SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14(A) INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. _________)
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Check the appropriate box:
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Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
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GPU, INC.
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(Name of Registrant as Specified in Its Charter)
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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IMPORTANT LEGAL INFORMATION UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This newsletter contains forward-looking statements within the meaning
of the "safe harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995. Investors are cautioned that such
forward-looking statements with respect to revenues, earnings, performance,
strategies, prospects and other aspects of the businesses of FirstEnergy
Corp. and GPU, Inc. are based on current expectations that are subject to
risks and uncertainties. A number of factors could cause actual results or
outcomes to differ materially from those indicated by such forward-looking
statements. These factors include, but are not limited to, risks and
uncertainties set forth in FirstEnergy's and GPU's filings with the SEC,
including risks and uncertainties relating to: failure to obtain expected
synergies from the merger, delays in obtaining or adverse conditions
contained in any required regulatory approvals, changes in laws or
regulations, economic or weather conditions affecting future sales and
margins, changes in markets for energy services, changing energy market
prices, availability and pricing of fuel and other energy commodities,
legislative and regulatory changes (including revised environmental and
safety requirements), availability and cost of capital and other similar
factors. Readers are referred to FirstEnergy's and GPU's most recent
reports filed with the SEC.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed merger, FirstEnergy Corp. and GPU,
Inc. have filed a preliminary joint proxy statement/prospectus with the
SEC. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THIS JOINT PROXY
STATEMENT/PROSPECTUS AND, WHEN IT BECOMES AVAILABLE, THE DEFINITIVE JOINT
PROXY STATEMENT/PROSPECTUS. THE JOINT PROXY STATEMENT/PROSPECTUS CONTAINS
IMPORTANT INFORMATION. Investors and security holders may obtain a free
copy of the definitive joint proxy statement/prospectus (when available)
and other documents filed by FirstEnergy and GPU with the SEC at the SEC's
Web site at http://www.sec.gov. Free copies of the definitive joint proxy
statement/prospectus, once available, and each company's other filings with
the SEC may also be obtained from the respective companies. Free copies of
FirstEnergy's filings may be obtained by directing a request to FirstEnergy
Corp., Investor Services, 76 S. Main St., Akron, Ohio 44308-1890.
Telephone: 1-800-736-3402. Free copies of GPU filings may be obtained by
directing a request to GPU, Inc., 310 Madison Avenue, Morristown, New
Jersey 07962. Telephone: 1-973-401-8204.
FirstEnergy, its directors, certain executive officers, and certain
other employees (Thomas M. Welsh, Manager of Communications, and Kurt E.
Turosky, Manager of Investor Relations) may be deemed under the rules of
the SEC to be "participants in the solicitation" of proxies from the
security holders of FirstEnergy in favor of the merger. FirstEnergy's
directors and executive officers beneficially own, in the aggregate, less
than 1% of the outstanding shares of FirstEnergy common stock. Security
holders of FirstEnergy may obtain additional information regarding the
interests of the "participants in the solicitation" by reading the joint
proxy statement/prospectus relating to the merger.
GPU, its directors (Theodore H. Black, Fred D. Hafer (Chairman: CEO
and President), Thomas B. Hagen, Robert Pokelwaldt, John M. Pietruski,
Catherine A. Rein, Bryan S. Townsend, Carlisle A.H. Trost, Kenneth L. Wolfe
and Patricia K. Woolf), certain executive officers (Ira H. Jolles (Senior
Vice President and General Counsel), Bruce L. Levy (Senior Vice President
and CFO) and Carole B. Snyder (Executive Vice President Corporate Affairs))
and certain other employees (Jeff Dennard (Director of Corporate
Communications), Joanne Barbieri (Manager of Investor Relations) and Ned
Raynolds (Manager of Financial Communications)) may be deemed under rules
of the SEC to be "participants in the solicitation" of proxies from the
security holders of GPU in favor of the merger. GPU's directors and
executive officers beneficially own, in the aggregate, less than 1% of the
outstanding shares of GPU common stock. Security holders of GPU may obtain
additional information regarding the interests of "participants in the
solicitation" by reading the joint proxy statement/prospectus relating to
the merger.
<PAGE>
MERGER QUESTIONS AND ANSWERS
Here are some questions and answers about the pending merger between
GPU, Inc. and FirstEnergy Corp. as they relate to generation.
o SINCE FIRSTENERGY HAS GENERATION, ARE WE GOING TO GET BACK INTO
GENERATION? OR, DOES OUR VISION CONTINUE TO BE THE DELIVERY BUSINESS
ONLY?
