FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-86722 and 333-86722-01
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND
MAY BE CHANGED. THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL
THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED JULY 29, 2002
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 6, 2002)
1,800,000 TRUST PREFERRED SECURITIES
LACLEDE CAPITAL TRUST I
% TRUST ORIGINATED PREFERRED SECURITIES/SM/ ("TOPRS/SM/")
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
[LOGO] The Laclede Group
----------------
THE TRUST:
Laclede Capital Trust I is a Delaware business trust that will:
. sell trust preferred securities to the public;
. sell common securities to The Laclede Group, Inc.;
. use the proceeds from these sales to buy an equal principal amount of %
subordinated debentures due , 2032 of The Laclede Group; and
. distribute the cash payments it receives from The Laclede Group on the
subordinated debentures to the holders of the trust preferred securities
and the common securities.
QUARTERLY DISTRIBUTIONS:
. For each trust preferred security that you own, you will receive cumulative
cash distributions accumulating from , 2002, at an annual rate of %
of the liquidation amount of $25 per trust preferred security,
on , , and of each year, beginning , 2002.
. The Laclede Group may defer interest payments on the subordinated
debentures on one or more occasions for up to 20 consecutive quarterly
periods. If The Laclede Group does defer interest payments, the trust will
also defer payments of distributions on the trust preferred securities to
you. However, deferred distributions will accrue interest at an annual rate
of %, to the extent permitted by law.
OPTIONAL REDEMPTION:
. The trust may redeem some or all of the trust preferred securities at times
discussed herein at a redemption price equal to $25 per trust preferred
security plus accumulated distributions, if any.
THE LACLEDE GROUP:
. The Laclede Group will effectively guarantee, fully and unconditionally,
the payment by the trust of amounts due on the trust preferred securities
as discussed in this prospectus supplement and in the accompanying base
prospectus.
The trust plans to list the trust preferred securities on the New York Stock
Exchange under the symbol "LG PrA." If approved for listing, trading on the New
York Stock Exchange is expected to commence within 30 days after the trust
preferred securities are first issued.
INVESTING IN THE TRUST PREFERRED SECURITIES INVOLVES CERTAIN RISKS THAT ARE
DESCRIBED IN THE "RISK FACTORS" SECTION BEGINNING ON PAGE S-6 OF THIS
PROSPECTUS SUPPLEMENT.
----------------
PER TOPRS TOTAL
--------- -----
Public offering price (1).............................. $ $
Underwriting commission to be paid by The Laclede Group $ $
Proceeds, before expenses, to the trust................ $ $
(1)Plus accumulated distributions from , 2002, if settlement occurs
after that date
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined
whether this prospectus supplement or the accompanying base prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
The trust preferred securities will be ready for delivery in book-entry form
only through The Depository Trust Company on or about , 2002.
----------------
MERRILL LYNCH & CO. U.S. BANCORP PIPER JAFFRAY
----------------
The date of this prospectus supplement is , 2002.
--------
/SM/"Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Forward-Looking Statements................................................. S-2
Summary Information--Q&A................................................... S-3
Risk Factors............................................................... S-6
The Laclede Group.......................................................... S-9
Laclede Capital Trust I.................................................... S-9
Capitalization............................................................. S-11
Accounting Treatment....................................................... S-11
Use of Proceeds............................................................ S-12
Ratios of Earnings to Fixed Charges........................................ S-12
Selected Financial Data.................................................... S-13
Description of Securities.................................................. S-13
Certain U.S. Federal Income Tax Consequences............................... S-26
ERISA Considerations....................................................... S-30
Underwriting............................................................... S-33
Legal Matters.............................................................. S-35
Experts.................................................................... S-35
PROSPECTUS
About this Prospectus...................................................... 3
Forward-Looking Statements................................................. 3
Where You Can Find More Information........................................ 4
The Laclede Group.......................................................... 5
Laclede Capital Trust I.................................................... 6
Use of Proceeds............................................................ 7
Ratios of Earnings to Fixed Charges........................................ 8
Description of Debt Securities............................................. 8
Description of Common Stock................................................ 19
Description of Stock Purchase Contracts and Stock Purchase Units........... 23
Description of Trust Preferred Securities.................................. 23
Description of the Guarantees.............................................. 25
Book-Entry Securities...................................................... 28
Plan of Distribution....................................................... 30
Legal Opinions............................................................. 32
Experts.................................................................... 32
You should rely only on the information contained or incorporated by
reference in this prospectus supplement or the accompanying base prospectus. We
have not, and the underwriters have not, authorized any person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus supplement and the accompanying
base prospectus is accurate as of the date on the front cover of this
prospectus supplement and the accompanying base prospectus, respectively. Our
business, financial condition, results of operations and prospects may have
changed since these dates.
The following information concerning us, the trust, the trust preferred
securities, the guarantees and the subordinated debentures adds to, and should
be read in conjunction with, the information contained in the accompanying base
prospectus. In this prospectus supplement the terms "The Laclede Group," "we,"
"our," "ours" and "us" refer to The Laclede Group, Inc.
FORWARD-LOOKING STATEMENTS
Some of the information and discussion included in this prospectus
supplement and the documents we have incorporated by reference contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements related to future events or our
future financial performance may use certain words, such as "anticipate,"
"believe," "estimate," "expect," "intend," "plan," "seek" and similar words and
expressions, that identify forward-looking statements that involve
uncertainties and risks. Future developments, however, may not be in accordance
with our expectations or beliefs, and the effect of future developments may not
be as anticipated. There are many factors that may cause results to differ
materially from those contemplated, including:
. weather conditions;
. legislative, regulatory and judicial mandates and decisions,
particularly those applicable to our utility subsidiary, some of
which may be retroactive, including those affecting:
. allowed rates of return;
. incentive regulation;
. industry and rate structures;
. purchased gas adjustment provisions;
. franchise renewals;
. environmental or safety matters;
. taxes; and
. accounting standards;
. capital and energy commodity market conditions, including the ability
to obtain funds for necessary capital expenditures and the terms and
conditions imposed for obtaining sufficient gas supply for our
utility subsidiary;
. general economic, competitive, political and regulatory conditions;
. the results of litigation;
. our utility subsidiary's ability to collect amounts owed from its
customers, as well as any conservation efforts of its customers;
. employee workforce issues particularly at our utility subsidiary; and
. other factors discussed in "Risk Factors."
We urge you to consider the risks, uncertainties and other factors that
could affect our business as described in this prospectus supplement and the
documents incorporated herein by reference. We do not, by including this
statement, assume any obligation to publicly update or revise any particular
forward-looking statement in light of future events.
S-2
SUMMARY INFORMATION--Q&A
This prospectus supplement and the accompanying base prospectus should be
read together. This summary highlights selected information from this
prospectus supplement and the accompanying base prospectus to help you
understand the trust preferred securities. You should carefully read this
prospectus supplement and the accompanying base prospectus to understand fully
the terms of the trust preferred securities, as well as the tax and other
considerations that are important to you in making a decision about whether to
invest in the trust preferred securities. You should pay special attention to
the "Risk Factors" section beginning on page S-6 of this prospectus supplement
to determine whether an investment in the trust preferred securities is
appropriate for you.
For your convenience, we make reference to sections in this prospectus
supplement and the accompanying base prospectus for more detailed information
regarding some of the terms and concepts used throughout this prospectus
supplement.
WHAT ARE THE TRUST PREFERRED SECURITIES?
Each trust preferred security represents an undivided beneficial interest
in the assets of the trust. The trust is offering trust preferred securities at
a public offering price of $25 for each trust preferred security. See
"Underwriting" in this prospectus supplement.
WHO IS THE TRUST?
Laclede Capital Trust I is a Delaware business trust. The trust will sell
its trust preferred securities to the public and its common securities to us.
The trust will use the proceeds from these sales to buy a series of %
subordinated debentures due , 2032 from us with the same economic terms as
the trust preferred securities.
There will be five trustees of the trust. Three of the trustees are our
employees or officers, referred to as the "administrative trustees." The Bank
of New York will act as the property trustee of the trust and The Bank of New
York (Delaware) will act as the Delaware trustee, in each case until removed or
replaced by the holder of the common securities. For the purposes of compliance
with the provisions of the Trust Indenture Act of 1939, The Bank of New York
will also act as indenture trustee under the guarantee.
WHO IS THE LACLEDE GROUP?
We are a holding company incorporated in the State of Missouri and all of
our operations are conducted through our subsidiaries. Our principal subsidiary
is Laclede Gas Company, the largest regulated natural gas distribution company
in Missouri with over 630,000 customers. We also recently acquired SM&P Utility
Resources, Inc., one of the largest underground facility locating and marking
service companies. SM&P operates in ten states in the central United States. In
addition to our ownership of Laclede Gas Company and SM&P Utility Resources, we
own the unregulated entities listed under "The Laclede Group" in this
prospectus supplement. For the twelve months ended June 30, 2002, we reported
total revenue of approximately $721 million and operating income of
approximately $58 million. For that period, unregulated subsidiaries provided
approximately 16% of those revenues and 2% of the operating income.
At June 30, 2002, we and our subsidiaries had approximately 4,000
employees. Our executive office is located at 720 Olive Street, St. Louis,
Missouri 63101, and our telephone number is (314) 342-0500.
WHEN WILL YOU RECEIVE QUARTERLY DISTRIBUTIONS ON THE TRUST PREFERRED SECURITIES?
If you purchase the trust preferred securities, you will be entitled to
receive cumulative cash distributions at an annual rate of % of the
liquidation amount of $25 per trust preferred security. Distributions will
accumulate from , 2002 and will be payable quarterly in arrears on
, , and each year, beginning , 2002.
S-3
WHEN CAN PAYMENT OF YOUR DISTRIBUTIONS BE DEFERRED?
We may, on one or more occasions, defer interest payments on the
debentures for up to 20 consecutive quarterly periods unless an event of
default under the debentures has occurred and is continuing. See "Description
of Securities--Certain Terms of the Debentures--Option to Extend Interest
Payment Period" in this prospectus supplement. A deferral of interest payments
cannot extend beyond the stated maturity date of the debentures, which is
, 2032.
If we defer interest payments on the debentures, the trust will also
defer its distributions on the trust preferred securities to you. During this
deferral period, distributions will continue to accumulate on the trust
preferred securities at an annual rate of % of the liquidation amount of $25
per trust preferred security. Also, the deferred distributions will accrue
interest at an annual rate of % (to the extent permitted by law). Once we
make all deferred interest payments on the debentures, with accrued interest,
we may again defer interest payments on the debentures, if no event of default
under the debentures has then occurred and is continuing.
During any period in which we defer interest payments on the debentures,
we will not, with some exceptions, be permitted to:
. pay a dividend or make any other payment or distribution on our
capital stock;
. redeem, purchase or make a liquidation payment on any of our capital
stock; or
. make a principal, premium or interest payment, or repurchase or
redeem, any of our debt securities that rank equal with or junior to
the debentures.
If we defer interest payments on the debentures, the debentures will be
treated as being reissued with original issue discount, or OID, for U.S.
federal income tax purposes. Consequently, you will be required to accrue
interest income for U.S. federal income tax purposes before you receive cash
distributions. See "Certain U.S. Federal Income Tax Consequences" and "Risk
Factors--Our ability to defer distributions has tax consequences for you and
may affect the trading price of the trust preferred securities" in this
prospectus supplement.
WHEN CAN THE TRUST REDEEM THE TRUST PREFERRED SECURITIES?
The trust will redeem all the outstanding trust preferred securities when
the debentures are paid either at maturity on , 2032, or upon early
redemption.
We will repay the debentures at maturity on , 2032. We may redeem
before their maturity at a redemption price equal to 100% of the principal
amount being redeemed plus accrued and unpaid interest to the date of
redemption:
. all or some of the debentures on one or more occasions anytime on or
after , 2007; or
. all but not less than all of the debentures before , 2007, if
certain changes in tax or investment company law occur or will occur
within 90 days (each of which is a special event). See "Description
of Securities--Certain Terms of the Trust Preferred
Securities--Special Event Redemption" in this prospectus supplement.
If we redeem any debentures before their maturity, the trust will use the
cash it receives on the redemption of the debentures to redeem,
proportionately, trust preferred securities and common securities having a
total liquidation amount equal to the total principal amount of the debentures
redeemed, unless an event of default under the amended and restated declaration
of trust has occurred and is continuing. In that case, the trust preferred
securities will be redeemed before any common securities. An event of default
with respect to the debentures or the guarantees constitutes an event of
default under the declaration of trust. See "Description of
S-4
Debt Securities--Subordinated Debt Securities" and "Description of the
Guarantees--Events of Default" in the accompanying base prospectus for a
description of events of default in respect of the debentures and the
guarantees, respectively. The redemption price will be equal to $25 per trust
preferred security plus any accumulated distributions.
WHAT IS THE NATURE OF THE LACLEDE GROUP'S GUARANTEE OF THE TRUST PREFERRED
SECURITIES?
We will fully and unconditionally guarantee the trust preferred
securities through a combination of obligations:
. to make payments on the debentures and under our subordinated debt
indenture;
. under our guarantee of the trust preferred securities; and
. under the declaration of trust.
If we do not make a required payment on the debentures, the trust will
not have sufficient funds to make the related payment on the trust preferred
securities. The guarantee does not cover payments on the trust preferred
securities when the trust does not have sufficient funds to make such payments.
Our obligations under the debentures and under the guarantees are junior to our
obligations to make payments on our senior indebtedness. See "Risk Factors--Our
obligations under the debentures and the guarantees are subordinated" in this
prospectus supplement and "Description of the Guarantees" in the accompanying
base prospectus.
WHEN CAN THE DEBENTURES BE DISTRIBUTED TO YOU?
We, as the sponsor of the trust, have the right to dissolve the trust at
any time if the dissolution and any distribution of the debentures would not be
a taxable event to holders of the trust preferred securities. If we exercise
this right to dissolve the trust, the trust, after satisfying its creditors,
will be liquidated by distribution of the debentures to holders of the trust
preferred securities and the common securities.
WHAT HAPPENS IF THE TRUST IS DISSOLVED AND THE DEBENTURES ARE NOT DISTRIBUTED?
The trust may also be dissolved in circumstances where the debentures
will not be distributed to you. In those situations, after satisfying its
creditors, the trust will be obligated to pay in cash the liquidation amount of
$25 for each trust preferred security plus accumulated and unpaid distributions
to the date the payment is made. The trust will be able to make this
liquidation distribution only if the debentures are paid or we redeem them.
WILL THE TRUST PREFERRED SECURITIES BE LISTED ON A STOCK EXCHANGE?
The trust plans to list the trust preferred securities on the New York
Stock Exchange under the symbol "LG PrA." If approved for listing, trading of
the trust preferred securities on the New York Stock Exchange is expected to
commence within 30 days after the trust preferred securities are first issued.
You should be aware that the listing of the trust preferred securities will not
necessarily ensure that a liquid trading market will be available for the trust
preferred securities.
If the trust distributes the debentures, we will use our best efforts to
list them on the New York Stock Exchange or any other exchange or other
organization on which the trust preferred securities are then listed.
IN WHAT FORM WILL THE TRUST PREFERRED SECURITIES BE ISSUED?
The trust preferred securities will be represented by one or more global
securities that will be deposited with, or on behalf of, and registered in the
name of, The Depository Trust Company, New York, New York, or its nominee. This
means that you will not receive a certificate for your trust preferred
securities. Instead, you will hold your interest through DTC's book-entry-only
system. The trust expects that the trust preferred securities will be ready for
delivery through DTC on or about , 2002.
S-5
RISK FACTORS
Your investment in the trust preferred securities will involve risks. You
should carefully consider the following discussion of risks and the other
information included or incorporated by reference in this prospectus supplement
and the accompanying base prospectus before deciding whether an investment in
the trust preferred securities is suitable for you. The risks described below
are not the only ones facing the trust and us. Additional risks not presently
known to the trust and us or that we currently deem immaterial may also impair
our business.
Because the trust will rely on the payments it receives on the
subordinated debentures to fund all payments on the trust preferred securities
and because the trust may distribute the subordinated debentures in exchange
for the trust preferred securities, you are making an investment decision with
regard to the subordinated debentures as well as the trust preferred
securities. You should carefully review the information in this prospectus
supplement and the accompanying base prospectus, including information
incorporated by reference, about both of these types of securities and the
guarantees.
OUR OBLIGATIONS UNDER THE DEBENTURES AND THE GUARANTEES ARE SUBORDINATED.
Our obligations under the debentures are unsecured and will rank junior
in priority of payment to our senior indebtedness. This means that we may not
make any payments of principal or interest on the debentures if we default on a
payment on our senior indebtedness. For more information on the subordination
provisions, see "Description of Securities--Certain Terms of the
Debentures--Subordination" in this prospectus supplement. In the event of our
bankruptcy, liquidation or dissolution, our assets would be available to pay
obligations under the debentures only after all payments had been made on our
senior indebtedness. If on June 30, 2002 we and the trust had issued and sold
the trust preferred securities and the debentures and applied the estimated net
proceeds as described in this prospectus supplement, on a pro forma basis we
would have had no senior indebtedness. See "Capitalization" and "Use of
Proceeds" in this prospectus supplement.
Our obligations under the guarantees are unsecured and will rank junior
to all of our senior indebtedness in the same manner as the debentures. This
means that we cannot make any payments on the guarantees if we default on a
payment of any of our senior indebtedness. In the event of our bankruptcy,
liquidation or dissolution, our assets would be available to pay obligations
under the guarantees only after all payments had been made on our senior
indebtedness.
Because we are a holding company, our right to participate in any asset
distribution of any of our subsidiaries, on liquidation, reorganization or
otherwise, will rank junior to the rights of all creditors of our subsidiaries
(except to the extent that we may ourselves be a creditor of our subsidiaries).
The rights of holders of the trust preferred securities will also be junior to
those prior claims. Consequently, the debentures (and, likewise, the trust
preferred securities) will be effectively subordinated to all liabilities of
our subsidiaries. You should look only to our assets for payments on the
debentures (and the trust preferred securities). As of June 30, 2002, Laclede
Gas had outstanding first mortgage bond obligations of approximately $285
million.
Neither the debentures nor the guarantees will limit our ability or the
ability of our subsidiaries to incur additional indebtedness, including
indebtedness that ranks senior in priority of payment to the debentures and the
guarantees.
For more information, see "Description of Securities--Certain Terms of
the Debentures--Subordination" in this prospectus supplement and "Description
of the Guarantees" in the accompanying base prospectus.
THE GUARANTEES COVER PAYMENTS ONLY IF THE TRUST HAS CASH AVAILABLE.
The ability of the trust to pay distributions or the redemption price on
or the liquidation amount of the trust preferred securities is solely dependent
on us making the related payments on the debentures when due. If
S-6
we default on our obligations to pay principal (including redemption payments)
or interest on the debentures, the trust will not have sufficient funds to pay
distributions or the redemption price on or the liquidation amount of each
trust preferred security. In those circumstances, you will not be able to rely
on the guarantee for payment of these amounts because the guarantee covers such
payment only when the trust has sufficient funds on hand but fails to make such
payment.
Instead, you may:
. seek legal redress against us directly or seek other remedies to
collect your proportionate share of payments owed; or
. rely on the property trustee to enforce the trust's rights under the
debentures.
OUR ABILITY TO DEFER DISTRIBUTIONS HAS TAX CONSEQUENCES FOR YOU AND MAY AFFECT
THE TRADING PRICE OF THE TRUST PREFERRED SECURITIES.
So long as no event of default under the debentures has occurred and is
continuing, we may, on one or more occasions, defer interest payments to the
trust on the debentures as described in this prospectus supplement. See
"Description of Securities--Certain Terms of the Debentures--Option to Extend
Interest Payment Period" in this prospectus supplement. If we defer interest
payments on the debentures, the trust will defer distributions on the trust
preferred securities to you during any deferral period. If we defer interest
payments on the debentures, you will be required to accrue interest income, as
OID, in respect of the deferred stated interest allocable to your share of the
trust preferred securities for U.S. federal income tax purposes. As a result,
you will be required to include that accrued OID in your gross income for U.S.
federal income tax purposes prior to the receipt of any cash distributions. In
addition, you will not receive cash from the trust related to that accrued OID
if you dispose of your trust preferred securities before the record date for
the first payment of deferred distributions at the end of a deferral period.
Instead, the deferred distributions will be paid to the holder of record on the
record date, regardless of who the holder of record may have been on any other
date during the deferral period. Moreover, accrued OID will be added to your
adjusted tax basis in the trust preferred securities but might not be reflected
in the amount you realize on the sale. To the extent the amount realized on a
sale is less than your adjusted tax basis, you will recognize a capital loss
for U.S. federal income tax purposes. The deduction of capital losses is
subject to limitations.
We have no current intention of deferring interest payments on the
debentures. However, if we exercise our right to do so in the future, the trust
preferred securities may trade at a price that does not fully reflect the value
of accumulated but unpaid distributions on the trust preferred securities. If
you sell the trust preferred securities during an interest deferral period, you
may not receive the same return on investment as someone else who continues to
hold the trust preferred securities. In addition, the existence of our right to
defer payments of interest on the debentures may mean that the market price for
the trust preferred securities (which represent an undivided beneficial
interest in the debentures) may be more volatile than other securities that do
not have this right.
See "Certain U.S. Federal Income Tax Consequences" in this prospectus
supplement for more information regarding the tax consequences of purchasing,
holding and selling trust preferred securities.
TRUST PREFERRED SECURITIES MAY BE REDEEMED BEFORE , 2007, IF A SPECIAL
EVENT OCCURS.
