our operations are subject to extensive federal, state and local
environmental laws and regulations relating to air quality, water quality, waste
management, natural resources and the health and safety of our employees. These
environmental laws and regulations expose us to costs and liabilities relating
to our operations and our current and formerly owned properties. Compliance with
these legal requirements requires us to commit significant capital toward
environmental monitoring, installation of pollution control equipment and
permits at our facilities. Costs of compliance with environmental regulations,
and in particular emission regulations, could have a material impact on our
electric services business and our results of operations and financial position,
especially if emission limits are tightened, more extensive permitting
requirements are imposed, additional substances become regulated or the number
and type of electric generating plants we operate increase.
In addition, we are responsible for the clean-up of contamination at
certain manufactured gas plant ('MGP') sites and at other sites and are aware of
additional MGP sites where we may have responsibility for clean up costs. While
our gas rate plans generally allow for the full recovery of the costs of
investigation and remediation of MGP sites, these rate recovery mechanisms may
change in the future. To the extent rate recovery mechanisms change in the
future, or if additional environmental matters arise in the future at our
currently or historically owned facilities, at sites we may acquire in the
future or at third party waste disposal sites, costs associated with
investigating and remediating these sites could have a material adverse effect
on our results of operations and financial condition.
Provisions of our certificate of incorporation and bylaws and New York Corporate
Law and state regulatory requirements may discourage a takeover attempt.
Provisions contained in our certificate of incorporation and bylaws and the
laws of New York, the state in which we are organized, could make it more
difficult for a third party to acquire us in a transaction not approved by our
board of directors. Provisions of our certificate of incorporation and bylaws
impose various procedural and other requirements that could make it more
difficult for shareholders to affect certain corporate actions. These
requirements may have the effect of delaying or deterring a change of control of
our company. Furthermore, the SEC and utility regulatory commissions of New
York, Massachusetts and New Hampshire would need to approve any transaction that
involves a change of control of us. These provisions could limit the price that
certain investors might be willing to pay in the future for shares of our Common
Stock.
Our Businesses are Subject to Competition and General Economic Conditions
Impacting Demand for Services
We recently expanded the Ravenswood Facility, our merchant generation
plant, in our Electric Services segment with the Ravenswood Expansion, a 250 MW
combined cycle generating unit. However, the Ravenswood Facility and Ravenswood
Expansion continue to be subject to competition that could adversely impact the
market price for the electricity they produce. If new generation and/or
transmission facilities are constructed, and/or the availability of our
Ravenswood Facility deteriorates, then the capacity and energy sales quantities
could be adversely affected. We cannot predict, however, when or if new power
plants or transmission facilities will be built or the nature of the future New
York City energy requirements.
We may issue additional shares of Common Stock and thereby materially and
adversely affect the price of our Common Stock.
We are not restricted from issuing additional shares of Common Stock. If we
issue additional shares of Common Stock, that issuance may materially and
adversely affect the price of our Common Stock.
6
PROFILE OF KEYSPAN CORPORATION
KeySpan Corporation (NYSE:KSE) is currently a registered holding company
under PUHCA. KeySpan operates six regulated utilities that distribute natural
gas to approximately 2.6 million customers in New York City, Long Island,
Massachusetts and New Hampshire, making KeySpan the fifth largest gas
distribution company in the United States and the largest in the Northeast. We
also own, lease and operate electric generating plants in Nassau and Suffolk
Counties on Long Island and in Queens County in New York City and are the
largest electric generation operator in New York State. Under contractual
arrangements, we provide power, electric transmission and distribution services,
billing and other customer services for approximately 1.1 million electric
customers of the Long Island Power Authority ("LIPA"). KeySpan's other operating
subsidiaries are primarily involved in gas exploration and production;
underground gas storage; liquefied natural gas storage; retail electric
marketing; large energy-system ownership, installation and management; service
and maintenance of energy systems; and engineering and consulting services. We
also invest and participate in the development of natural gas pipelines,
electric generation and other energy-related projects.
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DESCRIPTION OF THE PROGRAM
SUMMARY
This summary highlights selected information from this prospectus, but may
not contain all of the information that is important to you. To fully understand
the Program and for a more complete description of the legal terms of the
Program, you should read this entire document carefully and the documents to
which we have referred you. To find out how to obtain copies of these documents,
see Question 32.
Program Administration
We have appointed Computershare Trust Company, N.A., ("Computershare"),
formerly EquiServe Trust Company, N.A., as our Transfer Agent and Registrar to
administer the Program. All purchases of Common Stock will be made by
Computershare at 100% of the then-current market price of the Common Stock,
calculated as described in this prospectus, either in the open market, or
directly from KeySpan.
Our Common Stock is primarily listed on the New York Stock Exchange under
the symbol KSE. Investing in KeySpan's Common Stock involves risks associated
with market fluctuations.
To the extent required by law, in certain jurisdictions, shares offered
through the Program will be offered through a registered broker/dealer to
persons who are not currently KeySpan shareholders.
Purpose of the Program
The purpose of the Program is to provide our Registered Shareholders
(shareholders whose stock is registered in their name, not in the name of a
broker) and other investors with a simple, convenient and economical way to make
and increase investments in our Common Stock and to reinvest all or a portion of
any cash dividends paid in additional shares of Common Stock. The Program also
provides participants with an economical method to sell shares of Common Stock.
How To Participate in the Program
New Investors
o If you are not currently a KeySpan shareholder, you can purchase Common
Stock for the first time with a minimum investment of $250, with no
transaction fees. New investors may make their initial investment in Common
Stock by completing an Initial Investment Form and either mailing it with a
check or money order for at least $250, or, alternatively, you can
authorize Computershare to automatically deduct your initial investment
from a checking or savings account at a U.S. bank or financial institution.
