File No. 70-9105
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO THE
FORM U-1 APPLICATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
------------------------
CENTRAL AND SOUTH WEST CORPORATION
1616 Woodall Rodgers Freeway
Dallas, TX 75202
(Names of companies filing this statement and addresses
of principal executive offices)
------------------------
CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
------------------------
Wendy G. Hargus, Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Joris M. Hogan, Esq.
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005-1413
(Names and addresses of agents for service)
<PAGE>
Central and South West Corporation ("CSW"), a Delaware
corporation and a registered holding company under the Public Utility Holding
Company Act of 1935, as amended (the "Act"), hereby files this Amendment No. 1
to amend and restate in its entirety the Form U-1 Application in this file. CSW
seeks authority: (1) to repurchase up to ten percent of its outstanding common
stock as of June 30, 1997 from its stock and employee benefit plans (pursuant to
the terms and conditions of such plans) from time to time through December 31,
2002; and (2) to utilize its short-term borrowing program, including without
limitation funds borrowed through its commercial paper program previously
authorized by Commission order, to finance its repurchase of up to twenty
percent of its outstanding common stock as of June 30, 1997 (the "Aggregate
Limit"), whether such repurchases are from its employee benefit plans under the
authority requested herein or through transactions that are exempt under Rule 42
of the Act. Item 1. Description of the Proposed Transactions.
CSW proposes to repurchase up to ten percent (approximately
21.22 million shares) of its outstanding common stock, par value $3.50
("Shares"), as of June 30, 1997, through purchases from its stock and employee
benefit plans, as described more fully below (pursuant to the terms and
conditions of such plans) from time to time through December 31, 2002
("Purchases"). In addition, CSW may engage in unlimited purchases of Shares
pursuant to the exemption provided by Rule 42 under the Act ("Exempt
Purchases"). CSW proposes to use its general funds and/or short-term borrowings
to finance its purchase of Shares up to the Aggregate Limit on an interim basis.
The objectives of the Purchases are to support the market
price of CSW's common stock, to facilitate any disaggregation or other
restructuring that may be mandated or made attractive by electric utility
restructuring legislation or the evolution of a competitive electricity
marketplace, to gain the flexibility to adjust its capital structure, and to
effectively utilize the proceeds of any system for stranded cost recovery
pursuant to electric utility restructuring legislation that may be adopted at
the federal or state level.
CSW seeks authority to repurchase Shares from the CSW Dividend
Reinvestment and Stock Purchase Plan (the "DRSPP"), which presently holds
approximately ten million Shares, and the CSW Retirement Savings Plan (the "RSP"
and, collectively with the DRSPP, the "Plans"), which presently holds
approximately eleven million Shares, pursuant to the terms and conditions of
those plans. The DRSPP, which was approved by the Commission by orders dated
October 4, 1993 (HCAR No. 25902), January 30, 1996 (HCAR No. 26465) and November
27, 1996 (HCAR No. 26616) in File No. 70-8087, is a stock plan through which
anyone can voluntarily make Share purchases directly from CSW. Individuals
holding Shares through the DRSPP can also sell such Shares through the DRSPP to
reduce their Share holdings. At present, the DRSPP administrator sells such
Shares into the market at the then-prevailing market price for Shares. CSW seeks
authority to purchase such Shares from the DRSPP from time to time at the market
price for Shares at the time of any such purchase.
The RSP is a voluntary employee benefit plan, which is a
401(k) savings plan, through which CSW employees can contribute a percentage of
their pay on a tax-advantaged basis to purchase Shares and other investments in
order to save for their retirement. When participants in the RSP wish to reduce
their holdings of Shares through the RSP, Shares are typically sold by the RSP
administrator into the market at the then-prevailing market price for Shares.
CSW requests authority to purchase such Shares from the RSP from time to time at
the market price for Shares at the time of any such purchase.
