-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ADWIBpexcY8q7Wvvxk8MPtTgrG9s0GQE8IrNWJS0Vq1mAcLlxBvwAAuxx9lGOETN KpISv4gX9W2zaWZU24WgIA== 0000950130-99-001441.txt : 19990316 0000950130-99-001441.hdr.sgml : 19990316 ACCESSION NUMBER: 0000950130-99-001441 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19990315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LACLEDE GAS CO CENTRAL INDEX KEY: 0000057183 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 430368139 STATE OF INCORPORATION: MO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-74423 FILM NUMBER: 99565316 BUSINESS ADDRESS: STREET 1: 720 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 BUSINESS PHONE: 3143420500 MAIL ADDRESS: STREET 1: 720 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on March 15, 1999 Registration No. 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- FORM S-3 REGISTRATION STATEMENT Under The Securities Act of 1933 --------------- LACLEDE GAS COMPANY (Exact name of Registrant as specified in its charter) --------------- Missouri 43-0368139 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 720 Olive Street, St. Louis, Missouri 63101, 314-342-0500 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) D. H. Yaeger, G. T. McNeive, Jr., or M. C. Kullman Laclede Gas Company, 720 Olive Street, St. Louis, Missouri 63101, 314-342-0500 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: GERALD T. McNEIVE, JR., ESQ. TODD W. ECKLAND, ESQ. MARY C. KULLMAN, ESQ. Winthrop, Stimson, Putnam & Roberts Laclede Gas Company One Battery Park Plaza 720 Olive Street New York, New York 10004-1490 St. Louis, Missouri 63101 (212) 858-1000 (314) 342-0500 Fax: (212) 858-1500 Fax: (314) 421-1979
--------------- Approximate date of commencement of proposed sale to the public: as soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [_] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
Proposed Proposed maximum Title of each class of Amount to maximum aggregate Amount of securities to be be offering price offering registration registered registered(1) per share(2) price(2) fee - ----------------------------------------------------------------------------------- Common Stock, $1.00 per 1,250,000 share par value(3)..... shares $22.41 $28,012,500 $7,787.48 - -----------------------------------------------------------------------------------
- ------------------------------------------------------------------------------- (1) Includes 150,000 shares subject to the Underwriters' over-allotment option. (2) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457 under the Securities Act. The average of the high and low prices for the Registrant's Common Stock reported on the New York Stock Exchange on March 10, 1999 was $22.41 per share. (3) Includes a Common Stock Purchase Right attached to each share of Common Stock, which, prior to the occurrence of certain events, will not be evidenced separately from the Common Stock. --------------- The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission acting pursuant to such section 8(a) may determine. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +The information in this prospectus is not complete and may be changed. We may + +not sell or accept offers to buy these securities before the registration + +statement filed with the Securities and Exchange Commission is effective. + +This prospectus is not an offer to sell these securities and is not + +soliciting an offer to buy these securities in any state where the offer or + +sale is not permitted. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED MARCH 15, 1999 PROSPECTUS 1,100,000 Shares Laclede Gas Company Common Stock $1.00 Par Value ----------- Laclede Gas Company, a Missouri corporation organized in 1857, is a local gas distribution public utility. Our service area includes the City of St. Louis, St. Louis County, and parts of eight other counties in eastern Missouri. We are offering 1,100,000 shares of common stock. Our shares are listed on the New York and Chicago Stock Exchanges under the symbol "LG." On March 11, 1999, the last reported sale price of our common stock on the New York Stock Exchange was $22 5/8 per share.
Per Share Total --------- ----- Public Offering Price............................... $ $ Underwriting Discount............................... $ $ Proceeds, before expenses, to Laclede Gas Company... $ $
----------- The underwriters may also purchase up to an additional 150,000 shares from us at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The shares of common stock will be ready for delivery in New York, New York on or about , 1999. ----------- Merrill Lynch & Co. A.G. Edwards & Sons, Inc. This Prospectus is dated , 1999. TABLE OF CONTENTS
Page ---- Where You Can Find More Information ....................................... 1 Summary ................................................................... 2 Service Area and Transmission Pipelines ................................... 4 Use of Proceeds ........................................................... 5 Laclede Gas Company ....................................................... 5 Price Range of Common Stock and Dividends ................................. 9 Description of Common Stock ............................................... 10 Underwriting .............................................................. 14 Legal Opinions ............................................................ 16 Experts ................................................................... 16
---------------- FORWARD-LOOKING STATEMENTS Certain statements in this prospectus (other than the financial statements and other statements of historical fact) are forward-looking statements made based upon our expectations and beliefs concerning future developments and their potential effect on us. These forward-looking statements may be identified by the use of such terms as "anticipate," "believe," "estimate," "expect," "intend," "plan," "seek" and similar expressions. Future developments may not be in accordance with our expectations or beliefs and the effect of future developments on us may not be those we anticipated. Among the factors that may cause our actual results to differ materially from those contemplated in any forward-looking statements are: . weather conditions and catastrophic events . changes in transportation and gas supply costs or availability . regulatory actions and initiatives of federal and state regulatory agencies (including those affecting financings, allowed rates of return, incentive regulation, industry and rate structure, purchase gas adjustment provisions, franchise renewal and environmental or safety requirements, as well as the possibility of any such actions and initiatives being made on a retroactive basis) . the effects of any industry or corporate restructuring . conservation efforts of our customers . economic factors such as changes in the conditions of capital markets, interest rates and rates of inflation . inability to retain existing customers or to attract new customers . our ability to obtain funds from operations or the sale of debt or equity to finance necessary capital expenditures and other investments . employee work force issues . statutory or tax changes . changes in accounting standards and . the effectiveness of Year 2000 computer system remediation efforts by third parties and unknown Year 2000 related problems We do not, by including this statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events. Where You Can Find More Information We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). You may read and copy any document that we file at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800- SEC-0330 for information on the operation of the Public Reference Room. Our SEC filings also are available to you at the SEC's website at "http://www.sec.gov." The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information we file later with the SEC will automatically update and may supersede this information. We incorporate by reference the documents listed below and any future filings made by us with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until all of the shares of Common Stock that we have registered are sold: . Annual Report on Form 10-K for the fiscal year ended September 30, 1998. . Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1998. . The description of the Common Stock contained in our registration under Section 12 of the Securities Exchange Act of 1934, including any amendment or report updating such description. . The description of our Common Stock Purchase Rights contained in our Form 8-A Registration Statement dated April 3, 1996. You may request a copy of these filings, at no cost, by writing or telephoning us at the following address and phone number: Corporate Secretary Laclede Gas Company 720 Olive Street St. Louis, Missouri 63101 314-342-0531 You should rely only on the information contained in, or incorporated by reference in, this prospectus. We have not, and the underwriters have not, authorized anyone else to provide you with different information. We are not, and the underwriters are not, making an offer of these securities in any state where the offer is not permitted. You should not assume that the information incorporated in this prospectus is accurate as of any date other than the date on the front of those documents. 1 Summary This summary highlights information contained elsewhere in this prospectus. This summary is not complete and may not contain all of the information that may be important to you. Before making an investment decision, you should read this entire prospectus as well as the documents incorporated by reference. Unless indicated otherwise, the information in this prospectus assumes that the underwriters' overallotment option is not exercised. Laclede Gas Company Our Business................... A public utility primarily engaged in natural gas distribution Our Service Territory.......... The City of St. Louis, St. Louis County and parts of eight other counties in eastern Missouri Population of Our Service Territory..................... Approximately 2.0 million Customers as of December 31, 1998............. Approximately 630,000 Our Address and Telephone Laclede Gas Company Number........................ 720 Olive Street St. Louis, Missouri 63101 314-342-0500 The Offering Common Stock Offered........... 1,100,000 shares Common Stock Outstanding as of December 31, 1998............. 17,627,987 shares Common Stock Outstanding as of December 31, 1998, Adjusted for the Offering.............. 18,727,987 shares Listing........................ New York and Chicago Stock Exchanges (Symbol: LG) Common Stock Price Range from March 11, 1998 to March 11, 1999.......................... $22 5/16 to $27 Current Indicated Annual Dividend Rate................. $1.34 per share Cash Dividends paid since...... 1946 Use of Proceeds................ General corporate purposes, including the repayment of short-term debt, capital expenditures and working capital requirements
2 Selected Consolidated Financial Information (Dollar amounts in thousands, except per share data)
Twelve Months Fiscal Year Ended September 30 Ended December 31 ---------------------------------- ------------------ 1996 1997 1998 1997 1998 ---------- ---------- ---------- -------- -------- Income Statement Data Operating Revenues...... $ 556,456 $ 602,832 $ 547,229 $608,634 $497,258 Utility Operating Income................. 48,410 49,725 46,666 47,443 41,881 Earnings Applicable to Common Stock........... 32,727 32,369 27,795 29,896 23,869 Average Number of Common Shares Outstanding (in thousands)............. 17,523 17,558 17,598 17,558 17,615 Earnings Per Common Share.................. 1.87 1.84 1.58 1.70 1.36 Dividends Declared Per Common Share........... 1.26 1.30 1.32 1.305 1.325 As of September 30 As of December 31 ---------------------------------- ------------------ 1996 1997 1998 1997 1998 ---------- ---------- ---------- -------- -------- Balance Sheet Data Total Assets............ $ 689,395 $ 720,710 $ 771,147 $797,659 $828,510 Net Utility Plant....... 452,165 467,573 490,585 472,201 496,966 Short-Term Debt (Including Current Maturities) ........... 59,600 99,000 98,500 127,500 136,157 Long-Term Debt (Excluding Current Maturities)............ 179,346 154,413 179,238 179,105 179,256 Redeemable Preferred Stock.................. 1,960 1,960 1,960 1,960 1,960 Common Stock Equity..... 240,843 250,387 256,785 258,202 260,562 Other Data Heating Degree Days..... 4,880 4,953 4,404 4,910 4,024 Percent Colder (Warmer) than Normal............ 4% 6% (6)% 5% (14)%
The table below reflects our actual capitalization and short-term debt as of December 31, 1998 and as adjusted to reflect net proceeds from the sale of 1,100,000 shares of common stock offered in this prospectus and the application of these net proceeds to repay a portion of our short-term debt. For more information on our use of the net proceeds from this offering, see "Use of Proceeds" in this prospectus. If the underwriters exercise their over-allotment option in full, Common Stock Equity and Total Capitalization, each as adjusted, would be $ and $ , respectively. See "Underwriting."
As of December 31, 1998 ------------------------------ Actual As Adjusted -------------- -------------- Capitalization and Short-Term Debt Short-Term Debt................................ $136,157 23.6% Long-Term Debt................................. 179,256 31.0% $179,256 % Redeemable Preferred Stock..................... 1,960 .3% 1,960 Common Stock Equity............................ 260,562 45.1% -------- ----- -------- ----- Total Capitalization and Short-Term Debt....... $577,935 100.0% $ 100.0% ======== ===== ======== =====
3 Service Area and Transmission Pipelines The following map depicts (a) the counties in the eastern portion of Missouri in which we provide service, together with transmission pipelines owned by Mississippi River Transmission Corporation, Missouri Pipeline Company and Williams Gas Pipeline Central, Inc. that connect to our distribution system, and (b) Missouri and other states through which Mississippi River Transmission Corporation's pipeline system runs. [Graphic Omitted] [The graphic depicts the matters described above.] 4 Use of Proceeds We will use the net proceeds from the sale of the shares of common stock for general corporate purposes, including the repayment of short-term debt, capital expenditures and working capital requirements. At December 31, 1998, we had outstanding short-term debt of approximately $136 million at an average interest rate of 5.43%. Laclede Gas Company General We are a public utility that distributes and transports natural gas. We are subject to the jurisdiction of the Missouri Public Service Commission (the "PSC") and serve 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. In addition, we operate underground natural gas storage fields and transport and store liquid propane. We have also invested in other minor non-utility businesses. Generally, we sell gas for househeating, certain other household uses, and commercial and industrial space heating at prices generally lower than are charged for competitive fuels and other energy forms. While coal is competitive as a fuel source for very large boiler plant loads, environmental concerns have restrained any significant market inroads. Oil and propane can be used to fuel boiler loads and certain direct-fired process applications, but these fuels vary widely in price throughout the year, thus limiting the competitiveness of these fuels. In certain cases, steam has been competitive with gas for downtown area heating users. In the past five years, we have made a net conversion of 27 steam customers to natural gas service. We have approximately 630,000 customers, 94% of which are residential customers using natural gas for heating and other household purposes. With regard to the space and water heating market, our management believes that we have the predominant share of the existing residential market in areas in which we currently provide gas service, as well as the new single home construction market in such areas, and that these market shares have not materially changed in a number of years. For the twelve months ended December 31, 1998, sales to residential customers accounted for approximately 67% of our revenues, with sales to commercial and industrial customers accounting for approximately 23% of our revenues. The balance of our revenues are primarily attributable to our off-system sales, Gas Supply Incentive Plan and transportation service. The tariff approved for transportation service produces a margin similar to that which we would have received under our regular sales rates. We have been able to maintain our market position in the residential, space-heating and water-heating markets, despite the price competition that exists in these markets. Competition exists primarily in the large industrial and commercial boiler fuel market where coal is the principal competing form of energy. To a lesser extent, electricity is a competing form of energy in the residential market. While several states have recently enacted legislation to deregulate the electric utility industry in an effort to increase competition and reduce the cost of electric energy, the Missouri Legislature has not to date adopted legislation of this nature. 5 The tables below reflect our utility operating revenues contributed by each class of our customers, as well as the number of customers and therms sold and transported in each class our of customers. One billion cubic feet ("Bcf") of gas represents ten million therms.