Certain tax law changes have been proposed from time to time that could
affect the deductibility of interest paid on the debentures. We refer to any
such changes in tax law, as well as certain changes in investment company law,
should they occur, as "special events." Upon the occurrence of a special event
before , 2007, we may redeem all but not less than all of the
debentures. The redemption price will equal 100% of the principal amount of the
debentures plus any accrued and unpaid interest to the redemption date. The
trust will use the cash it receives on any such redemption of the debentures to
redeem an equivalent liquidation amount of the trust preferred securities and
the common securities on a proportionate basis, unless an event of default
under the
S-7
declaration of trust has occurred and is continuing. In such a case, the trust
preferred securities will be redeemed before any common securities. You may not
be able to reinvest the proceeds from such a redemption at a rate that is equal
to or higher than the rate of return on the trust preferred securities.
The redemption of the trust preferred securities would be a taxable event
to you for U.S. federal income tax purposes.
See "Description of Securities--Certain Terms of the Trust Preferred
Securities--Special Event Redemption" in this prospectus supplement for more
information.
TRUST PREFERRED SECURITIES MAY BE REDEEMED ON OR AFTER , 2007, AT OUR
OPTION.
At our option, some or all of the debentures may be redeemed at any time
on or after , 2007, at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest to the
redemption date. See "Description of Securities--Certain Terms of the
Debentures--Redemption" in this prospectus supplement. You should assume that
we will exercise our redemption option when prevailing interest rates at the
time are lower than the interest rate on the debentures, in which case the
redemption proceeds generally will not be able to be reinvested in a comparable
security at as high a rate, or when it is otherwise in our interest to redeem
the debentures. If we exercise such redemption option, the trust will use the
cash it receives upon the redemption of the debentures to redeem an equivalent
liquidation amount of the trust preferred securities and the common securities
on a proportionate basis, unless an event of default under the declaration of
trust has occurred and is continuing. In such a case, the trust preferred
securities will be redeemed before any common securities.
The redemption of the trust preferred securities would be a taxable event
to you for U.S. federal income tax purposes.
See "Description of Securities--Certain Terms of the Trust Preferred
Securities--Redemption" in this prospectus supplement for more information.
DISTRIBUTION OF DEBENTURES MAY HAVE A POSSIBLE ADVERSE EFFECT ON TRADING PRICE.
We have the right to dissolve the trust at any time if the dissolution
and any distribution of the debentures would not be taxable to holders of the
trust preferred securities. If we exercise this right, the trust, after
satisfying its creditors, will be liquidated by distribution of the debentures
to holders of the trust preferred securities and the common securities. Under
current U.S. federal income tax laws, a distribution of debentures to you on
the dissolution of the trust would not be a taxable event to you. See "Certain
U.S. Federal Income Tax Consequences--United States Holders--Receipt of
Debentures or Cash upon Liquidation of the Trust" in this prospectus supplement
for more information.
We have no current intention of causing the dissolution of the trust and
the distribution of the debentures. We anticipate that we would consider
exercising this right in the event that expenses associated with maintaining
the trust become substantially greater than currently expected, such as if a
special event occurred. We cannot predict the other circumstances under which
this right would be exercised.
Although we will use our best efforts to list the debentures on the New
York Stock Exchange (or any other exchange or organization on which the trust
preferred securities are then listed) if they are distributed, we cannot assure
you that the debentures will be approved for listing or that a liquid trading
market for the debentures will be available.
We cannot predict the market prices for the debentures that may be
distributed. Accordingly, the debentures that you receive upon a distribution,
or the trust preferred securities you hold pending such a distribution, may
trade at a discount to the price that you paid to purchase the trust preferred
securities.
S-8
Because you may receive debentures, you should make an investment
decision with regard to the debentures in addition to the trust preferred
securities. You should carefully review all of the information regarding the
debentures contained in this prospectus supplement and the accompanying base
prospectus. See "Certain U.S. Federal Income Tax Consequences--United States
Holders--Receipt of Debentures or Cash upon Liquidation of the Trust" in this
prospectus supplement for more information.
HOLDERS OF TRUST PREFERRED SECURITIES WILL HAVE LIMITED VOTING RIGHTS.
You will have limited voting rights. In general, unless an event of
default under the declaration of trust has occurred and is continuing, only we
may elect or remove any of the trustees, and in no event may holders of the
trust preferred securities remove the administrative trustees.
See "Laclede Capital Trust I" in the accompanying base prospectus and
"Description of Securities--Certain Terms of the Trust Preferred
Securities--Voting Rights" in this prospectus supplement for more information.
THE LACLEDE GROUP
The Laclede Gas Light Company was created in March 1857 and renamed
Laclede Gas Company in 1950. On October 1, 2001, Laclede Gas reorganized into a
holding company structure. This reorganization resulted in the creation of a
new holding company, The Laclede Group, Inc. The Laclede Group is incorporated
in the State of Missouri and conducts all of its operations through its
subsidiaries.
As a result of the reorganization, we became the owner of all Laclede
Gas's outstanding common stock. We are a public utility holding company as
defined under the Public Utility Holding Company Act of 1935 but are exempt
from registration under that Act. In addition to our ownership of Laclede Gas,
we own SM&P Utility Resources, Inc., Laclede Energy Resources, Inc., Laclede
Energy Services, Inc., Laclede Venture Corp., Laclede Development Company,
Laclede Investment LLC, Laclede Gas Family Services, Inc. and Laclede Pipeline
Company, all unregulated entities. The unregulated businesses represented
approximately 16% of our total revenue for the twelve months ended June 30,
2002.
Laclede Gas is the largest local gas distribution company in the State of
Missouri with over 630,000 customers. It is subject to the jurisdiction of the
Missouri Public Service Commission and serves the City of St. Louis, St. Louis
County, the City of St. Charles and parts of St. Charles, Franklin, Jefferson,
St. Francois, Ste. Genevieve, Iron, Madison and Butler Counties, all in
Missouri. Laclede Gas maintains a diversified gas supply portfolio and has
significant natural gas and propane storage capacity.
On January 28, 2002, we acquired SM&P from NiSource, Inc. SM&P is one of
the largest underground facility locating and marking service companies in the
United States. It operates in ten central states: Texas, Oklahoma, Kansas,
Missouri, Illinois, Indiana, Ohio, Michigan, Wisconsin, and Minnesota.
For additional information about us and our subsidiaries, you should
refer to the information described under "Where You Can Find More Information"
in the accompanying base prospectus.
LACLEDE CAPITAL TRUST I
The trust is a statutory business trust created under Delaware law
pursuant to a declaration of trust and a certificate of trust, as filed with
the Secretary of State of the State of Delaware on April 5, 2002. The
declaration of trust will be amended and restated in its entirety, which we
refer to as the "declaration" or the "declaration of trust," substantially in
the form filed with the SEC by us and incorporated by reference in the
accompanying base prospectus. The declaration will be qualified as an indenture
under the Trust Indenture Act of 1939. Upon issuance of the trust preferred
securities, the purchasers thereof will own all the trust preferred securities.
We will directly or indirectly acquire common securities in a total liquidation
amount equal to at least 3% of the total
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capital of the trust and will own all the issued and outstanding common
securities. The trust exists for the exclusive purposes of:
. issuing the trust preferred securities and the common securities
representing undivided beneficial interests in the assets of the
trust;
. investing the gross proceeds of the trust preferred securities and
the common securities in the debentures; and
. engaging in only those other activities necessary, appropriate,
convenient or incidental thereto.
The trust has a 30-year term, but may be dissolved earlier as provided in the
declaration.
Under the declaration, the number of trustees initially will be five.
Three of the trustees are our employees or officers. The Bank of New York will
serve as property trustee under the declaration and as indenture trustee for
the purposes of the Trust Indenture Act of 1939. The Bank of New York
(Delaware) will act as the Delaware trustee. The property trustee and the
Delaware trustee may at any time be removed or replaced by the holder of the
common securities. For purposes of compliance with the provisions of the Trust
Indenture Act of 1939, The Bank of New York will also act as indenture trustee
under the trust preferred securities guarantee. See "Description of the
Guarantees" in the accompanying base prospectus.
The property trustee will hold title to the debentures for the benefit of
the trust and the holders of the trust preferred securities and common
securities. So long as the debentures are held by the trust, the property
trustee will have the power to exercise all rights, powers and privileges of a
holder of debentures under the indenture. In addition, the property trustee
will maintain exclusive control of a segregated non-interest bearing bank
account to hold all payments made in respect of the debentures for the benefit
of the holders of the trust preferred securities and common securities. The
property trustee will make payments of distributions and payments on
liquidation, redemption and otherwise to the holders of the trust preferred
securities and common securities out of funds from the property account. The
Bank of New York will hold the trust preferred securities guarantee for the
benefit of the holders of the trust preferred securities. We, as the direct or
indirect holder of all the common securities, will have the right to appoint,
remove or replace any trustee (subject to the limitations set forth in the
declaration) and to increase or decrease the number of trustees. We will pay
all fees, expenses, debts and obligations (other than with respect to the trust
preferred securities and common securities) related to the trust and the
offering of the trust preferred securities.
The rights of the holders of the trust preferred securities, including
economic rights, rights to information and voting rights, are set forth in the
declaration, the Delaware Business Trust Act, the indenture and the Trust
Indenture Act of 1939. See "Description of Securities--Certain Terms of the
Trust Preferred Securities" in this prospectus supplement.
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CAPITALIZATION
The following table sets forth our unaudited consolidated short-term debt
and capitalization as of June 30, 2002, and as adjusted to give effect to the
consummation of the offering of the trust preferred securities and the
application of the estimated net proceeds of the offering. See "Use of
Proceeds" in this prospectus supplement. The following data should be read in
conjunction with our consolidated financial statements and related notes
incorporated by reference herein as described in "Where You Can Find More
Information" in the accompanying base prospectus.
AT JUNE 30, 2002
-----------------
AS
ACTUAL ADJUSTED
-------- --------
IN THOUSANDS
(UNAUDITED)
Short-term debt (including current portion of long-term debt)....................... $138,310 $ 95,010
======== ========
Capitalization:
Long-term debt (less sinking fund requirements)--Laclede Gas..................... $259,524 $259,524
-------- --------
Company-obligated mandatorily redeemable preferred securities of Laclede Capital
Trust I (1).................................................................... -- $ 45,000
Stockholders' equity:
Common Stock, $1.00 par value, 18,877,987 shares issued and outstanding...... 18,878 18,878
Paid-in capital.............................................................. 63,701 63,701
Retained earnings............................................................ 214,087 214,087
Redeemable preferred stock--Laclede Gas...................................... 1,266 1,266
Total stockholders' equity................................................ $297,932 $297,932
-------- --------
Total short-term debt and capitalization............................................ $695,766 $697,466
======== ========
--------
(1)As described in this prospectus supplement, the sole assets of the trust
will be our % subordinated debentures due , 2032, with a principal
amount of $46,400,000 and upon redemption of such debentures, the trust
preferred securities will be mandatorily redeemed.
ACCOUNTING TREATMENT
The financial statements of the trust will be reflected in our
consolidated financial statements, with the trust preferred securities shown as
"Company-obligated mandatorily redeemable preferred securities of
subsidiaries." In a footnote to our audited consolidated financial statements,
there will be a statement that we wholly own the trust and that the sole assets
of the trust are the debentures (indicating the principal amount, interest rate
and maturity date thereof).
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USE OF PROCEEDS
The proceeds to the trust (without giving effect to expenses of the
offering payable by us or any compensation payable to the underwriters) from
the offering of the trust preferred securities will be approximately $45.0
million. All the proceeds from the sale of the trust preferred securities will
be invested by the trust in the debentures.
We expect to receive approximately $43.3 million in net proceeds from the
sale of the debentures, after deducting the underwriting commission and the
estimated offering expenses. See "Underwriting--General" and
"Underwriting--Commissions and Discounts" in this prospectus supplement. We
intend to use the net proceeds from the sale of the debentures to repay the
outstanding balance of our unsecured loan, which was $42.8 million as of June
30, 2002. We obtained our loan from U.S. Bank National Association in January
2002 to fund our acquisition of SM&P. The loan matures on January 27, 2003 and
bears interest at a variable rate of interest. The rate for the month of June
2002 is 2.7475%. Any remaining net proceeds from the sale of the debentures
after the loan repayment will be used for general corporate purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratios of earnings to fixed charges
for the respective periods indicated. Because the reorganization resulting in
the creation of our new holding company became effective on October 1, 2001,
the ratios for periods prior to that date represent the ratios of Laclede Gas
and not The Laclede Group.
TWELVE
MONTHS
ENDED
YEAR ENDED SEPTEMBER 30, JUNE 30,
------------------------ ---------
1997 1998 1999 2000 2001 2001 2002
---- ---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges................ 3.6 3.0 2.9 2.6 2.6 2.7 2.2
For purposes of computing the ratios of earnings to fixed charges,
earnings represent income from continuing operations before extraordinary items
and cumulative effect of changes in accounting principle plus applicable income
taxes and fixed charges. Fixed charges include all interest expense and the
proportion of rent expense deemed representative of the interest factor.
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SELECTED FINANCIAL DATA
The following table presents our selected financial data for the periods
indicated and should be read together with the consolidated financial
statements and related notes incorporated by reference in the accompanying base
prospectus. Our balance sheet and income statement data as of and for the three
years in the period ended September 30, 2001 are taken from our consolidated
financial statements as of the end of and for each such year. Our balance sheet
and income statement data as of and for the nine months ended June 30, 2002 and
2001 are taken from our unaudited condensed consolidated financial statements
as of the end of and for each such nine-month period. The data includes all
adjustments that are, in our opinion, necessary for a fair presentation and of
a normal recurring nature. Operating results for the nine months ended June 30,
2002 are not necessarily indicative of the results for the year ending
September 30, 2002. Effective October 1, 2001, Laclede Gas became a wholly
owned subsidiary of The Laclede Group. Accordingly, information for periods
ended on and before September 30, 2001 represents information for Laclede Gas
and not The Laclede Group.
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, JUNE 30,
---------------------------- -------------------
1999 2000 2001 2001 2002
-------- -------- ---------- -------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Income Statement Data:
Operating revenues....................... $491,318 $566,128 $1,002,109 $910,668 $ 629,388
Operating income......................... 61,219 63,343 72,325 75,969 61,759
Preferred stock dividends (Laclede Gas).. 97 93 87 66 52
Earnings applicable to common stock...... 25,965 25,872 30,385 35,485 27,547
Earnings per share....................... 1.43 1.37 1.61 1.88 1.46
Dividends per share of common stock...... 1.34 1.34 1.34 1.005 1.005
Balance Sheet Data (at period end):
Total assets............................. 837,664 931,740 975,910 966,735 1,018,015
Short-term debt (1)...................... 84,735 127,050 117,129 90,432 138,310
Long-term debt (2)....................... 204,323 234,408 284,459 284,437 259,524
Redeemable preferred stock (Laclede Gas). 1,923 1,763 1,588 1,435 1,266
Common equity............................ 282,324 282,985 288,085 299,509 296,666
--------
(1)Includes long-term debt maturities due within one year and current portion
of redeemable preferred stock.
(2)Excludes long-term debt maturities due within one year.
DESCRIPTION OF SECURITIES
This prospectus supplement and the accompanying base prospectus contain
the material terms and conditions for these securities. However, the summaries
in this prospectus supplement are not meant to be a complete description of the
trust preferred securities, the debentures or the guarantees. For more
information, refer to the amended and restated declaration of trust, the
indenture and the guarantees, which we filed with the SEC as exhibits to the
registration statement of which the accompanying base prospectus is a part. All
terms used in this prospectus supplement and the accompanying base prospectus
that are not defined in this prospectus supplement and the accompanying base
prospectus have the meanings given to them in the declaration of trust, the
indenture and the guarantees.
CERTAIN TERMS OF THE TRUST PREFERRED SECURITIES
DISTRIBUTIONS
The trust preferred securities represent undivided beneficial interests
in the assets of the trust. The only assets of the trust will be the
debentures. Distributions on the trust preferred securities are cumulative and
will
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accumulate from , 2002, at the annual rate of % of the $25 liquidation
amount of each trust preferred security. Distributions will be payable
quarterly in arrears on , , and of each
year, beginning , 2002. Distributions not paid when due will accrue
interest at the annual rate of % (to the extent permitted by law). When we
refer to any payment of distributions, that accrued interest, if any, is
included. The amount of distributions payable for any full quarterly period
will be computed on the basis of a 360-day year of twelve 30-day months. The
amount of distributions payable for any partial period will be computed on the
basis of the actual number of days elapsed in that 90-day quarterly period.
If distributions are payable on a date that is not a business day (as
defined below), payment will be made on the next business day (and without any
interest or other payment in respect of such delay). However, if the next
business day is in the next calendar year, payment of distributions will be
made on the preceding business day. A "business day" means any day other than a
Saturday or a Sunday or a day on which banking institutions in New York, New
York, are authorized or required by law to close.
The payment of distributions out of money held by the trust, and payments
upon redemption of the trust preferred securities or liquidation of the trust,
are guaranteed by us on a subordinated basis as and to the extent described
under "Description of the Guarantees" in the accompanying base prospectus. The
guarantee does not cover payment of distributions on the trust preferred
securities when the trust does not have sufficient funds to make such payments.
DEFERRAL OF DISTRIBUTIONS
So long as no event of default has occurred and is continuing under the
debentures, we may, on one or more occasions, defer interest payments on the
debentures to the trust for up to 20 consecutive quarterly periods. A deferral
of interest payments cannot extend beyond the stated maturity date of the
debentures on , 2032. If we defer interest payments on the debentures,
the trust will also defer quarterly distributions on the trust preferred
securities to you. During a deferral period, the amount of distributions due to
you would continue to accumulate and such deferred distributions will accrue
interest at the rate stated above (to the extent permitted by law).
Once we make all deferred interest payments on the debentures, with
accrued interest, we may again defer interest payments on the debentures if no
event of default under the debentures has then occurred and is continuing.
We have no current intention of deferring interest payments on the
debentures. If we defer interest payments on the debentures, we will be subject
to certain restrictions relating to the payment of dividends on or redemption
of our capital stock and payments on our debt securities that rank equal with
or junior to the debentures. See "Certain Terms of the Debentures--Option to
Extend Interest Payment Period" in this prospectus supplement.
PAYMENT OF DISTRIBUTIONS
Distributions on the trust preferred securities will be payable to
holders named on the securities register of the trust on the relevant record
date. As long as the trust preferred securities are held in book-entry form,
the record date for the payment of distributions will be one business day
before the relevant payment date. If the trust preferred securities are ever
issued in non-book-entry form, the record date for the payment of distributions
will conform to the rules of any securities exchange on which the trust
preferred securities are then listed, and, if none, shall be selected by the
administrative trustees, which date will be at least one business day but less
than 60 business days before the relevant payment date.
As long as the trust preferred securities are represented by a global
security, payments on the trust preferred securities will be made in
immediately available funds to DTC, the depositary for the trust preferred
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securities. If the trust preferred securities are ever issued in non-book-entry
form, payment of distributions on the trust preferred securities will be made
by check mailed on or before the due date to the holders thereof on the
relevant record date.
REDEMPTION
We will repay the debentures at maturity on , 2032. We may, before
their maturity, redeem:
. all or some of the debentures on one or more occasions anytime on or
after , 2007; and
. all but not less than all the debentures before , 2007, if
certain changes in tax or investment company law occur or will occur
within 90 days (each of which we refer to as a "special event" and is
more fully described under "Certain Terms of the Trust Preferred
Securities--Special Event Redemption" below in this prospectus
supplement).
When we repay some or all of the debentures, either at maturity on
, 2032 or upon early redemption, the trust will use the cash it receives upon
the redemption of the debentures to redeem a like liquidation amount of the
trust preferred securities and, unless an event of default under the
declaration of trust has occurred and is continuing, the common securities. The
trust preferred securities and common securities (if applicable) will be
redeemed at a price equal to their liquidation amount of $25 per security plus
accumulated distributions. The redemption price for the debentures is 100% of
their principal amount plus accrued and unpaid interest to the date of
redemption. See "Certain Terms of the Debentures--Redemption" in this
prospectus supplement.
If less than all the trust preferred securities and common securities are
to be redeemed in situations where common securities may be redeemed consistent
with the provisions described under "Certain Terms of the Trust Preferred
Securities--Subordination of Common Securities" in this prospectus supplement,
then the total liquidation amount of trust preferred securities and common
securities to be redeemed will be allocated proportionately based on the
liquidation amount of the trust preferred securities and the common securities.
SPECIAL EVENT REDEMPTION
Upon the occurrence of a tax event or an investment company event, each
as defined below, we may redeem all but not less than all the debentures at any
time following the occurrence and during the continuance of that special event.
"Tax event" means that the administrative trustees have received an
opinion of independent tax counsel experienced in such matters to the effect
that there is more than an insubstantial risk that:
. the trust is or, within 90 days of the date of such opinion, would be
subject to U.S. federal income tax with respect to income accrued or
received on the debentures;
. interest payable by us on the debentures is not or, within 90 days of
the date of such opinion, would not be deductible by us in whole or
in part for U.S. federal income tax purposes; or
. the trust is or, within 90 days of the date of such opinion, would be
subject to more than a minimal amount of other taxes, duties,
assessments or other governmental charges.
In order to constitute a "tax event," the events listed in the bullets
above must be the result of an
. amendment to, or change (including any announced prospective change)
in, the laws or regulations of the United States or any political
subdivision or taxing authority affecting taxation where such
amendment or change becomes effective on or after the date the trust
preferred securities are originally issued; or
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. official or administrative pronouncement or action, or judicial
decision, interpreting or applying such laws or regulations where
such pronouncement, action or decision is announced or occurs on or
after the date the trust preferred securities are originally issued.
"Investment company event" means that we and the administrative trustees
have received an opinion of independent counsel experienced in such matters to
the effect that, as a result of the occurrence of a change in law or regulation
or a written change (including any announced prospective change) in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the trust is or will be considered an "investment
company" under the Investment Company Act of 1940 that is required to be
registered under this law, which change or prospective change becomes effective
or would become effective on or after the date of this prospectus supplement.
