AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 3, 1995
REGISTRATION NO. 33-63505
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WESTERN RESOURCES CAPITAL I WESTERN RESOURCES, INC.
WESTERN RESOURCES CAPITAL II (Exact name of registrant as
(Exact name of registrants as specified in its charter)
specified in their Trust Agreements)
DELAWARE KANSAS
(State or other jurisdiction of incorporation or organization)
(TO BE APPLIED FOR) 48-0290150
(I.R.S. Employer Identification Nos.)
818 KANSAS AVENUE
TOPEKA, KANSAS 66612
(913) 575-6300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
STEVEN L. KITCHEN JOHN K. ROSENBERG, ESQ.
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
WESTERN RESOURCES, INC. WESTERN RESOURCES, INC.
TOPEKA, KANSAS 66612 TOPEKA, KANSAS 66612
(913) 575-6300 (913) 575-6300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after
the Registration Statement becomes effective, as determined by market conditions
and other factors.
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS TO WHICH IT
RELATES SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 3, 1995
PRELIMINARY PROSPECTUS SUPPLEMENT TO PRELIMINARY PROSPECTUS DATED NOVEMBER 3,
1995
[WESTERN]
PREFERRED SECURITIES
WESTERN RESOURCES CAPITAL I
% Cumulative Quarterly Income Preferred Securities, Series A ("QUIPS"-SM-)*
(Liquidation Amount $25 per Preferred Security)
guaranteed to the extent that the Series A Issuer
has funds as set forth herein by
WESTERN RESOURCES, INC.
---------
The % Cumulative Quarterly Income Preferred Securities, Series A (the
"Series A Preferred Securities") offered hereby represent undivided preferred
beneficial interests in Western Resources Capital I, a trust formed under the
laws of the State of Delaware (the "Series A Issuer" or the "Series A Trust").
The preferred interests represented by the Series A Preferred Securities will
have a preference under certain circumstances with respect to cash distributions
and amounts payable on liquidation, redemption or otherwise over the trust
interests represented by the Series A Common Securities (as defined) issued by
the Series A Issuer. See "Description of the Preferred Securities --
Subordination of Common Securities" in the accompanying Prospectus.
Western Resources, Inc., a Kansas corporation ("Western Resources" or the
"Company"), is the owner of the trust interests represented by the common
securities (the "Series A Common Securities") issued by the Series A Issuer. The
Series A Issuer exists for the sole purpose of issuing its trust interests and
investing the proceeds thereof in the % Deferrable Interest Subordinated
Debentures, Series A Due , (the "Series A Debentures") issued by
Western Resources.
(CONTINUED ON NEXT PAGE)
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SEE "RISK FACTORS" BEGINNING ON PAGE S-5 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES A PREFERRED SECURITIES, INCLUDING THE
PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT ON THE SERIES A
PREFERRED SECURITIES AND THE SERIES A DEBENTURES MAY BE DEFERRED AND THE RELATED
FEDERAL INCOME TAX CONSEQUENCES.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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PROCEEDS TO THE
INITIAL PUBLIC UNDERWRITING SERIES A
OFFERING PRICE COMMISSION(1) ISSUER(2)(3)
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Per Series A Preferred Security.............................. $ (2) $
Total........................................................ $ (2) $
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(1) The Series A Issuer and Western Resources have agreed to indemnify the
several Underwriters (as defined herein) against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
(2) In view of the fact that the proceeds of the sale of the Series A Preferred
Securities will be used to purchase the Series A Debentures, the
Underwriting Agreement provides that Western Resources will pay to the
Underwriters, as compensation for their arranging the investment therein of
such proceeds, $ per Series A Preferred Security (or $ in the
aggregate); or, in the case of certain institutions, $ per Series A
Preferred Security.
(3) Expenses of the offering, which are payable by Western Resources, are
estimated to be $ .
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The Series A Preferred Securities offered hereby are offered severally by
the Underwriters, as specified herein, and subject to receipt and acceptance by
them and subject to their right to reject any order in whole or in part. It is
expected that delivery of the Series A Preferred Securities will be made only in
book-entry form through the facilities of DTC on or about , 1995.
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* QUIPS-SM- is a servicemark of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO. SMITH BARNEY INC.
DILLON, READ & CO. INC.
PRUDENTIAL SECURITIES INCORPORATED
EDWARD D. JONES & CO.
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The date of this Prospectus Supplement is , 1995.
(CONTINUED FROM PREVIOUS PAGE)
Holders of the Series A Preferred Securities will be entitled to receive
cumulative cash distributions accruing from the date of original issuance and
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing , 199 , at the rate of % per annum.
Western Resources has the right to defer interest payments on the Series A
Debentures by extending the interest payment period thereon at any time for up
to 20 consecutive quarters (each an "Extension Period"). If interest payments
are so deferred, distributions on the Series A Preferred Securities will also be
deferred. During an Extension Period, distributions, as well as interest thereon
to the extent permitted by law, will continue to accrue, and holders of Series A
Preferred Securities will be required to accrue interest income for United
States Federal income tax purposes. See "Certain Terms of the Series A
Debentures -- Option to Extend Interest Payment Period" and "United States
Taxation -- Potential Extension of Interest Payment Period and Original Issue
Discount."
The payment of distributions, out of moneys held by the Series A Issuer, and
payments upon liquidation of the Series A Issuer or the redemption of Series A
Preferred Securities, as set forth below, are guaranteed to the extent set forth
herein by Western Resources (the "Series A Guarantee"). See "Certain Terms of
the Series A Guarantee." If Western Resources fails to make interest payments on
the Series A Debentures held by the Series A Issuer, the Series A Issuer will
have insufficient funds to pay distributions on the Series A Preferred
Securities. The Series A Guarantee does not cover payment of distributions when
the Series A Issuer does not have sufficient funds to pay such distributions. In
such event, the remedy of a holder of Series A Preferred Securities is to
enforce the rights of the Series A Issuer under the Series A Debentures held by
the Series A Issuer. Western Resources' obligations under the Series A Guarantee
are subordinate and junior in right of payment to all other liabilities of
Western Resources except trade credit and any liabilities that may be made pari
passu with or subordinate to the Series A Guarantee expressly by their terms
("Senior Indebtedness"). Wilmington Trust Company is the Property Trustee of the
Series A Issuer and the Guarantee Trustee of the Company.
The Series A Preferred Securities are subject to mandatory redemption upon
repayment of the Series A Debentures at maturity or their earlier redemption, in
whole or in part. See "Description of the Preferred Securities -- Redemption" in
the accompanying Prospectus. Western Resources will have the option at any time
on or after , to redeem, in whole or in part, the Series A
Debentures, and will also have the right at any time, upon occurrence of a
Special Event (as defined herein), to redeem, in whole but not in part, the
Series A Debentures. See "Description of the Debentures -- Optional Redemption"
in the accompanying Prospectus.
The Series A Debentures are subordinate and junior in right of payment to
all Senior Indebtedness of Western Resources. As of September 30, 1995, Western
Resources had approximately $1.8 billion principal amount of Senior Indebtedness
outstanding. The terms of the Series A Debentures do not limit Western
Resources' ability to incur additional Senior Indebtedness. See "Description of
the Debentures -- Subordination" in the accompanying Prospectus.
In the event of the liquidation of the Series A Issuer, the holders of the
Series A Preferred Securities will be entitled to receive for each Preferred
Security a liquidation preference of $25 (the "Liquidation Amount") plus accrued
and unpaid distributions thereon to the date of payment and interest thereon, to
the extent permitted by law, subject to certain limitations. See "Description of
the Preferred Securities -- Liquidation Distribution Upon Dissolution" in the
accompanying Prospectus.
Application has been made to list the Series A Preferred Securities on the
New York Stock Exchange.
The Series A Preferred Securities will be represented by a global
certificate registered in the name of The Depository Trust Company ("DTC") or
its nominee. Beneficial interests in the Series A Preferred Securities will be
shown on, and transfers thereof will be effected only through, records
maintained by Participants (as defined herein) in DTC. Except as described
herein, Series A Preferred Securities in certificated form will not be issued in
exchange for the global certificate. See "Description of the Preferred
Securities -- Book-Entry-Only Issuance -- The Depository Trust Company" in the
accompanying Prospectus.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A
PREFERRED SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK
STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
PROSPECTUS SUMMARY
The following summary information is qualified in its entirety by the
detailed information and financial statements incorporated herein by reference.
THE OFFERING
Securities Offered................ % Cumulative Quarterly Income Preferred Securities,
Series A
Distribution Payment Dates........ March 31, June 30, September 30 and December 31,
commencing , 199 , subject to deferral as
described herein
Redemption........................ At the option of Western Resources at $25 per Preferred
Security, in whole or in part, on or after ,
or, in whole, but not in part, upon the occurrence of a
Special Event (as defined herein).
Use of Proceeds................... Proceeds from this offering will be used by Western
Resources for the repayment of certain of its short-term
debt and for general corporate purposes.
WESTERN RESOURCES, INC.
Principal Business................ Supplying electric and natural gas utility service
Utility Service Area.............. Kansas (electric and gas utility service) and Oklahoma
(gas utility service)
Approximate Customers during Electric: 594,000
1994.............................. Gas: 643,000
S-3
WESTERN RESOURCES, INC.
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
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1990 1991(1) 1992(2) 1993 1994(3) 1994 1995
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INCOME STATEMENT DATA
Revenues................. $1,149,755 $1,162,178 $1,556,248 $1,909,359 $1,617,943 $1,258,717 $1,174,786
Operating Income......... 131,990 129,621 239,169 292,063 269,546 211,565 215,975
Net Income............... 79,619 89,645 127,884 177,370 187,447 154,059 135,196
Earnings Applicable to
Common Stock............ 77,875 83,268 115,133 163,864 174,029 143,995 125,132
Average Common Shares
Outstanding............. 34,566,170 34,566,170 52,271,932 59,294,091 61,617,873 61,617,873 61,960,602
Earnings Per Average
Common Share............ $2.25 $2.41 $2.20 $2.76 $2.82 $2.34 $2.02
Ratios of Earnings to
Fixed Charges........... 2.74 2.98 2.02 2.36 2.65
Ratios of Earnings to
Combined Fixed Charges
and Preferred and
Preference Dividend
Requirements............ 2.64 2.61 1.84 2.14 2.37
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(1) Includes a special one-time dividend of $.18 per share paid on February 28,
1991. Includes cumulative effect to January 1, 1991 of a change in revenue
recognition resulting in a $17.36 million ($.50 per share) increase.
(2) After giving effect to the acquisition of Kansas Gas and Electric Company,
effective from March 31, 1992.
(3) After giving effect to the sales of Western Resources' Missouri gas
properties, effective from January 31, 1994 and February 28, 1994.
UNAUDITED
AS OF SEPTEMBER 30, 1995
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ACTUAL AS ADJUSTED
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AMOUNT PERCENTAGE AMOUNT PERCENTAGE
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(DOLLARS IN THOUSANDS)
SUMMARY OF CAPITALIZATION
Common Stock Equity..................... $ 1,532,267 50.3% $ 1,532,267 48.7%
Cumulative Preferred Stock Not Subject
to Mandatory Redemption................ 24,858 0.8 24,858 0.8
Preference Stock Subject to Mandatory
Redemption............................. 150,000 4.9 150,000 4.8
Company-obligated Mandatorily Redeemable
Preferred Securities of Trust
Subsidiary(1).......................... -- 100,000 3.2
Long-term Debt:
First Mortgage Bonds.................. 841,000 841,000
Pollution Control Bonds............... 521,817 521,817
Less:
Unamortized Premium and Discount
(Net)............................ 5,619 5,619
Long-term Debt Due Within One
Year............................. 16,000 16,000
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Total Long-term Debt............ 1,341,198 44.0% 1,341,198 42.5%
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Total Capitalization.................. $ 3,048,323 100.0% $ 3,148,323 100.0%
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Current Liabilities:
Long-term Debt........................ $ 16,000 $ 16,000
Short-term Debt....................... $ 327,615 $ 231,430
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(1) As described herein, the assets of the Series A Issuer will include $100
million of % Series A Debentures of Western Resources which will
constitute approximately 97% of the total assets of the Series A Issuer.
S-4
RISK FACTORS
PROSPECTIVE PURCHASERS OF SERIES A PREFERRED SECURITIES SHOULD CAREFULLY
REVIEW THE INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS AND SHOULD PARTICULARLY CONSIDER THE FOLLOWING MATTERS:
SUBORDINATION OF SERIES A GUARANTEE AND SERIES A DEBENTURES. Western
Resources' obligations under the Series A Guarantee and under the Series A
Debentures are subordinate and junior in right of payment to all Senior
Indebtedness other than indebtedness that may be made pari passu with or
subordinate to the Series A Guarantee and the Series A Debentures expressly by
their terms. As of September 30, 1995, Western Resources had approximately $1.8
billion principal amount of indebtedness for borrowed money and capitalized
lease obligations constituting Senior Indebtedness outstanding on a consolidated
basis. There are no terms of the Series A Preferred Securities, the Series A
Debentures or the Series A Guarantee that limit Western Resources' ability to
incur additional Senior Indebtedness. See "Description of the Guarantees --
Status of the Guarantees" and "Description of the Debentures -- Subordination,"
each as set forth in the accompanying Prospectus.
The ability of the Series A Issuer to pay amounts due on the Series A
Preferred Securities is solely dependent upon Western Resources making payments
on the Series A Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES. Western
Resources has the right under the Indenture (as defined herein) to extend, from
time to time, the interest payment period on the Series A Debentures for a
period not exceeding 20 consecutive quarters. Upon the termination of any such
extended interest payment period and the payment of all amounts then due,
Western Resources may select a new extended interest payment period, subject to
the requirements described herein. During any such extended interest payment
period, quarterly distributions on the Series A Preferred Securities would be
deferred (but would continue to accrue with additional distributions thereon to
the extent permitted by law) by the Series A Issuer. In the event that Western
Resources exercises this right, during such period it may not declare or pay
dividends or distributions (other than dividends or distributions payable in
common stock of Western Resources or other securities ranking junior in right of
payment to the Series A Debentures) on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of its capital stock or any security
ranking pari passu with or junior in right of payment to the Series A
Debentures, or make any guarantee payment with respect to the foregoing (other
than pro rata payments under the Guarantees) or repurchase, or cause any of its
subsidiaries to repurchase, any security of Western Resources ranking pari passu
with or junior in right of payment to the Series A Debentures (except for
payments made on any series of Debentures upon the stated maturity of such
Debentures); provided that Western Resources may redeem, purchase, acquire or
make a liquidation payment with respect to any of its capital stock or any
security ranking pari passu with or junior in right of payment to the Series A
Debentures, make any guarantee payment with respect to the foregoing or
repurchase, or cause any of its subsidiaries to repurchase, any security of
Western Resources ranking pari passu with or junior in right of payment to the
Series A Debentures with securities (or the proceeds from the issuance of
securities) having no higher ranking than the capital stock or the other
securities which are to be redeemed, purchased, acquired, with respect to which
a liquidation payment is to be made, to which a guarantee payment is to be made
with respect to the foregoing or which are to be repurchased. Prior to the
termination of any such extended interest payment period, Western Resources may
further extend the interest payment period, provided that such extended interest
payment period, together with all previous and further extensions thereof, may
not exceed 20 consecutive quarters and that such extended interest payment
period may not extend beyond the maturity or redemption date of the Series A
Debentures. Upon the termination of any extended interest payment period and the
payment of all amounts then due, Western Resources may select a new extended
interest payment period, subject to the foregoing requirements. If Western
Resources should determine to exercise its extension right in the future, the
market price of the Series A Preferred Securities is likely to be affected. The
Series A Issuer and Western Resources believe that such an extension of an
interest payment period
S-5
on the Series A Debentures is unlikely to occur. See "Certain Terms of the
Series A Preferred Securities -- Distributions" and "Certain Terms of the Series
A Debentures -- Option to Extend Interest Payment Period."
Should an interest payment period be extended, Series A Preferred Securities
holders will continue to recognize interest income for United States Federal
income tax purposes. As a result, such holders will be required to include
accruing interest in gross income for United States Federal income tax purposes
in advance of the actual receipt of such interest. Furthermore, such holders
will not receive the related actual interest payments from the Series A Issuer
if they dispose of their Series A Preferred Securities prior to the record date
for payment of distributions. See "United States Taxation -- Potential Extension
of Interest Payment Period and Original Issue Discount."
RIGHTS UNDER THE SERIES A GUARANTEE. The Series A Guarantee will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Wilmington Trust Company will act as indenture trustee
under the Series A Guarantee for the purposes of compliance with the Trust
Indenture Act (the "Guarantee Trustee"). The Guarantee Trustee will hold the
Series A Guarantee for the benefit of the holders of the Series A Preferred
Securities and will also be the trustee for the Series A Debentures and the
Property Trustee (as defined herein).
The Series A Guarantee is limited to a guarantee, on a subordinated basis,
to the holders of the Series A Preferred Securities, of the payment (but not the
collection) of (i) any accrued and unpaid distributions required to be paid on
the Series A Preferred Securities, if and only to the extent that the Series A
Issuer has funds sufficient to make payment therefor, (ii) the Redemption Price
(as defined herein), including all accrued and unpaid distributions, with
respect to Series A Preferred Securities called for redemption by the Series A
Issuer, if and only to the extent that the Series A Issuer has funds sufficient
to make payment therefor and (iii) upon a voluntary or involuntary dissolution,
winding up or termination of the Series A Issuer (other than in connection with
a redemption of all of the Series A Preferred Securities), the lesser of (a) the
aggregate Liquidation Amount and all accrued and unpaid distributions on the
Series A Preferred Securities to the date of payment, to the extent the Series A
Issuer has funds sufficient to make such payment, and (b) the amount of assets
of the Series A Issuer remaining available for distribution to holders of the
Series A Preferred Securities in liquidation of the Series A Issuer. The holders
of a majority in aggregate Liquidation Amount of the Series A Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee or to direct the
exercise of any trust or power conferred upon the Guarantee Trustee under the
Series A Guarantee. If the Guarantee Trustee fails to enforce the Series A
Guarantee, any holder of Series A Preferred Securities may institute a legal
proceeding directly against Western Resources to enforce such holder's rights
under the Series A Guarantee without first instituting a legal proceeding
against the Series A Issuer, the Guarantee Trustee or any other person or
entity. If Western Resources were to default on its obligations under the Series
A Debentures, the Series A Issuer would lack available funds for the payment of
distributions or amounts payable on redemption of the Series A Preferred
Securities or otherwise, and in such event holders of the Series A Preferred
Securities would not be able to rely upon the Series A Guarantee for payment of
such amounts. In such event, if both the Debenture Trustee and the Series A
Issuer, as the holder of the Series A Debentures, fail to enforce the rights of
the Series A Issuer under the Series A Debentures, the holders of at least 25%
in aggregate Liquidation Amount of the Series A Preferred Securities then
outstanding shall have the right to enforce the rights of the Series A Issuer
under the Series A Debentures. See "Description of the Guarantees -- Status of
the Guarantees" and "Description of the Debentures -- Subordination," each as
set forth in the accompanying Prospectus.
SPECIAL EVENT REDEMPTION. Upon the occurrence of a Special Event (as
defined herein), Western Resources has the right to redeem the Series A
Debentures, in whole but not in part, in which event the Series A Issuer will
redeem the Series A Preferred Securities. See "Certain Terms of the Series A
Preferred Securities -- Redemption" and "-- Special Event Redemption or
Distribution."
S-6
LIMITED VOTING RIGHTS. Holders of Series A Preferred Securities will have
limited voting rights, and, except upon the occurrence of an Event of Default
(as defined herein) under the Series A Trust Agreement, will not be entitled to
vote to appoint, remove or replace the Property Trustee or the Administrative
Trustees (as defined herein) or to increase or decrease the number of the
Administrative Trustees. Such voting rights are vested exclusively in Western
Resources, as the Depositor of the Series A Issuer, unless and until an Event of
Default has occurred and is continuing. See "Description of the Preferred
Securities -- Events of Default; Notice" in the accompanying Prospectus.
TRADING CHARACTERISTICS OF SERIES A PREFERRED SECURITIES. Application has
been made to list the Series A Preferred Securities on the New York Stock
Exchange. If approved for listing, the Series A Preferred Securities are
expected to trade at a price that takes into account the value, if any, of
accrued and unpaid distributions; thus, purchasers will not pay and sellers will
not receive any accrued and unpaid interest with respect to their undivided
interests in Series A Debentures owned through the Series A Preferred Securities
that is not included in the trading price of the Series A Preferred Securities.
However, interest on the Series A Debentures will be included in the gross
income of U.S. Holders (as defined herein) of Series A Preferred Securities as
it accrues, rather than when it is paid. See "United States Taxation -- Income
from Series A Preferred Securities" and "-- Disposition of Series A Preferred
Securities."
Because the Series A Preferred Securities pay a dividend at a fixed rate
based upon the fixed interest rate payable on the Series A Debentures, the
trading price of the Series A Preferred Securities may decline if interest rates
rise.
HOLDING COMPANY STRUCTURE. A significant portion of the operations of
Western Resources are conducted through its subsidiaries, principally Kansas Gas
and Electric Company ("KG&E"). Except to the extent that Western Resources may
itself be a creditor with recognized claims against its subsidiaries, claims of
the creditors of such subsidiaries will have priority with respect to the assets
and earnings of such subsidiaries over the claims of creditors of Western
Resources, including claims under the Series A Debentures and the Series A
Guarantee, even though such subsidiary obligations do not constitute Senior
Indebtedness. The liabilities of Western Resources subsidiaries aggregated
approximately $1.3 billion, and the assets of such subsidiaries were
approximately $3.4 billion as of September 30, 1995.
In addition, in the event of a default on Western Resources debt or an
insolvency, liquidation or other reorganization of Western Resources, creditors
will have no right to proceed against the assets of its subsidiaries or to cause
their liquidation under Federal or state bankruptcy laws.
WESTERN RESOURCES CAPITAL I
Western Resources Capital I is a statutory business trust formed under the
Delaware Business Trust Act pursuant to (i) a Trust Agreement executed by
Western Resources, as Depositor of the Series A Issuer, and the Property Trustee
and (ii) the filing of a Certificate of Trust with the Delaware Secretary of
State on October 12, 1995. Such Trust Agreement will be amended and restated in
its entirety (as so amended and restated, the "Series A Trust Agreement")
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus Supplement is a part. The Series A Trust Agreement will be
qualified as an indenture under the Trust Indenture Act. The Series A Issuer
exists for the exclusive purposes of (i) issuing the Series A Preferred
Securities and the Series A Common Securities representing trust interests in
the Series A Issuer, (ii) purchasing the Series A Debentures with the Series A
Common Securities and the proceeds from the sale of the Series A Preferred
Securities and (iii) engaging only in those other activities necessary or
incidental thereto. All of the Series A Common Securities will be owned by
Western Resources. Western Resources will covenant not to transfer ownership of
the Series A Common Securities to any person other than an Affiliate of Western
Resources or a successor of Western Resources as permitted under the Indenture;
provided that no such transfer shall result in (x) the Series A Issuer being
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended, or (y) the Series A Issuer not being
S-7
taxed as a grantor trust for United States Federal income tax purposes. The
Series A Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the Series A Preferred Securities, except that upon the
occurrence and continuance of an Event of Default under the Series A Trust
Agreement, the rights of the holders of the Series A Common Securities to
payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinate and junior to the rights of the holders of the
Series A Preferred Securities. Western Resources will acquire Series A Common
Securities having an aggregate Liquidation Amount equal to 3% of the total
capital of the Series A Issuer. The Series A Issuer will terminate on
, 2025 unless earlier terminated as provided in the Series A Trust
Agreement. The Series A Issuer's business and affairs will be conducted by the
Property Trustee and the Administrative Trustees. Western Resources, as
Depositor of the Series A Issuer, or, if an Event of Default has occurred and is
continuing, the holders of at least a majority in the aggregate Liquidation
Amount of the then outstanding Series A Trust Securities (as defined herein),
will be entitled to appoint, remove or replace the Trustees (as defined herein)
of the Series A Issuer.
The duties and obligations of the Trustees shall be governed by the Series A
Trust Agreement. Steven L. Kitchen, James A. Martin and John K. Rosenberg, all
officers of Western Resources, will be appointed as Administrative Trustees
pursuant to the terms of the Series A Trust Agreement. Under the Series A Trust
Agreement, the Administrative Trustees will have certain duties and powers
including, but not limited to, the delivery of certain notices to the holders of
the Series A Preferred Securities, the appointment of the Paying Agent (as
defined in the accompanying Prospectus) and the Registrar (as defined in the
accompanying Prospectus) and the registering of transfers of the Series A
Preferred Securities. Under the Series A Trust Agreement, Wilmington Trust
Company, as the Property Trustee, will have certain duties and powers including,
but not limited to, holding legal title to the Series A Debentures on behalf of
the Series A Trust, the collection of payments in respect of the Series A
Debentures, maintenance of the Payment Account (as defined in the Series A Trust
Agreement), the sending of default notices with respect to the Series A
Preferred Securities and the distribution of the assets of the Series A Trust in
the event of a winding up of the Series A Trust. See "Description of the
Preferred Securities" in the accompanying Prospectus.
Western Resources has agreed to pay all fees and expenses related to the
Series A Issuer and the offering of the Series A Preferred Securities.
WESTERN RESOURCES, INC.
GENERAL
Western Resources is a combination electric and natural gas public utility
engaged in the generation, transmission, distribution and sale of electric
energy in Kansas and the purchase, distribution, transportation and sale of
natural gas in Kansas and Oklahoma. The Company was incorporated under the laws
of the State of Kansas in 1924.
The Company conducts its non-regulated business through Astra Resources,
Inc., Astra Power, Inc., Astra Services, Inc. and Mid Continent Market Center,
Inc. These businesses include natural gas compression, transportation, storage,
marketing, processing, gathering services and electric power marketing, and
investments in energy and technology related businesses. The Company's principal
executive offices are located at 818 Kansas Avenue, Topeka, Kansas 66612 and its
telephone number is (913) 575-6300.
RECENT DEVELOPMENTS
As disclosed in the Company's Form 10-Q for the quarter ended September 30,
1995 in Note 1 of the Notes to Consolidated Financial Statements included
therein, the Company has acquired corporate owned life insurance policies
(COLI). A portion of the net income generated by COLI policies purchased in 1992
and 1993 is used to offset the costs of post-retirement and post-employment
benefits offered to certain current and former employees. A significant portion
of such income relates to the tax deduction currently taken for interest
incurred on contract borrowings under COLI policies. The amount of the
S-8
interest deduction used to offset these benefits costs for the nine months ended
September 30, 1995 and the years ended December 31, 1994 and 1993, were $4.7
million, $5.8 million and $4.5 million, respectively. The U.S. Congress is
considering legislation which, if enacted, may substantially reduce or eliminate
this deduction. In addition, Western Resources may be required to reflect on its
books on a prospective basis the accrued costs of post-employment and
post-retirement benefits. As of September 30, 1995, approximately $32 million of
post-employment and post-retirement benefits costs had been accrued and
deferred. The Company's non-cash cost of providing these post-employment and
post-retirement benefits on an annual basis approximates $10 million. If the
legislation is enacted, the Company currently believes that it would be allowed
to recover these costs through rates.
COVERAGE RATIOS
The following table sets forth the ratios of earnings to fixed charges of
Western Resources and its subsidiaries for each of the years 1990 through 1994
and for the twelve months ended September 30, 1995.(1)
UNAUDITED
YEAR ENDED DECEMBER 31, TWELVE MONTHS
- ----------------------------------------------------------- ENDED
1990 1991(2) 1992(3) 1993 1994(4) SEPTEMBER 30, 1995
- --------- ----------- ----------- --------- ----------- -----------------------
2.74 2.98 2.02 2.36 2.65 2.44
- --------------
(1) Earnings are deemed to consist of net income to which has been added income
taxes (including net deferred investment tax credits) and fixed charges.
Fixed charges consist of all interest on indebtedness, amortization of debt
discount and expense, and the portion of rental expense which represents an
interest factor.
(2) Includes a special one-time dividend of $.18 per share paid on February 28,
1991. Includes cumulative effect to January 1, 1991 of a change in revenue
recognition resulting in a $17.36 million ($.50 per share) increase.
(3) After giving effect to the acquisition of KG&E, effective from March 31,
1992.
(4) After giving effect to the sales of Western Resources' Missouri gas
properties, effective from January 31, 1994 and February 28, 1994.
The following table sets forth the ratios of earnings to combined fixed
charges and preferred and preference stock dividends for each of the years 1990
through 1994 and for the twelve months ended September 30, 1995.(1)
UNAUDITED
YEAR ENDED DECEMBER 31, TWELVE MONTHS
- ----------------------------------------------------------- ENDED
1990 1991(2) 1992(3) 1993 1994(4) SEPTEMBER 30, 1995
- --------- ----------- ----------- --------- ----------- -----------------------
2.64 2.61 1.84 2.14 2.37 2.19
- --------------
(1) Earnings are deemed to consist of net income to which has been added income
taxes (including net deferred investment tax credits) and fixed charges.
Fixed charges consist of all interest on indebtedness, amortization of debt
discount and expense, and the portion of rental expense which represents an
interest factor. Preferred and preference dividend requirements consist of
an amount equal to the pre-tax earnings which would be required to meet
dividend requirements on preferred and preference stock.
(2) Includes a special one-time dividend of $.18 per share paid on February 28,
1991. Includes cumulative effect to January 1, 1991 of a change in revenue
recognition resulting in a $17.36 million ($.50 per share) increase.
(3) After giving effect to the acquisition of KG&E, effective from March 31,
1992.
(4) After giving effect to the sales of Western Resources' Missouri gas
properties, effective from January 31, 1994 and February 28, 1994.
S-9
USE OF PROCEEDS
The Series A Issuer will use the proceeds from this offering of $ million,
together with the Series A Common Securities, to purchase the Series A
Debentures. Western Resources will use the cash proceeds from the sale of the
Series A Debentures, net of the Underwriters' compensation and the other
expenses of this offering, for the repayment of certain of its short-term debt
and for general corporate purposes. As of September 30, 1995, such short-term
debt had a weighted average interest rate of approximately 6.02% per annum and
maturities within six months of its date of issuance.
CERTAIN TERMS OF THE SERIES A PREFERRED SECURITIES
GENERAL
The following summary of certain terms and provisions of the Series A
Preferred Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Series A Trust Agreement. The
form of the Series A Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and the accompanying
Prospectus are a part. See "Description of the Preferred Securities" in the
accompanying Prospectus.
DISTRIBUTIONS
The Series A Preferred Securities represent undivided preferred beneficial
interests in the assets of the Series A Issuer, and the distributions on each
Series A Preferred Security are payable at the rate set forth on the cover page
of this Prospectus Supplement, payable, except in the event of an extension,
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year. Distributions in arrears after the quarterly payment date therefor will
accumulate additional distributions thereon (to the extent permitted by law)
compounded quarterly at the rate per annum set forth on the cover page of this
Prospectus Supplement. The term "distributions" as used herein shall include any
such additional distributions to the extent permitted by law. Distributions will
accrue from the date of original issuance of the Series A Preferred Securities.
The amount of distributions payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and, for any period shorter than a
full monthly period, shall be computed on the basis of the actual number of days
elapsed in such period.
So long as an Event of Default under the Indenture has not occurred and is
continuing, Western Resources has the right at any time and from time to time to
extend the interest payment period on the Series A Debentures for not more than
20 consecutive quarters, provided that any such Extension Period shall not
extend beyond the maturity date or redemption date of the Series A Debentures.
During any Extension Period quarterly distributions on the Series A Preferred
Securities would be deferred by the Series A Issuer, would continue to accrue,
and holders of Series A Preferred Securities would be required to accrue
interest income for United States Federal income tax purposes. See "Certain
Terms of the Series A Debentures -- Option to Extend Interest Payment Period"
and "United States Taxation -- Potential Extension of Interest Payment Period
and Original Issue Discount." In the event that Western Resources exercises this
right, during such period it may not declare or pay any dividends or
distributions (other than dividends or distributions payable in common stock of
Western Resources or other securities ranking junior in right of payment to the
Series A Debentures) on, or redeem, purchase, acquire, or make a liquidation
payment with respect to, any of its capital stock or any security ranking pari
passu with or junior in right of payment to the Series A Debentures, or make any
guarantee payment with respect to the foregoing (other than pro rata payments
under the Guarantees) or repurchase, or cause any of its subsidiaries to
repurchase, any security of Western Resources ranking pari passu with or junior
in right of payment to the Series A Debentures (except for payments made on any
series of Debentures upon the stated maturity of such Debentures); provided that
Western Resources may redeem, purchase, acquire or make a liquidation payment
with respect to any of its capital stock or any security ranking pari passu with
or junior in right of payment to the Series A Debentures, make any guarantee
payment with respect to the foregoing or repurchase, or cause any of its
subsidiaries to repurchase, any security of Western Resources ranking pari passu
with or junior in right of payment to the Series A Debentures with securities
(or the proceeds from the issuance of securities) having no
S-10
higher ranking than the capital stock or the other securities which are to be
redeemed, purchased, acquired, with respect to which a liquidation payment is to
be made, to which a guarantee payment is to be made with respect to the
foregoing or which are to be repurchased. This covenant effectively, requires
that an interest payment on one series of Debentures may be extended only if the
interest periods on all series of Debentures are likewise extended. Prior to the
termination of any such extended interest payment period, Western Resources may
further extend the interest payment period, provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarters or extend beyond the maturity or redemption date of the
Series A Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, Western Resources may select a new extended
interest payment period, subject to the above requirements. See "Certain Terms
of the Series A Debentures -- Option to Extend Interest Payment Period" and
"United States Taxation -- Potential Extension of Interest Payment Period and
Original Issue Discount."
Western Resources has no current intention of exercising its right to defer
payments of distributions on the Series A Preferred Securities by extending the
interest payment period on the Series A Debentures.
REDEMPTION
Upon the payment of the Series A Debentures, whether at maturity or upon
earlier redemption as provided in the Indenture, the proceeds from such payment
will be applied by the Property Trustee to redeem a Like Amount (as defined
below) of the Series A Common Securities and the Series A Preferred Securities,
upon not less than 30 nor more than 90 days' notice, at a Redemption Price equal
to the aggregate Liquidation Amount plus accumulated and unpaid distributions,
plus additional distributions thereon to the extent permitted by law, to the
Redemption Date. See "Certain Terms of the Series A Debentures -- Redemption."
Western Resources has the right to redeem the Series A Debentures (a) on or
after ,200 , in whole or in part, or (b) at any time, in whole but not
in part, upon the occurrence of a Tax Event or an Investment Company Event (each
as defined below, a "Special Event"), subject to the conditions described under
"-- Special Event Redemption or Distribution," below.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
If a Special Event shall occur and be continuing with respect to the Series
A Issuer or the Series A Preferred Securities, Western Resources has the right
to (i) redeem the Series A Debentures in whole (but not in part) and thereby
cause a mandatory redemption of the Series A Preferred Securities in whole (but
not in part) at the Redemption Price within 90 days following the occurrence of
such Special Event, or (ii) terminate the Series A Issuer and cause the Series A
Debentures to be distributed, subject to the receipt of an Opinion of Counsel
experienced in such matters to the effect that the holders of the Series A
Preferred Securities will not recognize gain or loss for United States Federal
income tax purposes as a result of such distribution, to the holders of the
Series A Preferred Securities in liquidation of the Series A Issuer. If at any
time the Series A Issuer is not or will not be taxed as a grantor trust, but a
Tax Event has not occurred, Western Resources has the right to terminate the
Series A Issuer and cause the Series A Debentures to be distributed, subject to
the receipt of an Opinion of Counsel experienced in such matters to the effect
that the holders of the Series A Preferred Securities will not recognize gain or
loss for United States Federal income tax purposes as a result of such
distribution, to the holders of the Series A Preferred Securities in liquidation
of the Series A Issuer. Under current United States Federal income tax law and
interpretations, if the Series A Trust is treated as a grantor trust at the time
of the distribution, such a distribution should not be a taxable event to
holders of the Series A Preferred Securities. Should there be a change in law, a
change in legal interpretation, a Special Event or other circumstances, however,
the termination could be a taxable event to holders of the Series A Preferred
Securities. See "United States Taxation -- Receipt of Series A Debentures Upon
Liquidation of the Series A Issuer." If Western Resources does not elect either
option (i) or (ii) above, the Series A Preferred Securities will remain
outstanding.
S-11
"Tax Event" means the receipt by the Series A Issuer or Western Resources,
as the case may be, of an Opinion of Counsel (which may be counsel to the Series
A Issuer, Western Resources or an affiliate, and which must be reasonably
acceptable to the Property Trustee) experienced in such matters to the effect
that a relevant tax law change has occurred. For purposes of the preceding
sentence a relevant tax law change is any amendment or change to (or officially
proposed amendment or change to) the laws (including regulations thereunder) of
the United States or any political subdivision or taxing authority thereof, or
the publication of any judicial opinion interpreting such laws (and regulations)
or any written interpretation of such laws (or regulations) by any governmental
authority having jurisdiction to enforce or administer such laws (or
regulations) (including official and unofficial opinions purporting to apply
such laws and regulations to other persons who have issued securities similar to
the Series A Debentures), which amendment, change, proposed amendment or change,
opinion or interpretation could, if valid and enacted or applied to the Series A
Issuer or Western Resources, result in (i) the Series A Issuer, either currently
or within 90 days of the date thereof, becoming subject to United States Federal
income tax with respect to interest received on the Series A Debentures, (ii)
interest payable by Western Resources on the Series A Debentures attributable to
the Series A Preferred Securities, either currently or within 90 days of the
date thereof, becoming nondeductible for United States Federal income tax
purposes or (iii) the Series A Issuer, either currently or within 90 days of the
date thereof, becoming subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Investment Company Event" means the occurrence of a change in law or
regulation or a change in the interpretation or application of any law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law") to the effect that the Series A Issuer is
or will be considered an "investment company" that is required to be registered
under the Investment Company Act of 1940, as amended, which Change in 1940 Act
Law becomes effective on or after the date of original issuance of the Series A
Preferred Securities.
"Like Amount" means (i) with respect to a redemption of the Series A
Preferred Securities and the Series A Common Securities (together, the "Series A
Trust Securities"), Series A Trust Securities having an aggregate Liquidation
Amount equal to the principal amount of Series A Debentures to be
contemporaneously redeemed in accordance with the Indenture and the proceeds of
which will be used to pay the Redemption Price of such Series A Trust Securities
and (ii) with respect to a distribution of Series A Debentures to holders of
Series A Trust Securities in connection with a termination or liquidation of the
Series A Issuer upon the bankruptcy, dissolution or liquidation of a holder of
Series A Common Securities, the occurrence of a Special Event or in the event
that the Series A Trust is not or will not be taxed as a grantor trust but a Tax
Event has not occurred, Series A Debentures having a principal amount equal to
the aggregate Liquidation Amount of the Series A Trust Securities in exchange
for which such Series A Debentures are distributed.
LIQUIDATION AMOUNT
The Liquidation Amount payable on the Series A Preferred Securities in the
event of any liquidation of the Series A Issuer is $25 per Series A Preferred
Security, plus accumulated and unpaid distributions unless, in connection with
such liquidation, the Series A Debentures are distributed to the holders of the
Series A Preferred Securities.
CERTAIN TERMS OF THE SERIES A GUARANTEE
GENERAL
The following summary Description of the Series A Guarantee sets forth
certain portions of the description of the terms and provisions of the Series A
Guarantee included in the accompanying Prospectus under the heading,
"Description of the Guarantees," to which reference is hereby made. This summary
of certain terms and provisions of the Series A Guarantee does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
Series A Guarantee. The form of Series A Guarantee has been filed as an exhibit
to the Registration Statement of which this Prospectus Supplement and the
accompanying Prospectus are a part.
S-12
Western Resources will fully and unconditionally guarantee, on a
subordinated basis, the obligations of the Series A Issuer with respect to the
Series A Preferred Securities; provided that the Series A Guarantee will not
apply to any payment of distributions if and to the extent that the Series A
Issuer does not have funds sufficient to make such payments. If Western
Resources does not make interest payments on the Series A Debentures held by the
Series A Issuer, it is expected that the Series A Issuer will not pay
distributions on the Series A Preferred Securities. The Series A Guarantee will
rank subordinate and junior in right of payment to all liabilities of Western
Resources (except trade credit and any liabilities that may be made pari passu
with or subordinate to the Series A Guarantee expressly by their terms). See
"Description of the Guarantees -- Status of the Guarantees" in the accompanying
Prospectus.
EVENTS OF DEFAULT
An event of default under the Series A Guarantee will occur upon the failure
of Western Resources to perform any of its payment obligations thereunder.
If the Guarantee Trustee fails to enforce the Series A Guarantee, any holder
of Series A Preferred Securities may institute a legal proceeding directly
against Western Resources to enforce such holder's rights under the Series A
Guarantee without first instituting a legal proceeding against the Series A
Issuer, the Guarantee Trustee or any other person or entity. The Series A
Guarantee is a guarantee of payment, not of collection.
TERMINATION OF THE SERIES A GUARANTEE
The Series A Guarantee will terminate and be of no further force and effect
upon full payment of the Redemption Price of all Series A Preferred Securities,
the distribution of Series A Debentures to holders of Series A Preferred
Securities in exchange for all of the Series A Preferred Securities or upon
payment in full of the amounts payable upon liquidation of the Series A Issuer.
CERTAIN TERMS OF THE SERIES A DEBENTURES
GENERAL
The following summary Description of the Series A Debentures sets forth
certain portions of the description of the terms and provisions of the
Debentures included in the accompanying Prospectus under the heading,
"Description of the Debentures," to which reference is hereby made. This summary
of certain terms and provisions of the Series A Debentures does not purport to
be complete and is subject to, and qualified in its entirety by reference to,
the Indenture, including the Series A Supplemental Indenture. The forms of
Indenture and Supplemental Indenture have been filed as exhibits to the
Registration Statement of which this Prospectus Supplement and the accompanying
Prospectus are a part.
