<PAGE>
File No. 70-____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
APPLICATION-DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________
SOUTHWESTERN ELECTRIC POWER COMPANY
428 Travis Street
Shreveport, Louisiana 71101
(Name of company filing this statement and address
of principal executive office)
____________________
CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
____________________
Shirley S. Briones, Treasurer
Southwestern Electric Power Company
428 Travis Street
Shreveport, Louisiana 71101
Stephen J. McDonnell, Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
P.O. Box 660164
Dallas, Texas 75202
Joris M. Hogan, Esq.
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
(Names and addresses of agents for service)
<PAGE>
Southwestern Electric Power Company, a Delaware corporation
(the "Company"), is a wholly-owned electric utility subsidiary of
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").
Item 1. Description of Proposed Transaction.
The Company is hereby requesting authorization to
purchase 78 shares of common stock of The Arklahoma Corporation,
an Arkansas corporation ("Arklahoma"), from Oklahoma Gas and
Electric Company ("OG&E") for an aggregate purchase price of
approximately $54,288.
By order dated November 28, 1947 (HCAR No. 7869), the
Commission authorized the acquisition by the Company, OG&E and
Arkansas Power & Light Company ("AP&L"), respectively, of 160,
170 and 170 shares of common stock of Arklahoma. Arklahoma was
formed jointly by AP&L, OG&E and the Company and currently owns
certain facilities consisting of a 161 KV transmission line
extending for 166 miles from Lake Catherine, Arkansas to Boudinot
Tap, near Tahlequah, Oklahoma, the Lake Catherine substation at a
terminus of said transmission line and certain property
incidental thereto.
Such facilities are jointly leased to AP&L, OG&E and
the Company pursuant to an Agreement and Indenture, dated as of
December 9, 1947, as extended by a Extension of Agreement and
Indenture, dated September 6, 1977 (collectively, the "Lease")
and are jointly operated by AP&L, OG&E and the Company pursuant
to an Operating Agreement, dated December 9, 1947 ("Operating
Agreement"). In accordance with the terms of the Operating
Agreement, (a) each party is entitled to use up to but not in
excess of one-third of the capacity of such facilities without
payment to the other parties, and (b) all advances, costs and
other charges incurred under the Lease are borne equally by the
parties.
In order to facilitate the formation by OG&E of a
holding company system exempt from the registration requirements
of the Act, OG&E desires to reduce its percentage ownership of
Arklahoma common stock to less than 5% by selling 68 shares to
AP&L and 78 shares to the Company. OG&E believes that once its
ownership interest is so reduced, Arklahoma would not be deemed
an "affiliate" of OG&E for purposes of the Act.
As a result of the proposed sale, the Company's
ownership of Arklahoma common stock would increase from 32% to
47.6%, AP&L's ownership of Arklahoma common stock would increase
from 34% to 47.6% and OG&E's ownership of Arklahoma common stock
would be reduced from 34% to 4.8%. The sale of the shares will
not affect the rights and obligations of the parties under the
Lease and the Operating Agreement. Although each party has an
option to purchase the facilities and terminate the Lease, the
Company has no current intention to do so and knows of no current
intention on the part of either OG&E or AP&L to do so.
The purchase price for the shares will be based on the
book value of Arklahoma common stock immediately prior to the
proposed sale. It is estimated that the book value of Arklahoma
common stock immediately prior to the sale will be approximately
$348,000 (or $696 per share), resulting in a purchase price of
approximately $54,288 for the 78 shares to be acquired by the
Company.
Item 2. Fees, Commissions and Expenses.
An estimate of the fees and expenses to be paid or
incurred by the Company in connection with the proposed
transactions is set forth below.
Holding Company Act filing fee . . . . . . . . . . .$ 2,000
Counsel Fees:
Milbank, Tweed, Hadley & McCloy
New York, New York . . . . . . . . . . . . . . . . 5,000
Miscellaneous and incidental expenses including
travel, telephone and postage,
copying, etc. . . . . . . . . . . . . . . . . . . 500
________
TOTAL $7,500
* Actual Amount
OG&E has agreed to reimburse the Company for all of
such fees and expenses.
Item 3. Applicable Statutory Provisions.
SWEPCO believes that its proposed acquisition of the
Shares is subject to Sections 9(a) and 10 of the Act.
Item 4. Regulatory Approval.
In addition to this Commission, the Arkansas Public
Services Commission ("APSC") has jurisdiction over the
transactions proposed herein. On December 1, 1995, the Company
filed an application with the APSC seeking authorization to
acquire the Shares.
Item 5. Procedure.
The Company requests that the Commission issue and
publish no later than December 15, 1995, the requisite notice
under Rule 23 with respect to the filing of this Application-
Declaration, such notice to specify a date not later than January
8, 1995, as the date after which an order granting and permitting
this Application-Declaration to become effective may be entered
by the Commission and the Commission enter not later than January
9, 1995, an appropriate order granting and permitting this
Application-Declaration 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 or 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 -
Preliminary Opinion of Milbank, Tweed, Hadley & McCloy,
counsel to the Company.
Exhibit 2 -
Final or "Past Tense" opinion of Milbank, Tweed, Hadley &
McCloy, counsel to the Company (to be filed with Certificate
of Notification).
Exhibit 3 -
Proposed Notice of Proceeding.
Exhibit 4 -
Form of Stock Purchase Agreement between the Company, AP&L
and OG&E.
Exhibit 5 -
Application to the APSC.
Exhibit 6 -
Order of the APSC (to be filed by amendment).
The transactions proposed herein involve an expenditure
by the Company of approximately $54,288 and will not have a
material effect on the Company's financial position. Therefore,
no financial statements are field herewith.