Twelve Months Ended Fiscal Year Ended September 30 December 31 -------------------------------- --------------------- 1996 1997 1998 1997 1998 ---------- ---------- ---------- ---------- ---------- Utility Operating Revenues (In Thousands) Residential............. $ 376,818 $ 395,250 $ 365,768 $ 403,313 $ 332,297 Commercial and Industrial............. 145,466 152,222 132,504 152,381 116,707 Interruptible........... 2,035 2,098 2,254 2,114 2,131 Transportation.......... 15,375 13,042 12,734 13,141 12,816 Off-System and Other Incentive.............. 11,640 34,288 29,852 32,285 29,416 Exploration and Development............ 856 1,273 -- 702 -- Provision for Refunds and Other.............. 4,266 4,659 4,117 4,698 3,891 ---------- ---------- ---------- ---------- ---------- Total................. $ 556,456 $ 602,832 $ 547,229 $ 608,634 $ 497,258 ========== ========== ========== ========== ========== Customers (At End of Period) Residential............. 569,818 572,794 577,224 587,007 589,978 Commercial and Industrial............. 37,735 37,985 38,519 39,534 39,807 Interruptible........... 16 16 15 14 15 Transportation.......... 130 142 149 145 153 ---------- ---------- ---------- ---------- ---------- Total................. 607,699 610,937 615,907 $ 626,700 $ 629,953 ========== ========== ========== ========== ========== Therms Sold and Transported (In Thousands) Residential............. 642,367 606,327 560,732 602,047 521,540 Commercial and Industrial............. 309,477 296,222 259,205 286,003 238,963 Interruptible........... 5,766 5,718 5,838 5,482 5,791 Transportation.......... 186,400 176,622 190,811 187,183 188,915 Off-System.............. 33,101 126,149 104,763 112,537 114,294 ---------- ---------- ---------- ---------- ---------- Total................. 1,177,111 1,211,038 1,121,349 1,193,252 1,069,503 ========== ========== ========== ========== ==========
As a result of the large proportion of our residential heating sales relative to our total sales, our operations are highly sensitive to seasonal weather conditions. Historically, most of our revenues and related operating expenses occur during the winter heating season. Accordingly, we accrue most of our annual revenues during our first and second fiscal quarters, which are the six months ending March 31. Results for the third and fourth fiscal quarters frequently show net losses, reflecting significantly lower gas consumption during the nonheating season. Natural Gas Supply Our gas supply strategy has the twofold objectives of: (1) ensuring that our gas supplies are dependable and will be delivered when needed; and (2) to the extent compatible with that dependability, purchasing gas that is economically priced. We obtain the majority of our gas from Gulf Coast and Mid-Continent producing areas and have it transported through several interstate pipelines into the pipeline systems of Mississippi River Transmission Corporation ("MRT") for ultimate delivery to our service area. We continue to receive the majority of our natural gas through MRT. We are the predominant shipper on MRT's pipeline system, representing approximately 70% of its northbound capacity. Because our contract with MRT will expire on October 31, 1999, we and MRT are currently negotiating new arrangements to take effect after such date. Missouri Pipeline 6 Company ("MPC") provides gas to the western portion of our service area. This gas comes from the Mid-Continent producing area through the lines of Panhandle Eastern Pipeline Company ("Panhandle"), which in turn connect to MPC's lines. Recently, we obtained a direct connection to the Mid-Continent producing area through Williams Gas Pipeline Central, Inc. ("Williams"). Williams converted to natural gas service an existing approximately 200-mile petroleum products pipeline that crosses Missouri and connects directly to the Mid- Continent producing area. We have purchased the entire capacity of the converted pipeline, and natural gas began flowing in September 1998. This pipeline enables us to transport gas directly to the western portion of our service area, a fast-growing segment of our service area, as well as to access diverse reserves on the Williams system. Ultimately, we anticipate the new pipeline will transport about 10% of our annual natural gas purchases. We hold firm pipeline transportation capacity on several pipelines "upstream" of the MRT system connecting us to various onshore and offshore gas- producing basins. During fiscal year 1998, we released portions of our firm pipeline capacity to other shippers when we did not need the capacity. During fiscal 1998, we purchased natural gas from a diverse group of 37 suppliers to meet our current gas sales and storage requirements. We purchased a total of 78.0 Bcf of natural gas for delivery through MRT's system during fiscal year 1998 and another 10.0 Bcf of gas for delivery through Panhandle and MPC during fiscal 1998. Also, during fiscal 1998, certain commercial and industrial customers purchased their own gas and transported 19.1 Bcf of gas through our distribution system. We also have a firm storage service agreement with MRT for approximately 23.1 Bcf of allocated storage capacity on MRT's system located primarily in Unionville, Louisiana. In addition, we supplement flowing pipeline gas with natural gas withdrawn from our underground storage field located in St. Louis and St. Charles Counties. Propane Supply Laclede Pipeline Company, our wholly-owned subsidiary, owns and operates a propane pipeline which connects our 800,000-barrel, or approximately 33 million gallons, propane storage facilities in St. Louis County, Missouri, to propane supply terminal facilities located at Wood River and Cahokia, Illinois. Laclede Pipeline Company transports liquid propane through this pipeline to us for storage. We ultimately vaporize and use the propane to supplement our natural gas supply to meet the peak demands on the distribution system. Laclede Pipeline Company has a contract with Phillips Petroleum Company which provides for delivery of up to 35 million gallons of propane annually through March 31, 1999. Laclede Pipeline Company is negotiating new arrangements for the period subsequent to March 31, 1999. Regulatory Matters At the state level, there have been several important developments affecting us, some of which are still pending. On January 26, 1999, we filed a request with the PSC for a general rate increase to recover costs related to the operation of our gas distribution system. We do not anticipate higher rate levels during the current fiscal year, because the PSC generally suspends a general rate increase request until the PSC has reviewed and audited the filing, held hearings and reached its determination whether and to what extent the rate increase request should be granted. By statute, the PSC process may take no longer than 11 months. We have requested a rate adjustment that would increase annual revenues by $30.5 million and increase a typical residential heating customer's bill by about 5.8% (or about $3.37 a month). The PSC has set August 9, 1999 as the date to begin hearings on the request. Historically, the PSC has not granted our rate increase requests in full. On October 15, 1998, the PSC approved an agreement with us in a general rate case we had filed in February 1998. We had sought rates that would increase revenues by $25.4 million annually. The approved settlement provided that rates charged to the vast majority of our customers, including all residential and commercial heating customers, remained unchanged. However, the settlement also permitted us to record 7 substantially lower expenses in two areas effective July 1, 1998: (1) depreciation, by establishing lower depreciation rates; and (2) pension expense, by changing the regulatory accounting treatment for the recovery of our pension costs. The expected annualized effect of these accounting changes should result in a reduction of booked expenses of $16.8 million. Our currently filed rate case described above may impact the expected effect of these accounting changes. In addition, the PSC extended its previous authorization of certain cost- deferral mechanisms by which we may include in future rates certain expenses related to pensions and retirements and may apply for future rate recovery of certain other costs related to our gas safety replacement program and our environmental costs related to former manufactured gas plants. Further, the PSC authorized us to capitalize the costs incurred in connection with making our information systems ready for Year 2000 operations for consideration in future rates. On another matter, we sought and obtained re-authorization from the PSC to purchase a limited amount of specific financial instruments for the purpose of capping our cost of gas in the event of any unusually large gas price increases during the 1998-1999 winter season. The full cost of purchasing these instruments is being recovered from customers. In June 1998, we proposed program modifications that are designed to give us greater flexibility to trade in and out of these instruments when warranted by market conditions, to give us a financial incentive to increase the gas cost savings to be realized by customers and to reduce the overall cost of purchasing such instruments. The PSC's Staff and the Office of the Public Counsel have opposed our proposal. The PSC had formal hearings on this issue in late July 1998, but it has not yet issued a decision. Fiscal 1998 also was the second year of operation for our Gas Supply Incentive Plan (the "Incentive Plan"), which has provided significant benefits for our customers and stockholders. The PSC approved the initial Incentive Plan in our 1996 rate case for a three-year period ending September 30, 1999. Under the Incentive Plan, we and our customers share the benefits from off-system sales and certain gains and losses, as measured against benchmark levels of gas costs, related to the acquisition of our gas supply. During fiscal 1998, we achieved overall gas cost savings of about $31.0 million, resulting in savings to our customers of $24.6 million and contributing about $6.4 million to our pre-tax income. In September 1997, the PSC's Staff recommended that we refund $3.6 million to our ratepayers in connection with our sale of gas outside of Missouri during fiscal 1996, prior to the approval of the Incentive Plan. We believe we had full authority to enter into these transactions in part under the implementation of the Federal Energy Regulatory Commission's Order No. 636. We filed testimony opposing the PSC Staff's recommendation and formal hearings were held on this issue in October 1998. The PSC has not yet issued a decision. On October 30, 1998, the PSC issued an order opening a docket addressing the adequacy of our copper service line replacement program. Under this docket, the PSC Staff must advise the PSC of the status of its investigation by April 30, 1999. We currently face one lawsuit and two claims relative to incidents where gas has apparently leaked from direct buried copper service lines. We are unable to predict at this time what action, if any, the PSC may take in this docket or the outcome of this lawsuit or any of these claims. Year 2000 As of December 31, 1998, we have incurred total costs of approximately $11.9 million related to replacements and modifications of various computer systems as part of our Year 2000 readiness program. Of this amount, $10.4 million has been capitalized and $1.5 million has been charged to expense. As noted above, the PSC authorized us to capitalize the costs incurred in connection with making our information systems ready for Year 2000 operations for consideration in future rates. We estimate that costs remaining to be incurred for the remainder of fiscal 1999 will amount to approximately $6.0 million. We currently anticipate that our modifications to our critical internal systems and equipment will be completed by the summer of 1999. As these modifications are made, we then test the operation of such systems or equipment as corrected and modified to determine if any further adjustments are required. We also continue to verify the Year 2000 readiness of our critical vendors. 8 Price Range of Common Stock and Dividends Our common stock is listed on the New York and Chicago Stock Exchanges and is traded under the symbol LG. The high and low sales prices for the common stock as reported on the New York Stock Exchange composite transactions reporting system and dividends declared for fiscal years 1997, 1998 and 1999 to date are as follows:
Quarterly Cash Price Range Fiscal Year Dividends Declared High Low - ----------- ------------------ --------- --------- 1997: First Quarter ......................... $ .32-1/2 $24-7/8 $22-1/4 Second Quarter......................... .32-1/2 24-5/8 20-7/8 Third Quarter.......................... .32-1/2 23-1/8 20-1/4 Fourth Quarter......................... .32-1/2 24-5/8 21-5/8 --------- $1.30 ========= 1998: First Quarter.......................... $ .33 $28-5/8 $23-5/8 Second Quarter......................... .33 27-15/16 23-15/16 Third Quarter.......................... .33 25-7/16 22-15/16 Fourth Quarter......................... .33 25 22-3/8 --------- $1.32 ========= 1999: First Quarter.......................... $ .33-1/2 $27 $23 Second Quarter (through March 11)...... .33-1/2 27 22-5/16
- -------- On March 11, 1999, the last reported sale price of our common stock on the New York Stock Exchange was $22 5/8 per share. As of March 8, 1999, we had 9,485 common stockholders of record. Cash dividends on our common stock have been paid each year since 1946. Our Board of Directors' current policy is to pay cash dividends on our common stock on a quarterly basis. Future cash dividends will depend on our earnings, financial condition, capital requirements and other factors deemed relevant by our Board of Directors. See "Description of Common Stock" in this prospectus for certain restrictions upon our ability to pay cash dividends. We have a Dividend Reinvestment and Stock Purchase Plan (the "Drip Plan"). Under the Drip Plan, stockholders may automatically reinvest, at the then current market price, their common stock cash dividends in shares of our common stock. Participants in the Drip Plan may make optional cash purchases of common stock at market prices in amounts up to $30,000 per year. Additional information about the Drip Plan is contained in the Drip Plan prospectus, which may be obtained from the Drip Plan agent, UMB Bank, National Association, or from us: UMB Bank, National Association Laclede Gas Company Securities Transfer Division Corporate Secretary P. O. Box 410064 720 Olive Street Kansas City, Missouri 64141- 0064 St. Louis, Missouri 63101 1-800-884-4225 314-342-0531
9 Description of Common Stock The following description of the terms of our common stock sets forth general terms and provisions of our common stock and does not purport to be complete and is subject to and qualified in its entirety by reference to our Articles of Incorporation, as amended (the "Articles"), and our Mortgage and Deed of Trust, dated as of February 1, 1945, as amended and supplemented (the "Mortgage"), securing our first mortgage bonds. The total number of shares of capital stock which we have authority to issue is 51,480,000 shares, consisting of 50,000,000 shares of common stock, par value $1 per share, and 1,480,000 shares of preferred stock, par value $25 per share. Dividend Rights and Limitations Subject to the limitations referred to below, our Board of Directors may declare and pay dividends on our common stock out of funds legally available therefor. Cash dividends on and acquisition of our capital stock are limited by certain Mortgage provisions. Under the most restrictive of these provisions, we may not declare or pay any dividend (other than a dividend payable in our common stock), or otherwise acquire or retire for value any shares of common stock if, after giving effect thereto, the aggregate net amount expended of all such dividends, acquisitions and retirements made after September 30, 1953 would exceed the sum of (1) the Net Income Available for Common Stock (as defined in the Mortgage) since October 1, 1953 through the last day of the calendar quarter immediately preceding the calendar quarter in which such dividend is declared or other acquisition or retirement occurs, plus (2) $8 million. The aggregate net amount expended for dividends, acquisitions and retirements is determined as the excess, if any, of the aggregate amount thereof over the total cash amount received by us after September 30, 1953 for shares of our common stock sold after that date. As of December 31, 1998, the availability for distribution of our retained earnings was not impaired by the restriction described above. As of December 31, 1998, up to approximately $221 million was thus available for distribution. Payment of dividends on our common stock is also subject to the preferential rights of the holders of preferred stock to receive full cumulative dividends, both past and current. Also, we may not pay dividends on or acquire any of our common stock if our sinking fund obligations for our preferred stock are not met. If our net earnings (as defined in the Articles) are less than our sinking fund obligations, an "excused failure" may occur; no dividends may be paid on our common stock for 12 months following an excused failure unless we make up the deficiencies in sinking fund payments. These preferential rights and requirements do not currently impair our ability to pay common stock dividends since we have paid and continue to pay the preferred stock dividends as required, we have satisfied our sinking fund obligations to date, including those for the period ending March 31, 1999, and no "excused failure" has occurred. The Articles further provide that if the stated capital for all of our stock junior to our preferred stock plus paid-in and capital surplus and retained earnings is less than 25% of our total capitalization, no dividends (other than stock dividends) will be paid on our junior stock unless (1) the dividend is less than or equal to 75% of our net earnings, after providing for dividends on our outstanding preferred stock, earned during the fiscal year in which such dividend is declared and before the end of the quarter in which it is declared, or (2) the dividend together with all dividends on our junior stock declared or paid since the earliest date of issue of any of our outstanding preferred stock is less than or equal to 75% of our net earnings after providing for dividends on the outstanding preferred stock earned between said earliest date of issue and the end of the quarter in which such dividend is declared. This, too, does not currently impair our ability to pay dividends on our common stock, since at December 31, 1998, the sum of our stated capital for our common stock plus paid-in and capital surplus and retained earnings was approximately 59% of total capitalization, thus exceeding 25% of our total capitalization. 