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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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Rule 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
Southwest Gas Corporation
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(Name of Registrant as Specified In Its Charter)
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[LOGO] ONEOK
[LOGO] SOUTHWEST GAS
[PICTURE OF TWO HANDS SHAKING]
VOTE "FOR"
THE MERGER TO CREATE THE
LARGEST INDEPENDENT GAS
DISTRIBUTION COMPANY
IN THE UNITED STATES!
A guide to the merger agreement between
Southwest Gas Corporation and ONEOK, Inc.
<PAGE> 3
July 6, 1999
Dear Fellow Shareholder:
When you read the proxy materials we have provided, you will learn, in
considerable detail, why your Board of Directors unanimously recommends that you
vote FOR the proposed merger between Southwest Gas Corporation and ONEOK, Inc. I
realize that the proxy materials are lengthy and make for heavy reading.
However, the details included in the proxy materials can help to inform you as
you consider your vote on this important transaction. I hope this pamphlet will
usefully supplement the proxy materials by providing you with a summary of some
of the reasons why we believe you should vote FOR the proposed merger between
Southwest Gas Corporation and ONEOK, Inc.
As you decide how you will vote, please consider that:
- If the regulators in three states and a majority of all shareholders
approve the proposed acquisition, you could receive $30 per share in
cash in November 1999, the expected close of this transaction.
- The Public Utilities Commission of Nevada has already unanimously
approved the transaction two months faster than state law required. A
settlement with the Arizona Corporation Commission Staff and the
Residential Utility Consumers Office in Arizona has been reached, and
discussions with regulators in California are proceeding smoothly and
productively.
- By voting FOR this merger, you will give yourself the opportunity to
immediately realize the future value of the Company's long-term
prospects.
The combination of Southwest Gas into ONEOK will create the largest
independent gas distribution company in the United States. The two
businesses fit very well with each other. Southwest Gas is growing rapidly
but has weak cash flow, while ONEOK has financial strength and strong
cash flow, but minimal growth opportunities. ONEOK's cash will support
Southwest's growth.
I invite you to read this worthwhile pamphlet and the proxy materials you
have received. I strongly urge you to join with me, the Board of Directors
and management in voting FOR this merger through your proxy. Remember,
if you do not return your proxy, it has the same effect as a vote against the
merger. If shareholders are to receive $30 per share from ONEOK, we
must receive FOR votes from a majority of all shares outstanding, not just
a majority of shares voted. IT IS THUS CRUCIAL THAT YOU MARK YOUR BALLOT
AND RETURN IT PROMPTLY.
If you have any questions, please call our Shareholder Services Department
at (800) 331-1119.
Sincerely,
Michael O. Maffie
President & Chief Executive Officer
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Q & A
WHY SHOULD I VOTE "FOR" THIS MERGER?
a. With a majority shareholder vote and required regulatory approvals,
shareholders could receive $30 per share in cash in November 1999, the expected
close of this transaction.
- The Public Utilities Commission of Nevada (PUCN) voted unanimously to
approve the merger on June 21, 1999. Nevada regulators praised the
combination as a positive step for Southwest Gas customers.
- On June 25, 1999, a Settlement Agreement was reached with the Arizona
Corporation Commission (ACC) Staff and the Residential Utility Consumers
Office (RUCO).
- The rapid and positive conclusion to the PUCN regulatory review and the
proposed Arizona Settlement bodes well for the outcome of regulatory
reviews still to be completed in California.
b. The ONEOK/Southwest Gas merger will allow Southwest shareholders to
immediately realize the future value of the Company's long-term prospects.
- Given the continued convergence in the utility industry, an eventual
merger between Southwest Gas and some utility was likely.
- Southwest Gas has been identified as a takeover candidate in several
analyst reports in recent years due to its attractive, growing service
territories.
- Due to its relative size, Southwest Gas has been challenged to fund the
significant system expansion needed to meet the demands of rapid growth
in our service territory. In addition, the need for more sophisticated
technology, and its cost, makes size an important factor.
- Southwest has traditionally been penalized by the financial community
due to the negative financial impacts of rapid growth,
historically-based rate making jurisdictions, and the short and moderate
heating season in the desert climate we serve.
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<PAGE> 5
Q & A
WHY MERGE WITH ONEOK?
ONEOK is a larger, well-capitalized natural gas provider. It brings the
financial resources and operating history needed to address the capital
requirements of Southwest's growing service territory and maintain the
superior service that our customers have come to expect.
- ONEOK is a larger, A-rated company. In contrast to Southwest, ONEOK
has experienced only modest growth in its natural gas distribution
service territories. ONEOK generates a strong positive cash flow
from its "mature" service territory and unregulated businesses. It
can apply its positive cash flow to help fund the continuing
expansion of Southwest Gas in Nevada, Arizona and California.
- Regulatory approval has been received from the PUCN and a Settlement
has been reached with the ACC Staff and RUCO. The Board believes
that the ONEOK/Southwest Gas merger is likely to receive timely
regulatory approval in California, and close during the fourth
quarter of 1999. These are the only regulatory approvals required to
consummate the merger between ONEOK and Southwest Gas.
- A combination of ONEOK and Southwest Gas creates a company with more
diversified operating activities, regulation, and weather impacts.
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<PAGE> 6
Q & A
WHAT WILL HAPPEN TO THE PRICE OF SOUTHWEST GAS STOCK IF THE MERGER IS NOT
APPROVED?
Management believes that the Company's common stock price is likely to
decrease from its recent levels if the merger is not completed.
- Management believes that the Company's common stock price during
1998 included a "merger premium" because Southwest Gas had been
identified as a "takeover candidate" by the financial community.
- The market price of the Company's common stock on the day before the
announcement of the merger with ONEOK was $24.38. Since the
announcement, the stock has traded in the range of $25.25 to $29.50.
- The average price/earnings ratio for diversified natural gas
utilities is in the range of 18-19. Applying this ratio to the
current consensus of analyst estimates for the Company's 1999
earnings of $1.16, the Company's common stock price would be
estimated in the range of $20.88 to $22.04 per share.
VOTE "FOR"
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<PAGE> 7
Q & A
WHAT DO I NEED TO DO TO SUPPORT THE BOARD'S RECOMMENDATION?
- Vote FOR this combination and send in your proxy card today.
- The Southwest Gas Board of Directors has unanimously endorsed this
merger and urges all shareholders to vote FOR each proposal on their
proxy card and send it in quickly.
- Your vote FOR on the proxy card is needed to complete the merger.
- If you do not send in your proxy card, that is the same as if you vote
against the proposal.
- The Company must receive FOR votes from a majority of all shares
outstanding. It is thus crucial that you mark your proxy card FOR the
merger and return it immediately.
VOTE "FOR"
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<PAGE> 8
Q & A
CAN I PARTICIPATE IN ONEOK'S DIVIDEND REINVESTMENT PLAN?
You will be receiving $30 cash in payment for each share of Southwest Gas
stock that you hold, rather than stock in the combined company. If you so
choose, you may become a participant in the ONEOK Direct Stock Purchase and
Dividend Reinvestment Plan.
The paying agent will include information regarding ONEOK's plan along with
your check when proceeds for your shares are sent to you.
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VOTE TODAY!
SOUTHWEST GAS' BOARD OF DIRECTORS AND MANAGEMENT URGE YOU TO VOTE "FOR" THE
MERGER.
[LOGO] ONEOK [LOGO] SOUTHWEST GAS
Right from the Start
Remember: If you do not return your proxy card, do not vote in person, or
abstain, it has the same effect as voting against the merger.
