<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )(1)
PUGET SOUND POWER & LIGHT COMPANY
- - --------------------------------------------------------------------------------
(NAME OF ISSUER)
COMMON STOCK, STATED VALUE $10 PER SHARE
- - --------------------------------------------------------------------------------
(TITLE OF CLASS OF SECURITIES)
74533210
- - --------------------------------------------------------------------------------
(CUSIP NUMBER)
Robert J. Tomlinson
Senior Vice President, General Counsel and Secretary
Washington Energy Company
815 Mercer Street
Seattle, Washington 98109
(206) 622-6767
- - --------------------------------------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
with copies to:
Marion V. Larson
Riddell, Williams, Bullitt & Walkinshaw
1001 Fourth Avenue
Plaza Building, Suite 4400
Seattle, Washington 98154
(206) 389-1798
and
David B. Chapnick
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
(212) 455-2000
October 18, 1995
- - --------------------------------------------------------------------------------
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
--------------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
<PAGE> 2
Check the following box if a fee is being paid with the statement /x/.
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of less than five percent of
such class. See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
(Page 1 of __ Pages)
<PAGE> 3
SCHEDULE 13D
- - -------------------------------- -----------------------------------
CUSIP No. 74533210 Page 2 of 10 Pages
- - -------------------------------- -----------------------------------
- - --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Washington Energy Company
IRS Identification No. 91-1005304
- - --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- - --------------------------------------------------------------------------------
3 SEC USE ONLY
- - --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC, OO (See Item 3)
- - --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED TO ITEMS 2(d)
or 2(e)
/ /
N/A
- - --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Washington
- - --------------------------------------------------------------------------------
7 SOLE VOTING POWER
12,664,531+
---------------------------------------------------------
NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY EACH 0
REPORTING PERSON ---------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
12,664,531+
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- - --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,664,531+
- - --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
N/A
- - --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.6%
- - --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- - --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
+ Beneficial ownership disclaimed with respect to 12,664,531 shares.
See Item 5 below.
<PAGE> 4
4
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D relates to the Common Stock,
stated value $10 per share ("Company Common Stock"), of Puget Sound Power &
Light Company, a Washington corporation (the "Company" or "Puget"). The
principal executive offices of the Company are located at 411 108th Avenue N.E.,
Bellevue, Washington 98004-5515.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c), (f) This Statement is being filed by Washington Energy
Company, a Washington corporation ("WECO"). WECO is a holding company whose
principal subsidiary is Washington Natural Gas Company, a Washington corporation
("WNG"). WNG is the largest retail gas distribution utility in the Pacific
Northwest serving approximately 468,000 customers in five counties in western
Washington state, including the Greater Seattle area. WECO also has certain
non-utility subsidiaries. The address of WECO's principal business and executive
offices is 815 Mercer Street, Seattle, Washington 98109.
Pursuant to General Instruction C of Schedule 13D, the name,
business address, present principal occupation or employment and the name and
principal business and address of any corporation or other organization in which
such employment is conducted of each director and executive officer of WECO are
set forth on Schedule I hereto and are incorporated herein by reference. Each of
such persons is a citizen of the United States.
(d), (e) During the last five years, neither WECO nor, to the
best knowledge of WECO, any of its executive officers or directors named in
Schedule I hereto has (i) been convicted in any criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or finding any violations with
respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Concurrently with entering into the Merger Agreement (as
defined in Item 4 below), WECO was granted the Option (as defined in Item 4
below). None of the triggering events permitting exercise of the Option have
occurred as of the date of this Schedule 13D. In the event that the Option
becomes exercisable and WECO wishes to purchase for cash the Company Common
Stock subject thereto, WECO will fund the exercise price from working capital or
through other sources, which could include borrowings.
ITEM 4. PURPOSE OF TRANSACTION.
WECO, WNG and the Company have entered into an Agreement and
Plan of Merger, dated as of October 18, 1995 (the "Merger Agreement"), which
provides for a strategic business combination involving WECO, WNG and the
Company in a "merger-of-equals" transaction (the "Merger"). The Merger, which
was unanimously approved by the Boards of Directors of WECO, WNG and the
Company, is expected to close shortly after all of the conditions to the
consummation of the Merger, including obtaining applicable regulatory approvals,
are met or waived. The regulatory approval process is expected to be completed
within 12 months.
The Merger Agreement is incorporated herein by reference to
Exhibit 2.1 to WECO and WNG's Current Report on Form 8- K dated October 18, 1995
(the "WECO Form 8-K"), as filed with the Securities and Exchange Commission (the
"Commission") on October 23, 1995. The description of the Merger Agreement set
forth herein does not purport to be complete and is qualified in its entirety by
the provisions of the Merger Agreement.
