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SCHEDULE 14A 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:
/ / Preliminary Proxy Statement
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14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
AMERICAN ELECTRIC POWER CO., INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Vote FOR
the merger to create the
nation's preeminent
diversified electric utility
company.
Dear Fellow AEP Shareholder,
AEP recently mailed you proxy materials regarding our proposed merger with
Central and South West Corporation. This brochure provides a brief overview of
the benefits of and frequently asked questions about our merger and explains why
I believe this will enhance your investment in AEP.
I strongly believe that the merger with CSW offers significant opportunities to
AEP shareholders and is an excellent way for AEP to strengthen its position in
the coming competitive market. CSW has many strengths, among them a generation
and transmission system that complements our own extremely well; an
international presence in Latin America where we currently have no operations,
and a corporate culture and philosophy about the future of the industry that
meshes with ours. I believe that CSW is an ideal fit with AEP.
Going forward, AEP and CSW will be the largest electric utility company in the
country in terms of generation and number of customers. We'll have a large
presence in the growing Southwest and expanded expertise with a diverse base of
fuels for generation. We'll be extremely well poised for growth domestically and
abroad.
AEP shareholders are not required to approve the merger itself, but rather to
approve an increase in the number of common shares of stock that can be issued
in order to facilitate the merger. That is one of the primary issues that will
be on the ballot at the annual shareholders meeting to be held in Columbus.
AEP's management team and board of directors urge you to return your proxy card
today to vote for the increase in the number of shares that can be issued so
that this merger can move forward. With your help, the new AEP will compete
successfully nationally and internationally. Thank you for helping us lead our
company into the competitive future.
Sincerely,
/s/ E. Linn Draper, Jr.
E. Linn Draper, Jr.
Chairman, President and Chief Executive Officer
<PAGE>
Vote
FOR:
* Cost Savings and Improved Operations
* Competitive Prices and Services
* Greater Diversification
* Increased Scale and Growth
* Financial Strength
For additional information or questions on
voting for the merger, please call toll-free:
1-800-566-9061.
VOTE TODAY!
<PAGE>
Vote
FOR:
Cost Savings
and Improved Operations
The combined company expects merger-related net savings of approximately $2
billion over the next 10 years through:
* Greater efficiencies in operations and business processes
* Elimination of duplication in corporate and
administrative programs and positions
* Improved purchasing power
* Expanded customer relationships using combined
distribution channels
[GRAPH] [GRAPH]
Vote
FOR:
Competitive Prices
and Services
The merger will create a company better able to meet the needs of customers in
the face of increased competition. The merger also will create operating
efficiencies that allow the
<PAGE>
combined company to continue to produce and deliver low-cost power which is
below the industry average.
[GRAPH]
Vote
FOR:
Greater Diversification
This merger will create a company that is diverse in its fuels, its power
generation and its service area.
In addition, the combined company will immediately be able to:
* serve a larger and more diverse base
of customers
* enhance economic
and competitive position
* enhance fuel mix
[MAP]
AEP/CSW Service Territories
States served by AEP/CSW
<PAGE>
Combined Domestic Territory
After Merger
[MAP]
Increased Scale and Growth
The combined company will serve more than 4.6 million customers in 11 states and
4 million customers outside the United States. The merger is expected to improve
revenue by doubling the worldwide customer base.
American Electric Power
* AEP Resources, Inc.
* AEP Resources Service Company
* AEP Communications, Inc.
* AEP Investments, Inc.
* AEP Energy Services, Inc.
American Electric Power
* Leeds, United Kingdom
* Toronto, Canada
* Beijing, China
* Sydney, Australia
Central and South West
<PAGE>
* CSW Energy, Inc./CSW
International, Inc.
* C3 Communications, Inc.
* EnerShop Inc.
* CSW Energy Services, Inc.
* CSW Credit, Inc.
* CSW Leasing, Inc.
Central and South West
* Crawley, United Kingdom
* Sao Paulo, Brazil
* Mexico City, Mexico
* Altamira, Mexico
Financial Strength
Historically, AEP and CSW have each maintained a strong financial position.
Together we will be even stronger. By having this stronger financial base, the
combined company is expected to increase its financial flexibility and improve
its position in the financial markets.
[PICTURE]
Questions & Answers
Q What am I being asked to vote on?
A You are being asked to increase the number of shares of common stock
that AEP can issue to facilitate the merger of CSW into AEP.
<PAGE>
Q How will the shareholders of AEP benefit?
A The merger will better position AEP and CSW to compete in energy
markets worldwide. The United States energy markets are moving away
from regulated monopolies and toward competition. A combined AEP and
CSW will have greater financial and marketing resources as well as an
expanded international presence and a more diverse base of generating
capacity. Added value will be created through cost savings and improved
operations, competitive prices and services, greater diversification
and increased scale and growth.
Q How will this merger occur?
A AEP shareholders must authorize the increased number of shares in order
for the merger to move forward. CSW shareholders must approve the
merger. Once the shareholders of both companies have voted
affirmatively, the merger must be presented to various regulatory
bodies, such as state regulatory agencies, the Securities and Exchange
Commission and the Federal Energy Regulatory Commission.
Q What do I need to do now?
A Just sign and return your proxy card in the enclosed return envelope as
soon as possible so that your shares can be voted at the shareholder
meeting. Recordholders also can vote by telephone or the Internet.
Instructions are on the proxy card.
Q What will be the effect of the merger on AEP stock?
A The exchange of shares of CSW common stock for the shares of AEP common
stock will slightly dilute AEP's earnings in the first few years, but
will add to AEP's cash flow from day one. After the initial dilution,
we believe AEP's earnings will grow faster than if there had not been a
merger.
Q When do you expect the merger to be completed?
A We are working to complete the merger as quickly as possible. Because
we must secure the approval of a number of regulatory agencies, we
don't expect the merger to be complete before the first half of 1999.
Q What happens to my future dividend?
A AEP's current dividend is $2.40 a year and AEP does not anticipate
making any change to its dividend policy after the merger, although
future dividends will be determined quarterly by the Board of
Directors. The Company has successfully lowered its dividend payout
ratio by growing earnings rather than cutting the dividend.
<PAGE>
AEP's board of directors and
management team urge you
to vote FOR the merger Today!
Remember . . .
Not returning your proxy card or abstaining
has the effect of a vote against the merger.
For additional information or questions on
voting for the merger, please call toll-free:
1-800-566-9061
