-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, SwFvecTeXC1ypWAl+3LhZMznRJQDTEn7Hig/RXIMS+3C819sbzkrtyCGS2eBWNr7 VSxyW7bLC41yLvgDzBrAxw== 0000018540-95-000097.txt : 19950612 0000018540-95-000097.hdr.sgml : 19950612 ACCESSION NUMBER: 0000018540-95-000097 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950609 ITEM INFORMATION: Other events FILED AS OF DATE: 19950609 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL & SOUTH WEST CORP CENTRAL INDEX KEY: 0000018540 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 510007707 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01443 FILM NUMBER: 95546111 BUSINESS ADDRESS: STREET 1: 1616 WOODALL RODGERS FRWY CITY: DALLAS STATE: TX ZIP: 75202 BUSINESS PHONE: 2147541000 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 9, 1995 Commission Registrant, State of Incorporation, I.R.S. Employer File Number Address and Telephone Number Identification No. 1-1443 Central and South West Corporation 51-0007707 (A Delaware Corporation) 1616 Woodall Rodgers Freeway Dallas, TX 75202-1234 (214) 777-1000 ITEM 5. OTHER EVENTS CENTRAL AND SOUTH WEST CORPORATION (CSW) AND EL PASO ELECTRIC COMPANY (EL PASO) PROPOSED MERGER RECENT DEVELOPMENTS On June 9, 1995, CSW sent a letter to El Paso terminating their merger agreement (Merger Agreement) and declining to extend the termination date under the Merger Agreement as requested by El Paso in its May 22, 1995 letter to CSW. CSW's June 9, 1995 letter also informed El Paso that it was revoking the Modified Third Amended Plan of Reorganization for the proposed merger with El Paso by a contemporaneous filing with the United States Bankruptcy Court for the Western District of Texas, Austin Division, before which the El Paso bankruptcy reorganization proceeding, Case No. 92- 10148-FM is pending. The letter is attached as Exhibit 99.1. In addition, on June 9, 1995, CSW issued a press release announcing that it had terminated the Merger Agreement with El Paso because conditions for completing the proposed merger had not been satisfied and because El Paso had breached their agreement. The press release is attached as Exhibit 99.2. BACKGROUND INFORMATION For background information and earlier developments related to the proposed merger with El Paso, reference is made to CSW's 1994 Annual Report on Form 10-K, Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, Current Report on Form 8-K dated May 23, 1995 and the documents referenced therein. OTHER El Paso is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports and other information with the Securities and Exchange Commission. For additional information concerning El Paso and the proposed merger, see El Paso's Annual Report on Form 10-K for the year ended December 31, 1994 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 1995 and the documents referenced therein or supplementary thereto. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CENTRAL AND SOUTH WEST CORPORATION Date: June 9, 1995 By: /s/ Wendy G. Hargus Wendy G. Hargus Controller EX-99.1 2 EXHIBIT 99.1 Letter from CSW to El Paso dated 6/9/95 Central and South West Corporation 1616 Woodall Rodgers Freeway P.O. Box 660164 - Dallas,Texas 75266-0164 214-777-1096 FERD. C. MEYER, JR. Senior Vice President and General Counsel June 9, 1995 Mr. David H. Wiggs, Jr. Chairman and Chief Executive Officer Mr. Curtis L. Hoskins President Board of Directors El Paso Electric Company 303 North Oregon El Paso, Texas 79901 Re: Notice of Termination and Response to Request for Extension of Termination Date Gentlemen: This letter (i) constitutes notice of termination of the Agreement and Plan of Merger among El Paso Electric Company ("EPE"), Central and South West Corporation ("CSW") and CSW Sub, Inc. ("CSW Sub") dated as of May 3, 1993, as amended (the "Merger Agreement"), and (ii) responds to the May 22, 1995 letter from EPE requesting a six-month extension of the Termination Date. Pursuant to Sections 9.1(b) and (d) and 10.1 of the Merger Agreement, CSW, by and through its Board of Directors, hereby gives its notice of termination of the Merger Agreement to EPE's President and Board of Directors. CSW also declines to grant EPE's requested extension of the Termination Date because CSW has reasonably determined that one or more closing conditions are incapable of being satisfied on or before the Termination Date as extended. The granting of the extension would therefore be futile. Moreover, EPE's extension request is not supportable under existing facts and circumstances. I. Termination - Failure of Conditions CSW has the right to terminate the Merger Agreement if one or more of the closing conditions set forth in Article VIII of the Merger Agreement have not been satisfied on or before June 8, 1995. As described herein, a number of closing conditions were not fulfilled by June 8, 1995. These unsatisfied closing conditions include, but are not limited to, the following: Central Power and Light Company - Public Service Company of Oklahoma - Southwestern Electric Power Company West Texas Utilities Company - Transok, Inc. - Central and South West Services, Inc. Mr. David H. Wiggs, Jr. June 9, 1995 Page 2 A. All required regulatory approvals and rate orders of the Public Utility Commission of Texas, the New Mexico Public Utility Commission, the Federal Energy Regulatory Commission, the Securities and Exchange Commission, and the Nuclear Regulatory Commission must have been received and become Final Orders and must be in effect. Merger Agreement at Sections 8.2(b), 8.3(g). B. No Governmental Authority shall have enacted any law, rule, regulation, or ordinance, or issued an order, that would have an EPE Material Adverse Effect upon the prospects for the business of Reorganized EPE after the Merger. Merger Agreement at Section 8.2(c). C. No EPE Material Adverse Effect shall have occurred and no fact or circumstance shall exist which may reasonably be expected to give rise to an EPE Material Adverse Effect. Merger Agreement at Section 8.3(f). II. Termination - Breaches In a letter dated May 23, 1995, CSW gave written notice of EPE's material breaches of its