The automatic deduction feature also provides new investors with the option
of having a minimum of $25 deducted either monthly or semi-monthly, in
order to reach the minimum investment of $250. However, it will be
necessary to notify Computershare to stop making automatic deductions.
o New investors can also enroll on the Internet at Computershare's website at
www.computershare.com/equiserve or the Investor Relations section of
KeySpan's website at www.keyspanenergy.com.
o New investors can reinvest their dividends by checking the dividend
reinvestment option on the Initial Investment Form, or by calling
Computershare at 1-800-482-3638.
8
Registered Shareholders
o If you are a Registered Shareholder, you may make additional investments
(minimum of $25, annual maximum of $150,000) by check, money order or by
authorizing Computershare to automatically deduct your investment from your
checking or savings account at a U.S. bank or financial institution.
o Registered Shareholders wishing to change dividend reinvestment options may
do so by completing and submitting an Enrollment Authorization Form. Please
refer to Question 5 for information on contacting Computershare.
Non-Registered Shareholders
o KeySpan shareholders holding their stock through a broker must become
Registered Shareholders to enroll in the Program.
For further instructions on how to participate in the Program, please see
Question 7.
Features of the Program
o Automatically reinvest all or part of your cash dividends to purchase
additional shares.
o You do not need to reinvest your dividends to participate. Dividends not
reinvested can be paid to you by check or electronic deposit to your bank
account.
o You may sell your shares of Common Stock by instructing Computershare,
either by telephone, in writing, or through the Internet. Sale orders are
processed daily.
o You may transfer shares or make gifts of shares of Common Stock easily and
at no cost.
o You may make all account inquiries by telephone, writing, and/or via the
Internet.
o Cash investments are processed weekly, usually on Thursdays.
o Your whole and fractional shares of Common Stock are credited to your
Program account in safe and convenient book-entry form. However, you may
request stock certificates free of charge.
o For safekeeping purposes, stock certificates can be converted into
book-entry shares, which will be credited to your Program account at no
cost to you.
Fees and Commissions
o KeySpan pays all processing fees for initial investments in the Program,
for additional investments and dividend reinvestments processed as original
issue or treasury shares and for the annual maintenance cost of your
Program account. However, should the Company purchase shares on the open
market, participants will pay a brokerage commission of $0.05 per share.
9
o You will be charged only the transaction and brokerage fees (currently
$5.00 per transaction and $0.05 per share) on the sale of shares of Common
Stock through the Program, and brokerage commissions on all purchases made
using open market shares (currently $0.05 per share).
o Returned checks or failed automatic deduction transactions will result in a
charge of $20 to the participant.
o You will be charged $5.00 per year (not to exceed $25.00) for a duplicate
statement older than two calendar years.
QUESTIONS AND ANSWERS
The following is a question and answer format explanation of the Program
which provides the terms and conditions of the Program.
Purpose
1. What is the purpose of the Program?
The purpose of the Program is to provide Registered Shareholders of Common
Stock and other investors a simple, convenient and economical way to
accumulate and increase their investment in Common Stock and to reinvest
all or a portion of their cash dividends in additional shares of Common
Stock. The Program also provides participants with an economical method to
sell shares of Common Stock.
Advantages and Disadvantages
2. What are the advantages of the Program?
The advantages of the Program are as follows:
o Direct Purchase of Initial Shares: Persons not presently owning shares of
Common Stock may enroll in the Program by making an initial investment of
at least $250, but not more than $150,000.
o Reinvestment of Dividends: Participants may purchase additional shares of
Common Stock automatically by reinvesting all or a portion of their cash
dividends. Dividend payments not reinvested will be paid to participants by
check or will be deposited electronically upon written request.
o Direct Purchase of Common Stock through Additional Cash Investments:
Participants may purchase additional shares of Common Stock by making
additional cash investments by check, money order or electronic transfer in
amounts of at least $25 per investment, with a maximum allowable investment
of $150,000 per year.
o Certificate Safekeeping: The Program offers a "safekeeping" service free of
charge, whereby Registered Shareholders may deposit their Common Stock
certificates with Computershare and have their certificated shares credited
10
to their Program account. This feature prevents stock certificate loss,
theft or destruction. Since deposited shares become book-entry shares, they
may be transferred or sold through the Program in a convenient and
economical manner.
o Reduced Fees: Fees charged to participants are usually less than if the
individual investor purchased or sold shares outside of the Program through
a broker.
o Certificates/Transfer or Shares: Participants may request the issuance of
stock certificates or transfer to another participant all or a portion of
their Program shares free of charge. Stock certificates will only be issued
in whole share amounts.
o Convenient, Inexpensive Sale of Shares: Participants may sell Program
shares by providing written instructions to Computershare, by using the
automated telephone sales feature or via the Internet. Participants will be
charged a sales fee of $5.00 for each transaction and a brokerage
commission of $0.05 per share sold.
o Simplified Recordkeeping: Participants are furnished an acknowledgment
after each purchase or sale, quarterly statements and cumulative year-end
statements of their Program accounts, providing a simplified method of
recordkeeping.
3. What are the Disadvantages of the Program?
The disadvantages of the Program are as follows:
o No Interest Paid on Funds Pending Investment: No interest is paid on
dividends or optional cash investments held by Computershare pending
investment or reinvestment.
o Purchase/Sale Price Determination: Participants have no control over
the share price or the timing of the sale or purchase of Program
shares. Participants cannot designate a specific price or a specific
date or the selection of a broker/dealer through or from whom
purchases are made. In addition, participants will not know the exact
number of shares purchased until after the investment date.
Program Administration
4. Who administers the Program?
Computershare has been appointed as our transfer agent, to administer the
Program. Computershare's responsibilities in administering the Program
include:
o Determining the timing and the making of purchases of Common Stock on the
open market.
o Crediting participant's accounts with shares of Common Stock acquired under
the Program.
o Maintaining Program account records.
o Sending statements of Program account activity to participants.
