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No.
We do not charge you, and you are not responsible for, any expenses in
connection with purchases of Common Stock under the Plan. We will pay all costs
of administration of the Plan and any brokerage commissions or service fees
incurred in purchasing shares of Common Stock. However, if you request that we
sell your shares, we will deduct any related, incurred brokerage commissions or
service fees from the sale proceeds that we remit to you.
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 cash payments received
since the last investment in the Plan, the amount of your dividends to be reinvested and
the price of the Common Stock on the investment date or during the investment period. On
each investment date or at the end of each investment period,
10
your Plan account will be
credited with that number of shares of Common Stock, 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 purchase price of shares of Common Stock determined?
When
we purchase Original Issue Shares, 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 the
Plan agent purchases Original Issue Shares, 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 the Plan agent purchases Open
Market Shares, the price of the shares will be the weighted average price of the Common
Stock acquired during the investment period.
SAFEKEEPING
17.
Do I have the option of depositing my stock certificate(s) in the Plan for
safekeeping?
Yes.
The Plan provides you the opportunity to deposit your Common Stock
certificate(s) with the Plan for safekeeping. By taking advantage of this
option, you will eliminate the risk and inconvenience associated with the loss,
misplacement or destruction of your certificate(s). 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. (See also Question 2 above)
PARTICIPANT ACCOUNTS AND
RECORDS
18.
What records and accounts will you maintain for me?
We
will maintain a Plan account for you. We will credit to your Plan account all shares of
Common Stock purchased for you under the Plan. When we issue to you certificate(s) for
shares or when we sell shares for your Plan account, we will withdraw those shares from
your Plan account.
19.
What Plan reports will you send 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 generally to
other holders of Common Stock, including our quarterly reports to shareholders, our 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 you will receive a Plan proxy
enabling you to vote your shares. (See also Question 28 below)
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WITHDRAWAL AND
TERMINATION
20.
When may I withdraw from the Plan?
You
may withdraw from the Plan by providing a written request to us. You must arrange for your
request to be signed by all registered holders listed on your Plan account. We will
generally process these requests weekly. During the periods commencing three
business days prior to the ex-dividend date for a particular dividend through the payment
date for that dividend, we will not process withdrawals. If we receive your request within
three business days of the ex-dividend date for a particular dividend and on or before the
record date for that dividend, we will process the request after the record date. If we
receive your request after the record date and on or before the investment date or
investment period for that dividend, we will not process your request until we reinvest
that dividend in your Plan account. (See also Question 23 below)
21.
How do I withdraw from the Plan?
In
order to withdraw from the Plan, you must notify and instruct us in writing to either
issue to you a certificate of the whole shares of Common Stock in your Plan account or
deliver to you the proceeds of sale. You must arrange for your request to be signed by all
registered holders listed on your Plan account. We will sell fractional shares in all
cases. On or prior to requesting the sale of shares or the sale of fractional shares, we
must have a certified tax identification number on file to avoid federal income tax
withholding.
22.
Can you terminate me as a Participant?
Yes.
Our administrative costs for each Plan account do not justify inactivity. We
reserve the right to terminate your Plan account if you have not invested or
reinvested a minimum of $100 in any twelve-month period. In addition, we reserve
the right to terminate your Plan account if your check or other form of
remittance has not been honored.
23.
What happens upon my withdrawal from, or the termination or discontinuance
of, the Plan?
When
you withdraw from the Plan or when we terminate your Plan account or discontinue the Plan,
we will issue certificates for all shares of Common Stock credited to the Plan accounts
within 30 days of such event and at such time we will make cash payments for fractional
shares. We will sell fractional shares through the Plan agent, and we will deduct any
brokerage commissions or service fees from the sale proceeds before we make the cash
payment.
In
the alternative, you may request that we sell all of the shares of Common Stock, both
whole and fractional, credited to your Plan account. If you request a sale, the Plan agent
will sell the shares. If we receive the request within three business days of the
ex-dividend date for a particular dividend and on or before the record date for that
dividend, we will process the request after the record date. If we receive the request
after the record date and on or before the investment date or investment period for that
dividend, we will not process the request until that dividend is reinvested in your Plan
account. We will charge to you any related brokerage commissions or service fees, and you
will receive the sale proceeds less these amounts.
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If
we receive your withdrawal request on or before the record date for a particular dividend,
we will pay directly to you that dividend and all subsequent dividends upon shares of
Common Stock registered in your name. If we receive your withdrawal request after the
record date, we will not process the request until we reinvest that dividend in your Plan
account. Once we process the request, we will pay directly to you all subsequent dividends
upon shares registered in your name.
If
we receive your withdrawal request on or before the investment date or the day before the
start of the next investment period, we will return any payment that we are holding. If we
receive your withdrawal request after such dates, we will reinvest any payment that we are
holding.