Concurrently with the issuance of the Series A Preferred Securities, the
Series A Issuer will invest the proceeds thereof, together with the Series A
Common Securities, in the Series A Debentures issued by Western Resources to the
Series A Issuer. The Series A Debentures will bear interest at the annual rate
of %, payable quarterly in arrears, except in the event of an extension, on
March 31, June 30, September 30 and December 31 of each year commencing
, 19 . Interest which is accrued and unpaid after the quarterly
payment date therefor will bear additional interest on the amount thereof (to
the extent permitted by law) at the rate specified for the Series A Debentures.
The term "Interest" as used herein shall include quarterly interest payments,
interest on quarterly interest payments in arrears and Additional Interest (as
defined below), as applicable.
The Series A Debentures will be issued under the Indenture and the Series A
Supplemental Indenture. The Series A Debentures will mature on , 2025. The
Series A Debentures will be unsecured and will rank junior and be subordinate in
right of payment to all Senior Indebtedness of Western Resources. See
"Description of the Debentures -- Subordination" in the accompanying Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Western Resources has the right at any time and from time to time, so long
as an Event of Default under the Indenture has not occurred and is continuing,
to extend the Interest payment period for the
S-13
Series A Debentures for up to 20 consecutive quarters; provided that no
Extension Period shall extend beyond the stated maturity date or date of
redemption of the Series A Debentures. At the end of the Extension Period,
Western Resources is obligated to pay all interest then accrued and unpaid
(together with interest thereon to the extent permitted by law). During any
Extension Period, Western Resources will not declare or pay any dividends or
distributions (other than dividends or distributions payable in common stock of
Western Resources or other securities ranking junior in right of payment to the
Series A Debentures) on, or redeem, purchase, acquire, or make a liquidation
payment with respect to, any of its capital stock or any security ranking pari
passu with or junior in right of payment to the Series A Debentures, or make any
guarantee payment with respect to the foregoing (other than pro rata payments
under the Guarantees) or repurchase, or cause any of its subsidiaries to
repurchase, any security of Western Resources ranking pari passu with or junior
in right of payment to the Series A Debentures (except for payments made on any
series of Debentures upon the stated maturity of such Debentures); provided that
Western Resources may redeem, purchase, acquire or make a liquidation payment
with respect to any of its capital stock or any security ranking pari passu with
or junior in right of payment to the Series A Debentures, make any guarantee
payment with respect to the foregoing or repurchase, or cause any of its
subsidiaries to repurchase, any security of Western Resources ranking pari passu
with or junior in right of payment to the Series A Debentures with securities
(or the proceeds from the issuance of securities) having no higher ranking than
the capital stock or the other securities which are to be redeemed, purchased,
acquired, with respect to which a liquidation payment is to be made, to which a
guarantee payment is to be made with respect to the foregoing or which are to be
repurchased. This covenant requires that an interest payment period on one
series of Debentures may be extended only if the interest payment periods on all
series of Debentures are likewise extended. Prior to the termination of any
Extension Period, Western Resources may further extend the interest payment
period, provided that such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the maturity or redemption date of the Series A Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due,
Western Resources may select a new Extension Period subject to the above
requirements.
So long as the Property Trustee shall be the sole holder of the Series A
Debentures, Western Resources is required to give the Property Trustee and the
Debenture Trustee notice of its selection of such Extension Period at least one
Business Day prior to the date the Property Trustee or Western Resources is
required to give notice to any national securities exchange on which any of the
Series A Preferred Securities are listed or other applicable self-regulatory
organization or to holders of the Series A Preferred Securities on the record
date, but in any event not less than one Business Day prior to such record date.
The Debenture Trustee will be required to give notice of Western Resources'
selection of such Extension Period to the holders of the Series A Preferred
Securities and the Administrative Trustees.
ADDITIONAL INTEREST
If at any time the Series A Issuer is required to pay additional
distributions on distributions in arrears in respect of the Series A Preferred
Securities, Western Resources will pay to the Series A Issuer as the holder of
the Series A Debentures an amount of additional interest ("Additional Interest
Attributable to Deferral") equal to such additional distributions on
distributions in arrears. Accordingly, in such circumstances Western Resources
will, to the extent permitted by applicable law, pay interest upon interest in
order to provide for quarterly compounding on the Series A Debentures. In
addition, if the Series A Issuer is required to pay taxes, duties, assessments
or governmental charges of whatever nature (other than withholding taxes)
imposed by the United States or any other taxing authority, then, in any case,
Western Resources will also pay such amounts as shall be required so that the
net amounts received and retained by the Series A Issuer after paying such
taxes, duties, assessments or governmental charges will be not less than the
amounts the Series A Issuer would have received had no such taxes, duties,
assessments or governmental charges been imposed ("Additional Interest
Attributable to Taxes" and, together with Additional Interest Attributable to
Deferral, "Additional Interest").
S-14
REDEMPTION
The Series A Debentures are redeemable prior to maturity at the option of
Western Resources (i) at any time on or after the date set forth on page S-2 of
this Prospectus Supplement, in whole or in part, and (ii) if a Special Event
occurs and is continuing, in whole, but not in part, in each case at a
Redemption Price equal to 100% of the principal amount thereof plus accrued
interest to the Redemption Date. The Series A Debentures will be subject to
optional redemption in whole, but not in part, upon the termination and
liquidation of the Series A Issuer pursuant to an order for the dissolution,
termination or liquidation of the Series A Issuer entered by a court of
competent jurisdiction. For so long as the Series A Trust is the holder of all
Series A Debentures outstanding, the proceeds of any redemption described in
this section shall be used by the Series A Issuer to redeem the Series A
Preferred Securities and the Series A Common Securities in accordance with their
terms.
Western Resources shall not redeem the Series A Debentures in part unless
all accrued and unpaid interest (including any Additional Interest) has been
paid in full on all Series A Debentures outstanding for all quarterly interest
periods on or prior to the Redemption Date.
DISTRIBUTIONS OF SERIES A DEBENTURES
Under certain circumstances involving the termination of the Series A
Issuer, Series A Debentures may be distributed to the holders of the Series A
Preferred Securities in liquidation of the Series A Issuer, after satisfaction
of all liabilities to creditors of the Series A Issuer as provided by applicable
law. If distributed to holders of Series A Preferred Securities in liquidation,
the Series A Debentures will initially be issued in the form of one or more
global securities, and DTC, or any successor depositary for the Series A
Preferred Securities, will act as depositary for the Series A Debentures. It is
anticipated that the depositary arrangements for the Series A Debentures, if
distributed, would be substantially identical to those in effect for the Series
A Preferred Securities. Neither Western Resources, the Debenture Trustee, any
Paying Agent nor any other agent of Western Resources or the Debenture Trustee
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of persons holding Series A Debentures in the
form of a global security for the Series A Debentures or for maintaining,
supervising or reviewing any records relating to such holders.
A global security shall be exchangeable for Series A Debentures registered
in the names of persons other than DTC or its nominee only if (i) DTC notifies
Western Resources that it is unwilling or unable to continue as a depositary for
such global security and no successor depositary shall have been appointed, or
if at any time DTC ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, at a time when DTC is required to
be so registered to act as such depositary, (ii) Western Resources in its sole
discretion determines that such global security shall be so exchangeable, or
(iii) there shall have occurred and be continuing an Event of Default with
respect to such global security. Any global security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for definitive
certificates registered in such names as DTC shall direct. It is expected that
such instructions will be based upon directions received by DTC from its
Participants (as defined in the accompanying Prospectus) with respect to the
ownership of beneficial interests in such global security. In the event that
Series A Debentures are issued in definitive form, such Series A Debentures will
be issued in denominations of $25 and integral multiples thereof and may be
transferred or exchanged at the offices described below.
Payments on Series A Debentures represented by a global security will be
made to DTC, as the depositary for the Series A Debentures. In the event Series
A Debentures are issued in definitive form, principal and interest will be
payable, the transfer of the Series A Debentures will be registrable, and Series
A Debentures will be exchangeable for Series A Debentures of other denominations
of a like aggregate principal amount, at the corporate office of the Debenture
Trustee in Wilmington, Delaware, or at the offices of any paying or transfer
agent appointed by Western Resources, provided that payment of interest may be
made, at the option of Western Resources, by check mailed to the address of the
persons entitled thereto or by wire transfer. In addition, if the Series A
Debentures are issued in certificated form, the record dates for payment of
interest will be the 15th day preceding the end of each
S-15
quarter. For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights and other matters, see
"Description of the Preferred Securities -- Book-Entry-Only Issuance -- The
Depository Trust Company" in the accompanying Prospectus.
If the Series A Debentures are distributed to the holders of Series A
Preferred Securities upon the liquidation of the Series A Issuer, Western
Resources will use its best efforts to list the Series A Debentures on such
stock exchanges, if any, as the Series A Preferred Securities are then listed.
UNITED STATES TAXATION
GENERAL
The following is a summary of certain United States Federal income tax
considerations that may be relevant to prospective purchasers of Series A
Preferred Securities and represents the opinion of Cahill Gordon & Reindel,
counsel to Western Resources, insofar as it relates to matters of law and legal
conclusions. This section is based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations
thereunder and current administrative rulings and court decisions, all of which
are subject to change. Subsequent changes may cause tax consequences to
investors to vary substantially from the consequences described below. Unless
otherwise stated, this summary deals only with Series A Preferred Securities
held as capital assets and not with special classes of holders, such as dealers
in securities or currencies, life insurance companies, persons holding Series A
Preferred Securities as a hedge against or which are hedged against currency
risks or as a part of a straddle, or persons whose functional currency is not
the United States dollar.
POTENTIAL INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF SERIES A PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR
CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS.
While Western Resources believes, based upon the advice of its counsel, that
the Series A Debentures will be treated as indebtedness for United States
Federal income tax purposes, holders of Series A Preferred Securities should
note that the Internal Revenue Service (the "IRS") may attempt to treat the
Series A Debentures as equity rather than indebtedness for tax purposes. If the
IRS were successful in such attempt, the Series A Debentures would be subject to
redemption at the option of Western Resources as described under "Certain Terms
of the Series A Preferred Securities -- Special Event Redemption or
Distribution."
INCOME FROM SERIES A PREFERRED SECURITIES
In connection with the issuance of the Series A Preferred Securities, Cahill
Gordon & Reindel will render its opinion generally to the effect that under then
current law, and assuming full compliance with the terms of the Series A Trust
Agreement and the Indenture (and certain other documents), the Series A Issuer
will be classified for United States Federal income tax purposes as a grantor
trust and not as an association taxable as a corporation.
As a consequence, each holder of Series A Preferred Securities will be
considered the owner of a pro rata portion of the Series A Debentures held by
the Series A Issuer. As a further consequence, each holder of Series A Preferred
Securities will be required to include in gross income his or her pro rata share
of the income accrued on the Series A Debentures held by the Series A Issuer.
Such income should not exceed distributions received by the holders of Series A
Preferred Securities on the Series A Preferred Securities except in the case of
an extension of the interest payment period as described under "Certain Terms of
the Series A Preferred Securities -- Distributions." No portion of such income
will be eligible for the dividends-received deduction.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Under the Indenture, Western Resources has the option to extend from time to
time the interest payment period on the Series A Debentures to a period not
exceeding 20 consecutive quarters but not beyond the maturity date or redemption
date of the Series A Debentures. Western Resources' option to
S-16
extend the interest payment period (even if not exercised) will cause the Series
A Debentures, from the date of issuance, to be treated as issued with "original
issue discount" for United States Federal income tax purposes. Accordingly, a
holder of Series A Preferred Securities will accrue interest income (i.e.,
original issue discount) under a constant yield basis over the term of the
Series A Debentures (including any Extension Period), regardless of the receipt
of cash with respect to the period to which such income is attributable.
Holders of Series A Preferred Securities during an Extension Period will
include interest in gross income in advance of the receipt of cash, and any
holders of Series A Preferred Securities who dispose of Series A Preferred
Securities prior to the record date for the payment of distributions will
include such interest in gross income, but will not receive any cash related
thereto from the Series A Issuer. The tax basis of a Series A Preferred Security
will be increased by the amount of any original issue discount that is included
in income without the receipt of cash, and will be decreased when and if such
cash is subsequently received by the holder of the Series A Preferred Security.
DISPOSITION OF SERIES A PREFERRED SECURITIES
Gain or loss will be recognized on a sale, including a redemption for cash,
of Series A Preferred Securities in an amount equal to the difference between
the amount realized and the tax basis of a holder of the Series A Preferred
Securities in his or her Series A Preferred Securities. Gain or loss recognized
by a holder of Series A Preferred Securities on the sale or exchange of Series A
Preferred Securities held for more than one year generally will be taxable as
long-term capital gain or loss.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
holder or beneficial owner who or which is (i) a nonresident alien individual or
(ii) a foreign corporation, foreign partnership, foreign estate or foreign
trust, in any such case not subject to United States Federal income tax on a net
income basis in respect of the Series A Preferred Securities.
Under present United States Federal income tax law, subject to the
discussion below with respect to backup withholding:
(i) Payments by the Series A Issuer or any of its Paying Agents to any
United States Alien Holder will not be subject to United States withholding
tax provided that (a) the beneficial owner of the Series A Preferred
Securities does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of Western Resources, (b) the
beneficial owner of the Series A Preferred Securities is not a "controlled
foreign corporation" for United States tax purposes that is related to
Western Resources through stock ownership, and (c) either (1) the beneficial
owner of the Series A Preferred Securities certifies to the Series A Issuer
or its agent, under penalties of perjury, that it is a United States Alien
Holder and provides its name and address or (2) the holder of the Series A
Preferred Securities is a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution"), and such
statement has been received from the beneficial owner by such financial
institution or by a financial institution intermediary between it and the
beneficial owner, and such financial institution furnishes the Series A
Issuer with a copy thereof; and
(ii) a United States Alien Holder of the Series A Preferred Securities
will not be subject to United States Federal income or withholding tax on
any gain realized on the sale or exchange of the Series A Preferred
Securities unless (a) such person is present in the United States for 183
days or more in the taxable year of sale and (b) such person has a "tax
home" in the United States or certain other requirements are met.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information requirements will apply to payments to noncorporate
United States holders of the proceeds of the sale of the Series A Preferred
Securities within the United States, and "backup withholding" at a rate of 31%
will apply to such payments if the seller fails to provide a correct taxpayer
identification number.
S-17
Payments of the proceeds from the sale by a United States Alien Holder of
Series A Preferred Securities made to or through a foreign office of a broker
will not be subject to information reporting or backup withholding, except that,
if the broker is a United States person, a "controlled foreign corporation" for
United States tax purposes or a foreign person 50% or more of whose gross income
is effectively connected with a United States trade or business for a specified
three-year period, information reporting may apply to such payments. Payments of
the proceeds from the sale of Series A Preferred Securities to or through the
United States office of a broker is subject to information reporting and backup
withholding unless the holder or beneficial owner certifies as to its non-United
States status or otherwise establishes an exemption from information reporting
and backup withholding.
RECEIPT OF SERIES A DEBENTURES UPON LIQUIDATION OF THE SERIES A ISSUER
Under certain circumstances as described in "Certain Terms of the Series A
Preferred Securities -- Special Event Redemption or Distribution," Western
Resources may cause the Series A Issuer to be terminated and the Series A
Debentures to be distributed to the holders of Series A Preferred Securities in
liquidation of such holders' interests in the Series A Issuer. Under current
United States Federal income tax law and interpretations, if the Series A Trust
is treated as a grantor trust at the time of the distribution, such a
distribution should not be treated as a taxable event to holders of the Series A
Preferred Securities. Such a tax-free transaction would result in a holder of
Series A Preferred Securities retaining an aggregate tax basis in the Series A
Debentures equal to such holder's aggregate tax basis in the holder's pro rata
share of the Series A Debentures prior to the distribution. A holder's holding
period for such Series A Debentures would include the period for which the
Series A Preferred Securities were held by such holder.
If the Series A Trust were not treated as a grantor trust at the time of the
distribution, the distribution could be a taxable event to holders of the Series
A Preferred Securities, in which case the principles discussed above under "--
Disposition of Series A Preferred Securities" would apply, and the holders would
have a new tax basis and holding period in the Series A Debentures.
S-18
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
Western Resources and the Series A Issuer have agreed that the Series A Issuer
will sell to each of the underwriters named below (collectively, the
"Underwriters"), and each of such Underwriters for whom Goldman, Sachs & Co.,
Smith Barney Inc., Dillon, Read & Co. Inc., Prudential Securities Incorporated
and Edward D. Jones & Co. are acting as representatives, (the
"Representatives"), has severally agreed to purchase, the respective number of
Series A Preferred Securities set forth opposite its name below:
NUMBER OF
SERIES A
PREFERRED
UNDERWRITER SECURITIES
- -------------------------------------------------------------------------------------------------- --------------
Goldman, Sachs & Co. .............................................................................
Smith Barney Inc. ................................................................................
Dillon, Read & Co. Inc. ..........................................................................
Prudential Securities Incorporated................................................................
Edward D. Jones & Co. ............................................................................
--------------
Total.........................................................................................
--------------
--------------
Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Series A Preferred
Securities offered hereby, if any are taken.
The Underwriters propose to offer the Series A Preferred Securities in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and in part to certain securities
dealers at such price less a concession of $ per Series A Preferred
Security. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per Series A Preferred Security to certain brokers and
dealers. After the Series A Preferred Securities are released for sale to the
public, the offering price and other selling terms may from time to time be
varied by the Representatives.
In view of the fact that the proceeds from the sale of the Series A
Preferred Securities (together with the delivery by the Series A Issuer to
Western Resources of the Series A Common Securities) will be used to purchase
the Series A Debentures issued by Western Resources, the Underwriting Agreement
provides that Western Resources will pay as Underwriters' compensation for the
Underwriters arranging the investment therein of such proceeds, an amount of
$ per Series A Preferred Security or ($ per Series A Preferred Security
sold to certain institutions) for the accounts of the several Underwriters.
Western Resources and the Series A Issuer have agreed, during the period
beginning from the date of the Underwriting Agreement and continuing to and
including the earlier of (i) the date on which the distribution of the Series A
Preferred Securities ceases, as determined by the Underwriters, or (ii) 30 days
after the issuance of the Series A Preferred Securities, not to offer, sell,
contract to sell or otherwise dispose of any Series A Preferred Securities, any
other interests of the Series A Issuer or any other issuer of a series of
Preferred Securities or Western Resources which are substantially similar to the
Series A
S-19
Preferred Securities (including any Guarantee of such securities) or any
securities convertible into or exchangeable for Series A Preferred Securities,
preferred stock or such substantially similar securities of the Series A Issuer
or Western Resources, without the prior written consent of the Representatives.
Prior to this offering, there has been no market for the Series A Preferred
Securities. Application has been made to list the Series A Preferred Securities
on the New York Stock Exchange, subject to official notice of issuance, under
the symbol "WR PrA". In order to meet one of the requirements for listing the
Series A Preferred Securities on the New York Stock Exchange, the Underwriters
have undertaken to sell lots of 100 or more Series A Preferred Securities to a
minimum of 400 beneficial holders. If approved for listing, trading of the
Series A Preferred Securities on the New York Stock Exchange is expected to
commence within a fourteen-day period after the initial delivery of the Series A
Preferred Securities. The Representatives have advised Western Resources that
they intend to make a market in the Series A Preferred Securities prior to the
commencement of trading on the New York Stock Exchange, but are not obligated to
do so and may discontinue any such market-making at any time without notice. No
assurance can be given as to the liquidity of the trading market.
Western Resources and the Series A Issuer have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933.
Certain of the Underwriters engage in transactions with, and from time to
time have performed services for, Western Resources in the ordinary course of
business.
S-20
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 3, 1995
[WESTERN RESOURCES LOGO]
WESTERN RESOURCES CAPITAL I
WESTERN RESOURCES CAPITAL II
CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT THAT EACH SUCH ISSUER,
RESPECTIVELY, HAS FUNDS AS SET FORTH HEREIN BY
WESTERN RESOURCES, INC.
---------
Western Resources Capital I and Western Resources Capital II, each a
statutory business trust formed under the laws of the State of Delaware (each,
an "Issuer" and, collectively, the "Issuers") may severally offer, from time to
time, their respective cumulative quarterly income preferred securities (the
"Preferred Securities") representing preferred undivided beneficial interests in
the assets of each Issuer. Western Resources, Inc., a Kansas corporation
("Western Resources"), will be the sole owner of the beneficial interests
represented by common securities (the "Common Securities") of each Issuer.
Wilmington Trust Company is the Property Trustee of each Issuer. The payment of
periodic cash distributions ("Distributions") with respect to the Preferred
Securities and payments on liquidation or redemption with respect to such
Preferred Securities are each guaranteed by Western Resources in the case of
each Issuer (a "Guarantee"), in each case only out of funds held by such Issuer.
The obligations of Western Resources under each Guarantee will be subordinate
and junior in right of payment to all liabilities of Western Resources except
trade credit and any liabilities that may be made pari passu with or subordinate
to the Guarantees expressly by their terms ("Senior Indebtedness"). Concurrently
with the issuance by an Issuer of its Preferred Securities, such Issuer will
invest the proceeds thereof in Western Resources' deferrable interest
subordinated debentures (the "Debentures") having terms corresponding to such
Issuer's Preferred Securities. The Debentures will be unsecured and subordinate
and junior in right of payment to the Senior Indebtedness of Western Resources.
The Debentures held by each Issuer will be its sole asset, and the interest and
payments of principal on such Debentures will be its only revenues. Upon the
occurrence of certain events, Western Resources may redeem the Debentures or may
terminate either Issuer and cause the Debentures to be distributed to the
holders of the corresponding Preferred Securities in liquidation of the interest
in such Issuer represented by such Preferred Securities. See "Description of the
Preferred Securities -- Liquidation Distribution Upon Dissolution."
The Preferred Securities may be offered in amounts, at prices and on terms
to be determined at the time of offering, provided, however, that the aggregate
initial public offering price of all Preferred Securities issued pursuant to the
Registration Statement of which this Prospectus forms a part shall not exceed
$200,000,000. Certain specific terms of each Issuer's Preferred Securities in
respect of which this Prospectus is being delivered will be set forth in an
accompanying Prospectus Supplement, including, where applicable and to the
extent not set forth herein, the identity of the Issuer, the specific title, the
aggregate amount, the distribution rate (or the method for determining such
rate), the stated liquidation preference, redemption provisions, other rights,
the initial public offering price and any other special terms, as well as any
planned listing on a securities exchange, of such Preferred Securities.
The Preferred Securities may be sold in a public offering to or through
underwriters or dealers designated from time to time. See "Plan of
Distribution." The names of any of the underwriters or dealers involved in the
sale of the Preferred Securities in respect of which this Prospectus is being
delivered, the number of Preferred Securities to be purchased by any such
underwriters or dealers, any applicable commissions or discounts and the net
proceeds to each Issuer will be set forth in the applicable Prospectus
Supplement.
Each Prospectus Supplement will also contain information concerning certain
United States Federal income tax considerations applicable to the Preferred
Securities offered thereby.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
The date of this Prospectus is , 1995.
AVAILABLE INFORMATION
Western Resources is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by Western Resources may be inspected and
copied at the public reference facilities maintained by the Commission in Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at 7 World Trade Center, Suite 1300, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such materials may be obtained upon written
request from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, such material
may also be inspected and copied at the offices of the New York Stock Exchange,
Inc. (the "New York Stock Exchange"), 20 Broad Street, New York, New York 10005,
on which certain of Western Resources' securities are listed.
Western Resources and the Issuers have filed with the Commission a
registration statement on Form S-3 (herein together with all amendments and
exhibits thereto, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is hereby made to the
Registration Statement.
No separate financial statements of the Issuers are included herein. Western
Resources considers that such financial statements would not be material to
holders of the Preferred Securities because: (i) all of the Common Securities of
the Issuers are owned by Western Resources, a reporting company under the
Exchange Act; (ii) the Issuers have no independent operations, but exist for the
sole purpose of issuing the Preferred Securities and investing the proceeds
thereof (plus the Common Securities) in the Debentures; and (iii) the
obligations of the Issuers under the Preferred Securities, to the extent funds
are available therefor, are fully and unconditionally guaranteed to the extent
set forth herein by Western Resources.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Western Resources
pursuant to the Exchange Act, are incorporated herein by reference:
1. Western Resources' Annual Report on Form 10-K for the year ended
December 31, 1994. Such report includes the Annual Report on Form 10-K
for Kansas Gas and Electric Company ("KG&E") for the year ended December
31, 1994.
2. Western Resources' Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995.
3. Western Resources' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995.
4. Western Resources' Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995.
5. Western Resources' Current Reports on Form 8-K dated January 31, 1995
and August 18, 1995.
6. KG&E's Current Report on Form 8-K dated August 18, 1995.
All other documents filed by Western Resources pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and 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 respective
dates of the filing of such documents. Western Resources expressly excludes from
such incorporation the Report of the Compensation Committee and the Performance
Graph contained in any proxy statement filed by Western Resources pursuant to
Section 14 of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Preferred Securities hereby.
2
Any statement contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Western Resources will provide without charge to each person, including a
beneficial owner, to whom a copy of this Prospectus has been delivered, upon the
written or oral request of any such person, a copy of any and all of the
documents incorporated herein by reference, other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference in
such documents). Requests for such copies should be directed to Western
Resources, Inc., 818 Kansas Avenue, Topeka, Kansas 66612, telephone (913)
575-6322, Attention: Richard D. Terrill, Esq., Secretary of Western Resources.
THE ISSUERS
Each of the Issuers is a statutory business trust formed under Delaware law
pursuant to (i) a trust agreement executed by Western Resources (the
"Depositor"), as the depositor of each Issuer, and the Issuer Trustees (as
defined herein) and (ii) the filing of a certificate of trust with the Delaware
Secretary of State. Each such trust agreement will be amended and restated in
its entirety (as so amended and restated, a "Trust Agreement" and, collectively,
the "Trust Agreements") substantially in the form filed as an exhibit to the
Registration Statement of which this Prospectus is a part. Each Trust Agreement
will be qualified as an indenture under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). The Issuers exist for the exclusive purpose
of (i) issuing their respective Preferred Securities and their Common
Securities, (ii) purchasing the Debentures with the Common Securities and the
proceeds from the sale of the Preferred Securities and (iii) engaging only in
those other activities necessary or incidental thereto. All of the Common
Securities will be owned by Western Resources. The Common Securities will rank
pari passu, and payments will be made thereon pro rata, with the Preferred
Securities, except that upon the occurrence and continuance of an Event of
Default (as defined herein) under a Trust Agreement, the rights of the holders
of the corresponding Common Securities to payment in respect of distributions
and payments upon liquidation, redemption or other acquisition of Common
Securities will be subordinated to the rights of the holders of Preferred
Securities. Western Resources will acquire Common Securities of each Issuer in
an aggregate liquidation amount equal to 3% of the total capital of each Issuer.
Each Issuer has a term of approximately 30 to 49 years, as specified in the
applicable Prospectus Supplement, but may terminate earlier as provided in the
Trust Agreement with respect to such Issuer. Each Issuer's business and affairs
is conducted by its trustees, each appointed by Western Resources as holder of
the Common Securities: Wilmington Trust Company (the "Property Trustee") and
three individual trustees (the "Administrative Trustees") who are employees or
officers of or affiliated with Western Resources (collectively, the "Issuer
Trustees"). Western Resources, as the Depositor of the Issuer, or, the holders
of a majority in liquidation amount of the Issuer Securities (as defined
herein), if an Event of Default has occurred and is continuing, will be entitled
to appoint, remove or replace the Issuer. Unless an Event of Default shall have
occurred and is continuing, the holders of the Issuer Securities shall not have
the right to vote to appoint, remove or replace the Administrative Trustees,
which voting rights are vested exclusively in Western Resources as the Depositor
of the Issuer. The duties and obligations of each of the Issuer Trustees are
governed by the applicable Trust Agreement. Western Resources has agreed to pay
all fees and expenses related to each Issuer and the offering of the Preferred
Securities and has agreed to pay, directly or indirectly, all ongoing costs,
expenses and liabilities of each Issuer.
WESTERN RESOURCES, INC.
Western Resources is a combination electric and natural gas public utility
engaged in the generation, transmission, distribution and sale of electric
energy in Kansas and the purchase, distribution, transportation and sale of
natural gas in Kansas and Oklahoma. The Company was incorporated under the laws
of the State of Kansas in 1924. The Company's principal executive offices (as
well as its principal place of business) are located at 818 Kansas Avenue,
Topeka, Kansas 66612, and its telephone number is (913) 575-6300.
3
DESCRIPTION OF THE PREFERRED SECURITIES
GENERAL
An original trust agreement between Western Resources, as Depositor, and
Wilmington Trust Company, as the Property Trustee, has been used to authorize
and create each Issuer. The original trust agreements are filed as exhibits to
the Registration Statement of which this Prospectus is a part. The Preferred
Securities and the Common Securities of each Issuer (together, the "Issuer
Securities") will be issued by the Administrative Trustees on behalf of each
Issuer pursuant to the terms of each Issuer's Trust Agreement (as amended and
restated from the original trust agreement). Each Issuer's Preferred Securities
represent undivided beneficial trust interests in the assets of such Issuer and
entitle the holders thereof to a preference over the Common Securities of such
Issuer, in certain circumstances, with respect to distributions and amounts
payable on redemption or liquidation as well as to other benefits as described
in the applicable Trust Agreement. The following summary of certain provisions
of the Trust Agreements does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the provisions of such Trust
Agreements and the Trust Indenture Act. Wherever particular sections or defined
terms of the Trust Agreements are referred to, such sections or defined terms
are incorporated herein by reference. Section references used herein are
references to provisions of the Trust Agreements unless otherwise stated.
All of the Common Securities of each Issuer will be owned by Western
Resources. The Common Securities of each Issuer rank pari passu, and payments
will be made thereon pro rata, with the Preferred Securities of each such Issuer
except as described under "-- Subordination of Common Securities." (Section
4.03). Legal title to the Debentures will be held in the name of the Property
Trustee and held in trust for the benefit of the holders of the Issuer
Securities. (Section 2.09). Each Guarantee is a full and unconditional guarantee
on a subordinated basis with respect to the related Preferred Securities but
does not guarantee payment of distributions or amounts payable on redemption or
liquidation of the related Preferred Securities when the Issuer does not have
funds sufficient to make such payments.
The Preferred Securities will initially be offered in denominations of $25
(based on Liquidation Amount) and integral multiples of $25 in excess thereof.
DISTRIBUTIONS
The distributions payable on each series of Preferred Securities will be
fixed at the rate per annum set forth in the applicable Prospectus Supplement.
Distributions in arrears after the quarterly payment date therefor will
accumulate additional distributions thereon at the same rate per annum, to the
extent permitted by law. The term "distributions" as used herein includes any
such additional distributions, unless otherwise stated, and shall also include
any Additional Amounts (as defined herein) with respect to the Preferred
Securities. The amount of distributions payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and, for any period
shorter than a full month, shall be computed on the basis of the actual number
of days elapsed in such period. (Section 4.01(b)). See "Description of the
Debentures -- Additional Interest."
Distributions on the Preferred Securities will be cumulative, will accrue
from the date of the initial issuance thereof, and will be payable quarterly in
arrears, on March 31, June 30, September 30 and December 31 of each year, except
in the event of an extension of the interest payment period by Western Resources
on the corresponding series of Debentures. In the event that any date on which
distributions are otherwise payable on Preferred Securities is not a Business
Day, payment of the distributions payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect to any such delay) except that, if such Business Day is in the next
succeeding calendar year, payment of such distribution shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date (each date on which distributions are otherwise payable
in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than (x) a Saturday or a Sunday, (y) a day on which banks in
New
4
York are authorized or obligated by law or executive order to remain closed or
(z) a day on which the Corporate Trust Office of the Property Trustee or the
principal office of Western Resources is closed for business. (Sections 1.01 and
4.01(a)).
Western Resources has the right under the Deferrable Interest Subordinated
Debenture Indenture (the "Indenture"), as supplemented by a Supplemental
Indenture relating to a series of Debentures (a "Supplemental Indenture"), to
extend, from time to time, the interest payment period on each series of
Debentures issued thereunder for a period not exceeding 20 consecutive quarters,
with the consequence that quarterly distributions on the corresponding Preferred
Securities would be deferred (but would continue to accrue distributions
thereon, including additional distributions payable on unpaid distributions to
the extent permitted by law at the rate per annum set forth in the applicable
Prospectus Supplement, compounded quarterly) by each Issuer during any such
extended interest payment period. In the event Western Resources exercises this
right, during such period Western Resources will not declare or pay any
dividends or distributions (other than dividends or distributions payable in
common stock of Western Resources or other securities ranking junior in right of
payment to the Debentures) on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of its capital stock or any security
ranking pari passu with or junior in right of payment to the Debentures, or make
any guarantee payments with respect to the foregoing (other than pro rata
payments under the Guarantees) or repurchase, or cause any of its subsidiaries
to repurchase, any security of Western Resources ranking pari passu with or
junior in right of payment to the Debentures (except for payments made on any
series of Debentures upon the stated maturity of such Debentures); provided that
Western Resources may redeem, purchase, acquire or make a liquidation payment
with respect to any of its capital stock or any security ranking pari passu with
or junior in right of payment to the Debentures, make any guarantee payment with
respect to the foregoing or repurchase, or cause any of its subsidiaries to
repurchase, any security of Western Resources ranking pari passu with or junior
in right of payment to the Debentures with securities (or the proceeds from the
issuance of securities) having no higher ranking than the capital stock or the
other securities which are to be redeemed, purchased, acquired, with respect to
which a liquidation payment is to be made, to which a guarantee payment is to be
made with respect to the foregoing or which are to be repurchased. This covenant
requires that an interest payment period on one series of Debentures may be
extended only if the interest payment periods on all series of Debentures are
extended. Prior to the termination of any such extended interest payment period,
Western Resources may further extend the interest payment period, provided that
such extended interest payment period, together with all previous and further
extensions thereof, may not exceed 20 consecutive quarters or extend beyond the
maturity or the redemption date of the series of the Debentures in question.
Upon the termination of any extended interest payment period and the payment of
all amounts then due, Western Resources may select a new extended interest
payment period subject to the foregoing requirements. See "Description of the
Debentures -- Interest" and "-- Western Resources' Option to Extend Interest
Payment Periods."
It is anticipated that the income of each Issuer available for distribution
to the holders of the Preferred Securities of such Issuer will be limited to the
payments under the Debentures which the Issuer will purchase with the Common
Securities and the proceeds from the issuance and sale of the Preferred
Securities. See "Description of the Debentures." If Western Resources does not
make interest payments on the Debentures, the Property Trustee will not have
funds available to pay distributions on the Preferred Securities. The payment of
distributions (if and to the extent an Issuer has funds sufficient to make such
payments) is guaranteed on a subordinated basis by Western Resources to the
extent set forth herein under "Description of the Guarantees."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of the applicable Issuer on the relevant
record dates, which, as long as the Preferred Securities remain in
book-entry-only form, will be one Business Day prior to the relevant
Distribution Date. Subject to any applicable laws and regulations and the
provisions of the applicable Trust Agreement, each such
5
payment will be made as described under "-- Book-Entry-Only Issuance -- The
Depository Trust Company," below. In the event that the Preferred Securities do
not remain in book-entry-only form, the relevant record date shall be the date
15 days prior to the relevant Distribution Date. (Section 4.01(d)).
REDEMPTION
Upon the repayment of any series of Debentures, whether at maturity or upon
earlier redemption as provided in the Indenture, the proceeds from such
repayment shall be applied by the Property Trustee to redeem a Like Amount (as
defined herein) of corresponding Issuer Securities, upon not less than 30 nor
more than 90 days' notice, at the Liquidation Amount plus accumulated and unpaid
distributions to the Redemption Date (the "Redemption Price"). See "Description
of the Debentures -- Optional Redemption."
Western Resources will have the right to redeem the Debentures of any
particular series (a) on or after a date to be specified in the Prospectus
Supplement with respect to such series of Debentures, in whole or in part, or
(b) at any time, in whole but not in part, upon occurrence of a Tax Event or an
Investment Company Event (each as defined below, a "Special Event"), subject to
the conditions described under "Description of the Debentures -- Optional
Redemption."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
If a Special Event shall occur and be continuing with respect to an Issuer
or the Preferred Securities of such Issuer, Western Resources has the right to
(i) redeem the corresponding Debentures in whole, but not in part, and thereby
cause a mandatory redemption of such Preferred Securities in whole, but not in
part, at the Redemption Price within 90 days following the occurrence of such
Special Event, or (ii) terminate the Issuer and cause the corresponding
Debentures to be distributed, subject to the receipt of an Opinion of Counsel
experienced in such matters to the effect that the holders of the Preferred
Securities will not recognize gain or loss for United States Federal income tax
purposes as a result of such distribution, to the holders of the Preferred
Securities of such series in liquidation of such Issuer. If at any time an
Issuer is not or will not be taxed as a grantor trust, but a Tax Event has not
occurred, the Depositor has the right to terminate such Issuer and cause the
corresponding Debentures to be distributed, subject to the receipt of an Opinion
of Counsel experienced in such matters to the effect that the holders of the
Preferred Securities will not recognize gain or loss for United States Federal
income tax purposes as a result of such distribution, to the holders of the
Preferred Securities of such Issuer. Under current United States Federal income
tax law and interpretations, if the applicable Trust is treated as a grantor
trust at the time of the distribution, such a distribution should not be a
taxable event to holders of the Preferred Securities. Should there be a change
in law, a change in legal interpretation, a Special Event or other
circumstances, however, the termination could be a taxable event to holders of
the Preferred Securities of an Issuer. See "United States Taxation -- Receipt of
Series A Debentures Upon Liquidation of the Series A Issuer," in the
accompanying Prospectus Supplement. If Western Resources does not elect either
option (i) or (ii) above, the Preferred Securities will remain outstanding.
"Tax Event" means the receipt by an Issuer or Western Resources, as the case
may be, of an Opinion of Counsel (which may be counsel to the Issuer, Western
Resources or an affiliate, and which must be reasonably acceptable to the
Property Trustee) experienced in such matters to the effect that a relevant tax
law change has occurred. For purposes of the preceding sentence, a relevant tax
law change is any amendment or change to (or officially proposed amendment or
change to) the laws (including regulations thereunder) of the United States or
any political subdivision or taxing authority thereof, or the publication of any
judicial opinion interpreting such laws (and regulations) or any written
interpretation of such laws (or regulations) by any governmental authority
having jurisdiction to enforce or administer such laws (or regulations)
(including official and unofficial opinions purporting to apply such laws and
regulations to other persons who have issued securities similar to the
Debentures), which amendment, change, proposed amendment or change, opinion or
interpretation could, if valid and enacted or applied to an Issuer or Western
Resources, result in (i) such Issuer, either currently or within 90 days of the
date thereof, becoming subject to United States Federal income tax with respect
to interest received on a series of Debentures, (ii) interest payable by Western
Resources on a series of
6
Debentures attributable to the Preferred Securities, either currently or within
90 days of the date thereof, becoming nondeductible for United States Federal
income tax purposes or (iii) an Issuer, either currently or within 90 days of
the date thereof, becoming subject to more than a de minimis amount of other
taxes, duties, assessments or other governmental charges.
"Investment Company Event" means the occurrence of a change in law or
regulation or a change in the interpretation or application of any law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law") to the effect that an Issuer is or will
be considered an "investment company" that is required to be registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), which Change in
1940 Act Law becomes effective on or after the date of original issuance of a
particular series of Preferred Securities.
"Like Amount" means (i) with respect to a redemption of Issuer Securities,
Issuer Securities having an aggregate Liquidation Amount equal to the principal
amount of corresponding Debentures to be contemporaneously redeemed in
accordance with the Indenture and the proceeds of which will be used to pay the
Redemption Price of such Issuer Securities and (ii) with respect to a
distribution of a series of Debentures to holders of the corresponding Preferred
Securities in connection with the liquidation of the applicable Issuer upon the
bankruptcy, dissolution or liquidation of a holder of corresponding Common
Securities, the occurrence of a Special Event or in the event that the
applicable Issuer is not or will not be taxed as a grantor trust but a Tax Event
has not occurred, Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Preferred Securities of the holders to whom such
series of Debentures is distributed.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each date fixed for redemption (the
"Redemption Date") shall be redeemed at the Redemption Price with the proceeds
from the contemporaneous redemption of the corresponding Debentures. Redemptions
of Preferred Securities shall be made, and the Redemption Price shall be deemed
payable, on each Redemption Date only to the extent that an Issuer has funds
sufficient for the payment of such Redemption Price. (Section 4.02(d)). See "--
Subordination of Common Securities."
If the Property Trustee gives a notice of redemption in respect of Preferred
Securities of a particular series (which notice will be conditioned upon the
redemption of the related series of Debentures), then, by 12:00 noon, New York
time, on the Redemption Date, the Property Trustee will, so long as such
Preferred Securities are in book-entry-only form, irrevocably deposit with The
Depository Trust Company ("DTC") funds sufficient to pay the applicable
Redemption Price and, at the direction of the Depositor, will give DTC
irrevocable instructions and authority to pay the Redemption Price to the
holders of such Preferred Securities. See "-- Book-Entry-Only Issuance -- The
Depository Trust Company." If such Preferred Securities are no longer in
book-entry-only form, the Property Trustee will irrevocably deposit with the
Paying Agent for such Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing Preferred Securities.