At the time of effectiveness of the Merger (the "Effective
Time"), each of WECO and WNG will be merged with and into the Company, with the
Company being the surviving corporation (after the Effective Time, referred to
herein as the "Surviving Corporation"). As a result of the Merger, each
outstanding share of Common Stock, par value $5 per share, of WECO ("WECO Common
Stock") will be converted into the right to receive .860 shares of Common Stock,
stated value $10 per share, of the Surviving Corporation ("New Common Stock"),
which
<PAGE> 5
5
will include the associated purchase rights under the Rights Agreement, dated as
of January 15, 1991, between the Company and The Bank of New York (as successor
to The Chase Manhattan Bank, N.A.), as amended. Each outstanding share of a
series of Preferred Stock, par value $25 per share, of WNG ("WNG Preferred
Stock") will be converted into the right to receive one share of a series of
Preferred Stock, par value $25 per share, of the Surviving Corporation ("New
Preferred Stock") having substantially the same rights and preferences as the
WNG Preferred Stock which is so converted. Pursuant to the Merger Agreement, if,
at the shareholders meetings called in connection with the Merger, the required
approval of the holders of the WECO Common Stock and of the holders of the
Company Common Stock is obtained, but the approval of the holders of the WNG
Preferred Stock is not obtained, then at the Effective Time, only WECO will be
merged with and into the Company (the "Alternate Merger"; as used herein, the
term "Merger" shall refer to the merger of WECO and WNG with and into the
Company as set forth above or the Alternate Merger, as applicable). If the
Alternate Merger is effected, WNG will become a subsidiary of the Surviving
Corporation after the Merger and the WNG Preferred Stock will remain outstanding
and will not be converted as described above. Prior to the Effective Time, WECO
and the Company will jointly select a new name for the Surviving Corporation.
It is expected that the Surviving Corporation will follow the
dividend policy currently followed by the Company. The Company currently pays a
dividend of $1.84 annually per share of Company Common Stock and WECO currently
pays a dividend of $1.00 annually per share of WECO Common Stock.
The Merger Agreement contains certain covenants of the parties
pending the consummation of the Merger. Generally, the parties must carry on
their businesses in the ordinary course consistent with past practice, may not
increase dividends on their common stock, and, subject to limited exceptions,
may not issue any capital stock. The Merger Agreement also requires consent from
both WECO and the Company for either to make, among other things, certain
charter and bylaw amendments; capital expenditures, acquisitions, dispositions,
or incurrence of indebtedness above specified levels; certain increases in
employee compensation and benefits; and certain affiliate transactions. (See
Article VI of the Merger Agreement.)
The Merger is subject to the receipt of the approval of the
holders of two-thirds of the outstanding shares of WECO Common Stock and Company
Common Stock and two-thirds of the outstanding shares of both series of WNG
Preferred Stock (each voting separately as a class). The Merger is also subject
to customary closing conditions, including, without limitation, the receipt of
all necessary governmental approvals and the making of all necessary
governmental filings, including the approval of the Washington Utilities and
Transportation Commission, and the filing of the requisite notification with the
Federal Trade Commission and the Department of Justice under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
expiration of the applicable waiting periods thereunder. The Merger is also
subject to receipt of assurances from the Internal Revenue Service or opinions
of counsel that the Merger will qualify as a tax-free reorganization, and
assurances from the parties' independent accountants that the Merger will
qualify as a pooling of interests for accounting purposes. In addition, the
Merger is conditioned upon the effectiveness of a registration statement to be
filed with the Securities and Exchange Commission with respect to the New Common
Stock and New Preferred Stock issuable in the Merger and the approval for
listing of such shares on the New York Stock Exchange. (See Article VIII of the
Merger Agreement.) Shareholder meetings to vote upon the Merger are expected to
be held in early 1996.
After the Effective Time, the corporate headquarters and
principal executive offices of the Surviving Corporation will be located in
Bellevue, Washington. The Merger Agreement provides that the Surviving
Corporation's Board of Directors, which will be divided into three classes, will
consist of up to 15 directors, two-thirds of whom will be designated by the
Company and one-third of whom will be designated by WECO. Mr. Richard R.
