-----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, IGx93gET2Q5FU5sDjQGoxU9paAPtLGQyBsnLLAwgiqMGK5P9AKenN5AmzeIAi0kE r2nI3afbd0TAxIF/VH06FQ== 0000950136-94-000190.txt : 19941027 0000950136-94-000190.hdr.sgml : 19941027 ACCESSION NUMBER: 0000950136-94-000190 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19941026 SROS: NONE GROUP MEMBERS: CALIFORNIA ENERGY CO INC GROUP MEMBERS: CE ACQUISITION COMPANY, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MAGMA POWER CO /NV/ CENTRAL INDEX KEY: 0000355878 STANDARD INDUSTRIAL CLASSIFICATION: 4991 IRS NUMBER: 953694478 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-33882 FILM NUMBER: 94555134 BUSINESS ADDRESS: STREET 1: 4365 EXECUTIVE DR STE 900 CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6196227800 MAIL ADDRESS: STREET 1: 4365 EXECUTIVE DR STE 900 CITY: SAN DIEGO STATE: CA ZIP: 92121 FORMER COMPANY: FORMER CONFORMED NAME: MAGMA DEVELOPMENT CORP DATE OF NAME CHANGE: 19820519 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CALIFORNIA ENERGY CO INC CENTRAL INDEX KEY: 0000720556 STANDARD INDUSTRIAL CLASSIFICATION: 4961 IRS NUMBER: 942213782 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 10831 OLD MILL RD STE 900 CITY: OMAHA STATE: NE ZIP: 68194 BUSINESS PHONE: 4023308900 MAIL ADDRESS: STREET 1: 10831 OLD MILL ROAD CITY: OMAHA STATE: NE ZIP: 68154 SC 14D1/A 1 AMENDED SCHEDULE 14D-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14D-1 Amendment No. 4 (Tender Offer Statement Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934) MAGMA POWER COMPANY (Name of Subject Company) CE ACQUISITION COMPANY, INC. CALIFORNIA ENERGY COMPANY, INC. (Bidders) Common Stock, par value $0.10 per Share (Including the Associated Preferred Share Purchase Rights) (Title of Class of Securities) 94-2213782 (CUSIP Number of Class of Securities) Steven A. McArthur, Esq. Senior Vice President, General Counsel and Secretary CALIFORNIA ENERGY COMPANY, INC. 10831 Old Mill Road Omaha, Nebraska 68194 (402) 330-8900 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidder) Copies to: Peter J. Hanlon, Esq. Michael A. Schwartz, Esq. Willkie Farr & Gallagher One Citicorp Center 153 East 53rd Street New York, New York 10022 (212) 821-8000 CALCULATION OF FILING FEE - ------------------------------------------------------------------------------- Transaction Amount of Valuation* Filing Fee** - ------------------------------------------------------------------------------- $477,400,000 $95,480 - ------------------------------------------------------------------------------- *For purposes of calculating the filing fee only. This calculation assumes the purchase of 12,400,000 shares of Common Stock, par value $0.10 per share, of Magma Power Company at $38.50 net per share in cash. ** The amount of the filing fee, calculated in accordance with Rule 0-11(d) under the Securities Exchange Act of 1934, equals 1/50 of one percent of the aggregate value of cash offered by CE Acquisition Company, Inc. for such number of shares. [X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the off-setting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and date of its filing. Amount Previously Paid: $86,800 Filing Party: Same Form or Registration No.: 5-33882 Date Filed: October 6, 1994 California Energy Company, Inc., a Delaware corporation ("CECI"), and CE Acquisition Company, Inc., a Delaware corporation and a wholly owned subsidiary of CECI (the "Purchaser"), hereby amend and supplement their Tender Offer Statement on Schedule 14D-1, ("Schedule 14D-1") filed with the Securities and Exchange Commission (the "Commission") on October 6, 1994, as amended by Amendments Nos. 1, 2 and 3, with respect to the Purchaser's offer to purchase 12,400,000 shares of Common Stock, par value $0.10 per share (the "Shares"), of Magma Power Company, a Nevada corporation (the "Company"), and, if applicable, associated Preferred Share Rights (the "Rights"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 6, 1994 (the "Offer to Purchase"), and the related Letter of Transmittal (which together with the Offer to Purchase, the Supplement (as defined below) and its related Letter of Transmittal constitute the "Offer"). Unless otherwise indicated herein, each capitalized term used but not defined herein shall have the meaning assigned to such term in the Schedule 14D-1. Item 1. Security and Subject Company. The information set forth in Item 1(b) is hereby amended and supplemented by the following: The Purchaser has amended and supplemented the Offer to Purchase pursuant to a Supplement to the Offer to Purchase, dated October 26, 1994 (the "Supplement"), a copy of which is attached hereto as Exhibit (a)(11). The information set forth in the Introduction and Section 1 "Amended Terms of the Offer" of the Supplement is incorporated herein by reference. The information set forth in Item 1(c) is hereby amended and supplemented by the following: The information set forth in Section 3 "Price Range of Shares; Dividends" of the Supplement is incorporated herein by reference. Item 3. Past Contacts, Transactions or Negotiations with the Subject Company. The information set forth in Items 3(a)-(b) is hereby amended and supplemented by the following: The information set forth in Section 4 "Background of the Offer Since October 6, 1994; Contacts with the Company" of the Supplement is incorporated herein by reference. Item 4. Source of Amount of Funds or Other Consideration. The information set forth in Items 4(a)-(b) is hereby amended and supplemented by the following: The information set forth in the Introduction and Section 6 "Source and Amount of Funds" of the Supplement is incorporated herein by reference. Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder. The information set forth in Items 5(a)-(e) is hereby amended and supplemented by the following: The information set forth in the Introduction, Section 4 "Background of the Offer Since October 6, 1994; Contacts with the Company" and Section 5 "Purpose of the Offer and the Proposed Merger" of the Supplement is incorporated herein by reference. Item 7. Contracts, Arrangements, Understandings or Relationships with Respect to the Subject Company's Securities. The information set forth in Item 7 is hereby amended and supplemented by the following: The information set forth in the Introduction, Section 5 "Purpose of the Offer and the Proposed Merger" and Section 6 "Source and Amount of Funds" of the Supplement is incorporated herein by reference. Item 10. Additional Information. The information set forth in Items 10(b), (c), (d) and (e) is hereby amended and supplemented by the following: The information set forth in the Introduction, Section 4 "Background of the Offer Since October 6, 1994; Contacts with the Company," Section 6 "Source and Amount of Funds" and Section 7 "Certain Legal Matters" of the Supplement is incorporated herein by reference. The information set forth in Item 10(f) is hereby amended and supplemented by the following: The information set forth in the Supplement, a copy of which is attached hereto as Exhibit (a)(11), is incorporated herein by reference in its entirety. Item 11. Material to Be Filed as Exhibits. (a)(11) Supplement to the Offer to Purchase, dated October 26, 1994. (a)(12) Revised Letter of Transmittal. (a)(13) Revised Notice of Guaranteed Delivery. (a)(14) Revised Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated October 26, 1994. (a)(15) Revised Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated October 26, 1994. (a)(16) Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Subsitute Form W-9. (b)(1) Commitment Letter, dated October 25, 1994, to California Energy Company, Inc. and CE Acquisition Company, Inc. from Credit Suisse. (f)(1) Solicitation Materials. Signatures After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: October 26, 1994 CE ACQUISITION COMPANY, INC. By:/s/ Steven A. McArthur Steven A. McArthur Senior Vice President, General Counsel and Secretary CALIFORNIA ENERGY COMPANY, INC. By:/s/ Steven A. McArthur Steven A. McArthur Senior Vice President, General Counsel and Secretary EXHIBIT INDEX
Exhibit Page No. Description No. (a)(11) Supplement to the Offer to Purchase, dated October 26, 1994. (a)(12) Revised Letter of Transmittal. (a)(13) Revised Notice of Guaranteed Delivery. (a)(14) Revised Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated October 26, 1994. (a)(15) Revised Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated October 26, 1994. (a)(16) Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Subsitute Form W-9. (b)(1) Commitment Letter, dated October 25, 1994, to California Energy Company, Inc. and CE Acquisition Company, Inc. from Credit Suisse. (f)(1) Solicitation Materials.
EX-99.(A)(11) 2 OFFER TO PURCHASE SUPPLEMENT TO OFFER TO PURCHASE DATED OCTOBER 6, 1994 CE ACQUISITION COMPANY, INC. A WHOLLY OWNED SUBSIDIARY OF CALIFORNIA ENERGY COMPANY, INC. HAS AMENDED ITS OFFER TO PURCHASE TO INCREASE THE PRICE FOR 12,400,000 SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF MAGMA POWER COMPANY TO $38.50 NET PER SHARE THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS HAVE BEEN EXTENDED AND WILL NOW EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 4, 1994, UNLESS THE OFFER IS EXTENDED. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN BEFORE THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES WHICH, TOGETHER WITH SHARES BENEFICIALLY OWNED BY THE PURCHASER, REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS, (2) THE COMPANY HAVING ENTERED INTO A DEFINITIVE MERGER AGREEMENT WITH THE PURCHASER TO PROVIDE FOR THE ACQUISITION OF THE COMPANY PURSUANT TO THE OFFER AND THE PROPOSED MERGER DESCRIBED IN THE OFFER TO PURCHASE, (3) THE PURCHASER BEING SATISFIED, IN ITS SOLE JUDGMENT, THAT THE PURCHASER HAS OBTAINED FINANCING SUFFICIENT TO ENABLE IT TO CONSUMMATE THE OFFER AND THE PROPOSED MERGER AND (4) AUTHORIZATION BY CECI'S STOCKHOLDERS OF THE ISSUANCE OF CECI COMMON STOCK SUFFICIENT TO COMPLETE THE PROPOSED MERGER. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 12 OF THE OFFER TO PURCHASE. --------------- IMPORTANT Except as otherwise set forth in this Supplement, the Purchaser's Offer continues to be governed by the terms and conditions set forth in its Offer to Purchase dated October 6, 1994 and the original BLUE Letter of Transmittal, and the information contained therein continues to be important to each stockholder's decision with respect to the Offer. Accordingly, this Supplement should be read carefully in conjunction with such documents, which have been previously mailed to stockholders. Any stockholder desiring to tender all or any portion of his Shares (and the associated Rights) should either (1) complete and sign the original BLUE or the revised GREEN Letter of Transmittal or a facsimile thereof in accordance with the instructions in the revised GREEN Letter of Transmittal, have his signature thereon guaranteed if required by Instruction 1 of either Letter of Transmittal and mail or deliver either Letter of Transmittal or such facsimile with his certificates evidencing his Shares and, if separate, the certificates representing the associated Rights, and any other required documents to the Depositary, or follow the procedure for book-entry transfer of Shares (and Rights, if applicable) set forth in Section 4 of the Offer to Purchase, or (2) request his broker, dealer, commercial bank, trust company or other nominee to effect the transaction for him. Stockholders having Shares (and Rights, if applicable) registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if they desire to tender their Shares and, if applicable, Rights so registered. Unless and until the Purchaser, in its sole judgment, declares that the Merger Agreement Condition is satisfied, stockholders will be required to tender one Right for each Share tendered pursuant to the Offer in order to effect a valid tender of such Share. A stockholder who desires to accept the Offer and tender Shares and Rights and whose certificates for such Shares (and Rights, if applicable) are not immediately available should tender such Shares (and Rights, if applicable) by following the procedures for guaranteed delivery set forth in Section 4 of the Offer to Purchase. Questions and requests for assistance may be directed to the Information Agent or to the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover of this Supplement. Requests for additional copies of this Supplement, the Offer to Purchase, the revised GREEN Letter of Transmittal and other tender offer materials may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. --------------- The Dealer Manager for the Offer is: GLEACHER & CO. INC. October 26, 1994 TABLE OF CONTENTS
PAGE -------- INTRODUCTION .................................................................... 1 1. Amended Terms of the Offer ................................................. 2 2. Procedure for Tendering Shares and Rights .................................. 2 3. Price Range of Shares; Dividends ........................................... 3 4. Background of the Offer Since October 6, 1994; Contacts with the Company .. 3 5. Purpose of the Offer and the Proposed Merger ............................... 8 6. Source and Amount of Funds ................................................. 11 7. Certain Legal Matters ...................................................... 12 8. Miscellaneous .............................................................. 13
To All Holders of Shares of Common Stock (including the Associated Preferred Share Purchase Rights) of Magma Power Company: INTRODUCTION The following information amends and supplements the Offer to Purchase dated October 6, 1994 (the "Offer to Purchase") of CE Acquisition Company, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of California Energy Company, Inc., a Delaware corporation ("CECI"). The Purchaser is now offering to purchase 12,400,000 shares of Common Stock, par value $0.10 per share (the "Shares"), of Magma Power Company, a Nevada corporation (the "Company"), and (unless and until the Purchaser declares that the Merger Agreement Condition (as defined below) has been satisfied) the associated Preferred Share Purchase Rights (the "Rights") issued on October 14, 1994 pursuant to the Rights Agreement, dated as of October 6, 1994, between the Company and Chemical Trust Company of California, as Rights Agent (the "Rights Agreement"), at $38.50 per Share (and associated Right), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, as amended and supplemented by this Supplement, and in the related Letters of Transmittal (which together with the Offer to Purchase and this Supplement constitute the "Offer"). Unless the context otherwise requires, all references to Shares shall include the associated Rights and all references to the Rights shall include all benefits that may inure to holders of the Rights pursuant to the Rights Agreement. Except as otherwise set forth in this Supplement, the terms and conditions previously set forth in the Offer to Purchase remain applicable in all respects to the Offer, and this Supplement should be read in conjunction with the Offer to Purchase. Unless the context requires otherwise, capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to them in the Offer to Purchase. This Offer does not constitute a solicitation of proxies or consents of stockholders of the Company. Any such solicitation which the Purchaser may make will be made only pursuant to separate proxy or consent materials in compliance with the requirements of Section 14 of the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and regulations thereunder. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN BEFORE THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES WHICH, TOGETHER WITH SHARES BENEFICIALLY OWNED BY THE PURCHASER, REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS, (2) THE COMPANY HAVING ENTERED INTO A DEFINITIVE MERGER AGREEMENT WITH THE PURCHASER TO PROVIDE FOR THE ACQUISITION OF THE COMPANY PURSUANT TO THE OFFER AND THE PROPOSED MERGER (AS DEFINED BELOW) (SUCH CONDITION BEING REFERRED TO AS THE "MERGER AGREEMENT CONDITION"), (3) THE PURCHASER BEING SATISFIED, IN ITS SOLE JUDGMENT, THAT THE PURCHASER HAS OBTAINED FINANCING SUFFICIENT TO ENABLE IT TO CONSUMMATE THE OFFER AND THE PROPOSED MERGER AND (4) AUTHORIZATION BY CECI'S STOCKHOLDERS OF THE ISSUANCE OF CECI COMMON STOCK (AS DEFINED BELOW) SUFFICIENT TO COMPLETE THE PROPOSED MERGER. SEE SECTION 12 OF THE OFFER TO PURCHASE. The purpose of the Offer is to acquire majority control of the Company as the first step in the acquisition of the entire equity interest in the Company. CECI is seeking to negotiate with the Company a definitive acquisition agreement (the "Proposed Merger Agreement") pursuant to which the Company would, as soon as practicable following consummation of the Offer, consummate a merger or other business combination (the "Proposed Merger") with the Purchaser or another direct or indirect wholly owned subsidiary of CECI. In the Proposed Merger, each outstanding Share (other than Shares held by CECI, the Purchaser or any other direct or indirect wholly owned subsidiary of CECI, Shares held in the treasury of the Company and Shares held by stockholders who properly exercise dissenters' rights under the Nevada General Corporation Law (the "NGCL")) would be converted into the right to receive cash and shares of common stock, par value $0.0675 per share, of CECI ("CECI Common Stock") having a combined cash and market value of $38.50 per Share. The per Share amount of cash and CECI Common Stock to be distributed in the Proposed Merger would be determined such that the blended purchase price for all Shares acquired by the Purchaser and its affiliates in the Offer and the Proposed Merger would be $28.50 in cash, without interest thereon, and $10.00 in market value of CECI Common Stock, as established within a range of certain maximum and minimum prices for the CECI Common Stock. See Section 5 of this Supplement. 1 On October 25, 1994, CECI received from Credit Suisse a fully underwritten commitment to provide the financing for the Offer and the Proposed Merger. Such commitment is subject to customary conditions, including the execution of definitive documentation. See Section 6 of this Supplement. Stockholders should follow the procedures for tendering Shares set forth in Section 4 of the Offer to Purchase and Section 2 of this Supplement. Tendering stockholders may use either the original BLUE Letter of Transmittal and the original GREY Notice of Guaranteed Delivery for Shares accompanying the Offer to Purchase, or the revised GREEN Letter of Transmittal and the revised GOLD Notice of Guaranteed Delivery accompanying this Supplement. While the original BLUE Letter of Transmittal refers to the Offer to Purchase, stockholders using such document to tender their Shares (and associated Rights) will nevertheless receive $38.50 for each Share (and associated Right) validly tendered and not withdrawn and accepted for payment pursuant to the Offer, upon the terms and subject to the conditions of the Offer. Stockholders who have previously validly tendered and not withdrawn their Shares (and associated Rights) pursuant to the Offer are not required to take any further action in order to receive, upon the terms and subject to the conditions of the Offer, the increased price of $38.50 per Share (and associated Right) with respect to all Shares purchased pursuant to the Offer. See Section 4 of the Offer to Purchase and Section 1 of this Supplement. THIS SUPPLEMENT, THE OFFER TO PURCHASE AND THE RELATED LETTERS OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. AMENDED TERMS OF THE OFFER. Section 1 of the Offer to Purchase is amended and supplemented by Section 1 of this Supplement. The Purchaser has increased the price per Share (and associated Right) to be paid pursuant to the Offer from $35 per Share (and associated Right) to $38.50 per Share (and associated Right), net to the seller in cash and without interest thereon. Upon the terms and subject to the conditions of the Offer (including, if the Offer is further extended or amended, the terms and conditions of any such extension or amendment), all stockholders whose Shares (and associated Rights) are validly tendered and not withdrawn (including Shares tendered prior to the date of this Supplement) in accordance with the procedures set forth in Section 4 of the Offer to Purchase and Section 2 of this Supplement on or prior to the Expiration Date (as defined below) will receive the increased price. The term "Expiration Date" means 12:00 midnight, New York City time, on Friday, November 4, 1994, unless and until the Purchaser, in its sole judgment, shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the time and date at which the Offer, as so extended by the Purchaser, shall expire. This Supplement, the revised GREEN Letter of Transmittal and other relevant materials will be mailed by the Company to record holders of Shares and Rights whose names appear on the Company's stockholder list and the list of holders of Rights, if any, and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list and list of holders of Rights or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares and/or Rights. 2. PROCEDURE FOR TENDERING SHARES AND RIGHTS. Section 4 of the Offer to Purchase is amended and supplemented by Section 2 of this Supplement. TENDERING STOCKHOLDERS MAY CONTINUE TO USE THE ORIGINAL BLUE LETTER OF TRANSMITTAL AND GREY NOTICE OF GUARANTEED DELIVERY THAT WERE PROVIDED WITH THE OFFER TO PURCHASE. Although such BLUE Letter of Transmittal indicates that the Offer will expire at 12:00 midnight, New York City time, on Thursday, November 3, 1994, stockholders will be able to tender (or withdraw) their Shares and Rights pursuant to the Offer until 12:00 midnight, New York City time, on Friday, November 4, 1994 (or such later date to which the Offer may be extended). TENDERING STOCKHOLDERS MAY ALSO USE THE REVISED GREEN LETTER OF TRANSMITTAL AND GOLD NOTICE OF GUARANTEED DELIVERY PROVIDED WITH THIS SUPPLEMENT. 2 THE METHOD OF DELIVERY OF CERTIFICATES FOR SHARES AND RIGHTS, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDERS, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. 3. PRICE RANGE OF SHARES; DIVIDENDS. Section 6 of the Offer to Purchase is amended and supplemented by Section 3 of this Supplement. According to publicly available information, the Company has paid no cash dividends on the Shares since the date of the Offer to Purchase. The reported high and low sales prices per Share on the Nasdaq National Market (the "NNM") for the current quarter through October 24, 1994, were $37 and $34.25, respectively. On October 20, 1994, the last full trading day prior to CECI's issuance of the press release announcing its intention to increase the price per Share (and associated Right) to be paid pursuant to the Offer, the reported closing sale price per share on the NNM was $34.75. On September 19, 1994, the day of CECI's issuance of the press release announcing the transmission of a letter to the Company containing a proposal to acquire the Company in a transaction in which stockholders would receive cash and shares of CECI Common Stock having a combined cash and market value of $35 per Share, the reported closing price per Share on the NNM was $27.50. The Offer represents a 40% premium over the reported closing sale price per Share on September 19, 1994. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES. 4. BACKGROUND OF THE OFFER SINCE OCTOBER 6, 1994; CONTACTS WITH THE COMPANY. Section 10 of the Offer to Purchase is supplemented by Section 4 of this Supplement. On October 5, 1994, Mr. Ben Holt, a director of CECI and a record holder of Shares, made a demand to the Company for access to the Company's stockholder list and other stockholder information necessary to communicate with stockholders pursuant to the NGCL. On October 10, 1994, CECI learned through press reports that the Company's Board had recommended that its stockholders reject the Offer and had further stated that the Offer at a price of $35 per Share (and associated Right) was less attractive than remaining independent. On October 11, 1994, the Company filed with the Commission a Solicitation/Recommendation Statement on Schedule 14D-9 pursuant to the Exchange Act, formally rejecting the Offer and disclosing, among other things, that the Company's Board had (i) authorized the Company to enter into "golden parachute" severance agreements with 15 of the most highly compensated members of the Company's management, (ii) authorized the Company to enter into indemnification agreements with each member of the Company's Board, (iii) amended the Company's Bylaws purporting to eliminate the ability of the Company's stockholders to act by written consent and (iv) hired Goldman, Sachs & Co. ("Goldman") to assist the Company's Board with respect to CECI's proposal. On October 12, 1994, the Company informed CECI that it had denied Mr. Holt's demand for the Company's stockholder information under the NGCL, and that the Company would not currently provide such information to Mr. Holt. 3 On October 13, 1994, CECI issued the following press release announcing the filing of a preliminary proxy statement with the Commission pursuant to the Exchange Act: CALIFORNIA ENERGY TO SOLICIT CALL OF SPECIAL MEETING OF MAGMA STOCKHOLDERS OMAHA, NEBRASKA, October 13, 1994 -- California Energy Company, Inc. (NYSE, PSE and LSE: CE) ("CECI") announced today that in order to facilitate consummation of its pending cash tender offer ("Offer") for 12,400,000 shares, or approximately 51%, of the common stock of Magma Power Company (NASDAQ:MGMA) ("Magma") at a price of $35 net per share, CECI has filed materials with the Securities and Exchange Commission ("SEC") to solicit written requests from Magma shareholders to require Magma to call a Special Meeting of shareholders. A Special Meeting will provide Magma stockholders the opportunity to consider and vote on CECI's Special Meeting proposals which, if approved, would result in certain By-law amendments that would facilitate CECI's proposal and the election of four (4) CECI nominees to Magma's Board, who would be committed to removing any impediments to shareholders being able to freely choose whether to accept the Offer and approve the proposed merger, thereby ensuring that the Offer and proposed merger get a full and fair hearing. As previously announced, CECI's tender offer is to be followed by a second step merger in implementing its September 19 proposal to acquire all Magma shares for a combination of $25 in cash and $10 in market value of California Energy common stock. Today's announcement by CECI to commence a Special Meeting Request Solicitation follows the decision by Magma's Board of Directors to recommend that Magma shareholders not tender into CECI's $35 per share Offer because remaining independent was more attractive to shareholders. In its SEC filing recommending against CECI's Offer, Magma also disclosed that it had entered into "Golden Parachute" severance agreements with 15 of the most highly compensated members of Magma's management as well as indemnity agreements with Board members in response to CECI's September 19 proposal. CECI intends to take any appropriate action necessary to have any impediments to its Offer set aside. David L. Sokol, California Energy's Chairman and Chief Executive Officer, stated: "Magma's rejection of our offer, without any attempted negotiation with us, demonstrates their disregard for Magma shareholders. Rather than maximizing shareholder value, they have implemented Golden Parachutes for the top 15 members of management, entered into an excessive fee arrangement with Goldman Sachs and initiated wasteful litigation. These actions alone are estimated to cost Magma's shareholders between 0.75 and $1.00 per share. We believe that Magma's Board of Directors have a fiduciary obligation to maximize shareholder value, not the lifestyles of their friends and co-workers. It is our understanding that the Magma Board Chairman, President and Chief Financial Officer began a "road show" presentation for investors yesterday directed at misrepresenting and discrediting our offer, disparaging California Energy, and offering extraordinary and unsustainable projections for Magma's future. Much of the information which Magma presented is inaccurate, misleading and in our view in violation of the proxy solicitation rules established by the Securities and Exchange Commission. Magma's management, again yesterday, stated their hope to investors that we would just go away. This will not happen unless the shareholders reject our ultimate offer. It is our belief that Magma's shareholders recognize the value of our offer and will not allow the Magma management to prosper to their detriment." The Special Meeting Request Solicitation will be made only pursuant to definitive solicitation documents, which will be filed with the Securities and Exchange Commission and mailed to Magma stockholders. Gleacher & Co. Inc. is acting as Financial Advisor to California Energy and Dealer Manager in connection with the tender offer and Request Solicitation and MacKenzie Partners, Inc. is acting as the Information Agent for the tender offer and Request Solicitation. 