4
PARTICIPATION
5.
Who may participate in the Plan?
All
shareholders of Common Stock, Company natural gas customers and employees and residents of
Arizona, California and Nevada are eligible to participate in the Plan.
A
Plan account may be opened in your name, in the joint name of you and another person, or
in your name as custodian for a minor or as trustee for another person by completing the
Enrollment and Authorization Form (“Enrollment Form”) in the proper manner.
6.
How does an eligible individual join the Plan?
*
If you are a shareholder of record, you may join the Plan by completing and returning an
Enrollment Form. If you are a beneficial shareholder (i.e., the record shareholder is your
nominee), evidence acceptable to the Company regarding your ownership of the
Company’s Common Stock will have to accompany the Enrollment Form.
*
If you are a Company natural gas customer, you may join the Plan by completing an
Enrollment Form and returning it to the Company along with a minimum initial investment of
$100.
*
If you are a Company employee and participate in the Company’s Employees’
Investment Plan (“EIP”), you may join the Plan by completing and returning an
Enrollment Form. If you are a Company employee and do not participate in the
Company’s EIP, you may join the Plan by completing an Enrollment Form and returning
it along with a minimum initial investment of $100 to the Company.
*
If you are a resident of Arizona, California or Nevada and do not otherwise qualify to
participate in the Plan, you may join the Plan by completing an Enrollment Form and
returning it along with a minimum initial investment of $100 to the Company.
Enrollment
Forms will be furnished to you at any time upon request to Shareholder Services, Southwest
Gas Corporation, P.O. Box 98511, Las Vegas, Nevada 89193-8511, or by telephoning the
Company at (800) 331-1119 or (702) 876-7280.
7.
When can an eligible individual join the Plan?
If
you are a shareholder or an employee who is participating in the Company’s EIP, you
may join the Plan at any time. If an Enrollment Form is received on or before the record
date for a dividend payment, reinvestment of dividends will begin with that dividend. If
the Enrollment Form is received after the record date, reinvestment of dividends will
begin with the next dividend payment date. (See Question 10.)
Company
natural gas customers, other Company employees and residents of Arizona, California and
Nevada who are not already shareholders will join the Plan once their initial investment
of $100 has been used to purchase Common Stock. An initial investment of $100 received
during any month will be invested as of the next Investment Date or during the next
Investment Period. (See Question 9.) With the purchase of shares of Common Stock, you
will become Plan participants.
5
8.
What does the
Enrollment Form provide?
The
Enrollment Form authorizes the Company to do the following:
Initial
Investment—Upon receipt of a minimum initial investment payment of $100 from a
Company natural gas customer, Company employee or resident of Arizona, California and
Nevada who is not already a shareholder, the Company or the Plan Agent will purchase
shares of Common Stock for your Plan account on the next Investment Date or during the
next Investment Period. (See Question 9.)
Optional
Payments—Upon receipt of optional payments from a minimum of $25 up to a maximum
of $100,000 per calendar year, the Company or the Plan Agent will purchase shares of
Common Stock for your Plan account on the next Investment Date or during the next
Investment Period. (See Question 11.)
Dividend
Reinvestment—The Company or the Plan Agent will automatically reinvest dividends
on all shares of Common Stock held in Plan accounts on the Investment Date or during the
next Investment Period that coincides with the payment of dividends for shares. (See
Question 10.) The Company or the Plan Agent will also automatically reinvest dividends on
all of the shares held of record by you outside the Plan. If you own a total of 250 or
more shares, you will have the option of receiving one-half of your dividends in cash. If
you deposit and maintain all of your shares with the Plan for safekeeping purposes only,
you will have the option of receiving all of your dividends in cash.
INITIAL INVESTMENTS
9.
When will initial investment payments be invested?
The
timing for the investment of the initial payments depends upon whether the shares of
Common Stock will be purchased by the Company or the Plan Agent. If the purchases are made
by the Company of Original Issue Shares, the purchases will occur twice during the month.
If the purchases are made by the Plan Agent of Original Issue or Open Market Shares, the
purchases will occur once each month. No interest will be paid on payments received and
held by the Company prior to investment.
Company Purchases—Initial investment payments received by the Company by the 10th
day of any month will be invested in Original Issue Shares on the 15th day of the month.
Initial investment payments received after the 10th and on or before the 25th day of any
month will be invested in Original Issue Shares on the first business day of the following
month. If any of these dates are not business days, the planned action will be extended to
the following business day. Such dates are the “Investment Date(s)" for purposes
of the Plan. The Company may delay or authorize the Plan Agent to make purchases directly
from the Company during periods when the Plan is being marketed or during other
distributions of Common Stock.
