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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) FEBRUARY 19, 1999
TEXAS UTILITIES COMPANY
(Exact name of registrant as specified in its charter)
TEXAS 1-12833 75-2669310
(State or other (Commission (I.R.S. Employer
jurisdiction
of incorporation) File Number) Identification No.)
ENERGY PLAZA, 1601 BRYAN STREET, DALLAS,
TEXAS 75201-3411
(Address of principal executive offices, including zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING
AREA CODE - (214) 812-4600
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ITEM 5. OTHER EVENTS.
On February 19, 1998, the Board of Directors of Texas
Utilities Company, a Texas corporation (the "Company"),
authorized and declared a dividend distribution of one right
(each a "Right" and collectively, the "Rights") for each share of
common stock of the Company, without par value (the "Common
Stock"), outstanding at the close of business on March 1, 1999
(the "Record Date"). Each Right entitles the registered holder,
from the Distribution Date (as hereinafter defined) until
February 28, 2009 or the earlier redemption or exchange of the
Rights, to purchase from the Company one one-hundredth of a share
of Series A Preference Stock, $25 par value (the "Preference
Stock"), of the Company, at an exercise price of $150, subject to
certain adjustments and subject to any required regulatory
approval. The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement"), dated as of
February 19, 1999 between the Company and The Bank of New York
(the "Rights Agent"), the Rights Agent appointed by the Company.
Initially, the Rights will be represented by the
certificates for shares of Common Stock and will not be
exercisable or transferable apart from the shares of Common Stock
until the earlier to occur of (i) the close of business on the
tenth business day after the date a Person (as such term is
defined in the Rights Agreement) or group of affiliated or
associated persons has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding
Voting Shares (as such term is defined in the Rights Agreement)
(an "Acquiring Person") or (ii) the close of business on the
tenth business day following the commencement of, or announcement
of an intention to commence, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by
a Person or group of 15% or more of the outstanding Voting Shares
(such date being called the "Distribution Date").
In the event that, following the Shares Acquisition Date,
directly or indirectly, (a) the Company consolidates or merges
with and into another Person, (b) any Person consolidates with or
merges with or into the Company where the Company is the surviving
corporation and all or part of the shares of Common Stock are
changed or exchanged, (c) 50% or more of the Company's
consolidated assets or earning power are sold, or (d) an
Acquiring Person engages in certain "self-dealing" transactions
with the Company specified in the Rights Agreement, proper
provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof
at the then current exercise price of the Right, that number of
common shares of the acquiring company having an aggregate market
value of two times such exercise price.
In the event that any Person becomes an Acquiring Person,
proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will have the right, subject to
any required regulatory approval, to receive upon the exercise
thereof at the then current exercise price of the Right that
number of shares of Common Stock or, at the option of the
Company, one one-hundredths of a share of Preference Stock having
an aggregate market value of two times such exercise price. In
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the event that regulatory approval for the issuance of shares of
Common Stock or Preference Stock is not forthcoming, or if there
are insufficient authorized but unissued shares of Common Stock
or Preference Stock to permit the exercise in full of the Rights,
the Company may at its option, with respect to some or all of the
Rights, substitute therefor, subject to the receipt of any
required regulatory approval, cash, securities of the Company
and/or its subsidiaries, other assets or a combination thereof.
The Rights will first become exercisable on the Distribution
Date and could then begin trading separately from the shares of
Common Stock. The Rights will expire at the close of business on
February 28, 2009 (the "Final Expiration Date"), unless the
Rights are earlier redeemed or exchanged by the Company, in each
case as described below.
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such Acquiring Person of beneficial
ownership of 50% or more of the outstanding shares of Common
Stock, the Board of Directors of the Company may, subject to the
receipt of any necessary regulatory approval, exchange all but
not less than all the Rights (other than Rights owned by such
Acquiring Person which will have become void) at an exchange
ratio per Right of (a) one share of Common Stock, appropriately
adjusted, or (b) cash, securities of the Company and/or its
subsidiaries, other assets or any combination of the foregoing
having a value equal to the market value of a share of Common
Stock at the time the Acquiring Person became such.
At any time prior to the close of business on the tenth
business day after a person has become an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $0.001 per Right (the "Redemption
Price").