Sonstelie, the current President and Chief Executive Officer of the Company,
will serve as Chairman of the Board and Chief Executive Officer of the Surviving
Corporation after the Merger, and Mr. William P. Vititoe, the current Chairman
of the Board, Chief Executive Officer and President of WECO and WNG, will serve
as President and Chief Operating Officer of the Surviving Corporation after the
Merger. Mr. William S. Weaver, the current Executive Vice President and Chief
Financial Officer of the Company, will serve as Vice Chairman of the Surviving
Corporation after the Merger, and Mr. James P. Torgerson, the current Executive
Vice President, Chief Administrative Officer and Chief Financial Officer of WECO
and WNG, will serve as Chief Financial Officer of the Surviving Corporation
after the Merger.
<PAGE> 6
6
The Merger Agreement may be terminated under certain
circumstances, including (1) by mutual consent of the parties; (2) by any party
if the Merger is not consummated by December 31, 1996 (provided, however, that
such termination date shall be extended to March 31, 1997 if all conditions to
closing the Merger, other than the receipt of certain consents and/or statutory
approvals by any of the parties, have been satisfied by December 31, 1996); (3)
by any party if WECO's common shareholders vote against the Merger or the
Company's common shareholders vote against the Merger or certain other matters
related thereto or if any state or federal law or court order prohibits the
Merger; (4) by a non-breaching party if there exist breaches of any
representations or warranties contained in the Merger Agreement as of the date
thereof, which breaches, individually or in the aggregate, would result in a
material adverse effect on the breaching party and which are not cured within
twenty (20) days after notice; (5) by a non-breaching party if there occur
material breaches of any covenant or agreement which are not cured within twenty
(20) days after notice; (6) by either party if the Board of Directors of the
other party shall withdraw or adversely modify its recommendation of the Merger
or shall approve any competing transaction; or (7) by either party, under
certain circumstances, as a result of a third-party tender offer or business
combination proposal which such party, pursuant to its directors' fiduciary
duties, is, in the opinion of such party's counsel and after the other party has
first been given an opportunity to make concessions and adjustments in the terms
of the Merger Agreement, required to accept.
The Merger Agreement provides that if a breach described in
clause (4) or (5) of the previous paragraph occurs, then, if such breach is not
wilful, the non-breaching party will be entitled to reimbursement of its
out-of-pocket expenses, not to exceed $7 million. In the event of a wilful
breach, the non-breaching party will be entitled to its out-of-pocket expenses
(which shall not be limited to $7 million) and any remedies it may have at law
or in equity, provided that if, at the time of the breaching party's wilful
breach, there shall have been a third party tender offer or business combination
proposal which shall not have been rejected by the breaching party and withdrawn
by the third party, and within two and one-half years of any termination by the
non- breaching party, the breaching party accepts an offer to consummate or
consummates a business combination with such third party, then such breaching
party, upon the signing of a definitive agreement relating to such a business
combination, or, if no such agreement is signed then at the closing of such
business combination, will pay to the non-breaching party an additional fee
equal to $15 million. The Merger Agreement also requires reimbursement of
out-of-pocket expenses (which shall not be limited to $7 million) by one party
(the "Payor") to the other in certain circumstances, if (i) the Merger Agreement
is terminated (x) as a result of the acceptance by the Payor of a third-party
tender offer or business combination proposal or if the Board of Directors of
the Payor shall withdraw or adversely modify its recommendation of the Merger or
shall approve any competing transaction, (y) following a failure of the Payor to
obtain the requisite shareholder approval to the Merger or (z) as a result of
the Payor's material failure to convene a shareholders meeting, distribute proxy
materials and, subject to its board of directors' fiduciary duties, recommend
the Merger to its shareholders and (ii) at the time of such termination or prior
to the meeting of such party's shareholders there shall have been a third-party
tender offer or business combination proposal. In addition, the Merger Agreement
requires the Payor to pay a termination fee of $15 million if within two and
one-half years of any such termination described in the preceding sentence, the
Payor accepts an offer to consummate or consummates a business combination with
such third party. Such termination fee shall be paid upon the signing of a
definitive agreement between Payor and the third party, or, if no such agreement
is signed, then at the closing of such third-party business combination. The
termination fees payable by WECO or the Company under these provisions and the
aggregate amount which could by payable by WECO or the Company upon a required
purchase of the options granted pursuant to the Stock Option Agreements (defined
below) may not exceed $20 million in the aggregate (including reimbursement for
fees and expenses payable pursuant to these provisions). (See Article IX of the
Merger Agreement.)
