Field Operations. Integration of distribution operations--The combined company would have the ability to consolidate certain customer business offices and service centers in the eastern Kansas area where Western Resources and KCPL have contiguous service territories. The close proximity of these operations also enables customer service functions such as service initiation, service scheduling, etc. to be combined. The close proximity of the two companies would enable work to be reconfigured and resources to be shared in operations areas and with respect to customer calls and inquiries. . Integration of field and technical support functions--The combined company would be able to eliminate redundant functions in the area of distribution support, such as engineering, construction, operation and maintenance. Purchasing Economies . Streamlining of inventories and purchasing economies--The combined company can achieve savings through the centralization of purchasing and inventory functions related to construction, operation and maintenance at generating plants, service centers, warehouses and headquarters. The greater purchasing power and the relative quantity discounts that can be obtained as a result of the combination of the two companies would provide additional cost savings. Corporate and Administrative . Integration of facilities--The combined company would be able to consolidate certain duplicative facilities such as corporate headquarters and provide opportunities to consolidate energy control centers, service centers and warehouses. . Integration of corporate management and administrative functions--The combined company would be able to eliminate redundant functions in the areas of finance, accounting, purchasing, shareholder relations, human resources, corporate planning, public relations and administration among other areas. The payroll costs of such functions are relatively fixed and do not vary directly with an increase or decrease in the number of customers served. . Avoidance of future operating system expenditures--The combined company would be able to eliminate certain operational expenditures in the area of management information systems that would be made by each company on a stand-alone basis. These avoided expenditures relate to operating systems, such as the customer information and geographic information systems, that would not be wholly duplicated in the combined company. Additional expenditures could be reduced through the more efficient management of investment in other technology areas, such as in personal computers, mainframe upgrades and backup facilities. . Concentration of corporate programs and expenditures--The combined company would integrate corporate and administrative functions, thereby reducing certain non-labor costs, including insurance, audit and consulting fees, professional and trade association dues, stock transfer and other fees, vehicle expenses and various license fees, among others. Based upon Western Resources' experience from the merger with KGE, the cost savings outlined above can be achieved without layoffs by employing a combination of attrition, controlled hiring and work management programs (such as activity standardization or technology substitution). Anticipated net cost savings from the Offer and the Merger are expected to exceed $1 billion compared to approximately $636 million (derived from the KC United Registration Statement (as defined below) and the KCPL/UtiliCorp Joint Application, Docket No. ▇▇▇-▇▇▇-▇, filed with the KCC on February 2, 1996) estimated for the Proposed UtiliCorp/KCPL Transaction over a ten-year period. Cost savings are greater for the Merger than for the Proposed UtiliCorp/KCPL Transaction due to the scale differences between the individual companies, the contiguity and overlap of the KCPL and Western Resources service territories, the joint ownership or lease by Western Resources as operating lessee of over $2 billion of generating facilities and the knowledge and experience of Western Resources in identifying and realizing expected cost savings. The anticipated merger cost savings for each proposed transaction are summarized below: ESTIMATED MERGER COST SAVINGS OVER TEN YEARS ----------------------------- WESTERN RESOURCES/KCPL UTILICORP/KCPL -------------- -------------- ($ MILLIONS) Generation................................... $ 239 $315 Field Operations............................. 106 36 Purchasing Economies (non-fuel).............. 239 51 Corporate & Administrative (net of costs to achieve).................................... 459 234 ------ ---- Although limited information is available to fully compare each category, Western Resources believes the above table reflects a reasonable comparison. While figures for UtiliCorp and KCPL reflect the benefits of complete access to personnel and detailed data within those companies and the identification of specific cost savings categories, Western Resources has not had similar access. Nonetheless, Western Resources believes that upon inspection of similar data and discussions with KCPL personnel, additional cost savings categories can be identified. Because Western Resources was unable to discuss the above analyses with KCPL and did not have access to substantial material concerning KCPL's operations, these analyses were necessarily limited in scope. In addition, such analyses involve judgments and contain forward-looking statements with respect to, among other things, normal weather conditions, future national and regional economic and competitive conditions, inflation rates, regulatory treatment, future financial market conditions, interest rates, future business decisions and other uncertainties, which, though considered reasonable by Western Resources, are beyond Western Resources' control and difficult to predict. Accordingly, there can be no assurance that such cost savings will be realized, and actual cost savings may vary materially from those set forth above. In light of the uncertainties inherent in such analyses, the inclusion of estimated cost savings herein should not be regarded as a representation by Western Resources or any other person that such cost savings will be achieved. REGULATORY PLAN The allocation of the benefits and cost savings outlined above among the shareholders of Western Resources and KCPL and their respective customers will depend on the extent by which the rates of Western Resources and KCPL are adjusted to reflect such benefits. Although no assurances can be given, Western Resources anticipates that such adjustments will occur through approval of a regulatory plan (the "Regulatory Plan") that Western Resources has proposed in its application to the KCC seeking approval of the Offer and the Merger. The Regulatory Plan includes the following components: . An initial rate reduction of $21 million for cumulative rate reductions of $210 million for KCPL's retail electric customers in the first 10 years following the Merger. This is a 30% greater reduction in rates than in the Proposed UtiliCorp/KCPL Transaction. . An initial rate reduction of $10 million and a cumulative rate reduction of $100 million for KGE's retail electric customers in the first ten years following the Merger. . A five-year moratorium on electric rate increases for KCPL, KPL (as