Item 7. Information as to Environmental Effects.
The proposed transaction does not involve major federal
action having a significant effect on the human environment. To
the best of the Company'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: December 15, 1995
SOUTHWESTERN ELECTRIC POWER COMPANY
By:/s/SHIRLEY S. BRIONES
Shirley S. Briones
Treasurer
INDEX OF EXHIBITS
EXHIBIT TRANSMISSION
NUMBER EXHIBITS METHOD
1 Preliminary opinion of Milbank, Tweed,
Hadley & McCloy, counsel to the
Company. Electronic
2 Final or "past tense" opinion of
Milbank, Tweed, Hadley & McCloy,
counsel to the Company (to be filed with
Certificate of Notification). ---
3 Proposed Notice of Proceeding. Electronic
4 Form of Stock Purchase Agreement
between the Company, AP&L and OG&E. Electronic
5 Application to the APSC. Electronic
6 Order of the APSC (to be filed
by amendment). ---
<PAGE>
EXHIBIT 1
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
December 15, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Southwestern Electric Power Company
Form U-1 Application-Declaration
Dear Sirs:
We refer to the Form U-1 Application-Declaration (the
"Application") under the Public Utility Holding Company Act of
1935, as amended (the "1935 Act"), filed by Southwestern Electric
Power Company (the "Company"), a Delaware corporation and a
wholly-owned electric utility subsidiary of Central and South
West Corporation ("CSW"), a Delaware corporation and a registered
holding company. The Application relates to the Company's
request for authority under the 1935 Act to purchase 78 shares of
common stock of The Arklahoma Corporation (the "Shares") from
Oklahoma Gas and Electric Company (the "Transaction"), all as
more fully described in the Application. We have acted as
special counsel for the Company in connection with the filing of
the Application.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of the Company,
certificates of public officials, certificates of officers and
representatives of the Company 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 the Company 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 Transaction is 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
Acquisition as described in the Application will have been
complied with.
2. The Company will legally acquire the Shares.
3. The consummation of the proposed Transaction as
described in the Application will not violate the legal
rights of the lawful holders of any securities issued by the
Company or any associate company of the Company.
The opinions expressed above in respect of the proposed
Transaction as described in the Application are subject to the
following assumptions or conditions:
a. The Transaction shall have been duly authorized
and approved to the extent required by state law
by the Board of Directors of the Company.
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 Transaction
described therein.
c. The Transaction 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.
e. All legal matters incident to the Transaction
shall be satisfactory to us, including the receipt
in satisfactory form of opinions of others counsel
qualified to practice in jurisdictions pertaining
to the Transaction in which we are not admitted to
practice.
We hereby consent to the use of this opinion as an
exhibit to the Application.
Very truly yours,
/s/MILBANK, TWEED, HADLEY & MCCLOY
MILBANK, TWEED, HADLEY & McCLOY
<PAGE>
EXHIBIT 3
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filings Under the Public Utility Holding Company Act of 1935 (the
"Act") ________ __, 1995
Notice is hereby given that the following filings(s)
has/have been made with the Commission pursuant to 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 ___________, 1995, 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 addresses 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.
Southwestern Electric Power Company (File No. 70- )
Southwestern Electric Power Company ("SWEPCO"), 428
Travis Street, Shreveport, Louisiana 71101, a Delaware
corporation and a wholly-owned electric utility subsidiary of
Central and South West Corporation ("CSW"), a Delaware
corporation and a registered holding company under the Act, has
filed an Application-Declaration under Sections 9(a) and 10 of
the Act.
SWEPCO is requesting authorization to purchase 78
shares of common stock of The Arklahoma Corporation, an Arkansas
corporation ("Arklahoma"), from Oklahoma Gas and Electric Company
("OG&E") for an aggregate purchase price of approximately
$54,288.
By order dated November 28, 1947 (HCAR No. 7869), the
Commission authorized the acquisition by SWEPCO, OG&E and
Arkansas Power & Light Company ("AP&L"), respectively, of 160,
170 and 170 shares of common stock of Arklahoma. Arklahoma was
formed jointly by AP&L, OG&E and SWEPCO and currently owns
certain facilities consisting of a 161 KV transmission line
extending for 166 miles from Lake Catherine, Arkansas to Boudinot
Tap, near Tahlequah, Oklahoma, the Lake Catherine substation at a
terminus of said transmission line and certain property
incidental thereto.
Such facilities are jointly leased to AP&L, OG&E and
SWEPCO pursuant to an Agreement and Indenture, dated as of
December 9, 1947, as extended by an Extension of Agreement and
Indenture, dated September 6, 1977 (collectively, the "Lease")
and are jointly operated by AP&L, OG&E and SWEPCO pursuant to an
Operating Agreement, dated December 9, 1947 ("Operating
Agreement"). In accordance with the terms of the Operating
Agreement, (a) each party is entitled to use up to but not in
excess of one-third of the capacity of such facilities without
payment to the other parties, and (b) all advances, costs and
other charges incurred under the Lease are borne equally by the
parties.
In order to facilitate the formation by OG&E of a
holding company system exempt from the registration requirements
of the Act, OG&E desires to reduce its percentage ownership of
Arklahoma common stock to less than 5% by selling 68 shares to
AP&L and 78 shares to SWEPCO. OG&E believes that once its
ownership interest is so reduced, Arklahoma would not be deemed
an "affiliate" of OG&E for purposes of the Act.