4 California Energy Company is an international developer, owner and operator of geothermal and other environmentally responsible power generation facilities. Its six existing facilities currently produce in excess of 325 MW of power with an additional 300 MW under construction. On October 13, 1994, CECI issued the following press release regarding the Company's refusal to provide Mr. Holt with the requested stockholder information: MAGMA TO BE SUED TO OBTAIN RELEASE OF MAGMA STOCKHOLDER LIST OMAHA, Neb., Oct. 13--California Energy Company, Inc. (NYSE, PSE and LSE: CE) ("CECI") announced today that Magma Power Company (NASDAQ: MGMA) ("Magma"), in an apparent effort to delay the ability of Magma shareholders to call a special meeting, has denied the request of one of CECI's directors who is a long-time Magma shareholder, for the Magma shareholder list. As previously announced, CECI is soliciting requests to call a Special Meeting of Magma's shareholders in order to provide Magma stockholders the opportunity to consider and vote on CECI's Special Meeting proposals which, if approved, would result in certain By-law amendments that would facilitate CECI's proposal to acquire Magma and the election of four (4) CECI nominees to Magma's Board, who would be committed to removing any impediments to shareholders being able to freely choose whether to accept CECI's pending cash tender offer for 12,400,000 shares at $35 net per share and approve the proposed second step merger, thereby ensuring that the offer and proposed merger get a full and fair hearing. David L. Sokol, California Energy's Chairman and Chief Executive Officer, stated: "Magma's denial of access to the list of shareholders is, at best, an attempt to delay the inevitable, when Magma's Board and management will have to account for their recent actions in front of their shareholders. Such obstructionist tactics viewed in light of recent actions to implement "Golden Parachutes" for 15 of the most highly compensated members of management simply serve as further evidence of management's improper entrenchment motive in recommending against CECI's acquisition proposal." Sokol added: "This sort of irresponsible corporate behavior simply demonstrates the fact that Magma's management is apparently unwilling to permit its actions to be judged by the Company's owners and will result in another wasteful lawsuit to the detriment of Magma's shareholders." The Special Meeting Request Solicitation will be made only pursuant to definitive solicitation documents, which will be filed with the Securities and Exchange Commission and mailed to Magma stockholders. Gleacher & Co. Inc. is acting as Financial Advisor to California Energy and Dealer Manager in connection with the tender offer and request solicitation and MacKenzie Partners, Inc. is acting as the Information Agent for the tender offer and request solicitation. California Energy Company is an international developer, owner and operator of geothermal and other environmentally responsible power generation facilities. Its six existing facilities currently produce in excess of 325 MW of power with an additional 300 MW under construction. On October 14, Mr. Holt commenced an action in the Second Judicial District Court for the State of Nevada in and for the County of Washoe (the "Court"), seeking an order requiring the Company, pursuant to the NGCL, to turn over to him the stockholder information requested in his demand letter to the Company. The Court entered an order setting a briefing schedule which would permit consideration of the matter on an expedited basis. See Section 7 of this Supplement. 5 On October 17, 1994, CECI issued the following press release announcing that it had sued the directors of the Company's Board for, among other things, breach of their fiduciary duties in failing to consider CECI's proposal to acquire Magma and for taking obstructionist actions in response to CECI's proposal: CALIFORNIA ENERGY SUES MAGMA'S DIRECTORS FOR BREACH OF FIDUCIARY DUTY OMAHA, NEBRASKA, October 17, 1994 -- California Energy Company, Inc. (NYSE, PSE and LSE: CE) ("CECI") announced today that it has sued the Directors of Magma Power Company (NASDAQ: MGMA) ("Magma"), for, among other things, breach of their fiduciary duties in failing to properly consider CECI's proposal to acquire Magma and for taking obstructionist actions in response to CECI's proposal, such as adopting special indemnity agreements for themselves, "Golden Parachutes" for 15 Magma executives, a discriminatory "poison pill" and by-law amendments which are intended to impede the right of the majority of Magma's shareholders to freely consider CECI's offer and to entrench current Magma management. In addition, CECI's suit notes that the Board (which includes five (5) present or former Dow employees out of an 11 member Board) breached its duties by not disclosing to Magma's shareholders Dow's conflict of interest in the transaction due to the fact that Dow cannot obtain the same benefit from the tender offer price as other shareholders because of recent Dow transactions that would invoke the SEC's Section16(b) short-swing profit disgorgement rule. David L. Sokol, California Energy's Chairman and Chief Executive Officer, stated: "We find it astounding that Magma's Board has not even given serious consideration to a proposal which would pay shareholders a $7.50 per share premium over Magma's trading price prior to making the proposal. Moreover, the Board, while stating our price to be "inadequate," has declined to engage in a discussion about what price would constitute an adequate offer. Although we have indicated that we are prepared to negotiate all aspects of our offer, Magma has refused to engage in price discussions, merely stating that it is somehow in the best interest of shareholders to remain "independent." At the same time Magma's Board has also taken actions to impede majority shareholder action (such as adopting a poison pill and by-law amendments and refusing access to a shareholder list) which indicate the Board's apparent belief that shareholders shouldn't be permitted to make up their own minds as to what is in their best economic interest and which only serve to entrench current management. It is also noteworthy that, while attempting to deny shareholders the right to consider our offer, Magma's Board has taken steps to provide for management's economic self-interest, such as approving "Golden Parachute" severance agreements for the 15 most highly compensated members of Magma's management. These and other obstructionist actions are estimated to cost shareholders between $0.75 and $1.00 per share. Such actions, viewed in the context of Dow's conflict of interest, due to its inability to fully benefit from the tender offer as a result of Section16(b), paint a picture of management entrenchment plain and simple." Sokol added: "It is curious to note that the five (5) Dow Board members recommended against our $35 per share offer in light of Dow's liquidation of a significant amount of its Magma holdings (3,635,000 shares) in 1993 at a net price of $30.88 per share and Dow's recent sale in September 1994 of 857,143 Magma shares at $28.25. Assuming the Section16(b) problems which prevent Dow from fully benefitting from our offer were fully disclosed to the independent Magma Board members, we do find it surprising that Magma's Board could be advised that there was not a conflict that would require the five (5) Dow members to abstain from voting on our proposal." 6 As previously announced, CECI is soliciting requests to call a Special Meeting of Magma's shareholders in order to provide Magma stockholders the opportunity to consider and vote on CECI's Special Meeting proposals which, if approved, would result in certain by-law amendments that would facilitate CECI's proposal to acquire Magma and the election of four (4) CECI nominees to Magma's Board, who would be committed to removing any impediments to shareholders being able to freely choose whether to accept CECI's pending cash tender offer for 12,400,000 shares at $35 net per share and to approve the proposed second step merger, thereby ensuring that the offer and proposed merger get a full and fair hearing. The Special Meeting Request Solicitation will be made only pursuant to definitive solicitation documents, which will be filed with the Securities and Exchange Commission and mailed to Magma stockholders. Gleacher & Co. Inc. is acting as Financial Advisor to California Energy and Dealer Manager in connection with the tender offer and request solicitation and MacKenzie Partners, Inc. is acting as the Information Agent for the tender offer and request solicitation. California Energy Company is a leading international developer, owner and operator of geothermal and other environmentally responsible power generation facilities. Its six existing facilities currently produce in excess of 325 MW with an additional 300 MW under construction. On October 21, 1994, CECI issued the following press release announcing that the Purchaser had increased the price per Share (and associated Right) to $38.50 per Share (and associated Right), net to the seller in cash and without interest thereon: CALIFORNIA ENERGY INCREASES ITS OFFER FOR MAGMA POWER TO $38.50 PER SHARE Omaha, Nebraska, October 21, 1994 -- California Energy Company, Inc. (NYSE, PSE, LSE: CE) ("CECI") announced today that it has increased its offer to purchase Magma Power Company to $38.50 per share, consisting of $28.50 per share in cash and $10.00 per share of CECI stock. In connection with this enhanced proposal, CECI has extended the expiration date of its pending cash tender offer for 51%, or 12,400,000 of Magma's shares to Friday, November 4, 1994 and has increased the cash price to $38.50 net per share. CECI also confirmed its intention to solicit consents to call a special meeting of Magma's shareholders to elect four new members to Magma's Board of Directors who would ensure that Magma gives proper consideration to this enhanced offer. CECI also announced it would commence a series of investor and shareholder presentations beginning Tuesday, October 25, 1994. These presentations would highlight to Magma shareholders the benefits of the CECI acquisition proposal. David L. Sokol, CECI's Chairman and Chief Executive Officer, stated: "We sincerely hope that Magma's Board of Directors will negotiate and sign a merger agreement with us so that all Magma shareholders can receive the benefits of our acquisition offer. In any event, we are now putting forth our best acquisition proposal, and are beginning a consent solicitation to provide Magma's shareholders the right to express their views directly on the merits of our proposal. We have increased the cash price of our Tender Offer which should provide Magma shareholders with an additional mechanism to communicate to Magma's Board their support of CECI's acquisition offer." California Energy Company is a leading international developer, owner and operator of geothermal and other environmentally responsible power generation facilities. Its six existing facilities currently produce in excess of 325 MW of power with an additional 300 MW under construction. On October 21, 1994, the Company announced that its local Indonesian partner on the smaller of its two proposed development stage projects in Indonesia, the Karaha project, had terminated its joint venture with the Company. On October 25, 1994, CECI and the Purchaser filed their second amended 7 counterclaims which, among other things, seek an injunction requiring the Company to refrain from taking actions to damage its international development projects, including the Karaha project. See Section 7 of this Supplement. On October 25, 1994, CECI issued the following press release announcing the receipt of a fully underwritten $500,000,000 financing commitment from Credit Suisse: CALIFORNIA ENERGY ANNOUNCES RECEIPT OF FULLY UNDERWRITTEN $500,000,000 FINANCING COMMITMENT FOR MAGMA ACQUISITION OMAHA, NE, October 25, 1994 -- California Energy Company, Inc. (NYSE, PSE, LSE:CE) ("CECI") today announced that it has received a fully-underwritten $500,000,000 financing commitment from Credit Suisse in connection with CECI's proposed acquisition of Magma Power Company (NASDAQ:MGMA) ("Magma"). The financing commitment contains two facilities and provides funding both for the purchase of tendered Magma common shares pursuant to CECI's pending cash tender offer for 51%, or 12,400,000 shares of Magma at $38.50 net per share, and for permanent financing in order to consummate a merger of the two companies. David L. Sokol, Chairman and Chief Executive Officer of CECI, stated, "We believe this $500,000,000 financing commitment, together with over $300,000,000 of existing cash on hand, demonstrates the strength of our offer to Magma's shareholders and reinforces our capability to expeditiously consummate the proposed transaction." The tender offer facility has a final maturity of 12 months (extendable to three years) and the permanent financing facility has a final maturity of 8 years with semi-annual amortization from internally-generated funds. Pricing is based upon Libor or an alternative base rate. California Energy Company is a leading international developer, owner and operator of geothermal and other environmentally responsible power generation facilities. Its six existing facilities currently produce in excess of 325 MW of power with an additional 300 MW under construction. Also on October 25, 1994, the Court issued an order in the action filed by Mr. Holt, granting the relief requested by Mr. Holt by directing that the Company turn over to Mr. Holt without delay the stockholder list and other information sought in his demand letter. 5. PURPOSE OF THE OFFER AND THE PROPOSED MERGER. Section 11 of the Offer to Purchase is amended and supplemented by Section 5 of this Supplement. General. The purpose of the Offer is to acquire majority control of the Company as the first step in the acquisition of the entire equity interest in the Company. The purpose of the Proposed Merger is to acquire all Shares not beneficially owned by the Purchaser following consummation of the Offer. The Purchaser is seeking to enter into the Proposed Merger with the Company as promptly as practicable following consummation of the Offer. Under the Proposed Merger Agreement, at the effective time of the Proposed Merger, each outstanding Share (other than Shares held by CECI, the Purchaser or any other direct or indirect wholly owned subsidiary of CECI, Shares held in the treasury of the Company and Shares held by stockholders who properly exercise dissenters' rights under the NGCL) would be converted into the right to receive cash and shares of CECI Common Stock having a combined cash and market value of $38.50 per Share. The per Share amount of cash and CECI Common Stock to be distributed in the Proposed Merger will be determined such that the blended purchase price for all Shares acquired by the Purchaser and its affiliates in the Offer and the Proposed Merger will be $28.50 in cash and $10.00 in market value of CECI Common Stock, subject to a collar provision in the Proposed Merger Agreement which would provide a range of maximum and minimum prices for CECI Common Stock. If the market value of CECI Common Stock were to exceed the top of such range, the number of shares of CECI Common Stock to be issued in the Proposed Merger would be based on the maximum price for CECI Common Stock (i.e., the top of the range), and if the market value of the CECI 8 Common Stock were to be less than the bottom of such range, the number of shares of CECI Common Stock to be issued in the Proposed Merger would be based on the minimum price for the CECI Common Stock (i.e., the bottom of the range). The effect of the collar provision would be to increase the number of Shares to be issued in the Proposed Merger (and therefore the value of the stock consideration to be received in the Proposed Merger) if the market price of the CECI Common Stock were to be greater than the top of the established range and to decrease the number of Shares to be issued in the Proposed Merger (and therefore the value of the stock consideration to be received in the Proposed Merger) if the market price of the CECI Common Stock were to be less than the bottom of the established range. CECI intends to establish such range shortly prior to the Purchaser's entering into the Proposed Merger Agreement. The Preferred Share Purchase Rights. According to the Company's Registration Statement on Form 8-A filed with the Securities and Exchange Commission (the "Commission") on October 7, 1994, as amended by the Company's amendment filed with the Commission on October 14, 1994 (the "Form 8-A"), the Company's Board declared a distribution of one Right for each outstanding Share to stockholders of record at the close of business on October 14, 1994 and for each Share issued (including Shares distributed from the Company's treasury) by the Company thereafter and prior to the Distribution Date (as defined below). The following description of the Rights is based on information contained in the Form 8-A and is qualified in its entirety by reference to such Form 8-A. Each Right entitles the registered holder, subject to the terms of the Rights Agreement, to purchase from the Company one one-thousandth of a share (a "Unit") of Series A Preferred Stock, par value $0.10 per share (the "Preferred Stock"), at a purchase price of $125 per Unit, subject to adjustment (the "Purchase Price"). Initially, the Rights will attach to all certificates representing Shares ("Share Certificates") and no separate certificates representing Rights ("Rights Certificates") will be distributed. The Rights will separate from the Shares and a "Distribution Date" will occur upon the earlier of (i) 10 business days following a public announcement (the date of such announcement being the "Stock Acquisition Date") that a person or group of affiliated or associated persons (other than the Company, any subsidiary of the Company or any employee benefit plan of the Company or such Subsidiary) (an "Acquiring Person") has acquired, obtained the right to acquire or otherwise obtained beneficial ownership of 10% or more of the then outstanding Shares (or if certain current holders of 10% or more of the outstanding Shares have acquired, obtained the right to acquire or otherwise obtained beneficial ownership of an additional 4% of the Shares), and (ii) 10 business days (or such later date as may be determined by action of the Company's Board prior to such time as any person becomes an Acquiring Person) following the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 20% or more of the then outstanding Shares. Until the Distribution Date, (i) the Rights will be evidenced by Share Certificates and will be transferred with and only with such Share Certificates, (ii) new Share Certificates issued after October 14, 1994 (also including Shares distributed from the Company's treasury) will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any certificates representing outstanding Shares will also constitute the transfer of the Rights associated with the Shares represented by such certificates. The Rights are not exercisable until the Distribution Date and will expire at the close of business on the tenth anniversary of the Rights Agreement unless earlier redeemed by the Company as described below. As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of the Shares as of the close of the business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights. In the event that (i) the Company is the surviving corporation in a merger with an Acquiring Person and the Shares shall remain outstanding, (ii) a person becomes the beneficial owner of 10% or more of the then outstanding Shares (or an additional 4% in the case of certain current 10% holders), (iii) an Acquiring Person engages in one or more "self-dealing" transactions as set forth in the Rights Agreement, or (iv) during such time as there is an Acquiring Person, an event occurs which results in such Acquiring Person's ownership interest being increased by more than 1%, then, in each such case, each holder of a Right will thereafter have the right to receive, upon exercise, Units (or, in certain circumstances, Shares, 9 cash, property or other securities of the Company) having a value equal to two times the exercise price of the Right. The exercise price is the Purchase Price multiplied by the number of Units issuable upon exercise of a Right prior to the events described in this paragraph. Notwithstanding any of the foregoing, following the occurrence of any of the events set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. In the event that, at any time following the Stock Acquisition Date, (i) the Company is acquired in a merger or other business combination transaction and the Company is not the surviving corporation (other than a merger described in the preceding paragraph), (ii) any person consolidates or mergers with the Company and all or part of the Shares are converted or exchanged for securities, cash or property of any other person or (iii) 50% or more of the Company's assets or earning power are sold or transferred, each holder of a Right (except Rights which previously have been voided as described above) shall thereafter have the right to receive, upon exercise, common stock of the Acquiring Person having a value equal to two times the exercise price of the Right. The Purchase Price payable, and the number of Units issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) if holders of the Preferred Stock are granted certain rights or warrants to subscribe for Preferred Stock or convertible securities at less than the current market price of the Preferred Stock, or (iii) upon the distribution to the holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above). With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price. The Company is not required to issue fractional Units. In lieu thereof, an adjustment in cash may be made based on the market price of the Preferred Stock prior to the date of exercise. At any time until ten business days following the Stock Acquisition Date, a majority of the Independent Directors (as defined in the Rights Agreement) may redeem the Rights in whole, but not in part, at a price of $0.01 per Right (the "Redemption Price"), payable, at the election of such majority of the Independent Directors, in cash or Shares. Immediately upon the action of a majority of Independent Directors ordering the redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. Any of the provisions of the Rights Agreement may be amended at any time prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended in order to cure any ambiguity, defect or inconsistency, to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person), or to shorten or lengthen any time period under the Rights Agreement; provided, however, that no amendment to adjust the time period governing redemption shall be made at such time as the Rights are not redeemable. On October 10, 1994, the Company's Board resolved that the Distribution Date shall not occur until the earlier of (i) such later date as the Company's Board, in its sole discretion, shall fix by resolution adopted prior to the Distribution Date and (ii) the date the Purchaser becomes an Acquiring Person. UNLESS THE RIGHTS ARE REDEEMED, HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER, STOCKHOLDERS WILL BE REQUIRED TO TENDER ONE RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH SHARE IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 4 OF THE OFFER TO PURCHASE AND SECTION 2 OF THIS SUPPLEMENT. IF SEPARATE RIGHTS CERTIFICATES ARE NOT ISSUED, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. 10 THE OFFER IS CONDITIONED ON, AMONG OTHER THINGS, THE MERGER AGREEMENT CONDITION BEING SATISFIED. THE PURCHASER INTENDS TO TAKE ANY ACTION NECESSARY TO HAVE ATTEMPTED IMPEDIMENTS TO THE OFFER AND THE PROPOSED MERGER SET ASIDE. IF THE PURCHASER ENTERS INTO THE PROPOSED MERGER AGREEMENT WITH THE COMPANY, SUCH AGREEMENT WILL REQUIRE THE COMPANY'S BOARD TO ADOPT A RESOLUTION PROVIDING, OR TAKE SUCH OTHER CORPORATE ACTION AS MAY BE REQUIRED TO ENSURE, THAT ANY RESTRICTIONS THAT MAY PURPORT TO BE IMPOSED BY THE RIGHTS ARE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER. SEE INTRODUCTION OF THE OFFER TO PURCHASE AND SECTION 12 OF THE OFFER TO PURCHASE. 