Notwithstanding the foregoing, if an Issuer does not make the distributions
payable on or prior to the Redemption Date for any Preferred Securities called
for redemption, such payments shall be payable to the holders of such Preferred
Securities on the relevant record date for the related Distribution Date. If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of holders of such Preferred
Securities so called for redemption will cease, except the right of the holders
of such Preferred Securities to receive the Redemption Price, but without
interest on such Redemption Price, and such Preferred Securities will cease to
be outstanding. In the event that any date fixed for redemption of Preferred
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of Preferred Securities called for redemption is
improperly
7
withheld or refused and not paid either by the applicable Issuer or by Western
Resources pursuant to the corresponding Guarantee described herein under
"Description of the Guarantees," distributions on such Preferred Securities will
continue to accrue at the rate set forth on the face of such securities, from
the original Redemption Date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price. (Section 4.02(e)).
Subject to applicable law (including, without limitation, United States
Federal securities law), Western Resources or its subsidiaries may at any time
and from time to time purchase outstanding Preferred Securities by tender, in
the open market or by private agreement.
Payment of the Redemption Price on Preferred Securities to holders of such
Preferred Securities shall be made to the record holders thereof as they appear
on the register for such Preferred Securities on the relevant record date, which
shall be one Business Day prior to the relevant Redemption Date, provided,
however, that in the event that such Preferred Securities do not remain in
book-entry-only form, the relevant record date shall be the date 15 days prior
to the Redemption Date. (Section 4.02(f)).
If less than all the outstanding Issuer Securities are to be redeemed on a
Redemption Date, then the aggregate amount payable shall be allocated 3% to the
Common Securities and 97% to the Preferred Securities. The particular Preferred
Securities to be redeemed shall be selected not more than 90 days prior to the
Redemption Date by the Property Trustee from the outstanding Preferred
Securities of such series not previously called for redemption, by such method
as the Property Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to $25 and integral
multiples in excess thereof) of the aggregate Liquidation Amount of Preferred
Securities of a denomination larger than $25. The Property Trustee shall
promptly notify the Securities Registrar in writing of the Preferred Securities
selected for partial redemption and, in the case of any such Preferred
Securities selected for partial redemption, the aggregate Liquidation Amount
thereof to be redeemed. For all purposes of each Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of a
series of Preferred Securities shall relate, in the case of any Preferred
Securities of such series redeemed or to be redeemed only in part, to the
portion of the aggregate Liquidation Amount of the Preferred Securities of such
series that has been or is to be redeemed. (Section 4.02(g)).
SUBORDINATION OF COMMON SECURITIES
Payment of distributions (including Additional Amounts, if applicable) on,
and the Redemption Price of, Issuer Securities, as applicable, shall be made pro
rata based on the aggregate Liquidation Amount of both the Preferred Securities
and the Common Securities; provided, however, that if on any Distribution Date
or Redemption Date an Event of Default (as defined herein, see "-- Events of
Default; Notice," below) under the Indenture shall have occurred and be
continuing, with respect to a series of Preferred Securities, no payment of or
any distribution (including Additional Amounts, if applicable) on, or the
Redemption Price of, any Common Security corresponding thereto, and no other
payment on account of the redemption, liquidation or other acquisition of the
corresponding Common Securities shall be made unless payment in full in cash of
all accumulated and unpaid distributions (including Additional Amounts, if
applicable) on all outstanding Preferred Securities of such series for all
distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price the full amount of such Redemption Price on all such
outstanding Preferred Securities called for redemption, shall have been made or
provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full of all distributions (including Additional
Amounts, if applicable) on, or the Redemption Price of such Preferred Securities
then due and payable. (Section 4.03(a)).
In the case of any Event of Default under a Trust Agreement, the holder of
the corresponding Common Securities will be deemed to have waived any right to
act with respect to any such Event of Default under such Trust Agreement until
the effect of all such Events of Default with respect to corresponding Preferred
Securities have been cured, waived or otherwise eliminated. Until all such
Events of Default under such Trust Agreement have been so cured, waived or
otherwise eliminated, the
8
Property Trustee shall act solely on behalf of the holders of such Preferred
Securities and not the holder of the corresponding Common Securities, and only
the holders of such Preferred Securities will have the right to direct the
Property Trustee to act on their behalf. (Section 4.03(b)).
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to either Trust Agreement, an Issuer shall be liquidated on the
first to occur of: (i) the expiration of the term of the relevant Trust; (ii)
the bankruptcy, dissolution or liquidation of a holder of Common Securities;
(iii) the Depositor has elected to cause the Trust to be dissolved after the
occurrence of a Special Event or in the event that the Trust is not or will not
be taxed as a grantor trust but a Tax Event has not occurred; (iv) the
redemption of all of the Preferred Securities of such series; and (v) an order
for dissolution of the Trust issued by a court of competent jurisdiction.
(Sections 9.01 and 9.02).
If an early termination occurs as described in clause (iii) of the
immediately preceding paragraph, the Issuer in question shall be liquidated as
expeditiously as practicable by having the Property Trustee distribute, subject
to the receipt of an Opinion of Counsel experienced in such matters to the
effect that the holders of the Preferred Securities will not recognize gain or
loss for United States Federal income tax purposes as a result of such
distribution, to each holder of Preferred Securities of such Issuer and the
corresponding Common Securities a Like Amount of Debentures held by such Issuer
(a "Final Distribution"). However, in the event that the Property Trustee
determines that such Final Distribution is impractical, the holders of such
Issuer Securities will be entitled to receive, out of the assets of such Issuer
available for distribution to holders after satisfaction of all liabilities of
creditors, an amount equal to, in the case of holders of Issuer Securities, the
aggregate of the stated Liquidation Amount of $25 per Issuer Security plus
accrued and unpaid distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because an Issuer has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by such Issuer on the Issuer Securities shall be paid on a pro rata basis.
However, if an Event of Default has occurred and is continuing, the holders of
the Common Securities will be entitled to receive distributions upon any such
dissolution only after the holders of the corresponding Preferred Securities. If
the Debentures of a particular series are distributed to the holders of the
corresponding Preferred Securities, Western Resources will use reasonable
efforts to have such Debentures listed on the New York Stock Exchange or such
other exchange on which the corresponding Preferred Securities are then listed.
If an early termination occurs as described in clause (ii) of the immediately
preceding paragraph, a liquidating trustee (the "Liquidating Trustee") may be
appointed by a majority of the aggregate Liquidation Amount of the Issuer
Securities or by a court of competent jurisdiction. Any such Liquidating Trustee
shall (unless otherwise instructed by a court of competent jurisdiction) make a
Final Distribution or, if deemed appropriate by such Liquidating Trustee, make a
Liquidation Distribution, in substantially the same manner as described above.
(Section 9.04).
EVENTS OF DEFAULT; NOTICE
The occurrence of an "Event of Default" as defined in Section 501 of the
Indenture (see "Description of the Debentures -- Events of Default") constitutes
an "Event of Default" under the affected Trust Agreement.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the affected Preferred
Securities, the Administrative Trustees and the Depositor, unless such Event of
Default shall have been cured or waived. (Section 8.02).
Unless an Event of Default shall have occurred and be continuing, any
Trustee with respect to a particular series of Issuer Securities may be removed
at any time by act of Western Resources, as Depositor of the Issuer. If an Event
of Default has occurred and is continuing, any Trustee with respect to a
particular series of Issuer Securities may be removed at such time by act of the
holders of a majority in aggregate Liquidation Amount of the outstanding Issuer
Securities of such series, delivered to such Trustee (in its individual capacity
and on behalf of the relevant Issuer). No resignation or removal of a
9
Trustee and no appointment of a successor Trustee shall be effective until the
acceptance of appointment by the successor Trustee in accordance with the
provisions of the applicable Trust Agreement. (Section 8.10).
If an Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the corresponding Common Securities upon
dissolution of the relevant Issuer as described above. See "-- Liquidation
Distribution Upon Dissolution."
MERGER OR CONSOLIDATION OF A TRUSTEE
Any corporation into which either the Property Trustee or any Administrative
Trustee that is not a natural person may be merged or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which any such Trustee shall be a party shall be the successor
to such Trustee under the Trust Agreements, provided such corporation is
otherwise qualified and eligible. (Section 8.12).
VOTING RIGHTS
Except as provided below and under "Description of the Guarantees --
Amendments and Assignments" and as otherwise required by law, the holders of the
Preferred Securities will have no voting rights. (Section 6.01(a)).
So long as any Debentures of a particular series are held by an Issuer, the
Property Trustee shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Debenture Trustee with respect to the
Debentures of such series, (ii) waive any past default which is waivable under
Section 513 of the Indenture, (iii) exercise any right to rescind or annul any
declaration that the principal of all the Debentures of such series shall be due
and payable or (iv) consent to any amendment, modification or termination of the
Indenture or the Debentures of such series, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
at least a majority in aggregate Liquidation Amount of the outstanding Issuer
Securities of such series; provided, however, that where a consent under the
Indenture would require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior consent of each holder of the Issuer Securities of such series. The
Property Trustee shall not revoke any action previously authorized or approved
by a vote of the holders of the Issuer Securities of a particular series, except
pursuant to a subsequent vote of the outstanding Issuer Securities. The Property
Trustee shall notify all holders of an affected series of Issuer Securities of
any notice of default received from the Debenture Trustee. In addition to
obtaining the foregoing approvals of the holders of the Issuer Securities of a
particular series, prior to taking any of the foregoing actions, the Property
Trustee shall obtain an Opinion of Counsel experienced in such matters to the
effect that the applicable Issuer will not be classified as an association
taxable as a corporation for United States Federal income tax purposes on
account of such action. (Section 6.01(b)).
If any proposed amendment to a Trust Agreement relating to a particular
series of Issuer Securities provides for, or the Trustees otherwise propose to
effect, (i) any action that would adversely affect the powers, preferences or
special rights of the holders of such Issuer Securities, whether by way of
amendment to the Trust Agreement relating to such Issuer Securities or
otherwise, or (ii) the dissolution, winding up or termination of the Issuer of
such Issuer Securities, other than pursuant to the Trust Agreement relating to
such series of Issuer Securities, then the holders of the outstanding Issuer
Securities of such series will be entitled to vote on such amendment or
proposal, and such amendment or proposal shall not be effective except with the
approval of the holders of at least a majority in aggregate Liquidation Amount
of such outstanding Issuer Securities. (Section 6.01(c)).
No amendment to a Trust Agreement may be made if, as a result of such
amendment, the applicable Issuer would be classified as an association taxable
as a corporation for United States Federal income tax purposes. (Section
6.01(c)).
10
Any required approval of the holders of Issuer Securities of a particular
series may be given at a separate meeting of the holders of Issuer Securities of
such series convened for such purpose or pursuant to the written consent of such
holders. The Administrative Trustees will cause a notice of any meeting at which
holders of such Issuer Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given to
each holder of record of such Issuer Securities in the manner set forth in the
applicable Trust Agreement. (Section 6.02).
No vote or consent of the holders of Issuer Securities of a particular
series will be required for the applicable Issuer to redeem and cancel Issuer
Securities of such series in accordance with the applicable Trust Agreement.
Notwithstanding that holders of Issuer Securities are entitled to vote or
consent under any of the circumstances described above, any of the Issuer
Securities that are owned by Western Resources, any Trustee or any affiliate of
Western Resources or any Trustee, shall, for purposes of such vote or consent,
be treated as if they were not outstanding.
CO-PROPERTY TRUSTEES AND SEPARATE PROPERTY TRUSTEES
Unless an Event of Default under a Trust Agreement shall have occurred and
be continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust Property (as defined in the applicable Trust Agreement) may at the
time be located, the Depositor and the Administrative Trustees shall have power
to appoint, and upon the written request of the Administrative Trustees, Western
Resources, as Depositor, shall for such purpose join with the Administrative
Trustees in the execution, delivery and performance of all instruments and
agreements necessary or proper to appoint one or more persons approved by the
Property Trustee either to act as co-property trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to act as separate
trustee of any such Trust Property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such person or persons
in such capacity, any property, title, right or power deemed necessary or
desirable, subject to the provisions of the applicable Trust Agreement. If
Western Resources, as Depositor, does not join in such appointment within 15
days after the receipt by it of a request to do so, or in case an Event of
Default under the Indenture has occurred and is continuing, the Administrative
Trustees and the Property Trustee shall have power to make such appointment.
(Section 8.09).
PAYMENT AND PAYING AGENTS
Payments in respect of the Preferred Securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable Distribution Dates
or, if the Preferred Securities are not held by DTC, such payments shall be made
by check mailed to the address of the holder entitled thereto as such address
shall appear on the securities register. The Paying Agent shall initially be
Wilmington Trust Company. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Depositor. In the event that Wilmington Trust Company
chooses no longer to be the Paying Agent, the Administrative Trustees shall
appoint a successor acceptable to the Property Trustee and Western Resources to
act as Paying Agent (which shall be a bank or trust company or Western
Resources). (Sections 4.04 and 5.08).
BOOK-ENTRY-ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
DTC will act as securities depository for the Preferred Securities. The
Preferred Securities will be issued only as fully-registered securities
registered in the name of Cede & Co. (DTC's nominee). One or more
fully-registered global Preferred Security certificates will be issued,
representing in the aggregate the total number of Preferred Securities, and will
be deposited with Wilmington Trust Company, as custodian for DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds
11
the securities that its participants ("Participants") deposit with it. DTC
facilitates the settlement of securities transactions among Participants through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers, securities dealers, banks, trust
companies, clearing corporations and certain other organizations ("Direct
Participants"). DTC is owned by a number of its Direct Participants, as well as
by the New York Stock Exchange, the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers, securities dealers, banks
and trust companies that clear through or maintain a custodial relationship with
a Direct Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to DTC and its Participants are on file with the
Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is, in turn, recorded on a Direct
or Indirect Participant's records, as the case may be. Beneficial Owners will
not receive written confirmation from DTC of their purchases, but Beneficial
Owners are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the
respective Direct or Indirect Participants through which the Beneficial Owners
purchased Preferred Securities. Transfers of ownership interests in the
Preferred Securities are also effected by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in Preferred
Securities, except in the event that use of the book-entry system for the
Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants are responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
the arrangements made among them, subject to any statutory or regulatory
requirements as may be in effect from time time.
Redemption notices, if any, will be sent to DTC. If less than all of the
Preferred Securities of a particular series are being redeemed, DTC's practice
is to determine by lot the amount of the Preferred Securities held by each
Direct Participant in such series to be redeemed.
Although voting with respect to the Preferred Securities is limited to the
holders of record of the Preferred Securities, in those cases where a vote is
required neither DTC nor Cede & Co. will itself consent or vote with respect to
any Preferred Securities. Under its usual procedures, DTC would mail an Omnibus
Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
(identified in a listing attached to the Omnibus Proxy) to whose accounts the
Preferred Securities are credited on the record date.
Distribution payments on the Preferred Securities will be made by the Issuer
to DTC. DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings as shown on
DTC's records, unless DTC has reason to believe that it will not receive
payments on such payment date. Payments by Participants to Beneficial Owners
will be governed by standing instructions and customary practices and will be
the responsibility of such Participants and not of DTC, the applicable Issuer or
Western Resources, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of distributions to DTC is the
responsibility of the Issuer in question, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of the Direct or
Indirect Participants in whose accounts the Preferred Securities are held,
respectively.
12
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
the Issuer in question. If DTC stops providing such services and a successor
securities depositary is not obtained, Preferred Security certificates for the
affected series must be printed and delivered. Additionally, the Administrative
Trustees (with the consent of Western Resources) could decide to discontinue use
of the system of book-entry transfers through DTC (or a successor depositary).
In that event, definitive certificates for the Preferred Securities would be
printed and delivered.
The information in this Section concerning DTC and DTC's book-entry system
has been obtained from sources that Western Resources and the Issuers believe to
be reliable. None of Western Resources or the Issuers have responsibility for
the performance by DTC or its Participants of their respective obligations as
described herein or under the rules and procedures governing their respective
operations.
REGISTRAR AND TRANSFER AGENT
Wilmington Trust Company will act as Securities Registrar and transfer agent
for the Issuer Securities. (Section 5.04).
Registration of transfers of Issuer Securities will be effected without
charge by or on behalf of either Issuer, but upon payment (with the giving of
such indemnity as the Issuer or Western Resources may require) in respect of any
tax or other governmental charges which may be imposed in connection therewith.
(Section 5.04).
The Securities Registrar will not be required to register or cause to be
registered any transfer of Issuer Securities of a particular series after they
have been called for redemption. (Section 5.04).
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee undertakes to perform only such duties as are
specifically set forth in such Trust Agreement and, after an Event of Default
under the Indenture, must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the request of any
holder of Preferred Securities or Debentures of a particular series unless the
Property Trustee is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. (Section 8.01).
Western Resources conducts other banking transactions with the Property
Trustee in the ordinary course of its business.
MODIFICATION OF THE TRUST AGREEMENTS
From time to time, Western Resources and the Trustees may, without the
consent of any holders of the Preferred Securities, amend either Trust Agreement
for specified purposes, including, among other things, (i) to cure ambiguities,
correct or supplement any provision of either Trust Agreement which may be
inconsistent with any other provision thereof or to make any other provisions
with respect to matters or questions arising under such Trust Agreement which
shall not be inconsistent with the other provisions of such Trust Agreement, or
(ii) to ensure that a Trust will not be classified for United States Federal
income tax purposes as an association taxable as a corporation and will not be
required to register as an "investment company" under the 1940 Act; provided,
however, that such amendment or action shall not adversely affect the rights of
any holder of the Issuer Securities. Each Trust Agreement contains provisions
permitting Western Resources and the Trustees, with the consent of the holders
of not less than a majority in aggregate Liquidation Amount of the outstanding
Issuer Securities related thereto and upon receipt of an appropriate opinion of
counsel, to modify such Trust Agreement in a manner affecting the rights of the
holders of such Issuer Securities; provided that no such modification may,
without the consent of the holder of each such outstanding Issuer Security
affected by the proposed modification (i) change the amount or timing of any
distribution on such Issuer Securities or otherwise adversely
13
affect the amount of any distribution required to be made in respect of such
Issuer Securities as of a specified date, or (ii) restrict the right of any
holder of such Issuer Securities to institute suit for the enforcement of any
payment under such Trust Agreement. (Section 10.02).
GOVERNING LAW
Each Trust Agreement will be governed by, and construed in accordance with,
the laws of the State of Delaware. (Section 10.04).
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of each Issuer and to operate each Issuer so that neither Issuer will be
deemed to be an "investment company" required to be registered under the 1940
Act or be taxed as a corporation for United States Federal income tax purposes
and so that the Debentures will be treated as indebtedness of Western Resources
for United States Federal income tax purposes. In this connection, the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of either Issuer or the Trust
Agreements, that the Administrative Trustees determine in their discretion to be
necessary or desirable for such purposes, as long as such action does not
adversely affect the interest of the holders of the Preferred Securities.
(Section 2.07).
Holders of the Preferred Securities have no preemptive rights.
DESCRIPTION OF THE GUARANTEES
GENERAL
Set forth below is certain information concerning the Guarantees that will
be executed and delivered by Western Resources for the benefit of the holders
from time to time of Preferred Securities of each particular series. Each
Guarantee will be qualified as an indenture under the Trust Indenture Act.
Wilmington Trust Company will act as indenture trustee (the "Guarantee Trustee")
under each Guarantee for purposes of compliance with the Trust Indenture Act.
The terms of each Guarantee will be those set forth in such Guarantee and those
made part of such Guarantee by the Trust Indenture Act. This summary does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the Guarantees, a form of which is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part, and of the Trust Indenture Act. The Guarantee Trustee will hold each
Guarantee for the benefit of the holders of the corresponding Preferred
Securities. Whenever particular provisions of or defined terms in the Guarantees
are referred to, such sections or defined terms are incorporated herein by
reference. Section references used herein are references to provisions of the
Guarantees unless otherwise stated.
Western Resources will fully and unconditionally agree, on a subordinated
basis, to the extent set forth below, to make the Guarantee Payments (as defined
below) in full to the holders of the Preferred Securities of a particular series
(without duplication of amounts theretofore paid by the applicable Issuer with
respect thereto), as and when due, regardless of any defense, right of set-off
or counterclaim that such Issuer may have or assert other than the defense of
payment. (Section 5.1). The following payments with respect to the Preferred
Securities of a particular series, to the extent not paid by or on behalf of the
applicable Issuer (the "Guarantee Payments"), will be subject to the related
Guarantee (without duplication): (i) any accrued and unpaid distributions
required to be paid on the Preferred Securities of such series, if and only to
the extent that the applicable Issuer has funds sufficient to make such payment;
(ii) the Redemption Price with respect to any such Preferred Securities called
for redemption by the applicable Issuer, if and only to the extent that the
applicable Issuer has funds sufficient to make such payment; and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of such Issuer
(other than in connection with a redemption of all of the corresponding
Preferred Securities), the lesser of (a) the aggregate Liquidation Amount and
all accrued and unpaid distributions on such Preferred Securities to the date of
payment, to the extent the Issuer has funds sufficient to make such payment, and
(b) such amount of assets of such Issuer remaining available for distribution to
holders of such Preferred Securities in liquidation of such Issuer. (Section
1.1). Western
14
Resources' obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by Western Resources to the holders of such
Preferred Securities or by causing the applicable Issuer to pay such amounts to
such holders. (Section 5.1).
Each Guarantee will be a full and unconditional guarantee on a subordinated
basis with respect to the Preferred Securities of the corresponding series from
the time of the issuance of such Preferred Securities, but will not apply (i) to
any payment of distributions if and to the extent that the Issuer with respect
thereto does not have funds sufficient to make such payments or (ii) to the
collection of payment. If Western Resources does not make interest payments on a
series of Debentures held by an Issuer, it is expected that such Issuer will not
pay distributions on such Preferred Securities. The Guarantees will rank
subordinate and junior in right of payment to all liabilities of Western
Resources (except trade credit and any liabilities that may be made pari passu
with or subordinate to the Guarantees expressly by their terms, i.e., another
Guarantee). See "-- Status of the Guarantees."
AMENDMENTS AND ASSIGNMENTS
Except with respect to any changes that do not adversely affect the rights
of the holders of Preferred Securities of a particular series (in which case no
consent of such holders will be required), the terms of a Guarantee may be
changed only with the prior approval of the holders of not less than a majority
in aggregate Liquidation Amount of such outstanding Preferred Securities. All
guarantees and agreements contained in any Guarantee will be binding upon the
successors, assigns, receivers, trustees and representatives of Western
Resources, and shall inure to the benefit of the holders of the corresponding
Preferred Securities then outstanding. (Sections 8.1 and 8.2).
EVENTS OF DEFAULT
An event of default under a Guarantee will occur upon the failure of Western
Resources to perform any of its payment obligations thereunder. (Section 1.1).
The holders of a majority in aggregate Liquidation Amount of the Preferred
Securities of the affected series have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of such Guarantee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under such Guarantee. (Section 5.4).
If the Guarantee Trustee fails to enforce a Guarantee, any holder of the
corresponding series of Preferred Securities may institute a legal proceeding
directly against Western Resources to enforce such Holder's rights under such
Guarantee without first instituting a legal proceeding against the applicable
Issuer, the Guarantee Trustee or any other person or entity. (Section 5.4).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by Western Resources in the performance of a Guarantee, undertakes to
perform only such duties as are specifically set forth in the Guarantees and,
after default with respect to any Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by a Guarantee at the
request of any holder of Preferred Securities of a particular series unless the
Guarantee Trustee is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. (Sections 3.1 and 3.2).
TERMINATION OF THE GUARANTEES
A Guarantee will terminate and be of no further force and effect upon full
payment of the Redemption Price of all Preferred Securities of the corresponding
series, the distribution of Debentures of the applicable series to the holders
of such Preferred Securities in exchange for all of such Preferred Securities or
upon payment in full of the amounts payable upon liquidation of the related
Issuer. Notwithstanding the foregoing, each Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Preferred Securities must restore payment of any sums paid under such
Preferred Securities or the related Guarantee. (Section 7.1).
15
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of Western Resources
and will rank subordinate and junior in right of payment to all Senior
Indebtedness (as defined above) of Western Resources. (Section 6.1). Each Trust
Agreement provides that each holder of Preferred Securities of a particular
series by acceptance thereof agrees to the subordination provisions and other
terms of the related Guarantee.
Each Guarantee will rank pari passu with each other Guarantee and with any
similar guarantees issued by the Guarantor on behalf of the holders of Preferred
Securities issued by any other Issuer holding Debentures issued under the
Indenture. (Section 6.2).
Each Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the applicable Guarantee without first
instituting a legal proceeding against any other person or entity). (Section
5.5).
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the laws
of the State of New York. (Section 8.5).
DESCRIPTION OF THE DEBENTURES
GENERAL
Set forth below is a description of certain terms of the Debentures which
each Issuer will purchase with its Common Securities and the proceeds of the
issuance and sale of such Issuer's Preferred Securities. The following summary
does not purport to be complete and is subject in all respects to, and is
qualified in its entirety by reference to, the Indenture, as supplemented by the
Supplemental Indenture creating each series of Debentures, from Western
Resources to Wilmington Trust Company, as trustee with respect to the Debentures
(the "Debenture Trustee"), the forms of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and the Trust
Indenture Act. Whenever particular provisions of or defined terms in the
Indenture or the Supplemental Indenture are referred to, such sections or
defined terms are incorporated herein by reference. Section references used
herein are references to provisions of the Indenture unless otherwise stated.
Concurrently with the issuance of each Issuer's Preferred Securities, the
Issuer will invest the proceeds thereof in a corresponding series of Debentures
newly issued by Western Resources. The Debentures will be unsecured subordinated
obligations of Western Resources issued under the Indenture. Each series of
Debentures will be in a principal amount equal to the aggregate stated
Liquidation Amount of the corresponding Preferred Securities plus Western
Resources' concurrent investment in the Common Securities and will rank pari
passu with all other series of Debentures. The Indenture does not limit the
aggregate principal amount of Debentures which may be issued thereunder.
OPTIONAL REDEMPTION
Western Resources will have the right, at any time and from time to time, as
set forth in an applicable Supplemental Indenture, to redeem any series of
Debentures, in whole or in part, at a redemption price as set forth in such
Supplemental Indenture, together with any accrued but unpaid interest thereon,
including any Additional Interest (as defined below) to the redemption date.
If a Special Event shall occur and be continuing, Western Resources shall
have the right to redeem any series of Debentures in whole but not in part, at
the Redemption Price plus any accrued and unpaid interest on such series of
Debentures, including any Additional Interest, if any, to the redemption date
fixed for redemption for such series (the "Redemption Date"). (Section 102 of
the Supplemental Indenture).
For so long as an Issuer is the holder of all the outstanding Debentures of
a particular series, the proceeds of any such redemption will be used by such
Issuer to redeem Preferred Securities of such
16
series and the corresponding Common Securities in accordance with their terms.
Western Resources may not redeem any series of Debentures in part unless all
accrued and unpaid interest thereon (including any Additional Interest) has been
paid in full on all outstanding Debentures of such series for all quarterly
interest periods terminating on or prior to the Redemption Date. (Section 102 of
the Supplemental Indenture).
Any optional redemption of any series of Debentures shall be made upon not
less than 30 nor more than 90 days' notice to the holders thereof. If at the
time of mailing of any notice of redemption Western Resources shall not have
deposited with the Debenture Trustee (and/or irrevocably directed the Debenture
Trustee to apply, from money held by it available to be used for the redemption
of Debentures) an amount in cash sufficient to redeem all of the Debentures to
be redeemed, including accrued interest to such Redemption Date, such notice
shall state that the proposed redemption to which such notice relates is subject
to the deposit of such amount with the Trustee on or before the Redemption Date.
(Section 1204).
After notice of redemption is given and Western Resources having on or
before the Redemption Date deposited with the Debenture Trustee (and/or having
irrevocably directed the Debenture Trustee to apply, from money held by it
available to be used for the redemption of Debentures) an amount in cash
sufficient to redeem all of the Debentures to be redeemed, the Debentures so to
be redeemed will, on the Redemption Date, become due and payable and from and
after such date, such Debentures will cease to bear interest. (Section 1206).
INTEREST
The Debentures of a particular series shall bear interest at the rate per
annum set forth in the applicable Supplemental Indenture and from the date
specified therein. Such interest shall be payable quarterly in arrears on March
31, June 30, September 30 and December 31 of each year (each, an "Interest
Payment Date"), subject to certain exceptions, to the person in whose name such
Debentures are registered, at the close of business on the Business Day next
preceding such Interest Payment Date. (Section 307 of the Indenture and Section
101 of the Supplemental Indenture). It is anticipated that the Debentures will
be held in the name of the Property Trustee in trust for the benefit of the
holders of the corresponding Issuer Securities.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and, for any period shorter than a
full monthly period, shall be computed on the basis of the actual number of days
elapsed in such period. (Section 310). In the event that any date on which
interest is payable on the Debentures is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date the payment was
originally payable. (Section 101 of the Supplemental Indenture).
WESTERN RESOURCES' OPTION TO EXTEND INTEREST PAYMENT PERIODS
Western Resources shall have the right, at any time and from time to time
while the Debentures of any particular series are outstanding, so long as an
Event of Default has not occurred or is continuing, to extend the interest
payment period on such Debentures for a period not exceeding 20 consecutive
quarters (the "Extension Period") during which period interest will compound
quarterly. At the end of any such Extension Period, Western Resources must pay
all interest then accrued and unpaid (together with interest thereon at the rate
specified for such Debentures to the extent permitted by applicable law). During
any such Extension Period, Western Resources may not declare or pay any
dividends or distributions (other than dividends or distributions payable in
common stock of Western Resources or other securities ranking junior in right of
payment to the Debentures of such series) on, or redeem, purchase, acquire, or
make a liquidation payment with respect to, any of its capital stock or any
security ranking pari passu with or junior in right of payment to the Debentures
of such series, or make any guarantee payment with respect to the foregoing
(other than pro rata payments under the Guarantees)
17
or repurchase, or cause any of its subsidiaries to repurchase, any security of
Western Resources ranking pari passu with or junior in right of payment to the
Debentures of such series (except for payments made on any series of Debentures
upon the stated maturity of such Debentures); provided that Western Resources
may redeem, purchase, acquire or make a liquidation payment with respect to any
of its capital stock or any security ranking pari passu with or junior in right
of payment to the Debentures of such series, make any guarantee payment with
respect to the foregoing or repurchase, or cause any of its subsidiaries to
repurchase, any security of Western Resources ranking pari passu with or junior
in right of payment to the Debentures of such series with securities (or the
proceeds from the issuance of securities) having no higher ranking than the
capital stock or the other securities which are to be redeemed, purchased,
acquired, with respect to which a liquidation payment is to be made, to which a
guarantee payment is to be made with respect to the foregoing or which are to be
repurchased. Such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity date or Redemption Date of such Debentures. Upon the termination of any
such Extension Period and the payment of all amounts then due, Western Resources
may select a new Extension Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extension Period, except at the end
thereof. So long as the Property Trustee shall be the sole holder of the
Debentures, Western Resources must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its selection of such Extension
Period at least one Business Day prior to the earlier of (i) the date that the
distribution on the corresponding Preferred Securities is payable or (ii) the
date the Administrative Trustees are required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Preferred Securities of such series of the record date for the payment of
such distribution or the date such distribution is payable, but in any event not
less than one Business Day prior to such record date. The Debenture Trustee will
be required to give prompt notice of Western Resources' selection of such
Extension Period to the holders of the Preferred Securities and the
Administrative Trustees. (Section 101 of the Supplemental Indenture).
ADDITIONAL INTEREST
If at any time an Issuer shall be required to pay any additional
distributions on distributions in arrears in respect of the Preferred Securities
of a particular series pursuant to the terms thereof, Western Resources will pay
as interest to such Issuer, as the holder of the Debentures of the corresponding
series, an amount of additional interest ("Additional Interest Attributable to
Deferral") equal to such additional distributions. Accordingly, in such
circumstances Western Resources will, to the fullest extent permitted by
applicable law, pay interest upon interest in order to provide for quarterly
compounding on such Debentures. In addition, if an Issuer is required to pay any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States or any other taxing
authority, then, in each case, Western Resources will also pay such amounts as
shall be required so that the net amounts received and retained by such Issuer
after paying such taxes, duties, assessments or governmental charges will be not
less than the amounts such Issuer would have received had no such taxes, duties,
assessments or governmental charges been imposed ("Additional Interest
Attributable to Taxes," and, together with Additional Interest Attributable to
Deferral, "Additional Interest"). (Section 101 of the Indenture and Section 101
of the Supplemental Indenture).
RIGHT OF SET-OFF
Notwithstanding anything to the contrary in the Indenture, Western Resources
shall have the right to set-off any payment it is otherwise required to make
thereunder to the extent Western Resources has theretofore made, or is
concurrently on the date of such payment, making a payment under the related
Guarantee. (Section 311).
SUBORDINATION
The Debentures will be subordinate and junior in right of payment to the
prior payment, in full in cash or cash equivalents, of all Senior Indebtedness
(as defined below). (Sections 101 and 1101). In the event of (a) any insolvency
or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relating to Western Resources or to its
18
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of Western Resources, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of
Western Resources (except a distribution in connection with a consolidation of
Western Resources with, or the merger of Western Resources into, another
corporation or the liquidation or dissolution of Western Resources following
conveyance, transfer or lease of its properties and assets substantially as an
entirety to another corporation upon the terms and conditions described below
under "-- Consolidation, Merger and Sale"), the holders of all Senior
Indebtedness will be entitled to receive payment in full in cash or cash
equivalents of all amounts due or to become due thereon, before the holders of
Debentures are entitled to receive any payment on account of the principal of or
interest on the Debentures; and any payment or distribution of assets of Western
Resources of any kind or character, whether in cash, property or securities, by
set-off or otherwise, to which the holders of the Debentures or the Debenture
Trustee would be entitled but for the provisions of the Indenture relating to
subordination shall be paid by the liquidating trustee or agent or other person
making such payment or distribution directly to the holders of Senior
Indebtedness ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness to the extent necessary to make payment in
full in cash or cash equivalents of all Senior Indebtedness remaining unpaid. In
the event that, notwithstanding the foregoing, the Debenture Trustee or any
holder of the Debentures shall have received payment or distribution of assets
of Western Resources of any kind or character (excluding certain permitted
subordinated securities) before all Senior Indebtedness is paid in full or
payment thereof provided for, then such payment or distribution will be paid
over or delivered to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or distribution of the
assets of Western Resources for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash or cash equivalents. (Section 1102).
Western Resources is prohibited from making payments on account of the
principal of or interest on the Debentures or on account of the purchase or
redemption or other acquisition of the Debentures if there shall have occurred
and be continuing: (a) a default in any payment with respect to any Senior
Indebtedness (as defined herein) or (b) any other event of default with respect
to any Senior Indebtedness resulting in the acceleration of the maturity
thereof. (Section 1103). In the event that Western Resources makes any payment
to the Debenture Trustee or any holder of any series of Debentures, which
payment is prohibited by the foregoing, then such payment is required to be paid
over to the representative of the holders of the Senior Indebtedness then
outstanding to the extent necessary to pay in full, in cash or cash equivalents,
all Senior Indebtedness. (Section 1103).
Subject to the payment in full of all Senior Indebtedness, the holders of
the Debentures shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments and distributions of assets of Western
Resources applicable to the Senior Indebtedness until the Debentures are paid in
full. (Section 1105).
If Western Resources fails to make any payment on a series of Debentures
when due or within any applicable grace period, such failure will constitute an
Event of Default under the related Indenture. See "Events of Default."
As of September 30, 1995, the Senior Indebtedness of Western Resources was
approximately $1.8 billion. As a holding company, certain of Western Resources'
assets consist of the stock of its subsidiaries. Except to the extent that
Western Resources may itself be a creditor with recognized claims against
Western Resources' subsidiaries, the claims of the holders of the Debentures to
the assets of the subsidiaries of Western Resources effectively are subordinated
to the claims of direct creditors of such subsidiaries. See "Risk Factors --
Holding Company Structure" in the accompanying Prospectus Supplement.
19
The term "Senior Indebtedness" shall mean the principal of, interest on and
any other payment due pursuant to any of the following, whether outstanding at
the date of execution of any Supplemental Indenture or thereafter incurred,
created or assumed:
(a) all indebtedness of Western Resources on a consolidated basis (other
than any obligations to trade creditors) evidenced by notes, debentures,
bonds or other securities sold by Western Resources for money borrowed and
capitalized lease obligations;
(b) all indebtedness of others of the kinds described in the preceding
clause (a) assumed by or guaranteed in any manner by Western Resources or in
effect guaranteed by Western Resources;
(c) all obligations of Western Resources issued or assumed as the
deferred purchase price of property, all conditional sale obligations of
Western Resources and all obligations of Western Resources under any title
retention agreement (but excluding trade accounts payable);
(d) certain obligations of Western Resources for the reimbursement of
any obligor on any letter of credit, banker's acceptance, security purchase
facility, surety bond or similar credit transaction entered into in the
ordinary course of business of Western Resources; and
(e) all renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding clauses (a) through (d);
unless, in the case of any particular indebtedness, renewal, extension or
refunding, the instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness, renewal,
extension or refunding is made pari passu with or subordinate to the Debentures.
(Section 101).
Notwithstanding the foregoing, each series of Debentures will rank pari
passu with each other series of Debentures.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued.
CERTAIN COVENANTS OF WESTERN RESOURCES
In the Indenture, Western Resources covenants that it will not declare or
pay any dividends or distributions (other than dividends or distributions
payable in common stock of Western Resources or other securities ranking junior
in right of payment to the Debentures of a particular series) on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or any security ranking pari passu with or junior in right of
payment to the Debentures of such series, or make any guarantee payments with
respect to the foregoing (other than pro rata payments under the Guarantees) or
repurchase, or cause any of its subsidiaries to repurchase, any security of
Western Resources ranking pari passu with or junior in right of payment to the
Debentures of such series (except for payments made on any series of Debentures
upon the stated maturity of such Debentures); provided that Western Resources
may redeem, purchase, acquire or make a liquidation payment with respect to any
of its capital stock or any security ranking pari passu with or junior in right
of payment to the Debentures of such series, make any guarantee payment with
respect to the foregoing or repurchase, or cause any of its subsidiaries to
repurchase, any security of Western Resources ranking pari passu with or junior
in right of payment to the Debentures of such series with securities (or the
proceeds from the issuance of securities) having no higher ranking than the
capital stock or the other securities which are to be redeemed, purchased,
acquired, with respect to which a liquidation payment is to be made, to which a
guarantee payment is to be made with respect to the foregoing or which are to be
repurchased; if at such time (i) there shall have occurred any event of which
Western Resources has actual knowledge that (a) with the giving of notice or the
lapse of time, or both, would constitute an Event of Default with respect to
such series of Debentures under the Indenture and (b) which Western Resources
shall not have taken reasonable steps to cure, (ii) Western Resources shall be
in default with respect to its payment of any obligations under the Guarantee or
(iii) Western Resources shall have given notice of its selection of an Extension
Period as provided in the Indenture, and such Extension Period, or any extension
thereof, shall have commenced and be continuing. (Section 1005). Western
Resources also covenants (i) not to
20
transfer ownership of Common Securities of the Issuer to which Debentures have
been issued to any person other than an Affiliate of Western Resources as
permitted under the Indenture; provided that no such transfer will result in (x)
such Issuer being considered an "investment company" that is required to be
registered under the Investment Company Act of 1940, as amended, or (y) the
Issuer not being taxed as a grantor trust for United States Federal income tax
purposes, (ii) not to voluntarily dissolve, wind up or terminate each Issuer,
except in connection with the distribution of the corresponding Debentures to
the holders of the Preferred Securities of such Issuer in liquidation of such
Issuer or in connection with certain mergers, consolidations or amalgamations
permitted by the corresponding Trust Agreement and (iii) to use its reasonable
efforts, consistent with the terms and provisions of the corresponding Trust
Agreement, to cause such Issuer to remain a grantor trust and otherwise not to
be classified as an association taxable as a corporation for United States
Federal income tax purposes. (Section 1005).
EVENTS OF DEFAULT
The Indenture will provide that any one or more of the following described
events with respect to a series of Debentures that has occurred and is
continuing constitutes an "Event of Default" with respect to such series of
Debentures:
(a) failure for 30 days to pay any interest on such series of
Debentures, including any Additional Interest in respect thereof, when due
(subject to the deferral of any due date in the case of an Extension
Period);
(b) failure to pay any principal on such series of Debentures when due
whether at maturity, upon redemption by declaration of acceleration or
otherwise; except that, in the case of an optional redemption, the failure
to redeem any Debenture which is the result of Western Resources' failure to
deposit on or before the Redemption Date with the Debenture Trustee (and/or
having irrevocably directed the Debenture Trustee to apply, from money held
by it available to be used for the redemption of Debentures) an amount in
cash sufficient to redeem all of the Debentures to be redeemed, shall not be
an Event of Default, but shall be deemed a recission of the call for
redemption;
(c) failure to observe or perform in any material respect any other
covenant relating to such series of Debentures contained in the Indenture
for 90 days after written notice to Western Resources from the Debenture
Trustee or the holders of at least 25% in principal amount of the
outstanding Debentures of such series; or
(d) certain events in bankruptcy, insolvency or reorganization of
Western Resources. (Section 501).
If an Event of Default has occurred and is continuing, the holders of a
majority in outstanding principal amount of each affected series of Debentures
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Debenture Trustee. (Section 512). The Debenture
Trustee or the holders of not less than 25% in aggregate outstanding principal
amount of such series of Debentures may declare the principal due and payable
immediately upon an Event of Default, and should the Debenture Trustee or such
holders of such Debentures fail to make such declaration the holders of at least
25% in aggregate Liquidation Amount of Preferred Securities of such series shall
have such right. The holders of a majority in aggregate outstanding principal
amount of such series of Debentures may annul such declaration and waive the
default if the default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration and
any Additional Interest has been deposited with the Debenture Trustee. (Section
502).