DISTRIBUTION OF DEBENTURES
We will have the right at any time to dissolve the trust if the
dissolution and any distribution of debentures would not be a taxable event to
holders of the trust preferred securities. See "--Liquidation Distribution upon
Dissolution" below. This right is optional and wholly within our discretion.
Circumstances under which we may determine to exercise such right could include
the occurrence of a special event, adverse tax consequences to us or the trust
that are not within the definition of a tax event because they do not result
from an amendment or change described in such definition and changes in the
accounting requirements applicable to the trust preferred securities as
described under "Accounting Treatment."
If debentures are distributed to the holders of the trust preferred
securities, we will use our best efforts to have the debentures listed on the
New York Stock Exchange or on such other exchange as the trust preferred
securities are then listed. After the date for any distribution of debentures
upon dissolution of the trust:
. the trust preferred securities and the guarantee will no longer be
deemed to be outstanding;
. DTC or its nominee, as the record holder of the trust preferred
securities, will receive a registered global certificate or
certificates representing the debentures to be delivered upon such
distribution; and
. any certificates representing trust preferred securities and the
guarantee not held by DTC or its nominee will be deemed to represent
debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate
identical to the rate of, and accrued and unpaid interest equal to
accumulated and unpaid distributions on, such trust preferred
securities, until such certificates are presented to us or our agent
for transfer or reissuance.
REDEMPTION PROCEDURES
The trust will give you at least 30 days', but not more than 60 days',
written notice before any redemption of trust preferred securities. To the
extent funds are available for payment, and as long as the trust preferred
securities are held in book-entry form, the property trustee will irrevocably
deposit with DTC sufficient funds to pay the redemption amount for the trust
preferred securities being redeemed. The trust will also give DTC irrevocable
instructions and authority to pay the redemption amount in immediately
available funds to the beneficial owners of the global securities representing
the trust preferred securities. Distributions to be paid on or before the
redemption date for any trust preferred securities called for redemption will
be payable to the holders on the record dates for the related dates of
distribution.
Once notice of redemption is given and funds are irrevocably deposited,
distributions on the trust preferred securities will cease to accrue
immediately prior to the close of business on the redemption date and all
rights of the holders of the trust preferred securities called for redemption
will cease, except for the right to receive the redemption amount (but without
interest on such redemption amount).
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If any redemption date is not a business day, then the redemption amount
will be payable on the next business day (and without any interest or other
payment in respect of any such delay), except that, if that business day falls
in the next calendar year, such payment will be made on the immediately
preceding business day.
If payment of the redemption amount for any trust preferred securities
called for redemption is improperly withheld or refused and not paid either by
the property trustee or by us, as guarantor, distributions on the trust
preferred securities will continue to accumulate at the applicable rate from
the original redemption date scheduled to the actual date of payment. In this
case, the actual payment date will be considered the redemption date for
purposes of calculating the redemption amount.
In compliance with applicable law (including the U.S. federal securities
laws), we or our subsidiaries may, at any time, purchase outstanding trust
preferred securities by tender, in the open market, or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Under the declaration of trust, the trust shall terminate on ,
2033, or earlier upon:
. our bankruptcy or the bankruptcy of the holder of the common
securities;
. the filing of a certificate of dissolution or its equivalent with
respect to us or the holder of the common securities, or the
revocation of our charter or the charter of the holder of the common
securities and the expiration of 90 days after the date of revocation
without a reinstatement thereof;
. the entry of a decree of judicial dissolution of us, the holder of
the common securities or the trust;
. the payment to the holders of the trust preferred securities and
common securities of amounts necessary for redemption thereof in
accordance with their terms; or
. the written direction of the property trustee from the holder of the
common securities at any time to dissolve the trust and, after
satisfaction of liabilities to creditors of the trust, to distribute
the debentures to holders in exchange for the trust preferred
securities and the common securities.
In the event of any dissolution of the trust (other than in connection
with the redemption of the trust preferred securities or the common
securities), the trust will be liquidated by the administrative trustees as
expeditiously as they determine to be possible by distributing to the holders
of the trust preferred securities and the common securities, after satisfaction
of liabilities to creditors of the trust as provided by applicable law,
debentures having a principal amount equal to the liquidation amount of the
securities of the holder to whom the debentures are distributed, unless that
distribution is determined by the property trustee not to be practicable, in
which event the holders will be entitled to receive out of the assets of the
trust legally available for distribution to holders, after satisfaction of
liabilities to creditors of the trust as provided by applicable law, a
liquidation distribution equal to the aggregate of the liquidation amount of
$25 per security plus accumulated and unpaid distributions thereon to the date
of payment. If, upon the liquidation a liquidation distribution can be paid
only in part because the trust has insufficient assets legally available to pay
in full the aggregate liquidation distribution, then the amounts payable
directly by the trust with respect to the securities will be paid on a pro rata
basis, unless an event of default under the declaration of trust has occurred
and is continuing, in which case any funds available to make that payment will
be paid first to each holder of the trust preferred securities pro rata and,
only after satisfaction of all amounts owed to the holders of the trust
preferred securities, to each holder of common securities pro rata.
EVENTS OF DEFAULT
An event of default under the indenture constitutes an event of default
under the declaration with respect to the trust preferred securities; provided,
however, that under the declaration, the holder of the common
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securities will be deemed to have waived any declaration event of default with
respect to the common securities until all declaration events of default with
respect to the trust preferred securities have been cured, waived or otherwise
eliminated. Until any declaration event of default with respect to the trust
preferred securities has been cured, waived or otherwise eliminated, the
property trustee will be deemed to be acting solely on behalf of the holders of
the trust preferred securities and only the holders of the trust preferred
securities will have the right to direct the property trustee with respect to
certain matters under the declaration and, therefore, the indenture.
Upon the occurrence of a declaration event of default, the indenture
trustee or the property trustee will have the right under the indenture to
declare the principal of and interest on the debentures to be immediately due
and payable.
VOTING RIGHTS
Subject to the requirement of the property trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of the next
paragraph, the holders of a majority in total liquidation amount of the trust
preferred securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the property trustee, or
direct the exercise of any trust or power conferred on the property trustee
under the declaration, including the right to direct the property trustee, as
holder of the debentures, to:
. exercise the remedies available to it as holder of the debentures;
. waive any past indenture event of default that is waivable under the
indenture; or
. exercise any right to rescind or annul a declaration that the
principal of all the debentures shall be due and payable, or consent
to any amendment, modification or termination of the indenture or the
debentures, where that consent should be required.
However, where a consent or action under the indenture would require the
consent or act of the holders of greater than a simple majority in principal
amount of debentures affected thereby, the property trustee may only give such
consent or take that action at the written direction of the holders of at least
the proportion in liquidation amount of the trust preferred securities that the
relevant super-majority represents of the total principal amount of the
debentures outstanding. The property trustee shall notify all holders of the
trust preferred securities of any notice of default received from the indenture
trustee with respect to the debentures. Except with respect to directing the
time, method and place of conducting a proceeding for a remedy, the property
trustee shall not take any of the actions described in the paragraph above
unless the property trustee has obtained an opinion of independent tax counsel
experienced in such matters to the effect that, after taking such action into
account, the trust will continue to be classified as a grantor trust for U.S.
federal income tax purposes.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions on, and the redemption and liquidation amount
of, the trust preferred securities and the common securities will be made
proportionately based on the total liquidation amounts of the trust preferred
securities and the common securities. However, if an event of default under the
declaration of trust has occurred and is continuing, no payments may be made on
the common securities unless all unpaid amounts on the trust preferred
securities have been provided for or paid in full.
If an event of default under the declaration of trust has occurred and is
continuing, the common securities holder will be deemed to have waived any
right to take any action with respect to the event of default until the event
of default has been cured, waived or eliminated. Until any event of default has
been cured, waived or eliminated, the property trustee will act solely on
behalf of the holders of the trust preferred securities, and these holders will
have the right to direct the property trustee to act on their behalf.
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BOOK-ENTRY-ONLY ISSUANCE--DTC
The trust preferred securities will be represented by one or more global
securities that will be deposited with, or on behalf of, and registered in the
name of, DTC or its nominee. This means that the trust will not issue
certificates to you for the trust preferred securities. Each global security
will be issued to DTC, which will keep a computerized record of its
participants, known as direct participants, whose clients have purchased the
trust preferred securities. Direct participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Each participant will then keep a record of its clients. Unless
a global security is exchanged in whole or in part for a certificated security,
a global security may not be transferred. However, DTC, its nominees and their
successors may transfer a global security as a whole to one another.
Beneficial interests in a global security will be shown on, and transfers
of the global security will be made only through, records maintained by DTC and
its direct participants. DTC holds securities that its direct participants
deposit with DTC. DTC also records the settlement among direct participants of
securities transactions, such as transfers and pledges, in deposited securities
through computerized records for direct participants' accounts. This eliminates
the need to exchange certificates.
DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies, known as indirect
participants, that work through a direct participant. The rules that apply to
DTC and its participants are on file with the SEC. DTC is owned by a number of
its direct participants and by the New York Stock Exchange, the American Stock
Exchange and the National Association of Securities Dealers.
DTC has advised us and the trust that DTC is a limited-purpose trust
company organized under New York Banking Law, a "banking organization" within
the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934.
PURCHASES UNDER THE DTC SYSTEM
When you purchase trust preferred securities through the DTC system, the
purchases must be made by or through a direct participant, who will receive
credit for the trust preferred securities on DTC's records. Because you
actually own the trust preferred security, you are the beneficial owner. Your
ownership interest will be recorded only on the direct (or indirect)
participants' records. DTC has no knowledge of your individual ownership of the
trust preferred securities. DTC's records show only the identity of the direct
participants and the amount of the trust preferred securities held by or
through them. You will not receive a written confirmation of your purchase or
sale or any periodic account statement directly from DTC. You will receive
these from your direct (or indirect) participant. As a result, the direct (or
indirect) participants are responsible for keeping accurate account of the
holdings of their customers.
PAYMENTS UNDER THE DTC SYSTEM
The property trustee will wire payments on the trust preferred securities
to DTC's nominee. We, the trust and the property trustee will treat DTC's
nominee as the owner and holder of each global security representing trust
preferred securities for all purposes. Accordingly, we, the trust and the
property trustee will have no direct responsibility or liability to pay amounts
due on the global security to you or any other beneficial owners in the global
security.
Any redemption notices will be sent by us and the property trustee
directly to DTC, who will in turn inform the direct participants, who will then
contact you as a beneficial owner. If less than all the trust preferred
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securities are being redeemed, DTC's practice is to choose by lot the amount of
the interest of each direct participant to be redeemed. The direct participant
will then use an appropriate method to allocate the redemption among its
beneficial owners.
It is DTC's current practice, upon receipt of any payment of
distributions or liquidation or redemption amount, to credit direct
participants' accounts on the payment date based on their holdings of
beneficial interests in the global securities as shown on DTC's records. In
addition, it is DTC's current practice to assign any consenting or voting
rights to direct participants whose accounts are credited with trust preferred
securities on a record date, by using an omnibus proxy. Payments by direct
participants to owners of beneficial interests in the global securities, and
voting by direct participants, will be based on the customary practices between
the direct participants and owners of beneficial interests, as is the case with
securities held for the account of customers registered in "street name."
However, payments will be the responsibility of the direct participants and not
of DTC, the property trustee, us or the trust.
For additional information about DTC and its book-entry system, see
"Book-Entry Securities" in the accompanying base prospectus.
EXCHANGE OF GLOBAL SECURITIES
Trust preferred securities represented by a global security will be
exchangeable for certificated securities with the same terms in authorized
denominations only if:
. DTC is unwilling, unable or ineligible to continue as depositary and
a successor depositary is not appointed by the trust within 90 days;
. an event of default has occurred and is continuing under the
indenture; or
. we decide to discontinue use of the system of book-entry transfer
through DTC (or any successor depositary).
If the book-entry-only system is discontinued, the property trustee will
keep the registration books for the trust preferred securities at its corporate
office and follow the practices and procedures discussed below.
CERTIFICATED SECURITIES--REGISTRATION AND TRANSFER
If the trust issues certificated securities, they will be registered in
the name of the security holder. The trust preferred securities may be
transferred or exchanged, based on administrative procedures in the declaration
of trust, without the payment of any service charge (other than any tax or
other governmental charge) by contacting the property trustee, The Bank of New
York, 101 Barclay Street, New York, New York 10286, Attention: Corporate Trust
Administration.
AMENDMENT OF THE DECLARATION OF TRUST
Except as provided in the succeeding paragraphs, the declaration of trust
may only be amended with the approval of the administrative trustees. If the
amendment affects the rights, powers, duties, obligations or immunities of the
property trustee or the Delaware trustee, the amendment also requires the
approval of the property trustee or the Delaware trustee, as appropriate.
The declaration of trust may be amended without the consent of the
holders of the trust preferred securities and the common securities to:
. cure any ambiguity;
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. correct or supplement any provision therein which may be defective or
inconsistent with any other provision therein;
. add to the covenants, restrictions or obligations of The Laclede
Group; or
. conform to any change in Rule 3a-5 of the Investment Company Act of
1940 or written change in interpretation or application of that rule
by any legislative body, court, government agency or regulatory
authority which amendment does not have a material adverse effect on
the rights, preferences or privileges of the holders of the trust
preferred securities.
The declaration of trust may not be amended, in the case of any proposed
amendment, unless the property trustee shall have first received an officers'
certificate from us that such amendment is permitted by, and conforms to the
terms of, the declaration (including the terms of the trust preferred
securities and the common securities). In the case of any proposed amendment
that affects the rights, powers, duties, obligations or immunities of the
property trustee or the Delaware trustee, the declaration may not be amended
unless, the property trustee or the Delaware trustee, as the case may be, shall
have first received an officers' certificate from us and an opinion of counsel
(who may be counsel to us or the trust) that such amendment is permitted by,
and conforms to the terms of, the declaration (including the terms of the trust
preferred securities and the common securities).
The declaration of trust also may not be amended to the extent the result
of such amendment would be to:
. cause the trust to fail to continue to be classified for purposes of
U.S. federal income taxation as a grantor trust;
. reduce or otherwise adversely affect the powers of the property
trustee in contravention of the Trust Indenture Act of 1939; or
. cause the trust to be deemed to be an investment company required to
be registered under the Investment Company Act of 1940.
In addition, if any proposed amendment to the declaration of trust
provides for, or the administrative trustees otherwise propose to effect, (1)
any action that would adversely affect the rights, privileges or preferences of
the trust preferred securities or the common securities, whether by way of
amendment to the declaration or otherwise, or (2) the dissolution, winding-up
or termination of the trust, other than as described under "--Liquidation
Distribution upon Dissolution" above, then the holders of outstanding trust
preferred securities and common securities as a class will be entitled to vote
on such amendment or proposal (but not on any other amendment or proposal) and
such amendment or proposal shall not be effective except with the approval of
the holders of a majority in liquidation amount of the securities, voting
together as a single class; PROVIDED, HOWEVER, if any amendment or proposal
referred to in clause (1) above would adversely affect only the trust preferred
securities or only the common securities, then only the affected 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 a majority in
liquidation amount of such class; and PROVIDED FURTHER, that:
. no such amendment or proposal that would reduce the principal amount
or the distribution rate or change the payment dates or maturity of
the trust preferred securities will be permitted without the consent
of each holder of trust preferred securities;
. the provisions of the declaration relating to the transfer of common
securities and those described above in this "--Amendment of the
Declaration of Trust" section may not be amended without the consent
of all of the holders of the trust preferred securities and the
common securities;
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. the provisions of the declaration relating to our ownership of, and
responsibilities relating to, the common securities may not be
amended without the consent of the holders of a majority in
liquidation amount of the common securities; or
. the rights of the holders of the common securities to increase or
decrease the number of, and appoint and remove, trustees shall not be
amended without the consent of the holders of a majority in
liquidation amount of the common securities.
If the consent of the property trustee, as the holder of the debentures,
is required under the indenture with respect to any amendment, modification or
termination of the indenture or the debentures, the property trustee will
request the written direction of the holders of the trust preferred securities
and the common securities with respect to that amendment, modification or
termination and will vote with respect to that amendment, modification or
termination as directed by holders of a majority in liquidation amount of the
trust preferred securities and, if no event of default under the declaration
has occurred and is continuing holders of a majority in liquidation amount of
the common securities voting together as a single class; PROVIDED, HOWEVER,
that where a consent under the indenture would require the consent of more than
a simple majority, the property trustee may only give such consent at the
direction of the holders of at least the proportion in liquidation amount of
the securities that the relevant super majority represents of the aggregate
principal amount of the debentures outstanding; PROVIDED, FURTHER, that the
property trustee may not take any action in accordance with the directions of
the holders described in this paragraph unless the property trustee has
obtained an opinion of tax counsel to the effect that for the purposes of U.S.
federal income tax the trust will not be classified as other than a grantor
trust on account of such action.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convert to, or convey, transfer or lease its properties and
assets substantially as an entirety to any business trust or other business
entity, except as described below. The trust may, with the consent of the
administrative trustees and without the consent of the holders of the trust
preferred securities, the Delaware trustee or the property trustee,
consolidate, amalgamate, merge with or into, be replaced by, or convey, lease
or transfer its properties and assets as an entirety or substantially as an
entirety to a trust organized as such under the laws of any state, provided
that:
. the successor entity either (A) expressly assumes all of the
obligations of the trust with respect to the trust preferred
securities and the common securities or (B) substitutes for the trust
preferred securities other successor securities having substantially
the same terms as the trust preferred securities so long as such
successor securities rank the same as the trust preferred securities
rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise;
. we expressly appoint a trustee of such successor entity possessing
the same powers and duties as the property trustee as the holder of
the debentures;
. the trust preferred securities or any successor securities are
listed, or any successor securities will be listed upon notification
of issuance, on any national securities exchange or other
organization on which the trust preferred securities are then listed
or quoted;
. the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the trust preferred securities
(including any successor securities) to be downgraded by any
nationally recognized statistical rating organization;
. the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the material rights,
preferences and privileges of the holders of the trust preferred
securities (including any successor securities) in any material
respect (other than with respect to any dilution of the holders'
interests in the trust preferred securities as a result of such
merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease);
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. the successor entity has a purpose substantially identical to that of
the trust;
. prior to the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, we have received an opinion of a
nationally recognized independent counsel to the trust to the effect
that (A) the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the material
rights, preferences and privileges of the holders of the trust
preferred securities or the common securities (including any
successor securities) in any material respect, (B) following the
merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the trust nor the successor entity will be
required to register as an investment company under the Investment
Company Act of 1940 Act and (C) following the merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the trust
or any successor entity will continue to be classified as a grantor
trust for U.S. federal income tax purposes; and
. we guarantee the obligations of the successor entity under the
successor securities at least to the extent provided by our guarantee
related to the trust preferred securities.
Notwithstanding the foregoing, the trust shall not, except with the
consent of holders of 100% in liquidation amount of the trust preferred
securities or the common securities, consolidate, amalgamate, merge with or
into, convert to, be replaced by or convey, transfer or lease to any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the trust or the successor entity to
be classified as other than a grantor trust for federal income tax purposes.
REGISTRATION AND TRANSFER OF CERTIFICATES
The administrative trustees will provide for the registration of
certificates representing the trust preferred securities and the common
securities and of transfers of such certificates, which will be effected
without charge but only upon payment (with the indemnity as the administrative
trustees may require) in respect of any tax or other governmental charges that
may be imposed in relation to it. Upon surrender for registration of transfer
of any certificate, the administrative trustees will cause one or more new
certificates to be issued in the name of the designated transferee or
transferees. Every certificate surrendered for registration of transfer will be
accompanied by a written instrument of transfer in form satisfactory to the
administrative trustees duly executed by the holder or that holder's attorney
duly authorized in writing. Each certificate surrendered for registration of
transfer will be canceled by the administrative trustees. A transferee of a
certificate will be entitled to the rights and subject to the obligations of a
holder under the declaration of trust upon the receipt by such transferee of a
certificate. By acceptance of a certificate, each transferee will be deemed to
have agreed to be bound by the declaration. In the event that the trust
preferred securities do not remain in book-entry only form, the property
trustee will act as paying agent and may designate an additional or substitute
paying agent at any time.
CERTAIN INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, prior to the occurrence of an event of default
under the declaration of trust with respect to the trust preferred securities,
undertakes to perform only those duties as are specifically set forth in the
declaration and, after default, is obligated to exercise the same degree of
care and skill as a prudent individual would exercise in the conduct of his or
her own affairs. Subject to those provisions, the property trustee is under no
obligation to exercise any of the powers vested in it by the declaration at the
request of any holder of trust preferred securities, unless offered reasonable
indemnity by that holder against the costs, expenses and liabilities that might
be incurred thereby. Except as explicitly provided in the declaration, the
property trustee is liable for its own negligent actions, its failure to act or
its willful misconduct.
The Bank of New York, the property trustee, will also act as trustee
under each of the indenture and the guarantee.
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GOVERNING LAW PROVISIONS
The declaration of trust will be governed by, and interpreted in
accordance with, the laws of the State of Delaware without regard to principles
of conflict of laws.
CERTAIN TERMS OF THE DEBENTURES
The debentures will be issued as a series pursuant to a supplemental
indenture or a resolution of our board of directors or a committee thereof as
provided in the indenture.
SUBORDINATION
The debentures are unsecured and are junior in right of payment to all of
our senior indebtedness. We may not make any payments of principal (including
redemption payments) or interest on the debentures if we default on a payment
on our senior indebtedness. See "Description of Debt Securities--Subordinated
Debt Securities" in the accompanying base prospectus for more detailed
information.
On any distribution of our assets to creditors upon any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors, marshalling of assets or liabilities or any bankruptcy, insolvency
or similar proceedings, all principal, premium, if any, and interest due or to
become due on all senior indebtedness must be paid in full before the holders
of the debentures are entitled to receive or retain any payment.