6. SOURCE AND AMOUNT OF FUNDS. Section 13 of the Offer to Purchase is amended and supplemented by Section 6 of this Supplement. As a result of the increase in the price per Share to be paid pursuant to the Offer, the Purchaser estimates that approximately $477.4 million will be required to purchase the 12,400,000 Share and Rights sought pursuant to the Offer. The Purchaser estimates that approximately an additional $218 million will be required to effectuate the Proposed Merger. The Purchaser will obtain such funds through borrowings from commercial banks and through a capital contribution by CECI from CECI's general corporate funds, which at September 30, 1994 aggregated approximately $316 million. The Purchaser anticipates that a substantial portion of the cash required to purchase Shares and Rights pursuant to the Offer and the Proposed Merger will be provided through a secured bank credit facility. CECI has received a fully underwritten financing commitment letter from Credit Suisse (the "Commitment Letter") which states that Credit Suisse will provide, on specified terms and subject to customary conditions, up to $500,000,000 in secured bank financing in connection with the Offer and the Proposed Merger. Such funds, together with a portion of CECI's general corporate funds, will be sufficient to pay the cash portion of the consideration for the Offer and the Proposed Merger and related expenses. The Commitment Letter contemplates (i) a facility of up to $250,000,000 to capitalize the Purchaser for the purpose of financing the Offer (the "Tender Facility") and (ii) facilities of up to $500,000,000 for, among other things, refinancing the Tender Facility and effectuating the Proposed Merger (the "Merger Facilities" and, together with the Tender Facility, the "Facilities"). The term of the Tender Facility will be 12 months, extendible for a term of up to three years from the initial funding at the mutual consent of CECI and Credit Suisse. The Tender Facility will be a margin loan collateralized by the Shares purchased pursuant to the Offer and subject to Regulation U promulgated under the Exchange Act. The Merger Facilities will be composed of (i) up to a 6-year amortizing term loan ("Term Loan A") in an expected amount of up to $500,000,000 less the amount of Term Loan B (as defined below) and (ii) up to a 8-year amortizing term loan ("Term Loan B") in an expected amount not to be less than $150,000,000. The Merger Facilities are to be amortized from internally generated funds and will be secured by an assignment and pledge of the stock of the Company and all unencumbered assets of the Company. Interest on loans borrowed under the Facilities will be payable at spreads of 2.50% above LIBOR (adjusted for reserves) or 1.25% above Base Rate for loans under the Tender Facility, 2.50% above LIBOR (adjusted for reserves) or 1.50% above Base Rate for Term Loan A, and 3.00% above LIBOR (adjusted for reserves) or 2.00% above Base Rate for Term Loan B. CECI may elect to incur loans at either LIBOR or Base Rate. Credit Suisse's commitment to provide the Facilities is subject to certain customary conditions, including without limitation (a) a capital investment in the Purchaser in an amount and form satisfactory to Credit Suisse, (b) the absence of certain material adverse changes and (c) Credit Suisse's satisfaction with its due diligence with respect to CECI and the Company. The definitive documentation relating to the Facilities will contain representations, warranties, covenants, events of default and conditions customary for transactions of this size and type. CECI has agreed to pay certain fees to Credit Suisse with respect to the Facilities which, in the aggregate, are not material to the transactions described herein. 11 The foregoing description of the Commitment Letter is qualified in its entirety by reference to the text thereof filed as an exhibit to Amendment No. 4 to the Tender Offer Statement on Schedule 14D-1 of the Purchaser and CECI (the "Schedule 14D-1") filed with the Commission in connection with the Offer, copies of which may be obtained from the offices of the Commission in the manner set forth in Section 8 of the Offer to Purchase (except that such information will not be available at the regional offices of the Commission). When definitive agreements relating to the Facilities are executed, copies will be filed as exhibits to further amendments to the Schedule 14D-1. 7. CERTAIN LEGAL MATTERS. Section 15 of the Offer to Purchase is amended and supplemented by Section 7 of this Supplement. Pending Litigation. On October 3, 1994, the Company filed a complaint entitled Magma Power Company v. California Energy Company, Inc., Case No. CV-N-94-06160, against CECI in the Second Judicial District Court of the State of Nevada in and for the County of Washoe. The complaint seeks a declaratory judgment that (i) the Company's Board properly discharged its fiduciary obligations in adopting the Rights Agreement and an amendment to the Company's Bylaws and, accordingly, such documents were valid and binding, and (ii) the Merger Moratorium Statute is valid and not in violation of the Commerce Clause and Supremacy Clause of the United States Constitution. CECI removed this action to the United States District Court for the District of Nevada (Case No. CV-N-94-00719-DWH). On October 17, 1994, CECI filed its answer and counterclaims in response to the Company's complaint. The counterclaims name the Purchaser as an additional counterclaim plaintiff and the Company's directors as counterclaim defendants in addition to the Company. CECI's counterclaims seek primarily: (i) a declaratory judgment that certain actions taken by the Company, including the amendment to the Company's Bylaws purporting to preclude the Company stockholders from taking action by written consent, and implementation of its "poison pill" Rights Agreement, are void and ultra vires, and constitute a breach of fiduciary duty by the Company's Board; (ii) an injunction requiring the Company's Board to rescind the amendment to the Company's Bylaws which purports to eliminate the power of stockholders to act by written consent, the "golden parachute" severance agreements granted to 15 members of the Company's management and the indemnification agreements granted to each member of the Company's Board; (iii) an injunction enjoining the operation of the "poison pill" Rights Agreement and directing the Company's Board to redeem the Rights provided for in that Agreement; (iv) a declaratory judgment that the Merger Moratorium Statute is unconstitutional under the Supremacy Clause and the Commerce Clause of the United States Constitution; (v) an injunction enjoining the Company's Board from invoking the terms of the Merger Moratorium Statute or otherwise obstructing the Offer; and (vi) an injunction requiring the Company to correct all false and misleading statements in its Schedule 14D-9 and the amendments thereto. On October 17, 1994, the Company filed an amended complaint, which, in addition to the relief requested in its original complaint, seeks (i) declaratory and injunctive relief with respect to certain purportedly false and misleading disclosures in CECI's and the Purchaser's Schedule 14D-1 and the Offer to Purchase therein; and (ii) declaratory and injunctive relief with respect to certain allegedly false and misleading statements made in CECI's preliminary Request Solicitation Statement filed with the Commission pursuant to Section 14(a) of the Exchange Act on October 13, 1994. On October 19, 1994, CECI and the Purchaser filed their answer to the Company's amended complaint and amended their counterclaims which, in addition to the relief requested in the original counterclaims, seek an injunction requiring the Company to correct additional false and misleading statements reflected in an amendment to its Schedule 14D-9 and in other statements made by the Company. On October 25, 1994, CECI and the Purchaser filed their second amended counterclaims which, in addition to the relief requested in the original and amended counterclaims, seek an injunction requiring the Company to refrain from (i) taking actions to damage its international development projects, including the Karaha project, or (ii) taking other actions designed to waste corporate assets and block the Offer and the Proposed Merger. 12 CECI intends to take any action necessary to have attempted impediments to the Offer and the Proposed Merger set aside. On October 14, 1994, Ben Holt, a stockholder of the Company, and a director of CECI, filed a complaint entitled Ben Holt v. Magma Power Company, Case No. CV94-06432, against the Company in the Second Judicial District Court for the State of Nevada in and for the County of Washoe (the "Court"), alleging, among other things, that the Company has infringed the plaintiff's right as a stockholder by denying his statutory right under the NGCL to demand access to the Company's stockholder list and certain related material necessary to communicate with the Company's shareholders. The plaintiff sought an order directing the Company to comply with the demand for the stockholder list and related information necessary to communicate with stockholders. On October 25, 1994, the Court issued an order directing the Company forthwith and without delay to turn over to Mr. Holt a complete record or list of the Company's stockholders together with certain other information concerning stockholders of the Company requested by Mr. Holt in his demand letter to the Company. The Court ruled expressly that Mr. Holt satisfied the requirements of the NGCL governing requests for stockholder information in that he had been a stockholder of the Company for more than six months as of the time of his demand, and had complied with the Company's request for an affidavit concerning his request; that Mr. Holt's purpose for requesting stockholder information of the Company, which was to facilitate CECI's request for a special meeting of stockholders of the Company and otherwise to communicate with the other stockholders of the Company concerning CECI's proposal to acquire the Company through the Offer and the Proposed Merger was a proper purpose for which to request stockholder information; and that the public interest is served by granting Mr. Holt's request for stockholder information. Antitrust. The required waiting period under the HSR Act was terminated by the FTC and the Antitrust Division on October 20, 1994. 8. MISCELLANEOUS. CECI and the Purchaser have filed with the Commission an amendment to the Schedule 14D-1 pursuant to Rule 14d-3 promulgated under the Exchange Act and are furnishing certain supplemental information with respect to the Offer. CECI and the Purchaser may file additional amendments to the Schedule 14D-1. The Tender Offer Statement on Schedule 14D-1 and any and all amendments thereto, including exhibits, may be examined and copies may be obtained from the Commission in the same manner as described in Section 8 of the Offer to Purchase with respect to information concerning the Company (except that the amendments will not be available at the regional offices of the Commission). Except as modified by this Supplement, the terms and conditions set forth in the Offer to Purchase remain applicable in all respects to the Offer and this Supplement should be read in conjunction with the Offer to Purchase and the Letters of Transmittal. 13 Facsimile copies of either of the Letters of Transmittal will be accepted. The Letter of Transmittal and certificates for Shares and any other required documents should be sent or delivered by each stockholder or his broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below: The Depositary for the Offer is: IBJ SCHRODER BANK & TRUST COMPANY Telephone Number: (212) 858-2103
By Mail: Facsimile Number: By Hand or Overnight Delivery: P.O. Box 84 (212) 858-2611 One State Street Bowling Green Station Attn: Reorganization Operations New York, New York 10004 New York, New York 10274-0084 Department Attn: Reorganization Operations Attn: Reorganization Operations Department Department Confirm Facsimile by Telephone: (212) 858-2103
Questions and requests for assistance may be directed to the Information Agent or to the Dealer Manager at their respective addresses and telephone numbers set forth below. Requests for additional copies of this Supplement, the Offer to Purchase, the Letters of Transmittal and other tender offer materials may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. The Information Agent for the Offer is: MACKENZIE PARTNERS, INC. [LOGO] 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (Collect) OR CALL TOLL FREE (800) 322-2885 The Dealer Manager for the Offer is: GLEACHER & CO. INC. 660 Madison Avenue New York, New York 10021 (212) 418-4206 EX-99.(A)(12) 3 LETTER OF TRANSMITTAL STOCKHOLDERS WISHING TO TENDER THEIR SHARES MAY USE EITHER THIS LETTER OF TRANSMITTAL OR THE BLUE LETTER OF TRANSMITTAL THAT WAS PROVIDED WITH THE OFFER TO PURCHASE. STOCKHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED (AND NOT WITHDRAWN) SHARES USING THE BLUE LETTER OF TRANSMITTAL NEED NOT TAKE ANY FURTHER ACTION IN ORDER TO TENDER SUCH SHARES. LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF MAGMA POWER COMPANY AT $38.50 NET PER SHARE PURSUANT TO THE OFFER TO PURCHASE DATED OCTOBER 6, 1994 AND THE SUPPLEMENT THERETO DATED OCTOBER 26, 1994 BY CE ACQUISITION COMPANY, INC. A WHOLLY OWNED SUBSIDIARY OF CALIFORNIA ENERGY COMPANY, INC. THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS HAVE BEEN EXTENDED AND WILL NOW EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 4, 1994, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: IBJ SCHRODER BANK & TRUST COMPANY Telephone Number: (212) 858-2103
By Mail: Facsimile Number: By Hand or Overnight Delivery: P.O. Box 84 (212) 858-2611 One State Street Bowling Green Station Attn: Reorganization Operations New York, New York 10004 New York, New York 10274-0084 Department Attn: Reorganization Operations Attn: Reorganization Operations Department Department Confirm Facsimile by Telephone: (212) 858-2103
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This revised GREEN Letter of Transmittal or the previously circulated BLUE Letter of Transmittal is to be completed by stockholders either if certificates for Shares ("Share Certificates") and/or Rights ("Rights Certificates") are to be forwarded herewith or if delivery is to be made by book-entry transfer to the account maintained by the IBJ Schroder Bank & Trust Company (the "Depositary") at The Depository Trust Company ("DTC"), Midwest Securities Trust Company ("MSTC") or Philadelphia Depository Trust Company ("PHDTC") (collectively, the "Book-Entry Transfer Facilities") pursuant to the procedures set forth in Section 4 of the Offer to Purchase, dated October 6, 1994 (the "Offer to Purchase"), and Section 2 of the Supplement thereto, dated October 26, 1994 (the "Supplement"), of CE Acquisition Company, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of California Energy Company, Inc., a Delaware corporation ("CECI"). If the Purchaser declares that the Merger Agreement Condition (as defined below) is satisfied, the Purchaser will not require delivery of Rights (as defined below). Unless and until the Purchaser declares that the Merger Agreement Condition is satisfied, holders of Shares will be required to tender one Right for each Share tendered to effect a valid tender of such Share. If the Distribution Date (as defined in the Offer to Purchase and the Supplement) has not occurred prior to the time Shares are tendered pursuant to the Offer, a tender of Shares will constitute a tender of the associated Rights. If the Distribution Date occurs and the Rights Certificates are distributed by the Company to holders of Shares prior to the time a holder's Shares are tendered pursuant to the Offer, in order for Rights (and the corresponding Shares) to be validly tendered, Rights Certificates representing a number of Rights equal to the number of Shares tendered must be delivered to the Depositary or, if book-entry delivery is available with respect to Rights, a book-entry confirmation must be received by the Depositary with respect thereto. If the Distribution Date occurs and Rights Certificates are not distributed prior to the time Shares are tendered pursuant to the Offer, Rights may be tendered prior to a stockholder receiving Rights Certificates by use of the guaranteed delivery procedures described in Section 4 of the Offer to Purchase and below. In any case, a tender of Shares constitutes an agreement by the tendering stockholder to deliver Rights Certificates representing a number of Rights equal to the number of Shares tendered pursuant to the Offer to the Depositary within five business days after the date Rights Certificates are distributed. The Purchaser reserves the right to require that the Depositary receive Rights Certificates, or a Book-Entry Confirmation (as defined in the Offer to Purchase), if available, with respect to such Rights prior to accepting the corresponding Shares for payment pursuant to the Offer if Rights Certificates have been distributed to holders of Shares at such time. If a stockholder desires to accept the Offer and tender Shares and Rights pursuant to the Offer and such stockholder's Share Certificates and, if applicable, Rights Certificates, are not immediately available or time will not permit all required documents to reach the Depositary prior to the expiration of the Offer (the "Expiration Date"), or the procedures for book-entry transfer cannot be completed on a timely basis, such Shares or Rights may nevertheless be tendered if the guaranteed delivery procedures set forth in Section 4 of the Offer to Purchase are followed. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
DESCRIPTION OF SHARES TENDERED - ------------------------------------------------------------------------------------------------------- Name(s) and Address(es) of Registered Share Certificate(s) Tendered (Attach additional signed list Holder(s) (Please fill in, if blank) if necessary) - ---------------------------------------- ------------------------------------------------------------- Total Number of Shares Represented Share Certificate by Share Number of Shares Number(s)* Certificate(s)* Tendered** - ---------------------------------------- ----------------- ------------------- --------------------- - ---------------------------------------- ----------------- ------------------- --------------------- - ---------------------------------------- ----------------- ------------------- --------------------- - ---------------------------------------- ----------------- ------------------- --------------------- - ---------------------------------------- ----------------- ------------------- --------------------- Total Shares: - ---------------------------------------- ----------------- ------------------- --------------------- * Need not be completed by stockholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares described above are being tendered. See Instruction 4. - -------------------------------------------------------------------------------------------------------
DESCRIPTION OF RIGHTS TENDERED - --------------------------------------------------------------------------------------------------------- Name(s) and Address(es) of Registered Rights Certificate(s) Tendered (Attach additional signed list Holder(s) (Please fill in, if blank) if necessary)* - ---------------------------------------- --------------------------------------------------------------- Total Number of Rights Rights Represented Certificate by Rights Number of Rights Number(s)** Certificate(s)** Tendered*** - ---------------------------------------- ----------------- -------------------- ---------------------- - ---------------------------------------- ----------------- -------------------- ---------------------- - ---------------------------------------- ----------------- -------------------- ---------------------- - ---------------------------------------- ----------------- -------------------- ---------------------- - ---------------------------------------- ----------------- -------------------- ---------------------- Total Rights: - ---------------------------------------- ----------------- -------------------- ---------------------- * If the tendered Rights are represented by separate Rights Certificates, complete using the certificate numbers of such Rights Certificates. Stockholders tendering Rights which are not represented by separate Rights Certificates should retain a copy of this Letter of Transmittal in order to accurately complete this Letter of Transmittal if Rights Certificates are received. ** Need not be completed by stockholders tendering by book-entry transfer. *** Unless otherwise indicated, it will be assumed that all Rights evidenced by Rights Certificates delivered to the Depositary are being tendered. See Instruction 4. - ---------------------------------------------------------------------------------------------------------
[ ]* CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution - ----------------------------------------------------------------------------- Check box of Book-Entry Transfer Facility: [ ]* DTC [ ]* MSTC [ ]* PHDTC Account Number - ----------------------------------------------------------------------------- Transaction Code Number - ----------------------------------------------------------------------------- [ ]* CHECK HERE IF TENDERED RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution - ----------------------------------------------------------------------------- Check box of Book-Entry Transfer Facility: [ ]* DTC [ ]* MSTC [ ]* PHDTC Account Number - ----------------------------------------------------------------------------- Transaction Code Number - ----------------------------------------------------------------------------- [ ]* CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Owner(s) - ----------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery - ----------------------------------------------------------------------------- Window Ticket Number (If Any) - ----------------------------------------------------------------------------- Name of Institution which Guaranteed Delivery - ----------------------------------------------------------------------------- If delivery is by book-entry transfer, check one box: [ ]* DTC [ ]* MSTC [ ]* PHDTC PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY [ ]* CHECK HERE IF TENDERED RIGHTS ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Owner(s) - ----------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery - ----------------------------------------------------------------------------- Window Ticket Number (If Available) - ----------------------------------------------------------------------------- Name of Institution which Guaranteed Delivery - ----------------------------------------------------------------------------- If delivery is by book-entry transfer, check one box: [ ]* DTC [ ]* MSTC [ ]* PHDTC PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS. Ladies and Gentlemen: The undersigned hereby tenders to CE Acquisition Company, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of California Energy Company, Inc., a Delaware corporation ("CECI"), the above described shares of common stock, par value $0.10 per share (the "Shares"), of Magma Power Company, a Nevada corporation (the "Company"), pursuant to the Purchaser's offer to purchase 12,400,000 Shares, and (unless and until the Purchaser declares that the Merger Agreement Condition (as defined in the Offer to Purchase (as defined below)) is satisfied) the associated Preferred Stock Purchase Rights (the "Rights") issued on October 14, 1994 pursuant to the Rights Agreement, dated as of October 6, 1994, between the Company and Chemical Trust Company of California, as Rights Agent (the "Rights Agreement"), at a price of $38.50 per Share (and associated Right), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 6, 1994 (the "Offer to Purchase"), as amended and supplemented by the Supplement to the Offer to Purchase, dated October 26, 1994 (the "Supplement") (receipt of which is hereby acknowledged) and in this revised GREEN Letter of Transmittal (which, together with the Supplement, the Offer to Purchase and the original BLUE Letter of Transmittal, constitutes the "Offer"). All references to the Rights shall include all benefits which may inure to the stockholders of the Company pursuant to the Rights Agreement and, unless the context otherwise requires, all references to Shares shall include the Rights. The undersigned understands that the Purchaser reserves the right to transfer or assign, in whole and from time to time in part, to one or more direct or indirect subsidiaries of CECI, the right to purchase Shares and Rights tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Purchaser of its obligations under the Offer or prejudice the rights of tendering stockholders to receive payment for Shares or Rights validly tendered and accepted for payment pursuant to the Offer. Subject to, and effective upon, acceptance for payment of the Shares and Rights tendered herewith in accordance with the terms and subject to the conditions of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all the Shares and Rights that are being tendered hereby and that are being accepted for purchase pursuant to the Offer (and any and all dividends, distributions, stock splits, other Shares, rights or other securities issued or issuable in respect of the Shares and Rights on or after October 6, 1994) which are payable or distributable to stockholders of record on a date prior to the transfer into the name of the Purchaser or its nominees or transferees on the Company's stock transfer records of the Shares and Rights purchased pursuant to the Offer (a "Distribution"), and irrevocably constitutes and appoints the Depositary the true and lawful attorney-in-fact and proxy of the undersigned with respect to such Shares and Rights (and any dividends, distributions, other Shares, rights or securities, including Distributions) with full power of substitution and resubstitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares and Rights (and any such dividends, distributions, other Shares, rights or securities, including Distributions), or transfer ownership of such Shares and Rights on the account books maintained by a Book-Entry Transfer Facility, together in either such case with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser upon receipt by the Depositary, as the undersigned's agent, of the purchase price (adjusted, if appropriate, as provided in the Offer to Purchase), (b) present such Shares and Rights (and any dividends, distributions, other Shares, rights or securities, including Distributions) for transfer on the books of the Company and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and Rights (and any such dividends, distributions, other Shares, rights or securities, including Distributions), all in accordance with the terms of the Offer. The undersigned understands that if the Distribution Date (as defined in the Offer to Purchase and in the Supplement) has occurred and Rights Certificates have been distributed by the Company to holders of Shares prior to the time a holder's Shares are tendered herewith, then for Rights (and the corresponding Shares) to be validly tendered, Rights Certificates representing a number of Rights equal to the number of Shares being tendered herewith must be delivered to the Depositary, or if book-entry delivery is available with respect to Rights, a Book-Entry Confirmation must be received by the Depositary with respect thereto. If the Distribution Date has occurred and Rights Certificates have not been distributed prior to the time Shares are tendered herewith, Rights may be tendered prior to a stockholder's receiving Rights Certificates by use of the guaranteed delivery procedures described in Section 4 of the Offer to Purchase. In any case, the undersigned agrees to deliver Rights Certificates representing a number of Rights equal to the number of Shares tendered herewith to the Depositary within five business days after the date such Rights Certificates are distributed. The undersigned understands that if the Merger Agreement Condition is not satisfied, the Purchaser reserves the right to require that the Depositary receive Rights Certificates, or a Book-Entry Confirmation, if available, with respect to such Rights prior to accepting the corresponding Shares for payment, if the Distribution Date occurs prior to the Expiration Date. In that event, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of, among other things, such Rights Certificates. The undersigned hereby irrevocably appoints David L. Sokol, Steven A. McArthur and John G. Sylvia and each of them, or any other designees of the Purchaser, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution and resubstitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to vote or act by written consent in such manner as each such attorney and proxy or his substitute shall in his sole discretion deem proper, and otherwise to act with respect to all the Shares and Rights tendered hereby that have been accepted for payment by the Purchaser prior to the time of such vote or action (and any and all non-cash dividends, distributions, other Shares, rights or securities issued or issuable in respect thereof on or after October 6, 1994), at any meeting of stockholders (whether regular or special and whether or not an adjourned meeting) of the Company, or consent in lieu of any such meeting, or otherwise. All such powers of attorney and proxies are irrevocable and coupled with an interest in the tendered Shares and Rights and are granted in consideration of, and are effective when, and only to the extent that, the Purchaser accepts such Shares and Rights for payment. Such acceptance for payment shall revoke any other proxies granted by the undersigned at any time with respect to such Shares and Rights (and any such non-cash dividends, distributions, other Shares, rights or other securities, including Distributions) and no subsequent proxies or written consents will be given (and if given will be deemed not to be effective) with respect thereto by the undersigned. