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