5. Who should I contact with questions regarding the Program and its
administration? You may contact Computershare by writing to:
11
Computershare
P.O. Box 43069
Providence, RI 02940-3069
You may also contact Computershare at one of the telephone numbers listed
below:
o Shareholder customer service, including sale of shares: 1-800-482-3638
(within the U.S. and Canada) and 1-201-324-0498 (outside the U.S. and
Canada).
o New investors requesting Program material: 1-800-948-1691 (available 24
hours, 7 days a week) and TDD: 1-201-222-4955 (a telecommunications device
for the hearing impaired is available).
You may also contact Computershare via the Internet. Computershare's
Internet address is www.computershare.com/equiserve. Messages sent via the
Internet will be responded to promptly. At Computershare's website, you can
access your share balance, sell shares, request a stock certificate, and
obtain online forms and other information about your Program account. To
get access to your Program account, you will require a password which will
be sent to you by mail, or you can request your password by calling
toll-free 1-877-THE-WEB7 (1-877-843-9327).
Eligibility
6. Am I eligible to participate in the Program?
Any person or entity is eligible to participate in the Program, whether or
not you currently own our Common Stock. If you are a resident of a foreign
country, you should make sure that participation would not violate any laws
in the country in which you reside.
Enrollment Procedures
7. How do I become a Program participant?
New Investors. If you do not currently own our Common Stock you may enroll
in the Program by completing an Initial Investment Form. You must return
the completed form to Computershare with an initial investment of at least
$250, but not more than $150,000. The payment can be in the form of a check
or money order, made payable to "Computershare - KeySpan." PLEASE DO NOT
SEND CASH.
You may also authorize automatic deductions of $25 per transaction from a
checking or savings account at a U.S. bank or financial institution either
monthly or semi-monthly, in order to reach the minimum investment of $250.
Automatic deductions will continue until such time as the new investor
notifies Computershare in writing to stop making automatic deductions. An
Automatic Deduction Authorization Form is included on the reverse side of
the Initial Investment Form.
If you are a Registered Shareholder. If you own shares of Common Stock that
are registered in your name, not the name of a broker, you can enroll in
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the Program by completing and returning an Enrollment Authorization Form to
Computershare or by calling Computershare directly at 1-800-482-3638. You
may obtain additional Enrollment Authorization Forms at any time upon
request to Computershare.
If you are a Non-Registered Shareholder. If you are the beneficial owner of
Common Stock through a bank, broker, or trustee, you can become a
Registered Shareholder by instructing your bank, broker, or trustee to
transfer some or all of your shares of Common Stock into your name. You can
choose whether to receive a physical stock certificate for your shares of
Common Stock, have them registered in the Direct Registration System in
your name or deposit them in a book-entry Program account maintained by
Computershare.
There are several options in which you may elect to hold your shares of KeySpan
Common Stock:
Stock Certificate. Once you receive your stock certificate in your name,
you can enroll in the Program and you may begin to use all of the services
of the Program, such as the dividend reinvestment and economical selling of
shares features.
Direct Registration System Book-Entry Shares. This is an electronic
transfer of your shares from your broker's name into your name through the
Direct Registration System. Simply instruct your broker to conduct the
transaction. This will establish a book-entry account at Computershare and
you can then commence using any or all of the Program services.
Deposit Shares with Computershare in Book-Entry Account. You can also opt
to have your shares held in a book-entry account administered by
Computershare. This allows you to have the added safe-keeping feature which
protects you against the loss, theft or destruction of your stock
certificate.
You may also arrange to have your bank, broker, or nominee participate in
the Program on your behalf. In this case, your participation may be on
terms and conditions which differ from the terms and conditions set forth
in this Program, you will be limited to the dividend reinvestment feature
use of the Program only. The terms and conditions set forth in the Program
will also be subject to the terms and conditions of your bank, broker, or
nominee. Computershare will not have a record of your transactions or your
account since they will remain under the name of your bank or broker.
8. What are my dividend reinvestment options available under the Program?
The following options are available to you under the Program. However, you
must elect one of the following options on the Initial Investment Form or
the Enrollment Authorization Form in order to have any portion of your
dividends paid to you, otherwise they will automatically be fully
reinvested to purchase additional shares of Common Stock.
Full Dividend Reinvestment. You can opt to have all of your cash dividends
on all certificated and Program shares of Common Stock automatically
reinvested to purchase additional shares of Common Stock. If you do not
make an election on the Initial Enrollment Form or the Enrollment
Authorization Form you will automatically have your dividends fully
reinvested.
Partial Dividend Reinvestment. You may choose to receive your cash
dividends on a specified number of shares of Common Stock and automatically
13
have the cash dividends on the remainder of your shares of Common Stock
reinvested to purchase additional shares of Common Stock. If you elect to
have partial dividends reinvestment, you must designate the number of
Program shares and/or certificated shares for which you choose to receive
your cash dividends in a whole number. Cash dividends are sent to you by
check or, upon request, are deposited electronically into your U.S. bank
account.
Cash Payment Only (No Dividend Reinvestment). You may choose to receive all
of your dividends as a cash payment. Cash dividends are sent to you by
check or, upon request, are deposited electronically into your U.S. bank
account.
For more information on the electronic deposit of dividends, please refer
to Question 10, or contact Computershare.
9. How do I make additional cash investments in Common Stock?
You may make additional cash investments by choosing among the following
two options:
Check Investment. You may make additional cash investments in Common Stock
by sending to Computershare a check, money order, or bank draft for the
purchase of additional shares of Common Stock. The check, money order, or
bank draft must be made payable to "Computershare - KeySpan" in U.S.
dollars and drawn on a U.S. bank. If you are not in the U.S., contact your
bank to verify that they can provide you with a check that clears through a
U.S. bank and can print the dollar amount in U.S. funds. Due to the longer
clearance period, we are unable to accept checks clearing through non-U.S.
funds. Computershare will not accept third party checks. All checks, money
orders, and bank drafts should be sent to Computershare at the address
listed on the tear-off form attached to each Program account statement you
receive, or with your Initial Investment Form.