The holders of a majority in outstanding principal amount of each series of
Debentures may, on behalf of the holders of all the Debentures of such series,
waive any past default, except a default in the payment of principal or interest
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default in respect of a covenant
or provision which under the Indenture cannot be modified or amended without the
consent of the holder of each outstanding Debenture of
21
such series. (Section 513). Western Resources is required to file annually with
the Debenture Trustee a certificate as to whether or not Western Resources is in
compliance with all the conditions and covenants applicable to it under the
Indenture. (Section 1004).
A voluntary or involuntary dissolution of any Issuer prior to the redemption
or maturity of the Debentures held by such Issuer will not constitute an Event
of Default with respect to such Debentures. If any Issuer is dissolved, an event
the possibility of which Western Resources and the Issuers consider to be
remote, any of the following, among other things, could occur: (i) a
distribution of the Debentures held by such Issuer to the holders of the
corresponding Preferred Securities, (ii) a cash distribution to the holders of
such Preferred Securities out of the sale of assets of such Issuer, after
satisfaction of all liabilities to creditors, (iii) a permitted redemption at
par of the Debentures, and a consequent redemption of a Like Amount of such
Preferred Securities, at the option of Western Resources under the circumstances
described under "-- Optional Redemption" or (iv) the rollover of the Trust
Property (as defined in the Trust Agreement) into another entity with similar
characteristics.
FORM, EXCHANGE AND TRANSFER
The Debentures, if issued in certificated form, will be issuable only in
registered form, without coupons and only in denominations of $25 and integral
multiples thereof. (Section 302).
Subject to the terms of the Indenture, Debentures may be presented for
registration of transfer or exchange (duly endorsed or accompanied by
satisfactory instruments of transfer) at the office of the Securities Registrar
or at the office of any transfer agent designated by Western Resources for such
purpose. No service charge will be made for any registration of transfer or
exchange of Debentures, but Western Resources may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Such transfer or exchange will be effected upon the Securities
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of transfer, title and identity of the person making the request.
Western Resources has appointed the Debenture Trustee as the initial Securities
Registrar. (Section 305). Western Resources may at any time designate additional
transfer agents, rescind the designation of any transfer agent or approve a
change in the office through which any transfer agent acts. (Section 1002).
If a series of Debentures is to be redeemed in part, Western Resources will
not be required to issue, register the transfer of or exchange any Debentures of
such series during a period beginning at the opening of business 15 days before
the day of mailing of the notice of redemption for such Debentures that may be
selected for redemption and ending at the close of business on the day of such
mailing. (Section 305).
PAYMENT AND PAYING AGENTS
Payment of interest on a Debenture on any Interest Payment Date will be made
to the Person in whose name such Debenture (or one or more predecessor
Debentures) is registered at the close of business on the Regular Record Date
for such interest. (Section 307).
Principal of and any interest on the Debentures will be payable at the
office of such Paying Agent or Paying Agents as Western Resources may designate
for such purpose from time to time, except that at the option of Western
Resources, payment of any interest may be made by check mailed to the address of
the person entitled thereto as such address appears in the Securities Register
or by wire transfer. (Section 101 of the Supplemental Indenture). The corporate
trust office of the Debenture Trustee in the City of Wilmington, Delaware is
designated as Western Resources' initial sole Paying Agent for payments with
respect to the Debentures. Western Resources may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts. (Section
1002).
SUPPLEMENTAL INDENTURES, MODIFICATION OF THE INDENTURE
From time to time Western Resources and the Debenture Trustee may, without
the consent of the holders of any series of Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies, qualifying, or maintaining
22
the qualification of, the Indenture under the Trust Indenture Act, or making any
other change that does not adversely affect the rights of any holder of
Debentures. (Section 901). The Indenture will contain provisions permitting
Western Resources and the Debenture Trustee, with the consent of the holders of
not less than a majority in principal amount of any outstanding series of
Debentures affected, to modify the Indenture in a manner affecting the rights of
the holders of such series of Debentures; provided that no such modification
may, without the consent of the holder of each outstanding Debenture so
affected, (i) change the fixed maturity of any series of Debentures, reduce the
principal amount thereof, or reduce the rate or extend the time for payment of
interest thereon (otherwise than as permitted under the Indenture), (ii) reduce
the percentage of the principal amount of Debentures of any series, the holders
of which are required to consent to any such modification of the Indenture or
(iii) modify certain provisions of the Indenture relating to the waiver of past
defaults or compliance by Western Resources with certain covenants set forth
therein. The Indenture also requires the consent of the holders of the affected
Preferred Securities in respect of certain amendments to or termination of the
Indenture and in respect to compliance by Western Resources with certain
covenants in the Indenture. (Section 902). In addition, Western Resources and
the Debenture Trustee may execute, without the consent of any holders of
Debentures, Supplemental Indentures for the purpose of creating new series of
Debentures. (Section 901).
CONSOLIDATION, MERGER AND SALE
Western Resources may not consolidate with, merge into, or convey, transfer
or lease its properties and assets substantially as an entirety to, any Person
(a "Successor Person"), and may not permit any Person to merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to
Western Resources, unless: (i) the Successor Person (if any), is a corporation,
partnership, trust or other entity organized and validly existing under the laws
of any United States jurisdiction and assumes Western Resources' obligations on
the Debentures, the Indenture, the Guarantees and the Expense Agreements (as
defined below); (ii) immediately after giving effect to the transaction and
treating any indebtedness which becomes an obligation of Western Resources or
any subsidiary as a result of the transaction as having been incurred by it at
the time of the transaction, no Event of Default, and no event which, after
notice or lapse of time, would become an Event of Default, shall have occurred
and be continuing; (iii) such transaction does not give rise to any breach or
violation of the Trust Agreement or the Guarantee; and (iv) Western Resources
has delivered to the Debenture Trustee an Officers' Certificate and an Opinion
of Counsel as to certain matters. (Section 801).
SATISFACTION AND DISCHARGE
Under the terms of the Indenture, Western Resources will be discharged from
any and all obligations in respect of a particular series of Debentures (except,
in each case, for certain obligations to register the transfer or exchange of
such Debentures, replace stolen, lost or mutilated Debentures and hold moneys or
U.S. Government Obligations (as defined in the Indenture) for payment in trust)
if Western Resources deposits with the Debenture Trustee, in trust, moneys or
U.S. Government Obligations in an amount sufficient to pay all the principal of,
and interest on, such series of Debentures on the dates such payments are due in
accordance with the terms of such Debentures. (Section 401).
GOVERNING LAW
The Indenture, the Supplemental Indentures and the Debentures will be
governed by, and construed in accordance with, the laws of the State of New
York. (Section 112).
MISCELLANEOUS
Western Resources will have the right at all times to assign any of its
rights or obligations under the Indenture to a direct or indirect wholly owned
subsidiary of Western Resources, provided that, in the event of any such
assignment, Western Resources will remain liable for such obligations. Subject
to the foregoing, the Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns. (Section 109).
23
RELATIONSHIP AMONG THE PREFERRED
SECURITIES, THE DEBENTURES AND THE GUARANTEES
As long as payments of interest and other payments are made when due on each
series of Debentures, such payments will be sufficient to cover distributions
and other payments due on the Preferred Securities of the corresponding series,
because: (i) the aggregate principal amount of each series of Debentures will be
equal to the sum of the aggregate stated Liquidation Amount of the corresponding
Issuer Securities; (ii) the interest rate and interest and other payment dates
on each series of Debentures will correspond to the distribution rate and
distribution and other payment dates on the Preferred Securities of such series;
(iii) the Expense Agreements entered into by Western Resources pursuant to the
Trust Agreements (each an "Expense Agreement" and, collectively, the "Expense
Agreements") provide that Western Resources shall pay for all, and an Issuer
shall not be obligated to pay, directly or indirectly, for any, costs, expenses
or liabilities of such Issuer, including any income taxes, duties and other
governmental charges, and all costs and expenses with respect thereto, to which
such Issuer may become subject, except for United States withholding taxes and
such Issuer's payment obligations to holders of the Preferred Securities of a
particular series under such Preferred Securities; and (iv) each Trust Agreement
further provides that the Trustees shall not cause or permit an Issuer to, among
other things, engage in any activity that is not consistent with the limited
purposes of each Issuer.
Payments of distributions and other amounts due on Preferred Securities of
each series (to the extent an Issuer has funds sufficient for the payment of
such distributions) are guaranteed by Western Resources as and to the extent set
forth under "Description of the Guarantees." If and to the extent that Western
Resources does not make payments on any series of Debentures, such Issuer will
not pay distributions or other amounts due on the Preferred Securities of the
corresponding series.
If the Guarantee Trustee fails to enforce any Guarantee, a holder of a
Preferred Security to which such Guarantee applies may institute a legal
proceeding directly against Western Resources to enforce such holder's rights
under such Guarantee without first instituting a legal proceeding against the
Issuer of such Preferred Security or any other person or entity.
Each Issuer's Preferred Securities will evidence the rights of the holders
thereof to the benefits of such Issuer, a trust that exists for the sole purpose
of issuing its Issuer Securities and investing the proceeds of its Preferred
Securities in a corresponding series of Debentures of Western Resources, while
each series of Debentures represents indebtedness of Western Resources. A
principal difference between the rights of a holder of a Preferred Security and
a holder of a Debenture is that a holder of a Debenture will accrue, and
(subject to the permissible extensions of the interest payment period) is
entitled to receive, interest on the principal amount of Debentures held, while
a holder of Preferred Securities is only entitled to receive distributions if
and to the extent the Issuer has funds sufficient for the payment of such
distributions.
Upon any voluntary or involuntary dissolution, winding up or termination of
any Issuer involving the distribution of a series of Debentures, the holders of
Issuer Securities of the corresponding series will be entitled to receive, out
of assets legally available for distribution to such holders, a Final
Distribution or a Liquidation Distribution; provided, however that if an Event
of Default under an applicable Trust Agreement shall have occurred and be
continuing, the holders of the Common Securities shall be entitled to receive,
out of assets legally available for distribution to such holders, distributions
only after the holders of the corresponding Preferred Securities. See
"Description of the Preferred Securities -- Liquidation Distribution Upon
Dissolution." Upon any voluntary or involuntary liquidation or bankruptcy of
Western Resources, each Issuer, as a holder of Debentures, would be a
subordinated creditor of Western Resources, junior in right of payment to all
Senior Indebtedness, but entitled to receive payment in full of principal and
interest before any stockholders of Western Resources receive any payments or
distributions. Since Western Resources has agreed to pay for all costs, expenses
and liabilities of the Issuers (other than United States withholding taxes and
other than the Issuers' obligations to the holders of Preferred Securities under
the Preferred Securities, which obligations are independently covered by the
24
Guarantees), the positions of a holder of Preferred Securities and a holder of
Debentures relative to other creditors and to stockholders of Western Resources
in the event of a liquidation or bankruptcy of Western Resources would be
substantially the same.
A default or event of default under any Senior Indebtedness will not
constitute a default or Event of Default under the Debentures. However, in the
event of payment defaults under, or acceleration of, Senior Indebtedness, the
subordination provisions of the Debentures provide that no payments may be made
in respect of the Debentures until such Senior Indebtedness has been paid in
full or any payment default thereunder has been cured or waived.
Failure to make required payments on any series of Debentures would
constitute an Event of Default under the Indenture.
PLAN OF DISTRIBUTION
The Preferred Securities may be sold in a public offering to or through
underwriters or dealers designated from time to time. An Issuer may sell its
Preferred Securities as soon as practicable after the effectiveness of the
Registration Statement of which this Prospectus is a part. The names of any
underwriters or dealers involved in the sale of the Preferred Securities of a
particular series in respect of which this Prospectus is delivered, the number
of Preferred Securities to be purchased by any such underwriters or dealers and
the applicable commissions or discounts will be set forth in the applicable
Prospectus Supplement.
Underwriters may offer and sell Preferred Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. In connection with the sale of Preferred Securities,
underwriters will be deemed to have received compensation from Western Resources
and/or an Issuer in the form of underwriting discounts or commissions.
Underwriters may sell Preferred Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters.
Any underwriting compensation paid by Western Resources to underwriters in
connection with the offering of the Preferred Securities, and any discounts,
concessions or commissions allowed by such underwriters to participating
dealers, will be set forth in the applicable Prospectus Supplement. Underwriters
and dealers participating in the distribution of Preferred Securities may be
deemed to be underwriters, and any discounts and commissions received by them,
and any profit realized by them on resale of such Preferred Securities, may be
deemed to constitute underwriting discounts and commissions under the Securities
Act. Underwriters and dealers may be entitled, pursuant to their agreement with
Western Resources and an Issuer, to indemnification against and contribution
toward certain civil liabilities, including liabilities under the Securities
Act, and to reimbursement by Western Resources for certain expenses.
In connection with the offering of the Preferred Securities of a particular
series, the Issuer thereof may grant to the underwriters an option to purchase
additional Preferred Securities to cover over-allotments, if any, at the initial
public offering price (with an additional underwriting commission), as set forth
in the applicable Prospectus Supplement.
Underwriters and dealers may engage in transactions with, or perform
services for, Western Resources, an Issuer and any of their respective
affiliates.
An Issuer's Preferred Securities will be a new issue of securities and will
have no established trading market. Any underwriters to whom an Issuer's
Preferred Securities are sold by such Issuer for public offering and sale may
make a market in such Preferred Securities, but such underwriters will not be
obligated to do so and may discontinue any market-making at any time without
notice. Such Preferred Securities may or may not be listed on a national
securities exchange. No assurance can be given as to the liquidity of or the
existence of meaningful trading markets for any Preferred Securities.
25
EXPERTS
The consolidated financial statements and schedules included in or
incorporated by reference in Western Resources' 1994 Annual Report on Form 10-K
have been audited by Arthur Andersen LLP, independent public accountants, as set
forth in its report. In that report, that firm states that with respect to
Kansas Gas and Electric Company (a wholly owned subsidiary of Western
Resources), its opinion is based on the report of other public accountants for
the year ended December 31, 1992, namely Deloitte & Touche LLP. Since 1993,
Arthur Andersen LLP has audited both Western Resources and Kansas Gas and
Electric Company. The consolidated financial statements and supporting schedules
referred to above have been incorporated herein in reliance upon the authority
of Arthur Andersen LLP as experts in giving said reports.
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from Kansas Gas and Electric
Company's Annual Report on Form 10-K for the year ended December 31, 1992 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
LEGAL MATTERS
Certain legal matters will be passed upon for Western Resources by John K.
Rosenberg, Esq., Executive Vice President and General Counsel of Western
Resources, by Cahill Gordon & Reindel, a partnership including a professional
corporation, counsel for Western Resources, and by Richards, Layton & Finger,
special Delaware counsel to Western Resources and the Issuers. The validity of
the Preferred Securities will be passed upon for the underwriters by Sidley &
Austin. Cahill Gordon & Reindel and Sidley & Austin will not pass upon the
incorporation of Western Resources and will rely upon the opinion of John K.
Rosenberg, Esq. as to matters of Kansas law and the Public Utility Holding
Company Act of 1935. At September 30, 1995, Mr. Rosenberg owned directly and/or
beneficially 2,631 shares of Common Stock of Western Resources and had been
granted, pursuant to and subject to the terms of Western Resources' Long-Term
Incentive Program, 1,466 performance shares.
26
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF WESTERN
RESOURCES SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
--------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
---------
Prospectus Summary................................... S-3
Risk Factors......................................... S-5
Western Resources Capital I.......................... S-7
Western Resources, Inc............................... S-8
Coverage Ratios...................................... S-9
Use of Proceeds...................................... S-10
Certain Terms of the Series A Preferred Securities... S-10
Certain Terms of the Series A Guarantee.............. S-12
Certain Terms of the Series A Debentures............. S-13
United States Taxation............................... S-16
Underwriting......................................... S-19
PROSPECTUS
Available Information................................ 2
Incorporation of Certain Documents by Reference...... 2
The Issuers.......................................... 3
Western Resources, Inc............................... 3
Description of the Preferred Securities.............. 4
Description of the Guarantees........................ 14
Description of the Debentures........................ 16
Relationship Among the Preferred Securities, the
Debentures and the Guarantees....................... 24
Plan of Distribution................................. 25
Experts.............................................. 26
Legal Matters........................................ 26
PREFERRED SECURITIES
WESTERN RESOURCES
CAPITAL I
(LIQUIDATION AMOUNT $25
PER PREFERRED SECURITY)
% CUMULATIVE QUARTERLY
INCOME PREFERRED
SECURITIES, SERIES A
GUARANTEED TO THE EXTENT
THAT THE ISSUER HAS FUNDS
AS SET FORTH HEREIN BY
WESTERN RESOURCES, INC.
-----------
[WESTERN]
-----------
GOLDMAN, SACHS & CO.
SMITH BARNEY INC.
DILLON, READ & CO. INC.
PRUDENTIAL SECURITIES INCORPORATED
EDWARD D. JONES & CO.
REPRESENTATIVES OF THE UNDERWRITERS
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An estimate of expenses, other than underwriting commission, follows:
Securities and Exchange Commission registration fee............. $ 68,966*
New York Stock Exchange listing fee............................. 67,000
Trustee's fees and expenses..................................... 25,000
Printing........................................................ 150,000
Legal fees and expenses......................................... 220,000
Accountants' fees and expenses.................................. 15,000
Rating agencies fees............................................ 100,000
Blue Sky expenses............................................... 5,000
Miscellaneous expenses.......................................... 14,034
----------
Total....................................................... $ 665,000
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*Fees marked with an asterisk are actual, not estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article XVIII of Western Resources' Restated Articles of Incorporation, as
amended, provides that a director of Western Resources shall not be personally
liable to Western Resources or its stockholders for monetary damages for breach
of fiduciary duty as a director except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for paying a dividend or approving a stock
repurchase in violation of the Kansas General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit. This
provision is specifically authorized by Section 17-6002(b)(8) of the Kansas
General Corporation Law.
Section 17-6305 of the Kansas General Corporation Law (the "Indemnification
Statute") provides for indemnification by a corporation of its corporate
officers, directors, employees and agents. The Indemnification Statute provides
that a corporation may indemnify such persons who have been, are, or may become
parties to an action, suit or proceeding due to their status as directors,
officers, employees or agents of the corporation. Further, the Indemnification
Statute grants authority to a corporation to implement its own broader
indemnification policy. Article XVIII of Western Resources' Restated Articles of
Incorporation, as amended, requires Western Resources to indemnify its directors
and officers to the fullest extent provided by Kansas law. Further, as is
provided for in Article XVIII, Western Resources has entered into
indemnification agreements with its directors, which provide indemnification
broader than that available under Article XVIII and the Indemnification Statute.
The form of Underwriting Agreement filed as Exhibit 1 to the Registration
Statement includes provisions requiring underwriters to indemnify Western
Resources, Western Resources Capital I and Western Resources Capital II and
their directors and officers who signed this Registration Statement, and their
controlling persons, against certain civil liabilities, including liabilities
under the Securities Act of 1933, in certain circumstances.
ITEM 16. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Exhibit Index
on Page E-1 of this Registration Statement, which Index is incorporated herein
by reference.
II-1
ITEM 17. UNDERTAKINGS.
The undersigned Registrants hereby undertake:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
a. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
b. 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 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
c. To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Western Resources' annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the Securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions described under Item 15 above, or
otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer or
controlling person of the 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 Registrants will, unless
in the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by them is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Western
Resources, Inc., on behalf of the Registrants, certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form S-3
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Topeka, State of
Kansas on the 1st day of November, 1995.
WESTERN RESOURCES, INC.
By: /s/ JOHN E. HAYES, JR.
-----------------------------------
John E. Hayes, Jr.
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------------------------------ -------------------------------- -----------------------
Chairman of the Board,
/s/ JOHN E. HAYES, JR. President, and Chief Executive
------------------------------------------- Officer (Principal Executive November 1, 1995
John E. Hayes, Jr. Officer)
Executive Vice President and
/s/ STEVEN L. KITCHEN Chief Financial Officer
------------------------------------------- (Principal Financial and November 1, 1995
Steven L. Kitchen Accounting Officer)
/s/ FRANK J. BECKER
------------------------------------------- Director November 1, 1995
Frank J. Becker
/s/ GENE A. BUDIG
------------------------------------------- Director November 1, 1995
Gene A. Budig
/s/ C.Q. CHANDLER
------------------------------------------- Director November 1, 1995
C.Q. Chandler
/s/ THOMAS R. CLEVENGER
------------------------------------------- Director November 1, 1995
Thomas R. Clevenger
/s/ JOHN C. DICUS
------------------------------------------- Director November 1, 1995
John C. Dicus
II-3
SIGNATURE TITLE DATE
- ------------------------------------------------------ -------------------------------- -----------------------
/s/ DAVID H. HUGHES
------------------------------------------- Director November 1, 1995
David H. Hughes
/s/ RUSSELL W. MEYER, JR.
------------------------------------------- Director November 1, 1995
Russell W. Meyer, Jr.
/s/ JOHN H. ROBINSON
------------------------------------------- Director November 1, 1995
John H. Robinson
/s/ SUSAN M. STANTON
------------------------------------------- Director November 1, 1995
Susan M. Stanton
/s/ LOUIS W. SMITH
------------------------------------------- Director November 1, 1995
Louis W. Smith
/s/ KENNETH J. WAGNON
------------------------------------------- Director November 1, 1995
Kenneth J. Wagnon
Pursuant to the requirements of the Securities Act of 1933, Western
Resources Capital I and Western Resources Capital II, the Registrants, certify
that they have reasonable grounds to believe that they meet all of the
requirements for filing on Form S-3 and have duly caused this Registration
Statement to be signed on their behalf by the undersigned, thereto duly
authorized, in the City of Topeka, State of Kansas on the 1st day of November,
1995.
WESTERN RESOURCES CAPITAL I
(Registrant)
By: Western Resources, Inc.,
as Depositor
By: /s/ JAMES A. MARTIN
--------------------------------------
James A. Martin
VICE PRESIDENT, FINANCE
WESTERN RESOURCES CAPITAL II
(Registrant)
By: Western Resources, Inc.,
as Depositor
By: /s/ JAMES A. MARTIN
--------------------------------------
James A. Martin
VICE PRESIDENT, FINANCE
II-4
INDEX TO EXHIBITS
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
- ------------- ------------------------------------------------------------------------------------- -----------------
1* -- Form of Underwriting Agreement.......................................................
4(a) -- Form of Preferred Security Certificate (included as Exhibit E to Exhibit 4(j)).......
4(b) -- Form of Debenture (included in Exhibit 4(d)).........................................
4(c) -- Form of Indenture....................................................................
4(d)* -- Form of Supplemental Indenture.......................................................
4(e)* -- Form of Guarantee Agreement (Agreements are substantially identical except for names
and dates)..........................................................................
4(f)* -- Certificate of Trust for Western Resources Capital I.................................
4(g)* -- Certificate of Trust for Western Resources Capital II................................
4(h)* -- Trust Agreement for Western Resources Capital I......................................
4(i)* -- Trust Agreement for Western Resources Capital II.....................................
4(j) -- Form of Amended and Restated Trust Agreement (Agreements are substantially identical
except for names and dates).........................................................
5(a)* -- Opinion of John K. Rosenberg, Esq. relating to the legality of the Debentures and the
Guarantees, including consent.......................................................
5(b)* -- Opinion of Richards, Layton & Finger, special Delaware counsel, relating to the
legality of the Preferred Securities of Western Resources Capital I, including
consent.............................................................................
5(c)* -- Opinion of Richards, Layton & Finger, special Delaware counsel, relating to the
legality of the Preferred Securities of Western Resources Capital II, including
consent.............................................................................
8 -- Opinion of Cahill Gordon & Reindel, as to tax matters, including consent.............
10 -- Form of Expense Agreement (Agreements are substantially identical except for names
and dates) (included as Exhibit D in Exhibit 4(j))..................................
12* -- Computation of Ratio of Consolidated Earnings to Fixed Charges and Computation of
Ratio of Consolidated Earnings to Combined Fixed Charges and Preferred and
Preference Dividend Requirements....................................................
23(a)* -- Consent of John K. Rosenberg, Esq. (contained in Exhibit 5)..........................
23(b)* -- Consent of Richards, Layton & Finger (contained in Exhibits 5(b) and 5(c))...........
23(c) -- Consent of Cahill Gordon & Reindel (contained in Exhibit 8)..........................
23(d) -- Consent of Independent Public Accountants, Arthur Andersen LLP.......................
23(e) -- Consent of Independent Auditors, Deloitte & Touche LLP...............................
25(a)* -- Form T-1 Statement of Eligibility under the Trust Indenture Act of Wilmington Trust
Company, as Indenture Trustee under the Indenture...................................
25(b)* -- Form T-1 Statement of Eligibility under the Trust Indenture Act of Wilmington Trust
Company, as Property Trustee under the Trust Agreements for Western Resources
Capital I and Western Resources Capital II..........................................
25(c)* -- Form T-1 Statement of Eligibility under the Trust Indenture Act of Wilmington Trust
Company, as Guarantee Trustee under the Guarantee Agreements for Western Resources
Capital I and Western Resources Capital II..........................................
- --------------
* Previously Filed
E-1
WESTERN RESOURCES, INC.
TO
TRUSTEE
________________________
INDENTURE
DATED AS OF , 1995
________________________
DEFERRABLE INTEREST SUBORDINATED DEBENTURES
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
__Act Section__ _Section_
Section 310(a)(1)..................................... 609
(a)(2).................................. 609
(a)(3).................................. Not Applicable
(a)(4).................................. Not Applicable
(b)..................................... 608, 610
Section 311(a)........................................ 613
(b)..................................... 613
Section 312(a)........................................ 701, 702(a)
(b)..................................... 702(b)
(c)..................................... 702(c)
Section 313(a)........................................ 703(a)
(b)..................................... 703(a)
(c)..................................... 703(a)
(d)..................................... 703(b)
Section 314(a)........................................ 704
(b)..................................... Not Applicable
(c)(1).................................. 102
(c)(2).................................. 102
(c)(3).................................. Not Applicable
(d)..................................... Not Applicable
(e)..................................... 101, 102
Section 315(a)........................................ 601
(b)..................................... 602
(c)..................................... 601
(d)..................................... 601
(e)..................................... 514
Section 316(a)........................................ 101
(a)(1)(A)............................... 502, 512
(a)(1)(B)............................... 513
(a)(2).................................. Not Applicable
(b)..................................... 508
(c)..................................... 104(c)
Section 317(a)(1)..................................... 503
(a)(2).................................. 504
(b)..................................... 1003
Section 318(a)........................................ 107
___________________
Note: This reconciliation and tie shall not, for any purposes,
be deemed to be a part of this Indenture.
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions...................................... 1
SECTION 102. Compliance Certificates and
Opinions...................................... 10
SECTION 103. Form of Documents Delivered to
Trustee....................................... 10
SECTION 104. Acts of Holders; Record Dates.................... 11
SECTION 105. Notices, Etc. to Trustee and the
Company....................................... 12
SECTION 106. Notice to Holders; Waiver........................ 13
SECTION 107. Conflict with Trust Indenture Act................ 14
SECTION 108. Effect of Headings and Table of
Contents...................................... 14
SECTION 109. Successors and Assigns........................... 14
SECTION 110. Separability Clause.............................. 14
SECTION 111. Benefits of Indenture............................ 14
SECTION 112. GOVERNING LAW.................................... 15
SECTION 113. Legal Holidays................................... 15
ARTICLE TWO
FORM OF SECURITIES
SECTION 201. Forms Generally.................................. 15
SECTION 202. Form of Legend for Global
Securities.................................... 16
SECTION 203. Form of Trustee's Certificate of
Authentication................................ 16
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in
Series........................................ 17
SECTION 302. Denominations.................................... 20
SECTION 303. Execution, Authentication, Delivery
and Dating.................................... 20
SECTION 304. Temporary Securities............................. 22
SECTION 305. Registration, Registration of
Transfer and Exchange......................... 23
-i-
Page
SECTION 306. Mutilated, Destroyed, Lost and Sto-
len Securities................................ 25
SECTION 307. Payment of Interest; Interest
Rights Preserved.............................. 26
SECTION 308. Persons Deemed Owners............................ 28
SECTION 309. Cancellation..................................... 28
SECTION 310. Computation of Interest.......................... 28
SECTION 311. Right of Set-Off................................. 29
SECTION 312. CUSIP Numbers.................................... 29
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of
Indenture..................................... 29
SECTION 402. Application of Trust Money....................... 31
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default................................ 31
SECTION 502. Acceleration of Maturity; Rescis-
sion and Annulment............................ 33
SECTION 503. Collection of Indebtedness and
Suits for Enforcement by Trustee.............. 34
SECTION 504. Trustee May File Proofs of Claim................. 35
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities...................... 35
SECTION 506. Application of Money Collected................... 36
SECTION 507. Limitation on Suits.............................. 36
SECTION 508. Unconditional Right of Holders to
Receive Principal and Interest................ 37
SECTION 509. Restoration of Rights and Remedies............... 37
SECTION 510. Rights and Remedies Cumulative................... 38
SECTION 511. Delay or Omission Not Waiver..................... 38
SECTION 512. Control by Holders............................... 38
SECTION 513. Waiver of Past Defaults.......................... 38
SECTION 514. Undertaking for Costs............................ 39
SECTION 515. Waiver of Stay or Extension Laws................. 39
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.............. 40
SECTION 602. Notice of Defaults............................... 41
-ii-
Page
SECTION 603. Certain Rights of the Trustee.................... 42
SECTION 604. Not Responsible for Recitals or
Issuance of Securities........................ 43
SECTION 605. May Hold Securities.............................. 43
SECTION 606. Money Held in Trust.............................. 43
SECTION 607. Compensation and Reimbursement................... 44
SECTION 608. Disqualification; Conflicting
Interests..................................... 44
SECTION 609. Corporate Trustee Required;
Eligibility................................... 45
SECTION 610. Resignation and Removal; Appoint-
ment of Successor............................. 45
SECTION 611. Acceptance of Appointment by
Successor..................................... 47
SECTION 612. Merger, Conversion, Consolidation
or Succession to Business..................... 48
SECTION 613. Preferential Collection of Claims
Against Company............................... 49
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names
and Addresses of Holders...................... 49
SECTION 702. Preservation of Information; Commu-
nications to Holders.......................... 50
SECTION 703. Reports by Trustee............................... 50
SECTION 704. Reports by Company............................... 50
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only
on Certain Terms.............................. 51
SECTION 802. Successor Substituted............................ 52
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without
Consent of Holders............................ 53
SECTION 902. Supplemental Indentures with Con-
sent of Holders............................... 54
SECTION 903. Execution of Supplemental
Indentures.................................... 55
-iii-
Page
SECTION 904. Effect of Supplemental Indentures................ 55
SECTION 905. Conformity with Trust Indenture Act.............. 56
SECTION 906. Reference in Securities to Supple-
mental Indentures............................. 56
ARTICLE TEN
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 1001. Payment of Principal and Interest................ 56
SECTION 1002. Maintenance of Office or Agency.................. 56
SECTION 1003. Money for Payments on Securities to
Be Held in Trust.............................. 57
SECTION 1004. Statement by Officers as to Default.............. 58
SECTION 1005. Additional Covenants ............................ 59
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101. Securities Subordinate to Senior
Indebtedness.................................. 60
SECTION 1102. Payment Over of Proceeds upon Dis-
solution, etc................................. 60
SECTION 1103. No Payment When Specified Senior
Indebtedness in Default....................... 62
SECTION 1104. Payment Permitted if No Default ................. 63
SECTION 1105. Subrogation to Rights of Holders of
Senior Indebtedness........................... 63
SECTION 1106. Provisions Solely to Define Rela-
tive Rights .................................. 64
SECTION 1107. Trustee to Effectuate Subordination.............. 64
SECTION 1108. No Waiver of Subordination
Provisions.................................... 65
SECTION 1109. Notice to Trustee................................ 66
SECTION 1110. Reliance on Judicial Order or Cer-
tificate of Liquidating Agent................. 67
SECTION 1111. Rights of Trustee as a Holder of
Senior Indebtedness; Preservation
of Trustee's Rights........................... 67
SECTION 1112. Article Applicable to Paying Agents.............. 67
-iv-
Page
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Applicability of Article......................... 68
SECTION 1202. Election to Redeem; Notice to
Trustee....................................... 68
SECTION 1203. Selection by Trustee of Securities
to Be Redeemed................................ 68
SECTION 1204. Notice of Redemption............................. 69
SECTION 1205. Deposit of Redemption Price...................... 70
SECTION 1206. Securities Payable on Redemption
Date.......................................... 70
SECTION 1207. Securities Redeemed in Part...................... 71
-v-
INDENTURE, dated as of , 1995, between West-
ern Resources, Inc., a corporation duly organized and existing
under the laws of the State of Kansas (herein called the "Com-
pany") having its principal office at 818 Kansas Avenue,
Topeka, Kansas 66612, and , as Trustee
(herein called the "Trustee"). Unless otherwise defined
herein, with respect to a given series of debentures, all capi-
talized terms used herein shall have the meanings ascribed to
them in the Amended and Restated Trust Agreement of the busi-
ness trust to which the securities of such series have been
issued, the form of which is attached as Annex A hereto.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from
time to time of its debentures (herein called the "Securi-
ties"), to be issued in one or more series to evidence the
loans to be made to the Company of the proceeds from the issu-
ance from time to time by one or more business trusts (each a
"Trust" and, collectively, the "Trusts") of preferred benefi-
cial interests in such Trusts (the "Preferred Securities") and
common beneficial interests in such Trusts (the "Common
Securities").
All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the pur-
chase of the Securities by the Holders thereof, it is mutually
agreed, for the equal and proportionate benefit of all Holders
of the Securities of each series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as other-
wise expressly provided or unless the context otherwise
requires:
-2-
(1) the terms defined in this Article have the mean-
ings assigned to them in this Article and include the plural as
well as the singular;
(2) all other terms used herein which are defined in
the Trust Indenture Act, either directly or by reference
therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
generally accepted accounting principles; and
(4) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
"Act", when used with respect to any Holder, has the
meaning specified in Section 104.
"Additional Interest" means the sum of Additional
Interest Attributable to Deferral and Additional Interest
Attributable to Taxes.
"Additional Interest Attributable to Deferral" means
interest that shall accrue on any interest on the Securities
that is in arrears for more than one quarter or not paid during
an Extension Period.
"Additional Interest Attributable to Taxes" means, if
a Trust is required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding
taxes) imposed by the United States or any other taxing author-
ity, such amounts as shall be required so that the net amounts
received by such Trust and available for distribution to hold-
ers of Trust Securities by such Trust after paying such taxes,
duties, assessments or governmental charges shall not be less
than the amounts such Trust would have received had no such
taxes, duties, assessments or governmental charges been
imposed.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or
-3-
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "con-
trolled" have meanings correlative to the foregoing.
"Board of Directors" means either the board of direc-
tors of the Company or any duly authorized committee of that
board.
"Board Resolution" means a copy of a resolution cer-
tified by the Secretary or an Assistant Secretary of the Com-
pany to have been duly adopted by the Board of Directors, and
delivered to the Trustee.
"Business Day" means a day other than (w) a Saturday
or a Sunday, (x) a day on which banks in New York are autho-
rized or obligated by law or executive order to remain closed,
(y) a day on which the Corporate Trust Office of the Trustee,
or the principal office of the Property Trustee, under the
Trust Agreement, is closed for business or (z) a day on which
the principal office of the Company is closed for business.
"Commission" means the Securities and Exchange Com-
mission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this
instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Company" means the Person named as the "Company" in
the first paragraph of this instrument until a successor Person
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Company" shall mean such suc-
cessor Person.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by its
Chairman, a Vice Chairman, its President or a Vice President
and delivered to the Trustee.
"Corporate Trust Office" means the principal office
of the Trustee in at which at any particular
time its corporate trust business shall be administered and
which at the date of this Indenture is
.
"Defaulted Interest" has the meaning specified in
Section 307.
-4-
"Depositary" means, with respect to Securities of any
series issuable in whole or in part in the form of one or more
Global Securities, a clearing agency registered under the
Exchange Act that is designated to act as Depositary for such
Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in
Section 501.
"Exchange Act" means the Securities Exchange Act of
1934 and any statute successor thereto, as amended from time to
time.
"Extension Period" has the meaning specified in
Section 301.
"Federal Bankruptcy Code" means the Bankruptcy Act of
Title 11 of the United States Code, as amended from time to
time.
"Global Security" means a Security that evidences all
or part of the Securities of any series and bears the legend
set forth in Section 202 (or such other legend as contemplated
by Section 301).
"Holder" means a Person in whose name a Security is
registered in the Securities Register.
"Indenture" means this instrument as originally exe-
cuted or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pur-
suant to the applicable provisions hereof, including, for all
purposes of this instrument and any such supplemental inden-
ture, the provisions of the Trust Indenture Act that are deemed
to be a part of and govern this instrument and any such supple-
mental indenture, respectively. The term "Indenture" shall
also include the terms of particular series of Securities
established as contemplated by Section 301.
"Interest Payment Date", when used with respect to
any installment of interest on any Security, means the date
specified in such Security as the fixed date on which an
installment of interest with respect to such Security is due
and payable.
"Investment Company Event" means the occurrence of a
change in law or regulation or a change in interpretation or
-5-
application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change
in 1940 Act Law") to the effect that a Trust is or will be con-
sidered an "investment company" that is required to be regis-
tered under the Investment Company Act of 1940, as amended,
which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities issued by
such Trust.
"Maturity", when used with respect to any Security,
means the date on which the principal of such Security becomes
due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, call for
redemption or otherwise.
"Officers' Certificate" means a certificate signed by
(i) the Chairman, a Vice Chairman, the President, a Vice Presi-
dent, or the Treasurer of the Company and (ii) the Secretary or
an Assistant Secretary of the Company and delivered to the
Trustee; provided, however, that such certificate may be signed
by two of the officers or directors listed in clause (i) above
in lieu of being signed by one of such officers or directors
listed in such clause (i) and one of the officers listed in
clause (ii) above. One of the officers signing an Officers'
Certificate given pursuant to Section 1004 shall be the princi-
pal executive, financial or accounting officer of the Company.
Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Indenture
shall include:
(a) a statement that each officer signing the Offic-
ers' Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opin-
ion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of
each such officer, such condition or covenant has been
complied with.
-6-
"Opinion of Counsel" means a written opinion of coun-
sel, who may be counsel for the Company, and who shall be rea-
sonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities,
means, as of the date of determination, all Securities thereto-
fore authenticated and delivered under this Indenture, except:
(i) Securities theretofor cancelled by the Trustee or delivered
to the Trustee for cancellation; (ii) Securities for whose pay-
ment or redemption money or U.S. Government Obligations in the
necessary amount have been theretofor deposited with the Trus-
tee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Com-
pany shall act as its own Paying Agent) for the Holders of such
Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursu-
ant to this Indenture or provision therefor satisfactory to the
Trustee has been made; and (iii) Securities which have been
paid pursuant to Section 1001, or in exchange for or in lieu of
which other Securities have been authenticated and delivered
pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company.
"Parent Guarantee" means any guarantee that the Com-
pany may enter into with a Trust for the benefit of the holders
of the Preferred Securities of such Trust.
"Paying Agent" means any Person authorized by the
Company to pay the principal of or interest on any Securities
on behalf of the Company. The Paying Agent shall initially be
.
"Person" means any individual, corporation, partner-
ship, joint venture, trust, limited liability company or corpo-
ration, unincorporated organization or government or any agency
or political subdivision thereof.
"Predecessor Security" of any particular Security
means every previous Security evidencing all or a portion of
the same debt as that evidenced by such particular Security;
and, for the purposes of this definition, any Security authen-
ticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall
-7-
be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Preferred Securities" has the meaning specified in
the Recitals to this Indenture.
"Redemption Date", when used with respect to any
Security to be redeemed, means the date fixed for such redemp-
tion by or pursuant to this Indenture.
"Redemption Price", when used with respect to any
Security to be redeemed, means the price at which it is to be
redeemed by or pursuant to this Indenture.
"Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series means the
date specified for that purpose as contemplated by Section 301.
"Representative" means an indenture trustee or other
trustee, agent or representative for an issue of Senior
Indebtedness.
"Responsible Officer", when used with respect to the
Trustee, means the chairman or any vice-chairman of the board
of directors, the chairman or any vice-chairman of the execu-
tive committee of the board of directors, the chairman of the
trust committee, the president, any vice president, the secre-
tary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust offi-
cer or assistant trust officer, the controller or any assistant
controller or any other officer of the Trustee customarily per-
forming functions similar to those performed by any of the
above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom
such matter is referred because of his knowledge of and famil-
iarity with the particular subject.
"Securities" has the meaning specified in the Recit-
als to this Indenture and more particularly means any Securi-
ties authenticated and delivered under this Indenture.
"Securities Register" and "Securities Registrar" have
the respective meanings specified in Section 305.
"Senior Indebtedness" means the principal of, pre-
mium, if any, interest on and any other payment due pursuant to
any of the following, whether outstanding at the date hereof or
-8-
hereafter incurred, created or assumed: (i) all indebtedness
of the Company on a consolidated basis (other than any obliga-
tions to trade creditors) evidenced by notes, debentures, bonds
or other securities sold by the Company for money borrowed and
capitalized lease obligations; (ii) all indebtedness of others
of the kinds described in the preceding clause (i) assumed or
guaranteed in any manner by the Company or in effect guaranteed
by the Company; (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all condi-
tional sale obligations of the Company and all obligations of
the Company under any title retention agreement (but excluding
trade accounts payable); (iv) certain obligations of the Com-
pany for the reimbursement of any obligor on any letter of
credit, banker's acceptance, security purchase facility, surety
bond or similar credit transaction entered into in the ordinary
course of business of the Company; and (v) all renewals, exten-
sions or refundings of indebtedness of the kinds described in
any of the preceding clauses (i), (ii), (iii) or (iv), unless,
in the case of any particular indebtedness, capitalized lease
obligation, guarantee, renewal, extension or refunding, the
instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebted-
ness, renewal, extension or refunding is subordinated to or is
pari passu with the Securities.