Neither the debentures nor the guarantees will limit our ability or the
ability of our subsidiaries to incur additional indebtedness, including
indebtedness that ranks senior in priority of payment to the debentures and the
guarantees. If at June 30, 2002, we and the trust had issued and sold the trust
preferred securities and the debentures and applied the estimated net proceeds
thereof as described in this prospectus supplement, on a pro forma basis we
would have had no senior indebtedness. In addition, as of that date, Laclede
Gas had outstanding first mortgage bond obligations of approximately $285
million. See "Capitalization" and "Use of Proceeds" in this prospectus
supplement.
INTEREST RATE AND MATURITY
The debentures will mature on , 2032, and will bear interest,
accruing from , 2002, at the annual rate of % of their principal
amount, payable quarterly in arrears on , , and of
each year, beginning , 2002. Interest payments not paid when due will
themselves accrue additional interest at the annual rate of % (to the extent
permitted by law). When we refer to any payment of interest, interest includes
such additional interest and any additional amounts referred to below. The
interest payment provisions for the debentures correspond to the distribution
provisions of the trust preferred securities. The debentures do not have a
sinking fund. This means that we are not required to make any principal
payments prior to maturity.
ADDITIONAL AMOUNTS
If the 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 authority, then we will be required
to pay additional amounts on the debentures so that after the trust pays any
taxes, the trust will be in the same position it would have been if it did not
have to pay such taxes.
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REDEMPTION
We may redeem, before their maturity:
. all or some of the debentures on one or more occasions anytime on or
after , 2007; or
. all but not less than all of the debentures before , 2007, upon
the occurrence of a special event as described under "--Certain Terms
of of the Trust Preferred Securities--Special Event Redemption" above.
If we decide to redeem debentures in these circumstances, the redemption
price of each debenture redeemed will be equal to 100% of the principal amount
of such debenture plus any accrued and unpaid interest on such debenture to the
date of redemption.
DISTRIBUTION OF DEBENTURES
If the property trustee distributes the debentures to the trust preferred
securities holders and common securities holders upon the dissolution and
liquidation of the trust, the debentures will be distributed in denominations
of $25 principal amount and integral multiples thereof. We anticipate that the
debentures would be distributed in the form of one or more global securities
and DTC, or any successor depositary for the trust preferred securities, would
act as depositary for the debentures. The depositary arrangements for the
debentures would be substantially similar to those in effect for the trust
preferred securities.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemption, other notices and
other matters, see "--Certain Terms of the Trust Preferred
Securities--Book-Entry-Only Issuance--DTC," "--Purchases under the DTC System"
and "--Payments under the DTC System" in this prospectus supplement.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
We may, on one or more occasions, defer interest payments on the
debentures for up to 20 consecutive quarterly periods, if no event of default
has occurred and is continuing with respect to the debentures. A deferral of
interest payments cannot extend beyond the stated maturity date of the
debentures. No interest will be due and payable on the debentures until the end
of the deferral period unless the debentures are redeemed prior to such time.
We may pay at any time all or any portion of the interest accrued to that
point during a deferral period. At the end of the deferral period or at a
redemption or maturity date, we will be obligated to pay all accrued and unpaid
interest.
Once we make all interest payments on the debentures, with accrued
interest, we may again defer interest payments on the debentures if no event of
default under the debentures has then occurred and is continuing.
During any deferral period and subject to certain exceptions, we will not
be permitted to:
. declare or pay any dividends or distributions or redeem, purchase,
acquire or make a liquidation payment with respect to any shares of
our capital stock;
. make any payment of principal, interest or premium, if any, on or
repay or repurchase or redeem any debt securities issued by us that
rank equal with or junior to the debentures; or
. make any guarantee payments with respect to any guarantee by us of
our debt securities if such guarantee ranks equal with or junior to
the debentures.
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Because the debentures to be issued to the trust will rank equal with all
other series of our subordinated debt securities that may be initially issued
to certain other trusts, partnerships or other entities affiliated with us,
during an interest deferral period, we will not be permitted to make payments
on such other series of subordinated debt securities. Likewise, if we defer
interest payments on any other of such series of subordinated debt securities,
it is not expected that we will be permitted to make payments on the debentures.
The restrictions described in the bullet points above will also apply if
there occurs and is continuing a default or event of default under the
indenture of which we have actual knowledge and in respect of which we have not
taken reasonable steps to cure or if we default on our obligations under the
guarantees.
We will give the trust, the administrative trustees, the property trustee
and the indenture trustee notice if we decide to defer interest payments on the
debentures. As long as the debentures are held by the trust, we will give that
notice at least one business day before the earlier of:
. the record date for the next date distributions on the trust
preferred securities would have been payable but for the decision to
defer such interest payments; and
. the date the trust is required to give notice to the New York Stock
Exchange (or any other applicable self-regulatory organization) or to
holders of the trust preferred securities on the record date or the
date distributions are payable.
There is no limitation on the number of times that we may elect to begin
an extension period. The administrative trustees will give notice to the
property trustee and the holders of trust preferred securities if we decide to
defer interest payments on the debentures.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Following is a summary of the material U.S. federal income tax
consequences of the purchase, ownership and disposition of the trust preferred
securities and represents the opinion of Thompson Coburn LLP, St. Louis,
Missouri, our counsel.
The following discussion is general and may not apply to your particular
circumstances for any of the following (or other) reasons:
. This summary is based on U.S. federal income tax laws in effect as of
the date of this prospectus, including applicable regulations and
administrative and judicial interpretations. Changes to any of these
laws, regulations or interpretations after this date may affect the
tax consequences described below, possibly on a retroactive basis.
. This summary discusses only trust preferred securities you acquire at
original issuance at the original offering price and hold as capital
assets (within the meaning of U.S. federal income tax law). It does
not discuss all of the tax consequences that may be relevant to
beneficial owners who are subject to special rules, such as banks,
financial institutions, real estate investment trusts, regulated
investment companies, insurance companies, brokers and dealers in
securities or currencies, certain securities traders, tax-exempt
organizations and tax-advantaged retirement accounts. This discussion
also does not discuss tax consequences that may be relevant to an
owner in light of the owner's particular circumstances, such as an
owner holding a trust preferred security as a position in a straddle,
hedging, conversion or other integrated investment.
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. This summary does not address:
(a)The tax consequences to shareholders in, or partners or
beneficiaries of, a holder of trust preferred securities;
(b)the U.S. alternative minimum tax consequences of purchasing,
owning and disposing of trust preferred securities; or
(c)any state, local or foreign tax consequences of purchasing, owning
and disposing of trust preferred securities.
The authorities on which this summary is based are subject to various
interpretations, and the opinions of Thompson Coburn LLP are not binding on the
Internal Revenue Service or the courts, either of which could take a contrary
position. Moreover, no rulings have been or will be sought from the Internal
Revenue Service with respect to the transaction described herein. Accordingly,
we cannot assure you that the Internal Revenue Service will not challenge the
opinion expressed herein or that a court would not sustain such a challenge.
WE URGE YOU TO CONSULT YOUR OWN TAX ADVISORS REGARDING THE TAX
CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF THE TRUST PREFERRED
SECURITIES BASED ON YOUR PARTICULAR CIRCUMSTANCES AND THE RELEVANT TAXING
JURISDICTIONS.
UNITED STATES HOLDERS
IN GENERAL
For purposes of the following discussion, a "United States Holder" means:
. a citizen or individual resident of the United States;
. a corporation, other entity treated as a corporation for U.S. federal
income tax purposes, or partnership created or organized in or under
the laws of the United States, any state or the District of Columbia;
. an estate the income of which is includable in its gross income for
U.S. federal income tax purposes without regard to its source; or
. a trust if a court within the United States is able to exercise
primary supervision over its administration and at least one United
States person has the authority to control all substantial decisions
of the trust.
If a partnership holds the trust preferred securities, the tax treatment
of a partner generally will depend upon the status of the partner and the
activities of the partnership. If you are a partner of a partnership holding
the trust preferred securities, you should consult your own tax advisor with
respect to the purchase, owning and disposing of the trust preferred securities.
CHARACTERIZATION OF THE TRUST
Assuming full compliance with the terms of the declaration of trust (and
other relevant documents), the trust will be characterized for U.S. federal
income tax purposes as a grantor trust. Accordingly, for U.S. federal income
tax purposes, if you, as a United States Holder, purchase a trust preferred
security you will be considered the owner of an undivided interest in the
debentures owned by the trust, and you will be required to include all income
or gain recognized for U.S. federal income tax purposes with respect to your
share of the debentures on your income tax return.
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INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Subject to the following discussion, you will be taxed on stated interest
on the debentures when such interest is paid or accrued in accordance with your
method of accounting for income tax purposes.
Under the terms of the debentures, we have the ability to defer payments
of interest from time to time by extending the interest payment period for a
period not exceeding 20 consecutive quarterly periods, but not beyond the
maturity date of the debentures. Under applicable Treasury Department
regulations, if the likelihood of deferring interest payments is "remote," the
debentures will not be considered issued with original issue discount, or OID.
We conclude that, as of the date of this prospectus, the likelihood of
our deferring payments of interest is "remote" within the meaning of the
applicable Treasury Department regulations. This conclusion is based in part on
the fact that exercising that option would prevent us from declaring dividends
on our common stock and would prevent us from making any payments with respect
to debt securities that rank equally with or junior to the debentures.
Therefore, the debentures should not be treated as issued with OID by reason of
our deferral option alone. You should note, however, that no published rulings
or any other published authorities of the Internal Revenue Service have
addressed this issue. Accordingly, we cannot assure you that the Internal
Revenue Service will not challenge this conclusion or that a court would not
sustain such a challenge.
In the event we exercise our option to defer payments of interest, the
debentures would be treated as redeemed and reissued for OID purposes. The sum
of the remaining interest payments on the debentures would thereafter be
treated as OID. The OID would accrue on a constant yield method, and be
includable in your taxable income, on a daily accrual basis (regardless of your
method of accounting for income tax purposes) over the remaining term of the
debentures (including any period of interest deferral), without regard to the
timing of payments under the debentures. Subsequent distributions of interest
on the debentures generally would not be taxable. The amount of OID that would
accrue in any period would generally equal the amount of interest that accrued
on the debentures in that period at the stated interest rate. Consequently,
during any period of interest deferral, you will include OID in gross income in
advance of the receipt of cash, and if you dispose of a trust preferred
security prior to the record date for payment of distributions on the
debentures following that period, you will be subject to income tax on OID
accrued through the date of disposition (and not previously included in your
income), but you will not receive cash from the trust with respect to the OID.
If our exercise of our option to defer payments of interest is not
treated as remote, the debentures would be treated as initially issued with OID
in an amount equal to the aggregate stated interest over the term of the
debentures. You would include that OID in your taxable income, over the term of
the debentures, on a daily accrual basis. We believe that the likelihood that
we will elect to defer interest payments is remote and, therefore, we will take
the position that the debentures will not be issued with OID.
CHARACTERIZATION OF INCOME
Because the income underlying the trust preferred securities will not be
characterized as dividends for income tax purposes, a corporate holder of the
trust preferred securities will not be entitled to a dividends-received
deduction for any income from the trust preferred securities.
MARKET DISCOUNT AND ACQUISITION PREMIUM
If you are not the initial purchaser of the trust preferred securities or
if you are the initial purchaser but you do not purchase at the original
offering price, you may be considered to have acquired your undivided interest
in the debentures with market discount or acquisition premium (as each term is
defined for U.S. federal income tax purposes). In this situation, you need to
contact your own tax advisor to determine your particular tax consequences.
S-28
RECEIPT OF DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
The trust may distribute the debentures to you at any time in exchange
for your trust preferred securities and in liquidation of the trust if such a
distribution would not be a taxable event for U.S. federal income tax purposes.
Upon such distribution, you would have an aggregate adjusted basis in the
debentures you receive for U.S. federal income tax purposes equal to your
aggregate adjusted basis in your trust preferred securities. For U.S. federal
income tax purposes, your holding period in the debentures you receive in such
a liquidation of the trust would include the period during which you held the
trust preferred securities.
Under certain circumstances described herein (see "Description of
Securities--Certain Terms of the Trust Preferred Securities--Redemption"), we
may redeem debentures for cash and distribute the proceeds of such redemption
to you in redemption of your trust preferred securities. Such a redemption
would be taxable for U.S. federal income tax purposes, and you would recognize
gain or loss as if you had sold the trust preferred securities for cash. See
"Sales of trust preferred securities" below.
SALES OF TRUST PREFERRED SECURITIES
If you sell your trust preferred securities, you will recognize gain or
loss equal to the difference between your adjusted tax basis in the trust
preferred securities and the amount realized on the sale of such trust
preferred securities. Your adjusted basis in the trust preferred securities
generally will be the initial purchase price, increased by any OID previously
included (or currently includable) in your gross income to the date of
disposition, and decreased by payments received on the trust preferred
securities (other than any interest received with respect to the period prior
to the effective date we first exercise our option to defer payments of
interest). Any such gain or loss generally will be capital gain or loss, and
generally will be a long-term capital gain or loss if you have held the trust
preferred securities for more than twelve months prior to the date of
disposition.
The trust preferred securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest on the debentures. If you
dispose of your trust preferred securities between record dates for payments of
distributions thereon, you will generally be required to include accrued but
unpaid interest (or OID, if any) on the debentures through the date of
disposition in your taxable income for U.S. federal income tax purposes, but
you will not receive any cash distribution relating to the accrued interest (or
OID, if any). In general, you may deduct the amount of such accrued interest
(or OID, if any) from the sales proceeds received in computing any gain or loss
realized upon such disposition. To the extent the selling price is less than
your adjusted tax basis, you will recognize a capital loss. Subject to certain
limited exceptions, capital losses generally cannot be applied to offset
ordinary income for U.S. federal income tax purposes.
NON-UNITED STATES HOLDERS
The following discussion applies to you if you are not a United States
Holder as described above.
Payments of interest, including OID, if any, to you, as a non-United
States Holder, on a trust preferred security will generally not be subject to
withholding of U.S. federal income tax, provided that:
. you did not (directly or indirectly, actually or constructively) own
10% or more of the total combined voting power of all classes of our
stock entitled to vote;
. you are not a controlled foreign corporation that is related to us
through stock ownership;
. you are not a bank receiving interest described in Section
881(c)(3)(A) of the Internal Revenue Code; and
. either (a) you certify to the trust or its agent (or other applicable
payor), under penalties of perjury and in accordance with applicable
Treasury regulations, that you are not a United States Holder and
provide your name and address, or (b) a securities clearing
organization, bank or other financial
S-29
institution that holds customers' securities in the ordinary course
of its trade or business (a Financial Institution), and holds the
trust preferred security in such capacity, certifies to the trust or
its agent (or other applicable payor), under penalties of perjury and
in accordance with applicable Treasury regulations, that it requires
and has received such a statement from you or another Financial
Institution between it and you in the chain of ownership, and
furnishes the trust or its agent or other applicable payor with a
copy thereof.
It is possible that changes in the law affecting the income tax
consequences of the debentures could adversely affect our ability to deduct
interest payable on the debentures. Such changes could also cause the
debentures to be classified as our equity, rather than our debt, for U.S.
federal income tax purposes. This might cause the income derived from the
debentures to be characterized as dividends, generally subject to a 30% income
tax on a withholding basis, when paid to you if you are not a United States
Holder, rather than as interest which, as discussed above, generally is exempt
from income tax in the hands of a person who is not a United States Holder.
You will generally not be subject to withholding of income tax or income
tax on any gain realized upon the sale or other disposition of a trust
preferred security.
If you hold the trust preferred securities in connection with the active
conduct of a U.S. trade or business, you will be subject to U.S. federal income
on all income and gains recognized with respect to your proportionate share of
the debentures.
INFORMATION REPORTING
In general, information reporting requirements will apply to payments of
any interest or premium on, and proceeds from the sale of, the trust preferred
securities within the United States to, and to the accrual of OID on trust
preferred securities with respect to, a non-corporate United States Holder. In
addition, information reporting requirements may apply to payments of interest
or premium on, and proceeds from the sale of, the trust preferred securities
within the United States to, and to the accrual of OID on trust preferred
securities with respect to, a non-United States Holder unless you certify in
accordance with applicable Treasury regulations as to your non-United States
Holder status or otherwise establish an exemption. Taxable income on the trust
preferred securities for a calendar year should be reported to United States
Holders on the appropriate forms by the following January 31st.
BACKUP WITHHOLDING
Payments of any interest on, proceeds from the sale of, and the accrual
of OID on, the trust preferred securities may be subject to a "backup"
withholding tax at the applicable rate unless you comply with certain
identification or exemption requirements. Any amounts so withheld will be
allowed as a credit against your U.S. federal income tax liability, or
refunded, if the required information is provided to the Internal Revenue
Service.
ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit
plan (an "ERISA Plan") subject to Title I of the Employee Retirement Income
Security Act of 1974 ("ERISA") should consider the fiduciary standards of ERISA
in the context of that ERISA Plan's particular circumstances before authorizing
an investment in the trust preferred securities with assets of that Plan. In
particular, among other factors, the fiduciary should consider whether the
investment would satisfy the prudence and diversification requirements of
Section 404(a) of ERISA and would be consistent with the documents and
instruments governing a ERISA Plan.
S-30
Section 406 of ERISA and Section 4975 of the Internal Revenue Code
prohibit ERISA Plans, as well as individual retirement accounts and Keogh plans
that are not subject to ERISA but are subject to Section 4975 of the Internal
Revenue Code (together with ERISA Plans, "Plans"), from engaging in certain
transactions involving "Plan assets" with persons who are "parties in interest"
under ERISA or "disqualified persons" under the Internal Revenue Code (together
"Parties in Interest") with respect to such Plan. A violation of these
"prohibited transaction" rules may cause a Party in Interest to be subject to
an excise tax and a Plan fiduciary to incur certain liabilities under ERISA
and/or Section 4975 of the Internal Revenue Code (and, in the case of
individual retirement accounts, the loss of tax-exempt status), unless
exemptive relief is available under an applicable statutory or administrative
exemption.
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA)
and foreign plans (as described in Section 4(b)(4) of ERISA) are not subject to
the requirements of ERISA or Section 4975 of the Internal Revenue Code;
however, those plans may be subject to federal, state or local laws or
regulations which affect their ability to invest in the trust preferred
securities. Any fiduciary of such a governmental, church or foreign plan
considering an investment in the trust preferred securities should determine
the need for, and, if necessary, the availability of, any exemptive relief
under such laws or regulations.
Under U.S. Department of Labor Regulation 29 C.F.R. (S) 2510.3-101 (the
"Plan Assets Regulations") the assets of an entity in which a Plan acquired an
equity interest will be deemed to be the assets of such Plan under certain
circumstances. An "equity interest" is defined under the Plan Assets Regulation
as any interest in an entity other than an instrument that is treated as
indebtedness under applicable local law and that has no substantial equity
features and specifically includes a beneficial interest in a trust.
Under the Plan Assets Regulation, the assets of the trust will be
considered to be the assets of the Plans investing in the trust preferred
securities unless, among other exceptions not relevant here, (a) less than 25%
of the value of each class of equity interests in the trust is held by Plans,
which includes certain employee benefit plans not subject to ERISA or Section
4975 of the Internal Revenue Code (such as governmental, church and foreign
plans) and entities whose underlying assets are "Plan assets" by reason of a
Plan's investment in these entities (collectively, "Benefit Plan Investors"),
or (b) the trust preferred securities are "publicly-offered securities" for
purposes of the Plan Assets Regulation. We cannot assure you that the value of
the trust preferred securities held by Benefit Plan Investors will be less than
25% of the total value of those trust preferred securities at the completion of
the initial offering or thereafter, and no monitoring or other measures will be
taken with respect to the satisfaction of the conditions of this exception. In
addition, we cannot assure you that the trust preferred securities will be
considered to be "publicly-offered securities" under the Plan Assets
Regulation. All of the common securities will be purchased and held by us.
If the assets of the trust are deemed to be the assets of the Plans
investing in the trust, then certain transactions involving the trust could be
deemed to constitute direct or indirect prohibited transactions under ERISA and
Section 4975 of the Internal Revenue Code with respect to one or more of these
Plans. For example, if we were a Party in Interest with respect to an investing
Plan (either directly or by reason of ownership of its subsidiaries),
extensions of credit between us and the trust (as represented by the debentures
and the guarantees) would likely be prohibited by Section 406(a)(1)(B) of ERISA
and Section 4975(c)(1)(B) of the Internal Revenue Code, unless exemptive relief
were available under an applicable administrative exemption (see below). In
addition, if we were considered to be a fiduciary with respect to the trust as
a result of certain powers we hold (such as the powers to remove and replace
the property trustee and the administrative trustees), certain operations of
the trust including the optional redemption or acceleration of the debentures,
could be considered to be prohibited transactions under Section 406(b) of ERISA
and Section 4975(c)(1)(E) of the Internal Revenue Code. To reduce the
likelihood that these and other transactions involving the trust would be
characterized as prohibited transactions, each investing Plan, by purchasing
trust preferred securities, will be deemed to have directed the trust to invest
in the debentures and to have appointed the property trustee.
S-31
The Department of Labor has issued five prohibited transaction class
exemptions that may provide exemptive relief for direct or indirect prohibited
transactions that may arise from the purchase, holding or disposition of the
trust preferred securities if assets of the trust were deemed to be the assets
of the Plans investing in the trust as described above. Those class exemptions
are PTCE 96-23 (for certain transactions effected on behalf of a Plan by an
in-house asset manager), PTCE 95-60 (for certain transactions involving
insurance company general accounts), PTCE 91-38 (for certain transactions
involving bank collective investment funds), PTCE 90-1 (for certain
transactions involving insurance company separate pooled accounts), and PTCE
84-14 (for certain transactions effected on behalf of a Plan by an independent
qualified professional asset manager).