Automatic Investment from a Bank Account. As an alternative to sending
checks, money orders, and bank drafts for additional cash investments, you
may elect to have funds automatically withdrawn from your checking or
savings account at a U.S. bank or financial institution. You may elect the
automatic deduction option by completing and signing an Automatic
Deductions Authorization Form and returning this form to Computershare,
together with a voided blank check or savings account deposit slip for the
bank account from which the funds are to be withdrawn. Additional Automatic
Deductions Authorization Forms are available through Computershare. Your
Automatic Deductions Authorization Form will be processed and will become
effective as promptly as practicable. However, you should allow four to six
weeks for the first investment to be initiated using this automatic
deduction feature. Once automatic deductions begin, funds will be withdrawn
from your bank account on either the first or fifteenth day of each month,
or both (at your option), or on the next business day if either of those
days is not a business day. You may change or discontinue automatic
deductions by completing and submitting to Computershare a new Automatic
Deductions Authorization Form.
Brokers or bank nominees participating on behalf of Non-Registered
Shareholders or beneficial owners may only use the dividend reinvestment
feature of the Program and cannot use the additional cash investment
feature. If a Non-Registered Shareholder wishes to participate in the
additional cash investment feature of the Program, he or she must first
become a Registered Shareholder or make an initial investment to enroll
directly in the Program.
14
10. Can my cash dividends be deposited directly to my bank account?
Yes, you may elect to have any cash dividends which are not reinvested paid
by electronic funds transfer to your U.S. bank account. To do this, you
must first complete and return a Direct Deposit Authorization Form to
Computershare along with a copy of a voided blank check or savings account
deposit slip. This form is not included with your Program materials and
must be specifically requested from Computershare by calling
1-800-870-2340.
11. What are the minimum and maximum amounts for additional cash investments?
In addition to increasing your holdings of Common Stock through the
reinvestment of dividends, you may make additional cash investments in
Common Stock at any time. Your additional cash investments by check, money
order, or automatic deductions must be at least $25 with a maximum
allowable investment of $150,000 per calendar year. If you are not a
Registered Shareholder and are a first time investor in the Program, your
initial investment must be for at least $250 and cannot exceed $150,000.
See Question 7 regarding new investors.
Common Stock Purchases
12. What are the sources of Common Stock purchased under the Program?
Shares of Common Stock will be purchased either on the open market, or
directly from KeySpan, from shares held in our treasury or as newly issued
shares, or a combination of the foregoing. You cannot choose the source of
your shares purchased since this is entirely at our discretion.
Shares purchased on the open market may be made on any stock exchange where
our Common Stock is traded or by negotiated transactions on terms that
Computershare may reasonably determine. Should the Company purchase shares
on the Open Market, participants will pay a brokerage commission of $0.05
per share. Neither KeySpan nor any participant will have any authority or
power to direct the date, time, or price at which shares of Common Stock
may be purchased, or the selection of a broker or dealer through or from
whom purchases are made.
13. When will shares be purchased under the Program?
o General. Direct purchases from KeySpan's authorized but unissued shares of
Common Stock will normally be made on a weekly basis on the relevant
"investment date," (usually Thursdays) or the next trading day if the
investment date is not a trading day. Purchases on the open market will
begin on the investment date and will be completed no later than 30 days
from such date, except where completion at a later date is necessary or
advisable under any applicable federal securities law.
o Cash Investments. Computershare will normally invest any initial and
additional cash investments for the purchase of Common Stock on a weekly
basis, usually on Thursdays, after receipt of the check, money order, bank
draft or automatic deduction. Computershare will determine the actual
investment date for initial and additional cash investments and should
receive payment no later than 2 business days prior to each week's
investment date. However, it should be noted that there is no guarantee of
15
the date on which investments will be made or if your payment will be
received on time for that week's investment.
o Dividend Reinvestments. The investment date for dividend reinvestments will
be the dividend payment date or the next business day if the dividend
payment date is not a business day. If Computershare receives your
Enrollment Authorization Form requesting reinvestment of dividends on or
before the record date established for a particular dividend, reinvestment
will commence with that dividend. If Computershare receives your Enrollment
Authorization Form requesting reinvestment of dividends after the record
date established for a particular dividend, you will be paid the dividend
in cash and your reinvestment of dividends will begin on the next dividend
payment date.
The anticipated payment dates for Common Stock are usually on the first
business day of February, May, August, and November. The record dates for
Common Stock are usually the week of the 10th of the previous month of the
payment date. It is anticipated that record dates and payment dates for
dividends, that we may declare in the future, will be at approximately the
same times of the year.
14. How is the purchase price of the Common Stock determined?
The purchase price of Common Stock purchased directly from KeySpan, as
treasury shares or original issue shares, will be the average of the high
and low prices of the Common Stock as reported in the New York Stock
Exchange composite transactions for that investment date.
You cannot request a specific purchase price, date, quantity, and/or
purchase by a specific broker.
The purchase price of Common Stock purchased on the open market is the
weighted average of the actual purchase price of all shares purchased
during the applicable investment period. The price is adjusted to include
brokerage commissions of $0.05 per share. Open market purchases are
expected to be made through Computershare.
A Program participant will have the applicable commissions deducted from
the funds used to purchase shares acquired under the Program, see Question
25.
15. How many shares of Common Stock will be purchased for me?
The number of shares purchased for you will be equal to the amount of your
additional cash investments, plus any dividends available for reinvestment,
or the initial investment received by Computershare during the investment
period, less any applicable fees, divided by the purchase price of the
shares. Your Program account will be credited with the number of shares of
Common Stock, including fractional shares computed to three decimal places.
16. Will I be paid interest on any amounts pending the actual investment date?
No. Interest will not be paid on amounts sent to Computershare for
investment pending the actual investment date.
16
Stock Certificates and Safe Keeping
17. Will I be issued stock certificates for shares of Common Stock purchased
through the Program?