As a result of the proposed sale, SWEPCO's ownership of
Arklahoma common stock would increase from 32% to 47.6%, AP&L's
ownership of Arklahoma common stock would increase from 34% to
47.6% and OG&E's ownership of Arklahoma common stock would be
reduced from 34% to 4.8%. The sale of the shares will not affect
the rights and obligations of the parties under the Lease and the
Operating Agreement. Although each party has an option to
purchase the facilities and terminate the Lease, SWEPCO states
that it has no current intention to do so and knows of no current
intention on the part of either OG&E or AP&L to do so.
The purchase price for the shares will be based on the
book value of Arklahoma common stock immediately prior to the
proposed sale. It is estimated that the book value of Arklahoma
common stock immediately prior to the sale will be approximately
$348,000 (or $696 per share), resulting in a purchase price of
approximately $54,288 for the 78 shares to be acquired by SWEPCO.
For the Commission, by the Division of Investment
Management, pursuant to delegated authority.
Jonathan G. Katz
Secretary
<PAGE>
EXHIBIT 4
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is
made and entered into this _____ day of _________, 1995, by and
among ARKANSAS POWER & LIGHT COMPANY, an Arkansas corporation
("AP&L"), SOUTHWESTERN ELECTRIC POWER COMPANY, a Delaware
corporation ("SWEPCO"), and OKLAHOMA GAS AND ELECTRIC COMPANY, an
Oklahoma corporation ("OG&E").
W I T N E S S E T H:
WHEREAS, AP&L, SWEPCO and OG&E, own, respectively, one
hundred seventy (170) shares, one hundred sixty (160) shares and
one hundred seventy (170) shares of common stock, $100 par value,
of The Arklahoma Corporation, an Arkansas corporation
("Arklahoma"), representing all of the outstanding shares of
capital stock of Arklahoma;
WHEREAS, Arklahoma owns certain facilities consisting
of a 161 KV transmission line extending from Lake Catherine,
Arkansas to Boudinot Tap, near Tahlequah, Oklahoma, the Lake
Catherine substation at a terminus of said transmission line and
certain property incidental thereto;
WHEREAS, Arklahoma leases such facilities to AP&L,
SWEPCO and OG&E pursuant to an Agreement and Indenture, dated as
of December 9, 1947, as extended by an Extension of Agreement and
Indenture, dated September 6, 1977 (collectively, the "Lease");
WHEREAS, such facilities are jointly operated by AP&L,
SWEPCO and OG&E pursuant to an Operating Agreement, dated
December 9, 1947 ("Operating Agreement");
WHEREAS, in order to facilitate the formation by OG&E
of a holding company system exempt from the registration
requirements of the Public Utility Holding Company Act of 1935,
as amended (the "35 Act"), OG&E desires to reduce its ownership
of the outstanding common stock of Arklahoma to less than five
percent by selling sixty-eight (68) shares of such stock to AP&L
and seventy-eight (78) shares of such stock to SWEPCO; and
WHEREAS, AP&L and SWEPCO have agreed to acquire such
shares in accordance with the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the covenants and
agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Purchase and Sale of Shares. Subject to the terms and
conditions herein stated, (a) OG&E agrees to sell, assign,
transfer and deliver to AP&L, and AP&L agrees to purchase from
OG&E at the Closing (as hereinafter defined), sixty-eight (68)
shares of common stock, $100 par value, of Arklahoma, and (b)
OG&E agrees to sell, assign, transfer and deliver to SWEPCO, and
SWEPCO agrees to purchase from OG&E at the Closing, seventy-eight
(78) shares of common stock, $100 par value, of Arklahoma
(collectively, the "Shares").
2. Purchase Price. In full consideration for the purchase
by AP&L and SWEPCO of the Shares, (a) AP&L shall pay to OG&E an
aggregate of [___________________ Dollars ($_________)], and (b)
SWEPCO shall pay to OG&E an aggregate of [_____________ Dollars
($___________)] (collectively, the "Purchase Price").
3. Closing. The closing of the transactions provided for
herein shall take place at the offices of AP&L's counsel, Reid &
Priest LLP, 40 West 57th Street, New York, New York 10019, at
10:00 A.M. local time on the second business day following the
satisfaction or waiver of the conditions set forth in Section 8
hereof, or at such other time and location mutually agreeable to
the parties (the "Closing").
4. Deliveries at Closing. The following deliveries shall
be made by the respective parties at the Closing:
4.1. OG&E's Deliveries. OG&E shall deliver to AP&L and
SWEPCO the following:
(a) Certificates representing sixty-eight (68) Shares
and seventy-eight (78) Shares, respectively, duly endorsed in
blank with all necessary transfer tax and other revenue stamps,
acquired at OG&E's expense, affixed and canceled. OG&E agrees to
cure any deficiencies with respect to the endorsement of the
certificates representing the Shares or with respect to the stock
power accompanying any such certificates.
(b) Such other documents, certificates and opinions as
reasonably may be required by AP&L and SWEPCO in order to (i)
demonstrate the accuracy of, or the compliance by OG&E with, all
of the representations, warranties, covenants and conditions set
forth herein, and (ii) consummate the transactions contemplated
hereby.
4.2. AP&L's and SWEPCO's Deliveries. AP&L and SWEPCO
shall deliver to OG&E their respective portions of the Purchase
Price by check or by wire transfer of immediately available funds
to the account of OG&E designated in writing.
5. Provisions of Lease and Operating Agreement. AP&L,
SWEPCO and OG&E hereby acknowledge that the sale of the Shares
will not, in itself, act to modify the rights and obligations of
the parties under the Lease and the Operating Agreement.