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares and Rights tendered hereby (and any and all dividends, distributions, other Shares, rights or other securities issued or issuable in respect thereof, including Distributions, on or after October 6, 1994) and that, when the same are accepted for payment by the Purchaser, the Purchaser will acquire good and unencumbered title thereto, free and clear of all pledges, liens, restrictions, charges, proxies and encumbrances and the same will not be subject to any adverse claim. Upon request, the undersigned will execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any and all dividends, distributions, such other Shares, rights or other securities, including Distributions). In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of the Purchaser any and all other Shares and Rights or other securities, including Distributions, issued to the undersigned on or after October 6, 1994 in respect of Shares and Rights tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance or appropriate assurance thereof, the Purchaser shall be entitled to all rights and privileges as owner of any such other Shares and Rights or other securities and may withhold the entire consideration or deduct from the consideration the amount or value thereof, as determined by the Purchaser in its sole discretion. All authority herein conferred or agreed to be conferred in this Letter of Transmittal shall not be affected by, and shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators and legal and personal representatives of the undersigned. Except as stated in the Offer to Purchase, the Supplement and the Letters of Transmittal, this tender is irrevocable. The undersigned understands that tenders of Shares and Rights pursuant to any one of the procedures described in the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price and/or return any certificates for Shares and Rights not tendered or accepted for payment in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered." Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price and/or return any certificates for Shares and Rights not tendered or accepted for payment (and accompanying documents, as appropriate) to the registered holder(s) appearing under "Description of Shares Tendered" and "Description of Rights Tendered" at the address shown below the undersigned's signature. If both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the purchase price, and/or return any certificates for Shares and Rights not tendered or accepted for payment in the name of, and deliver said certificates and check and return such certificates to, the person or persons so indicated. Stockholders delivering Shares and Rights by book-entry transfer may request that any Shares and Rights not accepted for payment be returned by crediting such account maintained at a Book-Entry Transfer Facility as such stockholder may designate by making an appropriate entry under "Special Payment Instructions." The undersigned recognizes that the Purchaser has no obligation pursuant to the Special Payment Instructions to transfer any Shares and Rights from the name of the registered holder thereof if the Purchaser does not accept for payment any of the Shares and Rights so tendered. SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if certificates for Shares and/or Rights not tendered or not purchased and/or the check for the purchase price of Shares or Rights purchased are to be issued in the name of someone other than the undersigned, or if the Shares or Rights delivered by book-entry transfer which are not purchased are to be returned by credit to an account maintained at a Book-Entry Transfer Facility other than that designated above. Issue [ ] check [ ] Certificate(s) to: Name - ----------------------------------------------------------------------------- (Please Print) Address - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- (Include Zip Code) - ----------------------------------------------------------------------------- (Tax Identification or Social Security No.) (See Substitute Form W-9 on the reverse hereof) [ ] Credit unpurchased Shares or Rights delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below: Check appropriate box: [ ] DTC [ ] MSTC [ ] PHDTC - ----------------------------------------------------------------------------- (Account Number) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if certificates for Shares and/or Rights not tendered or not purchased and/or the check for the purchase price of Shares or Rights purchased are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown above. Mail [ ] check [ ] Certificate(s) to: Name - ----------------------------------------------------------------------------- (Please Print) Address - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- (Include Zip Code) - ----------------------------------------------------------------------------- (Tax Identification or Social Security No.) (See Substitute Form W-9 on the reverse hereof) STOCKHOLDERS SIGN HERE - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- SIGNATURE(S) OF OWNER(S) DATED: _________ IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 (Must be signed by registered holder(s) exactly as name(s) appear(s) on Share Certificate(s) or Rights Certificate(s) on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, agents, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5.) Name(s): - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- (Please Print) Capacity (full title): - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Address: - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- (Including Zip Code) Area Code and Telephone Number: - ----------------------------------------------------------------------------- Tax Identification or Social Security Number: - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- GUARANTEE OF SIGNATURE(S) (See Instructions 1 and 5 to determine if required.) Authorized Signature: - ----------------------------------------------------------------------------- Name: - ----------------------------------------------------------------------------- Name of Firm: - ----------------------------------------------------------------------------- Title: - ----------------------------------------------------------------------------- Address: - ----------------------------------------------------------------------------- Area Code and Telephone Number: - ----------------------------------------------------------------------------- Dated: - ----------------------------------------------------------------------------- INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of Transmittal is required (i) if this Letter of Transmittal is signed by the registered holder of the Shares or Rights (which term, for the purposes of this document, shall include any participant in a Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered herewith, unless such holder has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the reverse hereof or (ii) if such Shares are to be tendered for the account of a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agent's Medallion Program (collectively, "Eligible Institutions"). In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. If the Share Certificates or Rights Certificates are registered in the name of a person other than the signer of this Letter of Transmittal, or payment of the purchase price is to be made or certificates for unpurchased Shares and Rights are to be issued or returned to a person other than the registered owner, then the tendered certificates must be endorsed or accompanied by duly executed stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed by an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of Transmittal is to be completed by stockholders either if certificates are to be forwarded herewith or if tenders of Shares or Rights are to be made pursuant to the procedures for delivery by book-entry transfer set forth in the Offer to Purchase. Certificates for all physically tendered Shares, or timely confirmation of any book-entry transfer into the Depositary's accounts at DTC, MSTC or PHDTC or Shares tendered by book-entry transfer, as the case may be, as well as a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees, or an Agent's Message in the case of a book-entry delivery, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein on or prior to the Expiration Date (as defined in the Offer to Purchase) and Rights Certificates, or Book-Entry Confirmation of a transfer of Rights into the Depositary's account at a Book-Entry Transfer Facility, if available (together with, if Rights are forwarded separately from Shares, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) with any required signature guarantee, and any other documents required by this Letter of Transmittal), must be received by the Depositary at one of the addresses set forth herein prior to the Expiration Date or, if later, within five business days after the date such Rights Certificates are distributed. Stockholders whose Share Certificates or Rights Certificates are not immediately available (including, if the Distribution Date has occurred, because Rights Certificates have not yet been distributed by the Company), or who cannot deliver their certificates and all other required documents to the Depositary on or prior to the Expiration Date or who cannot complete the procedures for delivery by book-entry transfer on a timely basis may tender their Shares and/or Rights by properly completing and duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution, (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, must be received by the Depositary on or before the Expiration Date and (iii) the certificates for all tendered Shares and/or Rights or confirmation of any book-entry transfer into the Depositary's account at DTC, MSTC or PHDTC of Shares and/or Rights tendered by book-entry transfer, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase)), and all other documents required by this Letter of Transmittal, must be received by the Depositary within (a) in the case of Shares, five Nasdaq National Market ("NNM") trading days after the date of execution of such Notice of Guaranteed Delivery to the Depositary or (b) in the case of Rights, a period ending on the later of (i) five NNM trading days after the date of execution of such Notice of Guaranteed Delivery and (ii) five business days after Rights Certificates are distributed to stockholders by the Company, all as provided in the Offer to Purchase and in the Supplement. If Share Certificates are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) must accompany each such delivery. TENDERING STOCKHOLDERS MAY CONTINUE TO USE THE ORIGINAL BLUE LETTER OF TRANSMITTAL AND GREY NOTICE OF GUARANTEED DELIVERY THAT WERE PROVIDED WITH THE OFFER TO PURCHASE. Although such BLUE Letter of Transmittal indicates that the Offer will expire at 12:00 midnight, New York City time, on Thursday, November 3, 1994, stockholders will be able to tender (or withdraw) their Shares and Rights pursuant to the Offer until 12:00 midnight, New York City time, on Friday, November 4, 1994 (or such later date to which the Offer may be extended). TENDERING STOCKHOLDERS MAY ALSO USE THIS REVISED GREEN LETTER OF TRANSMITTAL AND THE GOLD NOTICE OF GUARANTEED DELIVERY PROVIDED WITH THE SUPPLEMENT. THE METHOD OF DELIVERY OF SHARE CERTIFICATES, RIGHTS CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND, EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 2, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Shares or Rights will be purchased. All tendering stockholders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive any notice of the acceptance of their Shares or Rights for payment. 3. INADEQUATE SPACE. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares or Rights should be listed on a separate signed schedule attached hereto. 4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares or Rights evidenced by any certificate submitted are to be tendered, fill in the number of Shares or Rights which are to be tendered in the box entitled "Number of Shares Tendered" or "Number of Rights Tendered." In such case, new certificate(s) for the remainder of the Shares or Rights that were evidenced by old certificate(s) will be sent to the registered holder, unless otherwise provided in the boxes entitled "Special Payment Instructions" or "Special Delivery Instructions" on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares or Rights represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. (a) If this Letter of Transmittal is signed by the registered holder(s) of the Shares and Rights tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without alteration, enlargement or any change whatsoever. (b) If any of the Shares or Rights tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. (c) If any tendered Shares or Rights are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. (d) If this Letter of Transmittal or any certificates or stock powers are signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Purchaser of such person's authority so to act must be submitted. (e) When this Letter of Transmittal is signed by the registered holder(s) of the Shares or Rights listed and transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment is to be made to, or certificates for Shares or Rights not tendered or purchased are to be issued in the name of, a person other than the registered holder(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution (unless signed by an Eligible Institution). (f) If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares or Rights listed, the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holder(s) appear on the certificates. Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution (unless signed by an Eligible Institution). (g) Unless and until the Purchaser declares the Merger Agreement Condition to be satisfied, if Rights Certificates have been distributed to holders of Shares, such holders are required to tender Rights Certificate(s) representing a number of Rights equal to the number of Shares tendered in order to effect a valid tender of such Shares. It is necessary that stockholders follow all such signature requirements of this Instruction 5 with respect to the Rights in order to tender such Rights. 6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the Purchaser will pay or cause to be paid any stock transfer taxes with respect to the transfer and sale of purchased Shares and Rights to it or its order pursuant to the Offer. If payment of the purchase price is to be made to, or if certificates for Shares and Rights not tendered or purchased are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder or such other person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF TRANSMITTAL. 7. Special Payment and Delivery Instructions. If a check is to be issued in the name of, and/or certificates for unpurchased Shares or Rights are to be returned to, a person other than the signer of this Letter of Transmittal or if a check is to be sent and/or certificates for unpurchased Shares or Rights are to be returned to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Stockholders tendering Shares or Rights by book-entry transfer may request that the Shares or Rights not purchased be credited to such account maintained at a Book-Entry Transfer Facility as such stockholder may designate hereon. If no such instructions are given, such Shares or Rights not purchased will be returned by crediting the account at a Book-Entry Transfer Facility designated above. See Instruction 1. 8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance may be directed to, or additional copies of the Supplement, the Offer to Purchase, and the revised GREEN Letter of Transmittal may be obtained from either the Information Agent or the Dealer Manager at their respective address set forth below or from your broker, dealer, commercial bank or trust company. 9. IRREGULARITIES. All questions as to the validity (including time of receipt) and acceptance for payment of any tender of Shares or Rights will be determined by the Purchaser, in its sole discretion, whose determination shall be final and binding. The Purchaser reserves the absolute right to reject any and all tenders determined by it not to be in the appropriate form or the acceptance for purchase of which may, in the opinion of its counsel, be unlawful. As set forth in the Offer to Purchase, the Purchaser also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularity in the tender of any Shares or Rights of any particular stockholder whether or not similar defects or irregularities are waived in the case of other stockholders. The Purchaser's interpretations of the terms and conditions of the Offer (including these instructions) will be final and binding. Unless waived, any defects or irregularities must be cured within such time as the Purchaser shall determine. None of the Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notice of any defects or irregularities in tenders or shall incur any liability for failure to give any such notification. Tenders shall not be deemed to have been made until all defects and irregularities have been cured or waived. 10. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under federal income tax laws, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on Substitute Form W-9 below and certify under penalties of perjury that such number is correct and that such stockholder is not subject to backup withholding. If the Depositary is not provided with the correct TIN and certifications are not provided, the Internal Revenue Service may subject the stockholder or other payee to a $50 penalty. In addition, payments that are made to such stockholder or other payee with respect to Shares or Rights purchased pursuant to the Offer may be subject to 31% backup withholding. Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, the stockholder must submit a Form W-8, signed under penalties of perjury, attesting to that individual's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. If backup withholding applies, the Depositary is required to withhold 31% of any such payments made to the stockholder or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. The box in Part 3 of the Substitute Form W-9 may be checked if the tendering stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% of all payments made prior to the time a properly certified TIN is provided to the Depositary. The stockholder is required to give the Depositary the TIN (e.g., social security number or employer identification number) of the record owner of the Shares or Rights or of the last transferee appearing on the transfers attached to, or endorsed on, the Shares or Rights. If the Shares or Rights are in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s) representing Shares or Rights has been lost, destroyed or stolen, the stockholder should promptly notify the Information Agent. The stockholder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF) OR AN AGENT'S MESSAGE, TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE. TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS (SEE INSTRUCTION 10)
PAYER'S NAME: IBJ SCHRODER BANK & TRUST COMPANY SUBSTITUTE Form W-9 PART 1 --PLEASE PROVIDE YOUR TIN IN THE Social security number BOX AT RIGHT AND CERTIFY BY SIGNING AND OR ______________________________ DATING BELOW Employer identification number ------------------------------------------------------------------------------------------- Department of PART 2 --CERTIFICATION --UNDER PENALTIES OF PERJURY, I CERTIFY THAT: the Treasury (1) The number shown on this form is my correct Taxpayer Identification Number (or I Internal Revenue Service am waiting for a number to be issued to me); and PAYER'S REQUEST FOR TAXPAYER (2) I am not subject to backup withholding because (i) I am exempt from backup withholding, (ii) I IDENTIFICATION NUMBER (TIN) have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in part 2 above if you have been notified by the IRS that you are subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item (2). ---------------------------------------------------------------------------------------- SIGNATURE ................ DATE ................ PART 3 NAME (Please Print)............................... Awaiting TIN -- [ ]
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (i) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (ii) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number within 60 days, 31% of all reportable payments made to me thereafter will be withheld until I provide a number. Signature .................................... Date ............ Name (Please Print) ............................................. FACSIMILE COPIES OF THIS LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER OF THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH ABOVE. Questions and requests for assistance may be directed to the Information Agent or to the Dealer Manager as set forth below. Requests for additional copies of the Offer to Purchase, the Supplement, the revised GREEN Letter of Transmittal and other tender offer materials may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. The Information Agent for the Offer is: MACKENZIE PARTNERS, INC. 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) OR CALL TOLL FREE (800) 322-2885 The Dealer Manager for the Offer is: GLEACHER & CO. INC. 660 Madison Avenue New York, New York 10021 (212) 418-4206 EX-99.(A)(13) 4 NOTICE OF GUARANTEED DELIVERY NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF MAGMA POWER COMPANY As set forth in Section 4 of the Offer to Purchase, dated October 6, 1994 (the "Offer to Purchase"), as amended and supplemented by Section 2 of the Supplement of the Offer to Purchase, dated October 26, 1994 (the "Supplement"), this revised GOLD Notice of Guaranteed Delivery or one substantially equivalent hereto must be used to accept the Offer (as defined below) if certificates representing shares of common stock, par value $0.10 per share (the "Shares"), of Magma Power Company, a Nevada corporation (the "Company"), and/or, if applicable, certificates for the associated Preferred Share Purchase Rights (the "Rights") issued on October 14, 1994 pursuant to the Rights Agreement, dated as of October 6, 1994, between the Company and Chemical Trust Company of California, as Rights Agent (the "Rights Agreement"), are not immediately available (including, if a Distribution Date (as defined in the Offer to Purchase and in the Supplement) has occurred, because certificates for Rights have not yet been distributed by the Company) or time will not permit all required documents to reach IBJ Schroder Bank & Trust Company (the "Depositary") on or prior to the Expiration Date (as defined in the Offer to Purchase), or the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or sent by telegram, facsimile transmission or mail to the Depositary. The Depositary for the Offer is: IBJ SCHRODER BANK & TRUST COMPANY Telephone Number: (212) 858-2103
By Mail: Facsimile Number: By Hand or Overnight Delivery: P.O. Box 84 (212) 858-2611 One State Street Bowling Green Station Attn: Reorganization Operations New York, New York 10004 New York, New York 10274-0084 Department Attn: Reorganization Operations Attn: Reorganization Operations Department Department Confirm Facsimile by Telephone: (212) 858-2103
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. Tendering stockholders may continue to use the original GREY Notice of Guaranteed Delivery that was provided with the Offer to Purchase. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto (see Instructions 1 and 5 of the Letter of Transmittal), such signature guarantee must appear on the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tenders to CE Acquisition Company, Inc., a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 6, 1994 (the "Offer to Purchase"), as amended and supplemented by the Supplement thereto, dated October 26, 1994 (the "Supplement"), and in the related Letters of Transmittal (which together constitute the "Offer"), receipt of which is hereby acknowledged, the number of Shares and Rights indicated below pursuant to the guaranteed delivery procedure set forth in Section 4 of the Offer to Purchase.