10 Voting Rights Our common stockholders are entitled to one vote for each share of our common stock held of record at all stockholder meetings, except that whenever six quarterly dividends payable on our preferred stock shall be in default, the holders of all series of our preferred stock will be entitled to one vote per share on all matters other than the election of our directors. In the event of an election of our directors after such default, our preferred stockholders, voting as a separate class, will have the right to elect the minimum number of our directors required to constitute a majority of our full Board. In such circumstances, the remainder of our full Board will be elected by our common stockholders, voting as a separate class. Cumulative voting is applicable to all elections of our directors. Our Board of Directors is divided into three classes and each year one class is elected to serve a three-year term. Change in Control and Business Combination Provisions The Articles: (1) provide for the classification of directors, with three-year staggered terms; (2) require an affirmative vote of holders of at least two-thirds of the outstanding shares of our common stock to remove all or less than all of the members of our Board of Directors (except that no director may be removed by stockholders if the votes cast against the director's removal would be enough to elect the director using cumulative voting at an election of the class of directors of which the director is a member); (3) require an affirmative vote of holders of at least two-thirds of the outstanding shares of our common stock to change the provision relating to the classified Board of Directors; and (4) require the affirmative vote of holders of at least 80% of the outstanding shares of our common stock to approve Business Combinations (as defined in the Articles) with a Substantial Shareholder (defined below), unless approved by a majority vote of the Continuing Directors (as defined in the Articles) or unless certain price and dividend requirements are met. Such provisions may have significant effects on stockholders' ability to change the composition of an incumbent Board of Directors or to benefit from transactions which may be opposed by an incumbent Board of Directors. The term "Substantial Shareholder" is defined in the Articles to include a securityholder (together with its Affiliates and Associates, as defined therein) who owns more than 10% of the outstanding shares of our common stock. The above provisions dealing with Business Combinations involving us and a Substantial Shareholder may discriminate against a securityholder who becomes a Substantial Shareholder by reason of ownership of such amount of our common stock. In addition, we, as a Missouri corporation, are subject to Missouri corporate statutes which restrict the voting rights of a person who acquires 20% or more of our outstanding common stock as well as such person's ability to enter into a business combination with us. Preferred Stock Our Board of Directors, without further action by our common stockholders, may issue one or more series of preferred stock from time to time, which may have terms more favorable than our common stock, including preferential dividend, liquidation and redemption rights. As of March 11, 1999, there were 71,870 shares of preferred stock Series B and 6,510 shares of preferred stock Series C outstanding. Common Stock Purchase Rights On May 1, 1996, we distributed a dividend of one Common Stock Purchase Right for each share of our common stock (other than shares held in our treasury) outstanding at the close of business on May 1, 1996 or issued thereafter. The following description of the Rights is not intended to be complete and is qualified in 11 its entirety by reference in this prospectus to the Rights Agreement between us and Boatmen's Trust Company, the initial Rights Agent (the "Rights Agreement"). UMB Bank, National Association is the current Rights Agent. Certain of the capitalized terms used in the following description have the meanings set forth in the Rights Agreement. Each Right, when it becomes exercisable, as described below, will entitle the registered holder to purchase a number of shares of our common stock, at a purchase price of $60, subject to certain adjustments (the "Purchase Price") and other specified conditions. Initially, the Rights are evidenced by the certificates of our common stock, registered in the names of the holders thereof, and are transferred with, and only with, our common stock. The Rights become exercisable upon the occurrence of a Distribution Date, which is defined in the Rights Agreement as the earlier of: (1) the tenth business day (or such later date as our Board of Directors may from time to time fix by resolution) after the date on which any Person commences a tender or exchange offer which, if consummated, would result in such Person's acquiring beneficial ownership of 20% or more of the outstanding common stock (such Person being called an "Acquiring Person"); and (2) the tenth business day after (A) the first date of public announcement by us or an Acquiring Person that a Person has become an Acquiring Person, or (B) the date on which we first have notice or otherwise determine that a Person has become an Acquiring Person. The definition of "Acquiring Person" excludes certain persons, including those who inadvertently acquire beneficial ownership of 20% or more of our outstanding common stock provided that such person promptly and irrevocably commits to divest and does promptly divest sufficient shares of our common stock to reduce such person's percentage of beneficial ownership below 20%. In the event that a Distribution Date occurs, each holder of a Right (other than Rights beneficially owned by the Acquiring Person or any Affiliate or Associate thereof, which Rights shall become void), subject to the Board of Directors' ability to exchange such Right for our common stock as described below, will (after the effective date of an appropriate registration statement) have the right to purchase from us that number of shares of our common stock having an aggregate current market price (as defined in the Rights Agreement), on the date such person becomes an Acquiring Person giving rise to the Distribution Date, equal to twice the Purchase Price for an amount in cash equal to the then current Purchase Price. In addition, our Board of Directors may, at its option, at any time after a Distribution Date and prior to the time an Acquiring Person together with any Affiliates or Associates thereof becomes the Beneficial Owner of 50% or more of the outstanding shares of our common stock, elect to exchange all or part of the then outstanding Rights (other than Rights beneficially owned by the Acquiring Person or any Affiliate or Associate thereof, which Rights shall have become void) for shares of our common stock at an exchange ratio of one share of our common stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date of the Rights Agreement (the "Exchange Ratio"). Immediately upon such action by our Board of Directors, the right to exercise the Rights will terminate and each Right (other than Rights that have become void as described above) will thereafter represent only the right to receive that number of shares of common stock equal to the number of Rights held by such holder multiplied by the Exchange Ratio. Any partial exchange will be made pro rata based on the number of Rights (other than Rights that have become void as described above) held by each holder of Rights. If we are acquired in a merger or other similar business combination where we are not the surviving corporation, or where our common stock is exchanged or changed, or 50% or more of our assets or earning power is sold, we shall take such action as necessary to ensure that the Rights will "flip-over" and entitle each holder of a Right to purchase common stock of the acquiring corporation having an aggregate market price equal to twice the then current Purchase Price of our common stock for an amount in cash equal to the then current Purchase Price. At any time prior to the earlier of (1) the tenth business day following the Stock Acquisition Date (as defined in the Rights Agreement) and (2) the close of business on May 1, 2006, our Board of Directors may redeem the Rights in whole, but not in part, at a price of $0.01 per Right. Under certain circumstances the Rights Agreement may be amended from time to time by our Board of Directors without approval of our stockholders. 12 The Rights have certain anti-takeover effects. The Rights may cause substantial dilution to a person or group that attempts to acquire us without Board approval. The Rights will not interfere with any merger or other business combination with a third party approved by our Board of Directors since the Board of Directors may, at its option, redeem all but not less than all of the then outstanding Rights as described above. Miscellaneous Our outstanding common stock is, and the shares of our common stock offered hereby when issued and paid for will be, fully paid and non-assessable. Holders of our common stock have limited preemptive rights. The Articles generally give holders of our common stock preemptive rights if our common stock is to be sold solely for money and other than by a public offering, through underwriters who agree to promptly make a public offering or pursuant to authorization by holders of a majority of our common stock. On liquidation, after payment of the liquidation preferences of our preferred stock, the holders of our common stock will be entitled to receive all amounts remaining for distribution to our stockholders. The Transfer Agent and Registrar for our common stock is UMB Bank, National Association, Kansas City, Missouri. Our outstanding common stock is, and the shares of our common stock offered hereby will be, listed on the New York and Chicago Stock Exchanges. 13 Underwriting Merrill Lynch, Pierce, Fenner & Smith Incorporated and A.G. Edwards & Sons, Inc. are acting as representatives of the underwriters named below (collectively referred to as the "underwriters"). Subject to the terms and conditions set forth in the underwriting agreement, we have agreed to sell to the underwriters, and the underwriters severally have agreed to purchase from us, the respective number of shares of our common stock indicated below.
Number of Underwriter Shares ----------- --------- Merrill Lynch, Pierce, Fenner & Smith Incorporated............................................ A.G. Edwards & Sons, Inc. ....................................... --------- Total ...................................................... 1,100,000 =========
In the underwriting agreement, the several underwriters, respectively, have agreed, subject to the terms and conditions set forth therein, to purchase all of the shares of common stock being sold pursuant to such agreement if any of the shares of our common stock being sold pursuant to such agreement are purchased. Under certain circumstances, the commitments of non-defaulting underwriters may be increased. The representatives of the underwriters have advised us that they propose initially to offer the shares of our common stock to the public at the public offering price set forth on the cover page of this prospectus, and to certain dealers at such price less a concession not in excess of $. per share. The underwriters may allow, and such dealers may reallow, a discount not in excess of $. per share of our common stock on sales to certain other dealers. After the initial public offering, the public offering price, concession and discount may be changed. We have granted an option to the underwriters, exercisable for 30 days after the date of this prospectus, to purchase up to an aggregate of 150,000 additional shares of our common stock at the public offering price set forth on the cover page of this prospectus less the underwriting discount. The underwriters may exercise this option solely to cover over-allotments, if any, made on the sale of our common stock offered hereby. If the underwriters exercise this option, each underwriter will be obligated, subject to certain conditions, to purchase a number of additional shares of our common stock proportionate to such underwriter's initial amount reflected in the foregoing table. The following table shows the per share and total underwriting discount to be paid by us to the underwriters. This information is presented assuming either no exercise or full exercise by the underwriters of their over-allotment option.
No Exercise Full Exercise Per Share of Option of Option --------- ----------- ------------- Public Offering Price ................ $ $ $ Underwriting Discount ................ Proceeds, before expenses, to us .....
The expenses of the offering are estimated at $150,000 and are payable by us. 14 The shares of our common stock are being offered by the several underwriters, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of certain legal matters by counsel for the underwriters and subject to certain other conditions. The underwriters reserve the right to withdraw, cancel or modify such offer and to reject orders in whole or in part. We have agreed not to offer or sell any other shares of our common stock or securities convertible into or exchangeable for our common stock for 120 days after the date of this prospectus. There are some exceptions to this restriction, including the issuance of our common stock in connection with our employee benefit plans, our Restricted Stock Plan for Non-Employee Directors and the Drip Plan. We have agreed to indemnify the underwriters against certain liabilities, including certain liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make in respect thereof. Until the distribution of the shares of our common stock is completed, rules of the SEC may limit the ability of the underwriters and certain selling group members to bid for and purchase the shares of our common stock. As an exception to these rules, the representatives of the underwriters are permitted to engage in certain transactions that stabilize the price of our common stock. Such transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of our common stock. If the underwriters create a short position in our common stock in connection with this offering, i.e., if they sell more shares of common stock than are set forth on the cover page of this prospectus, the representatives of the underwriters may reduce that short position by purchasing our common stock in the open market. The representatives may also elect to reduce any short position by exercising all or part of the over-allotment option described above. The representatives of the underwriters may also impose a penalty bid on certain underwriters and selling group members. This means that if the representatives purchase shares of our common stock in the open market to reduce the underwriters' short position or to stabilize the price of our common stock, they may reclaim the amount of the selling concession from the underwriters and selling group members who sold those shares as part of this offering. In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases. The imposition of a penalty bid might also have an effect on the price of our common stock to the extent that it discourages resales of our common stock. Neither we nor any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor any of the underwriters makes any representation that the representatives of the underwriters will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice. Some of the underwriters or their affiliates have provided investment or commercial banking services to us in the past and are likely to do so in the future. They receive customary fees and commissions for these services. 15 Legal Opinions The legality of the shares of our common stock offered hereby will be passed upon for us by Gerald T. McNeive, Jr., Senior Vice President-Finance and General Counsel. The legality of the shares of our common stock offered hereby will be passed upon for the underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New York. Experts The 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, 1998 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 16 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. The following table sets forth the estimated expenses in connection with the issuance and sale of the Common Stock being registered. Filing fee--Securities and Exchange Commission: Registration Statement........................................ $ 7,787.48 Filing fee--National Association of Securities Dealers Inc...... 3,301.25 New York Stock Exchange listing fees............................ 4,375.00 Chicago Stock Exchange listing fees............................. 6,250.00 *Accountants' fee............................................... 25,000.00 *Printing costs................................................. 75,000.00 *Miscellaneous expense (including blue-sky expense)............. 28,286.27 ----------- *Total Expenses............................................... $150,000.00 ===========
- -------- *Estimated Item 15. Indemnification of Directors and Officers. Under Section 351.355 of The General and Business Corporation Law of Missouri (the "Indemnification Statute"), Laclede Gas Company (the "Company") may indemnify any present or former director, officer, employee or agent of the Company who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he is or was a director, officer, employee or agent of the Company against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. If the action or suit is by or in the right of the Company, (1) the Company may indemnify him against expenses, including attorneys' fees and amounts paid in settlement actually and reasonably incurred in connection with the defense or settlement if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the Company, and (2) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Company unless and only to the extent that the court in which the action or suit was brought determines upon application that the person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. The termination of an action, suit, or proceeding by judgment, order, settlement, conviction or plea of nolo contendere does not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the Company, and, with respect to criminal proceedings, had reasonable cause to believe his conduct was unlawful. The Indemnification Statute further provides that the Company has the power to give any additional indemnity to any person who is or was a director, officer, employee or agent, provided that such additional indemnity is authorized by the articles of incorporation or any by-law or agreement of the Company adopted by a vote of the stockholders; however, the Company shall not indemnify any person from or on account of such person's conduct that was finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful misconduct. The above is a general summary of the Indemnification Statute and is subject in all cases to the specific and detailed provisions of The General and Business Corporation Law of Missouri. II-1 The Company's Articles provide that the Company shall indemnify each of its directors and officers to the full extent permitted by the Indemnification Statute and, in addition, shall indemnify each of them against all expenses incurred in connection with any claim by reason of the fact that such director or officer is or was, serving the Company, or at the request of the Company, in any of the capacities referred to in the Indemnification Statute, or arising out of such person's status in any such capacity, provided that the Company shall not indemnify any person from or on account of such person's conduct that was finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful misconduct, or to the extent that such indemnification shall otherwise be finally adjudged to be prohibited by applicable law. The Indemnification Statute further provides that the Company may purchase and maintain insurance, on behalf of any person who is or was a director, officer, employee or agent of the Company, against any liability asserted against him and incurred by him in any such capacity. In accordance with this section, the Company has obtained insurance protecting the officers and directors against certain liabilities. The Company has also entered into indemnification agreements with each of its directors and officers that (1) provide for the indemnification of each such director and officer to the extent provided for by the Articles as described above and (2) state that the indemnification provided thereunder shall survive the elimination or modification of the Articles with respect to claims that have arisen prior to such elimination or modification. Each of the underwriters has also agreed to indemnify the Company, its directors and each of its officers who signs this registration statement against certain liabilities, including certain liabilities under the Securities Act of 1933, or to contribute to payments such directors and officers may be required to make in respect thereof. The rights of indemnification provided for above are not exclusive of any other rights of indemnification to which the persons seeking indemnification may be entitled under the Articles or the Company's By-Laws or any agreement, vote of stockholders or disinterested directors, or otherwise. Item 16. List of Exhibits.