6. Representations and Warranties.
6.1. OG&E's Representations and Warranties. OG&E
represents and warrants to AP&L and SWEPCO, as of the date of
this Agreement and as of the Closing (as if each such
representation and warranty was remade at the Closing), as
follows:
(a) Corporate Standing; Authorization. OG&E is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Oklahoma with all requisite
corporate power, authority and legal right to execute, deliver,
and perform its obligations under this Agreement and to
consummate the transactions contemplated hereunder, and has taken
all necessary corporate action to authorize the sale of the
Shares hereunder on the terms and conditions of this Agreement
and to authorize the execution, delivery and performance of this
Agreement.
(b) Due Execution and Enforceability. This Agreement
is a valid and binding obligation of OG&E enforceable in
accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
of general application referring to or affecting enforcement of
creditors' rights and general principles of equity.
(c) No Restrictions Against Performance. Neither the
execution, delivery, authorization or performance of this
Agreement, nor the consummation of the transactions contemplated
hereby will, with or without the giving of notice or the passage
of time, or both, violate any provisions of, conflict with,
result in a breach of, constitute a default under, or result in
the creation or imposition of any lien or condition under (i)
OG&E's Certificate of Incorporation or By-Laws; (ii) any federal,
state or local law, statute, ordinance, regulation or rule, which
is applicable to OG&E other than as set forth in paragraph 6.1(d)
hereof (provided that OG&E makes no representation as to any such
laws, statutes, ordinances, regulations or rules which require
consent, authorization or approval with respect to AP&L or
SWEPCO); (iii) any contract, indenture, instrument, agreement,
mortgage, lease, right or other obligation or restriction to
which OG&E is a party or by which OG&E is bound; or (iv) any
order, judgment, writ, injunction, decree, license, franchise,
permit or other authorization of any federal, state or local
court, arbitration tribunal or governmental agency by which OG&E
is bound, any of which, when taken as a whole, would have a
material adverse affect on OG&E.
(d) Third-Party and Governmental Consents. No
approval, consent, waiver, order or authorization of, or
registration, qualification, declaration, or filings with, or
notice to, any federal, state or local governmental authority or
other third party is required on the part of OG&E in connection
with the execution of this Agreement or the consummation of the
transactions contemplated hereby, other than the approvals of the
Federal Energy Regulatory Commission, the Oklahoma Corporation
Commission and the Arkansas Public Service Commission, which
approvals have been sought in connection with the formation by
OG&E of a holding company system.
(e) Ownership of Shares. OG&E is the lawful owner of
the Shares, free and clear of all liens, charges, encumbrances,
restrictions and claims of every kind; OG&E has full legal right,
power and authority to enter into this Agreement and to sell,
assign, transfer and convey the Shares pursuant to this
Agreement; the delivery to AP&L and SWEPCO of the Shares pursuant
to the provisions of this Agreement will transfer to AP&L and
SWEPCO, respectively, valid title thereto, free and clear of all
liens, encumbrances, restrictions and claims of every kind.
6.2. AP&L's and SWEPCO's Representations and
Warranties. Each of AP&L and SWEPCO represents and warrants to
OG&E, with respect to itself only, as of the date of this
Agreement and as of the Closing (as if each such representation
and warranty was remade at the Closing), as follows:
(a) Corporate Standing; Authorization. AP&L and
SWEPCO are corporations duly organized, validly existing and in
good standing under the laws of the States of Arkansas and
Delaware, respectively. Each of AP&L and SWEPCO has all
requisite corporate power, authority and legal right to execute,
deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereunder, and has taken
all necessary corporate action to authorize the purchase of the
Shares hereunder on the terms and conditions of this Agreement
and to authorize the execution, delivery and performance of this
Agreement.
(b) Due Execution and Enforceability. This Agreement
is a valid and binding obligation of AP&L and SWEPCO, as the case
may be, enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application referring to or
affecting enforcement of creditors' rights and general principles
of equity.
(c) No Restrictions Against Performance. Neither the
execution, delivery, authorization or performance of this
Agreement, nor the consummation of the transactions contemplated
hereby will, with or without the giving of notice or the passage
of time, or both, violate any provisions of, conflict with,
result in a breach of, constitute a default under, or result in
the creation or imposition of any lien or condition under (i)
AP&L's or SWEPCO's Articles or Certificate of Incorporation or
By-Laws; (ii) any federal, state or local law, statute,
ordinance, regulation or rule, which is applicable to AP&L or
SWEPCO, as the case may be, other than as set forth in paragraph
6.2(d) hereof (provided that AP&L and SWEPCO make no
representation as to any such laws, statutes, ordinances,
regulations or rules which require consent, authorization or
approval with respect to OG&E); (iii) any contract, indenture,
instrument, agreement, mortgage, lease, right or other obligation
or restriction to which AP&L or SWEPCO, as the case may be, is a
party or by which AP&L or SWEPCO, as the case may be, is bound;
or (iv) any order, judgment, writ, injunction, decree, license,
franchise, permit or other authorization of any federal, state or
local court, arbitration tribunal or governmental agency by which
AP&L or SWEPCO, as the case may be, is bound, any of which, when
taken as a whole, would have a material adverse affect on AP&L or
SWEPCO, as the case may be.
(d) Third-Party and Governmental Consents. No
approval, consent, waiver, order or authorization of, or
registration, qualification, declaration, or filings with, or
notice to, any federal, state or local governmental authority or
other third party is required on the part of AP&L or SWEPCO, as
the case may be, in connection with the execution of this
Agreement or the consummation of the transactions contemplated
hereby, other than the approvals of the Securities and Exchange
Commission under the 35 Act and the Arkansas Public Service
Commission.