No. Shares of Common Stock purchased through the Program will not be issued
to you in stock certificate form, but will be credited to your Program
account - as book entry shares - by Computershare on your behalf. The
number of shares of Common Stock credited to your Program account will be
shown on your Program account statement.
18. How may I receive a stock certificate?
You may obtain a stock certificate at no cost for some or all of the whole
shares credited to your Program account at any time by simply requesting
Computershare to withdraw shares from your Program account and to issue
them in stock certificate form. You may make such a request by:
o Calling Computershare at 1-800-482-3638;
o Accessing your Program account through the Internet at Computershare's
website www.computershare.com/equiserve;
o Using the tear-off form attached to the Program account statement; or
o Sending written notice specifying the number of whole shares to be
withdrawn.
Stock certificates will be issued to you and registered in your name. Stock
certificates are normally issued to participants within two business days
after receipt of a request. No stock certificates will be issued for a
fractional share of Common Stock. If you request a stock certificate for
all shares credited to your Program account, a stock certificate will be
issued for the whole shares and a cash payment will be made for any
remaining fractional shares. That cash payment will be based upon the
then-current market price of the Common Stock, less any service fee, any
applicable brokerage commission, and any other costs of sale.
Withdrawing shares from your Program account into stock certificate form
does not affect your dividend reinvestment option. For example, if you
authorized the full dividend reinvestment option, cash dividends with
respect to shares withdrawn from your Program account in stock certificate
form will continue to be reinvested.
19. May I add my shares of Common Stock held in stock certificate form to my
Program account with Computershare for safekeeping purposes?
Yes, you may deposit any Common Stock certificate in your possession and
registered in your name with Computershare for credit to your Program
account as book-entry shares at any time, at no transaction cost. We will
pay all fees for this service. This safekeeping feature offers two
advantages:
o The risk associated with loss, theft, or destruction of stock certificates
is eliminated; otherwise, in the case of a lost or stolen stock
certificate, no sale or transfer may occur until a replacement is obtained,
which can be a costly and time-consuming process; and
17
o Since shares deposited into your Program account with Computershare are
treated in the same manner as shares purchased through the Program, they
may be transferred or sold through the Program in a convenient and
efficient manner.
To combine shares held in stock certificate form with shares credited to
your Program account, you must send your request and your stock
certificates to Computershare. The stock certificates should not be
endorsed. Computershare will promptly send you a statement confirming each
stock certificate deposited.
To insure against loss resulting from mailing stock certificates to
Computershare, the Program provides for mail insurance, free of charge, for
stock certificates valued up to $25,000 current market value (maximum
coverage) when mailed first class, using a brown, pre-addressed envelope
provided by Computershare. Envelopes may be obtained by calling
Computershare at 1-800-482-3638. For information about mailing stock
certificates which have a current market value in excess of $25,000, you
should contact Computershare. To be eligible for stock certificate mailing
insurance, you must notify Computershare of any lost stock certificate
claim within 30 calendar days of the date the stock certificates were
mailed.
Mail insurance covers the replacement of shares of Common Stock, but in no
way protects you against any loss resulting from fluctuations in the value
of the shares from the time you mail the stock certificates until the time
replacement can be made. If you do not use a brown, pre-addressed envelope
provided by Computershare, you should send your stock certificates to the
address listed in Question 5 by registered mail, return receipt requested,
and insure for possible mail loss for 3% (minimum of $20) of the market
value. This represents the approximate cost to you of replacing stock
certificates if they are lost or stolen.
Sale of Shares
20. How can I sell Program shares?
To sell any shares that you hold in stock certificate form through the
Program, the shares must first be converted into book-entry shares and
credited to your Program account with Computershare. You can sell any of
the shares credited to your Program account with Computershare by calling
Computershare at 1-800-482-3638, accessing your Program account via the
Internet at www.computershare.com/equiserve, by writing to Computershare,
or by completing and submitting the tear-off portion of your Program
account statement.
21. How is the sale price of Program shares determined?
Computershare aggregates all requests to sell shares and then sells the
total share amount on the open market. Upon receipt of your request to sell
some or all of your shares, Computershare will make every reasonable effort
to process all sales orders on the day the orders are received. To do so,
you must ensure that instructions are received before 1:00 p.m. (Eastern
Time) on a business day during which Computershare and the New York Stock
Exchange are open.
Sales will be made at the then-current market price of the Common Stock and
Computershare will promptly mail you a check. The check will be for the net
cash proceeds of the sale, minus a service fee of $5.00 plus brokerage
commissions of $0.05 per share. Computershare has full discretion in all
matters related to the sale, including the time of sale and sales price and
18
the selection of a broker. You cannot specify a price or a time at which to
sell your book-entry shares.
You should be aware that the Common Stock price may rise or fall during the
period between a request for sale, its receipt by Computershare and the
ultimate sale on the open market. Instructions sent to Computershare to
sell shares are irrevocable and may not be rescinded.
Transfer of Shares
22. Can I assign or transfer all or a part of my Program shares to another
person?
Yes. You may change ownership of all or part of your Program shares through
a gift, sale or otherwise at any time. You may contact Computershare at
1-800-482-3638 for complete transfer instructions and you will be asked to
send Computershare written transfer instructions to enact the transfer.
Requests for transfer are subject to the same requirements as for the
transfer of stock certificates, including the requirement of a Medallion
Signature Guarantee.
23. If Program shares are transferred to another person, will Computershare
issue a stock certificate to the transferee?
No. Transfers will be credited to an account in book entry form. If you so
request, a stock certificate can be issued to the transferee. You should
contact Computershare for full details on how to make the transfer.
For book entry transfers that involve the establishment of a new Program
account, the completed Initial Investment Form must be returned to
Computershare, along with written instructions signed by the current
participant, indicating the number of shares to be transferred to the
transferee. The current participant's signature must be guaranteed by a
bank, broker or financial institution that is a member of the Medallion
Signature Guarantee program. The new Program account will be set up for
full dividend reinvestment unless otherwise instructed by the previous or
new shareholder.