Plan Agent Purchases—Initial investment payments received by the 25th day of any
month will be invested in Original Issue or Open Market Shares by the Plan Agent during
the 30-day period commencing on the 26th day of the month. Such period is the
“Investment Period” for the purposes of the Plan.
6
Upon
written request received by the Company on or before the Investment Date or the day before
the start of the Investment Period in which the initial investment payment is being held
by the Company, you may, without withdrawing from the Plan, receive the return of a
portion of the initial investment payment, provided that a minimum of $100 is maintained
in the Plan.
REINVESTED DIVIDENDS
10.
When will dividends be reinvested?
Any
dividends on shares of Common Stock to be reinvested will be reinvested on the Investment
Date or Investment Period coinciding with the payment of such dividend. Common Stock
dividends have ordinarily been paid on the first business day of March, June, September,
and December, but no assurance can be given that the Company will continue to pay
dividends on this basis.
Instructions
regarding the automatic reinvestment of dividends on shares of Common Stock of record will
be effective on the next dividend payment date if the shareholder’s Enrollment Form
is received by the Company by the record date (which is normally the 15th calendar day of
the month preceding the month in which a dividend is paid) established for a dividend
payment. Instructions received after the record date for a dividend will not be effective
until the next dividend payment date.
OPTIONAL PAYMENTS
11.
Who is eligible to make optional payments?
Once
you become a participant, you are eligible to make optional cash payments of at least $25
at any time. An optional cash payment may be made when joining the Plan by enclosing the
payment with the Enrollment Form. Thereafter, optional cash payments should be accompanied
by the form provided with your statement of your Plan account.
Optional
cash payments cannot be less than $25 and can not exceed $100,000 per calendar year per
Plan participant. Optional cash payments shall be made by check or money order payable to:
Southwest Gas Corporation DRSPP, P.O. Box 98511, Las Vegas, Nevada 89193-8511, Attention:
Shareholder Services. Your Plan account number should be included on all checks.
12.
When will optional payments be invested and when will dividends be paid on
shares of Common Stock purchased with optional
payments?
The
timing for the investment of optional payments depends upon whether the Common Stock will
be purchased by the Company or the Plan Agent. If the purchases are made by the Company of
Original Issue Shares, the purchases will occur twice during the month. If the purchases
are made by the Plan Agent of Original Issue or Open Market Shares, the purchases will
occur once each month. No interest will be paid on payments received and held by the
Company prior to investment.
7
Company Purchases—Optional payments received by the Company by the 10th day of
any month will be invested in Original Issue Shares on the 15th day of the month. Optional
payments received after the 10th and on or before the 25th day of any month will be
invested in Original Issue Shares on the first business day of the following month. Such
dates are the “Investment Date(s)” for purposes of the Plan. If any of these
dates are not business days, the planned action will be extended to the following business
day. The Company may delay or authorize the Plan Agent to make purchases directly from the
Company during periods when the Plan is being marketed or during other distributions of
Common Stock.
Plan Agent Purchases—Optional payments received by the 25th day of any month will
be invested in Original Issue or Open Market Shares by the Plan Agent during the
Investment Period, the 30-day period commencing on the 26th day of the month.
Any
dividends on shares of Common Stock purchased with optional payments will be reinvested on
the Investment Date coinciding with the payment of a dividend when Original Issue Shares
are purchased directly by the Company. Common Stock dividend payment dates are ordinarily
the first business day of March, June, September, and December. No assurance can be given
that the Company will continue to pay dividends on this basis. When Original Issue or Open
Market Shares are purchased by the Plan Agent, the Investment Period will be the 30-day
period beginning on the 26th day of the month preceding the dividend date.
You
may, without withdrawing from the Plan, have returned any optional payment upon written
request received by the Company on or before the Investment Date or the day before the
start of the Investment Period for any payment being held by the Company.
13.
How do I make payments?
The
amount of the optional payment made each time may vary. However, you are encouraged to set
an investment goal and then send a fixed amount every month or quarter. A payment may be
made by enclosing a check or money order payable to Southwest Gas Corporation DRSPP with
the Enrollment Form or on the optional payment form provided with your statement. In
addition, electronic transfers from shareholder checking or savings accounts are
available. A payment to be invested must not be included in a check or money order
submitted for payment of gas service.
EXPENSES
14.
Are there any expenses charged to me in connection with participation in the
Plan?
There
are no expenses charged to participants in connection with purchases of Common Stock under
the Plan. All costs of administration of the Plan and any brokerage commissions or service
fees incurred in purchasing shares of Common Stock will be paid by the Company. However,
if you request that the Company sell your shares, any related brokerage commissions or
service fees incurred by the Company will be deducted from the proceeds remitted to you.