Because we or any other person may be or become a Party in Interest with
respect to an investing Plan, the trust preferred securities may not be
purchased by, should not be held by and should not be disposed to, any Plan,
any entity whose underlying assets include "Plan assets" by reason of a Plan's
investment in such entity (a "Plan Asset Entity"), or any person investing the
assets of any Plan, unless such purchaser or holder is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another applicable exemption regardless of whether the assets of the trust are
deemed to be the assets of the Plans investing in the trust preferred
securities. Any purchaser or holder of the trust preferred securities or any
interest therein will be deemed to have represented by its purchase and holding
thereof that it either (a) is not a Plan or a Plan Asset Entity and is not
purchasing or holding such securities on behalf of or with the assets of any
Plan, or (b) is eligible for the exemptive relief available under PTCE 96-23,
95-60, 91-38, 90-1 or 84-14 or another applicable exemption with respect to
such purchase or holding.
Due to the complexity of these rules and the penalties that may be
imposed upon persons involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries and other persons considering
purchasing the trust preferred securities on behalf of or with the assets of
any Plan consult with their counsel regarding the potential consequences if the
assets of the trust were deemed to be "Plan assets" and the availability of
exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or any other
applicable exemption.
This discussion is general in nature and is not intended to be complete.
Any fiduciary of a Plan, governmental plan, church plan or a foreign plan
considering an investment in the trust preferred securities should consult with
its legal advisors regarding the consequences and advisability of such
investment.
Insurance companies considering an investment in the trust preferred
securities should note that the Small Business Job Protection Act of 1996 added
new Section 401(c) of ERISA relating to the status of the assets of insurance
company general accounts under ERISA and Section 4975 of the Internal Revenue
Code. Under Section 401(c), the Department of Labor issued Regulation 29 C.F.R.
(S) 2550.401c-1 (the "General Account Regulation") in January 2000 with respect
to insurance policies that are supported by an insurer's general account. The
General Account Regulation describes which assets held by the insurer in its
general account constitute assets of a Plan for purposes of the fiduciary
responsibility and prohibited transaction provisions of ERISA and the
prohibited transaction provisions of Section 4975 of the Internal Revenue Code,
and provides guidance with respect to the application of Title I of ERISA and
Section 4975 of the Internal Revenue Code to the general account assets of
insurers.
S-32
UNDERWRITING
GENERAL
Subject to the terms and conditions of an underwriting agreement, the
trust has agreed to sell to each of the underwriters named below, and each of
the underwriters has severally agreed to purchase from the trust, the number of
trust preferred securities set forth opposite its name below.
NUMBER OF TRUST
UNDERWRITER PREFERRED SECURITIES
----------- --------------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................
U.S. Bancorp Piper Jaffray Inc.............
---------
Total............................. 1,800,000
=========
In the underwriting agreement the several underwriters have agreed,
subject to the terms and conditions set forth in that agreement, to purchase
all the trust preferred securities offered hereby if any of the trust preferred
securities are purchased. In the event of default by an underwriter, the
underwriting agreement provides that, in certain circumstances, the purchase
commitment of the nondefaulting underwriter may be increased or the
underwriting agreement may be terminated.
We and the trust have agreed with the underwriters to indemnify them
against certain civil liabilities, including liabilities under the Securities
Act of 1933, or to contribute with respect to payments that the underwriters
may be required to make.
The underwriters are offering the preferred securities, subject to prior
sale, when, as and if issued to and accepted by them, subject to approval of
legal matters by their counsel, including the validity of the preferred
securities, and other conditions contained in the underwriting agreement, such
as the receipt by the underwriters of officer's certificates and legal
opinions. The underwriters reserve the right to withdraw, cancel or modify
offers to the public and to reject orders in whole or in part.
Certain of the underwriters and their affiliates have in the past and may
in the future engage in transactions with, or perform services for, us in the
ordinary course of their businesses. In particular, we obtained a loan from
U.S. Bank, an affiliate of U.S. Bancorp Piper Jaffray, one of the underwriters,
in January 2002 to fund our acquisition of SM&P, which we intend to repay with
the net proceeds from the sale of the debentures. See "Use of Proceeds."
Because more than 10% of the net proceeds of this offering will be paid to an
affiliate of a member of the National Association of Securities Dealers, Inc.
that is participating in this offering, this offering is conducted in
compliance with Rule 2710(c)(8) of the Conduct Rules of the NASD. The
underwriters have informed us that they will not confirm sales to accounts over
which they exercise discretionary authority without the prior written approval
of the customer.
COMMISSIONS AND DISCOUNTS
The underwriters will offer the trust preferred securities directly to
the public initially at $25 per trust preferred security. The underwriters may
also offer the trust preferred securities to certain dealers at the
above-mentioned offering price less a concession of $ per trust preferred
security. The underwriters may allow, and such dealers may reallow, a discount
not in excess of $ per trust preferred security to certain dealers. After the
initial public offering, the public offering price, concession and discount may
be changed.
S-33
Because the proceeds from the sale of the trust preferred securities and
the common securities will be used to purchase the debentures, The Laclede
Group has agreed to pay to the underwriters an underwriting commission of $
per trust preferred security or a total of $ .
We will pay all expenses, estimated to be approximately $300,000,
associated with the offer and sale of the trust preferred securities.
NEW YORK STOCK EXCHANGE LISTING
Before this offering, there was no established public trading market for
the trust preferred securities. We plan to list the trust preferred securities
on the New York Stock Exchange under the symbol "LG PrA." If approved, trading
of the trust preferred securities on the New York Stock Exchange is expected to
begin within 30 days of the issuance of the trust preferred securities. In
order to meet all the requirements for listing the trust preferred securities
on the New York Stock Exchange, the underwriters have agreed to sell the trust
preferred securities to a minimum of 400 beneficial holders. The underwriters
have advised us that they intend to make a market in the trust preferred
securities prior to the commencement of trading on the New York Stock Exchange.
However, the underwriters are not obligated to do so and may discontinue market
making at any time without notice. We cannot give any assurance that a liquid
trading market for the trust preferred securities will be available.
NO SALES OF SIMILAR SECURITIES
We and the trust have agreed that, during a period of 30 days from the
date of this prospectus supplement, we will not offer, sell, contract to sell
or otherwise dispose of any trust preferred securities, any other beneficial
interests of the trust or any securities of us that are substantially similar
to the trust preferred securities, including the guarantees, and including, but
not limited to, any securities that are convertible into or exchangeable for or
that represent the right to receive trust preferred securities or any such
substantially similar securities of either the trust or us (except the
debentures and the trust preferred securities offered by this prospectus
supplement), without the prior consent of the underwriters.
SETTLEMENT
It is expected that delivery of the trust preferred securities will be
made against payment therefor on or about the date specified in the last
paragraph of the cover page of this prospectus supplement, which will be
the business day following the date of this prospectus supplement.
PRICE STABILIZATION AND SHORT POSITIONS
In connection with the sale of the trust preferred securities, SEC rules
permit the underwriters to engage in transactions that stabilize the price of
the trust preferred securities. These transactions may include purchases for
the purpose of fixing or maintaining the price of the trust preferred
securities.
The underwriters may create a short position in the trust preferred
securities in connection with this offering. That means they may sell a larger
number of the trust preferred securities than is shown on the cover page of
this prospectus supplement. If they create a short position, the underwriters
may purchase trust preferred securities in the open market to reduce the short
position.
S-34
If the underwriters purchase the trust preferred securities to stabilize
the price or to reduce their short position, the price of the trust preferred
securities could be higher than it might be if they had not made such
purchases. The underwriters make no representation or prediction about any
effect that the purchases may have on the price of the trust preferred
securities.
The underwriters may suspend any of these activities at any time.
PENALTY BIDS
The underwriters also may impose a penalty bid on certain underwriters
and selling group members. This means that, if the underwriters purchase trust
preferred securities in the open market to reduce the underwriters' short
position or to stabilize the price of the trust preferred securities, they may
reclaim the amount of the selling concession from the underwriters and selling
group members who sold those trust preferred securities as part of this
offering.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the trust
preferred securities, the enforceability of the declaration of trust and the
creation of the trust will be passed upon on behalf of the trust by Richards,
Layton & Finger, P.A., special Delaware counsel to the trust. The validity of
the trust preferred securities guarantee, the debentures and certain matters
relating thereto will be passed upon on our behalf by Thompson Coburn LLP, St.
Louis, Missouri. Certain legal matters will be passed upon on behalf of the
underwriters by Pillsbury Winthrop LLP, New York, New York. From time to time
Thompson Coburn LLP and Pillsbury Winthrop LLP provide legal services to us and
Laclede Gas. Certain U.S. federal income taxation matters will be passed upon
for the trust and us by Thompson Coburn LLP, St. Louis, Missouri.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in the accompanying base prospectus by reference from our
Annual Report on Form 10-K for the year ended September 30, 200l have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated therein by reference, and have been so
incorporated in reliance upon the reports of such firm, given on the authority
of said firm as experts in auditing and accounting.
S-35
PROSPECTUS
-----------
THE LACLEDE GROUP, INC.
$500,000,000
SENIOR DEBT SECURITIES
SUBORDINATED DEBT SECURITIES
COMMON STOCK
STOCK PURCHASE CONTRACTS
AND
STOCK PURCHASE UNITS
LACLEDE CAPITAL TRUST I
TRUST PREFERRED SECURITIES
GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
THE LACLEDE GROUP, INC.
The Laclede Group may offer senior debt securities, subordinated debt
securities, shares of common stock, stock purchase contracts and stock purchase
units.
Laclede Capital Trust I may offer trust preferred securities that will be
guaranteed by The Laclede Group to the extent discussed in this prospectus.
The aggregate initial offering price of the securities that the trust and
we will offer will not exceed $500,000,000. We may offer these securities from
time to time, in amounts, on terms and at prices that we will determine at the
time they are offered for sale.
This prospectus contains summaries of the general terms of these
securities. We will describe these terms and prices, and the manner in which
they are being offered, in more detail in one or more supplements to this
prospectus, which will be distributed at the time the securities are offered.
You should read this prospectus and the applicable prospectus supplement,
including the "Risk Factors" section of the applicable prospectus supplement,
carefully before you invest.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF ANY OF THESE
SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
The Laclede Group's common stock is listed on the New York Stock Exchange
under the symbol "LG." Each prospectus supplement offering any other securities
will state whether those securities are listed or will be listed on any
national securities exchange.
We may sell the securities to or through underwriters, through dealers or
agents, directly to purchasers or through a combination of these methods. If an
offering of securities involves any underwriters, dealers or agents, then the
applicable prospectus supplement will name the underwriters, dealers or agents
and will provide information regarding any fee, commission or discount
arrangement made with those underwriters, dealers or agents.
-----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------
THE DATE OF THIS PROSPECTUS IS MAY 6, 2002.
TABLE OF CONTENTS
PAGE
----
About This Prospectus...................................................... 3
Forward-Looking Statements................................................. 3
Where You Can Find More Information........................................ 4
The Laclede Group.......................................................... 5
Laclede Capital Trust I.................................................... 6
Use of Proceeds............................................................ 7
Ratios of Earnings to Fixed Charges........................................ 8
Description of Debt Securities............................................. 8
Description of Common Stock................................................ 19
Description of Stock Purchase Contracts and Stock Purchase Units........... 23
Description of Trust Preferred Securities.................................. 23
Description of the Guarantees.............................................. 25
Book-Entry Securities...................................................... 28
Plan of Distribution....................................................... 30
Legal Opinions............................................................. 32
Experts.................................................................... 32
2
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission, which we refer to as the SEC, using a
"shelf" registration, or continuous offering, process. Under this shelf
registration process, Laclede may issue and sell senior debt securities or
subordinated debt securities, common stock, stock purchase contracts and stock
purchase units and the trust may issue trust preferred securities in one or
more offerings with a maximum aggregate offering price of up to $500,000,000.
The trust preferred securities will be issued by Laclede Capital Trust I.
This prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. Any prospectus supplement may also add, update or change information
contained in this prospectus. If there is any inconsistency between the
information in this prospectus and the prospectus supplement, you should rely
on the information in the prospectus supplement. The registration statement we
filed with the SEC includes exhibits that provide more detail on descriptions
of matters discussed in this prospectus. You should read this prospectus and
the related exhibits filed with the SEC and any prospectus supplement together
with additional information described under the heading "Where You Can Find
More Information."
In this prospectus, "we," "us," "our" and "Laclede" refers to The Laclede
Group, Inc., "Laclede Gas" refers to Laclede Gas Company, our principal
subsidiary, and the "trust" refers to Laclede Capital Trust I.
FORWARD-LOOKING STATEMENTS
Some of the information and discussion included in this prospectus, any
prospectus supplement or term sheet and the documents Laclede has incorporated
by reference contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended. Such statements
related to future events or Laclede's future financial performance may use
certain words, such as "anticipate," "believe," "estimate," "expect," "intend,"
"plan," "seek" and similar words and expressions that identify forward-looking
statements that involve uncertainties and risks. Future developments, however,
may not be in accordance with our expectations or beliefs, and the effect of
future developments may not be those that we anticipate. There are many factors
that may cause results to differ materially from those contemplated, including:
. weather conditions;
. legislative, regulatory and judicial mandates and decisions,
particularly those applicable to our utility subsidiary, some of
which may be retroactive, including those affecting
. allowed rates of return
. incentive regulation
. industry and rate structures
. purchased gas adjustment provisions
. franchise renewals
. environmental or safety matters
. taxes
. accounting standards;
. capital and energy commodity market conditions including the ability
to obtain funds for necessary capital expenditures and the terms and
conditions imposed for obtaining sufficient gas supply for our
utility subsidiary;
3
. general economic, competitive, political and regulatory conditions;
. the results of litigation;
. our utility subsidiary's ability to collect amounts owed from its
customers, as well as any conservation efforts of its customers;
. employee workforce issues particularly at our utility subsidiary; and
. other factors discussed in "Risk Factors."
Readers are urged to consider the risks, uncertainties and other factors
that could affect our business as described in this prospectus, any prospectus
supplement, term sheet and the documents incorporated herein by reference. We
do not, by including this statement, assume any obligation to publicly update
or revise any particular forward-looking statement in light of future events.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC.
These SEC filings are available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the
SEC's public reference room at 450 Fifth Street N.W., Room 1024, Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on the
public reference rooms and their copy charges. You may also inspect our SEC
reports and other information at the New York Stock Exchange, 20 Broad Street,
New York, New York 10005.
In connection with this offering, Laclede and the trust have filed with
the SEC a registration statement on Form S-3 under the Securities Act of 1933
covering the securities. As permitted by SEC rules, this prospectus omits
certain information included in the registration statement. For a more complete
understanding of the securities we may offer, you should refer to the
registration statement, including its exhibits.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file separately with it, which means we may disclose important
information by referring you to those other documents. The information we
incorporate by reference is considered to be part of this prospectus, any
prospectus supplement, or term sheet, except for any information superseded by
information in this prospectus. This prospectus incorporates by reference the
documents set forth below that we have filed previously with the SEC, and later
information that Laclede files with the SEC will automatically update and
supersede that information as well as information in the prospectus and any
accompanying prospectus supplement or term sheet. These documents contain
important information about us and our finances.
SEC FILINGS (FILE NO. 1-16681) PERIOD/DATE
------------------------------ -----------
Annual Report on Form 10-K Year ended September 30, 2001
Quarterly Reports on Form 10-Q Quarter ended December 31, 2001
Current Reports on Form 8-K October 1, 2001, October 25, 2001,
December 12, 2001, December 13,
2001, December 14, 2001,
January 24, 2002 and February 20, 2002
Registration Statement on Form 8-A September 6, 2001
4
The documents filed by us with the SEC pursuant to Sections 13(a), 13(c),
14 and 15 of the Securities Exchange Act of 1934 after the date of this
prospectus are also incorporated by reference into this prospectus.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
CORPORATE SECRETARY
THE LACLEDE GROUP, INC.
720 OLIVE STREET, 15/TH/ FLOOR
ST. LOUIS, MISSOURI 63101
(314) 342-0503
You should rely only on the information contained or incorporated by
reference in this prospectus and the accompanying prospectus supplement. We
have not authorized anyone to provide you with information that is different
from this information.
Separate financial statements of the trust have not been included in this
prospectus. Laclede and the trust do not consider those financial statements to
be helpful because:
. we beneficially own directly or indirectly all of the undivided
beneficial interests in the assets of the trust (other than the
beneficial interests represented by the trust preferred securities).
See "Laclede Capital Trust I," "Description of Securities--Trust
Preferred Securities" and "Description of Securities--The Guarantee;"
. to the extent described in this prospectus, we will guarantee the
trust preferred securities such that the holders of the trust
preferred securities, with respect to the payment of distributions
and amounts upon liquidation, dissolution and winding up, are at
least in the same position with regard to our assets as a preferred
shareholder;
. in future filings under the Securities Exchange Act of 1934, an
audited footnote to our annual financial statements will state that
the trust is wholly owned by us, that the sole assets of the trust
are our subordinated debt securities having a specified total
principal amount, and that, considered together, the back-up
undertakings, including the guarantees, constitute a full and
unconditional guarantee by us of the trust's obligations under the
trust preferred securities issued by the trust; and
. the trust is a newly created entity, has no operating history, no
independent operations and is not engaged in, and will not engage in,
any activity other than as described under "Laclede Capital Trust I."
THE LACLEDE GROUP
The Laclede Group, Inc., a Missouri corporation, is a holding company.
Its principal subsidiary is Laclede Gas Company that provides natural gas
service. Laclede is also developing its presence in non-regulated activities
that fit well and are believed to provide opportunities for sustainable growth.
Laclede Gas was founded in 1857 and is the largest natural gas distribution
utility in Missouri, serving more than 630,000 residential, commercial and
industrial customers in metropolitan St. Louis and surrounding counties in
eastern Missouri. For the twelve months ended December 31, 2001, Laclede
reported total revenue of approximately $852 million. For that same period,
non-regulated subsidiaries provided approximately 8% of our revenues.
On January 28, 2002, Laclede acquired SM&P Utility Resources, Inc. from
NiSource, Inc. SM&P operates an underground locating and marking service in ten
midwestern states, with about 2,000 employees. For the twelve months ended
December 31, 2001, it had revenues of approximately $106.6 million.
In addition, Laclede directly or indirectly owns all of the common stock
of the following subsidiaries:
Laclede Pipeline Company, which operates a propane pipeline that connects
the propane storage facilities of Laclede Gas in St. Louis County,
Missouri, to propane supply terminal facilities located at Wood River and
Cahokia, Illinois.
5
Laclede Investment LLC, which invests in other enterprises and has made
loans to several joint ventures engaged in real estate development,
including several of those in which Laclede Development Company invests.
Laclede Energy Resources, Inc., which engages in non-utility efforts to
market natural gas and related activities.
Laclede Gas Family Services, Inc., which is a Missouri-licensed insurance
agency that promotes the sale of insurance and related products.
Laclede Development Company, which participates in real estate
development, primarily through investment in joint ventures.
Laclede Venture Corp., which offers services for the compression of
natural gas to third parties who desire to use or sell compressed natural
gas for use in vehicles.
Laclede's principal offices are located at 720 Olive Street, St. Louis,
Missouri, 63101 and its telephone number is 314-342-0500.
The foregoing information about Laclede and its subsidiaries is only a
general summary and is not intended to be comprehensive. For additional
information about Laclede and its business you should refer to the information
described under the caption "Where You Can Find More Information."
LACLEDE CAPITAL TRUST I
Laclede Capital Trust I is a statutory business trust created under the
Delaware Business Trust Act by way of:
. a declaration of trust executed by us, as sponsor, and the trustees
of the trust; and
. the filing of a certificate of trust with the Secretary of State of
the State of Delaware.
At the time of public issuance of the trust preferred securities, the
trust agreement will be amended and restated in its entirety and will be
qualified as an indenture under the Trust Indenture Act of 1939. The trust
preferred securities and the common securities of the trust will represent
undivided beneficial interests in the assets of the trust. We will own all the
common securities of the trust representing a total liquidation amount equal to
at least 3% of the total capital of the trust. The preferred securities will
represent the remaining percentage of Laclede Capital Trust I's total
capitalization. The trust common securities will have terms substantially equal
to, and will rank equal in priority of payment with, the trust preferred
securities. However, if we default on our debt securities owned by Laclede
Capital Trust I or another event of default under the trust agreement occurs,
then, so long as the default continues, cash distributions and liquidation,
redemption and other amounts payable or deliverable on the securities of the
trust must be paid or delivered to holders of trust preferred securities before
the holders of the trust common securities. Laclede Capital Trust I may not
borrow money, use debt, grant mortgages or pledge any of its assets. The trust
preferred securities will be guaranteed by us as described in this prospectus
and the applicable prospectus supplement.
The trust exists for the exclusive purposes of:
. issuing the trust preferred securities and common securities
representing undivided beneficial interests in the assets of the
trust;
. investing the gross proceeds of the common securities and the trust
preferred securities in our debt securities and holding and disposing
of such debt securities in accordance with the declaration of trust;
and
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. engaging in only those other activities necessary or incidental
thereto.
Unless otherwise specified in the prospectus supplement, the following
five trustees will conduct Laclede Capital Trust I's business and affairs:
Three of our employees, officers or affiliates, as administrative trustees, The
Bank of New York, as property trustee; and The Bank of New York (Delaware), as
the Delaware trustee.