representations, warranties, covenants, and agreements under the Merger Agreement and requested that the breaches be remedied within ten (10) days of receipt thereof. The May 23 letter identified the following material breaches: * EPE's failure to remedy the material adverse effects identified in his September 12, 1994 letter (constituting breaches of EPE's representations and warranties under Sections 3.6 and 8.3(b) and its covenants and agreements under Sections 5.2(o) and (p) and 6.8 of the Merger Agreement); * EPE's action in Bankruptcy Court seeking to enjoin the PUCT, which caused the PUCT to postpone its consideration of the Merger, and which filings were not provided to CSW in advance (constituting breaches of EPE's agreements and covenants under Sections 5.2(o), 6.8 and 7.1 of the Merger Agreement); * EPE's pursuit of a stand-alone plan in lieu of the proposed Merger, including actively participating in discussions with, and otherwise assisting, facilitating, and encouraging other persons, including representatives of EPE's creditors and shareholders, in connection with possible proposals regarding reorganization of EPE, and expending substantial sums in doing so, thereby reducing EPE's value and breaching Sections 5.3(b) and 6.8 of the Merger Agreement; and Mr. David H. Wiggs, Jr. June 9, 1995 Page 3 * EPE's action, in further pursuit of a stand-alone plan, to reward its own senior management through abnormal stock option grants in breach of Sections 5.2(g) and 5.2(m) of the Merger Agreement. These breaches have not been cured. In addition, EPE's pursuit of a stand-alone plan constitutes a breach permitting termination under Section 9.1(b)(iii) of the Merger Agreement. III. Merger Agreement Void; Plan Revoked By virtue of this termination, effective upon receipt of this letter, the Merger Agreement has become void and no further liability exists on the part of CSW or its officers or directors to any party. Merger Agreement at Section 9.2. CSW reserved the right under the Plan, at any time prior to the Effective Date, with or without approval of the Bankruptcy Court, to revoke or withdraw the Plan. Plan at Section 6.7. Accordingly, CSW hereby gives its notice to EPE of revocation of the Plan, which notice shall be contemporaneously filed with the Bankruptcy Court. Consequently, the Plan and confirmation order shall be of no further force or effect. The decision of CSW's Board of Directors to terminate the Merger Agreement was made only after a careful review and consideration of all facts and circumstances bearing thereon. We regret that CSW's best efforts did not result in the consummation of the Merger under the terms set forth in the Merger Agreement. Very truly yours, CENTRAL AND SOUTH WEST CORPORATION By: Ferd. C. Meyer, Jr. Senior Vice President and General Counsel FCM/ml cc: Akin, Gump, Strauss, Hauer & Feld, L.L.P. 4100 First City Center 1700 Pacific Avenue Dallas, TX 75201-4518 Attn.: Allen P. Miller, P.C. EX-99.2 3 EXHIBIT 99.2 Press Release Issued 6/9/95 CSW Central and South West Corporation News Release Central and South West Corporation terminates merger agreement with El Paso Electric Company, cites breach of agreement and material adverse effects Dallas (June 9, 1995)--Central and South West Corporation (NYSE: CSR) said it notified El Paso Electric Company today that it is terminating the companies' proposed merger because conditions for completing the agreement have not been satisfied and because El Paso Electric has breached the merger agreement. Central and South West said its board of directors rejected a May 22 request from El Paso Electric to extend the merger agreement for six months until December 8. "We have used our best efforts to complete the merger, investing many thousands of hours and millions of dollars," said E.R. Brooks, chairman, president and chief executive officer of Central and South West. "Our decision to terminate the merger agreement is in the best interests of Central and South West's shareholders and customers," Brooks said. Under the merger agreement, Central and South West is permitted to terminate the agreement if conditions for completing the merger were not satisfied by June 8, 1995. The company noted that several of the closing conditions had not been satisfied and could not be satisfied by December 8, including receipt of required state and federal regulatory approvals. In a May 23 letter, Central and South West had warned El Paso Electric that the utility was in breach of the merger agreement and that it had 10 days to remedy the breaches, as required under the merger agreement. In a June 1 response, El Paso Electric denied that it had breached the merger agreement and accused Central and South West of repudiating and breaching the agreement. Central and South West said its decision to terminate voided the merger agreement with El Paso Electric and the utility's plan of reorganization, which had been confirmed by the bankruptcy court on December 8, 1993. The proposed merger between Central and South West and El Paso Electric was announced on May 4, 1993. Central and South West Corporation is a public utility holding company based in Dallas. It owns Central Power and Light Company, Public Service Company of Oklahoma, Southwestern Electric Power Company and West Texas Utilities Company. These four subsidiaries provide electric utility service to 1.6 million customers in Texas, Oklahoma, Louisiana and Arkansas. Central and South West also owns Transok, Inc., an Oklahoma intrastate natural gas pipeline company, and several other subsidiaries. El Paso Electric Company is an electric utility serving approximately 268,000 customers in El Paso, Texas, and an area of the Rio Grande Valley in West Texas and southern New Mexico as well as wholesale customers located in Southern California and Mexico. # # # Media contact: Gerald R. Hunter, manager of external communications for Central and South West Corporation, 214-777-1165. Financial analyst contact: Sharon R. Peavy, director of investor relations for Central and South West Corporation, 214-777-1277. -----END PRIVACY-ENHANCED MESSAGE-----