8
PRICING AND PURCHASING
OF SHARES
15.
How many shares of Common Stock will be purchased for me?
The
number of shares of Common Stock to be purchased for you on any Investment Date or during
the Investment Period will depend upon the amount of the optional payments received since
the last investment in the Plan, the amount of your dividends to be reinvested and the
price of the Company’s Common Stock on the Investment Date or during the Investment
Period. On each Investment Date or at the end of each Investment Period, your Plan account
will be credited with that number of shares, including fractional shares computed to four
decimal points, equal to the total amount to be invested and reinvested on your behalf,
divided by the price of the Common Stock on the Investment Date or during the Investment
Period. Fractional shares will earn proportionate dividends as declared.
16.
How is the price of new shares of Common Stock determined?
When
Original Issue Shares are purchased by the Company, the price of the shares of Common
Stock will be the composite closing price of the Common Stock as reported on the
consolidated tape for New York Stock Exchange listed securities administered by the
Consolidated Tape Association on the Investment Date or, if no trading in the Common Stock
occurs on that date, the composite closing price on the next preceding date on which
trading occurred. When Original Issue Shares are purchased by the Plan Agent, the price of
the shares will be the weighted average composite closing price of the Common Stock, as
reported on the consolidated tape for the New York Stock Exchange listed securities
administered by the Consolidated Tape Association, acquired during the Investment Period.
When Open Market Shares are purchased by the Plan Agent, the price of the shares will be
the weighted average price of the Common Stock acquired during the Investment Period.
SAFEKEEPING
17.
You have the option of depositing your share certificates in the Plan.
An additional
option under the Plan is the opportunity to deposit your Common Stock certificates with
the Plan for safekeeping. By taking advantage of this option, the risk and inconvenience
associated with the loss of your certificates is eliminated. By participating in the Plan
through this option, you have the opportunity to buy additional shares of Common Stock,
sell shares, and reinvest your dividends through the Plan. You also have the opportunity
to receive your dividends in cash.
PARTICIPANT ACCOUNTS AND
RECORDS
18.
What records and accounts will be maintained by the Company for me?
The
Company will maintain a Plan account for you. All shares of Common Stock purchased for you
under the Plan will be credited to your Plan account. When certificates for shares are
issued to you or shares are sold for your Plan account, the shares will be withdrawn from
your Plan account.
9
19.
What Plan reports will be sent to me?
You
will receive a statement of your Plan account after each dividend and after any other Plan
account activity. These statements are your continuing record of the cost of your
purchases and should be retained for income tax purposes. In addition, you will
receive each amended Prospectus for the Plan and copies of all communications sent to all
other holders of the Company’s Common Stock, including the Company’s quarterly
reports to shareholders, the annual report to shareholders, notice of annual meeting and
proxy statement and tax information with respect to dividends paid. You are entitled to
vote all shares of Common Stock, including fractional shares, held in your Plan account
and will receive a Plan proxy enabling the proxy to vote your shares.
WITHDRAWAL AND
TERMINATION
20.
When may I withdraw from the Plan?
You
may withdraw from the Plan by providing a written request to the Company. The requests
will be processed upon receipt except during the periods commencing three business days
prior to the ex-dividend date for a particular dividend through the payment date for that
dividend. During that period, a request will be processed depending upon the time the
request is received by the Company. If your request is received within three business days
of the ex-dividend date for a particular dividend and on or before the record date for
that dividend, the request will be processed after the record date. If your request is
received after the record date and on or before the Investment Date or Investment Period
for that dividend, your request will not be processed until that dividend is reinvested in
your Plan account. (See Question 23.)
21.
How do I withdraw from the Plan?
In
order to withdraw from the Plan, you must notify the Company in writing and instruct the
Company to either issue a certificate of the whole shares of Common Stock in your Plan
account to you or deliver the proceeds of sale to you. Fractional shares will be sold in
all cases. You must have a certified tax identification number on file with the Company on
or prior to requesting the sale of shares.
22.
Can the Company terminate me as a participant?
Yes.
The administrative costs to the Company for each Plan account does not justify
inactivity. The Company reserves the right to terminate your Plan account if you
have not invested and/or reinvested a minimum of $100 in any twelve month
period. In addition, the Company reserves the right to terminate your Plan
account if your check or other form of remittance has not been honored.
23.
What happens upon withdrawal, termination or discontinuance?