CSW intends to use its general funds and/or short-term
borrowings, including without limitation funds borrowed through its short-term
borrowing program previously authorized by order dated March 28, 1997 (HCAR No.
26697; File No. 70-8557) (the "Short-Term Borrowing Authority") to finance its
purchase of Shares up to the Aggregate Limit (whether by Purchases or Exempt
Purchases) on an interim basis, until such time as the amounts paid in respect
of repurchased shares are refinanced on a permanent basis or repaid using
internally generated funds, the proceeds of any issuance of preferred stock or
debt securities by CSW and/or its subsidiaries (either pursuant to separate
Commission authority or subject to further Commission approval), or the proceeds
of any system for stranded cost recovery pursuant to electric utility
restructuring legislation that may be adopted at the federal or state level.
Although CSW can engage in Exempt Purchases in unlimited
amounts, it will only use funds raised under its Short-Term Borrowing Authority
to acquire Shares, whether through Purchases or Exempt Purchases, up to the
Aggregate Limit. If CSW wishes to repurchase Shares above the Aggregate Limit,
it undertakes not to utilize its Short-Term Borrowing Authority to finance such
repurchases without a further Commission order approving such higher level of
short-term borrowing for the purpose of repurchasing Shares.
CSW will file a certificate of notification pursuant to Rule
24 within sixty days of the end of any quarterly period in which it repurchases
Shares from the Plans, which certificate will report: (1) the number of Shares
repurchased from each Plan; and (2) the aggregate purchase price paid for the
Shares so repurchased. Item 2. Fees, Commissions and Expenses.
An estimate of the fees and expenses to be paid or incurred by
CSW in connection with the proposed transactions is as follows:
Counsel Fees:
Milbank, Tweed, Hadley & McCloy ........ $ 5,000
Miscellaneous and incidental expenses
including travel, telephone and
postage ................................ 1,000
Total .................................... $ 6,000
Item 3. Applicable Statutory Provisions.
Sections 9(a), 10 and 12(c) of the Act and Rule 42
thereunder are or may be applicable to the transactions proposed herein. To the
extent that any other sections of the Act may be applicable to the proposed
transactions, CSW hereby requests appropriate authority thereunder. CSW believes
that numerous orders of the Commission provide precedent for the its repurchase
of common stock in general. See, e.g., Central and South West Corp., HCAR No.
25961 (Dec. 22, 1993); Entergy Corp., HCAR No. 25699 (Dec. 9, 1992); General
Public Utilities Corp., HCAR No. 25749 (Feb. 24, 1993); National Fuel Gas Co.,
HCAR No. 25052 (Mar. 9, 1990); American Electric Power Co., HCAR No. 25036 (Feb.
8, 1990). Indeed, in 1994, the Commission amended Rule 42 to permit most
repurchases of securities by a registered holding company and its subsidiaries
without Commission approval.
The Purchases for which authority is requested herein do not
qualify for the Rule 42 exemption because the Plans are affiliates of CSW. CSW
proposes to make Purchases at the market price that prevails at the time of such
Purchases and will make such Purchases from the Plans, which will be voluntary
sellers, pursuant to the terms and conditions of such plans. Thus, like stock
repurchases under Rule 42, the Purchases do not present the opportunity for
overreaching, cross-subsidization or the other abuses of the affiliate
relationship against which the Act protects. As such, the Purchases satisfy the
applicable standards of the Act and the rules thereunder. Rule 54
No proceeds from the proposed transactions will be used by CSW
or any subsidiary thereof for the direct or indirect acquisition of an interest
in an exempt wholesale generator, as defined in Section 32 of the Act ("EWG"),
or a foreign utility company, as defined in Section 33 of the Act ("FUCO"). Rule
54 promulgated under the Act states that in determining whether to approve the
issue or sale of a security by a registered holding company for purposes other
than the acquisition of an EWG or a FUCO, or other transactions by such
registered holding company or its subsidiaries other than with respect to EWGs
or FUCOs, the Commission shall not consider the effect of the capitalization or
earnings of any subsidiary which is an EWG or a FUCO upon the registered holding
company system if Rule 53(a), (b) and (c) are satisfied. As set forth below, all
applicable conditions set forth in Rule 53(a) are, and, assuming the
consummation of the transactions proposed herein, will be, satisfied and none of
the conditions set forth in Rule 53(b) exist or will exist as a result of the
transactions proposed herein thereby satisfying such provision and making Rule
53(c) inapplicable.