"Special Record Date" for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity", when used with respect to any
Security or any installment of interest thereon, means the date
specified in such Security as the fixed date on which the prin-
cipal, together with any accrued and unpaid interest (including
Additional Interest), of such Security or such installment of
interest is due and payable.
"Subsidiary" means any Person a majority of the
equity ownership or the Voting Stock of which is at the time
owned, directly or indirectly, by the Company or by one or more
other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as
no senior class of stock has such voting power by reason of any
contingency.
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"Tax Event" means the receipt by a Trust or the Com-
pany, as the case may be, of an Opinion of Counsel experienced
in such matters to the effect that a relevant tax law change
has occurred. For purposes of the preceding sentence a rele-
vant tax law change is any amendment or change to (or offi-
cially proposed amendment or change to) the laws (including
regulations thereunder) of the United States or any political
subdivision or taxing authority thereof, or the publication of
any judicial opinion interpreting such laws (and regulations)
or any written interpretation of such laws (or regulations) by
any governmental authority having jurisdiction to enforce or
administer such laws (or regulations) (including official and
unofficial opinions purporting to apply such laws and regula-
tions to other Persons who have issued securities similar to
the Securities), which amendment, change, proposed amendment or
change, opinion or interpretation could, if valid and enacted or
applied to such Trust or the Company, result in (i) such Trust,
either currently or within 90 days of the date thereof, becom-
ing subject to United States federal income tax with respect to
interest received on the Securities, (ii) interest payable by
the Company on the Securities attributable to the Preferred
Securities, either currently or within 90 days of the date
thereof, becoming nondeductible for United States federal
income tax purposes or (iii) such Trust, either currently or
within 90 days of the date thereof, becoming subject to more
than a de minimis amount of other taxes, duties or other gov-
ernmental charges.
"Trust Agreement" means any agreement establishing a
Trust, as the same may be amended, modified, supplemented or
restated.
"Trust Indenture Act" means the Trust Indenture Act
of 1939 as in force at the date as of which this Indenture was
executed; provided, however, that in the event the Trust Inden-
ture Act of 1939 is amended after such date, "Trust Indenture
Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in
the first paragraph of this Indenture until a successor Trustee
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean such suc-
cessor Trustee, and if at any time there is more than one such
person, "Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of
that series.
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"U.S. Government Obligations" means securities that
are (x) direct obligations of the United States of America for
the payment of which its full faith and credit is pledged or
(y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of Amer-
ica, which, in either case, are not callable or redeemable at
the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended) as custodian
with respect to any such U.S. Government Obligation or a spe-
cific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of
the holder of such depository receipt, provided that (except as
required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such deposi-
tory receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific pay-
ment of principal of or interest on the U.S. Government Obliga-
tion evidenced by such depository receipt.
"Vice President", when used with respect to the Com-
pany or the Trustee, means any vice president, whether or not
designated by a number or a word or words added before or after
the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Inden-
ture, the Company shall furnish to the Trustee such certifi-
cates and opinions as may be required under the Trust Indenture
Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer
of the Company, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust
Indenture Act and any other requirement set forth in this
Indenture.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Per-
son, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one
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such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Com-
pany may be based, insofar as it relates to legal matters, upon
a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable
care should know, that the certificate or opinion or represen-
tations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such cer-
tificate or opinion of counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of,
or representations by, an officer or officers of the Company
stating that the information with respect to such factual mat-
ters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that
the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instru-
ment.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Inden-
ture to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instru-
ment or instruments are delivered to the Trustee and, where it
is hereby expressly required, to the Company. Such instrument
or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of exe-
cution of any such instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Inden-
ture and (subject to Section 601) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this
Section.
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(b) The fact and date of the execution by any Person
of any such instrument or writing may be proved by the affida-
vit of a witness of such execution or by a certificate of a
notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual sign-
ing such instrument or writing acknowledged to him the execu-
tion thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate
or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing
the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The Company may, in the circumstances permitted
by the Trust Indenture Act, fix any day as the record date for
the purpose of determining the Holders entitled to give or take
any request, demand, authorization, direction, notice, consent,
waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the
Company prior to the first solicitation of a Holder made by any
Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such
action or vote shall be the 30th day (or, if later, the date of
the most recent list of Holders required to be provided pursu-
ant to Section 701) prior to such first solicitation or vote,
as the case may be. With regard to any record date, only the
Holders on such date (or their duly designated proxies) shall
be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by
the Securities Register.
(e) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Secu-
rity shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
SECTION 105. Notices, Etc. to Trustee and the Company.
Any request, demand, authorization, direction,
notice, consent, waiver or Act or other document provided or
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permitted by this Indenture to be made upon, given or furnished
to, or filed with,
(1) the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the Trus-
tee at its Corporate Trust Office, Attention: Corporate
Trust Administration, or
(2) the Company by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office
specified in the first paragraph of this Indenture, Atten-
tion: Vice President, Finance, or at any other address
previously furnished in writing to the Trustee by the Com-
pany.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders
of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such
event, at such Holder's address as it appears in the Securities
Register, not later than the latest date (if any), and not ear-
lier than the earliest date (if any), prescribed for the giving
of such notice. In any case where notice to Holders is given
by mail, neither the failure to mail such notice, nor any
defect in a notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any man-
ner, such notice may be waived in writing by the Person enti-
tled to receive such notice, either before or after the event,
and such waiver shall be the equivalent of such notice. Waiv-
ers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracti-
cable to give such notice by mail, then such notification as
shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
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SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or con-
flicts with a provision of the Trust Indenture Act that is
required under such Act to be a part of and govern this Inden-
ture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so mod-
ified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 109. Successors and Assigns.
The Company will have the right at all times to
assign any of its rights or obligations under this Indenture to
(a) a direct or indirect wholly owned Subsidiary, provided
that, in the event of any such assignment, the Company will
remain liable for all such obligations and (b) to any other
Person in accordance with the provisions of Article Eight of
this Indenture. This Indenture may not otherwise be assigned
by the parties hereto. Subject to the foregoing, this Inden-
ture is binding upon and inures to the benefit of the parties
hereto and their respective successors and assigns.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provi-
sions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the holders of
Senior Indebtedness, the holders of Preferred Securities (to
the extent provided herein) and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim under
this Indenture.
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SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemp-
tion Date or Stated Maturity of any Security shall not be a
Business Day, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of interest on or prin-
cipal of the Securities shall be made on the next succeeding
day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such pay-
ment of interest on or principal of the Securities, as the case
may be, shall be made on the immediately preceding Business
Day, in each case, with the same force and effect as if made on
the Interest Payment Date or Redemption Date, or at the Stated
Maturity.
ARTICLE TWO
FORM OF SECURITIES
SECTION 201. Forms Generally.
The Securities of each series shall be in substan-
tially the forms established by or pursuant to a Board Resolu-
tion or in one or more indentures supplemental hereto, with
such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and
may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or
Depositary or as may, consistently herewith, be determined by
the officers executing such Securities, as evidenced by their
execution of such Securities. If the form of Securities of any
series is established by action taken pursuant to a Board Reso-
lution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the deliv-
ery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
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The definitive Securities shall be printed, litho-
graphed, engraved or produced by any combination of these or
other methods, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 202. Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section
301 for the Securities evidenced thereby, every Global Security
authenticated and delivered hereunder shall bear a legend in
substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REG-
ISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE
OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
SECTION 203. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be
in substantially the following form:
This is one of the Securities of the series desig-
nated therein referred to in the within-mentioned Indenture.
______________________________,
as Trustee
By:___________________________
Authorized Signatory
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which
may be authenticated and delivered under this Indenture is
unlimited.
The Securities may be issued in one or more series.
There shall be established in or pursuant to a Board Resolution
and, subject to Section 303, set forth, or determined in the
manner provided, in an Officers' Certificate, or established in
one or more indentures supplemental hereto, prior to the issu-
ance of Securities of any series,
(1) the title of the Securities of the
series (which shall distinguish the Securities of
such series from Securities of any other series);
(2) any limit upon the aggregate principal
amount of the Securities of the series which may
be authenticated and delivered under this Inden-
ture (except for Securities authenticated and
delivered upon registration of, transfer of, or in
exchange for, or in lieu of, other Securities of
the series pursuant to Section 304, 305, 306, 906
or 1207 and except for any Securities which, pur-
suant to Section 303, are deemed never to have
been authenticated and delivered hereunder);
(3) the Person to whom any interest on a
Security of the series shall be payable, if other
than the Person in whose name that Security (or
one or more Predecessor Securities) is registered
at the close of business on the Regular Record
Date for such interest;
(4) the date or dates on which the principal
of any Securities of the series is payable;
(5) the rate or rates at which any Securi-
ties of the series shall bear interest, if any,
the extent to which additional interest attribut-
able to deferral amounts ("Additional Interest
Attributable to Deferral"), if any, shall be
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payable in respect of any Securities of such
series, the date or dates from which any such
interest shall accrue, the Interest Payment Dates
on which any such interest shall be payable, the
Regular Record Date for any such interest payable
on any Interest Payment Date and the right, if
any, of the Company to extend the interest payment
periods and the duration of such extension (an
"Extension Period");
(6) the place or places where the principal
of and any premium and interest on any Securities
of the series shall be payable;
(7) the period or periods within which, the
price or prices at which and the terms and condi-
tions upon which any Securities of the series may
be redeemed, in whole or in part, at the option of
the Company and, if other than by a Board Resolu-
tion, the manner in which any election by the Com-
pany to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Company
to redeem or repurchase any Securities of the
series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof,
and the period or periods within which, the price
or prices at which and the terms and conditions
upon which any Securities of the series shall be
redeemed or purchased, in whole or in part, pursu-
ant to such obligation;
(9) if other than denominations of $25 and
any integral multiple thereof, the denominations
in which any Securities of the series shall be
issuable;
(10) if the amount of principal of or any
premium or interest on any Securities of the
series may be determined with reference to an
index or pursuant to a formula, the manner in
which such amounts shall be determined;
(11) if other than the currency of the United
States of America, the currency, currencies or
currency units in which the principal of or any
premium or interest on any Securities of the
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series shall be payable and the manner of deter-
mining the equivalent thereof in the currency of
the United States of America for any purpose,
including for purposes of the definition of "Out-
standing" in Section 101;
(12) if the principal of or any premium or
interest on any Securities of the series is to be
payable, at the election of the Company or the
Holder thereof, in one or more currencies or cur-
rency units other than that or those in which such
Securities are stated to be payable, the currency,
currencies or currency units in which the princi-
pal of or any premium or interest on such Securi-
ties as to which such election is made shall be
payable, the periods within which and the terms
and conditions upon which such election is to be
made and the amount so payable (or the manner in
which such amount shall be determined);
(13) if other than the entire principal
amount thereof, the portion of the principal
amount of any Securities of the series which shall
be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502;
(14) if applicable, that any Securities of
the series shall be issuable in whole or in part
in the form of one or more Global Securities and,
in such case, the respective Depositaries desig-
nated for such Global Securities, the form of any
legend or legends which shall be borne by any such
Global Security in addition to or in lieu of that
set forth in Section 202 and any circumstances in
addition to or in lieu of those set forth in
Clause (2) of the last paragraph of Section 305,
in which any such Global Security may be exchanged
in whole or in part for Securities registered, and
any transfer of such Global Security in whole or
in part may be registered, in the name or names of
Persons other than the Depositary for such Global
Security or a nominee thereof;
(15) any addition to or change in the Events
of Default which apply to any Securities of the
series and any change in the right of the Trustee
or the requisite Holders of such Securities to
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declare the principal amount thereof due and pay-
able pursuant to Section 502;
(16) any addition to or change in the cove-
nants set forth in Article Ten which applies to
Securities of the series; and
(17) any other terms of the series (which
terms shall not be inconsistent with the provi-
sions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substan-
tially identical except as to denomination and except as may
otherwise be provided in or pursuant to the Board Resolution
referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and deliv-
ered to the Trustee at or prior to the delivery of the Offic-
ers' Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of pay-
ment to Senior Indebtedness as provided in Article Eleven.
SECTION 302. Denominations.
The Securities of each series shall be issuable only
in registered form, without coupons, and only in denominations
as shall be specified as contemplated by Section 301. In the
absence of any such specified denomination with respect to the
Securities of any series, the Securities of such series shall
be issuable in denominations of $25 and any integral multiple
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the
Company by its Chairman, one of its Vice Chairman, its Presi-
dent or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers
on the Securities may be manual or facsimile.
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Securities bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such indi-
viduals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Securities.
At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver Securi-
ties of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authenti-
cation and delivery of such Securities; and the Trustee in
accordance with such Company Order shall authenticate and
deliver such Securities. If the form or terms of the Securi-
ties of the series have been established by or pursuant to one
or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Secu-
rities, the Trustee shall be entitled to receive, and (subject
to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating,
(1) if the form of such Securities has been
established by or pursuant to Board Resolutions as
permitted by Section 201, that such form has been
established in conformity with the provisions of
this Indenture;
(2) if the terms of such Securities have
been established by or pursuant to Board Resolu-
tions as permitted by Section 301, that such terms
have been established in conformity with the pro-
visions of this Indenture; and
(3) that such Securities, when authenticated
and delivered by the Trustee and issued by the
Company in the manner and subject to any condi-
tions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations
of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating
to or affecting creditors' rights and to general
equity principles.
If such form or terms have been so established, the Trustee
shall not be required to authenticate such Securities if the
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issue of such Securities pursuant to this Indenture will affect
the Trustee's own rights, duties or immunities under the Secu-
rities or this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of
the preceding paragraph, if all Securities of a series are not
to be originally issued at one time, it shall not be necessary
to deliver the Officers' Certificate otherwise required pursu-
ant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or
prior to the authentication of each Security of such series if
such documents are delivered at or prior to the authentication
upon original issuance of the first Security of such series to
be issued.
Each Security shall be dated the date of its
authentication.
No Security shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence,
that such Security has been duly authenticated and delivered
hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of
any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substan-
tially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of
definitive Securities of such series, the temporary Securities
of such series shall be exchangeable for definitive Securities
of such series upon surrender of the temporary Securities of
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such series at any office or agency of the Company designated
pursuant to Section 1002, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securi-
ties of any series the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series of
any authorized denominations. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to
the same benefits under this Indenture as definitive Securities
of such series.
SECTION 305. Registration, Registration of Transfer and
Exchange.
The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register maintained
in such office and in any other office or agency designated
pursuant Section 1002 being herein sometimes collectively
referred to as the "Securities Register") in which, subject to
such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and of trans-
fers of Securities. The Trustee is hereby appointed "Securi-
ties Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any
Security of a series at an office or agency of the Company des-
ignated pursuant to Section 1002 for such purpose for that
series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated trans-
feree or transferees, one or more new Securities of the same
series of any authorized denominations and of a like aggregate
principal amount.
At the option of the Holder, Securities of any series
may be exchanged for other Securities of the same series of any
authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surren-
dered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of trans-
fer or exchange of Securities shall be the valid obligations of
the Company, evidencing the same debt, and entitled to the same
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benefits under this Indenture, as the Securities surrendered
upon such registration of transfer or exchange.
Every Security presented or surrendered for registra-
tion of transfer or for exchange shall (if so required by the
Company or the Trustee) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar duly executed, by the
Holder thereof or such Holder's attorney duly authorized in
writing.
No service charge shall be made for any registration
of transfer or exchange of Securities, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1207 not involving
any transfer.
If the Securities of any series (or of any series and
specified tenor) are to be redeemed in part, the Company will
not be required to issue, register the transfer of or exchange
any Securities of that series (or of that series and specified
tenor, as the case may be) during a period beginning at the
opening of business 15 days before the day of the mailing of a
notice of redemption of any such Securities that may be
selected for redemption and ending at the close of business on
the day of such mailing, except the unredeemed portion of any
such Securities being redeemed in part.
The provisions of clauses (1), (2), (3) and (4) below
shall apply only to Global Securities:
(1) Each Global Security authenticated under this
Indenture shall be registered in the name of the Deposi-
tary designated for such Global Security or a nominee
thereof and delivered to such Depositary or a nominee
thereof or custodian therefor, and each such Global Secu-
rity shall constitute a single Security for all purposes
of this Indenture.
(2) Notwithstanding any other provision in this
Indenture, no Global Security may be exchanged in whole or
in part for Securities registered, and no transfer of a
Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such
Global Security or a nominee thereof unless (A) such
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Depositary (i) has notified the Company that it is unwill-
ing or unable to continue as Depositary for such Global
Security or (ii) has ceased to be a clearing agency regis-
tered under the Exchange Act at a time when the Depositary
is required to be so registered to act as such Depositary,
(B) there shall have occurred and be continuing an Event
of Default with respect to such Global Security, (C) the
Company in its sole discretion determines that such Global
Security shall be so exchangeable, or (D) there shall
exist such circumstances, if any, in addition to or in
lieu of the foregoing as have been specified for this pur-
pose as contemplated by Section 301.
(3) Subject to clause (2) above, any exchange of a
Global Security for other Securities may be made in whole
or in part, and all Securities issued in exchange for a
Global Security or any portion thereof shall be registered
in such names as the Depositary for such Global Security
shall direct.
(4) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu
of, a Global Security or any portion thereof, whether pur-
suant to this Section, Section 304, 306, 906 or 1207 or
otherwise, shall be authenticated and delivered in the
form of, and shall be, a Global Security, unless such
Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee
thereof.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trus-
tee, the Company shall execute, and the Trustee shall authenti-
cate and deliver in exchange therefor, a new Security of the
same series and of like tenor and principal amount and bearing
a number not contemporaneously outstanding.
If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the destruction,
loss or theft of any security and (ii) such security or indem-
nity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has
been acquired by a bona fide purchaser, the Company shall exe-
cute, and the Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Security, a new Security
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of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Secu-
rity, pay such Security.
Upon the issuance of any new Security under this Sec-
tion, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to
this Section in lieu of any destroyed, lost or stolen Security
shall constitute an original additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that
series duly issued hereunder.
The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of muti-
lated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by
Section 301 with respect to any series of Securities, interest
on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest.
Any interest on any Security of any series which is
payable, but is not punctually paid or duly provided for, on
any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the Holder on the rele-
vant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
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(1) the Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Secu-
rities of such series (or their respective Predecessor
Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed pay-
ment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trus-
tee shall fix a Special Record Date for the payment of
such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed pay-
ment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at such Hold-
er's address as it appears in the Securities Register, not
less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Per-
sons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and
shall no longer be payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other law-
ful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed,
and, if so listed, upon such notice as may be required by
such exchange, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this
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clause, such manner of payment shall be deemed practicable
by the Trustee.
Subject to the foregoing provisions of this Section,
each Security delivered under this Indenture upon registration
of transfer of or in exchange for or in lieu of any other Secu-
rity shall carry the rights to interest accrued and unpaid, and
to accrue (including in each such case Additional Interest),
which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registra-
tion of transfer, the Company, the Trustee and any agent of the
Company or the Trustee shall treat the Person in whose name
such Security is registered as the owner of such Security for
the purpose of receiving payment of principal of and (subject
to Section 307) interest (including Additional Interest) on
such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and none of the Company, the
Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any
time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Com-
pany may have acquired in any manner whatsoever, and all Secu-
rities so delivered shall be promptly cancelled by the Trustee.
No Securities shall be authenticated in lieu of or in exchange
for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed
by a Company Order.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by
Section 301 for Securities of any series, interest on the Secu-
rities of each series shall be computed on the basis of a
360-day year of twelve 30-day months and, for any period
shorter than a full monthly period, shall be computed on the
basis of the actual number of days elapsed in such period.
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SECTION 311. Right of Set-Off.
Notwithstanding anything to the contrary in this
Indenture, the Company shall have the right to set-off any pay-
ment it is otherwise required to make hereunder to the extent
the Company has theretofore made, or is concurrently on the
date of such payment making, a payment under a Parent
Guarantee.
SECTION 312. CUSIP Numbers.
The Company in issuing the Securities of any series
may use "CUSIP" numbers (if then generally in use), and, if so,
the Trustee shall use "CUSIP" numbers in notices of redemption
as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as con-
tained in any notice of a redemption and that reliance may be
placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by
any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect
(except as to any surviving rights of registration of transfer
or exchange of Securities herein expressly provided for), and
the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated
and delivered (other than (i) Securities which have
been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money or U.S. Government
Obligations have theretofor been deposited in trust
or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from
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such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore deliv-
ered to the Trustee for cancellation;
(i) have become due and payable; or
(ii) will become due and payable at their
Stated Maturity within one year; or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense,
of the Company
and the Company, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with
the Trustee as trust funds (a) money in the necessary
amount or (b) U.S. Government Obligations, the prin-
cipal of and the interest on which when due, and
without any regard to reinvestment thereof, in the
opinion of an independent accountant, and, in the
opinion of the officers of the Company executing an
Officers' Certificate to that effect, will provide
moneys which, together with the moneys, if any,
deposited with or held by the Trustee, shall be suf-
ficient to pay when due the principal of, premium, if
any, and interest due and to become due on said Secu-
rities or portions thereof on the Redemption Date or
the Stated Maturity thereof, as the case may be, in
trust to pay and discharge the entire indebtedness on
such Securities not theretofore delivered to the
Trustee for cancellation, for principal and interest
(including Additional Interest to the date of
deposit) to the date of such deposit (in the case of
Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case
may be;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for
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relating to the satisfaction and discharge of this Inden-
ture have been complied with.
Notwithstanding the satisfaction and discharge of this Inden-
ture, the obligations of the Company to the Trustee under Sec-
tion 607 and, if money or U.S. Government Obligations shall
have been deposited with the Trustee pursuant to subclause (B)
of clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall
survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of
Section 1003, all money and U.S. Government Obligations depos-
ited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of
the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal and interest
for whose payment such deposited money and the money from U.S.
Government Obligations have been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default," wherever used herein with respect
to Securities of any series, means any one of the following
events that has occurred and is continuing (whatever the reason
for such Event of Default and whether it shall be occasioned by
the provisions of Article Eleven or be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) failure for 30 days to pay any interest on the
Securities of that series, including any Additional Inter-
est in respect thereof, when due (subject to the deferral
of any due date in the case of an Extension Period); or
(2) failure to pay any principal on the Securities
of that series when due whether at Stated Maturity, upon
redemption by declaration of acceleration or otherwise; except
that, in the event of an optional redemption, the failure
to redeem any Security which is the result of the Company's
failure to deposit on or before the Redemption Date with the
Trustee (and/or having irrevocably directed the Trustee to apply,
from money held by it available to be used for the redemption
of Securities) an amount in cash sufficient to redeem all of
the Securities to be redeemed, shall not be an Event of Default,
but shall be deemed a recission of the call for redemption; or
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(3) failure to observe or perform in any material
respect any other covenant relating to a particular series
contained in this Indenture for 90 days after written
notice to the Company from the Trustee or the holders of
at least 25% in principal amount of the Outstanding Secu-
rities of that series; or
(4) a decree or order is entered by a court having
jurisdiction in the premises (i) for relief in respect of
the Company in an involuntary case or proceeding under the
Federal Bankruptcy Code or any other federal or state
bankruptcy, insolvency, reorganization or similar law or
(ii) adjudging the Company a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or compo-
sition of or in respect of the Company under the Federal
Bankruptcy Code or any other applicable federal or state
law, or appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or other similar offi-
cial) of the Company or of any substantial part of any of
its properties, or ordering the winding up or liquidation
of any of its affairs, and any such decree or order
remains unstayed and in effect for a period of 60 consecu-
tive days; or
(5) the Company institutes a voluntary case or pro-
ceeding under the Federal Bankruptcy Code or any other
applicable federal or state law or any other case or pro-
ceedings to be adjudicated a bankrupt or insolvent, or the
Company consents to the entry of a decree or order for
relief in respect of the Company in any involuntary case
or proceeding under the Federal Bankruptcy Code or any
other applicable federal or state law or to the institu-
tion of bankruptcy or insolvency proceedings against the
Company, or the Company files a petition or answer or con-
sent seeking reorganization or relief under the Federal
Bankruptcy Code or any other applicable federal or state
law, or consents to the filing of any such petition or to
the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator
(or other similar official) of the Company or of any sub-
stantial part of its property, or makes an assignment for
the benefit of creditors, or admits in writing its inabil-
ity to pay its debts generally as they become due or takes
corporate action in furtherance of any such action.
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SECTION 502. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default with respect to the Securities
of any series at the time Outstanding occurs and is continuing,
then and in every such case, the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Outstanding
Securities of that series shall have the right to declare the
principal of and the interest (including any Additional Inter-
est) on all the Securities of that series and any other amounts
payable hereunder to be due and payable immediately, provided,
however, that if upon an Event of Default, the Trustee or the
Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series fail to declare the pay-
ment of all amounts on the Securities of that series to be
immediately due and payable, the holders of at least 25% in
aggregate liquidation amount of the Preferred Securities then
outstanding of the Trust to which such series of securities
have been issued shall have such right, by a notice in writing
to the Company (and to the Trustee if given by Holders or the
holders of such Preferred Securities) and shall have the right
to enforce any and all other rights of Holders of Securities of
that series as creditors with respect to the Securities of that
series. Upon any such declaration, such principal and all
accrued interest shall become immediately due and payable.
At any time after such a declaration of acceleration
has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee as hereinafter
provided in this Article, the Holders of a majority in princi-
pal amount of the Outstanding Securities of that series, by
written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trus-
tee a sum sufficient to pay,
(A) all overdue interest (including any Addi-
tional Interest) on all Securities of that series,
(B) the principal of any Securities which have
become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne
by such Securities, and
(C) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
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disbursements and advances of the Trustee, its agents
and counsel;
and
(2) all Events of Default with respect to Securities
of that series, other than the non-payment of the princi-
pal of Securities of that series which have become due
solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent
default or impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforce-
ment by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest
(including any Additional Interest) on any Security when
such interest becomes due and payable and such default
continues for a period of 30 days (subject to the deferral
of any due and payable interest in the case of an Exten-
sion Period), or
(2) default is made in the payment of the principal
of any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, the whole amount
then due and payable on such Securities for principal and
interest (including any Additional Interest), at the rate borne
by the Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel.
If an Event of Default with respect to Securities of
any series occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the
rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this
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Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relating to the
Company (or any other obligor upon the Securities), its prop-
erty or its creditors, the Trustee shall be entitled and empow-
ered, by intervention in such proceeding or otherwise, to take
any and all actions authorized under the Trust Indenture Act in
order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be
authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquida-
tor, sequestrator or other similar official in any such judi-
cial proceeding is hereby authorized by each Holder to make
such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the rea-
sonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 607.
No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture
or the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the produc-
tion thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reason-
able compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment
has been recovered.
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SECTION 506. Application of Money Collected.
Subject to Article Eleven, any money or U.S. Govern-
ment Obligations collected by the Trustee pursuant to this
Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or interest (including any
Additional Interest), upon presentation of the Securities and
the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee
under Section 607;
SECOND: To the payment of the amounts then due and
unpaid for principal of and interest (including any Addi-
tional Interest) on the Securities in respect of which or
for the benefit of which such money has been collected,
ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securi-
ties for principal and interest (including any Additional
Interest), respectively; and
THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have
any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice
to the Trustee of a Continuing Event of Default with
respect to Securities of that series;
(2) the Holders of not less than 25% in principal
amount of the Outstanding Securities of that series shall
have made written request to the Trustee to institute pro-
ceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trus-
tee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such
request;
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(4) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to
institute any such proceeding; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of
the Outstanding Securities of that series;
it being understood and intended that no one or more Holders
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holders, or to obtain or
to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of
all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Princi-
pal and Interest.
Notwithstanding any other provision in this Inden-
ture, the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal
of and (subject to Section 307) interest (including any Addi-
tional Interest) on such Security on the Stated Maturity (sub-
ject to the deferral of any due date in the case of an Exten-
sion Period) expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for
the enforcement of any such payment, and such rights shall not
be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any pro-
ceeding to enforce any right or remedy under this Indenture,
and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any deter-
mination in such proceeding, the Company, the Trustee and the
Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and reme-
dies of the Trustee and the Holder shall continue as though no
such proceeding had been instituted.
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SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Securities in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permit-
ted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder
of any Security to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquies-
cence therein. Every right and remedy given by this Article or
by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any
rule of law or with this Indenture; and
(2) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
direction.
SECTION 513. Waiver of Past Defaults.
Subject to Sections 902 and 1005 hereof, the Holders
of not less than a majority in principal amount of the Out-
standing Securities of any series may on behalf of the Holders
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of all the Securities of such series waive any past default
hereunder and its consequences, except a default
(1) in the payment of the principal of or interest
(including any Additional Interest) on any Security of
such series (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration have been
deposited with the Trustee); or
(2) in respect of a covenant or provision hereof
which under Article Nine cannot be modified or amended
without the consent of the Holder of each Outstanding
Security of such series affected.
Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or rem-
edy under this Indenture, or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, a
court may require any party litigant in such court to file an
undertaking to pay the costs of such suit, and may assess costs
against any such party litigant, in the manner and to the
extent provided in the Trust Indenture Act; provided, that nei-
ther this Section nor the Trust Indenture Act shall be deemed
to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company
or the Trustee or in any suit for the enforcement of the right
to receive the principal of and interest (including any Addi-
tional Interest) on any Security.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may law-
fully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the cove-
nants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law and covenants that it
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will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been
enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(1) Except during the continuance of an Event of Default,
(A) the Trustee undertakes to perform such
duties and only such duties as are specifically set forth
in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(B) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Inden-
ture; but in the case of any such certificates or opinions
which by any provisions hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture.
In case an Event of Default has occurred and is con-
tinuing, the Trustee shall exercise such of the rights and pow-
ers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his
own affairs.
(2) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct except that
(A) this Subsection shall not be construed to
limit the effect of Subsection (1) of this Section;
(B) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
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Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(C) the Trustee shall not be liable with
respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of Holders
pursuant to Section 512 relating to the time, method and
place of conducting any proceeding for any remedy avail-
able to the Trustee, or exercising any trust or power con-
ferred upon the Trustee, under this Indenture with respect
to the Securities of such series.
Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the perfor-
mance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indem-
nity against such risk or liability is not reasonably assured
to it.
Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affect-
ing the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
If any default occurs hereunder with respect to Secu-
rities of any series, the Trustee shall give the Holders of
Securities of such series notice of such default as and to the
extent provided by the Trust Indenture Act; provided, however,
that in the case of any default of the character specified in
Section 501(3) with respect to Securities of such series, no
such notice to Holders shall be given until at least 30 days
after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of
any Event of Default unless the Trustee shall have received
written notice, or a Responsible Officer charged with the
administration of the Trust Agreement shall have obtained writ-
ten notice, of such Event of Default.
For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securi-
ties of such series.
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SECTION 603. Certain Rights of the Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, cer-
tificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company men-
tioned herein shall be sufficiently evidenced by a Company
Request or Company Order, and any resolution of the Board
of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omit-
ting any action hereunder, the Trustee (unless other evi-
dence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel of its
choice, which may be counsel to the Company, and the writ-
ten advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Hold-
ers pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indem-
nity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any res-
olution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
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paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation,
it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attor-
ney;
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys, and the
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(h) the Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good
faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon
it by this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities,
except the Trustee's certificates of authentication, shall be
taken as the statements of the Company, and the Trustee assumes
no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of Secu-
rities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Paying Agent, any Securities Regis-
trar, or any other agent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Securi-
ties and, subject to Sections 608 and 613, may otherwise deal
with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, or such other
agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by
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law. The Trustee shall be under no liability for interest on
any money received by it hereunder except as otherwise agreed
in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from
time to time agree in writing for all services rendered by
it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein,
to reimburse the Trustee upon its request for all reason-
able expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and any predecessor
Trustee for, and to hold it harmless against, any and all
loss, damage, claim, liability or expense, including taxes
(other than taxes based on the income of the Trustee)
incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or
administration of this trust, including the costs and
expenses of defending itself against any claim or lia-
bility in connection with the exercise or performance of
any of its powers or duties hereunder.
To secure the Trustee's rights under this Section,
the Trustee shall have a lien against any money or other prop-
erty collected hereunder. The provisions of this Section shall
survive the termination of this Indenture.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the
Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by and subject to the provi-
sions of, the Trust Indenture Act and this Indenture. To the
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extent permitted by such Act, the Trustee shall not be deemed
to have a conflicting interest by virtue of being a trustee
under this Indenture with respect to Securities of more than
one series.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder with
respect to the Securities of each series, which may be a Trus-
tee hereunder for Securities of one or more other series. Each
Trustee shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000 and has its Corporate Trust
Office in . If any such Person publishes reports
of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and sur-
plus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee with respect to the
Securities of any series shall cease to be eligible in accor-
dance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter spec-
ified in this Article.
SECTION 610. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by
the successor Trustee under Section 611.
(b) The Trustee may resign at any time with respect
to the Securities of one or more series by giving written
notice thereof to the Company. If an instrument of acceptance
by a successor Trustee shall not have been delivered to the
Trustee within 60 days after the giving of such notice of res-
ignation, the resigning Trustee may petition any court of com-
petent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Trustee may be removed at any time with
respect to the Securities of any series by Act of the Holders
of a majority in principal amount of the Outstanding Securities
of such series, delivered to the Trustee and to the Company.
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(d) If at any time:
(1) the Trustee shall fail to comply with Section
608 after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Security
for at least six months, or
(2) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabili-
tation, conservation or liquidation, or
(4) an Event of Default has not occurred and is not
continuing,
then, in any such case, (i) the Company by a Board Resolution
may remove the Trustee with respect to all Securities, or
(ii) subject to Section 514, any Holder who has been a bona
fide Holder of a Security for at least six months may, on
behalf of such Holder and all others similarly situated, peti-
tion any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the
office of Trustee for any cause, with respect to the Securities
of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such
series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). If,
within one year after such resignation, removal or incapa-
bility, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed
by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company
and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment,
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become the successor Trustee with respect to Securities of such
series and supersede the successor Trustee with respect to the
Securities of any series appointed by the Company. If no suc-
cessor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders and
accepted appointment in the manner hereinafter provided, any
Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(f) The Company shall give notice of each resigna-
tion and each removal of the Trustee with respect to the Secu-
rities of any series and each appointment of a successor Trus-
tee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section
106. Each notice shall include the name of the successor Trus-
tee with respect to the Securities of such series and the
address of such successor Trustee's Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee with respect to all Securi-
ties appointed hereunder shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; provided that, on request of
the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its reasonable charges, execute and
deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trus-
tee all property and money held by such retiring Trustee
hereunder.
In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not
all) series, the Company, the retiring Trustee and each succes-
sor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and
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to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of
such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or
change any of the provisions of this Indenture as shall be nec-
essary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that
each such Trustee shall be trustee of a trust or trusts hereun-
der separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, with-
out any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates;
but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor
Trustee relates.
Upon request of any such successor Trustee, the Com-
pany shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee
all such rights, powers and trusts referred to in the first or
second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any
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corporation resulting from any merger, conversion or consolida-
tion to which the Trustee shall be a party, shall be the suc-
cessor of the Trustee hereunder, provided that such corporation
shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Securi-
ties shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authen-
ticated such Securities.
SECTION 613. Preferential Collection of Claims Against
Company.
If and when the Trustee shall be or become a creditor
of the Company (or any other obligor upon the Securities), the
Trustee shall be subject to the provisions of the Trust Inden-
ture Act regarding the collection of claims against the Company
(or any such other obligor).
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to
the Trustee
(a) semiannually, not later than February 15 and
August 15 in each year, a list, in such form as the Trus-
tee may reasonably require, of the names and addresses of
the Holders of Securities of each series as of a date not
more than 15 days prior to the delivery thereof, and
(b) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the Com-
pany of any such request, a list of similar form and con-
tent as of a date not more than 15 days prior to the time
such list is furnished;
excluding from any such list names and addresses received by
the Trustee in its capacity as Securities Registrar.
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SECTION 702. Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Hold-
ers contained in the most recent list furnished to the Trustee
as provided in Section 701 and the names and addresses of Hold-
ers received by the Trustee in its capacity as Securities Reg-
istrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so
furnished.
(b) The rights of Holders to communicate with other
Holders with respect to their rights under this Indenture or
under the Securities, and the corresponding rights and duties
of the Trustee, shall be as provided by the Trust Indenture
Act.
(c) Every Holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee that
none of the Company, the Trustee or any agent of either of them
shall be held accountable by reason of any disclosure of infor-
mation as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with each
stock exchange upon which any Securities are listed, with the
Commission and with the Company. The Company will notify the
Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Com-
mission, and transmit to Holders, such information, documents
and other reports, and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any
such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the
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Exchange Act shall be filed with the Trustee within 15 days
after the same is so required to be filed with the Commission.
Delivery of such reports, information and documents to the
Trustee is for informational purposes only, and the Trustee's
receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information
contained therein, including the Company's compliance with any
of its covenants hereunder (as to which the Trustee is entitled
to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only on Certain
Terms.
The Company shall not consolidate with or merge into
any other Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, and the
Company shall not permit any Person to consolidate with or
merge into the Company or convey, transfer or lease its proper-
ties and assets substantially as an entirety to the Company,
unless:
(1) in case the Company shall consolidate with or
merge into another Person or convey, transfer or lease its
properties and assets substantially as an entirety to any
Person, the Person formed by such consolidation or into
which the Company is merged or the Person which acquires
by conveyance or transfer, or which leases, the properties
and assets of the Company substantially as an entirety
shall be a corporation, partnership or trust, shall be
organized and validly existing under the laws of the
United States of America, any State thereof or the Dis-
trict of Columbia and shall expressly assume, by an inden-
ture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee,
the due and punctual payment of the principal of and
interest (including any Additional Interest) on all the
Securities and the performance or observance of every
covenant of this Indenture, any Trust Agreement, any Par-
ent Guarantee and any Expense Agreement on the part of the
Company to be performed or observed;
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(2) immediately after giving effect to such transac-
tion and treating any indebtedness which becomes an obli-
gation of the Company or a Subsidiary as a result of such
transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time
or both, would become an Event of Default, shall have hap-
pened and be continuing;
(3) such consolidation or merger or conveyance,
transfer or lease of properties or assets of the Company
does not give rise to any breach or violation of, any
Trust Agreement or any Parent Guarantee; and
(4) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supple-
mental indenture comply with this Article and that all
conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger
of the Company into, any other Person or any conveyance, trans-
fer or lease of the properties and assets of the Company sub-
stantially as an entirety in accordance with Section 801, the
successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had
been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor Person shall be relieved of
all obligations and covenants under this Indenture and the
Securities.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for
any of the following purposes:
(1) to evidence the succession of another Person to
the Company and the assumption by any such successor of
the covenants of the Company herein and in the Securities;
(2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities
(and if such covenants are to be for the benefit of less
than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of
such series) or to surrender any right or power herein or
in the Securities conferred upon the Company;
(3) to cure any ambiguity or to correct any provi-
sion herein which may be defective or inconsistent with
any other provision herein;
(4) to comply with the requirements of the Commis-
sion in order to effect or maintain the qualification of
this Indenture under the Trust Indenture Act, as contem-
plated by Section 905 or otherwise;
(5) to evidence and provide for the acceptance of
the appointment of a successor Trustee with respect to the
Securities of one or more series hereunder and to add to
or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administra-
tion of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611;
(6) to establish the form or terms of Securities of
any series as permitted by Sections 201 and 301; or
(7) to make any other change that does not adversely
affect the rights of any Holder.
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SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities of
each series affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Com-
pany, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture
or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, how-
ever, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected
thereby,
(1) change the Stated Maturity of the principal of,
or any installment of interest (including any Additional
Interest) on, any Security, or reduce the principal amount
thereof or the rate of interest thereon, or change the
place of payment where, or the coin or currency in which,
any Security or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in
the case of redemption, on or after the Redemption Date),
or modify the provisions of this Indenture with respect to
the subordination of the Securities in a manner adverse to
the Holders,
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose
Holders is required for any such supplemental indenture,
or the consent of whose Holders if required for any waiver
(of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences) pro-
vided for in this Indenture, or
(3) modify any of the provisions of this Section,
Section 513 or Section 1005, except to increase any such
percentage (referred to in clause (2), above) or to pro-
vide that certain other provisions of this Indenture can-
not be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby;
provided, that, so long as any of the Preferred Securities
remain outstanding, no such amendment shall be made that
adversely affects the holders of the Preferred Securities and
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no waiver of any Event of Default or compliance with any cove-
nant under this Indenture shall be effective, without the prior
consent of the holders of at least a majority of the aggregate
liquidation amount of the outstanding Preferred Securities
unless and until the Securities and all accrued and unpaid
interest (including any Additional Interest) thereon have been
paid in full.
A supplemental indenture which changes or eliminates
any covenant or other provision of this Indenture which has
expressly been included solely for the benefit of one or more
particular series of Securities, or which modifies the rights
of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect
the rights under this Indenture of the Holders of Securities of
any other series.
It shall not be necessary for any Act of Holders
under this Section to approve the particular form of any pro-
posed supplemental indenture, but it shall be sufficient if
such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts cre-
ated by, any supplemental indenture permitted by this Article
or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (sub-
ject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such sup-
plemental indenture is authorized or permitted by this Inden-
ture. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trust-
ee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture
under this Article, this Indenture shall be modified in accor-
dance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and deliv-
ered hereunder shall be bound thereby.
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SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to
this Article shall conform to the requirements of the Trust
Indenture Act.
SECTION 906. Reference in Securities to Supplemental
Indentures.
Securities of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to
this Article may bear a notation in form approved by the Trus-
tee as to any matter provided for in such supplemental inden-
ture. If the Company shall so determine, new Securities of any
series so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be pre-
pared and executed by the Company and authenticated and deliv-
ered by the Trustee in exchange for Outstanding Securities of
such series.