When
you withdraw from the Plan or when the Company terminates your Plan account or
discontinues the Plan, certificates for all shares of Common Stock credited to the Plan
accounts will be issued and a cash payment will be made for fractional shares. Fractional
shares will be sold through the Plan Agent and any brokerage commissions or service fees
will be deducted from the proceeds before the cash payment is made.
10
In
the alternative, you may request that all of the shares of Common Stock, both whole and
fractional, credited to your Plan account be sold. If you request a sale, the sale will be
made by the Plan Agent. If the request is received within three business days of the
ex-dividend date for a particular dividend and on or before the record date for that
dividend, the request will be processed after the record date. If the request is received
after the record date and on or before the Investment Date or Investment Period for that
dividend, the request will not be processed until that dividend is reinvested in your Plan
account. You will be charged any related brokerage commissions or service fees, and will
receive the proceeds of the sale less these amounts.
If
your withdrawal request is received by the Company on or before the record date for a
particular dividend, that dividend and all subsequent dividends upon shares of Common
Stock registered in your name will be paid directly to you. If the request is received
after the record date, the withdrawal request will not be processed until that dividend is
reinvested in your Plan account. Once the request is processed, all subsequent dividends
upon shares registered in your name will be paid directly to you.
If
your withdrawal request is received by the Company on or before the Investment Date or the
day before the start of the next Investment Period, any payment being held by the Company
will be returned. If the request is received after such dates, any payment being held will
be reinvested.
24.
Is there a grace period to re-enroll in the Plan?
No,
you can re-enroll in the Plan any time after you have withdrawn from the Plan, as long as
you continue to qualify under the terms of the Plan. (See Questions 5 through 8.)
OTHER INFORMATION
25.
Will certificates be issued for shares of Common Stock purchased under the
Plan?
Certificates
for shares of Common Stock purchased under the Plan will be issued to you upon your
written request to the Company. Upon receipt of such request, certificates for the number
of whole shares up to the number credited to your Plan account may be withdrawn from the
Plan account and issued to you. Any remaining full and fractional shares will continue to
be credited to your Plan account. Certificates for shares issued to you will be registered
in the same name or names in which your Plan account is maintained. Dividends on all of
your shares, including those shares for which certificates have been issued, will either
be reinvested or paid in cash as provided for in the Plan. (See Question 8.) Certificates
for fractional shares will not be issued under any circumstances.
26.
May a portion of the shares of Common Stock held in the Plan be sold?
Yes.
Upon receipt of a written request, the Company will withdraw and sell, through
the Plan Agent, any number of whole shares of Common Stock credited to your Plan
account; provided, you maintain a minimum of 100 shares in your Plan account.
You will be charged any related brokerage commissions or service fees and will
receive the proceeds of the sale less these amounts.
11
If
the partial withdrawal request is received within three business days of the ex-dividend
date for a particular dividend or between that date and the record date for that dividend,
it will be processed after the record date. Dividends on the shares of Common Stock to be
withdrawn will either be reinvested or paid in cash as provided for in the Plan. (See
Question 8.) You must have a certified tax identification number on file with the Company
on or prior to requesting the sale of shares.
27.
May shares of Common Stock in a Plan account be pledged or assigned?
Shares
of Common Stock credited to your Plan account may not be assigned or pledged. If you wish
to assign or pledge shares, you must request that certificates for the shares be issued in
your name.
28.
How will my shares of Common Stock be voted at meetings of shareholders?
You
will receive Plan proxy cards covering the number of full and fractional shares of Common
Stock held under the Plan, enabling you to vote your shares. If a proxy card is returned
to the Company properly signed and marked for voting, all the shares covered by the proxy
card will be voted as marked. If no instructions are indicated on a properly signed and
returned proxy card, your shares will be voted in accordance with the recommendations of
the Company.
29.
What is the responsibility of the Company and the Plan Agent under the Plan?
The
Plan provides that the Company and any Plan Agent will not be liable for any act done in
good faith or for any good faith omission to act, including, without limitation, any claim
of liability arising out of failure to terminate your Plan account upon your death prior
to receipt of legally sufficient instructions with respect thereto.
You
should recognize that neither the Company nor the Plan Agent can assure your profits or
protect you against losses in the value of the shares of Common Stock purchased under the
Plan or assure you of any future dividends.
30.
May the Plan be changed or discontinued?
The
Company reserves the right to suspend, modify or discontinue the Plan at any time and to
interpret and regulate the Plan as it deems necessary or desirable in connection with the
operation of the Plan. You will receive notice of any suspension, modification or
termination. The notices will be mailed to you at the addresses shown on the Company’s
record.
31.
What happens if the Company makes a rights offering?