7. Conditions to Closing.
7.1. Conditions Precedent To Each Party's Obligations.
The obligations of each party to perform hereunder are subject to
the satisfaction, or waiver in writing, of the following
conditions at or prior to the Closing:
(a) Regulatory Approvals. All requisite regulatory
approvals shall have been obtained, in form and substance
satisfactory to each party, in order to permit the consummation
of the transactions contemplated hereby, including, without
limitation, the issuance of appropriate orders of the Securities
and Exchange Commission under the 35 Act and the Arkansas Public
Service Commission.
(b) No Injunction. No action or proceeding by any
governmental authority or other person shall have been instituted
or threatened which could enjoin, restrain or prohibit, or could
result in substantial damages in respect of, any provisions of
this Agreement or the consummation of the transactions
contemplated hereby.
7.2. Conditions Precedent To Obligations of AP&L and
SWEPCO. The obligations of AP&L and SWEPCO to perform hereunder
are subject to the satisfaction, or waiver in writing by AP&L and
SWEPCO, of the following conditions at or prior to the Closing:
(a) Representations and Warranties True; Conditions
Satisfied. All representations and warranties of OG&E contained
in this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing as though
made on and as of the Closing. OG&E shall have performed and
complied with all of its covenants and obligations under this
Agreement in all material respects.
(b) Third-Party Consents. OG&E shall have obtained
and delivered to AP&L and SWEPCO all necessary consents and
approvals of third parties or governmental authorities to permit
OG&E to sell the Shares. OG&E shall also have made all
registrations, qualifications, declarations, or filings with, or
notices to, any governmental authority or other third party
required on the part of OG&E in connection with the execution of
this Agreement or the consummation of the transactions
contemplated hereby.
(c) No Adverse Change. Through the Closing, there
shall have been no adverse change in the business, operations,
properties, assets or financial condition of Arklahoma and none
of Arklahoma's properties or assets shall have been adversely
affected in any way.
(d) No Litigation. No action or proceeding by any
governmental authority or other person shall be pending or shall
have been instituted or threatened which might have an adverse
effect on the business, operations, properties, assets or
financial condition of Arklahoma.
7.3. Conditions Precedent to Obligations of OG&E. The
obligations of OG&E to perform hereunder are subject to the
satisfaction, or waiver in writing by OG&E, of the following
conditions at or prior to the Closing;
(a) Representations and Warranties True Conditions
Satisfied. All representations and warranties of AP&L and SWEPCO
contained in this Agreement shall be true and correct in all
material respects as of the date hereof and as of the Closing as
though made on and as of the Closing. AP&L and SWEPCO shall have
performed and complied with all of their covenants and
obligations under this Agreement in all material respects.
(b) Third-Party Consents. AP&L and SWEPCO shall have
obtained and delivered to OG&E all necessary consents and
approvals of third parties or governmental authorities to permit
AP&L and SWEPCO to purchase the Shares. AP&L and SWEPCO shall
also have made all registrations, qualifications, declarations,
or filings with, or notices to, any governmental authority or
other third party required on the part of AP&L or SWEPCO in
connection with the execution of this Agreement or the
consummation of the transactions contemplated hereby.
8. Survival of Representations, Warranties and Agreements.
All of the parties' warranties, representations and covenants
contained in this Agreement or in any document delivered
hereunder shall survive the purchase and sale of the Shares
contemplated hereby.
9. Indemnification by OG&E. OG&E agrees to defend,
indemnify and hold AP&L and SWEPCO and their respective officers,
directors and agents harmless from and against any and all
losses, liabilities, damages, costs, or expenses (including
reasonable attorneys' fees, penalties and interest) payable to or
for the benefit of, or asserted by, any party, resulting from,
arising out of, or incurred as a result of (a) the breach of any
representation made by OG&E herein or in accordance herewith; or
(b) the breach of any warranty or covenant made by OG&E herein or
in accordance herewith. The obligation to indemnify and hold
harmless pursuant to this Section shall survive the consummation
of the transactions contemplated hereby.
10. Termination of Agreement. This Agreement may be
terminated (a) at any time by mutual written consent of the
parties hereto, or (b) by any party in the event that the Closing
has not occurred by November 30, 1996. If this Agreement is
terminated pursuant to this Section, none of the parties hereto,
nor any of its agents or successors in interest, shall have any
liability or further obligation to the other parties or any of
their respective agents or successors in interest pursuant to
this Agreement.
11. Expenses. OG&E shall pay its own and AP&L's and
SWEPCO's expenses (including, without limitation, all filing fees
and the reasonable fees and expenses of their respective agents,
representatives, counsel, accountants and service companies)
incidental to (a) the negotiation, drafting and performance of
this Agreement and (b) the receipt of all necessary regulatory
approvals for the parties to consummate the transactions
contemplated hereby.
12. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of AP&L, SWEPCO, OG&E and
their respective, successors, representatives and assigns.
13. Waiver. No provision of this Agreement shall be deemed
waived by course of conduct, including the act of closing, unless
such waiver is made in a writing signed by the parties hereto
stating that it is intended specifically to modify this
Agreement, nor shall any course of conduct operate or be
construed as a waiver of any subsequent breach of this Agreement,
whether of a similar or dissimilar nature.
14. Entire Agreement; Modification. This Agreement
supersedes any other agreement, whether written or oral, that may
have been made or entered into by AP&L, SWEPCO and OG&E (or by
any director, officer, agent, or other representative of such
parties) relating to the matters contemplated hereby. This
Agreement constitutes the entire agreement between the parties
and there are no agreements or commitments except as expressly
set forth herein. This Agreement may be amended or modified only
by a written instrument executed by the parties hereto which
states specifically that it is intended to amend or modify this
Agreement.