ARTICLE TEN
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the princi-
pal of and interest on the Securities of each series in accor-
dance with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in the United States an
office or agency for each series of Securities where Securities
of that series may be presented or surrendered for payment,
where Securities of that series may be surrendered for regis-
tration of transfer or exchange, where Securities of that
series may be surrendered for conversion and where notices and
demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of
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the Trustee, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices
and demands.
The Company may also from time to time designate one
or more other offices or agencies (in the United States) where
the securities of one or more series may be presented or sur-
rendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such des-
ignation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the United
States for each series of Securities for such purposes. The
Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the loca-
tion of any such other office or agency.
SECTION 1003. Money for Payments on Securities to Be Held in
Trust.
If the Company shall at any time act as its own Pay-
ing Agent with respect to any series of Securities, it will, on
or at the option of the Company before each due date of the
principal of or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Per-
sons entitled thereto a sum sufficient to pay the principal or
interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying
Agents for any series of Securities, it will, prior to 12:00
noon, New York time, on each due date of the principal of or
interest on any Securities of that series, deposit with a Pay-
ing Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such
Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any
series of Securities other than the Trustee or the Company to
execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the pro-
visions of this Section 1003, that such Paying Agent will (i)
comply with the provisions of the Trust Indenture Act appli-
cable to it as a Paying Agent and (ii) during the continuance
of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in
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respect of the Securities of that series, upon the written
request of the Trustee, forthwith pay to the Trustee all sums
held in trust by such Paying Agent as such.
The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or
for any other purpose, pay, or by Company Order direct any Pay-
ing Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trus-
tee upon the same trusts as those upon which such sums were
held by the Company or such Paying Agent; and, upon such pay-
ment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of
the principal of or interest on any Security of any series and
remaining unclaimed for two years after such principal or
interest has become due and payable shall be paid to the Com-
pany on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only
to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall
thereupon cease.
The Trustee and the Paying Agent shall promptly pay
to the Company upon request any excess money or securities held
by them at any time.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120
days after the end of each fiscal year of the Company ending
after the date hereof, an Officers' Certificate, stating
whether or not to the best knowledge of the signers thereof the
Company is in default in the performance and observance of any
of the material terms, provisions and conditions of this Inden-
ture (without regard to any period of grace or requirement of
notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.
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SECTION 1005. Additional Covenants.
The Company covenants and agrees for the benefit of
the Holders of Securities of each series that it will not
declare or pay any dividends or distributions (other than divi-
dends or distributions in common stock of the Company or other
securities ranking junior in right of payment to the Securities
of a particular series), on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock
or any security ranking pari passu with or junior in right of
payment to the Securities of such series, or make any guarantee
payments with respect to the foregoing (other than pro rata
payments under the Parent Guarantee and any similar Parent
Guarantees issued by the Company on behalf of the holders of
Preferred Securities issued by any issuer holding Securities)
or repurchase, or cause any of the Subsidiaries to repurchase,
any securities of the Company ranking pari passu with or
junior in right of payment to the Securities of such series
(except for payments made on any series of Securities upon
the stated maturity of such Securities); provided that Western
Resources may redeem, purchase, acquire or make a liquidation
payment with respect to any of its capital stock or any
security ranking pari passu with or junior in right of payment
to the Securities of such Series, make any guarantee payment
with respect to the foregoing or repurchase, or cause any of
its subsidiaries to repurchase, any security of Western
Resources ranking pari passu with or junior in right of
payment to the Securities of such series with securities
(or the proceeds from the issuance of securities) having no
higher ranking than the capital stock or the other securities
which are to be redeemed, purchased, acquired, with respect
to which a liquidation payment is to be made, to which a
guarantee payment is to be made with respect to the foregoing
or which are to be repurchased; if at such time (i) there
shall have occurred any event of which the Company has actual
knowledge that (a) with the giving of notice or the lapse of
time or both, would constitute an Event of Default hereunder
with respect to Securities of such series and (b) which the
Company shall not have taken reasonable steps to cure,
(ii) the Company shall be in default with respect to its
payment of any obligations under a Parent Guarantee relating to
the Preferred Securities of the Trust corresponding to which
the Securities of such series have been issued or (iii) the
Company shall have given notice of its selection of an Exten-
sion Period as provided herein with respect to Securities of
such series and such period, or any extension thereof, shall
have commenced and be continuing.
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The Company also covenants, for the benefit of the Holders of
Securities of each series, (i) not to transfer ownership of the Common
Securities of the Trust to which the Securities of such series have been
issued to any person other than an Affiliate of the Company or a successor
of the Company permitted under Article 8 of the Indenture; provided that no
such transfer shall result in (x) the Trust being considered an "investment
company" that is required to be registered under the Investment Company Act
of 1940, as amended, or (y) the Trust not being taxed as a grantor trust
for United States Federal income tax purposes; (ii) not to voluntarily
dissolve, wind up or terminate such Trust, except in connection with a
distribution of the Securities of such series to the holders of the
corresponding Preferred Securities in liquidation of such Trust or in
connection with certain mergers, consolidations or amalgamations permitted
by the Trust Agreement relating to such Trust and (iii) to use its reason-
able efforts, consistent with the terms and provisions of such Trust
Agreement, to cause such Trust to remain a business trust and not to be
classified as an association taxable as a corporation for United States
Federal income tax purposes.
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of
a Security, by such Holder's acceptance thereof, likewise cove-
nants and agrees that, notwithstanding anything to the contrary
contained herein, to the extent and in the manner hereinafter
set forth in this Article, the indebtedness represented by the
Securities and the payment of the principal of and premium, if
any, and interest on each and all of the Securities are hereby
expressly made subordinate and subject in right of payment to
the prior payment in full in cash or cash equivalents of all
Senior Indebtedness (including any interest accruing after the
occurrence of an Event of Default under Section 501(4) or (5)).
SECTION 1102. Payment Over of Proceeds upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case
or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding in connection therewith,
relative to the Company or to its creditors, as such, or to its
assets, or (b) any liquidation, dissolution or other winding up
of the Company, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) any assignment
for the benefit of creditors or any other marshalling of assets
and liabilities of the Company, then and in any such event:
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(1) the holders of Senior Indebtedness shall be
entitled to receive payment in full in cash or cash equiv-
alents of all amounts due or to become due on or in
respect of all Senior Indebtedness, or provision shall be
made for such payment in cash or cash equivalents, before
the Holders of the Securities are entitled to receive any
payment on account of principal of (or premium, if any) or
interest on the Securities; and
(2) any payment or distribution of assets of the
Company of any kind or character, whether in cash, prop-
erty or securities, by set-off or otherwise, to which the
Holders or the Trustee would be entitled but for the pro-
visions of this Article Eleven, including any such payment
or distribution which may be payable or deliverable by
reason of the payment of any other indebtedness of the
Company being subordinated to the payment of the Securi-
ties (except, so long as the effect of this parenthetical
clause is not to cause the Securities to be treated in any
case or proceeding or similar event described in Subsec-
tion (a), (b) or (c) of this Section 1102 as part of the
same class of claims as the Senior Indebtedness or any
class of claims on a parity with or senior to the Senior
Indebtedness, for any such payment or distribution of
securities which (i) are unsecured, (ii) have an average
life and final maturity no shorter than the average life
and final maturity of the Securities and (iii) are subor-
dinated, to at least the same extent as the Securities, to
the payment of all Senior Indebtedness then outstanding),
shall be paid by the liquidating trustee or agent or other
person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Indebted-
ness or their Representative or Representatives or to the
trustee or trustees under any indenture under which any
instruments evidencing any of such Senior Indebtedness may
have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the principal of,
and premium, if any, and interest on, and other amounts
due on or in connection with, the Senior Indebtedness to
the extent necessary to make payment in full in cash or
cash equivalents of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness;
and
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(3) in the event that, notwithstanding the foregoing
provisions of this Section, the Trustee or the Holder of
any Security shall have received any such payment or dis-
tribution of assets of the Company of any kind or char-
acter, whether in cash, property or securities, including
any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebt-
edness of the Company being subordinated to the payment of
the Securities, before all Senior Indebtedness is paid in
full or payment thereof provided for, then and in such
event such payment or distribution shall be paid over or
delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent
or other Person making payment or distribution of assets
of the Company for application to the payment of all
Senior Indebtedness remaining unpaid to the extent neces-
sary to pay all Senior Indebtedness in full in cash or
cash equivalents, after giving effect to any concurrent
payment or distribution to or for the holders of Senior
Indebtedness.
The consolidation of the Company with, or the merger
of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance, transfer
or lease of its properties and assets substantially as an
entirety to another corporation upon the terms and conditions
set forth in Article Eight shall not be deemed a dissolution,
winding up, liquidation, reorganization, assignment for the
benefit of creditors or marshalling of assets and liabilities
of the Company for the purposes of this Section 1102 if the
corporation formed by such consolidation or into which the Com-
pany is merged or the corporation which acquires by conveyance,
transfer or lease such properties and assets substantially as
an entirety, as the case may be, shall, as a part of such con-
solidation, merger, conveyance, transfer or lease, comply with
the conditions set forth in Article Eight.
SECTION 1103. No Payment When Senior Indebtedness in Default.
(i) In the event of and during the continuation of
any default in the payment of principal of (or premium, if any)
or interest on any Senior Indebtedness or (ii) in the event
that any other event of default with respect to any Senior
Indebtedness shall have occurred and be continuing and shall
have resulted in such Senior Indebtedness becoming or being
declared due and payable prior to the date on which it would
otherwise have become due and payable, then no payment shall be
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made by the Company on account of the principal of (or premium,
if any) or interest on the Securities or on account of the pur-
chase or redemption or other acquisition of Securities unless
and until such payment default shall have been cured or waived
or shall have ceased to exist or such acceleration shall have
been rescinded or annulled or the holders of such Senior
Indebtedness or their agents have waived the benefits of this
Section.
In the event that, notwithstanding the foregoing, the
Company shall make any payment to the Trustee or the Holder of
any Security prohibited by the foregoing provisions of this
Section, then and in such event such payment shall be received
and held in trust for the holders of Senior Indebtedness and
shall be paid over or delivered to the Representative of Senior
Indebtedness then outstanding to the extent necessary to pay in
full in cash or cash equivalents all Senior Indebtedness.
The provisions of this Section shall not apply to any
payment with respect to which Section 1102 would be applicable.
SECTION 1104. Payment Permitted if No Default.
Nothing contained in this Article or elsewhere in
this Indenture or in any of the Securities shall prevent the
Company, at any time except during the pendency of any case,
proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshalling of
assets and liabilities of the Company referred to in Section
1102 or under the conditions described in Section 1103, from
making payments at any time of principal of (and premium, if
any) or interest on the Securities.
SECTION 1105. Subrogation to Rights of Holders of Senior
Indebtedness.
Subject to the payment in full of all Senior Indebt-
edness, the Holders of the Securities shall be subrogated
(equally and ratably with the holders of all indebtedness of
the Company which by its express terms is subordinated to
Senior Indebtedness of the Company to the same extent as the
Securities are subordinated and which is entitled to like
rights of subrogation) to the rights of the holders of such
Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebt-
edness until the principal of (and premium, if any) and inter-
est on the Securities shall be paid in full. For purposes of
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such subrogation, no payments or distributions to the holders
of Senior Indebtedness of any cash, property or securities to
which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no pay-
ments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities or
the Trustee, shall, as among the Company, its creditors other
than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
SECTION 1106. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended
solely for the purpose of defining the relative rights of the
Holders of the Securities on the one hand and the holders of
Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securi-
ties is intended to or shall (a) impair, as among the Company,
its creditors other than holders of Senior Indebtedness and the
Holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the
Securities the principal of (and premium, if any) and interest
on the Securities as and when the same shall become due and
payable in accordance with their terms; or (b) affect the rela-
tive rights against the Company of the Holders of the Securi-
ties and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder
of any Security from exercising all remedies otherwise permit-
ted by applicable law upon default under this Indenture, sub-
ject to the express limitations set forth in Article Five and
to the rights, if any, under this Article of the holders of
Senior Indebtedness (1) in any case, proceeding, dissolution,
liquidation or other winding up, assignment for the benefit of
creditors or other marshalling of assets and liabilities of the
Company referred to in Section 1102, to receive, pursuant to
and in accordance with such Section, cash, property and securi-
ties otherwise payable or deliverable to the Trustee or such
Holder, or (2) under the conditions specified in Section 1103,
to prevent any payment prohibited by such Section.
SECTION 1107. Trustee to Effectuate Subordination.
Each Holder of a Security by such Holder's acceptance
thereof authorizes and directs the Trustee on such Holder's
behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and
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appoints the Trustee his attorney-in-fact for any and all such
purposes.
With respect to the holders of Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of
its covenants and obligations as are specifically set forth in
this Article Eleven, and no implied covenants or obligations
with respect to the holders of Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and, subject to the provisions of Section
601, the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall pay over or deliver to holders of
Securities, the Company or any other Person money or assets to
which any holder of Senior Indebtedness shall be entitled by
virtue of this Article Eleven or otherwise.
SECTION 1108. No Waiver of Subordination Provisions.
No right of any present or future holder of any
Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or any
non-compliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness may, at
any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and
without impairing or releasing the subordination provided in
this Article or the obligations hereunder of the Holders of the
Securities to the holders of Senior Indebtedness, do any one or
more of the following: (a) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter,
Senior Indebtedness or any instrument evidencing the same or
any agreement under which Senior Indebtedness is outstanding;
(b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness;
(c) release any Person liable in any manner for the collection
of Senior Indebtedness; and (d) exercise or refrain from exer-
cising any rights against the Company and any other Person.
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SECTION 1109. Notice to Trustee.
The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit
the making of any payment to or by the Trustee in respect of
the Securities. Notwithstanding the provisions of this Article
or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which
would prohibit the making of any payments to or by the Trustee
in respect of the Securities, unless and until the Trustee
shall have received written notice thereof at the Corporate
Trust Office of the Trustee from the Company or a holder of
Senior Indebtedness or from any trustee, fiduciary or agent
therefore; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Section 602,
shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section 1109 at least
three Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of (and pre-
mium, if any) or interest on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and
to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the con-
trary which may be received by it within three Business Days
prior to such date. Nothing in this Section 1109 shall limit
the right of the holders of Senior Indebtedness to recover pay-
ments as contemplated by Sections 1102 and 1103.
Subject to the provisions of Section 602, the Trustee
shall be entitled to rely on the delivery to it of a written
notice by a Person representing such Person to be a holder of
Senior Indebtedness (or a trustee, fiduciary or agent therefor)
to establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee, fiduciary or agent there-
for). In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Article, the Trus-
tee may request such Person to furnish evidence to the reason-
able satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Per-
son is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person
under this Article, and if such evidence is not furnished, the
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Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such
payment.
SECTION 1110. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the
Company referred to in this Article, the Trustee, subject to
the provisions of Section 602, and the Holders of the Securi-
ties shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which such insol-
vency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pend-
ing, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of
creditors, agent or other Person making such payment or distri-
bution, delivered to the Trustee or to the Holders of Securi-
ties, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of
Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 1111. Rights of Trustee as a Holder of Senior Indebt-
edness; Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be enti-
tled to all the rights set forth in this Article with respect
to any Senior Indebtedness which may at any time be held by it,
to the same extent as any other holder of Senior Indebtedness,
and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607.
SECTION 1112. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context otherwise requires) be
construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article in addition to or
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in place of the Trustee; provided, however, that (i) Section
1111 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent and
(ii) any notice required by this Article Eleven to be given by
the holders of, or a Representative for, Senior Indebtedness
need only be given to the Trustee and not to any Paying Agent.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Applicability of Article.
Securities of any series which are redeemable before
their stated maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated
by Section 301 for such Securities) in accordance with this
Article.
SECTION 1202. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities
pursuant to Section 1201 shall be evidenced by a Board Resolu-
tion or in another manner specified as contemplated by
Section 301 for such Securities. In case of any redemption at
the election of the Company, the Company shall, at least 30
days and no more than 90 days prior to the Redemption Date
fixed by the Company, notify the Trustee of such Redemption
Date and of the principal amount of Securities to be redeemed
and provide a copy of the notice of redemption given to Holders
of Securities to be redeemed pursuant to Section 1204.
SECTION 1203. Selection by Trustee of Securities to Be
Redeemed.
If less then all the Securities of any series are to
be redeemed (unless such redemption affects only a single Secu-
rity), the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series not
previously called for redemption, by such method (including pro
rata or by lot) as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of por-
tions (equal to $25 or any integral multiple thereof) of the
principal amount of the Securities of such series.
-69-
The Trustee shall promptly notify the Company in
writing of the Securities selected for redemption as aforesaid
and, in case of any Securities selected for partial redemption
as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall
not apply with respect to any redemption affecting only a sin-
gle Security, whether such Security is to be redeemed in whole
or in part. In the case of any such redemption in part, the
unredeemed portion of the principal amount of the Security
shall be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the con-
text otherwise requires, all provisions relating to the redemp-
tion of Securities shall relate, in the case of any Securities
redeemed or to be redeemed only in part, to the portion of the
principal amount of such Securities which has been or is to be
redeemed.
SECTION 1204. Notice of Redemption.
Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than 90
days prior to the Redemption Date, to each Holder of Securities
to be redeemed, at his address appearing in the Securities Reg-
ister. If at the time of mailing of any notice of redemption
the Company shall not have deposited with the Trustee (and/or
irrevocably directed the Trustee to apply, from money held by
it available to be used for the redemption of Securities) an
amount in cash sufficient to redeem all of the Securities to be
redeemed, including accrued interest to such Redemption Date,
such notice shall state that the proposed redemption to which
such notice relates is subject to the deposit of such amount
with the Trustee on or before the Redemption Date.
All notices of redemption shall identify the Securi-
ties to be redeemed (including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of
any series consisting of more than a single Security are
to be redeemed, the identification (and, in the case of
the partial redemption of any such Securities, the
-70-
principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities
of any series consisting of a single Security are to be
redeemed, the principal amount of the particular Security
to be redeemed,
(4) that on the Redemption Date the Redemption Price
will become due and payable upon each such Security to be
redeemed and that interest thereon will cease to accrue on
and after said date, and
(5) the place or placement where such Securities are
to be surrendered for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at
the election of the Company shall be given by the Company or,
at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1205. Deposit of Redemption Price.
Prior to 12:00 noon, New York time, on any Redemption
Date, the Company shall deposit with the Trustee or with a Pay-
ing Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003)
an amount of money sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment
Date) accrued interest on, all the Securities which are to be
redeemed on that date.
SECTION 1206. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid
and the Company having on or before the Redemption Date depos-
ited with the Trustee (and/or having irrevocably directed the
Trustee to apply, from money held by it available to be used
for the redemption of Securities) an amount in cash sufficient
to redeem all of the Securities to be redeemed, the Securities
so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and
after such date, such Securities shall cease to bear interest.
Upon surrender of any such Security for redemption in accor-
dance with said notice, such Security shall be paid by the Com-
pany at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one
-71-
or more Predecessor Securities, registered as such at the close
of business on the relevant Record Dates according to their
terms and the provisions of Section 307.
If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, such Security shall
remain outstanding and shall, until paid, bear interest from
the Redemption Date at the rate borne by the Security.
SECTION 1207. Securities Redeemed in Part.
Any Security which is to be redeemed only in part
shall be surrendered at a place of payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or
a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or
such Holder's attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge,
a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal
of the Security so surrendered.
_________________
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together consti-
tute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, and their respective corpo-
rate seals to be hereunto affixed and attested, all as of the
day and year first above written.
WESTERN RESOURCES, INC.
By:____________________________
Name:
Title:
Attest:
___________________________
By:____________________________
Name:
Title:
Attest:
___________________________
STATE OF _________)
) ss.:
COUNTY OF ________)
On the ____ day of ________, 1995, before me person-
ally came ________, to me known, who, being by me duly sworn,
did depose and say that he/she is the ________ of Western
Resources, Inc., one of the corporations described in and which
executed the foregoing instrument; and that he/she signed
his/her name thereto by authority of the Board of Directors of
such corporation.
______________________________
AMENDED AND RESTATED
TRUST AGREEMENT
between
WESTERN RESOURCES, INC., as Depositor
and
WILMINGTON TRUST COMPANY, as Property Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of __________ __, ______
WESTERN RESOURCES CAPITAL I
WESTERN RESOURCES CAPITAL I
.Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Amended and Restated
Trust Indenture Trust Agreement
Act Section Section
Sections 310(a)(1)............................................. 8.07
(a)(2)............................................. 8.07
(a)(3)............................................. 8.09
(a)(4).. .......................................... Not Applicable
(a)(5)............................................. 8.08
(b)...... ......................................... 8.08
(c)................................................ Not Applicable
Sections 311(a)................................................ 8.13
(b)................................................ 8.13
Sections 312(a)................................................ 5.07
(b)................................................ 5.07
(c)................................................ 5.07
Sections 313 ................................................ 8.14
Sections 314(a)................................................ 8.15
(b)................................................ Not Applicable
(c)(1)............................................. 8.16
(c)(2)............................................. 8.16
(c)(3)............................................. 8.16
(d)................................................ Not Applicable
(e)................................................ 8.16
Sections 315(a)................................................ 8.01
(b)................................................ 8.02, 8.14(b)
(c)................................................ 8.01(a)
(d)................................................ 8.01, 8.03
(e)................................................ 8.03
Sections 316(a)................................................ 6.04
(b)................................................ 5.13
(c)................................................ 6.04
Sections 317(a)(1)............................................. 8.03
(a)(2)............................................. 8.03
(b)................................................ 5.08
Sections 318(a)................................................ 10.09
(b)................................................ 10.09
(c)................................................ 10.09
- -------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Trust Agreement.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS
Section 1.01. Definitions.................................................. 1
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 2.01. Name......................................................... 9
Section 2.02. Office of the Property Trustee; Principal Place of Business.. 9
Section 2.03. Initial Contribution of Trust Property; Organizational
Expenses..................................................... 9
Section 2.04. Issuance of the Preferred Securities......................... 9
Section 2.05. Subscription and Purchase of Debentures; Issuance of the
Common Securities............................................ 9
Section 2.06. Declaration of Trust......................................... 9
Section 2.07. Authorization to Enter into Certain Transactions............ 10
Section 2.08. Assets of the Trust......................................... 13
Section 2.09. Title to Trust Property..................................... 13
ARTICLE III
PAYMENT ACCOUNT
Section 3.01. Payment Account............................................ 13
ARTICLE IV
DISTRIBUTIONS; REDEMPTIONS
Section 4.01. Distributions.............................................. 13
Section 4.02. Redemptions................................................ 14
Section 4.03. Subordination of Common Securities......................... 16
Section 4.04. Payment Procedures......................................... 16
Section 4.05. Tax Returns and Reports.................................... 17
Section 4.06. Payment of Taxes, Duties, Etc. of the Trust.................17
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.01. Initial Ownership.......................................... 17
Section 5.02. The Trust Securities Certificates.......................... 17
Section 5.03. Delivery of Trust Securities Certificates.................. 17
Section 5.04. Registration of Transfer and Exchange of Preferred Securities
Certificates............................................... 18
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates............................................... 18
Section 5.06. Persons Deemed Securityholders............................. 18
Section 5.07. Access to List of Securityholders' Names and Addresses..... 19
Section 5.08. Appointment of Paying Agent................................ 19
TABLE OF CONTENTS (CONT.)
Page
Section 5.09. Book-Entry Preferred Securities Certificates; Common
Securities Certificate...................................... 20
Section 5.10 Notices to Clearing Agency.................................. 20
Section 5.11. Definitive Preferred Securities Certificates................ 21
Section 5.12. Rights of Securityholders................................... 21
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.01. Limitations on Voting Rights................................ 22
Section 6.02. Notice of Meetings.......................................... 22
Section 6.03. Meetings of Preferred Securityholders....................... 23
Section 6.04. Voting Rights............................................... 23
Section 6.05. Proxies, Etc................................................ 23
Section 6.06. Securityholder Action by Written Consent.................... 23
Section 6.07. Record Date for Voting and Other Purposes................... 23
Section 6.08. Acts of Securityholders..................................... 24
Section 6.09. Inspection of Records....................................... 25
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BANK
Section 7.01. Representations and Warranties.............................. 25
ARTICLE VIII
THE TRUSTEES
Section 8.01. Certain Duties and Responsibilities......................... 26
Section 8.02. Notice of Defaults.......................................... 27
Section 8.03. Certain Rights of the Property Trustee...................... 27
Section 8.04. Not Responsible for Recitals or Issuance of Securities...... 29
Section 8.05. May Hold Securities......................................... 29
Section 8.06. Compensation; Fees; Indemnity............................... 29
Section 8.07. Corporate Property Trustee Required; Eligibility of Trustees 30
Section 8.08. Conflicting Interests....................................... 30
Section 8.09. Co-Trustees and Separate Trustees........................... 30
Section 8.10. Resignation and Removal; Appointment of Successor........... 32
Section 8.11. Acceptance of Appointment by Successor...................... 33
Section 8.12. Merger, Conversion, Consolidation or Succession to Business. 34
Section 8.13. Preferential Collection of Claims Against Depositor or
Trust....................................................... 34
Section 8.14. Reports by the Property Trustee............................. 34
Section 8.15. Reports to the Property Trustee............................. 34
Section 8.16. Evidence of Compliance with Conditions Precedent............ 34
Section 8.17. Number of Trustees.......................................... 35
Section 8.18. Delegation of Power......................................... 35
TABLE OF CONTENTS (CONT.)
Page
ARTICLE IX
TERMINATION AND LIQUIDATION
Section 9.01. Termination Upon Expiration Date............................ 35
Section 9.02. Early Termination........................................... 35
Section 9.03. Termination................................................. 36
Section 9.04. Liquidation................................................. 36
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Limitation on Rights of Securityholders.................... 37
Section 10.02. Amendment.................................................. 38
Section 10.03. Separability............................................... 39
Section 10.04. Tax Elections.............................................. 39
Section 10.05. GOVERNING LAW.............................................. 39
Section 10.06. Successors................................................. 39
Section 10.07. Headings................................................... 39
Section 10.08. Intention of Parties....................................... 39
Section 10.09. Notice and Demand.......................................... 39
Section 10.10. Agreement Not to Petition.................................. 40
Section 10.11. Trust Indenture Act; Conflict with Trust Indenture Act..... 40
--------------------
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C The Depository Trust Company: Principal and Income Payments
Rider
Exhibit D Representations for Deposit/Withdrawal at Custodian
Exhibit E Form of Common Securities Certificate
Exhibit F Form of Agreement as to Expenses and Liabilities
Exhibit G Form of Preferred Securities Certificate
WESTERN RESOURCES CAPITAL I
AMENDED AND RESTATED TRUST AGREEMENT, dated as of _____ __,____,
among (i) Western Resources, Inc., a Kansas corporation (the "Depositor" or
"Western Resources"), (ii) Wilmington Trust Company, a banking corporation
duly organized and existing under the laws of the State of Delaware, as
trustee (the "Property Trustee" and, in its separate corporate capacity and
not in its capacity as Property Trustee, the "Bank"), (iii) Steven L. Kitchen,
an individual, James A. Martin, an individual, and John K. Rosenberg, an
individual, each of whose address is c/o Western Resources, 818 Kansas Avenue,
Topeka, Kansas 66612 (each an "Administrative Trustee" and referred to
collectively as the "Administrative Trustees") (the Property Trustee and the
Administrative Trustees being referred to collectively as the "Trustees") and
(iv) the several Holders (as defined herein).
W I T N E S S E T H:
WHEREAS, the Depositor and the Bank have heretofore duly declared
and established Western Resources Capital I (the "Trust") as a business trust
pursuant to the Delaware Business Trust Act by the entering into of that
certain Trust Agreement dated as of October 12, 1995 (the "Original Trust
Agreement"), and by the execution and filing on October 12, 1995 by the
Property Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust attached hereto as Exhibit A; and
WHEREAS, the Depositor and the Bank desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the acquisition by the Trust from the Depositor of all
of the right, title and interest in the Debentures (as defined herein),
(ii) the issuance of the Common Securities (as defined herein) by the Trust to
the Depositor, (iii) the issuance and sale of the Preferred Securities (as
defined herein) by the Trust pursuant to the Underwriting Agreement (as
defined herein) and (iv) the appointment of the Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, each party, for the benefit
of the other parties hereto, including the Holders, and intending to be
legally bound hereby amends and restates the Original Trust Agreement in its
entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
Section 1.01. Definitions. For all purposes of this Trust
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means the amount of Additional Interest
Attributable to Deferral (as defined in the Subordinated Indenture) paid by
the Depositor on a Like Amount of Debentures for such period.
"Administrative Trustee" means each of the individuals identified as
an "Administrative Trustee" in the preamble to this Trust Agreement solely in
his or her capacity as Administrative Trustee of the Trust heretofore formed
and continued hereunder, and not in his or her individual capacity; or such
Administrative Trustee's successor in interest in such capacity, or any
successor administrative trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(i) a decree or order is entered by a court having jurisdiction in
the premises (a) for relief in respect of such Person in an involuntary
case or proceeding under the Federal Bankruptcy Code or any other Federal
or state bankruptcy, insolvency, reorganization or similar law or (b)
adjudging such Person a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of or in respect of such Person
under the Federal Bankruptcy Code or any other applicable Federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of such Person or of
any substantial part of any of its properties, or ordering the winding up
or liquidation of any of its affairs, and any such decree or order
remains unstayed and in effect for a period of 60 consecutive days; or
(ii) such Person institutes a voluntary case or proceeding under the
Federal Bankruptcy Code or any other applicable Federal or state law or
any other case or proceeding to be adjudicated a bankrupt or insolvent,
or such Person consents to the entry of a decree or order for relief in
respect of such Person in any involuntary case or proceeding under the
Federal Bankruptcy Code or any other applicable Federal or state law or
to the institution of bankruptcy or insolvency proceedings against such
Person, or such Person files a petition or answer or consent seeking
reorganization or relief under the Federal Bankruptcy Code or any other
applicable Federal or state law, or consents to the filing of any such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of any such Person or of any substantial part of its property,
or makes an assignment for the benefit of creditors, or admits in writing
its inability to pay its debts generally as they become due or takes
corporate action in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.08.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors or a duly authorized committee thereof
and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial
interest in the Preferred Securities Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 5.10.
"Business Day" means a day other than (x) a Saturday or a Sunday,
(y) a day on which banks in New York, New York are authorized or obligated by
law or executive order to remain closed or (z) a day on which the Property
Trustee's corporate trust office or, if Western Resources acts as Paying
Agent, Western Resources' principal office is closed for business.
"Certificate Depository Agreement" means the agreement among the
Trust, the Depositor and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Certificates, sub-
stantially in the form attached hereto as Exhibit B, as the same may be
amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means the "Time of Delivery" as defined in the
Underwriting Agreement, which date is also the date of execution and delivery
of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
as amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Security" means a beneficial interest in the Trust, having a
Liquidation Amount of $25 and having the rights provided therefor in this
Trust Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached hereto as
Exhibit C.
"Corporate Trust Office" means the principal office of the Property
Trustee located in Wilmington, Delaware.
"Debenture Event of Default" means an "Event of Default" as defined
in the Subordinated Indenture.
"Debenture Redemption Date" means "Redemption Date" as defined in
the Subordinated Indenture.
"Debenture Trustee" means Wilmington Trust Company, a banking
corporation duly organized and existing under the laws of the State of
Delaware.
"Debentures" means the $_________ aggregate principal amount of
Western Resources __% Deferrable Interest Subordinated Debentures, Series A
Due 20__, issued pursuant to the Subordinated Indenture.
"Definitive Preferred Securities Certificates" means either or both
(as the context requires) of (i) Preferred Securities Certificates issued in
typewritten, fully registered form as provided in Section 5.10(a) and (ii)
Preferred Securities Certificates issued in certificated, fully registered
form as provided in Section 5.12.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801, et seq., as it may be amended from
time to time.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Event of Default" means the occurrence of a Debenture Event of
Default (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body).
"Expense Agreement" means the Agreement as to Expenses and
Liabilities between Western Resources and the Trust, substantially in the form
attached as Exhibit D, as amended from time to time.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of
the United States Code, as amended from time to time.
"Final Distribution" has the meaning set forth in Section 9.04.
"Final Distribution Date" means the Date on which Debentures are to
be distributed to Holders of Trust Securities in connection with a dissolution
and liquidation of the Trust pursuant to Section 9.04(a).
"Global Certificate" shall mean the Preferred Securities Certificate
or Certificates issued as specified in Section 5.10.
"Guarantee" means the Guarantee Agreement executed and delivered by
Western Resources and Wilmington Trust Company, a Delaware banking
corporation, as trustee, contemporaneously with the execution and delivery of
this Trust Agreement, as amended from time to time.
"Holder" or "Securityholder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such
Person shall be deemed to be a beneficial owner within the meaning of the
Delaware Business Trust Act.
"Investment Company Event" means the occurrence of a change in law
or regulation or a change in the interpretation or application of any law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law") to the effect that the Trust is or will
be considered an "investment company" that is required to be registered under
the Investment Company Act of 1940, as amended, which Change in 1940 Act Law
becomes effective on or after the date of original issuance of the Preferred
Securities.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed
of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means (i) Trust Securities having an aggregate
Liquidation Amount equal to the principal amount of Debentures to be
contemporaneously redeemed in accordance with the Subordinated Indenture and
the proceeds of which will be used to pay the Redemption Price of such Trust
Securities, or (ii) Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Trust Securities of the Holder to whom
such Debentures are distributed, as the case may be.
"Liquidating Trustee" means a Person appointed pursuant to Section
9.04(b), solely in its capacity as Liquidating Trustee of the Trust heretofore
formed and continued hereunder and not in its individual capacity.
"Liquidation Amount" means the stated amount of U.S. $25 per Trust
Security.
"Liquidation Distribution" has the meaning specified in Section
9.04(e).
"Officers' Certificate" means a certificate signed by (i) the
Chairman, a Vice Chairman, the President, a Vice President, or the Treasurer
of the Depositor and (ii) the Secretary or an Assistant Secretary of the
Depositor, and delivered to the appropriate Trustee; provided, however, that
such certificate may be signed by two of the officers or directors listed in
clause (i) above in lieu of being signed by one of such officers or directors
listed in such clause (i) and one of the officers listed in clause (ii) above.
One of the officers signing an Officers' Certificate given pursuant to
Section 8.16 shall be the principal executive, financial or accounting officer
of the Depositor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust Agreement
shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals
to this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as
of the date of determination, all Trust Securities theretofore authenticated
and delivered under this Trust Agreement, except:
(i) Trust Securities theretofore canceled by the Administrative
Trustees or delivered to the Administrative Trustees for cancellation;
(ii) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee
or any Paying Agent for the Holders of such Preferred Securities;
provided that, if such Trust Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Trust Agreement; and
(iii) Trust Securities which have been paid pursuant to Section
5.05 or in exchange for or in lieu of which other Trust Securities have
been authenticated and delivered pursuant to this Trust Agreement;
provided, however, that in determining whether the Holders of the requisite
aggregate Liquidation Amount of the Outstanding Trust Securities have given
any request, demand, authorization, direction, notice, consent or waiver here-
under, Trust Securities owned by the Depositor, any Trustee or any Affiliate
of the Depositor or any Trustee shall be disregarded and deemed not to be
Outstanding, except that (a) in determining whether any Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Trust Securities which such Trustee knows to
be so owned shall be so disregarded and (b) the foregoing shall not apply at
any time when all of the outstanding Preferred Securities are owned by the
Depositor, one or more of the Trustees and/or any such Affiliate. Trust
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustees the pledgee's right so to act with respect to such
Trust Securities and that the pledgee is not the Depositor, any Trustee or any
Affiliate of the Depositor or any Trustee.
"Owner" means each Person who is the beneficial owner of a Book-
Entry Preferred Securities Certificate as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.08 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee
shall make payments to the Securityholders in accordance with Section 4.04.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Security" means a beneficial interest in the Trust,
having a Liquidation Amount of $25 and having the rights provided therefor in
this Trust Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as
Exhibit E.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement,
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor trustee appointed as herein
provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date shall be a Redemption
Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any date fixed for
redemption of any Trust Security, the Liquidation Amount of such Trust
Security, plus accumulated and unpaid Distributions to such date.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Securities Register" and "Securities Registrar" shall be as
described in Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such
Person shall be deemed to be a beneficial owner within the meaning of the
Delaware Business Trust Act.
"Special Event" means either a Tax Event or an Investment Company
Event.
"Subordinated Indenture" means the Indenture, dated as of
__________ __,____, between Western Resources and the Debenture Trustee, as
trustee, as amended or supplemented from time to time.
"Supplemental Indenture" means the Supplemental Indenture to the
Indenture establishing the Debentures.
"Tax Event" means the receipt by the Trust or the Depositor, as the
case may be, of an Opinion of Counsel experienced in such matters to the
effect that a relevant tax law change has occurred. For purposes of the
preceding sentence a relevant tax law change is any amendment or change to (or
officially proposed amendment or change to) the laws (including regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof, or the publication of any judicial opinion interpreting
such laws (or regulations) or any written interpretation of such laws (or
regulations) by any governmental authority having jurisdiction to enforce or
administer such laws (or regulations) (including official and unofficial
opinions purporting to apply such laws and regulations to other Persons who
have issued securities similar to the Debentures), which amendment, change,
proposed amendment or change, opinion or interpretation could if valid and
enacted or applied to the Trust or the Depositor result in (i) the Trust,
either currently or within 90 days of the date thereof, becoming subject to
United States Federal income tax with respect to interest received on the
Debentures, (ii) interest payable by the Depositor on the Debentures
attributable to the Preferred Securities, either currently or within 90 days
of the date thereof, becoming nondeductible for United States Federal income
tax purposes or (iii) the Trust, either currently or within 90 days of the
date thereof, becoming subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Trust" means the Delaware business trust created and continued
hereby and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Trust Agreement, as the same may be
modified, amended or supplemented in accordance with the applicable provisions
hereof, including all exhibits hereto, including, for all purposes of this
Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are "automatically" deemed to be a
part of and govern this Trust Agreement and any such modification, amendment
or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this Trust Agreement was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit
in, or owing to, the Payment Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held or deemed to be held by the Property Trustee pursuant to the trusts of
this Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
"Underwriting Agreement" means the Underwriting Agreement, dated as
of ______ ___, ____, among the Trust, Western Resources and the several
underwriters named therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 2.01. Name. The Trust created and continued hereby shall
be known as "Western Resources Capital I," as such name may be modified from
time to time by the Administrative Trustees following written notice to the
Holders and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
Section 2.02. Office of the Property Trustee; Principal Place of
Business. The office of the Property Trustee in the State of Delaware is
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration, or
such other address in Delaware as the Property Trustee may designate by
written notice to the Securityholders and the Depositor. The principal place
of business of the Trust is c/o Western Resources, Inc., 818 Kansas Avenue,
Topeka, Kansas 66612; Attention: Vice President, Finance.
Section 2.03. Initial Contribution of Trust Property;
Organizational Expenses. The Property Trustee acknowledges receipt, in trust
from the Depositor in connection with the Original Trust Agreement, of the sum
of $10, which constituted the initial Trust Property. The Depositor shall pay
the organizational expenses of the Trust as they arise or shall, upon request
of any Trustee, promptly reimburse such Trustee for any such expenses paid by
such Trustee. The Depositor shall make no claim upon the Trust Property for
the payment of such expenses.
Section 2.04. Issuance of the Preferred Securities.
On_______________, the Depositor, on behalf of the Trust and pursuant to the
Original Trust Agreement, executed and delivered the Underwriting Agreement.
Contemporaneously with the execution and delivery of this Trust Agreement, the
Administrative Trustees, on behalf of the Trust, shall execute and deliver to
the underwriters named therein Preferred Securities Certificates, registered
in the name of the nominee of the initial Clearing Agency, in an aggregate
amount of _________ Preferred Securities having an aggregate Liquidation
Amount of $________ against receipt of the aggregate purchase price of such
Preferred Securities of $________, which amount the Administrative Trustees
shall promptly deliver to the Property Trustee. The consideration received by
the Trust for the issuance of the Preferred Securities shall constitute a
contribution to the capital of the Trust and shall not constitute a loan to
the Trust.
Section 2.05. Subscription and Purchase of Debentures; Issuance of
the Common Securities. Contemporaneously with the execution and delivery of
this Trust Agreement, the Administrative Trustees, on behalf of the Trust,
shall subscribe to and purchase from the Depositor Debentures, registered in
the name of the Trust and having an aggregate principal amount equal to
$________, and, in satisfaction of the purchase price for such Debentures, (x)
the Property Trustee, on behalf of the Trust, shall deliver to the Depositor
the sum of $________, and (y) contemporaneously therewith the Administrative
Trustees, on behalf of the Trust, shall execute and deliver to the Depositor
Common Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of ______ Common Securities having an aggregate Liquidation
Amount of $________. The consideration received by the Trust for the issuance
of the Common Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
Section 2.06. Declaration of Trust. The exclusive purposes of the
Trust are (a) to issue Trust Securities, (b) to purchase the Debentures with
the Common Securities and the proceeds from the sale of the Preferred
Securities, and (c) to engage in those activities necessary or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein, and
the Trustees hereby accept such appointment. The Property Trustee hereby
declares that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust.