Exhibit Number Exhibit ------- ------- 1.1 Form of Underwriting Agreement for Common Stock. 4.1* Articles of Incorporation of Laclede Gas Company as of February 11, 1994, filed on February 22, 1994 as Exhibit 4(b) to the Company's Registration Statement No. 33-52357. 4.2* By-Laws of Laclede Gas Company effective January 26, 1995; filed as Exhibit 4.2 to the Company's Registration Statement No. 33-58757. 4.2(a)* Amendment to the Company's By-Laws, effective at the close of business on July 24, 1997; filed as Exhibit 3.01 to the Company's 10-Q for the fiscal quarter ended June 30, 1997 (File No. 1-1822). 4.2(b)* Amendment to the Company's By-Laws, effective at the close of business on November 20, 1997; filed as Exhibit 3.01(ii) to the Company's 10-Q for the fiscal quarter ended December 31, 1997 (File No. 1-1822). 4.3* Rights Agreement, filed as Exhibit 1 to Form 8-A Registration Statement dated April 3, 1996 (File No. 1-1822). 4.4* Mortgage and Deed of Trust, dated as of February 1, 1945; filed as Exhibit 7-A to Registration Statement No. 2-5586.
II-2
Exhibit Number Exhibit ------- ------- 4.5* Fourteenth Supplemental Indenture, dated as of October 26, 1976; filed on June 26, 1979 as Exhibit b-4 to Registration Statement No. 2-64857. 4.6* Eighteenth Supplemental Indenture, dated as of November 15, 1989; filed as Exhibit 28(b) to the Registration Statement No. 33-38413. 4.7* Nineteenth Supplemental Indenture, dated as of May 15, 1991; filed on May 16, 1991 as Exhibit 4.01 to the Company's Form 8-K (File No. 1- 1822). 4.8* Twentieth Supplemental Indenture, dated as of November 1, 1992; filed on November 4, 1992 as Exhibit 4.01 to the Company's Form 8-K (File No. 1-1822). 4.9* Twenty-First Supplemental Indenture, dated as of May 1, 1993; filed on May 13, 1993 as Exhibit 4.01 to the Company's Form 8-K (File No. 1- 1822). 4.10* Twenty-Second Supplemental Indenture, dated as of November 15, 1995; filed on December 3, 1995 as Exhibit 4.01 to the Company's Form 8-K (File No. 1-1822). 4.11* Twenty-Third Supplemental Indenture, dated as of October 15, 1997; filed on November 6, 1997 as Exhibit No. 4.01 to the Company's Form 8- K (File No. 1-1822). 5 Opinion of Gerald T. McNeive, Jr., Senior Vice President-Finance and General Counsel. 23(a) Consent of Gerald T. McNeive, Jr. (included in Exhibit 5 filed herewith). 23(b) Consent of Deloitte & Touche LLP. 24 Power of Attorney.
- -------- * Incorporated herein by reference. Item 17. Undertakings. The undersigned registrant hereby undertakes: (1) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (2) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (3) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any II-3 action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Louis, and State of Missouri, on the fifteenth day of March, 1999. LACLEDE GAS COMPANY /s/ G.T. McNeive, Jr. By:__________________________________ Gerald T. McNeive, Jr. Senior Vice President-Finance and General Counsel Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
Name Title Date ---- ----- ---- *D. H. Yaeger Chairman of the Board, March 15, 1999 ____________________________________ President, Chief Executive (D. H. Yaeger) Officer and Director /s/ G. T. McNeive, Jr. Senior Vice President- March 15, 1999 ____________________________________ Finance and General Counsel (G. T. McNeive, Jr.) (Principal Financial Officer) /s/ J. A. Fallert Controller March 15, 1999 ____________________________________ (J. A. Fallert) *R. E. Beumer Director March 15, 1999 ____________________________________ (R. E. Beumer) *A. B. Craig, III Director March 15, 1999 ____________________________________ (A. B. Craig, III) *H. Givens Director March 15, 1999 ____________________________________ (H. Givens) *C. R. Holman Director March 15, 1999 ____________________________________ (C. R. Holman) *R. C. Jaudes Retired, Chairman of the March 15, 1999 ____________________________________ Board and Director (R. C. Jaudes) *M. A. Krey Director March 15, 1999 ____________________________________ (M. A. Krey)
II-5 *W. E. Nasser Director March 15, 1999 ____________________________________ (W. E. Nasser) *R. P. Stupp Director March 15, 1999 ____________________________________ (R. P. Stupp) *H. E. Trusheim Director March 15, 1999 ____________________________________ (H. E. Trusheim) /s/ G. T. McNeive, Jr. *By: _______________________________ March 15, 1999 G. T. McNeive, Jr. (Attorney-in-Fact)
II-6 INDEX TO EXHIBITS.
Exhibit Number Exhibit ------- ------- 1.1 Form of Underwriting Agreement for Common Stock. 4.1* Articles of Incorporation of Laclede Gas Company as of February 11, 1994, filed on February 22, 1994 as Exhibit 4(b) to the Company's Registration Statement No. 33-52357. 4.2* By-Laws of Laclede Gas Company effective January 26, 1995; filed as Exhibit 4.2 to the Company's Registration Statement No. 33-58757. 4.2(a)* Amendment to the Company's By-Laws, effective at the close of business on July 24, 1997; filed as Exhibit 3.01 to the Company's 10-Q for the fiscal quarter ended June 30, 1997 (File No. 1-1822). 4.2(b)* Amendment to the Company's By-Laws, effective at the close of business on November 20, 1997; filed as Exhibit 3.01(ii) to the Company's 10-Q for the fiscal quarter ended December 31, 1997 (File No. 1-1822). 4.3* Rights Agreement, filed as Exhibit 1 to Form 8-A Registration Statement dated April 3, 1996 (File No. 1-1822). 4.4* Mortgage and Deed of Trust, dated as of February 1, 1945; filed as Exhibit 7-A to Registration Statement No. 2-5586. 4.5* Fourteenth Supplemental Indenture, dated as of October 26, 1976; filed on June 26, 1979 as Exhibit b-4 to Registration Statement No. 2-64857. 4.6* Eighteenth Supplemental Indenture, dated as of November 15, 1989; filed as Exhibit 28(b) to the Registration Statement No. 33-38413. 4.7* Nineteenth Supplemental Indenture, dated as of May 15, 1991; filed on May 16, 1991 as Exhibit 4.01 to the Company's Form 8-K (File No. 1- 1822). 4.8* Twentieth Supplemental Indenture, dated as of November 1, 1992; filed on November 4, 1992 as Exhibit 4.01 to the Company's Form 8-K (File No. 1-1822). 4.9* Twenty-First Supplemental Indenture, dated as of May 1, 1993; filed on May 13, 1993 as Exhibit 4.01 to the Company's Form 8-K (File No. 1- 1822). 4.10* Twenty-Second Supplemental Indenture, dated as of November 15, 1995; filed on December 3, 1995 as Exhibit 4.01 to the Company's Form 8-K (File No. 1-1822). 4.11* Twenty-Third Supplemental Indenture, dated as of October 15, 1997; filed on November 6, 1997 as Exhibit No. 4.01 to the Company's Form 8- K (File No. 1-1822). 5 Opinion of Gerald T. McNeive, Jr., Senior Vice President-Finance and General Counsel. 23(a) Consent of Gerald T. McNeive, Jr. (included in Exhibit 5 filed herewith). 23(b) Consent of Deloitte & Touche LLP. 24 Power of Attorney.
- -------- * Incorporated herein by reference. II-7 EX-1.1 2 FORM OF UNDERWRITING AGREEMENT FOR COMMON STOCK EXHIBIT 1.1 UNDERWRITING AGREEMENT ---------------------- LACLEDE GAS COMPANY Common Stock May [__], 1999 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated A.G. EDWARDS & SONS, INC. As Representatives of the several Underwriters named in Schedule I hereto c/o Merrill Lynch & Co. World Financial Center North Tower New York, New York 10281 Ladies and Gentlemen: Laclede Gas Company, a Missouri corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell severally to you (the "Representatives") and the other several Underwriters named in Schedule I hereto (collectively, including any underwriter substituted as hereinafter provided in Section 4 hereof, the "Underwriters") the aggregate number of shares of the Common Stock, par value $1 per share, of the Company ("Common Stock") set forth on Schedule I hereto (the "Firm Shares"). The Company also proposes, subject to the terms and conditions stated herein, to issue and sell severally to the Underwriters not more than an additional 150,000 shares of Common Stock ("Option Shares"), if and to the extent that the Representatives, on behalf of the Underwriters, shall have determined to exercise the right to purchase Option Shares pursuant to Section 2(c) hereof. As used herein, the term "Securities" shall mean, collectively, the Firm Shares and Option Shares. 1. Representations and Warranties of the Company. The Company represents and --------------------------------------------- warrants to, and agrees with, each of the Underwriters that: (a) A registration statement on Form S-3 (File No. 333-[_____]) with respect to the Securities has been prepared by the Company in conformity with the requirements of the Securities Act of 1933, as amended (the "Act"), and the rules and regulations of the Securities and Exchange Commission (the "Commission") under the Act (the "Regulations"), has been filed with the Commission and has become effective. The Company meets the requirements for the use of Form S-3 under the Act. Copies of such registration statement, together with all amendments, if any, and the prospectus contained therein, in the form in which it became effective, including the documents incorporated in such prospectus by reference, have heretofore been delivered to the Underwriters. Such registration statement in the form in which it most recently became effective, including all exhibits thereto and the information deemed to be a part thereof pursuant to Rule 430A(b) of the Regulations, is referred to hereinafter as the "Registration Statement." The prospectus, including the documents incorporated therein by reference, contained in the Registration Statement is referred to hereinafter as the "Prospectus"; provided, however, that, as used in this Agreement (except in this Section 1), upon the completion of the Prospectus on or after the date hereof (whether by filing the Prospectus as so completed with the Commission pursuant to Rule 424(b) of the Regulations or an amendment to the Registration Statement with the Commission under the Act in accordance with Rule 430A of the Regulations or as a result of any other revision thereof or supplement thereto provided to the Underwriters for use in connection with the offering of the Securities that differs from the Prospectus on file with the Commission at the time the Registration Statement became effective, whether or not such revision or supplement is required to be filed with the Commission pursuant to Rule 424(b) of the Regulations), the term "Prospectus" shall mean the Prospectus as so completed (the "Completed Prospectus"). All references in this Agreement to amendments or supplements to the Registration Statement, the Prospectus or the Completed Prospectus shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the date of this Agreement that is or is deemed to be incorporated by reference in the Prospectus; all references to the Registration Statement, the Prospectus or the Completed Prospectus, or any amendment or supplement to any of the foregoing, shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). (b) No stop order with respect to the Registration Statement has been issued by the Commission under the Act and no proceeding therefor is pending before, or to the knowledge of the Company threatened by, the Commission; the Registration Statement, at the time it became effective, complied in all material respects with the requirements of the Act and the Regulations and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; the Prospectus, on the date hereof, and the Completed Prospectus, at the time it is filed with the Commission pursuant to Rule 424(b) of the 2 Regulations or first used and at the Time of Delivery and an Option Shares Time of Delivery (each as defined in Section 4 hereof), as the case may be, complied in all material respects with the requirements of the Act and the Regulations and neither the Prospectus, on the date hereof, nor the Completed Prospectus, at any such times, contains or will contain an untrue statement of a material fact or omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each document incorporated by reference in the Prospectus, at the time it was or will be filed with the Commission under the Exchange Act, conformed or will conform when so filed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder (the "Exchange Act Regulations"); provided, however, that the representations and warranties contained in this Section 1(b) shall not apply to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished in writing to the Company, through the Representatives by any Underwriter, expressly for use in the Registration Statement or the Prospectus. (c) Since the respective dates as of which information is given in the Prospectus, there has not been any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole and there has not been any material transaction entered into by the Company, other than transactions in the ordinary course of business and transactions referred to in, or contemplated by, the Prospectus; and the Company does not have any material contingent obligation that is not disclosed in the Prospectus. (d) Neither the Company or any of its subsidiaries is, or with the giving of notice or the lapse of time or both would be, in breach of any of the terms and provisions of, or in default under, nor will the consummation by the Company of the transactions herein contemplated or the fulfillment of the terms hereof result in a breach of any of the terms or provisions of, or constitute a default under, the Articles of Incorporation or By-Laws of the Company, each as amended, or any statute, indenture, mortgage, deed of trust or other agreement or instrument to which the Company is a party or by which it is bound or to which any of the property of the Company is subject, or any order, rule or regulation applicable to the Company of any court or governmental agency or body having jurisdiction over the Company or any of its properties, nor will any such action result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to the terms of any such agreement or instrument; the State of Missouri Public Service Commission (the "MPSC") has issued an order or orders authorizing the issuance and sale of the Securities, which order is, or orders are, in full force and effect; and no other approval, authorization, consent or order of any public board or body is legally required for the issuance and sale of the Securities by the Company hereunder, except such as may be required under the Act or state securities laws. (e) The financial statements, together with related notes, incorporated by reference in the Prospectus present fairly the financial position and the results of 3 operations of the Company on the bases set forth in such statements and related notes at the dates or for the periods to which they apply; such statements and related notes have been prepared in accordance with generally accepted principles of accounting, consistently applied throughout the periods involved, except as otherwise stated therein; and the supporting schedule incorporated by reference in the Prospectus presents fairly the information required to be stated therein. (f) The Company is a validly organized and existing corporation in good standing under the laws of the State of Missouri, with full power and authority to own or lease its properties and conduct its business as described in the Prospectus; each of the Company's subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with full power and authority to own or lease its properties and conduct its business; and each of the Company and its subsidiaries is duly qualified to do business and is in good standing in each jurisdiction in which the character of the business conducted by it or the location of the properties owned or leased by it makes such qualification necessary, except where the failure to so qualify would not have a material adverse effect in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole. (g) The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus (except for changes that the Registration Statement discloses have occurred or may occur or that were occasioned by the declaration of dividends and for Common Stock offered under the Company's shareholder and employee plans, including, without limitation, the Company's Dividend Reinvestment and Stock Purchase Plan); all of the outstanding shares of the capital stock of the Company (other than the Securities) have been duly and validly authorized and issued and are fully paid and non-assessable; when the Securities shall have been delivered against payment therefor as provided herein, they will have been duly and validly authorized and issued and fully paid and non-assessable and entitled to the rights set forth in the Company's Articles of Incorporation, as amended, and the Rights Agreement dated as of April 3, 1996 between the Company and UMB Bank, National Association (formerly Boatmen's Trust Company), as rights agent thereunder; other than as set forth in the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer of, any shares of Common Stock pursuant to the Articles of Incorporation or By-Laws of the Company, each as amended, or other agreement or instrument to which the Company is a party or by which it is bound or to which any of the property of the Company is subject; and the Common Stock, including the Securities, conforms to the description thereof contained in the Prospectus. (h) No labor dispute with any employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors, which labor dispute or disturbance in each case might reasonably be expected to result in any material adverse change in the 4 condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole. (i) Other than as set forth in the Prospectus, there are no legal, governmental or administrative proceedings pending to which the Company is a party or of which any property of the Company is the subject, the outcome of which, singly or in the aggregate, might reasonably be expected to result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole; and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (j) The Company and its subsidiaries have all valid material franchises, licenses and permits as are required for the conduct of their business as now conducted, and no franchise, license or permit is subject to any deficiency, exception, restriction, condition or limitation, except deficiencies, exceptions, restrictions, conditions and limitations that do not materially adversely affect the conduct, business and operation of the Company and its subsidiaries taken as a whole; and the Company and its subsidiaries have complied with such terms and provisions of franchises, licenses and permits the non-compliance with which would materially adversely affect the conduct, business and operation of the Company and its subsidiaries taken as a whole. (k) To the knowledge of the Company, no person or corporation that is a "holding company" or a "subsidiary of a holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, directly or indirectly owns, controls or holds with power to vote ten percent or more of the outstanding voting securities of the Company. (l) The Company and its subsidiaries possess such certificates, authorities or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice of any proceedings relating to the revocation or modification of any such certificate, authority or permit that, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, might reasonably be expected to materially and adversely affect the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole. 2. Purchase and Sale. ----------------- (a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price of $[_____] per share, the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto. (b) In addition, for the sole purpose of covering over-allotments in connection with the sale of the Firm Shares, the Company agrees to grant to the Underwriters an option to purchase 5 from the Company the number of Option Shares set forth in the notice referred to in Section 2(c) hereof (the "Option"). If the Option is exercised by the Underwriters, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price of $[_____] per share, the number of Option Shares (subject to such adjustments as the Representatives may determine in order to avoid fractional shares) that bears the same proportion to the aggregate number of Option Shares to be purchased as the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto bears to the aggregate number of Firm Shares. (c) The Option may be exercised, in whole or in part from time to time, within the period of 30 days from the date hereof, by written notice from the Representatives, on behalf of the Underwriters, to the Company. Such notice shall set forth the aggregate number of Option Shares as to which the Option is being exercised and the date of delivery of, and payment for, such Option Shares, which date shall be neither earlier than the later of the Time of Delivery and the second Business Day (as defined below) after the date of such exercise nor later than the seventh Business Day after the date of such exercise. As used herein, "Business Day" shall mean any day on which the New York Stock Exchange (the "NYSE") and banks in the City of New York are open. 3. Offering. Subject to the terms and conditions herein set forth, the -------- Underwriters will make a public offering of the Securities upon the terms and conditions set forth in the Prospectus. 