Number of Shares: Dated: - --------------------------------------------- --------------------------------------- Number of Rights: Name(s) of Record Holder(s): - --------------------------------------------- --------------------------------------- Certificate No(s). (if available): --------------------------------------- - --------------------------------------------- Address(es): - --------------------------------------------- --------------------------------------- If Shares will be tendered by book-entry --------------------------------------- transfer, check one box: [ ] The Depository Trust Company Area Code and Telephone Number(s): [ ] Midwest Securities Trust Company --------------------------------------- [ ] Philadelphia Depository Trust Company Signature(s): Account Number: --------------------------------------- - --------------------------------------------- ---------------------------------------
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm that is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agent's Medallion Program, hereby (a) represents that the tender of shares effected hereby complies with Rule 14e-4 under the Securities Exchange Act of 1934 and (b) guarantees to deliver to the Depositary, at one of its addresses set forth above, the certificates representing all tendered Shares and/or Rights, in proper form for transfer, or confirmation of a book-entry transfer of such Shares and/or Rights, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in the case of book-entry delivery, and any other documents required by the Letter of Transmittal within (a) in the case of Shares, five Nasdaq National Market ("NNM") trading days after the date of execution of this Notice of Guaranteed Delivery or (b) in the case of Rights, a period ending on the later of (x) five NNM trading days after the date of execution of this Notice of Guaranteed Delivery and (y) five business days after the date certificates for Rights are distributed to holders of Shares by the Company.
Name of Firm: - ---------------------------------- -------------------------------- Authorized Signature Address: Name: - ---------------------------------- -------------------------------- - ---------------------------------- Please type or print Zip Code Date: Area Code and -------------------------------- Telephone Number: - ----------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES OR RIGHTS WITH THIS NOTICE OF GUARANTEED DELIVERY. CERTIFICATES FOR SHARES OR RIGHTS SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.(A)(14) 5 BROKER-DEALER LETTER GLEACHER & CO. INC. 660 MADISON AVENUE NEW YORK, NEW YORK 10021 (212) 418-4206 SUPPLEMENT TO OFFER TO PURCHASE DATED OCTOBER 6, 1994 CE ACQUISITION COMPANY, INC. A WHOLLY OWNED SUBSIDIARY OF CALIFORNIA ENERGY COMPANY, INC. HAS AMENDED ITS OFFER TO PURCHASE TO INCREASE THE PRICE FOR 12,400,000 SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF MAGMA POWER COMPANY TO $38.50 NET PER SHARE THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS HAVE BEEN EXTENDED AND WILL NOW EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 4, 1994, UNLESS THE OFFER IS EXTENDED. October 26, 1994 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by CE ACQUISITION COMPANY, INC., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of California Energy Company, Inc. ("CECI"), to act as the Dealer Manager in connection with its offer to purchase 12,400,000 shares of common stock, par value $0.10 per share (the "Shares"), of Magma Power Company, a Nevada corporation (the "Company"), and the associated Preferred Share Purchase Rights (the "Rights") issued on October 14, 1994 pursuant to the Rights Agreement, dated as of October 6, 1994, between the Company and Chemical Trust Company of California, as Rights Agent (the "Rights Agreement"), at $38.50 per Share (and associated Right), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 6, 1994 (the "Offer to Purchase"), as amended and supplemented by the Supplement thereto, dated October 26, 1994 (the "Supplement"), and in the revised GREEN Letter of Transmittal (which, together with the original BLUE Letter of Transmittal, constitute the "Offer") enclosed herewith. If the Purchaser declares that the Merger Agreement Condition (as defined in the Offer to Purchase and in the Supplement) is satisfied, the Purchaser will not require delivery of Rights. Unless and until the Purchaser declares that the Merger Agreement Condition is satisfied, holders of Shares will be required to tender one Right for each Share tendered to effect a valid tender of such Share. If the Distribution Date (as defined in the Offer to Purchase and in the Supplement) has not occurred prior to the time Shares are tendered pursuant to the Offer, a tender of Shares will constitute a tender of the associated Rights. If the Distribution Date occurs and the certificates representing Rights ("Rights Certificates") are distributed by the Company to holders of Shares prior to the time a holder's Shares are tendered pursuant to the Offer, in order for Rights (and the corresponding Shares) to be validly tendered, Rights Certificates representing a number of Rights equal to the number of Shares tendered must be delivered to IBJ Schroder Bank & Trust Company (the "Depositary") or, if book-entry delivery is available with respect to Rights, a book-entry confirmation must be received by the Depositary with respect thereto. If the Distribution Date occurs and Rights Certificates are not distributed prior to the time Shares are tendered pursuant to the Offer, Rights may be tendered prior to a stockholder receiving Rights Certificates by use of the guaranteed delivery procedures described in Section 4 of the Offer to Purchase and below. In any case, a tender of Shares constitutes an agreement by the tendering stockholder to deliver Rights Certificates representing a number of Rights equal to the number of Shares tendered pursuant to the Offer to the Depositary within five business days after the date Rights Certificates are distributed. The Purchaser reserves the right to require that the Depositary receive Rights Certificates, or a book-entry confirmation, if available, with respect to such Rights prior to accepting the corresponding Shares for payment pursuant to the Offer, if the Distribution Date occurs prior to the expiration of the Offer (the "Expiration Date"). Holders of Shares and Rights whose certificates for such Shares ("Share Certificates") or, if applicable, Rights Certificates, are not immediately available (including, if the Distribution Date has occurred, because Rights Certificates have not yet been distributed) or who cannot deliver their Share Certificates or, if applicable, their Rights Certificates, and all other required documents to the Depositary on or prior to the Expiration Date, or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Shares and Rights according to the guaranteed delivery procedures set forth in Section 4 of the Offer to Purchase. All references to Rights shall include all benefits which may inure to stockholders pursuant to the Rights Agreement and, unless the context requires otherwise, all references to Shares shall include the Rights. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN BEFORE THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES WHICH, TOGETHER WITH SHARES BENEFICIALLY OWNED BY THE PURCHASER, REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS, (2) THE COMPANY HAVING ENTERED INTO A DEFINITIVE MERGER AGREEMENT WITH THE PURCHASER TO PROVIDE FOR THE ACQUISITION OF THE COMPANY PURSUANT TO THE OFFER AND THE PROPOSED MERGER (AS DEFINED IN THE OFFER TO PURCHASE), (3) THE PURCHASER BEING SATISFIED, IN ITS SOLE JUDGMENT, THAT THE PURCHASER HAS OBTAINED FINANCING SUFFICIENT TO ENABLE IT TO CONSUMMATE THE OFFER AND THE PROPOSED MERGER AND (4) AUTHORIZATION BY CECI'S STOCKHOLDERS OF THE ISSUANCE OF CECI COMMON STOCK (AS DEFINED IN THE OFFER TO PURCHASE) SUFFICIENT TO COMPLETE THE PROPOSED MERGER. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS. Enclosed herewith for your information and for forwarding to your clients for whose accounts you hold Shares (and associated Rights) registered in your name or in the name of your nominee are copies of the following documents: 1. The Supplement, dated October 26, 1994; 2. The revised GREEN Letter of Transmittal for your use and for the information of your clients. Facsimile copies of either Letter of Transmittal may be used to tender Shares (and associated Rights); 3. A revised GOLD Notice of Guaranteed Delivery to be used to accept the Offer if certificates for Shares (and associated Rights) are not immediately available or if such certificates and all other required documents cannot be delivered to the Depositary before the expiration of the Offer or if the procedures for book-entry transfer cannot be completed on a timely basis; 4. A printed revised form of the letter which may be sent to your clients for whose account you hold Shares (and associated Rights) registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer; 5. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9; and 6. A return envelope addressed to the Depositary. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS HAVE BEEN EXTENDED AND WILL NOW EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 4, 1994, UNLESS THE OFFER IS EXTENDED. In order to accept the Offer, (i) a duly executed and properly completed Letter of Transmittal with any required signature guarantees or any Agent's Message (as defined in the Offer to Purchase), or other documentation should be sent to the Depositary, and (ii) either certificates representing the tendered Shares (and, if applicable, certificates representing the tendered Rights) should be delivered to the Depositary or such Shares (and, if applicable, such Rights, if available with respect to such Rights) should be tendered by book-entry transfer into the Depositary's account maintained at one of the Book-Entry Transfer Facilities (as defined in the Offer to Purchase), all in accordance with the instructions set forth in the Letters of Transmittal, the Offer to Purchase, and the Supplement. If holders of Shares wish to tender, but it is impractical for them to forward their certificates for such Shares and associated Rights or other required documentation on or prior to the expiration of the Offer or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures specified in Section 4 of the Offer to Purchase. The Purchaser will not pay any commissions or fees to any broker, dealer or other person (other than the Dealer Manager and the Information Agent, as described in the Offer to Purchase) for soliciting tenders of Shares and associated Rights pursuant to the Offer. The Purchaser will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. The Purchaser will pay or cause to be paid any stock transfer taxes payable on the transfer of Shares and associated Rights to it, except as otherwise provided in Instruction 6 of the enclosed Letter of Transmittal. Any questions or requests for assistance may be directed to the Information Agent or to the Dealer Manager at its address and telephone numbers set forth on the back cover of the Offer to Purchase and of the Supplement. Requests for additional copies of the Supplement, the Offer to Purchase, the Letters of Transmittal and other tender offer materials may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. Very truly yours, GLEACHER & CO. INC. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, CECI, THE DEALER MANAGER, THE DEPOSITARY, THE INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. EX-99.(A)(15) 6 CLIENT LETTER SUPPLEMENT TO OFFER TO PURCHASE DATED OCTOBER 6, 1994 CE ACQUISITION COMPANY, INC. A WHOLLY OWNED SUBSIDIARY OF CALIFORNIA ENERGY COMPANY, INC. HAS AMENDED ITS OFFER TO PURCHASE TO INCREASE THE PRICE FOR 12,400,000 SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF MAGMA POWER COMPANY TO $38.50 NET PER SHARE THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS HAVE BEEN EXTENDED AND WILL NOW EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 4, 1994, UNLESS THE OFFER IS EXTENDED. October 26, 1994 To Our Clients: Enclosed for your consideration are the Supplement, dated October 26, 1994 (the "Supplement"), to the Offer to Purchase, dated October 6, 1994 (the "Offer to Purchase"), and the revised GREEN Letter of Transmittal (which documents, together with the original BLUE Letter of Transmittal, constitute the "Offer") relating to an offer by CE Acquisition Company, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of California Energy Company, Inc. ("CECI"), to purchase 12,400,000 shares of common stock, par value $0.10 per share (the "Shares"), of Magma Power Company, a Nevada Corporation (the "Company"), and the associated Preferred Share Purchase Rights (the "Rights") issued on October 14, 1994 pursuant to the Rights Agreement, dated as of October 6, 1994, between the Company and Chemical Trust Company of California, as Rights Agent (the "Rights Agreement") at $38.50 per Share (and associated Right), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer. If the Purchaser declares that the Merger Agreement Condition (as defined in the Offer to Purchase and in the Supplement) is satisfied, the Purchaser will not require delivery of Rights. Unless and until the Purchaser declares that the Merger Agreement Condition is satisfied, holders of Shares will be required to tender one Right for each Share tendered to effect a valid tender of such Share. IF THE DISTRIBUTION DATE (AS DEFINED IN THE OFFER TO PURCHASE) HAS NOT OCCURRED PRIOR TO THE TIME SHARES ARE TENDERED PURSUANT TO THE OFFER, A TENDER OF SHARES WILL CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. IF THE DISTRIBUTION DATE OCCURS AND THE CERTIFICATES REPRESENTING RIGHTS ("RIGHTS CERTIFICATES") ARE DISTRIBUTED BY THE COMPANY TO HOLDERS OF SHARES PRIOR TO THE TIME A HOLDER'S SHARES ARE TENDERED PURSUANT TO THE OFFER, IN ORDER FOR RIGHTS (AND THE CORRESPONDING SHARES) TO BE VALIDLY TENDERED, RIGHTS CERTIFICATES REPRESENTING A NUMBER OF RIGHTS EQUAL TO THE NUMBER OF SHARES TENDERED MUST BE DELIVERED TO IBJ SCHRODER BANK & TRUST COMPANY (THE "DEPOSITARY") OR, IF BOOK-ENTRY DELIVERY IS AVAILABLE WITH RESPECT TO RIGHTS, A BOOK-ENTRY CONFIRMATION MUST BE RECEIVED BY THE DEPOSITARY WITH RESPECT THERETO. If the Distribution Date occurs and Rights Certificates are not distributed prior to the time Shares are tendered pursuant to the Offer, Rights may be tendered prior to a stockholder receiving Rights Certificates by use of the guaranteed delivery procedures described in Section 4 of the Offer to Purchase and below. In any case, a tender of Shares constitutes an agreement by the tendering stockholder to deliver Rights Certificates representing a number of Rights equal to the number of Shares tendered pursuant to the Offer to the Depositary within five business days after the date Rights Certificates are distributed. The Purchaser reserves the right to require that the Depositary receive Rights Certificates, or a book-entry confirmation, if available, with respect to such Rights prior to accepting the corresponding Shares for payment pursuant to the Offer, if the Distribution Date occurs prior to the expiration of the Offer (the "Expiration Date"). Holders of Shares and Rights whose certificates for such Shares ("Share Certificates") or, if applicable, Rights Certificates, are not immediately available (including, if the Distribution Date has occurred, because Rights Certificates have not yet been distributed) or who cannot deliver their Share Certificates or, if applicable, their Rights Certificates, and all other required documents to the Depositary on or prior to the Expiration Date, or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Shares and Rights according to the guaranteed delivery procedures set forth in Section 4 of the Offer to Purchase and below. All references to Rights shall include all benefits which may inure to stockholders pursuant to the Rights Agreement and, unless the context requires otherwise, all references to Shares shall include the Rights. THIS MATERIAL IS BEING FORWARDED TO YOU AS THE BENEFICIAL OWNER OF SHARES AND ASSOCIATED RIGHTS CARRIED BY US IN YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. A TENDER OF SUCH SHARES AND RIGHTS CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES OR RIGHTS HELD BY US FOR YOUR ACCOUNT. ACCORDINGLY, WE REQUIRE INSTRUCTIONS AS TO WHETHER YOU WISH TO TENDER ANY OR ALL OF SUCH SHARES AND RIGHTS HELD BY US FOR YOUR ACCOUNT, UPON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THE OFFER. Please note the following: 1. The Purchaser is offering to purchase 12,400,000 Shares (and associated Rights) at an increased price of $38.50 per Share (and associated Right), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer. 2. The Offer, the proration period and withdrawal rights will expire at 12:00 Midnight, New York City time, on Friday, November 4, 1994, unless the Offer is extended. 3. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN BEFORE THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES WHICH, TOGETHER WITH SHARES BENEFICIALLY OWNED BY THE PURCHASER, REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS, (2) THE COMPANY HAVING ENTERED INTO A DEFINITIVE MERGER AGREEMENT WITH THE PURCHASER TO PROVIDE FOR THE ACQUISITION OF THE COMPANY PURSUANT TO THE OFFER AND THE PROPOSED MERGER (AS DEFINED IN THE OFFER TO PURCHASE), (3) THE PURCHASER BEING SATISFIED, IN ITS SOLE JUDGMENT, THAT THE PURCHASER HAS OBTAINED FINANCING SUFFICIENT TO ENABLE IT TO CONSUMMATE THE OFFER AND THE PROPOSED MERGER, AND (4) AUTHORIZATION BY CECI'S STOCKHOLDERS OF THE ISSUANCE OF CECI COMMON STOCK (AS DEFINED IN THE OFFER TO PURCHASE) SUFFICIENT TO COMPLETE THE PROPOSED MERGER. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS. 4. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares or Rights pursuant to the Offer. 5. Payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates for such Shares and, if applicable, Rights Certificates for the associated Rights, or timely confirmation of the book-entry transfer of such Shares and, if applicable, Rights (if available with respect to such Rights), into the Depositary's account at The Depository Trust Company, Midwest Securities Trust Company or Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer Facilities"), pursuant to the procedures set forth in Section 4 of the Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase) (as described in Section 4 of the Offer to Purchase) in connection with a book-entry transfer, and (iii) any other documents required by the Letter of Transmittal. Accordingly, payment may not be made to all tendering stockholders at the same time depending upon when certificates for, or confirmations of book-entry transfer of, such Shares (or Rights, if available with respect to such Rights) into the Depositary's account at a Book-Entry Transfer Facility are actually received by the Depositary. If you wish to have us tender any or all of the Shares and/or Rights held by us for your account, please so instruct us by completing, executing and returning to us the instruction form contained in this letter. If you authorize a tender of your Shares and/or Rights, all such Shares and such Rights will be tendered unless otherwise indicated in such instruction form. Your authorization to tender Shares shall be deemed authorization to tender the associated Rights regardless of whether they are separate from the Shares. Please forward your instructions to us in ample time to permit us to submit a tender on your behalf prior to the expiration of the Offer. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account. The Purchaser is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to state statute. If the Purchaser becomes aware of any state where the making of the Offer is so prohibited, the Purchaser will make a good faith effort to comply with any such statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Purchaser cannot comply with any applicable statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares and/or Rights in such states. In those jurisdictions where the laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on behalf of the Purchaser by Gleacher & Co. Inc. or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH 12,400,000 SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF MAGMA POWER COMPANY The undersigned acknowledge(s) receipt of your letter and the enclosed Supplement, dated October 26, 1994 (the "Supplement"), to the Offer to Purchase, dated October 6, 1994 (the "Offer to Purchase"), and the related revised GREEN Letter of Transmittal (which, together with the original BLUE Letter of Transmittal, constitute the "Offer") relating to the offer by CE Acquisition Company, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of California Energy Company, Inc. ("CECI"), to purchase 12,400,000 shares of common stock, par value $0.10 per share (the "Shares"), of Magma Power Company, a Nevada corporation, and the associated Preferred Share Purchase Rights (the "Rights") issued on October 14, 1994 pursuant to the Rights Agreement, dated as of October 6, 1994, between the Company and Chemical Trust Company of California, as Rights Agent, (the "Rights Agreement") at $38.50 per Share (and associated Right), net to the seller in cash, without interest thereon upon the terms and subject to the conditions set forth in the Offer to Purchase, the Supplement and in the Letters of Transmittal. This will instruct you to tender to the Purchaser the number of Shares and Rights indicated below (or if no number is indicated below, all Shares and Rights) which are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. Dated: ------------------------- Number of Shares to be Tendered* _________________________Shares Number of Rights to be Tendered* _________________________Rights - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Signature - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Print Name(s) - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Print Address - ----------------------------------------------------------------------------- Area Code and Telephone Number - ----------------------------------------------------------------------------- Tax Identification or Social Security Number - --------------- * UNLESS AND UNTIL THE PURCHASER DECLARES THAT THE MERGER AGREEMENT CONDITION (AS DEFINED IN THE OFFER TO PURCHASE AND IN THE SUPPLEMENT) IS SATISFIED, HOLDERS OF SHARES ARE REQUIRED TO TENDER ONE RIGHT FOR EACH SHARE TENDERED TO EFFECT A VALID TENDER OF SUCH SHARE. IF CERTIFICATES REPRESENTING RIGHTS ("RIGHTS CERTIFICATES") HAVE BEEN DISTRIBUTED BY THE COMPANY TO HOLDERS OF SHARES PRIOR TO THE TIME A HOLDER'S SHARES ARE TENDERED PURSUANT TO THE OFFER, SUCH HOLDERS WILL BE REQUIRED TO VALIDLY TENDER RIGHTS CERTIFICATES REPRESENTING A NUMBER OF RIGHTS EQUAL TO THE NUMBER OF SHARES BEING TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH SHARES. If separate Rights Certificates have not been issued, a tender of Shares will also constitute a tender of the associated Rights and only the line with respect to "Number of Shares to be Tendered" should be filled in. See Section 4 of the Offer to Purchase and Section 2 of the Supplement. Unless otherwise indicated, it will be assumed that all Shares and Rights held by us for your account are to be tendered. EX-99.(A)(16) 7 GUIDELINES FOR CERTIFICATION ON FORM W-9 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER--Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer.