The Bank of New York also serves as the indenture trustee for purposes of
compliance with provisions of the Trust Indenture Act of 1939, the guaranty
trustee under our guarantees in favor of the holders of trust preferred
securities and common securities and debt trustee under the indenture related
to our debt securities. The property trustee holds our debt securities for the
benefit of the holders of the trust common and trust preferred securities. The
property trustee has the power to exercise all rights, powers and privileges
under the indenture as holder of our debt securities. In addition, the property
trustee maintains exclusive control of a segregated, non-interest bearing bank
account to hold all payments made in respect of our debt securities for the
benefit of the holders of the trust common and trust preferred securities. The
property trustee makes payments of distributions and payments on liquidation,
redemption and otherwise to the holders of the trust common and trust preferred
securities out of funds from that bank account. As a direct or indirect holder
of all trust common securities, we have the right to appoint, remove or replace
any administrative trustee and to increase or decrease the number of
administrative trustees. We pay all fees and expenses related to Laclede
Capital Trust I and any offering of the trust preferred securities.
The rights of the holders of the trust preferred securities, including
economic rights, rights to information and voting rights, are set forth in the
trust agreement and the Delaware Business Trust Act. The trust agreement, the
indenture and our guarantee also incorporate by reference terms of the Trust
Indenture Act of 1939. The trust agreement, indenture and our guarantee will be
qualified under the Trust Indenture Act.
The Delaware trustee for the trust in the State of Delaware is The Bank
of New York (Delaware). The principal place of business of the trust will be
c/o The Laclede Group, Inc., 720 Olive Street, St. Louis, Missouri 63101.
USE OF PROCEEDS
Unless we state otherwise in any applicable prospectus supplement, we may
use the net proceeds from any sale of the offered securities:
. to finance our subsidiaries' working capital and capital expenditure
needs;
. to redeem, repurchase, repay or retire outstanding indebtedness,
including indebtedness of our subsidiaries;
. to finance strategic investments in or future acquisitions of other
entities or their assets; and
. for other general corporate purposes.
The prospectus supplement relating to a particular offering of securities
will identify the use of proceeds for that offering.
The proceeds from the sale of trust preferred securities by the trust
will be invested in our subordinated debt securities.
7
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratios of earnings to fixed charges
for the respective periods indicated:
TWELVE MONTHS
ENDED DECEMBER 31, YEARS ENDED SEPTEMBER 30, (1)
------------------ -----------------------------
2001 2000 (1) 2001 2000 1999 1998 1997
---- -------- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges (2) 2.0 3.1 2.6 2.6 2.9 3.0 3.6
--------
(1)The ratios for these years pre-date the corporate reorganization effective
October 1, 2001 in which Laclede became the corporate parent of Laclede Gas
and its subsidiaries. Thus, these ratios reflect Laclede Gas's and its
subsidiaries' ratios of earnings to fixed charges for the periods prior to
October 1, 2001.
(2)For purposes of computing the ratios of earnings to fixed charges, earnings
represent income from continuing operations before extraordinary items and
cumulative effect of changes in accounting principles plus applicable income
taxes and fixed charges. Fixed charges include all interest expense and the
proportion of rent expense deemed representative of the interest factor.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The senior debt securities and the subordinated debt securities, which we
refer to collectively as the debt securities, will represent our unsecured debt
obligations. We may issue one or more series of debt securities directly to the
public, to a trust or as part of a stock purchase unit from time to time. We
expect that each senior debt securities or subordinated debt securities will be
issued as a new series of debt securities under one of two separate indentures,
as each may be amended or supplemented from time to time. We will issue the
senior debt securities in one or more series under a senior debt indenture
between us and The Bank of New York, as trustee. We will issue the subordinated
debt securities in one or more series under a subordinated indenture between us
and The Bank of New York. The form of the senior debt indenture, the form of
the subordinated indenture and the form of supplemental indentures or other
instruments establishing the debt securities of a particular series are filed
as exhibits to, or will be subsequently incorporated by reference in, the
registration statement of which this prospectus is a part. Each indenture will
be qualified under the Trust Indenture Act of 1939.
There is no requirement under the senior debt indenture nor under the
subordinated indenture that our future issuances of debt securities be issued
exclusively under either indenture, and we will be free to employ other
indentures or documentation, containing provisions different from those
included in either indenture or applicable to one or more issuances of senior
debt securities or subordinated debt securities, as the case may be, in
connection with future issuances of other debt securities. The senior debt
indenture and the subordinated indenture provide that the applicable debt
securities will be issued in one or more series, may be issued at various
times, may have differing maturity dates and may bear interest at differing
rates. We need not issue all debt securities of one series at the same time.
Unless otherwise provided, we may reopen a series, without the consent of
the holders of the senior debt securities or the subordinated debt securities
of that series, as the case may be, for issuance of additional senior debt
securities or subordinated debt securities of that series, as applicable.
Unless otherwise described in the applicable prospectus supplement, neither
indenture described above limits or will limit the aggregate amount of debt,
including secured debt, we or our subsidiaries may incur.
The following briefly summarizes the material provisions of the
indentures and the debt securities. You should read the more detailed
provisions of the applicable indenture, including the defined terms, for
provisions that may be important to you. The indentures have been filed as
exhibits to the registration statement of which this prospectus is a part.
Copies of the indentures may also be obtained from Laclede or the applicable
trustee.
8
The applicable prospectus supplement relating to any series of debt
securities will describe the following terms, where applicable:
. the title of the debt securities;
. whether the debt securities will be senior or subordinated debt;
. the total principal amount of the debt securities;
. the percentage of the principal amount at which the debt securities
will be sold and, if applicable, the method of determining the price;
. the maturity date or dates or the method of determining the maturity
date or dates;
. the interest rate or the method of computing the interest rate;
. the date or dates from which any interest will accrue, or how such
date or dates will be determined, and the interest payment date or
dates and any related record dates;
. the location where payments on the debt securities will be made;
. the terms and conditions on which the debt securities may be redeemed
at the option of Laclede;
. any obligation of Laclede to redeem, purchase or repay the debt
securities at the option of a holder upon the happening of any event
and the terms and conditions of redemption, purchase or repayment;
. any provisions for the discharge of Laclede's obligations relating to
the debt securities by deposit of funds or United States government
obligations;
. whether the debt securities are to trade in book-entry form and the
terms and any conditions for exchanging the global security in whole
or in part for paper certificates;
. any material provisions of the applicable indenture described in this
prospectus that do not apply to the debt securities;
. any additional events of default; and
. any other specific terms of the debt securities.
Federal income tax consequences and other special considerations
applicable to any debt securities issued by Laclede at a discount will be
described in the applicable prospectus supplement.
REGISTRATION, TRANSFER AND EXCHANGE. Unless otherwise indicated in the
applicable prospectus supplement, each series of debt securities will initially
be issued in the form of one or more global securities, in registered form,
without coupons, as described under "Book-Entry System." The global securities
will be registered in the name of The Depository Trust Company, as depositary,
or its nominee, and deposited with, or on behalf of, the depositary. Except in
the circumstances described under "Book-Entry Securities," owners of beneficial
interests in a global security will not be entitled to have debt securities
registered in their names, will not receive or be entitled to receive physical
delivery of any debt securities and will not be considered the registered
holders thereof under the senior debt indenture or the subordinated debt
indenture.
Debt securities of any series will be exchangeable for other debt
securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. Subject to the terms of the applicable
indenture and the limitations applicable to global securities, debt securities
may be presented for exchange or registration of transfer--duly endorsed or
accompanied by a duly executed instrument of transfer--at the office of any
security registrar we may designate for such purpose, without service charge
but upon payment of any taxes and other governmental charges as described in
the applicable indenture.
9
Unless otherwise indicated in the applicable prospectus supplement, the
security registrar will be the trustee under the applicable indenture. We may
at any time designate additional security registrars or rescind the designation
of any security registrar or approve a change in the office through which any
security registrar acts, except that we will be required to maintain a security
registrar in each place of payment for the debt securities of each series.
PAYMENT AND PAYING AGENTS. Principal of and interest and premium, if
any, on debt securities issued in the form of global securities will be paid in
the manner described under "Book-Entry Securities."
Unless otherwise indicated in the applicable prospectus supplement, the
principal of and any premium and interest on debt securities of a particular
series in the form of certificated securities will be payable at the office of
the trustee or at the authorized office of any paying agent or paying agents
upon presentation and surrender of such debt securities. We 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,
except that we will be required to maintain a paying agent in each place of
payment for the debt securities of a particular series.
All monies we pay to a trustee or a paying agent for the payment of the
principal of, and premium or interest, if any, on, any debt security which
remain unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to us. The holder of
such debt security thereafter may look only to us for payment thereof, subject
to the laws of unclaimed property.
REDEMPTION. Any terms for the optional or mandatory redemption of the
debt securities will be set forth in the applicable prospectus supplement.
Unless otherwise indicated in the applicable prospectus supplement, debt
securities will be redeemable by us only upon notice by mail not less than 30
nor more than 60 days prior to the date fixed for redemption, and, if less than
all the debt securities of a series are to be redeemed, the particular debt
securities to be redeemed will be selected by the method provided for that
particular series, or in the absence of any such provision, by the trustee in
the manner it deems fair and appropriate.
Any notice of redemption at our option may state that redemption will be
conditional upon receipt by the trustee or the paying agent or agents, on or
prior to the date fixed for such redemption, of money sufficient to pay the
principal of and premium, if any, and interest on, the senior debt securities
and that if that money has not been so received, the notice will be of no force
and effect and we will not be required to redeem the debt securities.
ANNUAL NOTICE TO TRUSTEE. We will provide to each trustee an annual
statement by an appropriate officer as to our compliance with all conditions
and covenants under the applicable indenture.
NOTICES. Notices to holders of debt securities will be given by mail to
the addresses of the holders as they may appear in the security register for
the applicable debt securities.
TITLE. Laclede, the trustee, and any agent of Laclede or the trustee,
may treat the person in whose name debt securities are registered as the
absolute owner of those debt securities, whether or not those debt securities
may be overdue, for the purpose of making payments and for all other purposes
irrespective of notice to the contrary.
GOVERNING LAW. Each indenture and the debt securities will be governed
by, and construed in accordance with, the laws of the State of New York.
REGARDING THE TRUSTEE. The Bank of New York is the trustee under the
senior debt indenture as well as under the subordinated debt indenture.
10
A trustee may resign at any time by giving written notice to us or may be
removed at any time by act of the holders of a majority in principal amount of
all series of debt securities then outstanding delivered to the trustee and us.
No resignation or removal of a trustee and no appointment of a successor
trustee will be effective until the acceptance of appointment by a successor
trustee. So long as no event of default or event which, after notice or lapse
of time, or both, would become an event of default has occurred and is
continuing and except with respect to a trustee appointed by act of the
holders, if we have delivered to the trustee a resolution of our board of
directors appointing a successor trustee and that successor has accepted such
appointment in accordance with the terms of the applicable indenture, the
trustee will be deemed to have resigned and the successor will be deemed to
have been appointed as trustee in accordance with the applicable indenture.
Each indenture provides that our obligations to compensate the trustee
and reimburse the trustee for expenses, disbursements and advances will be
secured by a lien prior to that of the applicable senior debt securities upon
the property and funds held or collected by the trustee as such.
CONSOLIDATION, MERGER OR SALE OF ASSETS. Each indenture provides that we
may consolidate with or merge into, or sell, lease or convey our property as an
entirety or substantially as an entirety to any other corporation if the
successor corporation assumes our obligations under the debt securities and the
indentures and is organized and existing under the laws of the United States,
any state thereof or the District of Columbia.
SENIOR DEBT SECURITIES
GENERAL. The following summaries of some important provisions of the
senior debt indenture (including its supplements) are not complete and are
subject to, and qualified in their entirety by, all of the provisions of the
senior debt indenture, which is an exhibit to the registration statement of
which this prospectus forms a part.
RANKING. The senior debt securities will be our direct unsecured general
obligations and will rank equally with all of our other unsecured and
unsubordinated debt. As of December 31, 2001, we had no outstanding debt that
would have ranked equally with the senior debt securities, although, on January
28, 2002, we obtained a $42.8 million loan for the purchase of SM&P Utility
Resources, which loan would rank equal with the senior debt securities. As of
such date, Laclede Gas had outstanding mortgage obligations of approximately
$285 million.
Laclede is a holding company that derives substantially all of its income
from its operating subsidiaries and primarily from its utility subsidiary. As a
result, our cash flows and consequent ability to service our debt, including
the senior debt securities, are dependent upon the earnings of our subsidiaries
and distribution of those earnings to us and other payments or distributions of
funds by our subsidiaries to us, including payments of principal and interest
under intercompany indebtedness. Our operating subsidiaries are separate and
distinct legal entities and will have no obligation, contingent or otherwise,
to pay any dividends or make any other distributions (except for payments
required pursuant to the terms of intercompany indebtedness) to us or to
otherwise pay amounts due with respect to the senior debt securities or to make
specific funds available for such payments. Various financing arrangements,
charter provisions and regulatory requirements may impose certain restrictions
on the ability of our subsidiaries to transfer funds to us in the form of cash
dividends, loans or advances. Furthermore, except to the extent we have a
priority or equal claim against our subsidiaries as a creditor, the senior debt
securities will be effectively subordinated to debt and preferred stock at the
subsidiary level because, as the common shareholder of our subsidiaries, we
will be subject to the prior claims of creditors of our subsidiaries. As of
December 31, 2001, our subsidiaries had approximately $420 million of aggregate
outstanding debt and preferred stock.
EVENTS OF DEFAULT. Each of the following will constitute an event of
default under the senior debt indenture with respect to senior debt securities
of any series:
. Failure to pay principal of or premium, if any, on any senior debt
security of that series, as the case may be, within three business
days after maturity;
11
. Failure to pay interest on the senior debt securities of such series
within 60 days after the same becomes due and payable;
. Failure to perform or breach of any of our other covenants or
warranties in the senior debt indenture (other than a covenant or
warranty solely for the benefit of one or more series of senior debt
securities other than that series) for 90 days after written notice
to us by the trustee or to us and the trustee by the holders of at
least 33% in aggregate principal amount of the outstanding senior
debt securities of that series;
. Certain events of bankruptcy, insolvency, reorganization, assignment
or receivership; or
. Any other event of default specified in the applicable prospectus
supplement with respect to senior debt securities of a particular
series.
No event of default with respect to the senior debt securities of a particular
series necessarily constitutes an event of default with respect to the senior
debt securities of any other series issued under the senior debt indenture.
If an event of default with respect to any series of senior debt
securities occurs and is continuing, then either the trustee for such series or
the holders of at least 33% in aggregate principal amount of the outstanding
senior debt securities of that series, by notice in writing, may declare the
principal amount of and interest on all of the senior debt securities of that
series to be due and payable immediately. However, if the event of default
applies to more than one series of senior debt securities under the senior debt
indenture, the trustee for that series or the holders of at least 33% in
aggregate principal amount of the outstanding senior debt securities of all
such series, considered as one class, and not the holders of the senior debt
securities of any one of such series, may make such declaration of acceleration.
At any time after an acceleration with respect to the senior debt
securities of any series has been declared, but before a judgment or decree for
the payment of the money due has been obtained, the event or events of default
giving rise to such acceleration will be considered waived, and the
acceleration will be considered rescinded and annulled, if
. we pay or deposit with the trustee for such series a sum sufficient
to pay all matured installments of interest on all senior debt
securities of that series, the principal of and premium, if any, on
the senior debt securities of that series that have become due
otherwise than by acceleration and interest, if any, thereon at the
rate or rates specified in such senior debt securities, interest, if
any, upon overdue installments of interest at the rate or rates
specified in such senior debt securities, to the extent that payment
of such interest is lawful, and all amounts due to the trustee for
that series under the senior debt indenture; or
. any other event or events of default with respect to the senior debt
securities of such series have been cured or waived as provided in
the senior debt indenture.
However, no such waiver or rescission and annulment shall extend to or shall
affect any subsequent default or impair any related right.
There is no automatic acceleration, even in the event of our bankruptcy,
insolvency or reorganization.
Other than its duties in case of an event of default, the trustee is not
obligated to exercise any of its rights or powers under the senior debt
indenture at the request, order or direction of any of the holders, unless the
holders offer the trustee a reasonable indemnity. If they provide a reasonable
indemnity, the holders of a majority in principal amount of any series of
senior debt securities will have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the trustee, or
exercising any power conferred upon the trustee. However, if the event of
default relates to more than one series, only the holders of a majority in
aggregate principal amount of all affected series will have the right to give
this direction. The trustee is not obligated to comply with directions that
conflict with law or other provisions of the senior debt indenture.
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No holder of senior debt securities of any series will have any right to
institute any proceeding under the senior debt indenture, or to exercise any
remedy under the senior debt indenture, unless:
. the holder has previously given to the trustee written notice of a
continuing event of default;
. the holders of a majority in aggregate principal amount of the
outstanding senior debt securities of all series in respect of which
an event of default shall have occurred and be continuing have made a
written request to the trustee and have offered reasonable indemnity
to the trustee to institute proceedings; and
. the trustee has failed to institute any proceeding for 60 days after
notice and has not received any direction inconsistent with the
written request of holders during that period.
However, the limitations discussed above do not apply to a suit by a holder of
a debt security for payment of the principal of, or premium, if any, or
interest, if any, on, a senior debt security on or after the applicable due
date.
MODIFICATION AND WAIVER. Laclede and the trustee may enter into one or
more supplemental indentures without the consent of any holder of senior debt
securities for any of the following purposes:
. to evidence the assumption by any permitted successor of our
covenants in the senior debt indenture and in the senior debt
securities;
. to add additional covenants or to surrender any of our rights or
powers under the senior debt indenture;
. to add additional events of default;
. to change, eliminate, or add any provision to the senior debt
indenture; provided, however, if the change, elimination, or addition
will adversely affect the interests of the holders of senior debt
securities of any series in any material respect, such change,
elimination, or addition will become effective only:
. when the consent of the holders of senior debt securities of such
series has been obtained in accordance with the senior debt
indenture; or
. when no debt securities of the affected series remain outstanding
under the senior debt indenture;
. to provide collateral security for all but not part of the senior
debt securities;
. to establish the form or terms of senior debt securities of any other
series as permitted by the senior debt indenture;
. to provide for the authentication and delivery of bearer securities
and coupons attached thereto;
. to evidence and provide for the acceptance of appointment of a
successor trustee;
. to provide for the procedures required for use of a noncertificated
system of registration for the senior debt securities of all or any
series;
. to change any place where principal, premium, if any, and interest
shall be payable, debt securities may be surrendered for registration
of transfer or exchange and notices to us may be served; or
. to cure any ambiguity or inconsistency or to make any other
provisions with respect to matters and questions arising under the
senior debt indenture; provided that such action shall not adversely
affect the interests of the holders of senior debt securities of any
series in any material respect.
The holders of a majority in aggregate principal amount of the senior
debt securities of all series then outstanding may waive our compliance with
certain restrictive provisions of the senior debt indenture. The holders of a
majority in principal amount of the outstanding senior debt securities of any
series may waive any past default under the senior debt indenture with respect
to that series, except a default in the payment of
13
principal, premium, if any, or interest and certain covenants and provisions of
the senior debt indenture that cannot be modified or be amended without the
consent of the holder of each outstanding senior debt security of the series
affected.
If the Trust Indenture Act of 1939 is amended after the date of the
senior debt indenture in such a way as to require changes to the senior debt
indenture, the senior debt indenture will be deemed to be amended so as to
conform to such amendment of the Trust Indenture Act of 1939. We and the
trustee may, without the consent of any holders, enter into one or more
supplemental indentures to evidence such an amendment.
The consent of the holders of a majority in aggregate principal amount of
the senior debt securities of all series then outstanding is required for all
other modifications to the senior debt indenture. However, if less than all of
the series of senior debt securities outstanding are directly affected by a
proposed supplemental indenture, then the consent only of the holders of a
majority in aggregate principal amount of all series that are directly affected
will be required. No such amendment or modification may:
. change the stated maturity of the principal of, or any installment of
principal of or interest on, any senior debt security, or reduce the
principal amount of any senior debt security or its rate of interest
or change the method of calculating such interest rate or reduce any
premium payable upon redemption, or change the currency in which
payments are made, or impair the right to institute suit for the
enforcement of any payment on or after the stated maturity of any
senior debt security, without the consent of the holder;
. reduce the percentage in principal amount of the outstanding senior
debt securities of any series whose consent is required for any
supplemental indenture or any waiver of compliance with a provision
of the senior debt indenture or any default thereunder and its
consequences, or reduce the requirements for quorum or voting,
without the consent of all the holders of the series; or
. modify certain of the provisions of the senior debt indenture
relating to supplemental indentures, waivers of certain covenants and
waiver of past defaults with respect to the senior debt securities of
any series, without the consent of the holder of each outstanding
senior debt security affected thereby.
A supplemental indenture which changes the senior debt indenture solely
for the benefit of one or more particular series of senior debt securities, or
modifies the rights of the holders of senior debt securities of one or more
series, will not affect the rights under the senior debt indenture of the
holders of the senior debt securities of any other series.
The senior debt indenture provides that senior debt securities owned by
us or anyone else required to make payment on the senior debt securities shall
be disregarded and considered not to be outstanding in determining whether the
required holders have given a request or consent.
We may fix in advance a record date to determine the required number of
holders entitled to give any request, demand, authorization, direction, notice,
consent, waiver or other act of the holders, but we shall have no obligation to
do so. If a record date is fixed for that purpose, the request, demand,
authorization, direction, notice, consent, waiver or other act of the holders
may be given before or after that record date, but only the holders of record
at the close of business on that record date will be considered holders for the
purposes of determining whether holders of the required percentage of the
outstanding senior debt securities have authorized or agreed or consented to
the request, demand, authorization, direction, notice, consent, waiver or other
act of the holders. For that purpose, the outstanding senior debt securities
shall be computed as of the record date. Any request, demand, authorization,
direction, notice, consent, election, waiver or other act of a holder shall
bind every future holder of the same senior debt securities and the holder of
every senior debt security issued upon the registration of transfer of or in
exchange for those senior debt securities. A transferee will be bound by acts
of the trustee or us taken in reliance upon an act of holders whether or not
notation of that action is made upon that senior debt security.