24.
Is there a grace period to re-enroll in the Plan?
No.
You may re-enroll in the Plan at any time after you have withdrawn from the
Plan, as long as you continue to qualify under the terms of the Plan. (See also
Questions 5 through 8 above)
OTHER INFORMATION
25.
Will you issue certificates for shares of Common Stock purchased under the
Plan?
Yes.
Upon your request to us, we will issue to you certificates for shares of Common
Stock purchased under the Plan. You may withdraw from your Plan account whole
shares up to the number credited to your Plan account. We will continue to
credit your Plan account any remaining full and fractional shares. We will
register the certificates for shares issued to you in the same name or names in
which your Plan account is maintained. We will either reinvest or pay in cash
dividends on all of your shares, including those shares for which certificates
have been issued, as provided under the Plan. (See also Question 8 above) We
will not issue certificates for fractional shares under any circumstances.
26.
May I request that you sell a portion of the shares of Common Stock held in
my Plan account?
Yes.
Upon receipt of a written request, we will withdraw and sell, through the Plan
agent, any number of whole shares of Common Stock credited to your Plan account,
provided that you maintain a minimum of 100 shares in your Plan account. We will
charge you for any related brokerage commissions or service fees, and you will
receive the sale proceeds less these amounts.
If
we receive the partial withdrawal request within three business days of the ex-dividend
date for a particular dividend or between that date and the record date for that dividend,
we will process the request after the record date. We will either reinvest, or pay in
cash, dividends on the shares of Common Stock as provided for in the Plan. (See also
Question 8 above) On or prior to requesting the sale of shares, we must have a certified
tax identification number on file to avoid federal income tax withholding.
27.
May I pledge or assign shares of Common Stock in my Plan account?
No.
You may not pledge or assign shares of Common Stock credited to your Plan
account. If you wish to assign or pledge shares, you must request that
certificates for the shares be issued in your name.
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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 your Plan account, thereby enabling you to vote your shares. If you
return to us a proxy card that is properly signed and marked for voting, all of 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 our
recommendations. If the Plan proxy card is not returned, a Participant’s shares may
be voted only if the Participant or a duly appointed representative votes in person at the
meeting.
29.
What are your and the Plan agent’s liabilities under the
Plan?
The
Plan provides that we and any Plan agent will not be liable for any act done in good faith
or any good faith omission, including, without limitation, (i) any claim of
liability arising out of failure to terminate your Plan account upon your death prior to
our receipt of legally sufficient instructions to do so, (ii) with respect to
prices at which shares of Common Stock are purchased or sold for the Participant’s
account, (iii) the times when such purchases or sales are made or (iv) with respect
to any fluctuation in the market value after the purchase or sale of shares.
YOU
SHOULD RECOGNIZE THAT NEITHER WE 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.
This
Plan is purely voluntary on our part. Neither the Plan’s establishment nor any
amendment nor the creation of any Plan account will be construed as giving Participants
any legal or equitable rights against us or the Plan agent unless specifically provided
for in the Plan or conferred by the Plan agents’ or our affirmative actions according
to the terms and provisions in the Plan. Such actions will not be construed as giving any
employee the right to be retained in our service.
30.
May you modify, suspend or discontinue the Plan?
Yes.
We reserve the right to suspend, modify or discontinue the Plan at any time and
to interpret and regulate the Plan as we deem necessary or desirable in
connection with the operation of the Plan. We will mail to you notice of any
suspension, modification or termination at the address shown in our records.
(See also Question 23 above)
31.
What happens if you make a rights offering?
As
a shareholder, we will notify you of a rights offering. Upon receiving notification that
rights are exercisable, you should instruct us, before the rights expire, to exercise the
rights. If we do not timely receive those 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.
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32.
What happens if you declare a stock split or issue a stock dividend?
In
the event of a stock split or stock dividend, we will proportionally credit your Plan
account the additional shares of Common Stock attributable to your interest in the Plan.
33.
May I obtain a complete text of the Plan?
Yes.
You may request a copy of the Plan from Shareholder Services.
FEDERAL INCOME TAX
CONSEQUENCES OF THE PLAN
We
believe the following is an accurate summary of some of the important federal income tax
consequences of participation in the Plan as of the date of this prospectus. It is based
on the Internal Revenue Code, applicable Treasury Regulations, judicial authority, and
administrative rulings and practice, all as of the date of this prospectus and all of
which are subject to change, including changes with retroactive effect. It does not apply
to tax-exempt shareholders or those holding shares through a tax-advantaged account, such
as a 401(k) Plan or Individual Retirement Account. 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 your particular situation.