CSW's "aggregate investment" (as defined under Rule 53(a) of
the Act) in EWGs and FUCOs as of September 11, 1997 was approximately $921
million, or approximately 47% of $1,970 million, CSW's average consolidated
retained earnings for the four consecutive quarter periods ended June 30, 1997.
CSW thus satisfies Rule 53(a)(1). CSW will maintain and make available the books
and records required by Rule 53(a)(2). No more than 2% of the employees of the
Operating Subsidiaries will, at any one time, directly or indirectly, render
services to an EWG or FUCO in which CSW directly or indirectly owns an interest,
satisfying Rule 53(a)(3). And lastly, CSW will submit a copy of Item 9 and
Exhibits G and H of CSW's Form U5S to each of the public service commissions
having jurisdiction over the retail rates of CSW's operating utility
subsidiaries, satisfying Rule 53(a)(4). Item 4. Regulatory Approval.
No state or federal regulatory authority, other than the
Commission, has jurisdiction over the proposed transactions.
Item 5. Procedure.
The Company respectfully requests that the Commission issue no
later than September 19, 1997 the requisite notice under Rule 23 with respect to
the filing of this Application, such notice to specify a date not later than
October 13, 1997, as the date after which an order granting and permitting this
Application to become effective may be entered by the Commission and the
Commission enter not later than October 14, 1997, an appropriate order granting
and permitting this Application to become effective.
No recommended decision by a hearing officer or any other
responsible officer of the Commission is necessary or required in this matter.
The Division of Investment Management of the Commission may assist in the
preparation of the Commission's decision in this matter. There should be no
30-day waiting period between the issuance and the effective date of any order
issued by the Commission in this matter; and it is respectfully requested that
any such order be made effective immediately upon the entry thereof.
Item 6. Exhibits and Financial Statements.
Exhibit 1 - Revised Preliminary Opinion of Milbank, Tweed, Hadley &
McCloy, counsel to CSW.
Exhibit 2 - Revised Proposed Notice of Proceeding.
Exhibit 3 - Financial Statements per books and pro forma as of
June 30, 1997 of CSW and subsidiaries.
Item 7. Information as to Environmental Effects.
The Commission's action in this matter will not constitute any
major federal action having a significant effect on the human environment. To
the best of CSW's knowledge, no federal agency has prepared or is preparing an
environmental impact statement with respect to the proposed transactions.
<PAGE>
S I G N A T U R E
- - - - - - - - -
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, as amended, the undersigned company has duly caused this
document to be signed on its behalf by the undersigned thereunto duly
authorized.
Dated: October 10, 1997
CENTRAL AND SOUTH WEST CORPORATION
By:/s/ WENDY G. HARGUS
Wendy G. Hargus
Treasurer
<PAGE>
INDEX OF EXHIBITS
EXHIBIT TRANSMISSION
NUMBER EXHIBITS METHOD
- ------- -------- ------------
1 Revised Preliminary Opinion of Electronic
Milbank, Tweed, Hadley & McCloy,
counsel to CSW.
2 Revised Proposed Notice of Proceeding. Electronic
3 Financial Statements per books and pro ___
forma as of June 30, 1997 of CSW and
subsidiaries (previously filed).