Option Changes and Discontinuation of Reinvestment
24. How can I change my dividend reinvestment option or discontinue reinvesting
my dividends?
You may change dividend reinvestment options by calling Computershare
directly at 1-800-482-3638, instructing Computershare in writing, through
the Internet or by submitting to Computershare a new election on an
Enrollment Authorization Form. To be effective for a specific dividend, any
change must be received by Computershare before the record date for that
dividend - see Question 13 for information regarding record dates. You may
discontinue reinvestment of cash dividends at any time by calling or
writing Computershare or through the Internet. If Computershare receives
your request to discontinue dividend reinvestment on or after the record
date for a dividend, Computershare may either pay the dividend in cash or
reinvest it under the Program on the next investment date on your behalf.
If reinvested, Computershare may sell the shares purchased and send the
proceeds to you, less any service fees applicable, brokerage commissions
and other costs of sale. After processing your request to discontinue
dividend reinvestment, any dividends on any shares credited in book-entry
19
form or shares you hold in stock certificate form will be paid in cash by
check or by electronic funds transfer. To have dividends deposited directly
to your U.S bank account, see Question 10.
25. Are there any fees charged to me as a Program participant?
Please refer to the tabular summary of Program fees that follows:
Summary of Fees and Commissions
- -------------------------------------------------------------------
Transaction Fees/Commissions
- -------------------------------------------------------------------
Initial Enrollment Fee None
- -------------------------------------------------------------------
Additional Investment Purchase
(by check, money order or
automatic deductions)
Sources of Shares
-----------------
- Original Issue None
- Treasury None
- Open Market $0.05 per share
- -------------------------------------------------------------------
Reinvestment of Dividends Fee
Sources of Shares
-----------------
- Original Issue None
- Treasury None
- Open Market $0.05 per share
- -------------------------------------------------------------------
Selling Program shares $5.00 + $0.05 per
share
- -------------------------------------------------------------------
Issuance of Certificates None
- -------------------------------------------------------------------
Deposit of Certificates None
- -------------------------------------------------------------------
Transfers of Shares None
- -------------------------------------------------------------------
Returned checks or failed $20.00
automatic deductions
- -------------------------------------------------------------------
Duplicate statements $5 per year
(2 years or older). (not to exceed $25.00)
- -------------------------------------------------------------------
Reports to Participants
26. What kind of reports will I be sent?
To assist you in your record keeping, Computershare will send you the
following information (You should retain these statements for tax
purposes):
20
o For each initial cash investment, additional cash purchase, sale or
transfer that you make or receive, a statement detailing the transactions;
o For each dividend reinvested, a statement detailing all activity in your
Program account for that quarter;
o For any transactions you make after the fourth quarter dividend, an updated
cumulative statement detailing all activity in your Program account for
that year;
o You will also be sent copies of the communications sent to other
shareholders. These include KeySpan's annual reports, notices of annual
meeting and proxy statements, company updates, and income tax information
for reporting dividends paid and proceeds from the sale of Program shares.
However, if you are a beneficial owner who participates through a broker or
bank nominee, you should contact your broker or bank nominee for a
statement detailing reinvestment activity.
Federal Income Taxes
27. What are the Federal Income Tax consequences of participation in this
Program?
This is a general discussion of the U.S. federal income tax consequences of
the program. You should consult your own tax advisor with respect to the
tax consequences of participation in the program (including federal, state,
local and other tax laws and U.S. withholding laws) applicable to your
particular situation.
You will not realize gain or loss for U.S. federal income tax purposes upon
a transfer of shares to your account or the withdrawal of whole shares from
your account.
You will generally realize gain or loss upon the receipt of cash for a
fractional share credited to your account. You will also realize gain or
loss when shares are sold. The amount of gain or loss will be the
difference between the amount that you receive for the shares sold and your
tax basis in the shares, generally the amount you paid for the shares. In
order to determine the tax basis for shares in your account you should
retain all account statements.
Generally, cash dividends reinvested under the program will be taxable for
U.S. federal income tax purposes as having been received by you even though
you have not actually received them in cash. The total amount of dividends
paid to you during the year, whether or not they are reinvested, will be
reported to you and the U.S. Internal Revenue Service shortly after the
close of each year.
If you are a nonresident foreign stockholder whose dividends are subject to
U.S. federal income tax withholding, the amount of the tax to be withheld
will be deducted from the amount of dividends to determine the amount of
dividends to reinvest.
Dividends paid on shares in the accounts may be subject to "the backup
withholding" provisions of the Internal Revenue Code. If you are subject to
backup withholding, Computershare must withhold and pay over to the
Internal Revenue Service 28% from the amount of dividends, the proceeds of
the sale of a fractional share and the proceeds of any sale of whole
shares, unless you are exempt from the withholding requirements described
in Section 3406 of the Internal Revenue Code.
21
Other Information
28. What happens if KeySpan issues a stock dividend, declares a stock split or
has a rights offering?
All stock dividends or split shares distributed by us on shares credited to
your Program account and/or on shares held by you in the form of stock
certificates will be credited directly into your Program account. You will
receive a statement indicating the number of shares or dividends earned as
a result of the transactions. This includes entitlements on shares
calculated on book-entry shares and certificated shares registered in your
name. In the case of a rights offering, your rights will be based on the
full shares credited to your Program account and/or on shares held by you
in the form of stock certificates.
29. How will my shares be voted?
For any meeting of Common Stock shareholders, all participants will receive
proxy materials including a proxy card representing both the shares for
which you hold stock certificates and the whole shares credited to your
Program account. All shares will be voted as designated by you or may be
voted in person at shareholder meetings.
30. What are not the responsibilities of KeySpan and Computershare under the
Program?