GIVE THE SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: NUMBER OF-- - --------------------------------------- ---------------------------- 1. An individual's account The individual 2. Two or more individuals The actual owner of (joint account) the account or, if combined funds, any one of the individuals (1) 3. Husband and wife (joint account) The actual owner of the account or, if joint funds, either person (2) 4. Custodian account of a minor The minor (2) (Uniform Gift to Minors Act) 5. Adult and minor (joint account) The adult or, if the minor is the only contributor the minor (1) 6. Account in the name of guardian or The ward, minor, or committee for a designated ward, incompetent person (3) minor, or incompetent person 7. a. The usual revocable savings The grantor-trustee (1) trust account (grantor is also trustee) b. So-called trust account that is The actual owner (1) not a legal or valid trust under State law 8. Sole proprietorship account The owner (4) GIVE THE EMPLOYER IDENTIFICATION FOR THIS TYPE OF ACCOUNT: NUMBER OF-- - --------------------------------------- ---------------------------- 9. A valid trust, estate, or pension Legal entity (Do not furnish trust the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) (5) 10. Corporate account The corporation 11. Religious, charitable, or The organization educational organization account 12. Partnership account held in the The partnership name of the business 13. Association, club, or other The organization tax-exempt organization 14. A broker or registered nominee The broker or nominee 15. Account with the Department The public entity of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments - --------------------------------------- ----------------------------
(1) List first and circle the name of the legal trust, estate, or pension trust. (2) List first and circle the name of the person whose number you furnish. (3) Circle the minor's name and furnish the minor's social security number. (4) Circle the ward's, minor's, or incompetent person's name and furnish such person's social security number. (5) Show the name of the owner. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments including the following: o A corporation. o A financial institution. o An organization exempt from tax under section 501(a), or an individual retirement plan. o The United States or any agency or instrumentality thereof. o A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. o A foreign government, a political subdivision of a foreign government, or agency or instrumentality thereof. o An international organization or any agency, or instrumentality thereof. o A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. o A real estate investment trust. o A common trust fund operated by a bank under section 584(a). o An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). o An entity registered at all times under the Investment Company Act of 1940. o A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: o Payments to nonresident aliens subject to withholding under section 1441. o Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. o Payments of patronage dividends where the amount received is not paid in money. o Payments made by certain foreign organizations. o Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: o Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. o Payments of tax-exempt interest (including exempt interest dividends under section 852). o Payments described in section 6049(b)(5) to nonresident aliens. o Payments on tax-free covenant bonds under section 1451. o Payments made by certain foreign organizations. o Payments made to a nominee. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS. ALSO SIGN AND DATE THE FORM. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividends, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to the IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Beginning January 1, 1993, payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE 2 EX-99.(B)(1) 8 BANK COMMITMENT LETTER EXHIBIT (b)(1) Credit Suisse Tower 49 12 East 49th Street New York, New York October 25, 1994 Mr. John G. Sylvia Senior Vice President and Chief Financial Officer California Energy Company, Inc. 10831 Old Mill Road Omaha, Nebraska 68155 Dear Mr. Sylvia: You have advised Credit Suisse (the "Bank") that CE Acquisition Company, Inc., a newly formed Delaware corporation ("Newco") and a subsidiary of California Energy Company, Inc. ("CECI"), has offered to acquire through a tender offer (the "Tender Offer") 51% of the outstanding shares of common stock of Magma Power Company, a Nevada corporation ("Magma") and will enter into a merger with Magma (the "Merger"). Pursuant to your request, we are pleased to inform you that we hereby commit (i) to underwrite the financing of the Tender Offer in the principal amount of up to $250,000,000 (the "Tender Facility") and (ii) to underwrite the financing of the Merger in the principal amount of up to $500,000,000 (the "Merger Facility"), in each case on the terms and conditions described in the attached term sheets (the "Term Sheets"). This commitment is subject to (i) the preparation, execution and delivery of mutually acceptable loan and security documentation incorporating substantially the terms and conditions outlined in the Term Sheets, (ii) the absence of a material adverse change in the financial condition or operations of CECI or Magma and (iii) the Bank's satisfaction with its due diligence with respect to CECI and Magma. It is understood that, as provided in the Term Sheets, the Bank will act as Agent for the Tender Facility and the Merger Facility, with the right to syndicate the Tender Facility and Merger Facility to additional lending institutions. CECI and Newco acknowledge their joint and several obligation to pay fees and expenses as described in the Term Sheets and as otherwise agreed to by the Bank, Newco and CECI. CECI and Newco each jointly and severally hereby agrees to indemnify and hold harmless the Bank and each other lending institution that may participate in the Tender Facility or the Merger Facility, their respective affiliates and each of their respective directors, officers, employees, agents and advisors (each, an "Indemnified Party"), from and against any and all claims, damages, liabilities (including for securities liabilities), losses and expenses, including without limitation, fees, expenses and disbursements of counsel, which may be incurred by or asserted against an Indemnified Party in connection with the Bank's commitment or participation in the transactions contemplated hereby, this letter, the Tender Facility, the Merger Facility, the Tender Offer, the Merger or any related matter or any investigation, litigation or proceeding in connection therewith and whether or not the Tender Offer, the Merger or the financing herein contemplated is consummated, except to the extent such claim, damage, loss, liability or expenses is found in a final non- appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's own gross negligence or willful misconduct. In further consideration of the commitment of the Bank hereunder, and recognizing that in connection herewith the Bank is incurring out-of-pocket costs and expenses, CECI and Newco each jointly and severally agrees to reimburse the Bank for all out-of-pocket costs and expenses (including fees and disbursements of outside counsel for the Bank), incurred or sustained by the Bank in connection with the transactions contemplated hereby whether or not such transactions occur and whether incurred before or after the execution by CECI and Newco of this letter. Please evidence your acceptance of the Term Sheets and the other matters referred to herein by signing in the space provided below and returning a copy of this letter to us on or before October 25, 1994, the date on which the Bank's commitment set forth above (if not accepted prior thereto) will expire. Very truly yours, CREDIT SUISSE By: /s/ Scott E. Zoellner Name: Scott E. Zoellner Title: Associate By: /s/ Peter R. Nardin Name: Peter R. Nardin Title: Member of Senior Management Accepted this 25th day of October, 1994 CALIFORNIA ENERGY COMPANY, INC. By: /s/ John G. Sylvia Name: John G. Sylvia Title: Senior Vice President and Chief Financial Officer By: /s/ John G. Sylvia Name: John G. Sylvia Title: Senior Vice President and Chief Financial Officer CONFIDENTIAL California Energy Company SUMMARY OF TERMS AND CONDITIONS UP TO $250,000,000 TENDER OFFER FACILITY Borrower: California Energy Company on a non-recourse basis in form satisfactory to the Agent. Agent/Arranger/ Underwriter: Credit Suisse Lenders: The Agent and any other financial institutions to which the facility may be syndicated by the Agent. Facility: Up to a $250,000,000 12-month tender offer facility (the "Facility") subject to Regulation U and renewable/extendable for a term of up to three-years from initial funding at the mutual consent of both the Borrower and Lenders. Use of Proceeds: The Borrower proposes to capitalize CE Acquisition Company, Inc., a wholly-owned subsidiary ("Newco"), for the purpose of tendering for 51% of the stock of Magma Power Company (the "Target"). A condition of the tender will be the execution and delivery of a definitive merger agreement between Newco and the Target (the "Merger Agreement Condition"), although that condition may be waived by the Borrower as contemplated in the Offer to Purchase of the Borrower and Newco dated October 6, 1994, as it may be amended, (the "Offer to Purchase") under the caption "The Merger Agreement Condition." No material amendment to the Offer to Purchase shall be effective for purposes of this term sheet without the prior written consent of the Bank. If the Merger Agreement Condition is not waived, the form of the merger agreement shall be satisfactory to the Agent. Funds provided by the Facility will be advanced by the Borrower to Newco to purchase a secured note of Newco (the "Newco Secured Tender Note"). The proceeds from the sale of the Newco Secured Tender Note will be used, together with the Borrower's capital investment in Newco and other available moneys which will be in an amount and form satisfactory to the Agent, to purchase the tendered stock of the Target, and to pay related fees and costs of the transaction. The economic terms of the Newco Secured Tender Note will mirror the terms of the Facility. Borrowing Options: Adjusted LIBOR and Base Rate. "Adjusted LIBOR" means the average (rounded upward to the next higher 1/16 of 1%) of the rates offered to the reference Lenders in the London interbank market for deposits in an amount and maturity corresponding to the interest period for the advance. LIBOR will be adjusted for reserves and other regulatory requirements, as appropriate. "Base Rate" means the higher of the Agent's prime rate or the federal funds rate + 0.50% per annum. Applicable Interest Margins: LIBOR + 2.50% Base Rate + 1.25% Computation of Interest: Interest on Base Rate loan segments will be payable quarterly in arrears and calculated on the basis of the actual number of days elapsed over a 365/366 day year. Interest on LIBOR loan segments will be payable in arrears (i) at the end of each applicable interest period and (ii) in the case of any interest period longer than three months, every three months during such period. Interest on LIBOR loan segments will be calculated on the basis of the actual number of days elapsed over a 360 day year. Default Rate: All applicable margins will be increased by 2.00% per annum and all loan segments shall be maintained as Base Rate loan segments effective in the case of LIBOR loan segments at the end of each then existing period. Scheduled Amortization: The Facility will not be subject to a scheduled amortization prior to its maturity. Mandatory Prepayments: Subject to mandatory prepayment as a whole in connection with (i) any sale of any of the ownership interest of the Target by Newco; (ii) a permanent injunction of the merger between Newco and the Target; and (iii) the closing of the merger between Newco and the Target. Subject to mandatory prepayment in part in an amount equal to the proceeds of any dividends, loans, advances or other distributions from Target to Newco or from Newco to Borrower. Optional Prepayments: Optional prepayments will be permitted at any time in excess of a threshold amount without premium or penalty other than payment of applicable "breakage" costs on LIBOR loan segments. Required notice to the Agent will be (i) one Business Day prior to the date of prepayment of any Base Rate loan segment and (ii) three Business Days prior to the date of prepayment of any LIBOR loan segment. Application of Prepayments: All principal reductions shall be permanent. Prepayments will be applied first to Base Rate loan segments and then to LIBOR loan segments. The prepayment of LIBOR loan segments will be subject to the payment of "breakage" costs if the date of prepayment is not the last day of an interest period unless, at the option of the Borrower, the prepayment amount is escrowed with the Agent and invested in United States Treasury Securities to the last day of the applicable interest period. Security: The Facility will be secured by an assignment and a pledge of the Newco Secured Tender Note, including the Target stock pledged as security thereunder in form satisfactory to Agent. Payments on the collateral will be paid directly to the Agent, as collateral agent for the Lenders. The Borrower will provide for the payment of interest on the Facility in a manner satisfactory to the Agent. The Facility will be non-recourse to the Borrower, and the Lenders will agree to make an appropriate election under Section 1111(b) of the Bankruptcy Code to continue such non-recourse status in any proceeding involving Borrower as Debtor under the Bankruptcy Code. Representations and Warranties at Closing: Those customarily found in credit facilities of this nature and any additional appropriate to this transaction with respect to the Borrower and, as applicable, its subsidiaries including, without limitation, the following: 1. Corporate organization, existence and power. 2. Corporate and government authorization, no contravention, legality, validity, binding effect and enforceability of all documentation related to this transaction. 3. The financial information of the Borrower, Newco and their material subsidiaries (to the best knowledge of Borrower based upon information available to it in the case of Target and its subsidiaries). 4. No material adverse change in the Borrower, Newco and their material subsidiaries (to the best knowledge of Borrower based upon information available to it in the case of Target and its subsidiaries). 5. No material litigation (other than litigation to which Target is a party and which is described in the Target's Form 10-K for the year ended December 31, 1993 and as described in Section 15 of the Offer to Purchase (the "Magma Litigation")). 6. Absence of default(s) or Event of Default(s). 7. Compliance with ERISA (to the best knowledge of Borrower based upon information available to it in the case of Target and its subsidiaries). 8. Regulatory approvals, consents, filings and compliance with laws. 9. Existence, incorporation etc. of subsidiaries. 10. Environmental compliance. 11. Not an investment company. 12. Full disclosure. 13. Payment of taxes. 14. Adequate insurance. Conditions Precedent to Closing: Those customarily found in credit facilities of this nature and any additional appropriate to this transaction with respect to the Borrower and, as applicable, its subsidiaries including, without limitation, a capital investment in Newco in an amount and form satisfactory to the Agent, provision for an adequate level of working capital, provisions effective at the Merger, to insure Alto Peak and Malitbog equity commitments and ownership interest in Alto Peak and Malitbog satisfactory to Agent, no waiver of Tender Offer Conditions that are deemed material by Agent (other than the Merger Agreement Condition as contemplated by the Offer to Purchase) without the prior written consent of the Bank, receipt of appropriate certificates and legal opinions, accuracy of representations and warranties, absence of defaults and material litigation (excluding the Magma Litigation), evidence of authority, receipt of required governmental approvals, consents and filings of all persons, compliance with laws (including without limitation, environmental, labor and ERISA), absence of material adverse change in the Borrower, Newco, the Target and their respective subsidiaries, satisfactory due diligence by the Agent customary with tender offer facilities and payment of fees. Covenants: Those customarily found in a credit facility of this nature and any additional appropriate to this transaction with respect to the Borrower and, as applicable, its subsidiaries including, without limitation, covenants regarding compliance with laws (including ERISA), payment of taxes, maintenance of insurance, preservation of corporate existence, visitation rights, keeping of books, maintenance of properties, use of proceeds, margin stock, transactions with affiliates, notice of defaults, delivery of unaudited (quarterly) and audited (annual) financial statements of the Borrower, Newco and its significant subsidiaries, monthly delivery of an officer's certificate, in form and substance reasonably satisfactory to the Agent, certifying the absence of (i) a material adverse change in the financial condition or operations of the Borrower and its subsidiaries, taken as a whole, or (ii) a material adverse change in the financial condition or operations of Newco and its subsidiaries, taken as a whole (and, in either case, which could reasonably be expected to materially impact the ability of the Borrower to service the Facility or the ability of the Agent on behalf of the Lenders to realize upon the collateral securing the Facility), and other customary financial reporting requirements as any Lender may reasonably requests; and without limitation, the following restrictions and limitations (subject to such baskets and exceptions as the parties may agree): 1. Negative pledge of all stock and unencumbered assets of Newco and its subsidiaries. 2. Limitation on guaranties by Newco and Borrower. 3. Limitation on mergers and sales of assets. 4. Limitation on investment in other persons. 5. Prohibition on restricted payments. 6. Maintenance of ownership of Newco and all subsidiaries. 7. Prohibition on incurrence of additional debt at Newco and its subsidiaries. 8. Limitation on dividends from Newco to Borrower unless the proceeds are used to pay down the Facility in amounts to be agreed upon. 9. Limitation on the up-streaming of any assets or funds from Newco and its subsidiaries to the Borrower unless the proceeds are used to pay down the Facility in amounts to be agreed upon. 10. Restrictions on change in nature of business, except as contemplated by the Merger. Appropriate language modifications will be made to cover situations where Borrower is unable to control the Target; provided that in all events the Lenders shall receive the protections intended to be received from these covenants. Financial Covenants: Those customarily found in a Regulation U credit facility of similar nature or as may be appropriate for this transaction. Events of Default: Those customarily found in credit facilities of this nature and any additional appropriate to this transaction with respect to the Borrower and, as applicable, its subsidiaries including, without limitation, permanent injunction of the merger contemplated by the Merger Agreement Condition; breach of representation or warranty in any material respect; default in any covenant or financial covenant; material cross default; bankruptcy; insolvency; change of control (except under circumstances mutually satisfactory to the parties); certain ERISA defaults; the failure to pay one or more final judgments aggregating more than a specified threshold to be mutually agreed; failure to make a payment in connection with the Facility when due; and pledge agreement shall cease to be in full force and effect or the Borrower shall so assert. Cost and Yield Protection: Standard provisions for illegality, inability to determine rate, indemnification for breakage of LIBOR funding and increased costs or reduced return, including those arising from reserve requirements, taxes and capital requirements; provided that increased costs may be applied retroactively for a maximum of 90 days preceding written notice to the Borrower and will not be more, in the case of any participant, than the applicable fronting Lender would have been entitled to claim. Assignments and Participations: Lenders will have a right (i) to sell assignments in amounts of at least $5 million with the consent of the Borrower and the Agent, which consent shall not be unreasonably withheld, provided that the consent of the Borrower will not be required for assignments among Lenders or by a Lender to any of its affiliates or to the Federal Reserve Bank, and (ii) to sell participations in all or a part of their loans or commitments with the transferability of voting rights limited to principal, rate, fees and term. The Borrower shall not be responsible for the costs and expenses of syndication of the Facility except as provided under "Expenses" below. Waivers and Amendments: With the exception of decreases in interest rates or fees, increases in commitment amounts, extension of maturities and times for payment, changes in funding and yield protections and indemnities, changes in sharing provisions among Lenders, changes in several nature of the obligations of the Lenders, changes in the percentage of the Lenders necessary to act, assignment by the Borrower of rights or obligations under any of the documentation for the Facility and release of the pledged collateral (which shall require consent of all the Lenders), amendments to and waivers of provisions of the loan documents shall be made or given by Lenders holding a majority of commitments under the Facility. Increased Costs/ Changed Circumstances: The Agreement will contain customary provisions protecting the Lenders in the event of unavailability