Immediately upon the action of the Board of Directors of the
Company electing to redeem or exchange the Rights, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price or the
securities or assets to be received upon the exchange.
The terms of the Rights may be amended in any respect
without the consent of the holders of the Rights prior to the
date an Acquiring Person becomes such. Thereafter the Rights
Plan may be amended in any manner not adverse to the interests of
the holders of exercisable Rights.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
The exercise price payable, and the number of shares of
Preference Stock or other securities or property issuable upon
the 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
shares of Preference Stock, (ii) upon the grant to holders of the
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Preference Stock of certain rights or warrants to subscribe for
or purchase shares of Preference Stock at a price, or securities
convertible into shares of Preference Stock with a conversion
price, less than the then current market price of the shares of
Preference Stock or (iii) upon the distribution to holders of the
shares of Preference Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the exercise price
payable upon exercise of each Right are also subject to adjustment
in the event of a stock split of the Common Stock or a stock dividend
on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date.
Shares of Preference Stock purchasable upon exercise of the
Rights will be redeemable at the option of the Board of
Directors. Each share of Preference Stock will be entitled to a
preferential quarterly dividend payment. The annual rate of dividends
per share shall be equal to the greater of (i) $1 per share or (ii)
100 times the aggregate per share amount of all dividends or other
distributions declared per share of Common Stock. In the event of
liquidation, dissolution, or winding up of the Company, the holders
of shares of Preference Stock will be entitled to a preferential
liquidation payment equal to the greater of (i) $100 per share or
(ii) 100 times the aggregate amount to be distributed per share to
the holders of shares of Common Stock, plus, in either case, an
amount equal to accrued and unpaid dividends to the date of payment.
With certain exceptions, no adjustment in the exercise price
will be required until cumulative adjustments require an
adjustment of at least l% of such exercise price. No fractional
shares of Preference Stock will be issued (other than fractions
which are integral multiples of one one-hundredth of a share of
Preference Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and, in lieu thereof, an
adjustment in cash will be made based on the market price of the
shares of Preference Stock.
One Right will be distributed to shareholders of the Company
for each share of Common Stock owned of record by them at the
close of business on March 1, 1999. Until the earliest of the
Distribution Date, the Final Expiration Date or the redemption of
the Rights, the Company will issue one Right with each share of
Common Stock that shall become outstanding so that all shares of
Common Stock will have attached Rights. The Company has initially
authorized and reserved 10,000,000 shares of Preference Stock for
issuance upon exercise of the Rights. As of February 1, 1999,
there were 282,332,819 shares of Common Stock issued and outstanding
and 31,055,432 shares of Common Stock were reserved for issuance for
certain stock plans and stock purchase contracts.
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The present distribution of the Rights is not taxable to the
Company or its shareholders. The Rights are not dilutive and
will not affect reported earnings per share. The Company will
receive no proceeds from the issuance of the Rights.
The Rights have certain anti-takeover effects. The Rights
may cause substantial dilution to a person or group that attempts
to acquire the Company on terms not approved by the Board of
Directors of the Company, except pursuant to an offer conditioned
on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business
combination approved by the Board of Directors prior to the time
that a person or group has acquired beneficial ownership of 15%
or more of the Common Stock, since until ten business days after
such time the Rights may be redeemed by the Company at $0.001 per
Right.
The Rights Agreement between the Company and the Rights
Agent specifying the terms of the Rights is incorporated by
reference as an exhibit hereto. The foregoing description of the
Rights is qualified in its entirety by reference to the Rights
Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS.
EXHIBIT DESCRIPTION
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4 -- Rights Agreement, dated as of February 19,
1999, between Texas Utilities Company and
The Bank of New York, which includes as
Exhibit A thereto the form of Statement of
Resolution Establishing the Series A
Preference Stock, Exhibit B thereto the
form of a Right Certificate and Exhibit C
thereto the Summary of Rights to Purchase
Series A Preference Stock (incorporated by
reference to Exhibit 1 to the Registrant's
Registration Statement on Form 8-A, dated
February 26, 1999).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
TEXAS UTILITIES COMPANY
By: /s/ Peter B. Tinkham
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Name: Peter B. Tinkham
Title: Secretary and Assistant
Treasurer
Date: February 26, 1999
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