4. Payment and Delivery; Defaulting Underwriters. Delivery of the Firm --------------------------------------------- Shares, against payment therefor in immediately available funds by wire transfer, shall be made at the offices of Winthrop, Stimson, Putnam & Roberts, One Battery Park Plaza, New York, New York, at 10:00 A.M., New York City time, on the third Business Day after the date hereof, unless the price referred to in Section 2(a) hereof is determined after 4:30 P.M., New York City time on the date hereof, in which case on the fourth Business Day after the date hereof, or at such other place, time and date as shall be agreed upon in writing by the Company and the Representatives. The hour and date of such delivery and payment are herein called the "Time of Delivery." The Firm Shares shall be delivered to the Underwriters, for their respective accounts in fully registered form, in such authorized denominations and registered in such names as the Representatives may reasonably request in writing not later than 2:00 P.M., New York City time, on the second Business Day after the date hereof, or to the extent not so requested, registered in the respective names of the Underwriters in such authorized denominations as the Company shall determine. The Company agrees to make the certificates for the Firm Shares available to the Representatives for checking purposes not later than 2:00 P.M., New York City time, on the last full Business Day preceding the Time of Delivery, at the offices of The Depository Trust Company, New York, New York, or at such other place, time or date as may be agreed upon between the Company and the Representatives. Delivery of any Option Shares, against payment therefor in immediately available funds by wire transfer, shall be made at the offices of Winthrop, Stimson, Putnam & Roberts, One 6 Battery Park Plaza, New York, New York, at 10:00 A.M., New York City time, on the date specified by the Representatives in accordance with Section 2(c) hereof, or at such other place, time and date as shall be agreed upon in writing by the Company and the Representatives. The hour and date of any such delivery and payment are herein called an "Option Shares Time of Delivery." Option Shares shall be delivered to the Underwriters, for their respective accounts in fully registered form, in such authorized denominations and registered in such names as the Representatives may reasonably request in writing not later than 2:00 P.M., New York City time, on the second Business Day preceding the Option Shares Time of Delivery with respect to such Option Shares, or to the extent not so requested, registered in the respective names of the Underwriters in such authorized denominations as the Company shall determine. The Company agrees to make the certificates for such Option Shares available to the Representatives for checking purposes not later than 2:00 P.M., New York City time, on the last full Business Day preceding such Option Shares Time of Delivery, at the offices of The Depository Trust Company, New York, New York, or at such other place, time or date as may be agreed upon between the Company and the Representatives. If any one or more of the Underwriters shall default on its obligation or their obligations to purchase and pay for the Securities that it has or they have agreed herein to purchase and pay for (such Underwriter or Underwriters that shall have so defaulted being referred to herein as the "Defaulting Underwriters"), the Company shall immediately give written notice of such default to the Representatives and the Underwriters that shall not have so defaulted (the "Non-defaulting Underwriters") shall have the right, within 24 hours after the receipt of such notice by the Representatives, to determine to purchase or to procure one or more others, which shall be members of the National Association of Securities Dealers, Inc. (the "NASD") and reasonably satisfactory to the Company, to purchase, upon the terms herein set forth, all (but not less than all) of the Securities that the Defaulting Underwriters so agreed to purchase (the "Defaulted Securities"). If the Non-defaulting Underwriters shall determine to exercise such right, the Representatives shall give notice to the Company of such determination within 24 hours after their receipt of notice from the Company of such default. If the Representatives shall fail to give such notice or, within such 24-hour period, shall give notice to the Company that the Non-defaulting Underwriters will not exercise such right, then the Company shall have the right, within a further 24 hours after the failure of the Representatives to give such notice or within 24 hours after its receipt of such notice from the Representatives, to procure one or more others, which shall be members of the NASD and reasonably satisfactory to the Representatives, to purchase, upon the terms herein set forth, all (but not less than all) of the Defaulted Securities. In the event that the Non-defaulting Underwriters or the Company shall have arranged for the purchase of the Defaulted Securities as provided above, then either the Company or the Representatives shall have the right to postpone the Time of Delivery or an Options Shares Time of Delivery, as the case may be, for such period, not exceeding three Business Days, in order that the required changes in the Registration Statement, the Prospectus and any other documents or arrangements may be effected. In the event that neither the Non-defaulting Underwriters nor the Company shall have arranged for the purchase of the Defaulted Securities as provided above, then: 7 (a) if the Defaulted Securities do not exceed 10% of the Securities that the Non-defaulting Underwriters have otherwise agreed to purchase, the Non-defaulting Underwriters shall be obligated to purchase and pay for the respective amounts of the Securities that they have severally agreed to purchase hereunder and, in addition, to purchase and pay for (in proportion to their respective obligations hereunder except as may be otherwise determined by the Non-defaulting Underwriters) the Defaulted Securities; or (b) if the Defaulted Securities exceed 10% of the Securities that the Non-defaulting Underwriters have otherwise agreed to purchase, this Agreement shall terminate. Termination of this Agreement pursuant to this Section 4 shall not relieve any of the Defaulting Underwriters from liability in respect of its obligations under this Agreement, but shall be without liability on the part of the Company and the Non-defaulting Underwriters; provided, however, that such termination shall not affect the payment obligations set forth in Section 5 hereof. 5. Covenants of the Company. The Company agrees with each of the ------------------------ Underwriters that it will: (a) Promptly deliver to the Representatives a copy of each of the Registration Statement and all amendments thereto (in each case including copies of all documents (other than exhibits) incorporated in the Prospectus by reference and all exhibits filed therewith), either signed or certified by an officer of the Company, and including a copy of each consent and opinion included therein or filed as an exhibit thereto, either signed or certified by an officer of the Company, and as many unsigned copies of the Registration Statement and such amendments, as the Representatives may reasonably request. The Company also will deliver to the Representatives as soon as possible after the date of this Agreement and thereafter from time to time, during such period of time as a prospectus relating to the Securities is required to be delivered under the Act, as many copies of the Prospectus, including any amendments or supplements thereto, as the Representatives may reasonably request for the purposes of the Act. The copies of the Registration Statement and all amendments thereto, and the copies of the Prospectus, including any amendments or supplements thereto, that are furnished to the Representatives will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (b) Promptly advise the Representatives (i) when any amendment of the Registration Statement shall have become effective, (ii) of any request by the Commission for any amendment of the Registration Statement or the Prospectus and (iii) of the issuance of any stop order under the Act with respect to the Registration Statement or the institution of any proceedings therefor of which the Company shall have received notice. The Company will use its best efforts to prevent the issuance of any such stop order and, if issued, to secure the prompt removal thereof. The Company will neither file 8 nor use any amendment or supplement to the Registration Statement or the Prospectus to which the Representatives or counsel for the Underwriters shall object. (c) Pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation and filing by it of the Registration Statement and the Prospectus, (ii) the preparation and delivery of this Agreement, (iii) the corporate and regulatory actions precedent to the issuance and delivery of the Securities, (iv) the issuance and delivery of the Securities, (v) the fees and disbursements of the Company's counsel and accountants, (vi) except as provided in Section 5(d) hereof, the printing and delivery to the Underwriters of reasonable quantities of the Registration Statement, the Prospectus and any amendment or supplement thereto, (vii) the fees and expenses of any transfer agent and registrar, (viii) the qualification of the Securities for offering and sale under state securities laws, including the fees, not to exceed $5,000, and disbursements of counsel for the Underwriters in connection with such qualification and blue sky surveys relating thereto, (ix) the fees and expenses in connection with the listing of the Securities on the NYSE and the Chicago Stock Exchange and (x) the filing fees incident to any required review by the NASD of the terms of the sale of the Securities. (d) During such period of time (not exceeding nine months) after the effective date of the Registration Statement as a prospectus relating to the Securities is required to be delivered under the Act, if (i) any event shall occur as a result of which it is necessary, in the opinion of the Company and its counsel or the Representatives and counsel for the Underwriters, to amend or supplement the Prospectus in order to make the Prospectus not misleading, in the light of then existing circumstances, or (ii) it shall be necessary to amend or supplement the Registration Statement or the Prospectus to comply with the Act or the Regulations or the Exchange Act or the Exchange Act Regulations, forthwith, at its expense, prepare and furnish to the Representatives a reasonable number of copies of a supplement or an amendment to the Prospectus that will supplement or amend the Prospectus so that as so supplemented or amended it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of then existing circumstances, not misleading or it will comply with the Act or the Regulations or the Exchange Act or the Exchange Act Regulations. In case any of the Underwriters shall be required to deliver a prospectus relating to the Securities after the expiration of nine months from the date of this Agreement, the Company, upon the request of the Representatives, will furnish to the Underwriters, at the expense of the Underwriters, a reasonable quantity of a supplemented or amended prospectus, or supplements or amendments to the Prospectus, complying with Section 10(a) of the Act. (e) Make generally available to its security holders, as soon as practicable, an earning statement (which need not be audited) covering a period of 12 months beginning on the first day of the Company's fiscal quarter next succeeding the effective date of the Registration Statement that will satisfy the provisions of Section 11(a) of the Act (including Rule 158 of the Regulations). 9 (f) Furnish such proper information as may be lawfully required and otherwise cooperate in qualifying the Securities for offer and sale under the securities or blue sky laws of such jurisdictions as the Representatives may reasonably designate, and file and make such statements or reports as are or may be required by the laws of such jurisdictions; provided, however, that the Company shall not be required to qualify as a foreign corporation or dealer in securities or to file any consents to service of process under the laws of any jurisdiction. (g) Except for sales of Common Stock pursuant to its shareholder and employee plans (including, without limitation, the Company's Dividend Reinvestment and Stock Purchase Plan), during the period beginning on the date of this Agreement and continuing to and including the 120th day following the Time of Delivery, not sell, offer to sell, grant any option for the sale of, or otherwise dispose of, any Common Stock or any security convertible into Common Stock without the prior consent of the Representatives. All fees and disbursements of counsel for the Underwriters (exclusive of fees and expenses of such counsel that are to be paid by the Company as set forth in clause (viii) of Section 5(c) hereof) shall be paid by the Underwriters; provided, however, that if this Agreement shall be terminated in accordance with the provisions of Section 6, 7, 8 or 10 hereof, the Company shall reimburse the Underwriters for their out-of-pocket costs and expenses, including the reasonable fees and disbursements of counsel for the Underwriters. The Company shall not be required to pay any amount for any expenses of the Underwriters except as provided in the preceding sentence. The Company shall not in any event be liable to any of the Underwriters for damages on account of the loss of anticipated profits. 