EXHIBIT 1
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
October 10, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Central and South West Corporation
Form U-1 Application
Dear Sirs:
We refer to the Form U-1 Application (the "Application") under
the Public Utility Holding Company Act of 1935, as amended (the "1935 Act"),
filed by Central and South West Corporation ("CSW"), a Delaware corporation and
a registered holding company, for authority to repurchase up to twenty percent
of the issued and outstanding shares of CSW's common stock, par value $3.50 per
share, from its stock and employee benefit plans from time to time through
December 31, 2002 (the "Repurchases"), as more fully described in the
Application. We have acted as counsel for CSW in connection with the filing of
the Application.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of CSW, certificates of public
officials, certificates of officers and representatives of CSW and other
documents as we have deemed it necessary to require as a basis for the opinions
hereinafter expressed. In such examination we have assumed the genuineness of
all signatures and the authenticity of all documents submitted to us as
originals and the conformity with the originals of all documents submitted to us
as copies. As to various questions of fact material to such opinions we have,
when relevant facts were not independently established, relied upon certificates
by officers of CSW and other appropriate persons and statements contained in the
Application.
Based upon the foregoing, and having regard to legal
considerations which we deem relevant, we are of the opinion that, in the event
that the proposed Repurchases are consummated in accordance with the
Application, as it may be amended, and subject to the assumptions and conditions
set forth below:
1. All state laws applicable to the proposed Repurchases as
described in the Application will have been complied with.
2. The consummation of the proposed Repurchases as described
in the Application will not violate the legal rights of the lawful
holders of any securities issued by CSW or any associate company of
CSW.
The opinions expressed above in respect of the proposed
Repurchases as described in the Application are subject to the following
assumptions or conditions:
a. The Repurchases shall have been duly authorized and
approved to the extent required by state law by the
Board of Directors of the Companies.
b. The Securities and Exchange Commission shall have
duly entered an appropriate order or orders granting
and permitting the Application to become effective
with respect to the Repurchases described therein.
c. The Repurchases shall have been accomplished in
accordance with required approvals, authorizations,
consents, certificates and orders of any state
commission or regulatory authority with respect
thereto and all such required approvals,
authorizations, consents, certificates and orders
shall have been obtained and remain in effect at the
closing thereof.
d. No act or event other than as described herein shall
have occurred subsequent to the date hereof which
would change the opinions expressed above.
We hereby consent to the use of this opinion as an exhibit to
the Application.
Very truly yours,
MILBANK, TWEED, HADLEY & McCLOY
EXHIBIT 3
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35 - _______________)
Filings Under the Public Utility Holding Company Act of 1935 ("Act")
________________, 1997
Notice is hereby given that the following filing(s) has/have
been made with the Commission pursuant to the provisions of the Act and rules
promulgated thereunder. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the proposed
transaction(s) summarized below. The application(s) and/or declaration(s) and
any amendment(s) thereto is/are available for public inspection through the
Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing on
the application(s) and/or declaration(s) should submit their views in writing by
__________, 1997 to the Secretary, Securities and Exchange Commission,
Washington, D.C. 20549, and serve a copy on the relevant applicant(s) and/or
declarant(s) at the address(es) specified below. Proof of service (by affidavit
or, in the case of an attorney at law, by certificate) should be filed with the
request. Any request for hearing shall identify specifically the issues of fact
or law that are disputed. A person who so requests will be notified of any
hearing, if ordered, and will receive a copy of any notice or order issued in
the matter. After said date, the application(s) and/or declaration(s), as filed
or as amended, may be granted and/or permitted to become effective.
Central and South West Corporation, et al. (70- )
Central and South West Corporation ("CSW"), a registered
holding company located at 1616 Woodall Rodgers Freeway, Dallas, TX 75202 have
filed an application under Sections 9(a), 10 and 12(c) of the Act and Rule 42
thereunder.