15. Notices. All notices, demands, requests, and other
communications hereunder shall be in writing and shall be deemed
to have been duly given and shall be effective upon receipt if
delivered by hand, or sent by certified or registered United
States mail, postage prepaid and return receipt requested, or by
prepaid overnight express service. Notices shall be sent to the
parties at the following addresses (or at such other addresses
for a party as shall be specified by like notice; provided that
such notice shall be effective only upon receipt thereof): (a) if
to AP&L: Arkansas Power & Light Company, c/o Entergy Services,
Inc., P.O. Box 61000, New Orleans, Louisiana 70161, Attention:
Thomas J. Wright, Vice President, Transmission and Distribution
System, with copies to Laurence M. Hamric, Esq., General
Attorney-Corporate and Securities, at the foregoing address, and
to John T. Hood, Esq., Reid & Priest LLP, at the address set
forth in Section 3 above; (b) if to SWEPCO: Southwestern Electric
Power Company, 428 Travis Street, P.O. Box 21106, Shreveport,
Louisiana 71156, Attention: Michael Madison, Vice President of
Engineering and Operations, with copies to Joris M. Hogan, Esq.,
Milbank, Tweed, Hadley and McCloy, One Chase Manhattan Plaza, New
York, New York 10005; or (c) if to OG&E: Oklahoma Gas and
Electric Company, 101 North Robinson, Oklahoma City, Oklahoma
73101, Attention: James R. Hatfield, Treasurer, with copies to
Peter D. Clarke, Esq., Gardner, Carton & Douglas, 321 N. Clark
Street, Chicago, Illinois 60610.
16. Governing Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in
accordance with the substantive laws of the State of Arkansas,
without giving effect to the principles of conflicts of law
thereof.
17. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above-written.
ARKANSAS POWER & LIGHT COMPANY
By: ___________________________________
Name:
Title:
SOUTHWESTERN ELECTRIC POWER COMPANY
By: ___________________________________
Name:
Title:
OKLAHOMA GAS AND ELECTRIC COMPANY
By: ___________________________________
Name:
Title:
<PAGE>
EXHIBIT 5
BEFORE THE ARKANSAS PUBLIC SERVICE COMMISSION
IN THE MATTER OF THE APPLICATION OF )
SOUTHWESTERN ELECTRIC POWER COMPANY )
FOR AUTHORIZATION TO PURCHASE )
COMMON STOCK OF THE ARKLAHOMA ) DOCKET NO.
CORPORATION )
APPLICATION
Southwestern Electric Power Corporation (hereinafter "SWEPCO"
or the "Company"), respectfully states:
1. SWEPCO is a corporation organized and existing under the
laws of the State of Delaware and it is duly authorized to do
business in the States of Arkansas, Texas, Louisiana, and Oklahoma.
In the States of Arkansas, Texas and Louisiana, SWEPCO engages in
a general electric utility business of generating, transmitting,
distributing, and selling, at wholesale and retail, electric power
and energy to customers in its service areas. The Company owns
certain transmission facilities within the State of Oklahoma, but
otherwise does not do business within that state. SWEPCO's
principal office is at 428 Travis Street, Shreveport, Louisiana.
2. SWEPCO is a wholly owned electric utility subsidiary of
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.
3. This application is filed pursuant to Section 57(a)(2) of
Act 324 and Sections 2, 4, and 8 of the Rules of Practice and
Procedure of the Arkansas Public Service Commission. SWEPCO will
file a form U-1 Application-Declaration with the Securities and
Exchange Commission in connection with the transactions proposed
herein.
4. By order dated November 24, 1947, in Docket No. U-245,
the Commission authorized the acquisition by SWEPCO, Oklahoma Gas
and Electric Company (OG&E), and Arkansas Power and Light Company
(AP&L), respectively, of 160, 170, and 170 shares of common stock
of Arklahoma. Arklahoma was formed jointly by SWEPCO, OG&E and
AP&L and currently owns certain facilities consisting of a 161 kV
transmission line extending for 166 miles from Lake Catherine,
Arkansas, to Boudinot Tap near Tahlequah, Oklahoma, the Lake
Catherine substation at a terminus of said transmission line, and
certain property incidental thereto. Such facilities are jointly
leased by SWEPCO, OG&E and AP&L pursuant to an Agreement and
Indenture, dated as of December 9, 1947, as extended by an
Extension of Agreement and Indenture, dated September 6, 1977
(collectively, the "Lease") and are jointly operated by SWEPCO,
OG&E and AP&L pursuant to an Operating Agreement, dated December 9,
1947.
5. SWEPCO is hereby requesting authorization to purchase
from OG&E 78 shares of common stock of The Arklahoma Corporation
("Arklahoma"), an Arkansas corporation and a public utility as
defined by Act 324. The purchase price for the shares will be
based on the book value of Arklahoma common stock immediately prior
to the proposed sale. It is estimated that the book value of
Arklahoma common stock outstanding immediately prior to the sale
will be approximately $348,000 (or $696 per share), resulting in a
purchase price of approximately $54,288 for the 78 shares to be
acquired by SWEPCO.
6. SWEPCO is requesting authorization to purchase additional
shares of the common stock of Arklahoma from OG&E, at OG&E's
request, in order to facilitate the formation by OG&E of a holding
company system exempt from the registration requirements of the
Holding Company Act. OG&E believes that if it reduces its
percentage ownership of Arklahoma common stock to less than 5% by
selling 78 shares to SWEPCO and 68 shares to AP&L, Arklahoma will
not be deemed an "affiliate" of OG&E for purposes of the Holding
Company Act.