In
general, cash dividends paid by us and reinvested under the Plan are includable in your
income, for federal tax purposes, as if you actually received them in cash. Under this
general rule, the tax 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 us on your behalf
are treated as distributions subject to federal income tax in the same manner as
dividends. The amounts paid for brokerage commissions are, however, includable in the tax
basis of shares purchased. The information return sent to you and the Internal Revenue
Service following the end of each year, if so required, will show such amounts paid on
your behalf. Your holding period for shares acquired through the Plan will begin on the
day after the date the shares are credited to your Plan account.
You
will not realize a gain or loss for federal income tax purposes on the transfer of shares
to the Plan or the withdrawal of whole shares from the Plan. You generally, however, will
realize a gain or loss on the sale of any of your shares (including the receipt of cash
for a fractional share) held in the Plan. The amount of gain or loss generally will be the
difference between the amount you receive for the shares and the tax basis of those
shares. In order to determine the tax basis of your shares acquired through the Plan, you
should retain all of your transaction statements.
If
you are a U.S. shareholder electing to participate in the Plan, you must provide your
Taxpayer Identification Number (generally, your Social Security Number) or certify that
you are exempt from backup withholding. Failure to provide a correct Taxpayer
Identification Number will result in backup withholding at the current federal rate.
Withholding also may occur upon notification from the Internal Revenue Service directing
the Plan to institute backup withholding. If you are subject to backup withholding, only
the amount of dividends net of any withholding tax will be available for reinvestment
under the Plan.
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If
you are a foreign shareholder electing to participate in the Plan and your dividends are
subject to U.S. federal income tax withholding, only the amount of dividends net of any
withholding tax will be available for reinvestment under the Plan. The statements
confirming purchases made for a foreign participant will indicate that tax has been
withheld.
We
will send you a year-end statement which will include information for that year regarding
total dividends paid on Plan shares of Common Stock. In addition, following the end of
each year, we will send you an Internal Revenue Service Form 1099-DIV showing total
dividends paid to you during the year, whether or not they are reinvested under the Plan.
You should retain both statements for tax reporting purposes.
PLAN OF DISTRIBUTION
Shares
of Common Stock for Participants under the Plan will either be directly purchased from us
or through the Plan agent in the open market. We will pay any brokerage commissions or
service fees for purchases of shares of our Common Stock under the Plan and all costs for
administration of the Plan. (See also Question 14 above)
INTERESTS OF NAMED
EXPERTS AND COUNSEL
Mr.
Robert M. Johnson, Esq., our Assistant General Counsel, has given an opinion to
the SEC upon the validity of the shares of Common Stock being registered. We
employ Mr. Johnson on a full-time basis.
EXPERTS
The
consolidated financial statements, as of and for the years ended December 31, 2003 and
2002, incorporated in this prospectus by reference to the Annual Report on Form 10-K for
the year ended December 31, 2003 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on
authority of said firm as experts in auditing and accounting.
The
consolidated financial statements as of December 31, 2001 and for the year then ended
incorporated by reference in this prospectus were audited by Arthur Andersen LLP. We have
not been able to obtain, after reasonable efforts, the written consent of Arthur Andersen
LLP to the incorporation by reference in this prospectus of the report dated February 8,
2002 of Arthur Andersen LLP on Southwest Gas Corporation’s 2001 consolidated
financial statements as required by the Securities Act. Therefore, in reliance on Rule
437a promulgated under the Securities Act we have dispensed with the requirement to file a
written consent from Arthur Andersen LLP with this prospectus. As a result, the ability of
persons who purchase our securities pursuant to this prospectus to assert claims against
Arthur Andersen LLP may be limited, and they may not have an effective remedy against
Arthur Andersen LLP for any untrue statements of a material fact contained in Arthur
Andersen’s report or the financial statements covered thereby or any omissions to
state a material fact required to be stated therein.
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DISCLOSURE OF SEC
POSITION ON
INDEMNIFICATION 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.
Pursuant
to our Restated Articles of Incorporation and Amended Bylaws, and in accordance with
applicable law, our directors and officers 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 our company. In addition, we have 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 may be permitted to
directors, officers or persons controlling our company pursuant to the foregoing
provisions, we have 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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No dealer, salesperson or other
individual has been authorized to give any information or to make any representations
other than those contained or incorporated by reference in this prospectus in connection
with the offer made by this prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by us or any agent,
dealer or underwriter. Neither the delivery of this prospectus nor any sale made hereunder
shall under any circumstances create an implication that there has been no change in our
affairs since the date hereof. This prospectus does not constitute an offer or
solicitation by anyone in any state in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do so or to
anyone to whom it is unlawful to make such offer or solicitation.
SOUTHWEST GAS
CORPORATION
DIVIDEND REINVESTMENT
AND
STOCK PURCHASE PLAN
1,000,000 Shares
COMMON STOCK, $1 Par
Value
PROSPECTUS
PART II
INFORMATION NOT
REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of
Issuance and Distribution
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