Section 2.07. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section, and in accordance with the following provisions
(A) and (B), the Trustees shall have the authority to enter into all trans-
actions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the
Trustees under this Trust Agreement, and to perform all acts in furtherance
thereof, including without limitation, the following:
(A) As among the Trustees, the Administrative Trustees shall
have the power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(i) the issuance and sale of the Trust Securities;
(ii) to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, the Expense
Agreement and the Certificate Depository Agreement and such
other agreements as may be necessary or desirable in connection
with the purposes and function of the Trust;
(iii) assisting in the registration of the Preferred
Securities under the Securities Act of 1933, as amended, and
under state securities or blue sky laws, and the qualification
of this Trust Agreement as a trust indenture under the Trust
Indenture Act;
(iv) assisting in the listing of the Preferred Securities
upon such securities exchange or exchanges as shall be
determined by the Depositor and the registration of the
Preferred Securities under the Securities Exchange Act of 1934,
as amended, and the preparation and filing of all periodic and
other reports and other documents pursuant to the foregoing;
(v) the sending of notices (other than notices of
default) and other information regarding the Trust Securities
and the Debentures to the Securityholders in accordance with
this Trust Agreement;
(vi) the appointment of a Paying Agent, authenticating
agent and Securities Registrar in accordance with this Trust
Agreement;
(vii) registering transfers of the Trust Securities in
accordance with this Trust Agreement;
(viii) to the extent provided in this Trust Agreement,
the winding up of the affairs of and liquidation of the Trust
and the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(ix) unless otherwise determined by the Depositor, the
Property Trustee or the Administrative Trustees, or as
otherwise required by the Delaware Business Trust Act or the
Trust Indenture Act, to execute on behalf of the Trust (either
acting alone or together with any or all of the Administrative
Trustees) any documents that the Administrative Trustees have
the power to execute pursuant to this Trust Agreement; and
(x) the taking of any action incidental to the foregoing
as the Administrative Trustees may from time to time determine
is necessary or advisable to give effect to the terms of this
Trust Agreement for the benefit of the Securityholders (without
consideration of the effect of any such action on any
particular Securityholder).
(B) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect
to the following matters:
(i) the establishment and maintenance of the Payment
Account;
(ii) the receipt of the Debentures;
(iii) the collection of interest, principal and any other
payments made in respect of the Debentures into the Payment
Account;
(iv) the distribution of amounts owed to the Security-
holders in respect of the Trust Securities;
(v) the sending of notices of default and other
information regarding the Trust Securities and the Debentures
to the Securityholders in accordance with this Trust Agreement;
(vi) the distribution of the Trust Property in accordance
with the terms of this Trust Agreement;
(vii) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust and
the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(viii) after the occurrence of an Event of Default, the
taking of any action incidental to the foregoing as the
Property Trustee may from time to time determine is necessary
or advisable to protect and conserve the Trust Property for the
benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder);
and,
(ix) subject to this Section 2.07(a)(B), the Property
Trustee shall have none of the duties of the Administrative
Trustees set forth in Section 2.07(a)(A).
(b) So long as this Trust Agreement remains in effect, the Trust
(or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees shall not (i) acquire any
investments or engage in any activities not authorized by this Trust
Agreement, (ii) sell, assign, transfer, exchange, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take any action
that would cause the Trust to be treated as an association taxable as a
corporation for United States Federal income tax purposes, (iv) incur any
indebtedness for borrowed money or (v) take or consent to any action that
would result in the placement of a Lien on any of the Trust Property. The
Administrative Trustees shall defend all claims and demands of all Persons at
any time claiming any Lien on any of the Trust Property adverse to the
interest of the Trust or the Securityholders in their capacity as Security-
holders.
(c) In connection with the issue and sale of the Preferred Securi-
ties, the Depositor shall have the right and responsibility to assist the
Trust with respect to, or effect on behalf of the Trust, the following (and
any actions taken by the Depositor in furtherance of the following prior to
the date of this Trust Agreement are hereby ratified and confirmed in all
respects):
(i) to prepare for filing with the Commission a registration
statement on Form S-3 in relation to the Preferred Securities, the
Debentures and the Guarantee, including any amendments thereto;
(ii) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which must
be taken by or on behalf of the Trust, and advise the Trustees of actions
they must take on behalf of the Trust, and prepare for execution and
filing any documents to be executed and filed by the Trust or on behalf
of the Trust, as the Depositor deems necessary or advisable in order to
comply with the applicable laws of any such States;
(iii) to prepare for filing by the Trust an application to the
New York Stock Exchange for listing upon notice of issuance of the
Preferred Securities;
(iv) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Securities Exchange Act
of 1934, as amended, including any amendments thereto;
(v) to negotiate the terms of, and execute and deliver, the
Underwriting Agreement providing for the sale of the Preferred
Securities; and
(vi) any other actions necessary or desirable to carry out any
of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be
an "investment company" required to be registered under the Investment Company
Act of 1940, as amended, or taxed as a corporation for United States Federal
income tax purposes and so that the Debentures will be treated as indebtedness
of the Depositor for United States Federal income tax purposes. In so doing,
the Depositor and the Administrative Trustees are authorized to take any
action, not inconsistent with applicable law, the Certificate of Trust or this
Trust Agreement, that the Depositor or any of the Administrative Trustees
determines in its or his discretion to be necessary or desirable for such
purposes, provided that such action does not adversely affect the interests of
the Holders of the Preferred Securities. Any action not specifically assigned
herein that the Trustees may be permitted or required to do under this Trust
Agreement may be taken by majority vote of the Trustees.
Section 2.08. Assets of the Trust. The assets of the Trust shall
consist of the Trust Property.
Section 2.09. Title to Trust Property. Legal title to all Trust
Property shall be vested at all times in the Property Trustee (in its capacity
as such) and shall be held and administered by the Property Trustee for the
benefit of the Securityholders in accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
Section 3.01. Payment Account. (a) On or prior to the Closing
Date, the Property Trustee shall establish the Payment Account. The Property
Trustee and any agent of the Property Trustee shall have exclusive control and
sole right of withdrawal with respect to the Payment Account for the purpose
of making deposits in and withdrawals from the Payment Account in accordance
with this Trust Agreement. All monies and other property deposited or held
from time to time in the Payment Account shall be held by the Property Trustee
in the Payment Account for the exclusive benefit of the Securityholders and
for distribution as herein provided, including (and subject to) any priority
of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTIONS
Section 4.01. Distributions. (a) Distributions on the Trust
Securities shall be cumulative, and will accumulate whether or not there are
funds of the Trust available for the payment of Distributions. Distributions
shall accrue from ________ __,____, and, except in the event that Western
Resources exercises its right to extend the interest payment period for the
Debentures pursuant to Section 101 of the Supplemental Indenture, shall be
payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on________________. If any date on which
Distributions are otherwise payable on the Trust Securities is not a Business
Day, then the payment of such Distribution shall be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such distribution shall be made
on the immediately preceding Business Day, in each case, with the same force
and effect as if made on such date (each date on which distributions are
payable in accordance with this Section 4.01(a) a "Distribution Date").
(b) The Trust Securities represent beneficial interests in the
Trust, and, subject to Section 4.03 hereof, all Distributions will be made pro
rata on each of the Trust Securities; distributions payable as a preference on
the Preferred Securities shall be fixed at a rate of ___% per annum of the
Liquidation Amount of the Preferred Securities. The amount of Distributions
payable for any full quarterly period shall be computed on the basis of twelve
30-day months and a 360-day year and, for any period shorter than a full
monthly period, shall be computed on the basis of the actual number of days
elapsed in such period. If the interest payment period for the Debentures is
extended pursuant to Section 101 of the Supplemental Indenture, then the rate
per annum at which Distributions on the Trust Securities accumulate shall be
increased by an amount such that the aggregate amount of Distributions that
accumulate on all Trust Securities during any such extended interest payment
period is equal to the aggregate amount of interest (including interest
payable on unpaid interest at the percentage rate per annum set forth above,
compounded quarterly) that accrues during any such extended interest payment
period on the Debentures. The amount of Distributions payable for any period
shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made and shall
be deemed payable on each Distribution Date only to the extent that the Trust
has funds legally and immediately available in the Payment Account for the
payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on
the Securities Register for the Trust Securities on the relevant record date,
which shall be one Business Day prior to such Distribution Date; provided,
however, that in the event that the Preferred Securities do not remain in
book-entry-only form, the relevant record date shall be the date 15 days prior
to the relevant Distribution Date.
Section 4.02. Redemptions. (a) On each Debenture Redemption Date,
the Trust will be required to redeem a Like Amount of Trust Securities at the
Redemption Price.
(b) If (i) (x) a Special Event shall occur and be continuing and
(y) within 45 days following the occurrence of such Special Event the Trustees
shall not have received from the Debenture Trustee a notice of redemption of
all of the Debentures on a Debenture Redemption Date (as specified in such
notice) which is to occur not later than 90 days following the occurrence of
such Special Event, or (ii) if the Trust is not or will not be taxed as a
grantor trust, the Depositor may in its sole discretion direct the Trustees
to, and the Trustees shall if so directed by the Depositor, dissolve the Trust
and cause the Trust to distribute to each Holder of Trust Securities, in
accordance with Section 9.04 and on a Liquidation Date which shall occur not
later than 90 days following the occurrence of such Special Event, a Like
Amount of Debentures in liquidation of the Trust; provided, however, that the
Trustees shall be required to follow the direction of the Depositor to
dissolve the Trust and distribute the Debentures to Holders of Trust
Securities in accordance with this Section 4.02(b) and Section 9.04 only if
the Trust shall have received an Opinion of Counsel experienced in such
matters to the effect that the Holders of Preferred Securities will not
recognize any gain or loss for United States Federal income tax purposes as a
result of such distribution. The election of the Depositor to cause the Trust
to be dissolved shall be evidenced by a Board Resolution. If the Trust is not
dissolved pursuant to the preceding sentence and the Trust Securities remain
Outstanding, then Additional Interest Attributable to Taxes (as defined in the
Subordinated Indenture) will be payable on the Debentures.
(c) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 90
days prior to the Redemption Date to each Holder of Trust Securities to be
redeemed, at such Holder's address appearing in the Securities Register. All
notices of redemption shall identify the Trust Securities to be redeemed
(including CUSIP number) and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the place or payment where such Trust Securities are to
be surrendered for payment of the Redemption Price; and
(iv) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be redeemed
and that, if the monies required to effect such redemption have been
duly deposited by Western Resources with the Property Trustee,
interest thereon will cease to accrue on and after said date.
(d) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made
and the Redemption Price shall be deemed payable on each Redemption Date only
to the extent that the Trust has funds immediately available in the Payment
Account for the payment of such Redemption Price.
(e) If the Property Trustee gives a notice of redemption in respect
of any Preferred Securities, then, by 12:00 noon, New York time, on the
Redemption Date, subject to Section 4.02(d), the Property Trustee shall, so
long as the Preferred Securities are in book-entry-only form, irrevocably
deposit with the Clearing Agency for the Preferred Securities funds sufficient
to pay the applicable Redemption Price and, at the direction of the Depositor,
shall give such Clearing Agency irrevocable instructions and authority to pay
the Redemption Price to the Holders thereof; provided if the Property Trustee
does not do so, it will be regarded as having revoked the notice of
redemption. If the Preferred Securities are no longer in book-entry-only
form, the Property Trustee, subject to Section 4.02(d), shall irrevocably
deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price and shall give the Paying Agent irrevocable instructions to
pay the Redemption Price to the Holders thereof upon surrender of their Pre-
ferred Securities Certificates. Notwithstanding the foregoing, Distributions
payable on or prior to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Securities Register on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of
Securityholders holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price, but
without interest on such Redemption Price, and such Securities will cease to
be outstanding. In the event that any date on which any Redemption Price is
payable is not a Business Day, then payment of the Redemption Price payable on
such date shall be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar year,
payment of such Distribution shall be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on such
date. In the event that payment of the Redemption Price in respect of any
Trust Securities called for redemption is not paid either by the Trust or by
the Depositor pursuant to the Guarantee, such Trust Securities shall be
considered to remain outstanding and will continue to accrue, at the rate
specified above, from the Redemption Date originally established by the Trust
for such Trust Securities to the date such Redemption Price is actually paid,
in which case the actual payment date will be the date fixed for redemption
for purposes of calculating the Redemption Price.
(f) Payment of the Redemption Price on the Trust Securities shall
be made to the Owners thereof as they appear on the Securities Register on the
relevant record date, which shall be one Business Day prior to the relevant
Redemption Date; provided, however, that in the event that the Preferred
Securities do not remain in book-entry-only form, the relevant record date
shall be the fifteenth day prior to the Redemption Date.
(g) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated to the Common Securities and the
Preferred Securities on a pro rata basis based upon their respective aggregate
Liquidation Amounts. The particular Preferred Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Property
Trustee from the Outstanding Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or any integral multiple thereof) of the aggregate Liquidation
Amount of Preferred Securities of a denomination larger than $25. The
Property Trustee shall promptly notify the Securities Registrar in writing of
the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the aggregate
Liquidation Amount of Preferred Securities which has been or is to be
redeemed.
Section 4.03. Subordination of Common Securities. (a) Payment of
Distributions (including Additional Amounts, if applicable) on, and the
Redemption Price of, the Trust Securities, as applicable, shall be made pro
rata based on the aggregate Liquidation Amount of the Trust Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default shall have occurred and be continuing, no payment
of any Distribution (including Additional Amounts, if applicable) on, or
Redemption Price of, any Common Security, and no other payment on account of
the redemption, liquidation or other acquisition of Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) payable as a
preference on all Outstanding Preferred Securities for all distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all Outstanding
Preferred Securities called for redemption, shall have been made or provided
for, and all funds available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions (including Additional
Amounts, if applicable) on, or the Redemption Price of, Preferred Securities
then due and payable.
(b) In the case of the occurrence of any Debenture Event of
Default, the Holder of Common Securities will be deemed to have waived any
right to act with respect to any Event of Default until the effect of all such
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated. Until any such Events of Default under this
Trust Agreement with respect to the Preferred Securities have been so cured,
waived or otherwise eliminated, the Property Trustee shall act in accordance
with Article VIII hereof and solely on behalf of the Holders of the Preferred
Securities and not the Holder of the Common Securities. In such event, only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
Section 4.04. Payment Procedures. Payments in respect of the
Preferred Securities shall be made by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred Securities are held by a Clearing Agency,
payments shall be made by wire transfer to the Clearing Agency, which shall
credit the relevant Persons' accounts at such Clearing Agency on the
applicable Distribution Dates. Payments in respect of the Common Securities
shall be made in such manner as shall be mutually agreed between the Property
Trustee and the Common Securityholder.
Section 4.05. Tax Returns and Reports. The Administrative Trustees
shall prepare (or cause to be prepared), at the Depositor's expense, and file
all United States Federal, state and local tax and information returns
(including, without limitation, Form 8281 which must be filed by an issuer of
an original issue discount security) and reports required to be filed by or in
respect of the Trust. In this regard, the Administrative Trustees shall
prepare and file (or cause to be prepared or filed) the Internal Revenue
Service forms required to be filed in respect of the Trust in each taxable
year of the Trust. The Administrative Trustees shall provide the Depositor
and the Property Trustee with a copy of all such returns, reports and
schedules promptly after such filing or furnishing. The Trustees shall comply
with United States Federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
Section 4.06. Payment of Taxes, Duties, Etc. of the Trust. Upon
receipt under the Debentures of Additional Interest Attributable to Taxes (as
defined in the Subordinated Indenture), the Property Trustee shall distribute
to the Administrative Trustees an amount requested by them and they shall
promptly pay any taxes, duties, assessments or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Trust by the
United States or any other taxing authority.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.01. Initial Ownership. Upon the formation of the Trust
and the contribution by the Depositor pursuant to Section 2.03 and until the
issuance of the Trust Securities, and at any time during which no Trust
Securities are outstanding, the Depositor shall be the sole beneficial owner
of the Trust.
Section 5.02. The Trust Securities Certificates. Initial Holders
shall purchase Preferred Securities in minimum denominations of $25 (based on
Liquidation Amount) and integral multiples of $25 in excess thereof, and the
Common Securities Certificates shall be issued in denominations of $25 (based
on Liquidation Amount) and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by the manual signature
of at least one Administrative Trustee. Trust Securities Certificates bearing
the manual signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be
so authorized prior to the delivery of such Trust Securities Certificates or
did not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.04.
Section 5.03. Delivery of Trust Securities Certificates. On the
Closing Date, the Administrative Trustees shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04
and 2.05, to be executed on behalf of the Trust and delivered to or upon the
written order of the Depositor signed by its chairman of the board, its
president or any vice president, without further corporate action by the
Depositor, in authorized denominations.
Section 5.04. Registration of Transfer and Exchange of Preferred
Securities Certificates. The Securities Registrar shall keep or cause to be
kept a Securities Register in which, subject to such reasonable regulations as
it may prescribe, the Securities Registrar shall provide for the registration
of Trust Securities Certificates and registration of transfers and exchanges
of Trust Securities Certificates as herein provided. The Bank shall be the
initial Securities Registrar. The provisions of Sections 8.01, 8.03 and 8.06
shall apply to the Bank in its role as Securities Registrar.
Upon surrender for the registration of the transfer of any Trust
Securities Certificate, the Administrative Trustees or any one of them shall
execute and deliver, in the name of the designated transferee or transferees,
one or more new Trust Securities Certificates in authorized denominations of a
like aggregate Liquidation Amount dated the date of execution by such
Administrative Trustee or Trustees. The Securities Registrar shall not be
required to register the transfer of any Trust Securities that have been
called for redemption. At the option of a Holder, Trust Securities Certifi-
cates may be exchanged for other Trust Securities Certificates in authorized
denominations of the same class and of a like aggregate Liquidation Amount
upon surrender of the Trust Securities Certificates to be exchanged.
Every Trust Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer, in form satisfactory to the Administrative Trustees
and the Securities Registrar, duly executed by the Holder or his or her
attorney. Each Trust Securities Certificate surrendered for registration of a
transfer or exchange shall be canceled and subsequently disposed of by the
Administrative Trustees.
No service charge shall be made for any registration of transfer or
exchange of Trust Securities Certificates, but the Administrative Trustees or
the Securities Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer
or exchange of Trust Securities Certificates.
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate, and (b) there shall be delivered to the
Securities Registrar and the Administrative Trustees such security or
indemnity as may be required by them to save each of them harmless, then in
the absence of notice that such Trust Securities Certificate shall have been
acquired by a bona fide purchaser, the Administrative Trustees or any one of
them on behalf of the Trust shall execute and make available for delivery, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Securities Certificate, a new Trust Securities Certificate of like class,
tenor and denomination. In connection with the issuance of any new Trust
Securities Certificate under this Section, the Administrative Trustees or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to this Section
shall constitute conclusive evidence of a beneficial interest in the Trust, as
if originally issued, whether or not the lost, stolen or destroyed Trust
Securities Certificate shall be found at any time.
Section 5.06. Persons Deemed Securityholders. Prior to due
presentation of a Trust Securities Certificate for registration of transfer,
the Trustees or the Securities Registrar shall treat the Person in whose name
any Trust Securities Certificate shall be registered in the Securities
Register as the owner of such Trust Securities Certificate for the purpose of
receiving distributions and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
Section 5.07. Access to List of Securityholders' Names and
Addresses. In addition to, and not by way of limitation of, the Depositor's
obligations under Section 312(a) of the Trust Indenture Act, the Depositor
shall furnish or cause to be furnished to the Property Trustee semi-annually,
not later than February 15 and August 15 of each year, a list in such form as
the Property Trustee may reasonably require, of the names and addresses of all
Owners of Preferred Securities. The Securities Registrar shall furnish or
cause to be furnished (x) to the Depositor, within 15 days after receipt by
the Securities Registrar of a request therefor from the Depositor in writing
and (y) to the Property Trustee, promptly after receipt by the Securities
Registrar of a request therefor from the Property Trustee , a list, in such
form as the Depositor or the Property Trustee (as applicable) may reasonably
require, of the names and addresses of the Securityholders as of the most
recent Record Date. In addition to, and not by way of limitation of, the
provisions of Section 312(b) of the Trust Indenture Act, if one or more
Holders of Trust Securities Certificates evidencing not less than 25% of the
Liquidation Amount of the outstanding Preferred Securities apply in writing to
the Securities Registrar, and such application states that the applicants
desire to communicate with other Securityholders with respect to their rights
under this Trust Agreement or under the Trust Securities Certificates, and
such application is accompanied by a copy of the communication that such
applicants propose to transmit, then the Securities Registrar shall, within
five Business Days after the receipt of such application, afford such
applicants access during normal business hours to the current list of
Securityholders. Each Holder, by receiving and holding a Trust Securities
Certificate, shall be deemed to have agreed not to hold either the Depositor
or the Securities Registrar accountable by reason of the disclosure of its
name and address, regardless of the source from which such information was
derived.
Section 5.08. Appointment of Paying Agent. The Paying Agent shall
make distributions to Securityholders from the Payment Account and shall
report the amounts of such distributions to the Property Trustee and the
Administrative Trustees. The Paying Agent shall have the revocable power to
withdraw funds from the Payment Account for the purpose of making the
distributions referred to above. The Administrative Trustees may revoke such
power and remove the Paying Agent if such Trustees determine in their sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Agreement in any material respect. The Paying Agent shall initi-
ally be the Bank, and the Paying Agent may choose any co-paying agent that is
acceptable to the Administrative Trustees, the Property Trustee and the
Depositor. Any Person acting as a Paying Agent shall be permitted to resign
as Paying Agent upon 30 days' written notice to the Administrative Trustees,
the Property Trustee and the Depositor. In the event that the Bank shall no
longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act
as Paying Agent (which shall be a bank, trust company or the Depositor). The
Administrative Trustees shall cause such successor Paying Agent or any co-
paying agent appointed by the Paying Agent to execute and deliver to the
Trustees an instrument in which such successor Paying Agent or additional
Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Property Trustee. The
provisions of Sections 8.01, 8.03 and 8.06 shall apply to the Bank also in its
role as Paying Agent, for so long as the Bank shall act as Paying Agent and,
to the extent applicable, to any other paying agent appointed hereunder. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
Any Paying Agent shall hold in trust for the benefit of the
Preferred Securityholders all sums held by such Paying Agent for payment on
the Preferred Securities, and shall gave the Property Trustee notice of any
default hereunder by either the Trust or the Depositor.
Section 5.09. Book-Entry Preferred Securities Certificates; Common
Securities Certificate. (a) The Preferred Securities Certificates, upon
original issuance, will be issued in the form of a typewritten Preferred Secu-
rities Certificate or Certificates representing Book-Entry Preferred
Securities Certificates to be delivered to The Depository Trust Company, the
initial Clearing Agency, or to a custodian designated by it, by, or on behalf
of, the Trust. Such Preferred Securities Certificate or Certificates shall
initially be registered on the Securities Register in the name of Cede & Co.,
the nominee of the initial Clearing Agency, and no Owner will receive a
definitive Preferred Securities Certificate representing such Owner's interest
in such Preferred Securities, except as provided in Section 5.11. Unless and
until Definitive Preferred Securities Certificates have been issued to Owners
pursuant to Section 5.11:
(i) the provisions of this Section 5.09(a) shall be in full
force and effect;
(ii) the Securities Registrar, the Paying Agent and the Trust-
ees shall be entitled to deal with the Clearing Agency for all
purposes of this Trust Agreement relating to the Book-Entry
Preferred Securities Certificates (including the payment of
principal of and interest on the Book-Entry Preferred Securities and
the giving of instructions or directions to Owners of Book-Entry
Preferred Securities) as the sole Holder of Book-Entry Preferred
Securities, and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.09
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 5.09 shall control;
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and
agreements between such Owners and the Clearing Agency and/or the
Clearing Agency Participants. Pursuant to the Certificate
Depository Agreement, unless and until Definitive Preferred
Securities Certificates are issued pursuant to Section 5.11, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments on
the Preferred Securities to such Clearing Agency Participants; and
(v) whenever this Trust Agreement requires or permits actions
to be taken based upon the instructions or directions of Holders of
Trust Certificates evidencing a specified percentage of the
aggregate Liquidation Amount, the Clearing Agency shall be deemed to
represent such percentage only to the extent that it has received
instructions to such effect from Owners and/or Clearing Agency
Participants owning or representing, respectively, such required
percentage of the beneficial interest in the applicable class of
Trust Certificates and has delivered such instructions to the
Administrative Trustees.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate. In the event that the Depositor shall transfer any of
its Common Securities, additional Common Securities Certificates, in
definitive form, may be issued if required.
Section 5.10. Notices to Clearing Agency. To the extent a notice
or other communication to the Owners is required under this Trust Agreement,
unless and until Definitive Preferred Securities Certificates shall have been
issued to Owners pursuant to Section 5.12, the Trustees shall give all such
notices and communications specified herein to be given to the Clearing
Agency, and shall have no obligations to the Owners.
Section 5.11. Definitive Preferred Securities Certificates. If
(i) the Depositor advises the Trustees in writing that the Clearing Agency is
no longer willing or able properly to discharge its responsibilities with
respect to the Preferred Securities Certificates, and the Depositor is unable
to locate a qualified successor, (ii) the Depositor at its option advises the
Trustees in writing that it elects to terminate the book-entry system through
the Clearing Agency or (iii) after the occurrence of an Event of Default,
Owners of Preferred Securities Certificates representing beneficial interests
aggregating at least a majority of the Liquidation Amount advise the Clearing
Agency in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interest of the Owners of Preferred
Securities Certificates, then the Clearing Agency shall notify all Owners of
Preferred Securities Certificates and the Trustees of the occurrence of any
such event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Administrative Trustees by the Clearing Agency of
the typewritten Preferred Securities Certificate or Certificates representing
the Book-Entry Preferred Securities Certificates, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute,
by hand or by facsimile, the Definitive Preferred Securities Certificates in
accordance with the instructions of the Clearing Agency. Neither the
Securities Registrar nor the Trustees shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Preferred Securities Certificates, the Trustees shall recognize the Holders of
the Definitive Preferred Securities Certificates as Securityholders. The
Definitive Preferred Securities Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by the execution thereof (by hand or
by facsimile) by the Administrative Trustees or any one of them.
Section 5.12. Rights of Securityholders. The legal title to the
Trust Property is vested exclusively in the Property Trustee (in its capacity
as such) in accordance with Section 2.09. The Securityholders shall not have
any right or title therein other than the beneficial interest in the Trust
conferred by their Trust Securities, and they shall have no right to call for
any partition or division of property, profits or rights of the Trust except
as described below. The Trust Securities shall be personal property giving
only the rights specifically set forth therein and in this Trust Agreement.
The Trust Securities shall have no preemptive rights and when issued and
delivered to Securityholders against payment of the purchase price therefor
will be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, shall, except as otherwise set forth
herein, be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
The right of any Holder of Trust Securities to receive payment of
Distributions on the Trust Securities in accordance with this Declaration and
the terms of the Trust Securities on or after the respective payment dates
thereof, or to institute suit for the enforcement of any such payments on or
after such payment dates, shall not be impaired without the consent of each
such Holder.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.01. Limitations on Voting Rights. (a) Except as
provided in this Section, in Sections 8.10 and 10.02 hereof, and in the
Subordinated Indenture, and as otherwise required by law, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so
as to constitute the Securityholders from time to time as partners or members
of an association.
(b) So long as any Debentures are held by the Property Trustee on
behalf of the Trust, the Property Trustee shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or executing any trust or power conferred on the Debenture
Trustee with respect to such Debentures, (ii) waive any past default which is
waivable under Section 513 of the Subordinated Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Subordinated Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the
prior approval of the Holders of at least a majority in Liquidation Amount of
the Outstanding Trust Securities; provided, however, that where a consent
under the Subordinated Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each holder of Trust Securities.
The Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Trust Securities, except pursuant to a subsequent
vote of the Outstanding Trust Securities. The Property Trustee shall notify
all Holders of the Trust Securities of any notice of default received from the
Debenture Trustee with respect to the Debentures. In addition to obtaining
the foregoing approvals of the Holders of the Outstanding Trust Securities,
prior to taking any of the foregoing actions, the Property Trustee shall, at
the expense of the Depositor, obtain an Opinion of Counsel experienced in such
matters to the effect that the Trust will not be classified as an association
taxable as a corporation for United States Federal income tax purposes on
account of such action.
(c) If any proposed amendment to the Trust Agreement provides for,
or the Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Trust
Securities, whether by way of amendment to the Trust Agreement or otherwise,
or (ii) the dissolution, winding-up or termination of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of Outstanding
Trust Securities as a class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of the Holders of at least a majority in Liquidation Amount of the
Outstanding Trust Securities. No amendment to this Trust Agreement may be
made if, as a result of such amendment, the Trust would be classified as an
association taxable as a corporation for United States Federal income tax
purposes.
Section 6.02. Notice of Meetings. Notice of all meetings of the
Preferred Securityholders, stating the time, place and purpose of the meeting,
shall be given by the Administrative Trustees pursuant to Section 10.07 to
each Trust Securityholder of record, at his or her registered address, at
least 15 days and not more than 90 days before the meeting. At any such
meeting, any business properly before the meeting may be so considered whether
or not stated in the notice of the meeting. Any adjourned meeting may be held
as adjourned without further notice.
Any and all notices to which any Trust Securityholder hereunder may
be entitled and any and all communications shall be deemed duly served or
given if mailed, postage prepaid, addressed to any Trust Securityholder of
record at his last known address as recorded on the Securities Register.
Section 6.03. Meetings of Trust Securityholders. No annual meeting
of Securityholders is required to be held. The Administrative Trustees,
however, shall call a meeting of Securityholders to vote on any matter upon
the written request of Trust Securityholders of record of 25% (based upon
aggregate Liquidation Amount) of the Outstanding Trust Securities, and the
Administrative Trustees or the Property Trustee may, at any time in their
discretion, call a meeting of Trust Securityholders to vote on any matters as
to which Trust Securityholders are entitled to vote.
Trust Securityholders holding of record of 50% or more of the Trust
Securities (based upon aggregate Liquidation Amount), present in person or by
proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the
Outstanding Trust Securityholders of record present, in person or by proxy,
holding more than a majority of the Outstanding Trust Securities (based upon
aggregate Liquidation Amount) held by the Trust Securityholders of record
present, either in person or by proxy, at such meeting shall constitute the
action of the Securityholders, unless this Trust Agreement requires a greater
number of affirmative votes.
Section 6.04. Voting Rights. Securityholders shall be entitled to
one vote for each $25 of Liquidation Amount represented by their Trust
Securities in respect of any matter as to which such Securityholders are
entitled to vote. Securityholders' voting rights shall be as provided by
Section 316 of the Trust Indenture Act.
Section 6.05. Proxies, Etc. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Pursuant to a request by the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one
or more officers of the Property Trustee. Only Securityholders of record
shall be entitled to vote. When Trust Securities are held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be
executed by or on behalf of a Securityholder shall be deemed valid unless
challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. No proxy shall be valid later than thirty-six
(36) full calendar months after its date of execution (or such shorter period
as may be provided therein).
Section 6.06. Securityholder Action by Written Consent. Any action
which may be taken by Securityholders at a meeting may be taken without a
meeting if Securityholders holding more than a majority of all Outstanding
Trust Securities (based upon aggregate Liquidation Amount) entitled to vote in
respect of such action (or such larger proportion thereof as shall be required
by any express provision of this Trust Agreement) shall consent to the action
in writing.
Section 6.07. Record Date for Voting and Other Purposes. For the
purposes of determining the Securityholders who are entitled to notice of and
to vote at any meeting or by written consent, or to participate in any
distribution on the Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may, in the circumstances permitted
under the Trust Indenture Act, from time to time fix a date, not more than
90 days prior to the date of any meeting of Securityholders, the payment of
any distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes. If not set by the Administrative Trustees prior to the first
solicitation of a Securityholder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of
the most recent list of Holders required to be provided pursuant to Section
800) prior to such first solicitation or vote, as the case may be. With
regard to any record date, only the Holders on such date (or their duly
designated proxies) shall be entitled to give or take, or vote on, the
relevant action.
Section 6.08. Acts of Securityholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by
Securityholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing; and, except as otherwise expressly provided
herein, such action shall become effective when such instrument or instruments
are delivered to an Administrative Trustee. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Securityholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Trust
Agreement and (subject to Section 8.01) conclusive in favor of the Trustees,
if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgements of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his or her authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing
the same, may also be proved in any other manner which any Trustee receiving
the same deems sufficient.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Securityholder of any Trust Security shall bind
every future Securityholder of the same Trust Security and the Securityholder
of every Trust Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustees or the Trust in reliance thereon, whether
or not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder
to take any action hereunder with regard to any particular Trust Security may
do so with regard to all or any part of the Liquidation Amount of such Trust
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such
Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder
or Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
Section 6.09. Inspection of Records. Subject to Section 5.07
concerning access to the list of Securityholders, upon reasonable notice to
the Administrative Trustees and the Property Trustee, the other records of the
Trust shall be open to inspection by Securityholders during normal business
hours for any purpose reasonably related to such Securityholder's interest as
a Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BANK
Section 7.01. Representations and Warranties. The Bank hereby
represents and warrants for the benefit of the Depositor and the Security-
holders that:
(a) the Bank is a banking corporation or trust company duly
organized, validly existing and in good standing under the laws of the
State of Delaware;
(b) the Bank has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery
and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Bank and constitutes the valid and legally binding
agreement of the Bank enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(d) the execution, delivery and performance by the Bank of this
Trust Agreement have been duly authorized by all necessary corporate
action on the part of the Bank and do not require any approval of
stockholders of the Bank, and such execution, delivery and performance
will not (i) violate the Bank's Charter or By-laws, (ii) violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of, any Lien on
any properties included in the Trust Property pursuant to the provisions
of, any indenture, mortgage, credit agreement, license or other agreement
or instrument to which the Bank is a party or by which it is bound, or
(iii) violate any law, governmental rule or regulation of the United
States or the State of Delaware governing the banking or trust powers of
the Bank or any order, judgment or decree applicable to the Bank;
(e) neither the authorization, execution or delivery by the Bank of
this Trust Agreement nor the consummation of any of the transactions by
the Bank contemplated herein or therein requires the consent or approval
of, the giving of notice to, the registration with or the taking of any
other action with respect to, any governmental authority or agency under
any existing Federal law governing the banking or trust powers of the
Bank or under the laws of the State of Delaware; and,
(f) there are no proceedings pending or, to the best of the Bank's
knowledge, threatened against or affecting the Bank in any court or
before any governmental authority, agency or arbitration board or
tribunal which, individually or in the aggregate, would materially and
adversely affect the Trust or would question the right, power and
authority of the Bank to enter into or perform its obligations as one of
the Trustees under this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
Section 8.01. Certain Duties and Responsibilities. (a) The duties
and responsibilities of the Trustees shall be as provided by this Trust
Agreement and, in the case of the Property Trustee, by the Trust Indenture
Act. The Trustees shall have all the privileges, rights and immunities
provided by the Delaware Business Trust Act. Notwithstanding the foregoing,
no provision of this Trust Agreement shall require any of the Trustees to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. To the extent that, at law or in equity, a
Trustee has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to the Securityholders, such Trustee shall not be
liable to the Trust or to any Securityholder for such Trustee's good faith
reliance on the provisions of this Trust Agreement. The provisions of this
Trust Agreement, to the extent that they restrict the duties and liabilities
of the Trustees otherwise existing at law or in equity, are agreed by the
Depositor and the Securityholders to replace such other duties and liabilities
of the Trustees. Whether or not therein expressly so provided, every provi-
sion of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be subject to the
provisions of this Section and, in the case of the Property Trustee, to the
provisions of the Trust Indenture Act.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the income and
proceeds from the Trust Property. Each Securityholder, by its acceptance of a
Trust Security, agrees that it will look solely to the income and proceeds
from the Trust Property to the extent legally available for distribution to it
as herein provided and that the Trustees are not personally liable to it for
any amount distributable in respect of any Trust Security or for any other
liability in respect of any Trust Security. This Section 8.01(b) does not
limit the liability of the Trustees expressly set forth elsewhere in this
Trust Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.
(c) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement and no implied covenants shall be read into this Trust
Agreement against the Property Trustee. In case an Event of Default has
occurred (that has not been cured or waived), the Property Trustee shall
exercise such of the rights and powers vested in it by this Trust Agreement,
and use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of
the Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the
pertinent facts;
(ii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of
not less than a majority in Liquidation Amount of the
Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Trust
Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of
the Debentures and the Payment Account shall be to
deal with such Property in a similar manner as the
Property Trustee deals with similar property for its
own account, subject to the protections and
limitations on liability afforded to the Property
Trustee under this Trust Agreement and the Trust
Indenture Act;
(iv) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise
agree with the Depositor. Money held by the Property
Trustee need not be segregated from other funds held by it
except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 3.01 and except
to the extent otherwise required by law;
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees
or the Depositor with their respective duties under this
Trust Agreement, nor shall the Property Trustee be liable
for the default or misconduct of the Administrative
Trustees or the Depositor; and,
(vi) the Property Trustee shall have no responsibility for the
genuineness, value or sufficiency of the Debentures, or
for the payment of any taxes assessed or levied thereon.
Section 8.02. Notice of Defaults. Within five Business Days after
the occurrence of any Event of Default actually known to the Property Trustee,
the Property Trustee shall transmit, in the manner and to the extent provided
in Section 10.07, notice of such Event of Default to the Securityholders, the
Administrative Trustees and the Depositor, unless such default shall have been
cured or waived. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
Section 8.03. Certain Rights of the Property Trustee. Subject to
the provisions of Section 8.01 and except as provided by law:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder
or transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party
or parties;
(b) if (i) in performing its duties under this Trust
Agreement the Property Trustee is required to decide between
alternative courses of action or (ii) in construing any of the
provisions in this Trust Agreement the Property Trustee finds the
same ambiguous or inconsistent with any other provisions contained
herein or (iii) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter
as to which the Preferred Securityholders are entitled to vote under
the terms of this Trust Agreement, the Property Trustee shall
deliver a notice to the Depositor requesting written instructions of
the Depositor as to the course of action to be taken. The Property
Trustee shall take such action, or refrain from taking such action,
as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if
the Property Trustee does not receive such instructions of the
Depositor within ten Business Days after it has delivered such
notice, or such reasonably shorter period of time set forth in such
notice (which to the extent practicable shall not be less than two
Business Days), it may, but shall be under no duty to, take or
refrain from taking such action not inconsistent with this Trust
Agreement as it shall deem advisable and in the best interests of
the Securityholders, in which event the Property Trustee shall have
no liability except for its own bad faith, negligence or willful
misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently
evidenced by an Officer's Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be
established before undertaking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officer's Certificate which, upon
receipt of such request, shall be promptly delivered by the
Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel and the
written advice of such counsel shall be full and complete authori-
zation and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon; the
Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement
from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the Securityholders
pursuant to this Trust Agreement, unless such Securityholders shall
have offered to the Property Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document, unless
requested in writing to do so by one or more Securityholders, but
the Property Trustee may make such further inquiry or investigation
into such facts or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through its agents or attorneys, provided that the Property
Trustee shall be responsible for its own negligence or recklessness
with respect to selection of any agent or attorney appointed by it
hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder the Property Trustee (i) may request instructions
from the Holders of the Trust Securities which instructions may only
be given by the Holders of the same proportion in liquidation
amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect
of such remedy, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in acting in
accordance with such instructions; and,
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property
Trustee shall be construed to be a duty.
Section 8.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Trust, and the Trustees
do not assume any responsibility for their correctness. The Trustees shall
not be accountable for the use or application by the Trust of the proceeds of
the Trust Securities, provided that such use or application is in accordance
with Section 2.05.
Section. 8.05. May Hold Securities. Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or any other
agent of any Trustee or the Trust, in its individual or any other capacity,
may become the owner or pledgee of Trust Securities and may otherwise deal
with the Trust with the same rights it would have if it were not a Trustee or
such other agent.
Section 8.06. Compensation; Fees; Indemnity. The Depositor and the
Trust each agrees:
(1) to pay to the Trustees from time to time such
compensation as the Depositor and the Trustees shall from time to
time agree in writing for all services rendered by the Trustees
hereunder (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustees or any predecessor
Trustee for, and to hold the Trustees harmless against, any and all
loss, damage, claims, liability, penalty or expense, including
taxes, other than taxes based on the income of the Trustee or
withholding taxes imposed with respect to payments on the Trust
Securities, incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or
administration of this Trust Agreement, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder. The provisions of this Section 8.06 shall survive
the termination of this Trust Agreement, and to secure the same, the
Property Trustee shall have a lien against the Trust Property which
lien shall be prior to the claims of the Securityholders.
Section 8.07. Corporate Property Trustee Required; Eligibility of
Trustees. (a) There shall at all times be a Property Trustee, qualified as
provided in Section 310(a) of the Trust Indenture Act, hereunder with respect
to the Trust Securities. The Property Trustee shall be a Person that has (a)
a combined capital and surplus of at least $50,000,000 and (b) an unsecured or
deposit rating of at least investment grade by each of Standard & Poor's
Corporation and Moody's Investors Services, Inc. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to
the Trust Securities shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative
Trustee shall be either a natural person who is at least 21 years of age
or a legal entity that shall act through one or more persons authorized
to bind such entity.
Section 8.08. Conflicting Interests. None of the Trust, Western
Resources or any person directly or indirectly controlling, controlled by or
under common control with either the Trust or Western Resources may serve as
Property Trustee hereunder. If the Property Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the
Property Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Trust Agreement.
Section 8.09. Co-Trustees and Separate Trustees. Unless an Event
of Default shall have occurred and be continuing, at any time or times, for
the purpose of meeting the legal requirements of the Trust Indenture Act or of
any jurisdiction in which any part of the Trust Property may at the time be
located, the Depositor and the Administrative Trustees, by agreed action of
the majority of such Administrative Trustees, shall have power to appoint, and
upon the written request of the Administrative Trustees, the Depositor shall
for such purpose join with the Administrative Trustees in the execution,
delivery, and performance of all instruments and agreements necessary or
proper to appoint, one or more Persons approved by the Property Trustee either
to act as co-trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to act as separate trustee of any such property, in
accordance with Section 310(a) of the Trust Indenture Act, in either case with
such powers as may be provided in the instrument of appointment, and to vest
in such Person or Persons in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to the other provisions
of this Section. If the Depositor does not join in such appointment within 15
days after the receipt by it of a request so to do, or in case a Debenture
Event of Default has occurred and is continuing, the Administrative Trustees
and the Property Trustee, respectively, alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall satisfy the requirements of Section 8.07.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and
delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following terms,
namely:
(1) The Trust Securities shall be executed and delivered, and
all rights, powers, duties, and obligations hereunder in respect of
the custody of securities, cash and other personal property held by,
or required to be deposited or pledged with, the Trustees specified
hereunder, shall be exercised, solely by such Trustees.