In administering the Program, KeySpan and Computershare will not be liable
for any of the following acts done in good faith:
o Any claim of liability with respect to the shares of Common Stock of a
deceased participant's Program account prior to receipt in writing of
instructions relating to the disposition of such shares;
o With respect to the prices at which shares of Common Stock are purchased or
sold for the participant's Program account and the times when such
purchases or sales are made;
o With respect to any fluctuation in the market value before or after any
purchase or sale of shares of Common Stock.
Holding Common Stock under the Program is no different than holding shares
on your own. Neither KeySpan nor Computershare assure you of a profit or
protect you from any losses sustained on the purchase of Common Stock under
the Program.
31. May the Program be changed or discontinued?
We reserve the right to amend, suspend, discontinue or modify the Program
at any time without the approval of participants. Notice of our
determination to suspend, discontinue or modify the Program will be given
to all Program participants as soon as practicable after such determination
is made. Changes or discontinuation will not affect your rights as a
shareholder in any way and any book- entry shares you own will continue to
be credited to your Program account unless you specifically request
otherwise.
22
32. Where can I find more information on KeySpan?
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any of these documents at
the SEC's public reference room at 100 F Street, N.E., Washington, D.C.
20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public on the
SEC's web site at www.sec.gov.
KeySpan is subject to the reporting requirements of the Securities Act of
1934. In accordance to this Act, the Company files reports and other
information with the SEC.
You may also request copies of our 10-K, 10-Q, annual reports and proxy
statements directly from KeySpan by:
Mail: Telephone: Internet:
KeySpan Corporation 718-403-3196 www.keyspanenergy.com
---------------------
Investor Relations (Investor Relations Section)
One MetroTech Center, 22nd Floor
Brooklyn, NY 11201
23
USE OF PROCEEDS
At present, Program shares are purchased from the open market. The Company
does not receive any of the proceeds from the sale of shares when Program shares
are purchased on the open market. The Program also provides for the issuance of
Common Stock directly from the Company either from shares held in the Company's
treasury or as newly issued shares. To the extent that shares of Common Stock
are purchased directly from the Company, the net proceeds are expected to be
used for general corporate purposes. The Company cannot estimate the number of
shares of Common Stock that the Company will sell through the Program or the
prices at which such shares will be sold.
PLAN OF DISTRIBUTION
The shares of Common Stock will be offered directly to Program participants
without underwriters as described in this prospectus.
LEGAL OPINIONS
The validity of the Common Stock offered by us in this prospectus will be
passed upon for us by John J. Bishar, Jr., in his capacity as Executive Vice
President and General Counsel of KeySpan Corporation. Mr. Bishar is the
beneficial owner of or has the option to acquire approximately 142,236 shares of
our Common Stock.
EXPERTS
The financial statements, the related financial statement schedules, and
management's report on the effectiveness of internal control over financial
reporting incorporated in this prospectus by reference from the Company's Annual
Report on Form 10-K have been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their reports, which are
incorporated herein by reference, (which reports (1) express an unqualified
opinion on the financial statements and financial statement schedules and
include an explanatory paragraph related to the adoption of Statement of
Financial Accounting Standards (SFAS) No.142, "Goodwill and Other Intangible
Assets" as discussed in Note 1(G), the adoption of SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure" as discussed in Note 1(N),
the adoption of SFAS No. 143 "Accounting for Asset Retirement Obligations" as
discussed in Note 1(P) and the adoption of Financial Accounting Standards Board
Interpretation No. 46, "Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51" as discussed in Note 1(P), (2) express an
unqualified opinion on management's assessment regarding the effectiveness of
internal control over financial reporting, and (3) express an unqualified
opinion on the effectiveness of internal control over financial reporting), and
have been so incorporated in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
INCORPORATION OF DOCUMENTS BY REFERENCE
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any of these documents at the
SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings are also available to the public on the SEC's
web site at www.sec.gov.
The SEC allows us to "incorporate by reference" the information that we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
24
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until all of the securities are sold.
o Our Annual Report on Form 10-K for the fiscal year ended December 31, 2004;
o Our Quarterly Report on Form 10-Q for the quarterly periods ended March 31,
2005, June 30, 2005 and September 30, 2005;
o Our Current Reports on Form 8-K dated February 7, 2006, January 24, 2006,
January 10, 2006, December 14, 2005, November 8, 2005, November 4, 2005,
November 1, 2005, August 4, 2005, June 30, 2005, June 29, 2005, May 27,
2005, May 20, 2005, May 16, 2005, May 2, 2005, April 29, 2005, April 1,
2005, March 30, 2005, March 24, 2005, March 16, 2005 February 25, 2005,
February 16, 2005, February 1, 2005, January 31, 2005 and January 4, 2005.
o Our Form 8-A filed May 26, 1998 pursuant to Section 12(b) of the Exchange
Act which provides a description of the Company's Common Stock.
You may request a copy of these filings, at no cost, over the Internet at
our website at www.keyspanenergy.com or by writing or calling us at:
Investor Relations
KeySpan Corporation
One MetroTech Center, 22nd Floor
Brooklyn, New York, 11201
(718) 403-3196
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information.
We also undertake to provide without charge to each person to whom a copy
of this prospectus has been delivered, upon the written or oral request of any
such person, a copy of any or all of the documents and exhibits referred to
above which have been or may be incorporated by reference in this prospectus.
Exhibits not specifically incorporated herein by reference will be furnished
upon payment of 25 cents per page. Requests for such copies should be directed
to Investor Relations, KeySpan Corporation, One MetroTech Center, 22nd Floor,
Brooklyn, New York 11201 or by calling Investor Relations at (718) 403-3196.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC Registration Fee..................................................$19,376.10
Accounting Fees.......................................................$20,000.00
Miscellaneous Expenses................................................$25,000.00
Total Expenses........................................................$64,376.10
Item 15. Indemnification of Directors and Officers.