CSW proposes to repurchase up to ten percent (approximately
21.22 million shares) of its outstanding common stock, par value $3.50
("Shares"), as of June 30, 1997, through purchases from its stock and employee
benefit plans, as described more fully below (pursuant to the terms and
conditions of such plans) from time to time through December 31, 2002
("Purchases"). In addition, CSW may engage in unlimited purchases of Shares
pursuant to the exemption provided by Rule 42 under the Act ("Exempt
Purchases"). CSW proposes to use its general funds and/or short-term borrowings
to finance its purchase of Shares up to twenty percent of its outstanding common
stock as of June 30, 1997 (the "Aggregate Limit") on an interim basis.
The objectives of the Purchases are to support the market
price of CSW's common stock, to facilitate any disaggregation or other
restructuring that may be mandated or made attractive by electric utility
restructuring legislation or the evolution of a competitive electricity
marketplace, to gain the flexibility to adjust its capital structure, and to
effectively utilize the proceeds of any system for stranded cost recovery
pursuant to electric utility restructuring legislation that may be adopted at
the federal or state level.
CSW seeks authority to repurchase Shares from the CSW Dividend
Reinvestment and Stock Purchase Plan (the "DRSPP"), which presently holds
approximately ten million Shares, and the CSW Retirement Savings Plan (the "RSP"
and, collectively with the DRSPP, the "Plans"), which presently holds
approximately eleven million Shares, pursuant to the terms and conditions of
those plans. The DRSPP, which was approved by the Commission by orders dated
October 4, 1993 (HCAR No. 25902), January 30, 1996 (HCAR No. 26465) and November
27, 1996 (HCAR No. 26616) in File No. 70-8087, is a stock plan through which
anyone can voluntarily make Share purchases directly from CSW. Individuals
holding Shares through the DRSPP can also sell such Shares through the DRSPP to
reduce their Share holdings. At present, the DRSPP administrator sells such
Shares into the market at the then-prevailing market price for Shares. CSW seeks
authority to purchase such Shares from the DRSPP from time to time at the market
price for Shares at the time of any such purchase.
The RSP is a voluntary employee benefit plan, which is a
401(k) savings plan, through which CSW employees can contribute a percentage of
their pay on a tax-advantaged basis to purchase Shares and other investments in
order to save for their retirement. When participants in the RSP wish to reduce
their holdings of Shares through the RSP, Shares are typically sold by the RSP
administrator into the market at the then-prevailing market price for Shares.
CSW requests authority to purchase such Shares from the RSP from time to time at
the market price for Shares at the time of any such purchase.
CSW intends to use its general funds and/or short-term
borrowings, including without limitation funds borrowed through its short-term
borrowing program previously authorized by order dated March 28, 1997 (HCAR No.
26697; File No. 70-8557) (the "Short-Term Borrowing Authority") to finance its
purchase of Shares up to the Aggregate Limit (whether by Purchases or Exempt
Purchases) on an interim basis, until such time as the amounts paid in respect
of repurchased shares are refinanced on a permanent basis or repaid using
internally generated funds, the proceeds of any issuance of preferred stock or
debt securities by CSW and/or its subsidiaries (either pursuant to separate
Commission authority or subject to further Commission approval), or the proceeds
of any system for stranded cost recovery pursuant to electric utility
restructuring legislation that may be adopted at the federal or state level.
Although CSW can engage in Exempt Purchases in unlimited
amounts, it will only use funds raised under its Short-Term Borrowing Authority
to acquire Shares, whether through Purchases or Exempt Purchases, up to the
Aggregate Limit. If CSW wishes to repurchase Shares above the Aggregate Limit,
it undertakes not to utilize its Short-Term Borrowing Authority to finance such
repurchases without a further Commission order approving such higher level of
short-term borrowing for the purpose of repurchasing Shares.
CSW will file a certificate of notification pursuant to Rule
24 within sixty days of the end of any quarterly period in which it repurchases
Shares from the Plans, which certificate will report: (1) the number of Shares
repurchased from each Plan; and (2) the aggregate purchase price paid for the
Shares so repurchased.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz
Secretary