7. As a result of the proposed sale, SWEPCO's ownership of
Arklahoma common stock would increase from 32% to 47.6% and AP&L's
ownership of Arklahoma common stock would increase from 34% to
47.6% and OG&E's ownership would be reduced from 34% to 4.8%. The
sale of the shares will not affect the rights and obligations of
the parties under the Lease and the Operating Agreement. Although
each party has an option to purchase the facilities and terminate
the Lease, SWEPCO has no current intention to do so and knows of no
current intention on the part of either OG&E or AP&L to do so.
8. The financial statements of the Company are on file with
the Commission. No substantial changes in the Company's financial
condition have occurred since the last filing. Furthermore, the
transactions proposed herein involve an expenditure by the Company
of approximately $54,288 and will not have a material effect on the
Company's financial position.
9. The financial statements of Arklahoma, including
unaudited financials for the six months ending June 30, 1995, and
audited financials for the year ended December 31, 1994, are
attached hereto as SWEPCO Exhibit "A".
10. Pursuant to Section 2.03 of the Commission's Procedural
Rules, SWEPCO requests that the following individuals be shown on
the service list of this Docket:
William H. Lacefield
SWEPCO
428 Travis Street
P.O. Box 21106
Shreveport, LA 71156-0001
David R. Matthews
Matthews, Campbell, Rhoads,
McClure & Thompson, P.A.
119 South Second Street
Rogers, AR 72756
(501) 636-0875
WHEREFORE, Southwestern Electric Power Company respectfully
requests that the Commission enter its order on or before December
29, 1995, authorizing the Company to purchase 78 shares of common
stock of The Arklahoma Corporation from Oklahoma Gas and Electric
Company for an aggregate purchase price calculated as described
herein.
DATED this _____ day of _________________, 1995.
SOUTHWESTERN ELECTRIC POWER COMPANY
By:___________________________________
David R. Matthews, Its Attorney
Arkansas Bar# 76072
MATTHEWS, CAMPBELL, RHOADS,
McCLURE & THOMPSON, P.A.
119 South Second Street
Rogers, Arkansas 72756-4525
(501) 636-0875
THE ARKLAHOMA CORPORATION
BALANCE SHEET AS OF JUNE 30, 1995
ASSETS
Electric plant leased to others $2,561,863
Less - Reserve for depreciation 2,249,240
TOTAL UTILITY PLANT-NET 312,623
Cash and cash equivalents 368,326
Accounts Receivable - Assoc. Companies 17,476
TOTAL CURRENT ASSETS 385,802
TOTAL ASSETS $698,425
CAPITALIZATION AND LIABILITIES
Common stock issued $50,000
Unappropriated retained earnings 588,133
TOTAL CAPITALIZATION 638,133
CURRENT LIABILITIES:
Accounts payable - associated
companies -
DEFFERED CREDITS:
Defferred income taxes (SFAS 109) 60,292
TOTAL LIABILITIES 60,292
TOTAL CAPITALIZATION AND LIABILITIES $698,425
THE ARKLAHOMA CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
SIX MONTHS ENDING JUNE 30, 1995
REVENUES:
Interest Income $14,637
Other -
Total Revenue 14,637
OPERATING EXPENSES:
Administrative and general 6,030
Other 773
Total Operating Expenses 6,803
INCOME BEFORE FEDERAL AND
STATE INCOME TAXES 7,834
FEDERAL AND STATE INCOME TAXES (38)
NET INCOME (LOSS) $7,872
RETAINED EARNINGS
Balance at beginning of period $580,261
Net Income 7,872
Retained Earnings, end of year $588,133
THE ARKLAHOMA CORPORATION
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $7,872
Change in Certain Assets and Liabilities
(using) providing cash -
Accounts Receivable (17,476)
Accounts Payable (144,024)
Net Cash Provided From (Used In)
Operating Activities (153,628)
NET INCREASE (DECREASE) IN CASH (153,628)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 521,954
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $368,326
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash Paid During The Period
For Income Taxes $0
DISCLOSURE OF ACCOUNTING POLICY:
For the purposes of these financial statments, the Company considers
all highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents. These investments are carried at
cost which approximates market.