(2) The rights, powers, duties and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or imposed
upon and exercised or performed by the Property Trustee or by the
Property Trustee and such co-trustee or separate trustee jointly, as
shall be provided in the instrument appointing such co-trustee or
separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the
Property Trustee shall be incompetent or unqualified to perform such
Act, in which event such rights, powers, duties, and obligations
shall be exercised and performed by such co-trustee or separate
trustee.
(3) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the
Depositor, may accept the resignation of or remove any co-trustee or
separate trustee appointed under this Section, and, in case an Event
of Default under the Subordinated Indenture has occurred and is con-
tinuing, the Property Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Depositor. Upon the written request
of the Property Trustee, the Depositor shall join with the Property
Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner
provided in this Section.
(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee, or any other trustee hereunder.
(5) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(6) Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee. Upon receipt of such Act of Holders, the Property
Trustee shall promptly deliver a copy thereof to each such co-
trustee and separate trustee.
Section 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Relevant Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Relevant
Trustee in accordance with the applicable requirements of Section 8.11.
The Relevant Trustee may resign at any time with respect to the
Trust Securities by giving written notice thereof to the Securityholders. If
the instrument of acceptance by a successor Relevant Trustee required by
Section 8.11 shall not have been delivered to the Relevant Trustee within 30
days after the giving of such notice of resignation, the resigning Relevant
Trustee may petition any court of competent jurisdiction for the appointment
of a successor Relevant Trustee with respect to the Trust Securities.
Unless an Event of Default shall have occurred and be continuing,
the Relevant Trustee may be removed at any time by the Depositor. If an Event
of Default shall have occurred and be continuing, the Relevant Trustee may be
removed at such time by Act of the Securityholders of a majority in aggregate
Liquidation Amount of the Trust Securities Certificates then Outstanding,
delivered to the Relevant Trustee (in its individual capacity and on behalf of
the Trust). In the event that any Securityholder is deemed to have waived the
right to act to remove the Relevant Trustee, then for the purpose of
determining whether a majority in aggregate Liquidation Amount of Trust
Security Certificates have acted to remove the Relevant Trustee, the Trust
Securities of such Securityholders shall be treated as if they are not
Outstanding.
If the Relevant Trustee shall resign, be removed or become incapable
of continuing to act as Relevant Trustee at a time when no Event of Default
shall have occurred and be continuing, the Depositor, by delivering notice to
the retiring Relevant Trustee, shall promptly appoint a successor Relevant
Trustee or Trustees with respect to the Trust Securities and the Trust, and
the retiring Relevant Trustee shall comply with the applicable requirements of
Section 8.11. If the Relevant Trustee shall resign, be removed or become
incapable of continuing to act as the Relevant Trustee at a time when an Event
of Default shall have occurred and be continuing, the Securityholders, by Act
of the Securityholders of a majority in Liquidation Amount of the Trust
Securities then Outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees with respect to the
Trust Securities and the Trust, and the Relevant Trustee shall comply with the
applicable requirements of Section 8.11. In the event that any Securityholder
is deemed to have waived the right to appoint a successor Relevant Trustee or
Trustees with respect to the Trust Securities and the Trust, then for the
purpose of determining whether a majority in aggregate Liquidation Amount of
the Trust Securities then Outstanding have acted to appoint a successor
Relevant Trustee or Trustees with respect to the Trust Securities and the
Trust, the Trust Securities of such Securityholder shall be treated as if
they are not Outstanding. If no successor Relevant Trustee with respect to
the Trust Securities shall have been so appointed by the Depositor or the
Trust Securityholders and have accepted such appointment in the manner
required by Section 8.11, any Securityholder who has been a Securityholder of
Trust Securities for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Relevant Trustee with respect to the Trust
Securities.
The retiring Relevant Trustee shall give notice of each resignation
and each removal of such Relevant Trustee and each appointment of a successor
Relevant Trustee with respect to the Trust Securities and the Trust to all
Securityholders in the manner provided in Section 10.07 and to the Depositor.
Each notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust Office.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Property Trustee who
is a natural person dies or becomes incompetent or incapacitated, the vacancy
created by such death, incompetence or incapacity may be filled by (i) the
unanimous act of remaining Administrative Trustees if there are at least two
of them or (ii) otherwise by the Depositor (with the successor in each case
being an individual who satisfies the eligibility requirement for
Administrative Trustees set forth in Section 8.07). Additionally,
notwithstanding the foregoing or any other provision of this Trust Agreement,
in the event the Depositor believes that any Administrative Trustee has become
incompetent or incapacitated, the Depositor, by notice to the remaining
Trustees, may terminate the status of such Person as an Administrative Trustee
(in which case the vacancy so created will be filled in accordance with the
preceding sentence).
Section 8.11. Acceptance of Appointment by Successor. In case of
the appointment hereunder of a successor Relevant Trustee with respect to all
Trust Securities and the Trust, every such successor Relevant Trustee so
appointed shall execute, acknowledge and deliver to the Trust and to the
retiring Relevant Trustee an instrument accepting such appointment, and there-
upon the resignation or removal of the retiring Relevant Trustee shall become
effective, and such successor Relevant Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee; but, on the request of the Depositor
or the successor Relevant Trustee, such retiring Relevant Trustee shall, upon
payment of charges due to such retiring Relevant Trustee, execute and deliver
an instrument transferring to such successor Relevant Trustee all the rights,
powers and trusts of the retiring Relevant Trustee and shall duly assign,
transfer and deliver to such successor Relevant Trustee all property and money
held by such retiring Relevant Trustee hereunder.
In case of the appointment hereunder of a successor Relevant Trustee
with respect to the Trust Securities and the Trust, the retiring Relevant
Trustee and each successor Relevant Trustee with respect to the Trust
Securities shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (2) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Relevant Trustee, it being understood that nothing herein or in such amendment
shall constitute such Relevant Trustees co-trustees of the same trust and that
each such Relevant Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Relevant Trustee, and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor
Relevant Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Relevant
Trustee with respect to the Trust Securities and the Trust; but, on request of
the Trust or any successor Relevant Trustee, such retiring Relevant Trustee
shall duly assign, transfer and deliver to such successor Relevant Trustee all
Trust Property, all proceeds thereof and money held by such retiring Relevant
Trustee hereunder with respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the
Administrative Trustees on behalf of the Trust shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Relevant Trustee all such rights, powers and trusts referred to in
this Section 8.11.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
Section 8.12. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Property Trustee or any
Administrative Trustee which is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Relevant Trustee
shall be a party, shall be the successor of such Relevant Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article VIII, without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
Section 8.13. Preferential Collection of Claims Against Depositor
or Trust. If and when the Property Trustee shall be or become a creditor of
the Depositor or the Trust (or any other obligor upon the Debentures or the
Trust Securities), the Property Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the
Depositor or the Trust (or any such other obligor).
Section 8.14. Reports by the Property Trustee. (a) Within 60 days
after December 31 of each year commencing with December 31, 1995 the Property
Trustee shall transmit by mail to all Securityholders, as their names and
addresses appear in the Securities Register, and to the Depositor, a brief
report dated as of such December 31 with respect to:
(i) its eligibility under Section 8.07 or, in lieu thereof,
if to the best of its knowledge it has continued to be eligible
under said Section, a written statement to such effect; and
(ii) any action taken by the Property Trustee in the
performance of its duties hereunder which it has not previously
reported and which in its opinion materially affects the Trust
Securities.
(b) In addition the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and its actions
under this Trust Agreement as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each stock
exchange upon which the Trust Securities are listed, with the Commission and
with the Depositor.
Section 8.15. Reports to the Property Trustee. The Depositor and
the Administrative Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information (if any) as may be
required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in each case
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
Section 8.16. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act may be given in the form of an
Officers' Certificate.
Section 8.17. Number of Trustees. (a) The number of Trustees
shall be five (counting the Bank as Property Trustee), provided that the
Depositor, by written instrument, may increase or decrease the number of
Administrative Trustees.
(b) If a Trustee ceases to hold office for any reason, and the
number of Administrative Trustees is not reduced pursuant to Section 8.17(a),
or if the number of Trustees is increased pursuant to Section 8.17(a), a
vacancy shall occur. The vacancy shall be filled with a Trustee appointed in
accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not
operate to annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Trust Agreement.
Section 8.18 Delegation of Power. (a) Any Administrative Trustee
may, by power of attorney consistent with applicable law, delegate to any
other natural person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 2.07(a), including any
registration statement or amendment thereto filed with the Commission, or
making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from
time to time to such of their number the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
ARTICLE IX
TERMINATION AND LIQUIDATION
Section 9.01. Termination upon Expiration Date. Unless earlier
terminated, the Trust shall automatically terminate on_________, 20__ (the
"expiration date"), following the distribution of the Trust Property in
accordance with Section 9.04.
Section 9.02. Early Termination. Upon the first to occur of any of
the following events (such first occurrence, an "Early Termination Event"):
(i) the occurrence of a Bankruptcy Event in respect of, or
the dissolution or liquidation of, a Common Securityholder;
(ii) the Depositor has elected to cause the Trust to be
dissolved pursuant to Section 4.02(b);
(iii) the redemption of all of the Preferred Securities; and
(iv) the issuance of an order for dissolution of the Trust by a
court of competent jurisdiction.
then the Trust shall automatically terminate following (except in the case of
clause (1)) the Distribution of the Trust Property in accordance with Section
9.04.
Section 9.03. Termination. Except in the case of a termination
pursuant to Section 9.02(i), the respective obligations and responsibilities
of the Trustees and the Trust created and continued hereby shall terminate
upon the latest to occur of the following: (i) the distribution by the
Property Trustee to Securityholders, upon the liquidation of the Trust pursu-
ant to Section 9.04, or upon the redemption of all of the Trust Securities
pursuant to Section 4.02, of all amounts required to be distributed hereunder
upon the final payment of the Trust Securities; (ii) the payment of any
expenses owed by the Trust; and (iii) the discharge of all administrative
duties of the Administrative Trustees, including the performance of any tax
reporting obligations with respect to the Trust and the Securityholders. In
the case of a termination pursuant to Section 9.02(i), the respective
obligations and responsibilities of the Trustees and the Trust created and
continued hereby shall terminate without any further action upon the
occurrence of the event specified in Section 9.02(i).
Section 9.04. Liquidation. (a) If an Early Termination Event
specified in clause (i) or (ii) of Section 9.02 occurs, the Trustees shall as
expeditiously as the Trustees determine to be practicable make a final
distribution (a "Final Distribution") distributing, subject to receipt of an
Opinion of Counsel as specified in Section 4.02(b), to each Securityholder a
Like Amount of Debentures, subject to Section 9.04(e). Notice of such Final
Distribution shall be given by the Administrative Trustees by first-class
mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to
the Final Distribution Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. Any such notice of
Final Distribution shall:
(i) state the Liquidation Date;
(ii) state that from and after the Final Distribution Date,
the Trust Securities will no longer be deemed to be outstanding and
any Trust Securities Certificates not surrendered for exchange will
be deemed to represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.04(e) applies receive a Final
Distribution, as the Administrative Trustees or the Property Trustee
shall deem appropriate.
(b) If an early Termination Event specified in clause (i) of
Section 9.02 occurs, a Liquidating Trustee may be appointed (which Liquidating
Trustee may be the same Person as the Property Trustee) by Act of the
Securityholders of a majority in aggregate Liquidation Amount of the
Outstanding Trust Securities or by a court of competent juristiction. Any
such Liquidating Trustee shall (unless otherwise instructed by a court of
competent jurisdiction) distribute the Trust Property in substantially the
same manner as described in Section 9.04(a), (c) and (d), or, if deemed
appropriate by such Liquidating Trustee, shall liquidate the Trust Property
and distribute the proceeds in substantially the same manner as described in
Section 9.04(e).
(c) Except where Section 9.04(e) applies, in order to effect the
Final Distribution of the Debentures to Securityholders, the Property Trustee
shall establish a record date for such distribution (which shall be not more
than 45 days prior to the Final Distribution Date) and, either itself acting
as exchange agent or through the appointment of a separate exchange agent,
shall establish such procedures as it shall deem appropriate to effect the
distribution of Debentures in exchange for the Outstanding Trust Securities
Certificates.
(d) Except where Section 9.04(e) applies, after the Final
Distribution Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will
be issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange, (iii)
Western Resources shall use its reasonable efforts to have the Debentures
listed on the New York Stock Exchange or on such other exchange as the
Preferred Securities are then listed, (iv) any Trust Securities Certificates
not so surrendered for exchange will be deemed to represent a Like Amount of
Debentures, accruing interest at the rate provided for in the Debentures from
the last Distribution Date on which a Distribution was made on such Trust
Certificates until such certificates are so surrendered (and until such
certificates are so surrendered, no payments of interest or principal will be
made to Holders of Trust Securities Certificates with respect to such
Debentures) and (v) all rights of Securityholders holding Trust Securities
will cease, except the right of such Securityholders to receive Debentures
upon surrender of Trust Securities Certificates.
(e) In the event that, notwithstanding the other provisions of this
Section 9.04, whether because of an order for dissolution entered by a court
of competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee (or the
Liquidating Trustee if one is appointed pursuant to Section 9.02(b)) not to be
practical, the Trust Property shall be liquidated, the proceeds distributed
and the Trust Certificates cancelled by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date specified by the
Property Trustee, Securityholders will be entitled to receive out of the
assets of the Trust available for distribution to Securityholders, after
satisfaction of liabilities to creditors, an amount equal to the Liquidation
Amount per Trust Security plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"). If the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts
payable by the Trust on the Trust Securities shall be paid on a pro rata basis
(based upon Liquidation Amounts). The Holder of the Common Securities will be
entitled to receive Liquidation Distributions upon any such termination pro
rata (determined as aforesaid) with Holders of Preferred Securities, except
that, if an Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Limitation on Rights of Securityholders. The death
or incapacity of any person having an interest, beneficial or otherwise, in a
Trust Security shall not operate to terminate this Trust Agreement, nor
entitle the legal representatives or heirs of such person or any
Securityholder for such person, to claim an accounting, take any action or
bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
Section 10.02. Amendment. (a) This Trust Agreement may be amended
from time to time by the Trustees and the Depositor, without the consent of
any Securityholders, (i) to cure any ambiguity, correct or supplement any
provision herein or therein which may be inconsistent with any other provision
herein or therein, or to make any other provisions with respect to matters or
questions arising under this Trust Agreement, which shall not be inconsistent
with the other provisions of this Trust Agreement or (ii) to modify, eliminate
or add to any provisions of this Trust Agreement to such extent as shall be
necessary to ensure that the Trust will not be classified for United States
Federal income tax purposes as an association taxable as a corporation at any
time that any Trust Securities are outstanding or to ensure that the Trust
will not be required to register as an "investment company" under the
Investment Company Act of 1940, as amended; provided, however, that such
amendment or action shall not adversely affect the rights of any
Securityholder and, in the case of clause (i), any amendments of this Trust
Agreement shall become effective only when notice thereof is given to the
Securityholders.
(b) Except as provided in Section 10.02(c) hereof, any provision of
this Trust Agreement may be amended by the Trustees and the Depositor with (i)
the consent of Trust Securityholders representing not less than a majority
(based upon Liquidation Amounts) of the Trust Securities then Outstanding and
(ii) receipt by the Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor trust for
Federal income tax purposes or cause the Trust to fail or cease to qualify for
an exemption from the status of an "investment company" under the Investment
Company Act of 1940, as amended.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.03 or 6.06 hereof), this
Trust Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount
of any Distribution required to be made in respect of the Trust Securities as
of a specified date or (ii) restrict the right of a Securityholder to
institute suit for the enforcement of any such payment on or after such date.
Notwithstanding any other provision herein, without the unanimous consent of
the Securityholders (such consent being obtained in accordance with Section
6.03 or 6.06 hereof), paragraph (b) of this Section 10.02 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement,
no Trustee shall enter into or consent to any amendment to this Trust
Agreement which would cause the Trust to fail or cease to qualify for an
exemption from status of an "investment company" under the Investment Company
Act of 1940, as amended.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, this Trust Agreement may not
be amended in a manner which imposes any additional obligation on the
Depositor.
(f) In the event that any amendment to this Trust Agreement is
made, the Administrative Trustees shall promptly provide to the Depositor a
copy of such amendment.
(g) The Property Trustee shall not be required to enter into any
amendment to this Trust Agreement which affects its own rights, duties or
immunities under this Trust Agreement. The Property Trustee shall be entitled
to receive an Opinion of Counsel and an Officer's Certificate stating that any
amendment to this Trust Agreement is in compliance with this Trust Agreement.
Section 10.03. Separability. In case any provision in this Trust
Agreement or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 10.04. Tax Elections. Each holder of Trust Securities,
including any subsequent holder of Trust Securities, by accepting a Trust
Security grants to the Depositor a power of attorney to file any election
(including any protective election) that is necessary or desirable to cause
the Trust to be treated for income tax purposes as a grantor trust and/or not
as an association taxable as a corporation.
Section 10.05. GOVERNING LAW. THIS TRUST AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES
WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 10.06. Successors. This Trust Agreement shall be binding
upon and shall inure to the benefit of any successor to the Trust or the
Relevant Trustee or both, including any successor by operation of law.
Section 10.07. Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust
Agreement.
Section 10.08. Intention of Parties. It is the intention of the
parties hereto that the Trust not be classified for United States Federal
income tax purposes an association taxable as a corporation or partnership but
that the Trust be treated as a grantor trust for United States Federal income
tax purposes. The provisions of this Trust Agreement shall be interpreted to
further this intention of the parties.
Section 10.09. Notice and Demand. Any notice, demand or other
communication which by any provision of this Trust Agreement is required or
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, postage prepaid, in the
United States mail, hand delivery or facsimile transmission, in each case,
addressed, (i) in the case of a Preferred Securityholder, to such Preferred
Securityholder as such Securityholder's name and address may appear on the
Securities Register and (ii) in the case of the Common Securityholder or the
Depositor, to Western Resources, Inc., 818 Kansas Avenue, Topeka, Kansas
66612, Attention: Vice President, Finance, facsimile no. (913) 575-8160, with
a copy to the Secretary, facsimile no. (913) 575-8136. Such notice, demand or
other communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee or the Administrative Trustees shall be given
in writing addressed (until another address is furnished in writing) as
follows: (i) with respect to the Property Trustee, Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890,
Attention: Corporate Trust Administration; and (ii) with respect to the
Administrative Trustees, to them at the address above for notices to the
Depositor, marked "Attention: Administrative Trustees of Western Resources
Capital I, c/o Finance Department." Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing
by the Trust or the Property Trustee.
Section 10.10. Agreement Not to Petition. Each of the Trustees and
the Depositor agree for the benefit of the Securityholders that, until at
least one year and one day after the Trust has been terminated in accordance
with Article IX, they shall not file, or join in the filing of, a petition
against the Trust under any bankruptcy, reorganization, arrangement,
insolvency, liquidation or other similar law (including, without limitation,
the United States Bankruptcy Code) (collectively, "Bankruptcy Laws") or
otherwise join in the commencement of any proceeding against the Trust under
any Bankruptcy Law. In the event the Depositor takes action in violation of
this Section 10.08, the Property Trustee agrees, for the benefit of
Securityholders, that, at the expense of Depositor, the Property Trustee will
file an answer with the bankruptcy court or otherwise properly contest the
filing of such petition against the Trust or the commencement of such action
and raise the defense that the Depositor has agreed in writing not to take
such action and should be estopped and precluded therefrom and such other
defenses, if any, as counsel for the Trustee or the Trust may assert. The
provisions of this Section 10.08 shall survive the termination of this Trust
Agreement.
Section 10.11. Trust Indenture Act; Conflict with Trust Indenture
Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall,
to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the required provisions of the Trust Indenture Act, such
required provision shall control.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF
THIS TRUST AGREEMENT AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND
SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
_____________
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Trust Agreement, in the case of Western Resources, the Bank and the Property
Trustee by their representatives thereunto duly authorized.
WESTERN RESOURCES, INC.
By: _____________________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Property Trustee
By: _____________________________________________
Name:
Title:
Steven L. Kitchen
as Administrative Trustee
James A. Martin
as Administrative Trustee
John K. Rosenberg
as Administrative Trustee
EXHIBIT A
CERTIFICATE OF TRUST
OF
WESTERN RESOURCES CAPITAL I
THIS CERTIFICATE OF TRUST of Western Resources Capital I (the
"Trust"), dated October 12, 1995, is being duly executed and filed by the
undersigned, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. Code Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
Western Resources Capital I.
2. Delaware Trustee. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware is
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective as
of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
WILMINGTON TRUST COMPANY,
as Trustee
By:
Name:
Title:
EXHIBIT B
CERTIFICATE DEPOSITORY AGREEMENT
_______ __, 1995
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099.
Attention: General Counsel's Office
Re: Western Resources Capital I ____% Cumulative Quarterly Income
Preferred Securities, Series A
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating
to the issuance and deposit with The Depository Trust Company ("DTC") of the
Western Resources Capital I ____% Cumulative Quarterly Income Preferred
Securities, Series A (the "Preferred Securities"), of Western Resources
Capital I, a Delaware business trust (the "Issuer"), formed pursuant to a
Trust Agreement between Western Resources, Inc. ("Western Resources") and
Wilmington Trust Company (the "Bank") and Steven L. Kitchen, James A. Martin
and John K. Rosenberg, as Trustees. The payment of distributions on the
Preferred Securities and payments due upon liquidation of the Issuer or
redemption of the Preferred Securities are to be guaranteed by Western
Resources to the extent set forth in a Guarantee Agreement dated
_______________, ____ by Western Resources and Wilmington Trust Company, as
guarantee trustee, with respect to the Preferred Securities. Western
Resources and the Issuer propose to sell the Preferred Securities to certain
Underwriters (the "Underwriters") pursuant to an Underwriting Agreement dated
__________, _______ by and among the Underwriters, the Issuer and Western
Resources, and the Underwriters wish to take delivery of the Preferred
Securities through DTC.
To induce DTC to accept the Preferred Securities as eligible for
deposit at DTC, and to act in accordance with DTC's Rules with respect to the
Preferred Securities, the Issuer and Wilmington Trust Company make the
following representations to DTC:
1. Prior to the closing of the sale of the Preferred Securities to
the Underwriters, which is expected to occur on or about _____ __, _____,
there shall be deposited with DTC one or more global certificates
(individually and collectively, the "Global Certificate") registered in the
name of DTC's nominee, Cede & Co., representing an aggregate of up to ______
Preferred Securities and bearing the following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Issuer or its agent for
registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co.
or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede &
Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
2. The Amended and Restated Trust Agreement of Western Resources
Capital I provides for the voting by holders of the Preferred Securities under
certain limited circumstances. The Issuer shall establish a record date for
such purposes and shall, to the extent possible, give DTC notice of such
record date not less than 15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation
of all or any part of the Preferred Securities outstanding, the Issuer or the
Bank shall send DTC a notice of such event at least 5 business days prior to
the effective date of such event.
4. In the event of distribution on, or an offering or issuance of
rights with respect to, the Preferred Securities outstanding, the Issuer or
the Bank shall send DTC a notice specifying: (a) the amount of and conditions,
if any, applicable to the payment of any such distribution or any such
offering or issuance of rights; (b) any applicable expiration or deadline
date, or any date by which any action on the part of the holders of Preferred
Securities is required; and (c) the date any required notice is to be mailed
by or on behalf of the Issuer to holders of Preferred Securities or published
by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means
(e.g., legible telecopy, registered or certified mail, overnight delivery) in
a timely manner designed to assure that such notice is in DTC's possession no
later than the close of business on the business day before the Publication
Date. The Issuer or the Bank will forward such notice either in a separate
secure transmission for each CUSIP number or in a secure transmission for
multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such
notice shall have a method to verify subsequently the use of such means and
the timeliness of such notice.) The Publication Date shall be not less than
30 calendar days nor more than 60 calendar days prior to the payment of any
such distribution or any such offering or issuance of rights with respect to
the Preferred Securities. After establishing the amount of payment to be made
on the Preferred Securities, the Issuer or the Bank will notify DTC's Dividend
Department of such payment 5 business days prior to payment date. Notices to
DTC's Dividend Department by telecopy shall be sent to (212) 709-1723. Such
notices by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Bank shall confirm DTC's receipt of such telecopy
by telephoning the Dividend Department at (212) 709-1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Bank to DTC not less
than 30 calendar days prior to such event by a secure means in the manner set
forth in paragraph 4. Such redemption notice shall be sent to DTC's Call
Notification Department at (516) 227-4164 or (516) 227-4190, and receipt of
such notice shall be confirmed by telephoning (516) 227-4070. Notice by mail
or by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred
Securities, notice specifying the terms of the tender and the Publication Date
of such notice shall be sent by the Issuer or the Bank to DTC by a secure
means and in a timely manner as described in paragraph 4. Notices to DTC
pursuant to this paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes), shall be sent, unless
notification to another department is expressly provided for herein, by
telecopy to DTC's Reorganization Department at (212) 709-1093 or (212) 709-
1094 and receipt of such notice shall be confirmed by telephoning
(212) 709-6884, or by mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the
CUSIP number or numbers of the Preferred Securities and the accompanying
designation of the Preferred Securities, which, as of the date of this letter,
is "Western Resources Capital I ____% Cumulative Quarterly Income Preferred
Securities, Series A."
8. Distribution payments or other cash payments with respect to
the Preferred Securities evidenced by the Global Certificate shall be governed
by DTC's current Principal and Income Payments Rider, a copy of which is
attached hereto as Annex I. For purposes of this letter, the term "Agent"
used in Annex I shall be deemed to refer to the Bank.
9. DTC may direct the Issuer and the Bank to use any other
telecopy number or address of DTC as the number or address to which notices or
payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Bank's invitation) necessitating a reduction in the aggregate number of
Preferred Securities outstanding evidenced by the Global Certificate, DTC, in
its discretion: (a) may request the Issuer or the Bank to issue and
countersign a new Global Certificate; or (b) may make an appropriate notation
on the Global Certificate indicating the date and amount of such reduction.
11. DTC may discontinue its services as a securities depositary
with respect to the Preferred Securities at any time by giving reasonable
prior written notice to the Issuer and the Bank at which time DTC will confirm
with the Issuer or the Bank the aggregate number of Preferred Securities
deposited with it) and discharging its responsibilities with respect thereto
under applicable law. Under such circumstances, the Issuer may determine to
make alternative arrangements for book-entry settlement for the Preferred
Securities, make available one or more separate global certificates evidencing
Preferred Securities to any Participant having Preferred Securities credited
to its DTC account, or issue definitive Preferred Securities to the beneficial
holders thereof, and in any such case, DTC agrees to cooperate fully with the
Issuer and the Bank and to return the Global Certificate, duly endorsed for
transfer as directed by the Issuer or the Bank, together with any other
documents of transfer reasonably requested by the Issuer or the Bank.
12. In the event that the Issuer determines that beneficial owners
of Preferred Securities shall be able to obtain definitive Preferred
Securities, the Issuer or the Bank shall notify DTC of the availability of
certificates. In such event, the Issuer or the Bank shall issue, transfer and
exchange certificates in appropriate amounts, as required by DTC and others,
and DTC agrees to cooperate fully with the Issuer and the Bank and to return
the Global Certificate, duly endorsed for transfer as directed by the Issuer
or the Bank, together with any other documents of transfer reasonably
requested by the Issuer or the Bank.
13. This letter may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Nothing herein shall be deemed to require the Bank to advance funds
on behalf of the Issuer.
Very truly yours,
WESTERN RESOURCES CAPITAL I
(As Issuer)
By: Western Resources, Inc., Depositor
By:
Name:
Title:
WILMINGTON TRUST COMPANY
Property Trustee
By:
Name:
Title:
RECEIVED AND ACCEPTED: WILMINGTON TRUST COMPANY
THE DEPOSITORY TRUST COMPANY
By:
Name:
By: ________________________________ Title:
Authorized Officer
EXHIBIT C
PRINCIPAL AND INCOME PAYMENTS RIDER
1. This Rider supersedes any contradictory language set forth in the
Letter of Representations to which it is appended.
2. With respect to principal and income payments in the Securities:
A. DTC shall receive all dividend and interest payments on payable
date in same-day funds by 2:30 p.m. ET (Eastern Time).
B. Issuer agrees that it or Agent shall provide dividend and
interest payment information to a standard announcement service
subscribed to by DTC. In the unlikely event that no such
service exists, Issuer agrees that it or Agent shall provide
this information directly to DTC in advance of the dividend or
interest record date as soon as the information is available.
This information should be conveyed directly to DTC
electronically. If electronic transmission is not possible,
such information should be conveyed by telephone or facsimile
transmission to:
The Depository Trust Company
Manager, Announcements
Dividend Department
7 Hanover Square, 22nd Floor
New York, NY 10004
Phone: (212) 709-1270
Fax: (212) 709-1723, 1686
C. Issuer agrees that for dividend and interest payments, it or
Agent shall provide automated notification of CUSIP-level
detail to the depository no later than noon ET on the payment
date.
D. DTC shall receive maturity and redemption payments and CUSIP-
level detail on the payable date in same-day funds by 2:30 p.m.
ET. Absent any other arrangements between Agent and DTC, such
payments shall be wired according to the following
instructions:
Chemical Bank
ABA 021000128
For credit to A/C Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the
manner set forth in DTC's SDFS Paying Agent Operating
Procedures a copy of which has previously been furnished to
Agent.
E. DTC shall receive all other payments and CUSIP-level detail
resulting from corporate actions (such as tender offers or
mergers) on the first payable date in same-day funds by 2:30
p.m. ET. Absent any other arrangements between the Agent and
DTC, such payments shall be wired to the following address:
Chemical Bank
ABA 021000128
For credit to A/C Depository Trust Company
Reorganization Account 066-027608
EXHIBIT D
REPRESENTATIONS FOR DEPOSIT/WITHDRAWAL AT CUSTODIAN ("DWAC") --
to be included in DTC Letter of Representations
The Security certificate(s) shall remain in Agent's custody as a "Balance
Certificate" subject to the provisions of the Balance Certificate Agreement
between Agent and DTC currently in effect.
On each day on which Agent is open for business and on which it receives
an instruction originated by a Participant through DTC's Deposit/Withdrawal at
Custodian ("DWAC") system to increase the Participant's account by a specified
number of shares, units, or obligations (a "Deposit Instruction"), Agent
shall, before 6:30 p.m. (Eastern Time) that day, either approve or cancel the
Deposit Instruction through the DWAC system.
On each day on which Agent is open for business and on which it receives
an instruction originated by a Participant through the DWAC system to decrease
the Participant's account by a specified number of shares, units, or
obligations (a "Withdrawal Instruction"), Agent shall, before 6:30 p.m.
(Eastern Time) that day, either approve or cancel the Withdrawal Instruction
through the DWAC system.
Agent agrees that its approval of a Deposit or Withdrawal Instruction
shall be deemed to be the receipt by DTC of a new, reissued or reregistered
certificated security on registration of transfer to the name of Cede & Co.
for the quantity of Securities evidenced by the Balance Certificate after the
Deposit or Withdrawal Instruction is effected.
EXHIBIT E
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-1
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
WESTERN RESOURCES CAPITAL I
Common Securities, Series A
(liquidation amount U.S. $25 per Common Security)
Western Resources Capital I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that Western
Resources, Inc. (the "Holder") is the registered owner of ________ common
securities of the Trust representing beneficial interests in the Trust and
designated the Common Securities (liquidation amount U.S. $25 per Common
Security) (the "Common Securities"). In accordance with Section 5.10 of the
Trust Agreement (as defined below) the Common Securities are not transferable
and any attempted transfer hereof shall be void. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject
to the terms and provisions of, the Amended and Restated Trust Agreement of
the Trust dated as of ______ __,______, as the same may be amended from time
to time (the "Trust Agreement"), including the designation of the terms of the
Common Securities as set forth therein. The Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ___ day of ______,_____.
Western Resources Capital I
By:
Administrative Trustee
EXHIBIT F
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of _________,______, between Western Resources,
Inc., a Kansas corporation ("Western Resources"), and Western Resources
Capital I, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to and receive Debentures from Western Resources and to
issue and sell Western Resources Capital I, ___% Cumulative Quarterly Income
Preferred Securities, Series A (the "Preferred Securities") with such powers,
preferences and special rights and restrictions as are set forth in the
Amended and Restated Trust Agreement of the Trust dated as of _____ __,______
as the same may be amended from time to time (the "Trust Agreement");
WHEREAS, Western Resources is the issuer of the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of
the Preferred Securities, which purchase Western Resources hereby agrees shall
benefit Western Resources and which purchase Western Resources acknowledges
will be made in reliance upon the execution and delivery of this Agreement,
Western Resources and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by Western Resources. Subject to the terms
and conditions hereof, Western Resources hereby irrevocably and
unconditionally guarantees to each person or entity to whom the Trust is now
or hereafter becomes indebted or liable (the "Creditors") the full payment,
when and as due, of any and all Obligations (as hereinafter defined) to such
Creditors. As used herein, "Obligations" means any indebtedness, expenses or
liabilities of the Trust, other than obligations of the Trust to pay to
holders of any Preferred Securities or other similar interests in the Trust
the amounts due such holders pursuant to the terms of the Preferred Securities
or such other similar interests, as the case may be. This Agreement is
intended to be for the benefit of, and to be enforceable by, all such
Creditors, whether or not such Creditors have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall terminate
and be of no further force and effect upon the date on which there are no
Creditors remaining; provided, however, that this Agreement shall continue to
be effective or shall be reinstated, as the case may be, if at any time any
Creditor must restore payment of any sums paid under any Obligation for any
reason whatsoever. This Agreement is continuing, irrevocable, unconditional
and absolute.
Section 1.03. Waiver of Notice. Western Resources hereby waives
notice of acceptance of this Agreement and of any Obligation to which it
applies or may apply, and Western Resources hereby waives presentment, demand
for payment, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 1.04. No Impairment. The obligations, covenants,
agreements and duties of Western Resources under this Agreement shall in no
way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the extension of time for the payment by the Trust of all or
any portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part
of the Creditors to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Creditors with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind;
or
(c) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt or, or other similar proceedings affecting, the Trust or any of the
assets of the Trust.
There shall be no obligation of the Creditors to give notice to, or obtain the
consent of, Western Resources with respect to the happening of any of the
foregoing.
Section 1.05. Enforcement. A Creditor may enforce this Agreement
directly against Western Resources and Western Resources waives any right or
remedy to require that any action be brought against the Trust or any other
person or entity before proceeding against Western Resources.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements
contained in this Agreement shall bind the successors, assigns, receivers,
trustees and representatives of Western Resources and shall inure to the
benefit of the Creditors.
Section 2.02. Amendment. So long as there remains any Creditor or
any Preferred Securities of any series are outstanding, this Agreement shall
not be modified or amended in any manner adverse to such Creditor or to the
holders of the Preferred Securities.
Section 2.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), telex or by registered or certified mail, addressed as
follows (and if so given, shall be deemed given when mailed or upon receipt of
an answer-back, if sent by telex), to wit:
Western Resources Capital I
Wilmington Trust Company
Rodney Square North,
1100 North Market Street
Wilmington, Delaware 19890
and copies to:
Western Resources, Inc.
818 Kansas Avenue
Topeka, Kansas 66612
Facsimile No.: (913) 575-8160
Attention: Vice President, Finance
(with a copy sent to the same address marked to the
attention of the the Administrative Trustees)
Facsimile No.: (913) 575-8160
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF KANSAS.
THIS AGREEMENT is executed as of the day and year first above
written.
WESTERN RESOURCES, INC.
By:
Name:
Title:
WESTERN RESOURCES CAPITAL I
By:
Administrative Trustee
EXHIBIT G
This Preferred Security is a Global Certificate within the meaning
of the Trust Agreement hereinafter referred to and is registered in the name
of The Depository Trust Company (the "Depository") or a nominee of the
Depository. This Preferred Security is exchangeable for Preferred Securities
registered in the name of a person other than the Depository or its nominee
only in the limited circumstances described in the Trust Agreement and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York
City) to Western Resources Capital I or its agent for registration of
transfer, exchange or payment, and any Preferred Security issued is registered
in the name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment hereon is made
to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
Certificate Number Number of Preferred Securities
P- CUSIP NO.
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
WESTERN RESOURCES CAPITAL I
____% Cumulative Quarterly Income Preferred Securities, Series A
(liquidation amount U.S. $25 per Preferred Security)
Western Resources Capital, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that Cede &
Co. (the "Holder") is the registered owner of ________ preferred securities of
the Trust representing a beneficial ownership interest in the Trust and
designated the Western Resources Capital I ____% Cumulative Quarterly Income
Preferred Securities, Series A (liquidation amount U.S. $25 per Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.04 of the Trust Agreement
(as defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth in, and this certificate and the Preferred Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions
of, the Amended and Restated Trust Agreement of the Trust dated as of ________
_____, as the same may be amended from time to time (the "Trust Agreement")
including the designation of the terms of Preferred Securities as set forth
therein. The holder of this certificate is entitled to the benefits of the
Guarantee Agreement entered into by Western Resources, Inc., a Kansas
corporation, and Wilmington Trust Company, as guarantee trustee, dated as of
_____ __,______ (the "Guarantee") to the extent provided therein. The Trust
will furnish a copy of the Trust Agreement and the Guarantee to the holder of
this certificate without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the holder of this certificate is
bound by the Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ___ day of _______,______.
Western Resources Capital I
By:
Administrative Trustee
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Preferred Security Certificate on the
books of the Trust. The agent may substitute another to act for
him or her.
Date:_______________________
Signature:_______________________________________
(Sign exactly as your name appears on the other side of this
Preferred Security Certificate)
Exhibit 8
November 1, 1995
WESTERN RESOURCES, INC.
818 Kansas Avenue
Topeka, Kansas 08543
Gentlemen:
We have acted as counsel to Western Resources, Inc.
("Western Resources") in connection with the proposed offering
by Western Resources Capital I and Western Resources Capital II
(the "Trusts") of their Cumulative Quarterly Income Preferred
Securities (the "Preferred Securities") as described in that
certain Registration Statement on Form S-3 (the "Registration
Statement") filed with the Securities and Exchange Commission
on October 18, 1995.
We understand that our opinion will be attached as an
Exhibit to, and will be referred to under the heading "UNITED
STATES TAXATION" in, the Prospectus Supplement that is a part
of the Registration Statement, and we hereby consent to such
use of our opinion.
All capitalized terms used herein without definition
shall have the same meaning as in the Registration Statement.
In rendering the opinions expressed herein, we have
examined such documents as we have deemed appropriate, includ-
ing (but not limited to) the Registration Statement and all
Exhibits thereto. In our examination of documents, we have
assumed, with your consent, that all documents submitted to us
are authentic originals, or if submitted as photocopies, that
they faithfully reproduce the originals thereof, that all such
documents have been or will be duly executed to the extent
required, that all representations and statements set forth in
such documents are true and correct, and that all obligations
imposed by any such documents on the parties thereto are
enforceable, and have been or will be performed or satisfied,
in accordance with their terms. In addition, we have relied,
with your consent, upon (i) the opinion of John K. Rosenberg,
Esq. with respect to the validity of the Guarantee Agreement
and the Junior Subordinated Debentures to be issued by Western
Resources to the Trusts and (ii) the opinion of Richards,
Layton & Finger with respect to the validity of the Preferred
Securities.
Based upon and subject to the foregoing, we are of
the following opinions.
(1) The Trusts will be treated as grantor trusts and
not as associations taxable as corporations for United States
federal income tax purposes.
(2) The discussion contained in the Registration
Statement under the heading "UNITED STATES TAXATION", insofar
as it relates to matters of law and legal conclusions, is cor-
rect in all material respects.
The opinions expressed herein are based upon the
United States Internal Revenue Code, the United States Treasury
Regulations promulgated thereunder, current administrative
positions of the United Sates Internal Revenue Service, and
existing judicial decisions, any of which could be changed at
any time, possibly on a retroactive basis. Any such changes
could adversely affect the opinions rendered herein and the tax
consequences to the Trusts and to the holders of the Preferred
Securities. In addition, our opinions cannot be relied upon if
any of the facts contained in the documents that we have exam-
ined, including the opinions of John K. Rosenberg, Esq. and
Richards, Layton & Finger, or if any of the assumptions that we
have made, is, or later becomes, inaccurate.
Finally, our opinion is limited to the tax matters
specifically covered thereby, and we have not been asked to
address, nor have we addressed, any other tax consequences
relating to the formation or operation of the Trusts or of an
investment in the Preferred Securities.
Sincerely yours,
Exhibit 23(d)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent
to the incorporation by reference in this Registration State-
ment on Form S-3 used to register $200 million of the Cumula-
tive Quarterly Income Series A Preferred Securities of our
reports dated January 25, 1995, included in and incorporated by
reference in Western Resources, Inc.'s Form 10-K for the year
ended December 31, 1994, and to all references to our Firm
included in this Registration Statement.
ARTHUR ANDERSEN LLP
Kansas City, Missouri,
November 1, 1995
Exhibit 23(e)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement of Western Resources, Inc. on Form S-3
of our report dated January 29, 1993 appearing in the Annual
Report on Form 10-K of Kansas Gas and Electric Company for the
year ended December 31, 1992 and to the reference to us under
the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
DELOITTE & TOUCHE LLP
Kansas City, Missouri
Dated: November 1, 1995