of funding, illegality, capital adequacy requirements, increased costs, and funding losses and shall provide for all payments to be made free and clear of taxes. Indemnification: The Borrower will indemnify the Agent and the Lenders against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements relating to the transactions and the enforcement of the Agent's and/or Lenders' rights and remedies with respect to the loan documents, or the Borrower's use of loan proceeds or the commitments, in each case including but not limited to attorneys' fees and settlement costs whether or not the transaction contemplated herein is consummated. Expenses: The Borrower will pay all legal and other out-of-pocket expenses of the Agent related to this transaction pursuant to a schedule to be agreed to by the parties and any subsequent amendments or waivers; provided, however, that the Borrower shall not be liable for any such expenses incurred in connection with the syndication of the Facility except for any such expenses in connection with the syndication by the Agent of the Facility to any entity that becomes a lender on the closing of the Facility or within 90 days thereafter. Governing Law: The State of New York. CONFIDENTIAL California Energy Company SUMMARY OF TERMS AND CONDITIONS UP TO $500,000,000 IN MERGER FACILITIES Borrower: California Energy Company on a non-recourse basis in form satisfactory to the Agent Agent/Arranger/ Underwriter: Credit Suisse Lenders: The Agent and any other financial institutions to be arranged by the Agent. Facilities: Up to $500,000,000 in credit facilities (the "Facilities") composed of: (i) Up to a 6-year amortizing term loan ("Term Loan A") in an expected amount of up to $500,000,000 less the amount of the Term Loan B and (ii) Up to an 8-year amortizing term loan ("Term Loan B") in an expected amount not to be less than $150,000,000. Use of Proceeds: The Borrower proposes to capitalize CE Acquisition Company, Inc., a wholly-owned subsidiary ("Newco", which term shall also include the surviving corporation in the Merger (as defined below)), for the purpose of tendering for 51% of the stock of Magma Power Company (the "Target") and entering into a merger with the Target (the "Merger"). Funds provided by the Facilities will be advanced by the Borrower to Newco to purchase a secured term note of Newco (the "Newco Secured Term Note"). The proceeds from the sale of the Newco Secured Term Note will be used, together with the Borrower's capital investment in Newco, which will be in an amount and form satisfactory to the Agent, adequate provision of working capital and other available moneys, to fund the merger consideration payable in connection with the Merger, to refinance the Borrower's Tender Offer Facility by repaying its earlier advance to Newco to purchase the tendered stock of the Target evidenced by the Newco Secured Tender Note, to repay or acquire certain existing debt of the Target and to pay related fees and costs of the transaction. The economic terms of the Newco Secured Term Note will mirror the terms of the Facilities. Upon consummation of the Merger, the Target shall expressly assume the obligations of Newco under the Newco Secured Term Note. Borrowing Options: Adjusted LIBOR and Base Rate. "Adjusted LIBOR" means the average (rounded upward to the next higher 1/16 of 1%) of the rates offered to the reference Lenders in the London interbank market for deposits in an amount and maturity corresponding to the interest period for the advance. LIBOR will be adjusted for reserves and other regulatory requirements, as appropriate. "Base Rate" means the higher of the Agent's prime rate or the federal funds rate + 0.50% per annum. Applicable Interest Margins: Term Loan A: LIBOR + 2.50% Base Rate + 1.50% Term Loan B: LIBOR + 3.00% Base Rate + 2.00% Computation of Interest: Interest on Base Rate loan segments will be payable quarterly in arrears and calculated on the basis of the actual number of days elapsed over a 365/366 day year. Interest on LIBOR loan segments will be payable in arrears (i) at the end of each applicable interest period and (ii) in the case of any interest period longer than three months, every three months during such period. Interest on LIBOR loan segments will be calculated on the basis of the actual number of days elapsed over a 360 day year. Default Rate: All applicable margins will be increased by 2.00% per annum and all loan segments shall be maintained as Base Rate loan segments effective in the case of LIBOR loan segments at the end of each then existing period. Total annual amortization in accordance with the following table, with payments to be made semi-annually (the amount and timing of actual semi-annual payments to be determined after review of cash flows): Term Loan A Term Loan B Scheduled Annual Annual Amortization: Year Amortization Year Amortization 1 $20,000,000 1 $0 2 $30,000,000 2 $0 3 $50,000,000 3 $0 4 $75,000,000 4 $0 5 $80,000,000 5 $0 6 $95,000,000 6 $0 ------------ 7 $75,000,000 Total $350,000,000 8 $75,000,000 ------------ Total $150,000,000 Mandatory Prepayments: From the excess cash flow and capital transactions of Newco, including without limitation cash proceeds of asset sales and refinancing, on terms to be mutually agreed. Also from any other monies received from Newco other than through the Newco Secured Term Note except as mutually agreed to by the parties. Optional Prepayments: Optional prepayments will be permitted at any time in excess of a threshold amount without premium or penalty other than payment of applicable "breakage" costs on LIBOR loan segments. Required notice to the Agent will be (i) one Business Day prior to the date of prepayment of any Base Rate loan segment and (ii) three Business Days prior to the date of prepayment of any LIBOR loan segment. Application of Prepayments: Mandatory prepayments will be applied pro rata to each remaining mandatory amortization payment under the Facilities. All principal reductions shall be permanent. Prepayments will be applied first to Base Rate loan segments and then to LIBOR loan segments. The prepayment of LIBOR loan segments will be subject to the payment of "breakage" costs if the date of prepayment is not the last day of an interest period unless, at the option of the Borrower, the prepayment amount is escrowed with the Agent and invested in United States Treasury Securities to the last day of the applicable interest period. Optional prepayments will be applied in a manner to be agreed. Security: The Facilities will be secured by an assignment and pledge of the stock of Target and all other unencumbered assets of Target and its subsidiaries securing the Newco Secured Term Note. The Facilities will be non-recourse to the Borrower and the Lenders will agree to make an appropriate election under Section 1111(b) of the Bankruptcy Code to continue such non-recourse status in any proceeding involving the Borrower as Debtor under the Bankruptcy Code. Representations and Warranties: Those customarily found in credit facilities of this nature and any additional appropriate to this transaction with respect to the Borrower and, as applicable, its subsidiaries including, without limitation, the following: 1. Corporate organization, existence and power including the merger of Newco and the Target and all related transactions. 2. Corporate and government authorization, no contravention, legality, validity, binding effect and enforceability of all documentation related to this transaction. 3. The financial information of the Borrower, Newco and their material subsidiaries. 4. No material adverse change in the Borrower, Newco and their material subsidiaries. 5. No material litigation (other than litigation to which the Target is a party and which is described in the Target's Form 10-K for the year ended December 31, 1993 and as described in the Offer to Purchase (the "Offer to Purchase") of the Borrower and Newco dated October 6, 1994, as it may be amended (the "Magma Litigation")). No material amendments to the Offer to Purchase shall be effective for purposes of this term sheet without the prior written consent of the Bank. 6. Absence of default(s) or Event of Default(s). 7. Compliance with ERISA. 8. Regulatory approvals, consents, filings and compliance with laws. 9. Existence, incorporation etc. of subsidiaries. 10. Environmental compliance. 11. Not an investment company. 12. Full disclosure. 13. Payment of taxes. 14. Adequate insurance. Conditions Precedent to Closing: Those customarily found in credit facilities of this nature and any additional appropriate to this transaction with respect to the Borrower and, as applicable, its subsidiaries including, without limitation, a capital investment in Newco in an amount and form satisfactory to the Agent, provision for an adequate level of working capital, provisions to insure Alto Peak and Malitbog equity commitments and ownership interest in Alto Peak and Malitbog satisfactory to the Agent, receipt of appropriate certificates and legal opinions, accuracy of representations and warranties, absence of defaults and material litigation (excluding the Magma Litigation), evidence of authority, receipt of required governmental approvals, consents and filings of all persons, consummation of the merger pursuant to a definitive merger agreement between Newco and the Target satisfactory to Agent, compliance with laws (including without limitation, environmental, labor and ERISA), absence of material adverse change in the Borrower, Newco, the Target and their respective subsidiaries (in each case, taken as a whole), satisfactory due diligence by the Agent and payment of fees. Covenants: Those customarily found in credit facilities of this nature and any additional appropriate to this transaction with respect to the Borrower and its subsidiaries, as applicable, including, without limitation, covenants regarding compliance with laws (including ERISA), payment of taxes, maintenance of insurance, preservation of corporate existence, visitation rights, keeping of books, maintenance of properties, use of proceeds, margin stock, transactions with affiliates, notice of defaults, delivery of the unaudited (quarterly) and audited (annual) financial statements of the Borrower, Newco and its significant subsidiaries, quarterly delivery with financial statements of an officer's certificate, in form and substance reasonably satisfactory to the Agent, certifying the absence of (i) a material adverse change in the financial condition or operations of the Borrower and its subsidiaries, taken as a whole, or (ii) a material adverse change in the financial condition or operations of Newco and its subsidiaries, taken as a whole (and, in either case, which could reasonably be expected to materially impact the ability of Borrower to service the Facilities or the ability of the Agent on behalf of the Lenders to realize upon the collateral securing the Facilities), and other customary financial reporting requirements as any Lender may reasonably request; and without limitation, the following restrictions and limitations (subject to such baskets and exceptions as the parties may agree): 1. Negative pledge of all stock and unencumbered assets of Newco and its subsidiaries. 2. Limitation on guaranties by Newco and its subsidiaries. 3. Limitation on mergers and sales of assets by Newco and its subsidiaries. 4. Limitation on investment in other persons by Newco and its subsidiaries. 5. Prohibition on restricted payments by Newco and its subsidiaries. 6. Maintenance of ownership of Newco and all subsidiaries. 7. Prohibition on incurrence of additional debt at Newco and its subsidiaries. 8. Limitation on dividends on Newco stock to Borrower unless proceeds used to pay down the Facilities in amounts to be agreed upon. 9. Limitation on the up-streaming of any assets or funds from Newco and its subsidiaries to the Borrower unless the proceeds are used to pay down the Facilities in amounts to be agreed upon. 10. Restrictions on change in nature of business. 11. Limitation on amendments to the merger agreement. Financial Covenants: Those customarily found in credit facilities of this nature and any additional appropriate to this transaction with respect to Newco and, as applicable, its subsidiaries including, without limitation, the following: 1. Minimum interest coverage ratio. 2. Maximum leverage ratio. 3. Minimum operating cash flow. Events of Default: Those customarily found in credit facilities of this nature and any additional appropriate to this transaction with respect to the Borrower and, as applicable, its subsidiaries including, without limitation, breach of representation or warranty in any material respect; default in any covenant or financial covenant; permanent injunction of the Merger; material cross default with respect to Newco and its subsidiaries; payment default under any other agreement to which the Borrower is a party involving indebtedness in excess of $50,000,000, or other default under any such agreement resulting in acceleration which is not rescinded within 30 days; bankruptcy; insolvency; change of control (except under circumstances mutually satisfactory to the parties); certain ERISA defaults (which in the case of the Borrower shall only include such defaults as the Agent determines to materially adversely affect the collateral for the Facilities); the failure to pay one or more final judgments aggregating more than a specified threshold to be mutually agreed; failure to make a payment in connection with the Facilities when due; pledge agreement shall cease to be in full force and effect or the Borrower shall so assert. Cost and Yield Protection: Standard provisions for illegality, inability to determine rate, indemnification for breakage of LIBOR funding and increased costs or reduced return, including those arising from reserve requirements, taxes and capital requirements; provided that increased costs may be applied retroactively for a maximum of 90 days preceding written notice to the Borrower and will not be more, in the case of any participant, than the applicable fronting Lender would have been entitled to claim. Assignments and Participations: Lenders will have a right (i) to sell assignments in amounts of at least $5 million with the consent of the Borrower and the Agent, which consent shall not be unreasonably withheld, provided that the consent of the Borrower will not be required for assignments among Lenders or by a Lender to any of its affiliates or to the Federal Reserve Bank, and (ii) to sell participations in all or a part of their loans or commitments with the transferability of voting rights limited to principal, rate, fees and term. The Borrower shall not be responsible for the costs and expenses of syndication of the Facilities except as provided under "Expenses" below. Waivers and Amendments: With the exception of decreases in interest rates or fees, increases in commitment amounts, extension of maturities and times for payment, changes in funding and yield protections and indemnities, changes in sharing provisions among Lenders, changes in several nature of the obligations of the Lenders, changes in the percentage of the Lenders necessary to act, assignment by the Borrower of rights or obligations under any of the documentation for the Facilities and release of the pledged collateral (which shall require consent of all the Lenders), amendments to and waivers of provisions of the loan documents shall be made or given by Lenders holding a majority of commitments under the Facilities. Increased Costs/ Changed Circumstances: The Agreement will contain customary provisions protecting the Lenders in the event of unavailability of funding, illegality, capital adequacy requirements, increased costs, and funding losses and shall provide for all payments to be made free and clear of taxes. Indemnification: The Borrower will indemnify the Agent and the Lenders against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements relating to the enforcement of the Agent's and/or Lenders' rights and remedies with respect to the loan documents, or the Borrower's use of loan proceeds or the commitments, in each case including but not limited to attorneys' fees and settlement costs whether or not the transaction contemplated herein is consummated. Expenses: The Borrower will pay all legal and other out-of-pocket expenses of the Agent related to this transaction pursuant to a schedule to be agreed to by the parties and any subsequent amendments or waivers; provided, however, that the Borrower shall not be liable for any such expenses incurred in connection with the syndication of the Facilities except for any such expenses in connection with the syndication by the Agent of the Facilities to any entity that becomes a lender on the closing of the Facilities or within 90 days thereafter. Governing Law: The State of New York.
EX-99.(F)(1) 9 SOLICITATION MATERIALS CONTACTS: James Protos MacKenzie Partners, Inc. (212) 929-5397 or Evan Collins MacKenzie Partners, Inc. (212) 929-5500 FOR IMMEDIATE RELEASE CALIFORNIA ENERGY ANNOUNCES SCHEDULE OF MEETING FOR THE WEEK OF OCTOBER 24 OMAHA, NE., October 24, 1994 -- California Energy Company, Inc. (NYSE: CE; PSE and LSE) today announced its schedule of meetings with securities analysts, shareholders and bondholders of Magma Power Company (NASDAQ: MGMA) for the week of October 24. The schedule is as follows: Tuesday, October 25, 4:30 p.m. -- Boston, Massachusetts Four Seasons Hotel 200 Boylston Street Wendell Phillips Room Wednesday, October 26, 4:30 p.m., New York, New York Helmsley Palace Hotel 455 Madison Avenue Renaissance A Room Friday, October 28, 12:00 noon, Los Angeles, California Sheraton Grande Hotel 333 South Figueroa Street Conference Room Suite 310 Shareholders, bondholders and securities analysts who wish to attend should contact James Protos (212) 929-5397 or Evan Collins (212) 929-5500 at MacKenzie Partners, Inc. to confirm interest and receive an invitation. # # # 1 [CE logo appears here] CALIFORNIA ENERGY COMPANY, INC. October 1994 2 [CE logo appears here] OBJECTIVE: SECURE YOUR APPROVAL FOR THE PROPOSED TRANSACTION 3 [CE logo appears here] FIVE REASONS TO ACCEPT THE OFFER - - $38.50/Share Represents Fair Value (40% premium) - - CE and Magma Combination Benefits All Shareholders - - CE Management is Best Able to Meet Future Challenges - - Offer Contains No Significant Contingencies - - Magma's Share Price is Expected to Plummet if California Energy Retracts its Offer 4 [CE logo appears here] REASONS TO ACCEPT CALIFORNIA ENERGY'S OFFER WHAT SHOULD WE CONCLUDE FROM THE OWNERSHIP TREND OF CE'S AND MAGMA'S LARGEST SHAREHOLDERS? [A bar graph is presented depicting the following information.]
Month/Year Ownership(a) - ---------- ------------ Apr-90 Dow 39.0% Kiewit 0.0% Apr-91 Dow 24.0% Kiewit 29.0% Apr-92 Dow 24.0% Kiewit 35.0% Apr-93 Dow 24.0% Kiewit 37.0% Apr-94 Dow 5.0% Kiewit 38.0% Sep-93 Dow 5.0% Kiewit 44.0% ____________________ (a) Data from Proxy Statements and 13D Filings. Dow beneficial ownership net of 4,000,005 shares placed in escrow under Subordinated Exchangeable Note Offering dated April 11, 1991.
5 [CE logo appears here] REASONS TO ACCEPT CALIFORNIA ENERGY'S OFFER WHICH MANAGEMENT TEAM CAN BEST CREATE LONG-TERM SHAREHOLDER VALUE?
Magma Executive Experience Beneficial Officers(a) Age Dow IPP Ownership - --------------- --- --- --- ---------- Paul M. Pankratz 62 35 2 66,100 Ralph W. Boeker 60 34 1 15,000 John R. Peele 50 5 6 19,500 Wallace C. Diokmann 51 2 6 17,159 Trond Aschehoug 51 25 2 12,450 Kenneth J. Kerr 50 28 1 16,000 Average per Executive Officer 54 22 3 24,368 CE Executive IPP Beneficial Officers(a) Age Experience Ownership - ------------ --- ---------- ---------- David L. Sokol 38 16 394,431 Thomas R. Mason 51 16 55,420 Steven A. McArthur 36 4 68,416 Donald O'Shei Sr. 61 8 38,545 John G. Sylvia 36 9 60,270 Average Per Executive Officer 44 10 123,416 CE management: 10 years younger, 3X the IPP experience, and 3X the personal stake ____________________ (a) Statistics are based on the Magma 1994 Proxy Statement and the CE Proxy Statement.
6 [CE logo appears here] REASONS TO ACCEPT CALIFORNIA ENERGY'S OFFER DOW AND MAGMA MANAGEMENT - NET SELLERS [Graphic Representing Certain Sales of Magma Common Stock by Dow and by Certain Members of Magma Management.]
Magma Power Date Share Price -------- ----------- 10/21/93 $37.75 12/21/93 34.00 2/02/94 33.75 3/25/94 34.25 5/18/94 31.25 7/08/94 29.50 8/30/94 29.00 10/21/94 37.00
7 [CE logo appears here] REASONS TO ACCEPT CALIFORNIA ENERGY'S OFFER WHAT MAGMA SHAREHOLDERS MISSED [Graphic Representing Market Price of Magma Common Stock Relative to Market Price of California Energy's Offered Consideration in October 1991(a)]
Price Per Share ---------------------------------- 1991 Proposed Magma Power Date CE Consideration Share Price -------- ---------------- ----------- 10/01/91 $29 $26 3/27/92 24 22 9/18/92 26 22 3/19/93 42 39 9/10/93 37 39 3/04/94 36 31 8/31/94 35 29 ____________________ (a) Exchange Ratio = 2.0168
8 [CE logo appears here] OVERVIEW DISCUSSION TOPICS - - Transaction Rationale - - California Energy Offer and Magma Response - - Profile of California Energy - - Comparison of California Energy and Magma - - Correcting the Misstatements and Omissions - What Magma Didn't Tell You - - Five Reasons to Accept the Offer - - Questions 9 [CE logo appears here] TRANSACTION RATIONALE 10 [CE logo appears here] TRANSACTION RATIONALE INDUSTRY TRENDS - - International Markets Provide Most Attractive Investment Opportunities - - IPP Industry is Highly Competitive - Critical Mass and Name Recognition are Important - Competition not limited to renewables - Increased project size with more complex development and financing process - Enhanced access to public capital markets - "Brand Names" - Credibility with foreign governments - - Future Global Leaders Will Need to be "Full Service Providers" 11 [CE logo appears here] TRANSACTION RATIONALE OVERVIEW - - Creates One of the Largest Global IPPs 1993 SUMMARY FINANCIAL STATISTICS ($MM)
CE Magma ---- ----- Sales $149 $167 EBITDA 102 106 PROJECT PORTFOLIO (MWs) Operation 325 244 Construction 300 0 Development 930 [1,132](a) - --------------- (a) Pursuant to October 21, 1994 Magma Press Release.