The New York Business Corporation Law ("BCL"), Article 7, Sections 721-726
provide for the indemnification and advancement of expenses to officers and
directors. Section 721 provides that indemnification and advancement pursuant to
the BCL are not exclusive of any other rights an officer or director may be
entitled to, provided that no indemnification may be made to or on behalf of any
director or officer if a judgment or other final adjudication adverse to the
director or officer establishes that his acts were committed in bad faith or
were the result of active and deliberate dishonesty and were material to the
cause of action so adjudicated, or that the director or officer personally
gained a financial profit or other advantage to which he or she was not legally
entitled.
Section 722 of the BCL provides that a corporation may indemnify an officer
or director, in the case of third party actions, against judgments, fines,
amounts paid in settlement and reasonable expenses and, in the case of
derivative actions, against amounts paid in settlement and reasonable expenses,
provided that the director or officer acted in good faith, for a purpose which
he or she reasonably believed to be in the best interests of the corporation
and, in the case of criminal actions, had no reasonable cause to believe his
conduct was unlawful. In addition, statutory indemnification may not be provided
in derivative actions (i) which are settled or otherwise disposed of or (ii) in
which the director or officer is adjudged liable to the corporation, unless and
only to the extent a court determines that the person is fairly and reasonably
entitled to indemnity.
Section 723 of the BCL provides that statutory indemnification is mandatory
where the director or officer has been successful, on the merits or otherwise,
in the defense of a civil or criminal action or proceeding. Section 723 also
provides that expenses of defending a civil or criminal action or proceeding may
be advanced by the corporation upon receipt of an undertaking to repay them if
and to the extent the recipient is ultimately found not to be entitled to
indemnification. Section 725 provides for repayment of such expenses when the
recipient is ultimately found not to be entitled to indemnification. Section 726
provides that a corporation may obtain indemnification insurance indemnifying
itself and its directors and officers. The registrant has in effect insurance
policies providing both directors and officers liability coverage and corporate
reimbursement coverage.
Section 402(b) of the BCL provides that a corporation may include in its
certificate of incorporation a provision limiting or eliminating, with certain
exceptions, the personal liability of directors to a corporation or its
shareholders for damages for any breach of duty in such capacity. The
26
certificate of incorporation of the registrant contains provisions eliminating
the personal liability of directors or officers to the extent permitted by New
York law.
The registrant's certificate of incorporation provides generally that it
shall, except to the extent expressly prohibited by the BCL, indemnify each of
its officers and directors made or threatened to be made a party to any action,
suit or proceeding, or appeal thereof, whether civil or criminal by reason of
the fact that such person is or was an officer or director against all expense,
liability and loss (including, but not limited to all attorneys' fees,
judgments, fines, pension plan taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith. The certificate of incorporation further provides for advancement and
reimbursement of such expenses incurred by an officer or director in defending
any action or proceeding in advance of the final disposition thereof upon
receipt of an undertaking by such person to repay such amount if, and to the
extent that, such person is ultimately found not to be entitled to
indemnification.
Item 16. List of Exhibits.
See Exhibit Index
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, That:
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration
Statement is on Form S-3, Form S-8, or Form F-3 and the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to
27
the Securities and Exchange Commission by the Issuer pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for the purpose of determining liability under the Securities Act
of 1933 to any purchaser:
i. If the registrant is relying on Rule 430B (230.430B of this chapter):
A. Each prospectus filed by the registrant pursuant to Rule
424(b)(3)shall be deemed to be part of the registration statement
as of the date the filed prospectus was deemed part of and
included in the registration statement; and
B. Each prospectus required to be filed pursuant to Rule 424(b)(2),
(b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x) for the purpose of providing the
information required by section 10(a) of the Securities Act of
1933 shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the
first contract of sale of securities in the offering described in
the prospectus. As provided in Rule 430B, for liability purposes
of the issuer and any person that is at that date an underwriter,
such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the
registration statement to which that prospectus relates, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof. Provided, however, that
no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made
in any such document immediately prior to such effective date.
(5) That, for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser by means
of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
28
ii. Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
iii. The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
iv. Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
such registrant pursuant to the provisions referred to in Item 15 of this
registration statement, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by such registrants of expenses incurred or paid by a director,
officer or controlling person of such registrants in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
29
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, KeySpan Corporation
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3/A and has duly caused this registration
statement amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Brooklyn, State of New York, on the 14th day of
February, 2006.
KEYSPAN CORPORATION
Issuer of Securities
(Registrant)
By: /s/ Gerald Luterman
-------------------
Gerald Luterman
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated above.
Signatures and Titles:
/s/ Robert B. Catell
- --------------------
Robert B. Catell
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
/s/ Gerald Luterman
- -------------------
Gerald Luterman
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ Theresa A. Balog
- --------------------
Theresa A. Balog
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
*
- ---------------------
Andrea S. Christensen
Director
30
*
- ---------------------
Robert J. Fani
President, Chief Operating Officer and Director
*
- ---------------------
Alan H. Fishman
Director
*
- ---------------------
James R. Jones
Director
*
- ---------------------
James L. Larocca
Director
*
- ---------------------
Gloria C. Larson
Director
*
- ---------------------
Stephen W. McKessy
Director
*
- ---------------------
Edward D. Miller
Director
*
- ---------------------
Vikki L. Pryor
Director
* Such signature has been affixed pursuant to a power of attorney previously
filed as an exhibit.
31
EXHIBIT INDEX
Exhibit Number Description of Exhibits
- -------------- -----------------------
5* Opinion of John J. Bishar, Jr. as to the legality of the
Common Stock to be issued
23-a Consent of Deloitte & Touche LLP, Independent Registered
Public Accounting Firm
23-b* Consent of John J. Bishar, Jr. (contained in his Opinion
filed as Exhibit)
24-a* Powers of Attorney
24-b* Certified resolution of the Board of Directors of KeySpan
authorizing signatures pursuant to power of attorney
- -----------------
* Previously filed.
32