6. Conditions of Obligations of the Underwriters to Purchase the Firm ------------------------------------------------------------------ Shares. The several obligations of the Underwriters to purchase and pay for the - ------ Firm Shares shall be subject to the accuracy of the representations and warranties of the Company set forth in Section 1 hereof as of the date hereof, to the accuracy of the statements of officers of the Company made in any certificate given pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder to be performed at or prior to the Time of Delivery, and to the following additional conditions: (a) (i) No stop order suspending the effectiveness of the Registration Statement shall be in effect at the Time of Delivery and no order of the Commission directed to the adequacy or accuracy of any document incorporated by reference in the Prospectus shall be in effect at such date; no proceedings for any such purpose shall be pending before, or threatened by, the Commission at the Time of Delivery; if the Completed Prospectus is required to be filed with the Commission pursuant to Rule 424(b) of the Regulations, the Completed Prospectus shall have been filed in the manner and within the time period required by Rule 424(b) of the Regulations and the Company shall have provided evidence reasonably satisfactory to the Representatives thereof; and the Representatives shall have received a certificate dated the Time of Delivery and signed by an executive officer of the Company to the effect that no such order is in effect and that no proceedings for any such purpose are pending before, or to the knowledge of the Company threatened by, the Commission; (ii) there shall not have been any change in the 10 matters described in the letter furnished pursuant to Section 6(d) hereof the effect of which would, in the opinion of the Representatives, materially and adversely affect the market for the Firm Shares; (iii) there shall not have been, since the respective dates as of which information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), except as may otherwise be stated in the Registration Statement and the Prospectus (or any amendment or supplement thereto), any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole; and (iv) the Company and its subsidiaries shall not have any liabilities or obligations, direct or contingent (whether or not in the ordinary course of business), that are material to the Company and its subsidiaries taken as a whole, other than those reflected in the Registration Statement or the Prospectus (or any amendment or supplement thereto). (b) At the Time of Delivery, there shall be in full force and effect an order or orders of the MPSC authorizing the issuance and sale of the Securities on the terms and conditions herein set forth, and containing no provision unacceptable to the Representatives by reason of the fact that it is materially adverse to the Company (it being understood that no order in effect on the date hereof contains any such unacceptable provision). (c) At the Time of Delivery, the Representatives shall have received from Gerald T. McNeive, Jr., Esq., Senior Vice President--Finance and General Counsel of the Company, and Winthrop, Stimson, Putnam & Roberts, counsel for the Underwriters, opinions, dated the Time of Delivery, in substantially the form and substance prescribed in Exhibits A and B, respectively, hereto. (d) At the date of this Agreement, Deloitte & Touche LLP shall have furnished to the Representatives a letter, dated the date of this Agreement, to the effect that: (i) they are independent public accountants with respect to the Company within the meaning of the Act and the Regulations; (ii) in their opinion, the consolidated financial statements examined by them and incorporated by reference in the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Act and the Regulations and the Exchange Act and the Exchange Act Regulations; (iii) on the basis of limited procedures, not constituting an examination made in accordance with generally accepted auditing standards, including a reading of the unaudited consolidated financial information incorporated by reference in the Prospectus, the latest available interim financial statements of the Company, if any, a reading of the minute books of the shareholders and the Board of Directors of the Company since the close of the Company's most recent fiscal year through a specified date not more than five days prior to the date of such letter, inquiries of officials of the Company responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to 11 their attention that caused them to believe that (A) (1) any material modifications should be made to the unaudited consolidated financial statements incorporated by reference in the Prospectus for them to be in conformity with generally accepted accounting principles or (2) the unaudited consolidated financial statements incorporated by reference in the Prospectus do not comply with the applicable accounting requirements of the Act or the Exchange Act as they apply to Form 10-Q and the Regulations or the Exchange Act Regulations; (B) at the date of the latest available interim balance sheet of the Company and at a subsequent specified date not more than five days prior to the date of such letter, there has been any change in the capital stock, or any increase in the long-term debt, or any decrease in net assets, in each case of the Company and as compared with amounts shown in the balance sheet as of the date of the latest financial statements incorporated by reference in the Prospectus, except in each case for changes, increases or decreases that the Registration Statement discloses have occurred or may occur, that were occasioned by the declaration of dividends or that are described in such letter identifying the same and specifying the amount thereof (in which case such letter shall be accompanied by an explanation of the Company as to the significance thereof unless such explanation is not deemed necessary by the Representatives); or (C) for the twelve months ended as of the date of the latest available unaudited financial statements, there were any decreases, as compared with the comparable period of the preceding year, in the Company's operating revenues, net income or earnings available for common stock, except in each case for decreases that the Registration Statement discloses have occurred or may occur, that were occasioned by the declaration of dividends or that are described in such letter identifying the same and specifying the amount thereof (in which case such letter shall be accompanied by an explanation of the Company as to the significance thereof unless such explanation is not deemed necessary by the Representatives); and (iv) they have performed certain other specified procedures with respect to certain amounts and percentages set forth in the Registration Statement or in the documents incorporated by reference in the Prospectus, as have been requested by the Representatives or counsel for the Underwriters and approved by the Company, and have found them to be in agreement with the records of the Company and the computations to be arithmetically correct. (e) At the Time of Delivery, Deloitte & Touche LLP shall have furnished to the Representatives a letter, dated the Time of Delivery, to the effect that the statements set forth in the letter furnished pursuant to Section 6(d) hereof are reaffirmed, except that the specified date referred to therein shall be a date not more than five days prior to the Time of Delivery. (f) At the Time of Delivery, the Representatives shall have received a certificate, dated the Time of Delivery and signed by an executive officer of the Company, to the effect that (i) the Company's representations and warranties set forth in Section 1 hereof are true and correct at and as of the Time of Delivery with the same effect as if made at and as of the Time of Delivery; provided, however, that (A) if any post-effective 12 amendment to the Registration Statement shall have been filed subsequent to the date hereof, the Registration Statement referred to in Section 1(b) hereof shall be deemed, for the purposes of such certificate, to include such amendment and (B) if the Completed Prospectus shall have been filed with the Commission pursuant to Rule 424(b) of the Regulations, the Prospectus referred to in Sections 1(c), (e), (f), (g) and (i) hereof shall be deemed, for the purposes of such certificate, to be the Completed Prospectus, (ii) the Company shall have performed all of its obligations hereunder to be performed at or prior to the Time of Delivery, (iii) if the Company shall have been required to file the Completed Prospectus with the Commission pursuant to Rule 424(b) of the Regulations, the Company shall have done so and (iv) the order or orders described in Section 6(b) hereof shall be in full force and effect. (g) All legal proceedings to be taken in connection with the issuance and sale of the Firm Shares shall be reasonably satisfactory in form and substance to counsel for the Underwriters. (h) Subsequent to the date of this Agreement, there shall not have occurred (i) any material change in or affecting the business, properties, financial condition or results of operations of the Company and its subsidiaries taken as a whole not contemplated by the Prospectus or any amendment or supplement thereto (including the documents incorporated by reference therein at the date thereof) that, in the opinion of the Representatives, would materially and adversely affect the market for the Firm Shares or (ii) any event or development relating to or involving the Company or any officer or director of the Company that, in the opinion of the Company and its counsel or the Representatives and counsel for the Underwriters, requires the making of any addition to or change in the Prospectus or any amendment or supplement thereto in order to state a material fact required by the Act to be stated therein or necessary in order to make the statements therein not misleading, if amending or supplementing the Prospectus to reflect such event or development would, in the opinion of the Representatives, adversely affect the market for the Firm Shares. (i) The Firm Shares shall have been listed (subject to official notice of issuance) on the NYSE. (j) The NASD shall have confirmed that it has not raised any objection with respect to the fairness or reasonableness of the underwriting terms and arrangements of the offering of the Securities. In case any of the conditions specified above in this Section 6 shall not have been fulfilled at the Time of Delivery, this Agreement may be terminated by the Representatives upon notice thereof to the Company at any time at or prior to the Time of Delivery. Any such termination shall be without liability of any party to any other party hereunder, except as otherwise provided in Section 5 hereof and provided that the provisions of Sections 1, 5, 9 and 14 hereof shall survive such termination and remain in full force and effect. 13 7. Conditions to Obligations of the Underwriters to Purchase Option ---------------------------------------------------------------- Shares. The several obligations of the Underwriters to purchase and pay for any - ------ Option Shares shall be subject to the accuracy of the representations and warranties of the Company set forth in Section 1 hereof as of the date hereof, to the accuracy of the statements of the officers of the Company made in any certificate given pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder to be performed at or prior to the Option Shares Time of Delivery with respect to such Option Shares, and to the following additional conditions: (a) (i) No stop order suspending the effectiveness of the Registration Statement shall be in effect at such Option Shares Time of Delivery and no order of the Commission directed to the adequacy or accuracy of any document incorporated by reference in the Prospectus shall be in effect at such Option Shares Time of Delivery; no proceedings for any such purpose shall be pending before, or threatened by, the Commission on such date; if the Completed Prospectus, or any supplement thereto or to the Prospectus, is required to be filed with the Commission pursuant to Rule 424(b) of the Regulations, the Completed Prospectus, or any such supplement, shall have been filed in the manner and within the time period required by Rule 424(b) of the Regulations and the Company shall have provided evidence reasonably satisfactory to the Representatives thereof; and the Representatives shall have received a certificate dated such Option Shares Time of Delivery and signed by an executive officer of the Company to the effect that no such order is in effect and that no proceedings for any such purpose are pending before, or to the knowledge of the Company threatened by, the Commission; (ii) there shall not have been any change in the matters described in the letter furnished pursuant to Section 6(d) hereof the effect of which would, in the opinion of the Representatives, materially and adversely affect the market for such Option Shares; (iii) there shall not have been, since the respective dates as of which information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), except as may otherwise be stated in the Registration Statement and the Prospectus (or any amendment or supplement thereto), any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole; and (iv) the Company and its subsidiaries shall not have any liabilities or obligations, direct or contingent (whether or not in the ordinary course of business), that are material to the Company and its subsidiaries taken as a whole, other than those reflected in the Registration Statement or the Prospectus (or any amendment or supplement thereto). (b) At such Option Shares Time of Delivery, there shall be in full force and effect an order or orders of the MPSC authorizing the issuance and sale of the Securities on the terms and conditions herein set forth, and containing no provision unacceptable to the Representatives by reason of the fact that it is materially adverse to the Company (it being understood that no order in effect on the date hereof contains any such unacceptable provision). (c) At such Option Shares Time of Delivery, the Representatives shall have received from Gerald T. McNeive, Jr., Esq., Senior Vice President-- Finance and General Counsel of the Company, and Winthrop, Stimson, Putnam & Roberts, counsel for the 14 Underwriters, opinions, dated such Option Shares Time of Delivery, with respect to such Option Shares in substantially the form and substance prescribed in Exhibits A and B, respectively, hereto. (d) At such Option Shares Time of Delivery, Deloitte & Touche LLP shall have furnished to the Representatives a letter, dated such Option Shares Time of Delivery, to the effect that the statements set forth in the letter furnished pursuant to Section 6(d) hereof are reaffirmed, except that the specified date referred to therein shall be a date not more than five days prior to such Option Shares Time of Delivery. (e) At such Option Shares Time of Delivery, the Representatives shall have received a certificate, dated such Option Shares Time of Delivery and signed by an executive officer of the Company, to the effect that (i) the Company's representations and warranties set forth in Section 1 hereof are true and correct at and as of such Option Shares Time of Delivery with the same effect as if made at and as of such Option Shares Time of Delivery; provided, however, that (A) if any post-effective amendment to the Registration Statement shall have been filed subsequent to the date hereof, the Registration Statement referred to in Section 1(b) hereof shall be deemed, for the purposes of such certificate, to include such amendment and (B) if the Completed Prospectus shall have been filed with the Commission pursuant to Rule 424(b) of the Regulations, the Prospectus referred to in Sections 1(c), (e), (f), (g) and (i) hereof shall be deemed, for the purposes of such certificate, to be the Completed Prospectus, (ii) the Company shall have performed all of its obligations hereunder to be performed at or prior to such Option Shares Time of Delivery, (iii) if the Company shall have been required to file the Completed Prospectus with the Commission pursuant to Rule 424(b) of the Regulations, the Company shall have done so and (iv) the order or orders described in Section 7(b) hereof shall be in full force and effect. (f) All legal proceedings to be taken in connection with the issuance and sale of the Securities shall be reasonably satisfactory in form and substance to counsel for the Underwriters. (g) Subsequent to the date of this Agreement, there shall not have occurred (i) any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole not contemplated by the Prospectus or any amendment or supplement thereto (including the documents incorporated therein by reference at the date thereof) that, in the opinion of the Representatives, would materially, adversely affect the market for the Securities or (ii) any event or development relating to or involving the Company or any officer or director of the Company that, in the opinion of the Company and its counsel or the Representatives and counsel for the Underwriters, requires the making of any addition to or change in the Prospectus or any amendment or supplement thereto in order to state a material fact required by the Act to be stated therein or necessary in order to make the statements therein not misleading, if amending or supplementing the Prospectus to reflect such event or development would, in the opinion of the Representatives, adversely affect the market for the Securities. 15 (h) Such Option Shares shall have been listed (subject to official notice of issuance) on the NYSE. In case any of the conditions specified above in this Section 7 shall not have been fulfilled at such Option Shares Time of Delivery, this Agreement may be terminated by the Representatives upon notice thereof to the Company at any time at or prior to such Option Shares Time of Delivery. Any such termination shall be without liability of any party to any other party hereunder, except as otherwise provided in Section 5 hereof and provided that the provisions of Sections 1, 5, 9 and 14 hereof shall survive such termination and remain in full force and effect. 8. Conditions of Company's Obligation. The obligation of the Company to ---------------------------------- deliver the Firm Shares at the Time of Delivery and any Option Shares at the Option Shares Time of Delivery with respect to such Option Shares shall be subject to the following conditions: (a) No stop order suspending the effectiveness of the Registration Statement shall be in effect at the Time of Delivery or such Option Shares Time of Delivery, as the case may be, and no order of the Commission directed to the adequacy or accuracy of any document incorporated by reference in the Prospectus shall be in effect at such date; and no proceedings for any such purpose shall be pending before, or threatened by, the Commission at the Time of Delivery or such Option Shares Time of Delivery, as the case may be. (b) At the Time of Delivery or such Option Shares Time of Delivery, as the case may be, there shall be in full force and effect an order or orders of the MPSC authorizing the issuance and sale of the Securities on the terms and conditions herein set forth, and containing no provisions unacceptable to the Company by reason of the fact that it is materially adverse to the Company (it being understood that no order in effect on the date hereof contains any such unacceptable provision). In case any of the conditions specified above in this Section 8 shall not have been fulfilled at the Time of Delivery or such Option Shares Time of Delivery, as the case may be, this Agreement may be terminated by the Company, upon notice thereof to the Representatives. Any such termination shall be without liability of any party to any other party hereunder, except as otherwise provided in Section 5 hereof and provided that the provisions of Sections 1, 5, 9 and 14 hereof shall survive such termination and remain in full force and effect. 