12 [CE logo appears here] TRANSACTION RATIONALE SYNERGIES - - Critical Mass - - Greater Access to Capital and Financial Flexibility - - Enhanced Name Recognition - - Broaden International Development Resources - - Corporate/Operating Efficiencies and Cost Reductions - - Increased Equity Base 13 [CE logo appears here] CALIFORNIA ENERGY OFFER AND MAGMA RESPONSE 14 [CE logo appears here] CALIFORNIA ENERGY OFFER AND MAGMA RESPONSE CALIFORNIA ENERGY OFFER - - Price - $38.50 per share: Cash $28.50 Stock 10.00 - 40% premium - Offer price fully values new project opportunities and expected synergies - - History of Discussions - Long history of contacts over past 3 1/2 years - no progress - $30.25 per Magma share stock transaction proposed in 1991 - - Rationale for CE Offer - Magma unwillingness to negotiate - Merger makes economic sense for CE and Magma shareholders - Allows Magma shareholders to decide 15 [CE logo appears here] CALIFORNIA ENERGY OFFER AND MAGMA RESPONSE MAGMA RESPONSE - - Magma Has Made Numerous Efforts to Thwart CE and Deprive Shareholders the Opportunity to Maximize Value - Refusal to negotiate - Stalling for time - Implementation of Anti-Takeover impediments
Date Event __________________ _________________________________________________ September 19, 1994 - CE Offers to Acquire Magma for $35 per Share September 25, 1994 - Magma Requests that CE Delay Tender Offer until October 4 - CE Agrees October 3, 1994 - Magma Board Adopts Poison Pill and Golden Parachutes - Magma Commences Litigation Against CE October 4, 1994 - CE Announces Cash Tender Offer to Purchase 51% of Magma for $35 per Share October 10, 1994 - Magma Board Recommends that Shareholders Reject CE Proposal October 21, 1994 - CE Offers to Acquire Magma for $38.50 per Share
16 [CE logo appears here] CALIFORNIA ENERGY OFFER AND MAGMA RESPONSE COST TO SHAREHOLDERS OF MAGMA'S RECENT ACTIONS
ESTIMATED COSTS ------------------------------ MAGMA CE ------------- ----------- Golden Parachutes/Option Acceleration(a) $ 7,364,338 Legal/Litigation 4,000,000 $4,000,000 P.R./Advertising 250,000 250,000 Printing 250,000 250,000 Proxy Solicitation 225,000 225,000 Goldman, Sachs 5,750,016 Roadshow 25,000 25,000 Total $17,864,354 $4,750,000 Combined Total Cost $22,614,354
CONCLUSION: IS THIS REALLY IN THE BEST INTERESTS OF MAGMA SHAREHOLDERS? (a) Based on 1994 Proxy Statement. 17 [CE logo appears here] CALIFORNIA ENERGY OFFER AND MAGMA RESPONSE
MAGMA CLAIM CE RESPONSE Conditional upon Financing - Binding Bank Commitment for $500 million "It is not David Sokol's God-given - "It is not Ralph Boeker's right to acquire Magma" - Ralph God-given right to deny Boeker in Dow Jones interview his shareholders maximum value and entrench himself" - David Sokol High Leverage of Combined Company - Proper utilization of balance sheet - Leverage indicates non- recourse project financing success - Combined companies have enhanced access to new capital in future - Kiewit remains an important shareholder Too Many Other Conditions CE Shareholder Vote - Kiewit supports transaction (38% vote) Merger Agreement - Poison pill necessitates approach Coercive: 51% Offer - Offer strategy determined by Magma Board's refusal to negotiate
18 [CE logo appears here] PROFILE OF CALIFORNIA ENERGY 19 [CE logo appears here] PROFILE OF CALIFORNIA ENERGY MISSION STATEMENT "TO BE THE LEADING GLOBAL PROVIDER OF INDEPENDENTLY DEVELOPED, OWNED AND OPERATED ELECTRICAL ENERGY FACILITIES UTILIZING ENVIRONMENTALLY RESPONSIBLE TECHNOLOGY" 20 [CE logo appears here] PROFILE OF CALIFORNIA ENERGY OVERVIEW - - Clearly Defined Long-Term Strategy with a Focus and Strong Reputation: - Operational excellence - Recognized leader in development - Engineering and construction control - Financial innovation and strict adherence to internal rate of return and risk minimization standards - Strong management team with a proven successful track record CALIFORNIA ENERGY WAS AWARDED THE "STRATEGIC CONTINUITY AWARD" FOR PURSUING A SUCCESSFUL BUSINESS STRATEGY BY INDEPENDENT ENERGY MAGAZINE SEPTEMBER, 1994 21 [CE logo appears here] PROFILE OF CALIFORNIA ENERGY [Two adjacent bar graphs are presented depicting the following information.]
REVENUE (millions) - ------------------------------------------ Year 1989-1993 Growth Rate: 33% - ---- --------------------------- 1989 $48 1990 97 1991 116 1992 128 1993 149 EARNINGS (millions)(a) Year 1989-1993 Growth Rate: 43% 1989 $10 1990 12 1991 27 1992 39 1993 43 ____________________ (a) Before extraordinary items, change in accounting principle, and preferred dividends.
22 [CE logo appears here] PROFILE OF CALIFORNIA ENERGY EARNINGS PER SHARE(a) [A bar graph is presented depicting the following information.] 1989-1993 Growth Rate: 27%
Year Earnings Per Share - ---- ------------------ 1989 $0.38 1990 0.44 1991 0.75 1992 0.92 1993 1.00 ____________________ (a) Before extraordinary items and change in accounting principle.
23 [CE logo appears here] PROFILE OF CALIFORNIA ENERGY FIRST NINE MONTHS REVENUE AND EARNINGS(a) [Two adjacent bar graphs are presented depicting the following information.]
REVENUE - ---------------------------- Year $ in Millions - ---- ------------- 1993 $113.3 1994 139.2 EARNINGS - ---------------------------- Year $ in Millions - ---- ------------- 1993 $34.8 1994 38.3(b) ____________________ (a) Before extraordinary items, change in accounting principle and preferred dividends. (b) Before effect of Senior Discount Notes.
24 [CE logo appears here] PROFILE OF CALIFORNIA ENERGY CE HAS CONSISTENTLY OUTPERFORMED MAGMA(a) [Three adjacent bar graphs are presented depicting the following information.]
REVENUE GROWTH - ----------------------------- Company Revenue Growth - ------- -------------- CE 33% Magma 28% EARNINGS GROWTH(b) - ------------------------------ Company Earnings Growth - ------- --------------- CE 43% Magma 24% EPS GROWTH(b) - ------------------------- Company EPS Growth - ------- ---------- CE 27% Magma 21% ____________________ (a) Based on 1989-1993 Compound Annual Growth Rates. (b) Before extraordinary items, change in accounting principle, and preferred dividends.
25 [CE logo appears here] PROFILE OF CALIFORNIA ENERGY
STRENGTHS DEVELOPMENT x David Sokol developed 16 projects for Ogden in 6 years x Kiewit 50/50 JV - Sharing of development expenses - Investment diversification x Proven ability to complete projects in a timely manner x Strict adherence to internal standards ENGINEERING x Global geothermal facility design experience (including Salton Sea) x Experience in other technologies FINANCING x First investment grade IPP - $560 mm Coso Funding Notes x Largest corporate debt offering by IPP - $400 mm Discount Notes Offering x Full use of balance sheet to minimize equity issuance CONSTRUCTION x CE and Kiewit Relationship - Arm's length - CE flexibility to match best contractor with project - Foreign construction risk management - Proven success in power construction - Readily financeable - Quality reputation - Must competitively bid for projects OPERATIONS x Coso Performance - Demonstrated history of cost management - Demonstrated consistent high reliability and performance - One of, if not the best, safety records in the industry - Geotechnical systems such as 3D reservoir modeling CALIFORNIA ENERGY IS AN INTERNATIONAL FULL SERVICE PROVIDER 26 [CE logo appears here] PROFILE OF CALIFORNIA ENERGY PETER KIEWIT & SONS OVERVIEW - - Kiewit is a Global Infrastructure, Construction, Mining, Communications and Energy Company with $2.2 billion in Revenue and $261 million in Earnings in 1993 - - Recognized by Forbes and Warren Buffett as One of the Best Run Companies in America (Forbes feature article, October 24, 1994) - - Reputation for Successfully Managing and Completing Large Complex Projects Worldwide - - Involved in 5 Main Businesses:
Market Percent Company Capitalization Ownership Industry - ------- -------------- --------- -------- MFS Communications $2,316 Million 71% Communications California Energy $546 Million 43 IPP C-TEC $409 Million 57 Cable TV/ Telecommunications Kiewit Mining Private 100 Mining Kiewit Construction Private 100 Construction
27 [CE logo appears here] COMPARISON OF CALIFORNIA ENERGY AND MAGMA 28 [CE logo appears here] COMPARISON OF CALIFORNIA ENERGY AND MAGMA CE SETS THE STANDARD FOR OPERATING EXCELLENCE
OPERATING EXPENSES PER KWH EMPLOYEES PER MW - -------------------------- ------------------------- California Energy Coso 1993 2.38cents California Energy 0.569 California Energy Coso 1994 2.28cents Magma 1.360 Magma 1993 4.2cents Magma Stated Goal for 1998 2.5cents
[A bar graph is presented depicting the following information.]
Year % of Contract Capacity - ---- ---------------------- 1991 Magma 105.0% CE 102.8% 1992 Magma 107.7% CE 108.6% 1993 Magma 110.0% CE 118.9% 1994 (YTD) Magma 113.0% CE 120.6% Avg. Magma 109.0% CE 113.0%
29 [CE logo appears here] COMPARISON OF CALIFORNIA ENERGY AND MAGMA
PERFORMANCE SCORECARD CE MAGMA ------------ -------------- 1994 PROJECT DEVELOPMENT Capital Raised $802 million $135 million (Refinancing) New Projects Financed Upper Mahiao None Mahanagdong Projects Completed Yuma None 1993 COSO OPERATING PERFORMANCE Operating Expenses/KWH 2.38cents 4.2cents Plant Operations 118.9% 110.0% (% of Contract Capacity) 1989-1993 CAGR Revenue 33% 28% Earnings 43% 24% EPS 27% 21%
CONCLUSION: WHICH COMPANY IS DRIVING THE BUSINESS? 30 [CE logo appears here] COMPARISON OF CALIFORNIA ENERGY AND MAGMA RELATIVE PROJECT DEVELOPMENT SUCCESS
CONTRACT FINANCIAL AWARD CLOSE CE MAGMA -------- --------- ---- ----- IN OPERATION, CONSTRUCTION OR FINANCED MWs currently owned in operation 197 154 MWs financed and under construction Upper Mahiao 9/93 4/94 120 Mahanagdong(a) 9/93 8/94 90 Subtotal 407 154 UNDER DEVELOPMENT MWs under contract, no financing Newberry, Oregon 9/94 30 Malitbog 9/93 231 Fish Lake 3/92 36 Subtotal 30 267 MWs under development, in contract negotiations Indonesia: Dieng Patuha 800 Philippines: Casecnan 100 Philippines: Alto Peak 72 Nevada: Sheep Mountain 200 Indonesia: Wayang Windu 280 Indonesia: Karaha [150](b) California: BRPU (currently stayed by CPUC) 163 Subtotal 900 [865](b) Total Operation, Construction, Financed & Development 1,337 [1,286](b) CONCLUSION: WHO HAS MADE "REAL" MWs? ____________________ (a) Mahanagdong is a 180MW plant that was fully financed by CE. (b) Pursuant to October 21, 1994 Magma Press Release.
31 [CE logo appears here] CORRECTING THE MISSTATEMENTS AND OMISSIONS -- WHAT MAGMA DIDN'T TELL YOU 32 [CE logo appears here] CORRECTING THE MISSTATEMENTS AND OMISSIONS WHAT MAGMA DIDN'T TELL YOU #1 CONSTRUCTION: - - Magma Misstatements and Omissions - Magma uses multiple E&C contractors and CE uses single-source (Kiewit) - - The Facts - Kiewit competes for all construction opportunities on an arm's length basis - Since Kiewit investment, CE has used multiple contractors: - Raytheon built Yuma (50 MW) - Ormat building Upper Mahiao (120 MW) - Kiewit building Mahanagdong (180 MW) - Casecnan E&C - not selected - Magma claim of multiple contractors not verifiable due to limited construction activity #2 OWNERSHIP: - - Magma Misstatements and Omissions - Magma retains 50% or greater ownership and CE retains 50% or less - - The Facts - California Energy (All operated by CE): Navy I 46% Navy II 50% BLM 48% Desert Peak 100% Roosevelt Hot Springs 70% Yuma 100% Upper Mahiao 100% Mahanagdong 50% - Magma Power (4 of 7 projects): Vulcan 50% Hoch 50% Elmore 50% Leathers 50%
33 [CE logo appears here] #3 OPERATING PERFORMANCE: - - Magma Misstatements and Omissions - Magma has operated at 109% of contracted capacity in the last 4 years and CE has operated at 96% of contracted capacity 1991-1993 - - The Facts - Since 1991, Coso has averaged 113% of contracted capacity - Coso currently operates at 128% of contracted capacity #4 PLANT DEPRECIATION: - - Magma Misstatements and Omissions - Magma depreciates plants over a 20 year period and CE over a 37.5 year period - - The Facts - Weighted average depreciation for ALL CE geothermal depreciable assets is 24.6 years vs. 20 years for Magma #5 HIGHLY LEVERAGED: - - Magma Misstatements and Omissions - Magma's Debt/Total Capital ratio is 24.9% and CE's is 76.1% - - The Facts - Net Debt/Total Capitalization: 35.3% - Net Debt (excluding non-recourse project financing)/Total Capitalization: 13.0% - Magma balance sheet is unleveraged due to absence of new project financings #6 RESOURCE MANAGEMENT: - - Magma Misstatements and Omissions - Magma wells experience little if any decline while new Coso wells decline 35% to 45% in first year 34 [CE logo appears here] - - The Facts - Average decline for Coso is currently about 11% which is in line with original projections - As Magma expands their use of the resource their declines will naturally increase. Additionally, Salton Sea is a different type of reservoir #7 ROYALTY PAYMENTS: - - Magma Misstatements and Omissions - Magma's royalties are levelized, while CE's are back-end loaded - - The Facts - Back-end loaded royalty payments provide NPV benefits to shareholders and are evidence of superior negotiating #8 COST REDUCTION: - - Magma Misstatements and Omissions - Magma has a public plan to reduce cost to 2.5cents by 1998, while CE has no publicly announced plan - - The Facts - Beginning in 1991, CE implemented cost reduction programs leading to a current cost of 2.28cents per Kwh compared to Magma's current cost of 4.2cents CONCLUSION: THE FACTS SPEAK FOR THEMSELVES 35 [CE logo appears here] FIVE REASONS TO ACCEPT CALIFORNIA ENERGY'S OFFER 36 [CE logo appears here] FIVE REASONS TO ACCEPT THE OFFER REASON #1 - $38.50/SHARE REPRESENTS FAIR VALUE - - Proof: - 40% premium to market price prior to CE offer - Substantial premium to Magma's discounted cash flow value which reflects real and potential development opportunities - DLJ indicates $35.00/share is a fair price. - Wall Street Transcript quotes Ralph Boeker, Magma CEO: "I don't think we're totally undervalued" on August 1, 1994 when stock price was $28.75 - Obviously, two of your top executives agree, Mr. Boeker. They sold 10,000 shares at an average price of $34.25 in 1994. - On October 10, 1994, Mr. Boeker said, "In making its offer at this time, California Energy is trying to buy Magma at a bargain price that does not remotely reflect Magma's intrinsic value and long-term strategic promise." WHICH WAY IS IT, MR. BOEKER? 37 [CE logo appears here] FIVE REASONS TO ACCEPT THE OFFER REASON #2 - CE AND MAGMA COMBINATION BENEFITS ALL SHAREHOLDERS - - Benefits include: - Strong combined annual cash flow - Anticipated cost reductions - Operational efficiencies - Increased size, stability and diversification of asset base and geothermal resources - Increased global development opportunities 38 [CE logo appears here] FIVE REASONS TO ACCEPT THE OFFER REASON #3 - CE MANAGEMENT IS BEST ABLE TO MEET FUTURE CHALLENGES - - International IPP Development Requires More than Just Caretaker Management - David Sokol, CEO, and his team at Ogden Projects, successfully developed, financed and constructed 16 power projects in 6 years - CE's management team has completed the most innovative financings in the industry ($560mm Coso Funding, $400 million zero coupon Senior Notes) - CE's management team averages 10 years experience in the IPP industry while Magma's management team averages only 3 years - - Kiewit Beneficially Owns 43.3% of CE Stock and has been Extremely Supportive 39 [CE logo appears here] FIVE REASONS TO ACCEPT THE OFFER REASON #4 - OFFER CONTAINS NO SIGNIFICANT CONTINGENCIES - - Merger Agreement - - Financing in Place - CE has $300mm Cash - Binding Bank Commitments for $500mm - - Kiewit Votes 38% of CE Stock and Has Approved the Deal CE PREFERS TO OFFER THE SAME CONSIDERATION TO ALL SHAREHOLDERS 40 [CE logo appears here] FIVE REASONS TO ACCEPT THE OFFER REASON #5 - MAGMA'S SHARE PRICE IS EXPECTED TO PLUMMET IF CALIFORNIA ENERGY RETRACTS ITS OFFER - - No Other Offers have been Announced - - Magma's Share Price has Declined Steadily Throughout 1994 - - Offer Price Exceeds Magma's LTM Trading Level - - Dow Sales of Magma Stock have been at Prices Below CE's Offer - - JP Morgan Research Analyst warns, "If the CE deal were to fall through, Magma shares could fall significantly (possibly as low as the pre-bid level of $27.50)" - - CE will not Overpay for an Acquisition and is Willing to Walk Away if the Price is Not Right (e.g., Westmoreland Energy) 41 [CE logo appears here] CONCLUSION OUR OFFER MAXIMIZES THE VALUE OF YOUR MAGMA INVESTMENT WE URGE YOUR ACCEPTANCE 42 GRAPHICS APPENDIX (Pursuant Rule 304(a) of Regulation S-T) Description of Graphical Elements Page 5 See description on Page 5. Page 7 Graphical depiction of certain sales of Magma common stock by Dow and by certain members of Magma management. Graphical element is a line graph, the vertical axis of which is marked in $1 dollar increments from $25 to $40 and the horizontal axis of which is marked with certain dates from January 13, 1994 through October 21, 1994. The graph contains a wavering horizontal line representing the market price of Magma's common stock during the periods indicated and is marked to indicate the date of certain sales by Dow and by certain members of Magma management. Page 8 Graphical depiction of market price of Magma common stock relative to market price of California Energy's offered consideration in October 1991. Graphical element is a line graph, the vertical axis of which is marked in $5 dollar increments from $10 to $50 and the horizontal axis of which is marked with certain dates from October 1, 1991 through August 31, 1994. The graph contains two wavering horizontal lines, one of which represents the market price of Magma's common stock during the periods indicated and the other of which represents the market price of California Energy's offered consideration in October 1991 during the periods indicated. [California Energy's offered consideration is based on an exchange ratio of 2.0168.] Page 22 See description on Page 22. Page 23 See description on Page 23. Page 24 See description on Page 24. Page 25 See description on Page 25. Page 29 See description on Page 29. 43 -----END PRIVACY-ENHANCED MESSAGE-----