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SATISFACTION AND DISCHARGE. We will be discharged from our obligations
on the senior debt securities of a particular series, or any portion of the
principal amount of the senior debt securities of such series, if we
irrevocably deposit with the trustee sufficient cash or government securities
to pay the principal, or portion of principal, interest, any premium and any
other sums when due on the senior debt securities of such series at their
maturity, stated maturity date, or redemption.
The indenture will be deemed satisfied and discharged when no senior debt
securities remain outstanding and when we have paid all other sums payable by
us under the senior debt indenture.
All moneys we pay to the trustee or any paying agent on senior debt
securities which remain unclaimed at the end of two years after payments have
become due will be paid to or upon the order of us. Thereafter, the holder of
such senior debt security may look only to us for payment thereof, subject to
the laws of unclaimed property.
SUBORDINATED DEBT SECURITIES
GENERAL. The subordinated debt securities will be unsecured and issued
under a separate subordinated indenture and, unless otherwise specified in the
applicable prospectus supplement, will rank equally with our other unsecured
and subordinated indebtedness. The subordinated indenture does not limit the
aggregate principal amount of subordinated debt securities that may be issued
under the subordinated indenture.
SUBORDINATION. If subordinated debt securities are issued to the trust
or the trustee of the trust in connection with the issuance of trust preferred
securities of the trust, or if otherwise specified in the applicable prospectus
supplement, the subordinated debt securities will rank subordinated and junior
in right of payment, to the extent set forth in the subordinated indenture, to
all of our "senior indebtedness."
"Senior indebtedness" means distributions on the following, whether
outstanding on the date of execution of the subordinated debt indenture or
thereafter incurred, created or assumed:
. our indebtedness for money borrowed or evidenced by the senior debt
securities or any debentures (other than the subordinated debt
securities), notes, bankers' acceptances or other corporate debt
securities or similar instruments issued by us;
. our capital lease obligations;
. our obligations incurred for deferring the purchase price of
property, with respect to conditional sales, and under any title
retention agreement (but excluding trade accounts payable arising in
the ordinary course of business);
. our obligations with respect to letters of credit;
. all indebtedness of others of the type referred to in the four
preceding bullet points assumed by or guaranteed in any manner by us
or in effect guaranteed by us;
. all indebtedness of others of the type referred to in the five
preceding bullet points secured by a lien on any of our property or
assets; or
. renewals, extensions or refundings of any of the indebtedness
referred to in the preceding six bullet points unless, in the case of
any particular indebtedness, renewal, extension or refunding, under
the express provisions of the instrument creating or evidencing the
same or the assumption or guarantee of the same, or pursuant to which
the same is outstanding, such indebtedness or such renewal, extension
or refunding thereof is not superior in right of payment to the
subordinated debt securities.
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If we default in the payment of any distributions on any senior
indebtedness when it becomes due and payable after any applicable grace period,
then, unless and until the default is cured or waived or ceases to exist, we
cannot make a payment on account of or redeem or otherwise acquire the
subordinated debt securities issued under the subordinated indenture. The
subordinated indenture provisions described in this paragraph, however, do not
prevent us from making sinking fund payments on subordinated debt securities
acquired prior to the maturity of senior indebtedness or, in the case of
default, prior to such default and notice thereof. If there is any insolvency,
bankruptcy, liquidation or other similar proceeding relating to us, our
creditors or our property, then all senior indebtedness must be paid in full
before any payment may be made to any holders of subordinated debt securities.
Holders of subordinated debt securities must return and deliver any payments
received by them, other than in a plan of reorganization or through a
defeasance trust as described above, directly to the holders of senior
indebtedness until all senior indebtedness is paid in full.
The subordinated indenture does not limit the total amount of senior
indebtedness that may be issued. As noted above, we had no senior indebtedness
as of December 31, 2001. Since that date, however, we obtained a loan of $42.8
million to purchase SM&P Utility Resources, which loan would be senior
indebtedness.
CERTAIN COVENANTS IF SUBORDINATED DEBT SECURITIES ARE ISSUED TO THE
TRUST. If subordinated debt securities are issued to the trust or the trustee
of the trust in connection with the issuance of trust preferred securities of
the trust, we will covenant that we will not make the payments and
distributions described below if:
. an event of default has occurred under the subordinated indenture;
. an event of which we have actual knowledge occurs which, with the
giving of notice or the lapse of time, or both, would constitute an
event of default under the subordinated indenture and which we have
not taken reasonable steps to cure;
. we are in default with respect to our payment obligations under the
guarantees relating to the trust preferred securities; or
. we have elected to defer payments of interest on the related
subordinated debt securities by extending the interest payment period
and that deferral is continuing.
In these circumstances, we will not:
. declare or pay any dividends or distributions on, or redeem,
purchase, or make a liquidation payment with respect to, any of our
capital stock other than:
. dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, our common stock;
. transactions relating to our shareholders' rights plan;
. payments under the preferred securities guarantee;
. as a result of and only to the extent required in order to avoid
the issuance of fractional shares of capital stock following a
reclassification of our capital stock or the exchange or
conversion of one class or series of our capital stock for another
class or series of our capital stock; and
. the purchase of fractional share interests upon conversion or
exchange of our capital stock; or
. make any payment of principal, interest or any premium on, or repay
or repurchase or redeem any of our debt securities (including
guarantees) that rank equal with or junior to, the subordinated debt
securities.
In addition, if subordinated debt securities are issued in connection
with the issuance of trust preferred securities of the trust, we will agree:
. to maintain, directly or indirectly, 100% ownership of the trust
common securities, provided that certain successors permitted
pursuant to the indenture may succeed to our ownership of the common
securities;
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. not to voluntarily dissolve, wind up or liquidate the trust, except
. in connection with a distribution of the subordinated debt
securities to the holders of the trust preferred securities in
liquidation of the related trust; or
. in connection with specified mergers, consolidations or
amalgamations permitted by the amended and restated declaration of
trust; and
. to use our reasonable efforts to cause the related trust to remain
classified as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes.
EVENTS OF DEFAULT. The subordinated indenture provides that events of
default regarding any series of subordinated debt securities include the
following events that shall have occurred and be continuing:
. failure to pay required interest on the series of subordinated debt
securities for 30 days;
. failure to pay when due principal on the series of subordinated debt
securities;
. failure to make any required deposit or payment of any sinking fund
or analogous payment on the series of subordinated debt securities
when due;
. failure to perform, for 90 days after notice, any other covenant in
the subordinated indenture applicable to the series of subordinated
debt securities;
. certain events of bankruptcy or insolvency, whether voluntary or not;
and
. with respect to a series of subordinated debt securities issued to a
trust in connection with the issuance by the trust of trust preferred
securities, the trust is voluntarily or involuntarily dissolved,
wound up or terminated, except in connection with
. the distribution of the subordinated debt securities to the
holders of the common securities and the trust preferred
securities in liquidation of the trust;
. the redemption of all outstanding common securities and trust
preferred securities of the trust; and
. mergers, consolidation or amalgamations permitted by the declaration
of that trust.
If an event of default regarding subordinated debt securities of any
series should occur and be continuing, either the subordinated debt securities
trustee or the holders of at least 25% in total principal amount of outstanding
subordinated debt securities of such series may declare each subordinated debt
securities of that series immediately due and payable.
Holders of a majority in total principal amount of the outstanding
subordinated debt securities of any series will be entitled to control certain
actions of the subordinated debt securities trustee and to waive past defaults
regarding such series. The trustee generally will not be required to take any
action requested, ordered or directed by any of the holders of subordinated
debt securities, unless one or more of such holders shall have offered to the
trustee reasonable security or indemnity.
Before any holder of any series of subordinated debt securities may
institute action for any remedy, except payment on such holder's subordinated
debt securities when due, the holders of not less than 25% in principal amount
of the subordinated debt securities of that series outstanding must request the
subordinated debt securities trustee to take action. Holders must also offer
and give the subordinated debt securities trustee satisfactory security and
indemnity against liabilities incurred by the trustee for taking such action.
We are required to annually furnish the subordinated debt securities
trustee a statement as to our compliance with all conditions and covenants
under the subordinated indenture. The subordinated debt securities trustee is
required, within 90 days after the occurrence of a default with respect to a
series of subordinated debt
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securities, to give notice of all defaults affecting such series of
subordinated debt securities to each holder of such series of debentures.
However, the subordinated indenture provides that the subordinated debt
securities trustee may withhold notice to the holders of the subordinated debt
securities of any series of any default affecting such series, except payment
on holders' subordinated debt securities when due, if it considers withholding
notice to be in the interests of the holders of the subordinated debt
securities of such series.
MODIFICATION AND WAIVER. The subordinated indenture permits us and the
subordinated debt securities trustee to enter into supplemental indentures
without the consent of the holders of the subordinated debt securities to:
. establish the form and terms of any series of securities under the
subordinated indenture;
. secure the debentures with property or assets;
. evidence the succession of another corporation to us, and the
assumption by the successor corporation of our obligations, covenants
and agreements under the subordinated indenture;
. add covenants of Laclede for the benefit of the holders of the
subordinated debt securities;
. cure any ambiguity or correct or supplement any provision in the
subordinated indenture or any supplement to the subordinated
indenture, provided that no such action adversely affects the
interests of the holders of the subordinated debt securities; and
. evidence and provide for the acceptance of a successor trustee.
The subordinated indenture also permits us and the subordinated debt
securities trustee, with the consent of the holders of a majority in total
principal amount of the subordinated debt securities of all series then
outstanding and affected (voting as one class), to change in any manner the
provisions of the subordinated indenture or modify in any manner the rights of
the holders of the subordinated debt securities of each such affected series.
We and the trustee may not, without the consent of the holder of each
subordinated debt securities affected, enter into any supplemental indenture to:
. change the time of payment of the principal;
. reduce the principal amount of such subordinated debt securities;
. reduce the rate or change the time of payment of interest on such
subordinated debt securities;
. reduce any amount payable upon redemption of such subordinated debt
securities; or
. impair the right to institute suit for the enforcement of any payment
on any subordinated debt securities when due.
In addition, no such modification may reduce the percentage in principal
amount of the subordinated debt securities of the affected series, the consent
of whose holders is required for any such modification or for any waiver
provided for in the subordinated indenture.
Prior to the acceleration of the maturity of any subordinated debt
securities, the holders, voting as one class, of a majority in total principal
amount of the subordinated debt securities with respect to which a default or
event of default has occurred and is continuing, may, on behalf of the holders
of all such affected subordinated debt securities, waive any past default or
event of default and its consequences, except a default or event of default in
the payment of the principal or interest or in respect of a covenant or
provision of the applicable indenture or of any subordinated debt securities
that cannot be modified or amended without the consent of the holder of each
subordinated debt securities affected.
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SATISFACTION AND DISCHARGE. The subordinated indenture provides that, at
our option, we will be discharged from all obligations in respect of the
subordinated debt securities of a particular series then outstanding (except
for certain obligations to register the transfer of or exchange the
subordinated debt securities of such series, to replace stolen, lost or
mutilated subordinated debt securities of such series, to maintain paying
agencies and to maintain the trust described below) if we in each case
irrevocably deposit in trust with the relevant trustee money, and/or securities
backed by the full faith and credit of the United States that, through the
payment of the principal thereof and the interest thereon in accordance with
their terms, will provide money in an amount sufficient to pay all the
principal and interest on the subordinated debt securities of such series on
the stated maturities of such subordinated debt securities in accordance with
the terms thereof.
To exercise this option, we are required to deliver to the relevant
trustee an opinion of independent counsel to the effect that the exercise of
such option would not cause the holders of the subordinated debt securities of
such series to recognize income, gain or loss for United States federal income
tax purposes as a result of such defeasance, and such holders will be subject
to United States federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred.
DESCRIPTION OF COMMON STOCK
GENERAL
The following description of our common stock and the relevant provisions
of our articles of incorporation and bylaws are summaries. These summaries are
qualified by reference to (i) our articles of incorporation and bylaws that
have been previously filed with the SEC and are exhibits to the registration
statement of which this prospectus is a part and (ii) the applicable provisions
of The Missouri General and Business Corporation Law.
Under our articles of incorporation, we are authorized to issue up to 75
million shares of capital stock, consisting of 70 million shares of common
stock, $l.00 par value per share, and 5 million shares of preferred stock, $25
par value per share. At March 1, 2002, 18,877,987 shares of common stock and no
shares of preferred stock were issued and outstanding.
DIVIDEND RIGHTS AND LIMITATIONS
Subject to any rights of the holders of our preferred stock, if any is
issued, the holders of our common stock are entitled to receive such dividends
as may be declared by our board of directors from time to time out of funds
legally available therefor.
LIQUIDATION RIGHTS
In the event of any dissolution, liquidation or winding up of our affairs
voluntarily or involuntarily, the holders of our common stock will be entitled
to receive the remainder, if any, of our assets after the payment of all our
debts and liabilities and after the payment in full of any preferential amounts
to which holders of any preferred stock may be entitled.
VOTING RIGHTS
Except as otherwise provided by law and subject to the voting rights of
holders of our preferred stock that may be issued in the future, all voting
power rests exclusively in the holders of shares of our common stock. Each
holder of our common stock is entitled to one vote per share on all matters
submitted to a vote at a meeting of shareholders, including the election of
directors. The common stock shall vote together as a single class. The holders
of our common stock are not entitled to cumulate votes for the election of
directors. At annual and special meetings of shareholders, the holders of a
majority of the outstanding shares of common stock, present in person or by
proxy, constitute a quorum.
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MISCELLANEOUS
The holders of our common stock have no preemptive or preferential rights
to subscribe for or purchase any part of any new or additional issue of stock
or securities convertible into stock. The outstanding shares of our common
stock and the shares of common stock sold hereunder will be, upon payment for
them, fully paid and non-assessable. Our common stock does not contain any
redemption provisions or conversion rights.
TRANSFER AGENT AND REGISTRAR
UMB Bank, n.a., acts as transfer agent and registrar for our common
stock. They are at 928 Grand Boulevard, Kansas City, Missouri 64106. You can
reach them at 1-800-884-4225.
CERTAIN ANTI-TAKEOVER MATTERS
It is not the intent of our board of directors to discourage legitimate
offers to enhance shareholder value. Provisions of our articles of
incorporation or bylaws, however, may have the effect of discouraging
unilateral tender offers or other attempts to acquire our business. These
provisions include the classification of our directors with three-year
staggered terms, the requirement that director nominations by shareholders be
made not less than 60 nor more than 90 days prior to the date of the
shareholder meeting, and the ability of the board, without further action of
the holders of common stock, to issue one or more series of preferred stock
from time to time, which may have terms more favorable than the common stock,
including, among other things, preferential dividend, liquidation and
redemption rights.
These provisions might discourage a potentially interested purchaser from
attempting a unilateral takeover bid for us on terms that some shareholders
might favor. If these provisions discourage potential takeover bids, they might
limit the opportunity for our shareholders to sell their shares at a premium.
In addition, our articles of incorporation do not provide for cumulative
voting in the election of directors. Cumulative voting permits shareholders to
multiply their number of votes by the total number of directors being elected
and to cast their total number of votes for one or more candidates in each
shareholder's discretion.
Our bylaws also include provisions setting forth specific conditions and
restrictions under which business may be transacted at meetings of
shareholders. For example, no business may be transacted at a meeting unless it
is:
. specified in the notice of meeting,
. otherwise brought before the meeting by or at the direction of the
board of directors or a committee thereof, or
. brought before the meeting by a shareholder of record who provided
notice and other specified information in writing to the corporate
secretary not less than 60 nor more than 90 days prior to the meeting.
These provisions may create an anti-takeover effect by placing restrictions on
the content of the issues to be discussed at a shareholder meeting.
In addition, the issuance of authorized but unissued shares of our common
or preferred stock may have an anti-takeover effect. These shares might be
issued by our board of directors without shareholder approval in transactions
that might prevent or render more difficult or costly the completion of a
takeover transaction, for example, by diluting voting or other rights of the
proposed acquiror. In this regard, our articles of incorporation grant the
board of directors broad powers to establish the rights and preferences of the
authorized but unissued preferred stock, one or more series of which could be
issued entitling holders to vote separately as a class on any
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proposed merger or consolidation, to convert the stock into shares of our
common stock or possibly other securities, to demand redemption at a specified
price under prescribed circumstances related to a change in control or to
exercise other rights designed to impede a takeover.
SHAREHOLDER PROTECTION STATUTES
We are subject to Missouri corporate statutes that restrict the voting
rights of a person who acquires 20% or more of our outstanding common stock as
well as that person's ability to enter into a business combination with us.
The business combination statute restricts transactions between us and a
beneficial owner of 20% or more of our voting stock. A business combination is
defined in the statute as any of the following transactions with or proposed by
an interested shareholder: merger, consolidation, disposition of assets,
significant securities issuance, liquidation, dissolution, reclassification of
securities, loan, advance, guarantee, pledge or tax credit. Generally the
statute prohibits a business combination between us and an interested
shareholder for five years following the date the interested shareholder
acquired 20% or more of the voting stock, unless the business combination or
the interested shareholder's stock acquisition was approved by our board of
directors on or prior to that date. An interested shareholder may enter into a
business combination with us if it is approved by a majority of the outstanding
shares not owned by the interested shareholder or if it meets certain
consideration requirements.
The control share acquisition statute provides that shares acquired that
would cause the acquiring person's aggregate voting power to meet or exceed any
of three thresholds (20%, 33 1/3% or a majority) have no voting rights unless
such voting rights are granted by a majority vote of the holders of the shares
not owned by the acquiring person or any of our officers or directors or
employee-directors. The statute sets out a procedure whereby the acquiring
person may call a special shareholders meeting for the purpose of considering
whether voting rights should be conferred. Acquisitions as part of a merger or
exchange offer arising out of an agreement to which we are a party are exempt
from the statute.
Application of the business combination and control share acquisitions
statutes are automatic unless we take steps to "opt out" of their application.
We have not "opted out" of the statutes.
SHAREHOLDER RIGHTS PLAN
On August 23, 2001, our board of directors adopted a shareholder rights
plan and declared a dividend of one preferred share purchase right for each
outstanding share of our common stock. The plan is designed to assure
shareholders of fair and equal treatment in the event of a proposed takeover.
Each right entitles the registered holder to purchase from us one one-hundredth
of a share of Series A Junior Participating Preferred stock, par value $25.00
per share, at an exercise price of $90 per one one-hundredth of a share,
subject to adjustment upon the occurrence of certain dilutive events. The
rights will become exercisable and begin to trade separately from the common
stock only if a person or group acquires 20% or more of our common stock or
announces a tender offer for 20% or more of our common stock. If a person or
group acquires 20% or more of our common stock, each right will entitle its
holder to purchase, at the right's then-current exercise price, a number of
shares of our common stock having a market value of twice the exercise price.
In addition, if we are acquired in a merger or other business combination
transaction, each right will entitle its holder to purchase, at the right's
then-current exercise price, a number of shares of the acquiring company's
common stock having a market value of twice the exercise price. The acquiring
person or group will not be entitled to exercise these rights.
Our board of directors at any time prior to any person or group acquiring
20% or more of our common stock may (i) redeem the rights at $.01 per right or
(ii) exchange the rights at an exchange rate of one share of Common Stock for
each right exchanged.
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The rights were issued as a dividend payable October 1, 2001, to
shareholders of record on that date. The rights will expire on October 1, 2011.
One right will accompany each new share of our common stock issued prior to
such expiration date. The rights do not have voting or dividend rights and
until they become exercisable, have no dilutive effect on our per-share
earnings.
We have 700,000 shares of preferred stock initially reserved for issuance
upon exercise of the rights. There is no junior participating preferred stock
issued or outstanding as of the date of this prospectus.
The description and terms of the rights are set forth in an agreement
between us and UMB Bank, n.a., as rights agent. The preceding summary of the
rights and the shareholder rights plan is qualified in its entirety by
reference to the rights agreement and the description thereof each contained in
our registration statement on Form 8-A filed September 6, 2001, which is
incorporated by reference into this prospectus.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and us to sell to the holders, a specified number
of shares of our common stock at a future date or dates. The price per share of
common stock and the number of shares of common stock may be fixed at the time
the stock purchase contracts are issued or may be determined by reference to a
specific formula set forth in the stock purchase contracts. The stock purchase
contracts may be issued separately or as part of units, often known as stock
purchase units, consisting of a stock purchase contract and beneficial
interests in:
. senior debt securities or subordinated debt securities, or
. debt obligations of third parties, including U.S. Treasury securities,
securing the holder's obligations to purchase the common stock under the stock
purchase contracts. The stock purchase contracts may require us to make
periodic payments to the holders of the stock purchase units or vice versa, and
these payments may be unsecured or prefunded on some basis. The stock purchase
contracts may require holders to secure their obligations under those contracts
in a specified manner.
The applicable prospectus supplement will describe the terms of the stock
purchase contracts or stock purchase units, including, if applicable,
collateral or depositary arrangements relative to the stock purchase contracts
or stock purchase units.
DESCRIPTION OF TRUST PREFERRED SECURITIES
GENERAL
The trust may issue, on one or more occasions, trust preferred securities
having terms described in the prospectus supplement relating thereto. The
amended and restated trust agreement of the trust will authorize the
establishment of no more than one series of trust preferred securities, having
such terms, including distributions, redemption, voting, liquidation rights and
such other preferred, deferred or other special rights or such rights or
restrictions as shall be set forth therein or otherwise established by the
trustees pursuant thereto.