As
a shareholder, you will be notified by the Company of a rights offering. Upon receiving
notification that rights are exercisable, you should instruct the Company, before the
rights expire, to exercise the rights. If the Company does not receive such instructions,
the Plan Agent will sell the unexercised rights on the open market and proportionally
credit your Plan account to the extent the rights are not exercised with the proceeds for
investment on the next Investment Date or Investment Period.
12
32.
What happens if the Company declares a stock split or issues a stock
dividend?
In
the event of a stock split or stock dividend, the Company will proportionally credit your
Plan account the additional shares of Common Stock attributable to your interest in the
Plan.
33.
Can a complete text of the Plan be obtained?
Yes,
you can obtain a copy of the Plan upon request to Shareholder Services.
FEDERAL INCOME TAX
CONSEQUENCES OF THE PLAN
The
Company believes the following is an accurate summary of the tax consequences of
participation in the Plan as of the date of this Prospectus. This summary may not reflect
every possible situation that could result from participation in the Plan, and, therefore,
you are advised to consult your own tax advisors with respect to the tax consequences
(including federal, state, local and other tax laws and U.S. tax withholding laws)
applicable to their particular situations.
In
general, the amount of cash dividends paid by the Company is includable in income even
though reinvested under the Plan. Under this general rule, the cost basis for federal
income tax purposes of any shares of Common Stock acquired through the Plan will be the
price at which the shares are credited to your Plan account as described in the section
entitled Pricing and Purchasing of shares. In connection with open market purchases,
brokerage commissions paid by the Company on your behalf are to be treated as
distributions subject to income tax in the same manner as dividends. The amounts paid for
brokerage commissions are, however, includable in the cost basis of shares purchased. The
information return sent to you and the IRS at year-end, if so required, will show such
amounts paid on their behalf.
A
U.S. shareholder electing to participate in the Plan must provide his Taxpayer
Identification Number (generally, an individual’s Social Security Number) or certify
that they are exempt from backup withholdings. Failure to provide a correct Taxpayer
Identification Number will result in backup withholdings at the applicable rate.
Withholding may also occur upon notification from the Internal Revenue Service directing
the Plan to institute backup withholdings.
A
foreign shareholder who is a participant and whose dividends are subject to United States
income tax withholding will have the amount of the tax to be withheld deducted from such
dividends before reinvestment in additional shares of Common Stock for such
participant’s Plan account. The statements confirming purchases made for a foreign
participant will indicate that tax has been withheld.
The
final statement received from the Company during any calendar year will include
information for that year regarding total dividends paid on Plan shares of Common Stock.
In addition, the Company will send you an IRS Form 1099-Dividend at year-end showing total
dividends paid on shares held of record. Both statements should be retained for tax
reporting purposes.
13
INTERESTS OF NAMED
EXPERTS AND COUNSEL
Robert
M. Johnson, Esq., Assistant General Counsel for the Company, has given an opinion to the
SEC upon the validity of the shares of Common Stock being registered. Mr. Johnson is
employed by the Company on a full-time basis.
Arthur
Andersen LLP has not consented to the incorporation by reference of their report in this
prospectus on the financial statements of Southwest Gas Corporation for the year ended
December 31, 2001, and we have dispensed with the requirement to file their consent in
reliance upon Rule 437a of the Securities Act of 1933.
Because
Arthur Andersen LLP has not consented to the incorporation by reference of their report in
this prospectus, you will not be able to recover against Arthur Andersen LLP under Section
11 of the Securities Act of 1933 for any untrue statements of a material fact contained in
the financial statements audited by Arthur Andersen LLP or any omissions to state a
material fact required to be stated therein.
DISCLOSURE OF
SECURITIES AND EXCHANGE COMMISSION POSITION ONINDEMNIFICATION
FOR SECURITIES ACT
LIABILITIES
Section
317 of California’s General Corporation Law authorizes a court to award, or a
corporation’s Board of Directors to grant, indemnification to directors, officers and
other agents in terms sufficiently broad to permit indemnification under certain
circumstances for liabilities, including expenses, arising in connection with the
Securities Act of 1933, as amended.
Pursuant
to the Articles of Incorporation and the Bylaws of the Company, and in accordance with
applicable law, directors and officers of the Company are generally indemnified against
judgments, expenses and other amounts actually and reasonably incurred by or imposed upon
them in connection with or arising out of any action in which they were or are parties or
are threatened to be made parties by reason of their being or having been a director or
officer of the Company. In addition, the Company has entered into indemnification
agreements with certain officers and directors which provide for indemnification to the
full extent permitted by California law.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the Company, the Company has been
informed that in the opinion of the SEC such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
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