9. Indemnification; Contribution. (a) The Company agrees to indemnify and ----------------------------- hold harmless each of the Underwriters and each person, if any, who controls any of the Underwriters within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against (i) any and all losses, claims, damages, liabilities and expenses whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including any information deemed to be a part thereof pursuant to Rule 430A(b) of the Regulations, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus relating to the Securities or the Prospectus (or any 16 amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) any and all losses, claims, damages, liabilities and expenses whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, provided that (subject to the last sentence of Section 9(c) hereof) any such settlement is effected with the written consent of the Company; and (iii) any and all expense whatsoever, as incurred (including, subject to Section 9(c) hereof, the fees and disbursements of counsel chosen by the Representatives), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clause (i) or (ii) above; provided, however, that the indemnity agreement contained in this Section 9(a) shall not (A) apply to any such losses, claims, damages, liabilities or expenses to the extent arising out of any such untrue statement or alleged untrue statement, or any such omission or alleged omission, made in reliance upon and in conformity with information furnished in writing to the Company, through the Representatives by any Underwriter, expressly for use in the Registration Statement (or any amendment thereto) or any preliminary prospectus relating to the Securities or the Prospectus (or any amendment or supplement thereto) or (B) inure to the benefit of any Underwriter or any person who controls such Underwriter within the meaning of Section 15 of the Act on account of any such losses, claims, damages, liabilities or expenses arising from the sale of any of the Securities to any person if any amendment or supplement to the Prospectus (excluding any document incorporated or deemed to be incorporated by reference therein), furnished to the Representatives by the Company prior to the sending or giving of written confirmation of such sale to such person, was not sent or given by or on behalf of such Underwriter to such person with or prior to such written confirmation and any such untrue statement or alleged untrue statement, or any such omission or alleged omission, was corrected in such Prospectus. (b) Each of the Underwriters, severally, agrees to indemnify and hold harmless the Company, its directors, each of its officers who shall have signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any and all losses, claims, damages, liabilities and expenses described in Section 9(a) hereof, as incurred, but only with respect to the untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or any preliminary prospectus relating to the Securities or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company, through the Representatives by such Underwriter, expressly for use in connection with the Registration Statement (or any amendment thereto) or any preliminary prospectus relating to the Securities or the Prospectus (or any amendment or supplement thereto). (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may 17 be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability on account of this indemnity agreement except to the extent that such indemnifying party has been prejudiced in any material respect by such failure or from any liability that such indemnifying party may have to such indemnified party otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 9(a) hereof, counsel to the indemnified parties shall be selected by the Representatives and, in the case of parties indemnified pursuant to Section 9(b) hereof, counsel to the indemnified parties shall be selected by the Company. An indemnifying party shall be entitled to participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 9 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 9(a)(ii) hereof effected without its written consent if (A) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (B) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (C) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. (d) If the indemnification provided for in Section 9(a) or (b) hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, claims, damages, liabilities and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, or if such indemnified party failed to give the notice required under Section 9(c) hereof and such indemnifying party was prejudiced in a material respect by such failure, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the 18 Underwriters on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus bear to the aggregate initial public offering price of the Securities as set forth on such cover. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to above in this Section 9(d). The aggregate amount of losses, claims, damages, liabilities and expenses incurred by an indemnified party and referred to above in this Section 9(d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 9(d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9(d), each person, if any, who controls an Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who shall have signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company. The Underwriters' respective obligations to contribute pursuant to this Section 9(d) are several in proportion to the number of Firm Shares set forth opposite their respective names in Schedule I hereto and not joint. 10. Termination. (a) The Representatives may terminate this Agreement at any time at or prior to the Time of Delivery, or rescind the exercise of the Option by the Underwriters at any time prior to an Option Shares Time of Delivery, by notice to the Company, if prior to the Time of Delivery or such Option Shares Time of Delivery, as the case may be, (i) there has been, since the date of this Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change in the business or the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries 19 taken as a whole, whether or not arising in the ordinary course of business, or (ii) there has occurred any material adverse change in the financial markets in the United States or any outbreak of hostilities or escalation of any existing hostilities or calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) trading in the Common Stock has been suspended or materially limited by the Commission or the NYSE, or trading generally on the NYSE or the American Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by the NYSE, the American Stock Exchange or the Nasdaq National Market System or by order of the Commission, the NASD or any other governmental authority, or (iv) a banking moratorium has been declared by either Federal, New York or Missouri authorities. (b) Notwithstanding any termination of this Agreement pursuant to this Section 10, such termination will be without liability of any party to any other party hereunder, except as otherwise provided in Section 5 hereof and provided that the provisions of Sections 1, 5, 9 and 14 hereof shall survive such termination and remain in full force and effect. 11. Notices. All statements, requests, notices and agreements hereunder ------- shall be in writing or by telephone if confirmed in writing within 24 hours and, if to the Underwriters, shall be sufficient in all respects if delivered or sent by registered mail to the Representatives at the address given on the last page hereof; and, if to the Company, shall be sufficient in all respects if delivered or sent by registered mail to the Company, c/o Office of the General Counsel, Laclede Gas Company, 720 Olive Street, St. Louis, Missouri 63101; provided, however, that any notice to any of the Underwriters pursuant to Section 9(c) hereof shall be delivered or sent by registered mail to such party at its principal executive offices. 12. Information for Use in Prospectuses. The information with respect to ----------------------------------- the price to the public of the Securities to be set forth on, and the information to be set forth in the last paragraph of, the cover page of, and the information to be set forth in the second paragraph under the table under "Underwriting" in, the Prospectus shall be deemed to have been furnished in writing to the Company through the Representatives by or on behalf of the Underwriters specifically for use therein. 13. Representations and Warranties of Representatives. Each of the ------------------------------------------------- Representatives represents and warrants to the Company that it has full power and authority (a) to enter into this Agreement on behalf of each of the Underwriters listed in Schedule I hereto and (b) to act on behalf of each of the Underwriters with respect to the performance of this Agreement. In all dealings hereunder, the Company shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of all of the Underwriters made or given either by the Representatives jointly or by either of the Representatives individually. 14. Miscellaneous. (a) This Agreement shall be binding upon the ------------- Underwriters and the Company and shall inure solely to the benefit of the Underwriters, the Company and, to the extent provided in Section 9 hereof, the directors and officers of the Company and each 20 person who controls the Company or any of the Underwriters, and in each case their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities from any of the Underwriters shall be deemed a successor or assign by reason merely of such purchase. (b) This Agreement shall be construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York. (c) This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. (d) All representations, warranties and agreements contained in this Agreement, or in certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Underwriters. 21 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the counterparts hereof enclosed, and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement between the several Underwriters and the Company. Very truly yours, LACLEDE GAS COMPANY By: ----------------------------- Name: Title: Accepted at New York, New York as of the date first above written: MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated A.G. EDWARDS & SONS, INC. For themselves and as Representatives of the other Underwriters named in Schedule I to this Underwriting Agreement. By: Merrill Lynch, Pierce, Fenner & Smith Incorporated By ------------------------------------- Authorized Signatory Address: Merrill Lynch & Co. World Financial Center North Tower New York, New York 10281 22 SCHEDULE I Number of Shares Underwriters to be Purchased - ------------ ------------------- Merrill Lynch, Pierce, Fenner & Smith Incorporated A.G. Edwards & Sons, Inc. Total 1,100,000 ========== 23 Exhibit A --------- [Opinion of Gerald T. McNeive, Jr., Esq.] [Letterhead of the Company] May [__], 1999 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated A.G. EDWARDS & SONS, INC. As Representatives of the several Underwriters named in Schedule I to the Underwriting Agreement referred to below (the "Underwriters") c/o Merrill Lynch & Co. World Financial Center North Tower New York, New York 10281 Ladies and Gentlemen: I am Senior Vice President--Finance and General Counsel of Laclede Gas Company (the "Company") and have acted in that capacity in connection with the issuance and sale by the Company pursuant to the Underwriting Agreement dated May [__], 1999 between the Company and you, as Representatives of the Underwriters (the "Underwriting Agreement"), of [_____] shares of the Company's Common Stock, par value $1 per share (the "Shares"). The terms "Registration Statement" and "Prospectus" as used herein have the same meanings as when used in the Underwriting Agreement. I am familiar with the Articles of Incorporation, as amended, and the By- Laws, as currently in effect, of the Company (the "Articles" and the "By-Laws," respectively) and the records of various corporate and other proceedings, including the actions taken by the Company's Board of Directors relating to the authorization, issuance and sale of the Shares. I have participated in the preparation of or reviewed (a) the Underwriting Agreement; (b) the Registration Statement and the Prospectus; and (c) the proceedings before the State of Missouri Public Service Commission (the "MPSC") for authority to issue and sell the Shares and the order effective January 22, 1999 and the supplemental order effective February 9, 1999 for authority to issue and sell the Shares entered by the MPSC in respect thereto (such orders, the "MPSC Orders"). I have examined the Annual Report on Form 10-K of the Company for the fiscal year ended September 30, 1998, the Quarterly Reports on Form 10-Q of the Company for the quarterly periods ended December 31, 1998 and March 31, 1999, the Current Report on Form 8-K of the Company, dated January 28, 1999 and the Form 8-A Registration Statement of the Company dated April 3, 1996 (the "Exchange Act Documents"), each as filed with the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in the Prospectus. I have been advised by the Staff of the Commission of the issuance of an order from the Commission to the Company as to the effectiveness of the Registration Statement under the Securities Act of 1933, as amended (the "Securities Act"). I have also examined such documents and satisfied myself as to such other matters as I have deemed necessary to render this opinion. In the course of such examination, I have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as certified or photostatic copies and the authenticity of the originals of such latter documents. I have also relied upon information submitted to me by certain officers of the Company with respect to the existence or non-existence of certain facts that form the basis for the opinions set forth herein. Although I have not conducted any independent investigations of the accuracy of various of the matters covered by such information supplied by officers of the Company, I have no reason to believe that any of the matters covered thereby are inaccurate. I have also relied on certain documents, instruments and certificates of public officials. I have not examined the certificates for the Shares, except a specimen thereof, and have relied upon a certificate of the transfer agent and registrar for the Shares as to the issuance, registration and countersignature thereof. With respect to the matters relating to the outstanding shares of capital stock of the Company (other than the Shares) expressed in paragraph 3. below, I have relied upon the opinion of Thompson Mitchell Douglas & Neill, dated July 8, 1960, as to such counsel's opinion with respect to the due and valid authorization and issuance of, and the fully paid and non-assessable nature of, any such shares that were issued on or prior to the date of such opinion. Upon the basis of my familiarity with the foregoing and with the Company's properties and affairs generally, and as limited by the qualifications and limitations stated herein, I am of the opinion that: 1. Each of the Company, Laclede Pipeline Company, Laclede Investment Corporation and Laclede Energy Resources, Inc. is a corporation duly organized and validly existing in good standing under the laws of the State of Missouri. 2. The Company is a public utility corporation, is duly authorized by the Articles to conduct the utility business that it is described in the Prospectus as conducting, and, by virtue of its possession of valid and subsisting licenses, franchises A-2 and permits, and its compliance with the laws of the State of Missouri, is duly authorized to conduct such business in that State. In this regard, it should be noted that the Company will seek to renew its franchise in Florissant, Missouri, which franchise expired in 1992; and that since that time the Company has continued to provide service in that community without a formal franchise. 3. All of the outstanding shares of capital stock of the Company (other than the Shares) have been duly and validly authorized and issued and are fully paid and non-assessable. 4. The Shares have been duly and validly authorized and, when the Shares shall have been delivered against payment therefor as provided in the Underwriting Agreement, they will have been duly and validly issued and will be fully paid and non-assessable and entitled to the rights set forth in the Articles and the Rights Agreement dated as of April 3, 1996 between the Company and UMB Bank, National Association (formerly Boatmen's Trust Company), as rights agent thereunder; and, other than as set forth in the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer of, the Shares pursuant to the Articles or the By-Laws, or other agreement or instrument known to me to which the Company is a party or by which it is bound or to which any of the property of the Company is subject. 5. The statements made in the Prospectus under the caption "Description of Common Stock," insofar as they purport to constitute summaries of the terms of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. 6. The Shares have been listed (subject to official notice of issuance) on the New York Stock Exchange. 7. The Underwriting Agreement has been duly authorized, executed and delivered by the Company. 8. The Registration Statement has become and is effective under the Securities Act; and, to the best of my knowledge, no proceedings for a stop order with respect thereto are pending or threatened under Section 8(d) of the Securities Act. 9. The MPSC has issued the MPSC Orders authorizing the issuance and sale by the Company of the Shares; the issuance and sale of the Shares in accordance with the Underwriting Agreement are in conformity with the terms of the MPSC Orders; and no further approval, authorization, consent or other order of any public board or body (other than in connection or in compliance with the provisions of the securities or blue sky laws of any jurisdiction) is legally required for the issuance and sale of the Shares on the terms and conditions set forth in the Underwriting Agreement. 10. There are no legal, governmental or administrative proceedings pending to which the Company is a party or of which any property of the Company is the subject, A-3 other than as set forth in the Prospectus and other than proceedings incident to the kind of business conducted by the Company, the outcome of which, singly or in the aggregate, might reasonably be expected to have a materially adverse effect on the financial position, stockholders' equity or results of operations of the Company; and, to the best of my knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. 