FirstEnergy's ownership of generation does not change GPU's
planned business focus of providing infrastructure and infrastructure
services. The access to generation will increase the type of
non-regulated products and services we will offer as a combined
company. FirstEnergy also owns gas reserves and has marketing rights
to some of the output.
o WILL THIS MERGER HELP WITH OUR CAPPED GENERATION RATE? (PROVIDER OF
LAST RESORT) IS GPU GOING TO USE FIRSTENERGY'S GENERATION?
While it is expected that FirstEnergy's generation plants will be
able to serve some of GPU's customers, FirstEnergy does not really
have excess capacity during the high-demand, on-peak load periods.
FirstEnergy is planning to construct several new gas-fired peaking
units that may be able to serve some of the demand of GPU customers.
o WHY DID WE GET RID OF OUR GENERATION AND THEN PARTNER WITH A COMPANY
WHO STILL HAS GENERATION? DOES THIS MEAN A CHANGE IN STRATEGY ON
GENERATION?
The reasons behind GPU's divestiture of generation have not
changed. A large percentage of the portfolio of plants owned and
operated by GPU were small and inefficient and would not be
competitive on their own. Those plants would be more valuable to an
operator that had significant additional capacity and was interested
in investing significant amounts of money to build a regional or
national trading business. FirstEnergy's generation portfolio is quite
different with several large efficient fossil powered units and
several large nuclear units.
o WHAT TYPES OF GENERATION DOES FIRSTENERGY OWN? (COAL, NUCLEAR, ETC.)
FirstEnergy owns 16 power stations with a combined output of more
than 12,000 megawatts (Mw). The stations include 7,470 Mw of coal fired
generation, 3,700 Mw of nuclear generation and nearly 900 Mw of pumped
storage, and oil/gas fired units.
o SINCE FIRSTENERGY HAS MAINTAINED A GENERATION COMPONENT, DOES OR WILL
THIS MERGER/ACQUISITION HAVE ANY IMPACT ON WHAT IS GOING TO BE DONE
WITH YARDS CREEK OR FORKED RIVER? HAS OUR STRATEGY CHANGED SUCH THAT
WE WILL STAY IN GENERATION AND KEEP THESE UNITS WITH GPU/FIRSTENERGY?
Under the terms of the merger agreement, FirstEnergy will have to
approve any sale of GPU generation assets. Ongoing negotiations
regarding the sale of Yards Creek will continue subject to final
approval by FirstEnergy. Assets such as Forked River and York Haven,
where no active negotiations are underway, will not be offered for
sale during the transition period.
o ARE WE GOING TO CONVINCE FIRSTENERGY TO DIVEST GENERATION?
The merger was not planned based on FirstEnergy divesting its
generating assets. These plants are an integral part of FirstEnergy's
business plan.
o WITH THIS MERGER, WOULD WE CONSIDER BUYING BACK GENERATION?
Once the merger is completed, management will determine whether
additional generation assets would be desirable and, if so, which type
of assets should be added.
o SINCE FIRSTENERGY OWNS GENERATION, DOES THIS MEAN THAT GPU NOW ADMITS
THAT THEY WERE WRONG IN GETTING RID OF THEIR GENERATION PLANTS?
See answer to question 3.
o DOES FIRSTENERGY HAVE A SEPARATE GENERATION COMPANY?
FirstEnergy separated generation from its transmission and
distribution utilities. The generation business is part of its
unregulated retail operators.
o HOW MUCH EXCESS GENERATION DOES FIRSTENERGY HAVE TO GIVE US?
FirstEnergy has significant generation available during off-peak
and mid-peak hours. Studies are under way to consider how such supply
may help address GPU energy needs. While FirstEnergy currently does
not have excess on-peak generation capacity to support GPU needs, it
is planning the construction of several new gas-fired peaking units.
Also, next year shopping will be introduced to Ohio customers. To the
extent customers leave, they will free up capacity that could possibly
be used to serve GPU load.
o WHAT IS FIRSTENERGY'S STAND/PHILOSOPHY ON OWNING GENERATION?
FirstEnergy is committed to owning and operating generation
capacity through the region.
o IS FIRSTENERGY LOOKING TO EXPAND GENERATION? IF SO, HOW? WHY DID GPUE
DECIDE TO SELL ALL OF ITS GENERATION?
See answers to question 3 and 10.
o QUESTIONING THE DEREGULATION OUT WEST - IS IT REALLY WORKING
EFFECTIVELY? WHAT WE ARE DOING DOESN'T MAKE SENSE - SELLING
GENERATION? WAS THIS A DESPERATION MERGER?
We expect that the merger will create a combined company that is
bigger, stronger and more able to compete than either company would be
alone. The last two years have illustrated that the uncertainty in the
market will increase rapidly during this transition from a regulated
to a competitive system. Being strong will help both companies during
the transition. While we expect GPU to be better off as a result of
the merger, we entered into the deal not out of desperation but as a
deliberate move to create improved opportunities for our employees and
returns for our shareholders.