<TABLE>
THE ARKLAHOMA CORPORATION
ELECTRIC PLANT
JUNE 1995
<CAPTION>
CURRENT YEAR TOTAL TO DATE
ADDITIONS ADDITIONS NET
RETIREMENTS RETIREMENTS ADDITIONS
<S> <C> <C> <C> <C> <C>
INTANGIBLE PLANT
Organization $0 $0 $55 $0 $55
TOTAL INTANGIBLE PLANT 0 0 55 0 55
TRANSMISSION PLANT
Land and Land Rights 62,652 62,652
Structures and Improvements 45,689 37,735 7,954
Station Equipment 1,457,974 1,380,003 77,971
Poles and Fixtures 1,117,554 169,100 948,454
Overhead Conductors and
Devices 1,693,359 262,049 1,431,310
Roads and Trails 388 56 332
TOTAL TRANSMISSION PLANT 0 0 4,377,616 1,848,943 2,528,673
DISTRIBUTION PLANT
Land and Land Rights 655 655 0
Poles, Towers and Fixtures 1,176 1,176 0
Overhead Conductors and
Devices 1,437 1,437 0
Line Transformers 155 155 0
Services 36 36 0
TOTAL DISTRIBUTION PLANT 0 0 3,459 3,459 0
GENERAL PLANT
Office Furniture and Equipment 160 0 160
Transportation Equipment 8,362 8,362 0
Tools, Shop and Garage
Equipment 5,582 5,582 0
Communication Equipment 50,875 17,900 32,975
TOTAL GENERAL PLANT 0 0 64,979 31,844 33,135
TOTAL ELECTRIC PLANT
LEASED TO OTHERS 0 0 4,446,109 1,884,246 2,561,863
TOTAL ELECTRIC PLANT
PURCHASED OR SOLD 0 0 10,648 10,648 0
TOTAL UTILITY PLANT $0 $0 $4,456,757 $1,894,894 $2,561,863
</TABLE>
THE ARKLAHOMA CORPORATION
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 1994 AND 1993
ASSETS 1994 1993 Inc/(Dec)
Electric plant leased to others $2,561,863 $2,561,863 $0
Less - Reserve for depreciation 2,249,240 2,249,240 0
TOTAL UTILITY PLANT-NET 312,623 312,623 0
Cash and cash equivalents 521,954 557,419 (35,465)
Prepayments 0 571 (571)
TOTAL CURRENT ASSETS 521,954 557,990 (36,036)
TOTAL ASSETS $834,577 $870,613 ($36,036)
CAPITALIZATION AND LIABILITIES
Common stock issued $50,000 $50,000 $0
Unappropriated retained earnings 580,261 633,695 (53,434)
TOTAL CAPITALIZATION 630,261 683,695 (53,434)
CURRENT LIABILITIES:
Accounts payable - associated
companies 143,346 186,918 (43,572)
Other 678 0 678
144,024 186,918 (42,894)
DEFERRED CREDITS:
Deferred income taxes (SFAS 109) 60,292 0 60,292
TOTAL LIABILITIES 204,316 186,918 17,398
TOTAL CAPITALIZATION AND LIABILITIES $834,577 $870,613 ($36,036)
THE ARKLAHOMA CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
1994 1993 Inc/(Dec)
REVENUES:
Interest Income $14,791 $9,449 $5,342
Other 25 25 0
Total Revenue 14,816 9,474 5,342
OPERATING EXPENSES:
Administrative and general 5,909 5,895 14
Other 799 659 140
Total Operating Expenses 6,708 6,554 154
INCOME BEFORE FEDERAL AND
STATE INCOME TAXES 8,108 2,920 5,188
FEDERAL AND STATE INCOME TAXES 1,249 429 820
CUMMULATIVE EFFECT OF CHANGE
IN ACCOUNTING FOR INCOME
TAXES (SFAS 109) 60,292 - 60,292
NET INCOME (LOSS) ($53,433) $2,491 ($55,924)
RETAINED EARNINGS
Balance at beginning of period $633,694 $631,203 $2,491
Net Income (53,433) 2,491 (55,924)
Retained Earnings, end of year $580,261 $633,694 ($53,433)
THE ARKLAHOMA CORPORATION
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994 AND 1993
1994 1993 Inc/(Dec)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ($53,433) $2,491 ($55,924)
Cummulative effect of change in
accounting principle (SFAS 109) $60,292 $0 $60,292
Change in Certain Assets and Liabilities
(using) providing cash -
Accounts Receivable 0 6,367 (6,367)
Other Current Assets 571 711 (140)
Accounts Payable (42,895) 186,918 (229,813)
Net Cash Provided From (Used In)
Operating Activities (35,465) 196,487 (231,952)
NET INCREASE (DECREASE) IN CASH (35,465) 196,487 (231,952)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 557,419 360,932 196,487
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $521,954 $557,419 ($35,465)
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash Paid During The Year
For Income Taxes $0 $0 $0
DISCLOSURE OF ACCOUNTING POLICY:
For the purposes of these financial statments, the Company considers
all highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents. These investments are carried at
cost which approximates market.
<TABLE>
THE ARKLAHOMA CORPORATION
ELECTRIC PLANT
DECEMBER 1994
<CAPTION>
CURRENT YEAR TOTAL TO DATE
RETIREMENTS RETIREMENTS NET
ADDITIONS ADDITIONS ADDITIONS
<S> <C> <C><C> <C> <C>
INTANGIBLE PLANT
Organization $0 $0 $55 $0 $55
TOTAL INTANGIBLE PLANT 0 0 55 0 55
TRANSMISSION PLANT
Land and Land Rights 62,652 62,652
Structures and Improvements 45,689 37,735 7,954
Station Equipment 1,457,974 1,380,003 77,971
Poles and Fixtures 1,117,554 169,100 948,454
Overhead Conductors and
Devices 1,693,359 262,049 1,431,310
Roads and Trails 388 56 332
TOTAL TRANSMISSION PLANT 0 0 4,377,616 1,848,943 2,528,673
DISTRIBUTION PLANT
Land and Land Rights 655 655 0
Poles, Towers and Fixtures 1,176 1,176 0
Overhead Conductors and
Devices 1,437 1,437 0
Line Transformers 155 155 0
Services 36 36 0
TOTAL DISTRIBUTION PLANT 0 0 3,459 3,459 0
GENERAL PLANT
Office Furniture and Equipment 160 0 160
Transportation Equipment 8,362 8,362 0
Tools, Shop and Garage
Equipment 5,582 5,582 0
Communication Equipment 50,875 17,900 32,975
TOTAL GENERAL PLANT 0 0 64,979 31,844 33,135
TOTAL ELECTRIC PLANT
LEASED TO OTHERS 0 0 4,446,109 1,884,246 2,561,863
TOTAL ELECTRIC PLANT
PURCHASED OR SOLD 0 0 10,648 10,648 0
TOTAL UTILITY PLANT $0 $0 $4,456,757 $1,894,894 $2,561,863
</TABLE>