Concurrently with entering into the Merger Agreement, WECO and
the Company entered into reciprocal stock option agreements whereby each granted
the other, for no additional consideration, an irrevocable option to purchase
under certain circumstances up to that number of shares of common stock of the
other company which equals 19.9% of the number of shares of common stock of the
other company outstanding on October 18, 1995 (collectively, the "Stock Option
Agreements"). Specifically, under the Puget Sound Power & Light Company Stock
Option Agreement (the "Puget Stock Option Agreement"), Puget granted WECO an
irrevocable option to purchase (the "Option") up to 12,664,531 shares (subject
to adjustment for changes in capitalization) of Company Common Stock at an
exercise price of $23.25 per share under certain circumstances if the Merger
Agreement becomes terminable by WECO as a result of Puget's breach or as a
result of Puget becoming the subject of a third-
<PAGE> 7
7
party proposal for a business combination. The exercise price is payable, at
WECO's election, in cash or shares of WECO Common Stock. If the Option becomes
exercisable, WECO may request the Company to repurchase from WECO all or any
portion of the Option (or if the Option is exercised, to repurchase from WECO
all or any portion of the acquired shares of Company Common Stock) at the price
specified in the Puget Stock Option Agreement.
Each party to the Stock Option Agreements has agreed to vote,
prior to October 18, 2000, any shares of the capital stock of the other party
acquired pursuant to the Stock Option Agreements or otherwise beneficially owned
by such party on each matter submitted to a vote of shareholders of such other
party for and against such matter in the same proportion as the vote of all
other shareholders of such other party are voted for and against such matter.
The Stock Option Agreements provide that, prior to October 18,
2000, neither party may sell, assign, pledge or otherwise dispose of or transfer
the shares its acquires pursuant to the Stock Option Agreements (collectively,
the "Restricted Shares") except as specifically provided for in the Stock Option
Agreements. In addition to the repurchase rights mentioned above, subsequent to
the termination of the Merger Agreement, the parties have the right to have such
shares of the other party registered under the Securities Act of 1933 for sale
in a public offering, unless the issuer of the shares elects to repurchase them
at their then market value. The Stock Option Agreements also provide that,
following the termination of the Merger Agreement, either party may sell any
Restricted Shares pursuant to a tender or exchange offer approved or
recommended, or otherwise determined to be fair and in the best interests of
such other party's shareholders, by a majority of the Board of Directors of such
other party.
The Stock Option Agreements are incorporated herein by
reference to Exhibits 2.2 and 2.3 to the WECO Form 8-K. The description of the
Stock Option Agreements set forth herein does not purport to be complete and is
qualified in its entirety by the provisions of the Stock Option Agreements.
Pursuant to a Letter Agreement dated August 1, 1995 between
WECO and the Company (the "Confidentiality Agreement"), for a period commencing
on August 1, 1995 and ending August 1, 1997 the parties have agreed (other than
as contemplated in the Merger Agreement or the Stock Option Agreements), among
other things, not to (i) acquire, offer to acquire or agree to acquire any
voting securities or rights to acquire voting securities of the other party or
any subsidiary thereof of any substantial portion of the others party's assets;
(ii) make or participate in a solicitation of proxies for the other party; (iii)
form, join or participate in a "group" with respect to the vesting securities of
the other party; (iv) seek or propose to influence or control the management or
policies of the other party; or (v) advise, assist or encourage any third party
with respect to any of the foregoing. Such restrictions will terminate if any
third party (i) acquires or proposes to acquire more than 15% of the voting
securities of either party; (ii) makes or publicly announces a solicitation of
proxies for either party or (iii) publicly announces any other arrangement with
respect to a business combination with either party. The Confidentiality
Agreement is filed as an Exhibit to this Schedule 13D and is incorporated herein
by reference. The description of the Confidentiality Agreement set forth herein
does not purport to be complete and is qualified in its entirety by the
provisions of the Confidentiality Agreement.
Except as set forth in this Item 4, the Merger Agreement, the
Stock Option Agreements and the Confidentiality Agreement, neither WECO nor, to
the best of WECO's knowledge, any of the individuals named in Schedule I hereto,
has any plans or proposals which relate to or would result in any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a), (b) By reason of its execution of the Puget Stock Option
Agreement, pursuant to Rule 13d-3(d)(1)(i) promulgated under the Securities
Exchange Act of 1934, WECO may be deemed to have sole voting and dispositive
power with respect to the Company Common Stock subject to the Option and,
accordingly, may be deemed to beneficially own 12,664,531 shares of Company
Common Stock, or approximately 16.6% of the Company Common Stock outstanding on
October 18, 1995, assuming exercise of the Option. However, WECO expressly
disclaims any beneficial ownership of the 12,664,531 shares of Company Common
Stock which are obtainable by WECO upon exercise of the Option, because the
Option is exercisable only in the
<PAGE> 8
8
circumstances set forth in Item 4, none of which has occurred as of the date
hereof. Furthermore, even if events did occur which rendered the Option
exercisable, WECO believes it would be a practical impossibility to obtain
regulatory approvals necessary to acquire shares of Company Common Stock
pursuant to the Option within 60 days. The number of shares of Company Common
Stock, if any, owned by each of the directors and executive officer of WECO is
set forth in Schedule I hereto opposite the name of such director or executive
officer.