11. The consummation of the transactions contemplated in the Underwriting Agreement and the fulfillment of the terms thereof will not result in a breach of any of the terms or provisions of, or constitute a default under, (i) any indenture, mortgage, deed of trust or other material agreement or instrument known to me to which the Company is a party or by which it is bound or to which any of the property of the Company is subject, (ii) the Articles or the Bylaws or (iii) any order, rule or regulation of any court or other governmental body having jurisdiction over the Company or any of its property, or any statute, in each case of the United States of America or the State of Missouri, or, to the best of my knowledge, any order, rule or regulation of any other court or other governmental body having jurisdiction over the Company or any of its property or any other statute. I have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Prospectus or the Exchange Act Documents and take no responsibility therefor, except insofar as such statements relate to me and as and to the extent expressly set forth herein. In the course of the preparation of the Registration Statement and the Prospectus, I and other members of the Company's legal department (the "Legal Department") have participated in conferences with certain of the Company's officers and employees, with representatives of Deloitte & Touche LLP, the independent accountants for the Company, with your representatives and with counsel for the Underwriters. Based on my examination of the Registration Statement and the Prospectus, and the investigations made in connection with the preparation of the Registration Statement and the Prospectus and the Legal Department's participation in the conferences referred to above, (i) I am of the opinion that the Registration Statement, as of the date it was declared effective by the Commission, and the Prospectus, as of the date it was filed with the Commission pursuant to Rule 424(b) under the Securities Act, complied as to form in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder and that the Exchange Act Documents complied as to form when filed in all material respects with the requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case I express no opinion with respect to the financial statements or schedules or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents, and (ii) I have no reason to believe that the Registration Statement, as of the date it was declared effective by the Commission, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus, as of the date hereof, includes any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, except that in each case I express no opinion or belief with respect to the financial statements or schedules or other A-4 financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents. In passing upon the form of the Registration Statement, the form of the Prospectus and the forms of the Exchange Act Documents, I necessarily assume the correctness and completeness of the statements made by the Company and information included therein and take no responsibility therefor, except insofar as such statements relate to me and as set forth in paragraph 5. above. I have examined the portions of the information contained in the Registration Statement that are stated therein to have been made on my authority and, upon my review thereof, I believe such information to be correct. I am a member of the Bar of the State of Missouri and, except with respect to the matters expressed in paragraphs 2., 9., 10. and 11. above, I do not express any opinion herein as to any matters governed by any laws other than the laws of the State of Missouri and the Federal laws of the United States of America. I am also delivering this opinion to Winthrop, Stimson, Putnam & Roberts, who is entitled to rely upon this opinion to the same extent as if such opinion were addressed to such firm. This opinion is rendered to you and Winthrop, Stimson, Putnam & Roberts in connection with the above-described transaction. This opinion may not be relied upon by you or Winthrop, Stimson, Putnam & Roberts for any other purpose, or relied upon by or furnished to any other person, firm or corporation (other than the Underwriters), without my prior written consent. This opinion speaks only as of its date. I have no obligation to advise the Underwriters or you, as their Representatives, of changes in law or fact that occur after the date of this opinion, even where such change may affect the legal analysis, a legal conclusion or an informational confirmation in this opinion. Very truly yours, A-5 Exhibit B --------- [Letterhead of Winthrop, Stimson, Putnam & Roberts] May [__], 1999 MERRILL LYNCH & CO. Merrill Lynch Pierce, Fenner & Smith Incorporated A.G. EDWARDS & SONS, INC. As Representatives of the several Underwriters named in Schedule I to the Underwriting Agreement referred to below (the "Underwriters") c/o Merrill Lynch & Co. World Financial Center North Tower New York, New York 10281 Ladies and Gentlemen: We have acted as your counsel in connection with the issuance and sale by Laclede Gas Company (the "Company") of [_____] shares of the Company's Common Stock, par value $1 per share (the "Shares"), pursuant to the Underwriting Agreement dated May [__], 1999 between the Company and you, as Representatives of the Underwriters (the "Underwriting Agreement"). The terms "Registration Statement" and "Prospectus" as used herein have the same meanings as when used in the Underwriting Agreement. We have reviewed the Registration Statement and the Prospectus, which pursuant to Form S-3 under the Securities Act of 1933, as amended (the "Securities Act"), incorporates by reference the Annual Report on Form 10-K of the Company for the fiscal year ended September 30, 1998, the Quarterly Reports on Form 10-Q of the Company for the quarterly periods ended December 31, 1998 and March 31, 1999, the Current Report on Form 8-K of the Company dated January 28, 1999 and the Form 8-A Registration Statement of the Company dated April 3, 1996 (the "Exchange Act Documents"), each as filed with the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, we have reviewed, and have relied as to matters of fact upon, the documents delivered to you at the closing (except the certificates for the Shares, of which we have reviewed a specimen, and have relied upon a certificate of the transfer agent and registrar for the Shares as to the issuance, registration and countersignature thereof) and upon originals or copies, certified or otherwise identified to our satisfaction, of such corporate records, agreements, documents and other instruments and such certificates or comparable documents of public officials and of officers and representatives of the Company, and have made such other and further investigations, as we have deemed relevant and necessary as a basis for the opinions hereinafter set forth. In such review, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. We are members of the Bar of the State of New York and we do not express any opinion herein as to any matters governed by any laws other than the laws of the State of New York, the Federal laws of the United States of America and, to the extent set forth herein, the laws of the State of Missouri. With respect to legal matters governed by the laws of the State of Missouri, we understand that you are relying upon the opinion of Gerald T. McNeive, Jr., Esq., Senior Vice President--Finance and General Counsel of the Company, of even date, addressed to you. We believe that such opinion is satisfactory in form and that you are justified in relying thereon and we, on our part, have relied solely on said opinion as to such matters. We do not pass upon legal matters regarding the incorporation of the Company or its qualification to do business in any jurisdiction, as to which we understand you are relying upon the aforesaid opinion of Mr. McNeive. Based upon the foregoing and subject to the qualifications and limitations stated herein, we hereby advise you that in our opinion: 1. The Shares have been duly authorized by the Company and, upon payment and delivery in accordance with the Underwriting Agreement, will be validly issued, fully paid and nonassessable. 2. The statements made in the Prospectus under the caption "Description of Common Stock," insofar as they purport to constitute summaries of the terms of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. 3. The Underwriting Agreement has been duly authorized, executed and delivered by the Company. B-2 4. The Registration Statement has become and is effective under the Securities Act; and, to the best of our knowledge, no proceedings for a stop order with respect thereto are pending or threatened under Section 8(d) of the Securities Act. 5. No approval, authorization, consent or other order of any governmental agency or body of the United States of America or the State of New York is legally required for the issuance and sale by the Company of the Shares on the terms and conditions set forth in the Underwriting Agreement (other than the order of the Commission declaring the Registration Statement effective and except that we express no opinion as to any such approval, authorization, consent or other order as may be required under the provisions of the securities or blue sky laws of the State of New York in connection with the purchase and distribution of the Shares by the Underwriters). We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Prospectus or the Exchange Act Documents and take no responsibility therefor, except insofar as such statements relate to us and to the extent expressly set forth herein. In the course of the preparation by the Company of the Registration Statement and the Prospectus (excluding the Exchange Act Documents), we participated in conferences with certain of its officers and employees, with counsel for the Company, with representatives of Deloitte & Touche LLP, the independent accountants who examined certain of the Exchange Act Documents, and with your representatives. We did not prepare the Exchange Act Documents. Based on our examination of the Registration Statement, the Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement and the Prospectus (excluding the Exchange Act Documents) and our participation in the conferences referred to above, (i) we are of the opinion that the Registration Statement, as of the date it was declared effective by the Commission, and the Prospectus, as of the date it was filed with the Commission pursuant to Rule 424(b) under the Securities Act, complied as to form in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder, except that in each case we express no opinion with respect to the financial statements or schedules or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents, and (ii) we have no reason to believe that the Registration Statement, as of the date it was declared effective by the Commission, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus, as of the date hereof, includes any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no opinion or belief with respect to the financial statements or schedules or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents. In passing upon the form of the Registration Statement and the form of the Prospectus, we necessarily assume the correctness and completeness of the statements made by the Company and the information included or incorporated by reference in the Registration Statement and the B-3 Prospectus and take no responsibility therefor, except insofar as such statements relate to us and as set forth in paragraph 2. above. This opinion is rendered to you in connection with the above-described transaction. This opinion may not be relied upon by you for any other purpose, or relied upon by or furnished to any other person, firm or corporation (other than the Underwriters), without our prior written consent. Very truly yours, B-4 EX-5 3 OPINION OF GERALD T. MCNEIVE, JR. Exhibit 5 --------- March 15, 1999 Laclede Gas Company 720 Olive Street St. Louis, MO 63101 Ladies and Gentlemen: I am familiar with, and am rendering this opinion to you with respect to, the Registration Statement on Form S-3 (the "Registration Statement"), which Laclede Gas Company, a Missouri corporation (hereinafter called the "Company"), proposes to file with the Securities and Exchange Commission (the "Commission") on or shortly after the date hereof under the Securities Act of 1933, as amended (the "Act"), regarding the registration of one million two hundred and fifty thousand shares of the Company's Common Stock ($1.00 per share par value) to be issued and sold (hereinafter called the "Common Stock") with one Common Stock Purchase Right attached to each share of Common Stock (which Rights, prior to the occurrence of certain events, will not be evidenced separately from the Common Stock), which issuance and sale were the subject of certain Resolutions of the Company's Board of Directors dated November 19, 1998 (the "Resolutions"), and the Missouri Public Service Commission's Order Approving Financing dated January 12, 1999 and Supplemental Order Approving Financing dated January 27, 1999, both of which orders authorize the issuance and sale of the Common Stock (with attached Rights), which authorization remains in effect through January 1, 2001. In connection with this opinion, I, or attorneys under my supervision, have examined such documents, legal opinions and precedents, corporate and other records of the Company and certificates of public officials and officers of the Company as I have deemed necessary or appropriate to provide a basis for the opinions set forth below. In this examination, I have assumed the genuineness of all signatures, the authenticity of all documents submitted as original documents and the conformity to original documents of all documents submitted as certified or photostatic copies. Page 2 Laclede Gas Company March 15, 1999 On the basis of the foregoing, I am of the opinion that: 1. The Company has been duly incorporated and is validly existing as a corporation under the laws of the State of Missouri. 2. Upon (a) the effectiveness of the Registration Statement and (b) the Company's Board of Directors having taken further action approving the issuance and sale of the Common Stock (with attached Rights), as provided for by the Resolutions, the issuance and sale of the Common Stock (and attached Rights) will have been duly authorized by all necessary corporate action on the part of the Company, and, upon such issuance, and following receipt by the Company of the consideration for such Common Stock (and attached Rights), the Common Stock (and attached Rights) will be validly issued, fully paid and non-assessable. I am a member of the Missouri Bar and, in rendering this opinion, I am not holding myself out as an expert on the laws of any other state. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement, and I also consent to such references to me as may be made in the Registration Statement, as it may be amended, and in the prospectus relating to the Common Stock (and attached Rights). In giving such consent, I do not thereby admit that I am within the category of persons whose consent is required pursuant to Section 7 of the Act or the rules and regulations of the Commission thereunder. Very truly yours, /s/ Gerald T. McNeive, Jr. Gerald T. McNeive, Jr. GTM: af EX-23.(B) 4 CONSENT OF DELOITTE & TOUCHE LLP Exhibit 23(b) INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Laclede Gas Company on Form S-3 of our report dated November 19, 1998, appearing in the Annual Report on Form 10-K of Laclede Gas Company for the year ended September 30, 1998 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. St. Louis, Missouri March 11, 1999 /s/ Deloitte & Touche LLP EX-24 5 POWER OF ATTORNEY Exhibit 24 POWER OF ATTORNEY Each of the undersigned does hereby appoint R. C. JAUDES, D. H. YAEGER, G. T. McNEIVE, JR. and M. C. KULLMAN, and each of them severally, his or her true and lawful attorneys to execute in his or her name, place, and stead (whether on behalf of Laclede Gas Company, a Missouri corporation, or as an officer or director thereof, or by affixing or attesting the seal of said Company, or otherwise): (1) a registration statement on Form S-3 to be filed with the Securities and Exchange Commission (the "S-3" in connection with the registration of: (a) up to and including 1,250,000 shares of Laclede Gas Company common stock having a par value of $1.00 per share (the "Common Stock") for issuance in a public offering (the "Stock Issuance"), which Stock Issuance, subject to certain conditions, was authorized and approved by the Laclede Gas Company Board of Directors on November 19, 1998; and (b) a like number of related common stock purchase rights ("Related Rights") to accompany the shares of Common Stock; (2) any filings to register, or obtain exemption, under the securities and/or "blue sky" laws in any jurisdiction in connection with the Stock Issuance and/or the issuance of the Related Rights (the "Blue Sky Filings"); (3) any and all amendments (including, but not limited to post- effective amendments), supplements and/or exhibits to the S-3 and/or any Blue Sky Filings; and (4) all instruments necessary or advisable in connection therewith; as well as the power and authority, as such attorney or attorneys, to affix and attest the seal of Laclede Gas Company thereon, and to file the same with the Securities and Exchange Commission and any other regulatory agency in any jurisdiction. Each of said attorneys shall have power to act hereunder with or without the others. A copy hereof shall have the same force and effect as the original. IN WITNESS WHEREOF, the undersigned have executed this instrument this 19th day of November, 1998. /s/R. E. Beumer /s/W. E. Nasser ___________________________________________ ___________________________________________ R. E. BEUMER W. E. NASSER /s/A. B. Craig /s/R. P. Stupp ___________________________________________ ___________________________________________ A. B. CRAIG R. P. STUPP /s/H. Givens, Jr. /s/H. E. Trusheim ___________________________________________ ___________________________________________ H. GIVENS, JR. H. E. TRUSHEIM /s/C. R. Holman /s/D. H. Yaeger ___________________________________________ ___________________________________________ C. R. HOLMAN D. H. YAEGER /s/R. C. Jaudes /s/G. T. McNeive, Jr. ___________________________________________ ___________________________________________ R. C. JAUDES G. T. McNEIVE, JR. /s/M. A. Krey ___________________________________________ M. A. KREY
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