You should read the prospectus supplement relating to the trust preferred
securities for specific terms, including:
. the distinctive designation and the number of trust preferred
securities to be offered, which will represent undivided beneficial
interests in the assets of the trust;
. the annual distribution rate and the dates or date upon which such
distributions will be paid, provided, however, distributions on the
trust preferred securities will be paid quarterly in arrears to
holders of trust preferred securities as of a record date on which
the trust preferred securities are outstanding;
. whether distributions on trust preferred securities would be deferred
during any deferral of interest payments on the debt securities,
provided, however, that no such deferral, including extensions, if
any, may exceed 20 consecutive quarters nor extend beyond the stated
maturity date of the debt securities owned by the trust, and at the
end of any such deferrals, we will make all interest payments then
accrued or deferred and unpaid (including any compounded interest);
. the amount of any liquidation preference;
. the obligation, if any, of the trust to redeem trust preferred
securities as a result of our exercise of an option to redeem the
corresponding debt securities and the price or prices at which, the
period or
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periods within which and the terms and conditions upon which trust
preferred securities will be purchased or redeemed, in whole or in
part, under such obligation;
. the period or periods within which and the terms and conditions, if
any, including the price or prices or the rate or rates of conversion
or exchange and the terms and conditions of any adjustments, upon
which the trust preferred securities shall be convertible or
exchangeable at the option of the holder of the trust preferred
securities for other property or cash;
. the voting rights, if any, of the trust preferred securities as
provided in the amended and restated declaration of trust or set
forth under our guarantee (as defined below) as well as those
required by law;
. the additional payments, if any, that the trust will pay as a
distribution as necessary so that the net amounts received by the
trust and distributable to the holders of the trust preferred
securities, after all taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) have been
paid will not be less than the amount that would have been received
and distributed by the trust, and the amount the holders of the trust
preferred securities would have received, had no such taxes, duties,
assessments or governmental charges been imposed;
. the terms and conditions, if any, upon which the debt securities
owned by the trust may be distributed to holders of trust preferred
securities; and
. any other relative rights, powers, preferences, privileges,
limitations or restrictions of the trust preferred securities not
inconsistent with the amended and restated trust agreement or
applicable law.
All trust preferred securities offered hereby will be irrevocably
guaranteed by us, on a subordinated basis and to the extent set forth below
under "The Guarantee." Any federal income tax considerations applicable to any
offering of the trust preferred securities will be described in the prospectus
supplement relating thereto. The total number of trust preferred securities
that the trust shall have authority to issue will be determined under the terms
of the amended and restated trust agreement.
EFFECT OF OBLIGATIONS UNDER THE DEBT SECURITIES AND THE GUARANTEES
The sole purpose of the trust is to issue the trust common securities and
the trust preferred securities evidencing undivided beneficial interests in the
assets of the trust, to invest the proceeds from such issuance and sale to
acquire directly the debt securities from us and to hold and dispose of the
debt securities in accordance with the amended and restated declaration of
trust.
As long as payments of interest and other payments are made when due on
the debt securities, those payments will be sufficient to cover distributions
and payments due on the common securities and the trust preferred securities
because of the following factors:
. the total principal amount of debt securities will be equal to the
sum of the total stated liquidation amount of the trust common
securities and the trust preferred securities;
. the interest rate and the interest and other payment dates on the
debt securities will match the distribution rate and distribution and
other payment dates for the trust common securities and the trust
preferred securities;
. we will pay all, and the trust shall not be obligated to pay,
directly or indirectly, its costs, expenses, debt and obligations
(other than with respect to the trust common securities and the trust
preferred securities); and
. our trustees will not take or cause or permit the trust to, among
other things, engage in any activity that is not consistent with the
purposes of the trust.
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Payments of distributions (to the extent funds for distributions are
available) and other payments due on the trust preferred securities (to the
extent funds for other payments are available) are guaranteed by us as and to
the extent discussed under "The Guarantee" below. If we do not make interest
payments on the debt securities purchased by the trust, the trust likely will
not have sufficient funds to pay distributions on the trust preferred
securities. Our guarantee, which is for purposes of ensuring that the trust
performs its obligations to pay distributions on the trust preferred
securities, does not apply to any payment of distributions unless and until the
trust has sufficient funds for the payment of distributions and other payments
on the trust preferred securities. The trust will have sufficient funds only if
and to the extent that we have made a payment of interest or principal on the
debt securities held by the trust as its sole assets. Our guarantee, when taken
together with our obligations under the debt securities and the related
indenture and our obligations under the amended and restated trust agreement,
including our obligations to pay costs, expenses, debts and liabilities of the
trust (other than with respect to the common securities and the trust preferred
securities), provides a full and unconditional guarantee of amounts payable in
respect of the trust preferred securities.
If we fail to make interest or other payments on the debt securities when
due (taking account of any extension period), the holders of the trust
preferred securities may direct the property trustee to enforce its rights
under the debt securities. If the property trustee fails to enforce its rights
under the debt securities, a holder of trust preferred securities may, to the
fullest extent permitted by applicable law, institute a legal proceeding
against us to enforce the property trustee's rights under the debt securities
without first instituting any legal proceeding against the property trustee or
any other person or entity. Notwithstanding the foregoing, if an event of
default has occurred and is continuing under the trust agreement, and that
event is attributable to our failure to pay interest or principal on the debt
securities on the date such interest or principal is otherwise payable (or in
the case of redemption on the redemption date), then a holder of trust
preferred securities may institute legal proceedings directly against us to
obtain payment. If we fail to make payments under the guarantee, the guarantee
provides a mechanism whereby the holders of the trust preferred securities may
direct the guarantee trustee to enforce its rights thereunder. Any holder of
trust preferred securities may institute a legal proceeding directly against us
to enforce the guarantee trustee's rights under the guarantee without first
instituting a legal proceeding against the trust, the guarantee trustee, or any
other person or entity.
DESCRIPTION OF THE GUARANTEES
GENERAL
The following is a summary of information concerning the guarantee that
will be executed and delivered by us for the benefit of the holders, from time
to time, of the trust preferred securities. The guarantee will be qualified as
an indenture under the Trust Indenture Act of 1939. The Bank of New York will
act as indenture trustee under the guarantee for the purpose of compliance with
the provisions of the Trust Indenture Act of 1939. This summary is not complete
and is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the guarantee, which is filed as an exhibit to the
registration statement of which this prospectus forms a part.
We will irrevocably agree to pay in full, on a subordinated basis to the
extent set forth herein, the guarantee payments (as described below) to the
holders of the trust preferred securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the trust may have or assert,
other than the defense of payment. The following payments with respect to the
trust preferred securities, to the extent not paid by or on behalf of the
trust, will be subject to the guarantee:
(1)any accumulated and unpaid distributions required to be paid on the
trust preferred securities, to the extent that the trust has funds on
hand available therefor at such time;
(2)the redemption price with respect to any trust preferred securities
called for redemption to the extent that the trust has funds on hand
available therefor at such time; or
25
(3)upon a voluntary or involuntary dissolution, winding up or
liquidation of the trust (unless the debt securities are distributed
to holders of the trust preferred securities), the lesser of (a) the
liquidation distribution, to the extent that the trust has funds on
hand available for distribution at such time, and (b) the amount of
assets of the trust remaining available for distribution to holders
of trust preferred securities after the satisfaction of liabilities
of creditors of the trust, if any.
Our obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by us to the holders of the trust preferred
securities or by causing the trust to pay such amount to such holders.
Our guarantee will be an irrevocable guarantee on a subordinated basis of
the trust's obligations under the trust preferred securities, but will apply
only to the extent that the trust has funds sufficient to make such payments,
and is not a guarantee of collection. If we do not make interest payments on
the debt securities held by the trust, the trust will not be able to pay
distributions on the trust preferred securities and will not have funds legally
available therefor.
We have, through the guarantee, the trust agreement, the subordinated
debt securities and the indentures, taken together, fully, irrevocably and
unconditionally guaranteed all of the trust's obligations under the trust
preferred securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
trust's obligations under the trust preferred securities.
We have also agreed separately to irrevocably and unconditionally
guarantee the obligations of the trust with respect to the trust common
securities to the same extent as the guarantee of the trust preferred
securities, except that upon the occurrence and during the continuation of an
event of default, holders of trust preferred securities shall have priority
over holders of common securities with respect to distributions and payments on
liquidation, redemption or otherwise.
OUR COVENANTS
We will covenant that we will not:
(1)declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any
of our capital stock; or
(2)make any payment of principal or interest or premium, if any, on or
repay or repurchase or redeem any of our debt securities (including
guarantees of indebtedness for money borrowed) that rank equal with
or junior to the debt securities owned by the trust (other than (a)
any dividend, redemption, liquidation, interest, principal or
guarantee payment by us where the payment is made by way of
securities (including capital stock) that rank equal with or junior
to the securities on which such dividend, redemption, interest,
principal or guarantee payment is being made, (b) payments under our
guarantee of the trust preferred securities and the trust common
securities, (c) as a result of a reclassification of our capital
stock or the exchange or conversion of one series or class of our
capital stock for another series or class of our capital stock and
(d) the purchase of fractional interests in shares of our capital
stock under the conversion or exchange provisions of that capital
stock or the security being converted or exchanged);
if at such time (A) there shall have occurred any event of which we have actual
knowledge that (i) with the giving of notice or the lapse of time, or both,
would constitute an event of default under the indenture and (ii) in respect of
which we shall not have taken reasonable steps to cure; (B) we shall be in
default with respect to our payment of any obligations under the guarantee; or
(C) we shall have given notice of our selection of an extension period as
provided in the indenture with respect to the debt securities and shall not
have rescinded that notice, or that extension period, or any extension thereof,
shall be continuing.
26
We also will covenant to:
(1)maintain directly or indirectly 100% ownership of the trust common
securities, provided that certain successors that are permitted under
the indenture may succeed to our ownership of the common securities,
(2)not voluntarily dissolve, wind up or liquidate the trust, except:
. in connection with a distribution of the debt securities to the
holders of the trust preferred securities in liquidation of the
trust or
. in connection with certain mergers, consolidations or
amalgamations permitted by the amended and restated trust
agreement, and
(3)use our reasonable efforts, consistent with the terms and provisions
of the trust agreement, to cause the trust to remain classified as a
grantor trust and not as an association taxable as a corporation for
United States federal income tax purposes.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely
affect the rights of holders of the trust preferred securities (in which case
no vote will be required), our guarantee of the trust preferred securities may
not be amended without the prior approval of the holders of a majority in total
liquidation amount of such outstanding trust preferred securities. All
guarantees and agreements contained in the guarantee shall bind our successors,
assigns, receivers, trustees and representatives and shall inure to the benefit
of the holders of the trust preferred securities then outstanding.
TERMINATION OF THE GUARANTEE
Our guarantee of the trust preferred securities will terminate and be of
no further force and effect upon full payment of the redemption price of the
trust preferred securities, upon full payment of the amounts payable upon
liquidation of the trust or upon distribution of the debt securities to the
holders of the trust preferred securities in exchange for all of the trust
preferred securities. The guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of trust preferred
securities must restore payment of any sums paid under such trust preferred
securities or the guarantee.
EVENTS OF DEFAULT
An event of default under our guarantee of the trust preferred securities
will occur upon our failure to perform any of our payment or other obligations
thereunder. The holders of a majority in total liquidation amount of the trust
preferred securities 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 the guarantee or to direct the exercise of any trust or power
conferred upon the guarantee trustee under the guarantee.
If the guarantee trustee fails to enforce our guarantee of the trust
preferred securities, any holder of the trust preferred securities may
institute a legal proceeding directly against us to enforce its rights under
the guarantee without first instituting a legal proceeding against the trust,
the guarantee trustee or any other person or entity. In addition, any record
holder of trust preferred securities shall have the right, which is absolute
and unconditional, to proceed directly against us to obtain guarantee payments,
without first waiting to determine if the guarantee trustee has enforced the
guarantee or instituting a legal proceeding against the trust, the guarantee
trustee or any other person or entity. We have waived any right or remedy to
require that any action be brought just against the trust, or any other person
or entity before proceeding directly against us.
27
STATUS OF THE GUARANTEE
Our guarantee of the trust preferred securities will constitute our
unsecured obligation and will rank:
(1)equal to or subordinate and junior in right of payment, as described
in the applicable prospectus supplement, to all our other
liabilities, as applicable,
(2)equal with the most senior preferred stock hereafter issued by us and
with any guarantee now or hereafter entered into by us in respect of
any preferred or preference stock of any of our affiliates, and
(3)senior to our common stock.
Our guarantee of the trust preferred securities 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 guarantee without first instituting a legal proceeding against
any other person or entity). The guarantee will be held for the benefit of the
holders of the trust preferred securities. The guarantee will not be discharged
except by payment of the guaranteed payments in full to the extent not paid by
the trust or upon distribution of the debt securities to the holders of the
trust preferred securities. The guarantee does not place a limitation on the
amount of additional indebtedness that may be incurred by us.
BOOK-ENTRY SECURITIES
Unless otherwise specified in the applicable prospectus supplement, we
will issue securities, other than our common stock, to investors in the form of
one or more book-entry certificates registered in the name of a depositary or a
nominee of a depositary. Unless otherwise specified in the applicable
prospectus supplement, the depositary will be DTC. We have been informed by DTC
that its nominee will be Cede & Co. Accordingly, Cede is expected to be the
initial registered holder of all securities that are issued in book-entry form.
No person that acquires a beneficial interest in securities issued in
book-entry form will be entitled to receive a certificate representing those
securities, except as set forth in this prospectus or in the applicable
prospectus supplement. Unless and until definitive securities are issued under
the limited circumstances described below, all references to actions by holders
or beneficial owners of securities issued in book-entry form will refer to
actions taken by DTC upon instructions from its participants, and all
references to payments and notices to holders or beneficial owners will refer
to payments and notices to DTC or Cede, as the registered holder of such
securities.
DTC has informed us that it is:
. a limited-purpose trust company organized under New York banking laws;
. a "banking organization" within the meaning of the New York banking
laws;
. 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 under the Securities Exchange Act.
DTC has also informed us that it was created to:
. hold securities for "participants;" and
. facilitate the computerized settlement of securities transactions
among participants through computerized electronic book-entry changes
in participants' accounts, thereby eliminating the need for the
physical movement of securities certificates.
28
Participants have accounts with DTC and include securities brokers and
dealers, banks, trust companies and clearing corporations. Indirect access to
the DTC system also is available to indirect participants such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
Persons that are not participants or indirect participants but desire to
buy, sell or otherwise transfer ownership of or interests in securities may do
so only through participants and indirect participants. Under the book-entry
system, beneficial owners may experience some delay in receiving payments as
payments will be forwarded by our agent to Cede, a nominee for DTC. These
payments will be forwarded to DTC's participants, which thereafter will forward
them to indirect participants or beneficial owners. Beneficial owners will not
be recognized by the applicable registrar, transfer agent, trustee or
depositary as registered holders of the securities entitled to the benefits of
the certificate, the indenture or any deposit agreement. Beneficial owners that
are not participants will be permitted to exercise their rights as an owner
only indirectly through participants and, if applicable, indirect participants.
Under the current rules and regulations affecting DTC, DTC will be
required to make book-entry transfers of securities among participants and to
receive and transmit payments to participants. Participants and indirect
participants with whom beneficial owners of securities have accounts are also
required by these rules to make book-entry transfers and receive and transmit
such payments on behalf of their respective account holders.
Because DTC can act only on behalf of participants who, in turn act, only
on behalf of other participants or indirect participants, and on behalf of
certain banks, trust companies and other persons approved by it, the ability of
a beneficial owner of securities issued in book-entry form to pledge those
securities to persons or entities that do not participate in the DTC system may
be limited due to the unavailability of physical certificates for the
securities.
DTC has advised us that it will take any action permitted to be taken by
a registered holder of any securities under the certificate, the indenture or
any deposit agreement only at the direction of one or more participants to
whose accounts with DTC the securities are credited.
According to DTC, it has provided information with respect to DTC to its
participants and other members of the financial community for informational
purposes only and is not intended to serve as a representation, warranty or
contract modification of any kind.
Unless otherwise specified in the applicable prospectus supplement, a
book-entry security will be exchangeable for definitive securities registered
in the names of persons other than DTC or its nominee only if:
. DTC notifies us that it is unwilling or unable to continue as
depositary for the book-entry security or DTC ceases to be a clearing
agency registered under the Securities Exchange Act at a time when
DTC is required to be so registered; or
. we execute and deliver to the applicable registrar, transfer agent,
trustee and/or depositary an order complying with the requirements of
the certificate, the indenture or any deposit agreement that the
book-entry security will be so exchangeable.
Any book-entry security that is exchangeable in accordance with the
preceding sentence will be exchangeable for securities registered in such names
as DTC directs.
If one of the events described in the immediately preceding paragraph
occurs, DTC is generally required to notify all participants of the
availability through DTC of definitive securities. Upon surrender by DTC of the
book-entry security representing the securities and delivery of instructions
for re-registration, the registrar, transfer agent, trustee or depositary, as
the case may be, will reissue the securities as definitive securities. After
reissuance of the securities, those persons will recognize the beneficial
owners of such definitive securities as registered holders of securities.
29
Except as described above:
. a book-entry security may not be transferred except as a whole
book-entry security by or among DTC, a nominee of DTC and/or a
successor depositary appointed by us; and
. DTC may not sell, assign or otherwise transfer any beneficial
interest in a book-entry security unless the beneficial interest is
in an amount equal to an authorized denomination for the securities
evidenced by the book-entry security.
None of us, the trustees, any registrar and transfer agent or any
depositary, or any agent of any of them, will have any responsibility or
liability for any aspect of DTC's or any participant's records relating to, or
for payments made on account of, beneficial interests in a book-entry security.
PLAN OF DISTRIBUTION
GENERAL
We or the trust may sell the offered securities: through the solicitation
of proposals of underwriters or dealers to purchase the offered securities;
through underwriters or dealers on a negotiated basis; through agents; or
directly to a limited number of purchasers or to a single purchaser.
The prospectus supplement with respect to each offering of securities
will set forth the terms of such offering, including:
. the name or names of any underwriters, dealers or agents;
. the purchase price of the offered securities and the proceeds to us
and/or the trust from their sale;
. any underwriting discounts and commissions and other items
constituting underwriters' compensation;
. any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers; and
. any securities exchange on which the offered securities may be listed.
Any initial public offering price, discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
UNDERWRITERS
If underwriters are used in the sale, they will acquire the offered
securities for their own account and may resell them on one or more occasions
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. The
offered securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of securities will be named in
the prospectus supplement relating to such offering and, if an underwriting
syndicate is used, the names of the managing underwriter or underwriters will
be set forth on the cover of that prospectus supplement. Unless otherwise set
forth in the prospectus supplement relating thereto, the obligations of the
underwriters to purchase the offered securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all
the offered securities if any are purchased.
DEALERS
If dealers are utilized in the sale of offered securities, we and/or the
trust will sell such offered securities to the dealers as principals. The
dealers may then resell such offered securities to the public at varying prices
to be determined by such dealers at the time of resale. The names of the
dealers and the terms of the transaction will be set forth in the related
prospectus supplement.
30
AGENTS
The offered securities may be sold directly by us and/or the trust or
through agents designated by us and/or the trust from time to time. Any agent
involved in the offer or sale of the offered securities in respect to which
this prospectus is delivered will be named, and any commissions payable by us
and/or the trust to such agent will be set forth, in the related prospectus
supplement. Unless otherwise indicated in the prospectus supplement, any such
agent will be acting on a best-efforts basis for the period of its appointment.
DIRECT SALES
The offered securities may be sold directly by us and/or the trust to
institutional investors or others, who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resale thereof. The terms
of any such sales will be described in the related prospectus supplement.
INDEMNIFICATION
Agents, dealers and underwriters and the persons who control them may be
entitled under agreements with us and/or the trust to indemnification by us
and/or the trust against certain civil liabilities, including liabilities under
the Securities Act, or to contribution with respect to payments which these
agents, dealers or underwriters may be required to make in respect thereof.
Agents, dealers and underwriters may be customers of, engage in transactions
with, or perform services for us and/or the trust in the ordinary course of
business.
REMARKETING
The offered securities may also be offered and sold, if so indicated in
the applicable prospectus supplement, in connection with a remarketing upon
their purchase, in accordance with a redemption or repayment under their terms,
or otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for us and/or the trust. Any remarketing
firm will be identified and the terms of its agreement, if any, with its
compensation will be described in the applicable prospectus supplement.
Remarketing firms may be deemed to be underwriters, as such term is defined in
the Securities Act, in connection with the offered securities they remarket.
Remarketing firms may be entitled under agreements that may be entered into
with us and/or the trust to indemnification or contribution by us and/or the
trust against certain civil liabilities, including liabilities under the
Securities Act, and may be customers of, engage in transactions or perform
services for us and our subsidiaries in the ordinary course of business.
NO ASSURANCE OF LIQUIDITY
The offered securities may or may not be listed on a national securities
exchange. You should read the prospectus supplement for a discussion of this
matter. We cannot assure you there will be a market for any of the offered
securities.
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LEGAL OPINIONS
Opinions as to the legality of certain of our offered securities will be
rendered for us by Thompson Coburn LLP, St. Louis, Missouri. Certain matters of
Delaware law relating to the validity of the trust preferred securities will be
passed upon on behalf of the trust by Richards, Layton & Finger, P.A.,
Wilmington, Delaware, special Delaware counsel to us and the trust. Certain
United States federal income taxation matters may be passed upon for us by
Thompson Coburn LLP, special tax counsel to us and to the trust. Certain legal
matters with respect to the offered securities will be passed upon for the
underwriters by Pillsbury Winthrop LLP, New York, New York.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this prospectus by reference from our Annual Report on
Form 10-K for the year ended September 30, 200l have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm, given on the authority of said firm as experts
in auditing and accounting.
32
================================================================================
1,800,000 TRUST PREFERRED SECURITIES
LACLEDE CAPITAL TRUST I
% TRUST ORIGINATED PREFERRED SECURITIES/SM/ ("TOPRS/SM/")
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
[LOGO] The Laclede Group
------------------------------
PROSPECTUS SUPPLEMENT
------------------------------
MERRILL LYNCH & CO.
U.S. BANCORP PIPER JAFFRAY
, 2002
/SM /"Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
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