(c) Except as set forth above, neither WECO nor, to the best of
WECO's knowledge, any of the individuals named in Schedule I hereto, has
effected any transaction in the Company Common Stock during the past 60 days.
(d) So long as WECO has not purchased the Company Common Stock
subject to the Option, neither WECO nor, to the best knowledge of WECO, any of
the individuals named in Schedule I hereto, has the right to receive or the
power to direct the receipt of dividends from, or proceeds from the sale of, any
of the Company Common Stock.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
The Merger Agreement contains certain customary restrictions on
the conduct of the business of the Company pending the Merger, including certain
customary restrictions relating to the Company Common Stock. Except as provided
in the Merger Agreement, the Stock Option Agreements and the Confidentiality
Agreement, or as set forth herein, neither WECO nor, to the best of WECO's
knowledge, any of the individuals named in Schedule I hereto, has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to any securities of the Company, including, but not limited
to, transfer or voting of any securities of the Company, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following exhibits are incorporated by reference from the
WECO Form 8-K:
2.1 Agreement and Plan of Merger, dated as of October 18,
1995, among WECO, WNG and the Company (filed as
Exhibit 2.1 to the WECO Form 8-K).
2.2 Puget Stock Option Agreement, dated as of October 18,
1995 (filed as Exhibit 2.2 to the WECO Form 8-K).
2.3 WECO Stock Option Agreement, dated as of October 18,
1995 (filed as Exhibit 2.3 to the WECO Form 8-K).
99.1 Joint Press Release of WECO and the Company,
issued October 18, 1995 regarding the Merger (filed as
Exhibit 99.1 to the WECO Form 8-K).
The following exhibit is filed herewith:
2.4 Letter Agreement, dated August 1, 1995, between WECO
and the Company.
<PAGE> 9
9
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
WASHINGTON ENERGY COMPANY
By: /s/ James P. Torgerson
-----------------------------
Name: James P. Torgerson
Title: Executive Vice President, Chief Administrative
Officer and Chief Financial Officer
Dated: October 27, 1995
<PAGE> 10
10
SCHEDULE I
INFORMATION RELATING TO DIRECTORS AND EXECUTIVE OFFICERS
WASHINGTON ENERGY COMPANY
The following is a list of the directors and executive officers of
Washington Energy Company ("WECO"), and the number of shares of Company Common
Stock, if any, owned by each such director and executive officer, as of the date
of this Schedule 13D. Each director and executive officer that owns shares of
Company Common Stock has sole voting and dispositive power with respect to such
shares. Unless otherwise indicated, the business address for each of the
executive officers is 815 Mercer Street, Seattle, Washington 98109. Unless
otherwise indicated, each occupation set forth opposite an executive officer's
name refers to employment with WECO and Washington Natural Gas Company.
<TABLE>
<CAPTION>
<S> <C> <C>
Present Principal Occupation Number of Shares of
Name or Employment and Address Company Common Stock Owned
---- -------------------------------- --------------------------
DIRECTORS
Virginia Anderson Director None
Seattle Center, City of Seattle
305 Harrison Street
Seattle, Washington 98109
Robert F. Bailey President None
Trans Republic Energy, L.P.
415 West Wall, #703
Midland, Texas 79702
Donald J. Covey Chairman of the Board None
Covey Corporation
5002 47th Avenue N.E.
Seattle, Washington 98105
John W. Creighton, Jr. President and Chief Executive Officer None
Weyerhaeuser Company
33663 Weyerhaeuser Way South
Federal Way, Washington 98003
Robert L. Dryden Executive Vice President None
Boeing Commercial Airplane Group
8th and Park Avenues
10-60 Building
Renton, Washington 98055
Robert R. Golliver President and Chief Operating Officer None
Washington Energy Company
815 Mercer Street
Seattle, Washington 98109
</TABLE>
<PAGE> 11
11
<TABLE>
<S> <C> <C>
Tomio Moriguchi Chairman of the Board and Chief Executive Officer None
Uwajimaya, Inc.
4601 6th Ave. S.
Seattle, Washington 98108
Sally G. Narodick Chairman and Chief Executive Officer None
Edmark Corporation
6727 185th Ave N.E.
Redmond, Washington 98052
William P. Vititoe Chairman of the Board and Chief Executive Officer 100
Washington Energy Company and Washington Natural Gas Company
815 Mercer Street
Seattle, Washington 98109
EXECUTIVE OFFICERS
Donald H. Gessell President 100
Washington Energy Services Company
815 Mercer Street
Seattle, Washington 98109
James W. Gustafson Senior Vice President-Operations None
Washington Natural Gas Company
815 Mercer Street
Seattle, Washington 98109
Allyn P. Hebner Vice President and Chief Accounting Officer None
Timothy J. Hogan Executive Vice President, Chief None
Operating Officer
Robert J. Tomlinson Senior Vice President-Legal and Administration None
James P. Torgerson Executive Vice President, Chief Administrative Officer and Chief None
Financial Officer
William P. Vititoe Chairman of the Board, Chief Executive Officer and President (See above)
William J. Wortley Senior Vice President - Public Affairs None
Washington Natural Gas Company
815 Mercer Street
Seattle, Washington 98109
</TABLE>
<PAGE> 12
12
WASHINGTON ENERGY COMPANY
SCHEDULE 13D
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- - ----------- ----------- ----
<S> <C> <C>
2.1 Agreement and Plan of Merger, dated as of
October 18, 1995, among Washington Energy
Company ("WECO"), Washington Natural Gas
Company ("WNG") and Puget Sound Power & Light
Company ("Puget") (Incorporated by reference to
Exhibit 2.1 to the Current Report on Form 8-K
of WECO and WNG dated October 18, 1995, which
was filed with the Securities and Exchange
Commission on October 23, 1995 (the "WECO Form
8-K")).
2.2 Puget Stock Option Agreement, dated as of
October 18, 1995, between Puget and WECO
(Incorporated by reference to Exhibit 2.2 to
the WECO Form 8-K).
2.3 WECO Stock Option Agreement, dated as of
October 18, 1995, between WECO and Puget
(Incorporated by reference to Exhibit 2.3 to
the WECO Form 8-K).
2.4 Letter Agreement, dated August 1, 1995, between
Puget and WECO (Filed herewith).
99.1 Joint Press Release of WECO and Puget,
issued October 18, 1995 (Incorporated by
reference to Exhibit 99.1 to the WECO Form 8-K).
</TABLE>
<PAGE> 1
Exhibit 2.4
Washington Energy Company
815 Mercer Street
Seattle, WA 98109
August 1, 1995
Confidential
Puget Sound Power & Light Company
411-108th Avenue N.E.
Bellevue, WA 98004-5515
Ladies and Gentlemen:
In connection with the evaluation by Washington Energy Company and
Puget Sound Power & Light Co. of a possible strategic alliance, business
combination or similar transaction between the two companies (the
"Transaction"), each party (as the context requires, the "receiving party")
would like to examine certain Confidential Information (as hereinafter defined)
relating to the businesses of the other party and such other party's
subsidiaries and other affiliates, as such term is defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (collectively referred to herein as "affiliates"), which Confidential
Information may be furnished to the receiving party or its affiliates or
Representatives (as hereinafter defined) by the other party (the "disclosing
party") or the disclosing party's affiliates or Representatives. As used
herein, "Confidential Information" means all data, reports, interpretations,
forecasts and records (whether in written form, electronically stored or
otherwise) containing or otherwise reflecting information concerning the
disclosing party or its affiliates which is not available to the general public
and which the disclosing party or any of its affiliates or any of their
respective directors, officers, employees, agents or advisors, including without
limitation legal counsel, financial advisors and accountants (all such persons
being referred to herein as "Representatives") provides or has previously
provided to the receiving party or to the receiving party's affiliates or
Representatives at any time in connection with a possible Transaction, together
with summaries, analyses, extracts, compilations, studies, personal notes or
other documents or records, whether prepared by the receiving party or others,
which contain or otherwise reflect such information.
Notwithstanding the foregoing, the following information will not
constitute "Confidential Information": (i) information that is or becomes
generally available to the public other than as a result of a disclosure by the
receiving party or any affiliate or Representative of the receiving party, (ii)
information that was previously known or
<PAGE> 2
available to the receiving party or its affiliates or Representatives on a
nonconfidential basis prior to its disclosure to the receiving party, its
affiliates or Representatives by the disclosing party, its affiliates or
Representatives, (iii) information that prior to its disclosure to the receiving
party or its affiliates or Representatives by the disclosing party, its
affiliates or Representatives became or becomes available to the receiving party
on a nonconfidential basis from a source not known by the receiving party, its
affiliates or its Representatives to be subject to any confidentiality agreement
or other legal restriction on disclosing such information, or (iv) information
that has been independently acquired or developed by the receiving party or its
affiliates or Representatives without violating any of its obligations under
this agreement. The term "person" as used in this agreement will be interpreted
broadly to include any corporation, company, entity, partnership, group or
individual.
Except as otherwise provided herein, each party agrees that it and its
affiliates and Representatives will utilize the other party's Confidential
Information only in connection with the evaluation of a possible Transaction and
not for any other purpose, and will hold such Confidential Information in
strictest confidence. Each party hereto agrees that it will disclose such
information only to such of its affiliates and Representatives as are assisting
it in evaluating a possible Transaction and have a need to know such information
in order to perform their duties in connection therewith. Each party will
instruct each such affiliate or Representative of the confidential nature of
such information and the exclusive purposes for which such information may be
used. Each party agrees to be fully responsible for any breach of this
agreement by any of its affiliates or Representatives.
Except as herein provided, each party agrees that, without the prior
written consent of the other party unless such party is advised by counsel that
such party is legally required to make the disclosure referred to below in this
paragraph (including pursuant to any regulation of or agreement with the New
York Stock Exchange) and after using reasonable efforts to consult with the
other party, such party and its Representatives and affiliates will not disclose
to any person (i) that any investigation, discussions or negotiations are taking
or have taken place concerning a possible Transaction, or (ii) that either party
has requested or received Confidential Information, or any terms or other facts
regarding the possible Transaction, including the status thereof.
Except as herein provided, in the event that either party or its
affiliates or Representatives are requested or required in the context of a
litigation, governmental, judicial or regulatory investigation or other similar
proceedings (by oral questions, interrogatories, requests for information or
documents, subpoenas, civil investigative demands or similar process) to
disclose any Confidential Information (or to disclose
-2-
<PAGE> 3
that any investigation, discussions or negotiations are taking or have taken
place concerning the Transaction or that either party has requested or received
Confidential Information concerning the other party), the party or its affiliate
or its Representative so requested or required to make such disclosure will, to
the extent legally permitted, provide the other party with prompt notice of each
such request or requirement so that the other party may seek an appropriate
protective order or other remedy or waive compliance with the provisions of this
agreement. If, in the absence of a protective order or the receipt of a waiver
hereunder, the party or affiliate or Representative so requested or required to
make such disclosure is, in the written opinion of its counsel, legally required
to make such disclosure, such party or affiliate or Representative may disclose
without liability to the other party hereto only that portion of the
Confidential Information (or information relating to the Transaction) which it
is advised in writing by such counsel it is legally required to so disclose, and
will use its best efforts to obtain assurance that confidential treatment will
be accorded the information so disclosed.
At the request of either party at any time, all Confidential
Information provided by a disclosing party or its affiliates or Representatives
will be returned to the disclosing party promptly by the receiving party and its
affiliates and Representatives, without retention of any copies thereof, except
that any portion of the Confidential Information that consists of summaries,
analyses, extracts, compilations, studies, personal notes or other documents or
records prepared by the receiving party or any of its affiliates or
Representatives shall be destroyed upon the disclosing party's request (such
destruction to be confirmed in writing), without retaining any copies thereof.
Each party acknowledges that the other party makes no warranty or
representation in relation to the information supplied by it or on its behalf,
and shall have no liability to the other party resulting from the use thereof,
except as may be provided in any definitive agreement relating to the
Transaction and subject to such conditions and limitations as may be set forth
therein. The parties agree that unless and until a definitive agreement between
them with respect to a Transaction has been executed and delivered, neither
party will be under any legal obligation of any kind whatsoever with respect to
such a Transaction by virtue of this or any written or oral expression with
respect to such a Transaction by it or any of its Representatives except, in the
case of this letter, for the matters specifically agreed to herein.
The parties agree that, for a period of two years from the date of this
agreement, neither party nor any of its affiliates will, without the prior
written consent of the other party: (i) acquire, offer to acquire or agree to
acquire, directly or indirectly, by merger, tender offer, open market purchases
or otherwise, any voting securities or direct or indirect rights to acquire any
voting securities of the other party
-3-
<PAGE> 4
or any subsidiary thereof, or of any successor to or person in control of the
other party, or any substantial portion of the assets of the other party or any
subsidiary or division thereof or of any such successor or controlling person
(other than purchases of assets in the ordinary course of the parties'
respective businesses consistent with past practice); (ii) make, or in any way
participate, directly or indirectly, in any "solicitation" of "proxies" (as such
terms are defined by the rules of the Securities and Exchange Commission) with
respect to voting securities of the other party, or seek to advise or influence
any person with respect to the voting of such voting securities; (iii) form,
join or in any way participate in a "group" (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) with respect to any
voting securities of the other party; (iv) make, or in any way participate in,
directly or indirectly, any other effort to seek or influence control over the
Board of Directors, or management or policies, of the other party or seek to
advise or influence any person or entity with respect thereto; (v) make any
public announcement or disclose any plan, intention, proposal or arrangement
inconsistent with the foregoing; (vi) take any action which might require such
other party to make a public announcement regarding the possibility of a
business combination; (vii) advise, assist or encourage any other person in
connection with the foregoing; or (viii) request that the other party amend or
waive any provision of this paragraph. Notwithstanding the foregoing, in the
event any person or entity (other than a party or an affiliate) (a) acquires, or
publicly announces a proposal to acquire, by tender offer, open market
purchases, merger or otherwise, fifteen percent (15%) or more of the outstanding
voting securities of a party, or (b) makes, or publicly announces a proposal to
make, a solicitation of proxies with respect to election of directors of a
party, or (c) publicly announces any other plan, intention, proposal or
arrangement with respect to a business combination with a party, then the
restrictions set forth in this paragraph shall no longer apply to the other
party hereto.
In addition, each party agrees that for a period of eighteen months
from the date of this agreement, neither it nor any of its affiliates or
Representatives will, directly or indirectly, unless and until authorized to do
so in writing by the other party, solicit the employment of or hire any
employees of the other party or its affiliates with whom the hiring party had
contact or who became known to such party during the investigation of the
Transaction, other than pursuant to any general advertisement for or
solicitation of employees by either party or its affiliates.
Each party also agrees that until the 60th calendar day after the date
of this letter agreement, it will not, directly or indirectly, (i) make any
proposal to, or solicit proposals from, or initiate discussions with, any person
(other than the other party hereto) or its affiliates or Representatives
regarding a possible business combination involving such party and such other
person, or the purchase of voting securities of
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<PAGE> 5
such party or its affiliates, or (ii) participate in discussions initiated by
any other person regarding a possible business combination involving such party
and any person other than the other party hereto, or the purchase of voting
securities of such party or its affiliates, or furnish any such person or its
affiliates or Representatives with nonpublic information concerning such party
in order to enable it to evaluate a possible business combination involving, or
the purchase of voting securities of, such party or its affiliates, unless in
any such case such party has been advised by outside counsel that its board of
directors has a fiduciary obligation under applicable law to take such action
(in which case it will promptly advise the other party of, and keep the other
party informed as to, the action it proposes to take, the material details
thereof and the identity of the parties involved therewith). The provisions of
this paragraph shall not restrict a party from engaging in financing
transactions in the ordinary course of business in connection with its business
operations.
It is understood and agreed that the disclosing party would be
irreparably injured by a breach of this agreement by the receiving party or its
affiliates or Representatives, that money damages would not be a sufficient
remedy for any such breach and that the disclosing party shall be entitled to
equitable relief, including injunctive relief and specific performance, as a
remedy for any such breach (which shall not be the exclusive remedy for breach
of this agreement).
This agreement shall inure to the benefit of and be binding upon each
of the parties and their respective successors and assigns. It is further
understood and agreed that no failure or delay in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
This agreement shall constitute the entire agreement between the
parties with regard to the subject matter hereof. No modification, amendment or
waiver shall be binding unless set forth in a written amendment or waiver signed
by each of the parties hereto.
This agreement shall be for a term of two years (except for those
provisions hereof that by their terms expire at an earlier date), and shall be
governed by and construed in accordance with the laws of the State of
Washington, without regard to the choice of law or conflict of laws principles
thereof.
This agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which shall constitute the same agreement.
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<PAGE> 6
Please confirm your agreement with respect to the foregoing matters by
signing and returning to us the enclosed copy of this letter, whereupon this
letter will constitute a binding agreement between us with respect to the
subject matter hereof.
Very truly yours,
WASHINGTON ENERGY COMPANY
By: /s/ Robert J. Tomlinson
-----------------------------------
Name: Robert J. Tomlinson
Title: Senior Vice President-Legal
and General Counsel
Confirmed and agreed
as of the date first written above:
PUGET SOUND POWER & LIGHT CO.
By: /s/ Donald E. Gaines
--------------------------------
Name: Donald E. Gaines
Title: Treasurer
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