defined below), and KGE retail customers. The Regulatory Plan also includes Western Resources' current proposed rate reduction for KGE which reduces retail electric rates by $8.7 million annually beginning in August 1996, compounding to $60.9 million at the end of seven years (the "KGE Rate Plan"). The KGE Rate Plan also provides for acceleration of annual depreciation by $50 million for Wolf Creek (as defined below) for each of the next seven years and reduces depreciation by $11 million for certain other electric utility assets to reflect a more appropriate useful life for these properties. However, there can be no assurance that the Regulatory Plan will be implemented as described herein. In addition, Western Resources reserves the right to propose changes to the Regulatory Plan, including changes resulting from additional information about KCPL becoming available to Western Resources. REGULATORY APPROVALS Regulatory commissions reviewing the Offer and the Proposed UtiliCorp/KCPL Transaction will be asked to take into account the greater customer benefits of the Offer when deciding between the applications for approval. The consummation of the Offer and the Merger and the Proposed UtiliCorp/KCPL Transaction both would be subject to approval of the KCC, the MPSC, the Nuclear Regulatory Commission (the "NRC") and the FERC and the expiration or termination of the applicable waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and certain other miscellaneous filings. These are the only material regulatory approvals required to effect the Offer and the Merger. By contrast, in addition to all of the foregoing required regulatory approvals, the Proposed UtiliCorp/KCPL Transaction would also require approvals from utility regulators in Colorado, Iowa, Michigan, Minnesota, West Virginia and British Columbia and governmental approvals in Australia and New Zealand. On February 2, 1996, KCPL and UtiliCorp jointly filed with the MPSC and the KCC applications for approval of the Proposed UtiliCorp/KCPL Transaction. The MPSC and the KCC have scheduled hearings on the Proposed UtiliCorp/KCPL Transaction to begin, respectively, on October 7, 1996 and November 12, 1996. On March 29, 1996, KCPL and UtiliCorp jointly filed with the FERC an application for approval of the Proposed UtiliCorp/KCPL Transaction. As of April 22, 1996, the FERC had not set the application for hearing. On April 15, 1996, Western Resources filed an application with the KCC seeking approval of the Merger and a Petition to Intervene in the Proposed UtiliCorp/KCPL Transactions. In light of the superior value of the Offer and the benefits of the Regulatory Plan described above, Western Resources believes that it will be able to obtain the necessary regulatory approvals for the Offer on a timely basis and in a time frame at least as favorable as that in which UtiliCorp would be able to obtain the necessary regulatory approvals for the Proposed UtiliCorp/KCPL Transaction. Accordingly, Western Resources believes that the Proposed UtiliCorp/KCPL Transaction offers no timing advantage over the Offer. Kansas Gas and Electric Company ("KGE"), a wholly owned subsidiary of Western Resources, is the joint owner or lessee with KCPL of the LaCygne Station (a coal-fired station consisting of two generating units aggregating approximately 1,344 mw capacity) and the Wolf Creek Generating Station ("Wolf Creek") (a nuclear powered generating station of approximately 1,166 mw capacity). KGE and KCPL are joint owners of the Wolf Creek Nuclear Operating Corporation ("WCNOC") which operates Wolf Creek. Western Resources, KGE and KCPL are members of the MOKAN and Southwest Power Pools and in the normal course of business make purchases and sales of power to each other. KCPL leases a 345kv transmission line from Wolf Creek to LaCygne Station from KGE. Western Resources, KGE and KCPL from time to time in the normal course of business enter into agreements or arrangements with respect to their business operations. WESTERN RESOURCES Western Resources and its wholly owned subsidiaries include KPL, a rate- regulated electric and gas division of Western Resources ("KPL"), KGE, a rate- regulated utility and wholly owned subsidiary of Western Resources, Westar Capital, Inc., Westar Consumer Services, Inc., Westar Business Services, Inc., and The Wing Group, Inc., non-utility subsidiaries, and Mid Continent Market Center, Inc., a regulated gas transmission service provider. KGE owns 47% of Wolf Creek Nuclear Operating Corporation, the operating company for Wolf Creek. Western Resources is engaged principally in the production, purchase, transmission, distribution and sale of electricity and the delivery and sale of natural gas. Western Resources serves approximately 601,000 electric customers in eastern and central Kansas and approximately 648,000 natural gas customers in Kansas and northeastern Oklahoma. Western Resources' non-utility subsidiaries market natural gas primarily to large commercial and industrial customers, provide electronic security services and provide other energy- related products and services. Western Resources owns 30,800,000 common shares, par value $.10 per share (the "ADT Shares"), of ADT Limited, a corporation organized under the laws of Bermuda ("ADT") representing 23.9% of the ADT Shares and as such applies the equity method of accounting. Western Resources holds the ADT Shares for investment purposes and continually reviews its investment in ADT and, based on its evaluation of market conditions, applicable regulatory requirements, ADT's business prospects and future developments, it may from time to time determine to increase or decrease its equity position in ADT. Western Resources was incorporated under the laws of the State of Kansas in 1924. Western Resources' corporate headquarters is located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and its telephone number is (▇▇▇) ▇▇▇-▇▇▇▇. Western Resources is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission. Reports, proxy statements and other information filed by Western Resources with the Commission may be inspected and copied at the public reference facilities maintained by the Commission at Judiciary Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ and at the public reference facilities in the Commission's Regional Offices at Seven World Trade Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and Citicorp Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Copies of information may be obtained from the Public Reference Section of the Commission at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ at prescribed rates. The Western Resources Common Stock is listed and traded on the NYSE. Reports, proxy statements and other information filed by Western Resources and KCPL with the Commission may be inspected at the offices of the NYSE, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Certain information concerning the directors and executive officers of Western Resources and other representatives of Western Resources who may solicit proxies from KCPL Shareholders is set forth in Annex A hereto. Certain information concerning the Shares held by the persons described in the preceding sentence and by Western Resources, and certain transactions between any of them and KCPL, is set forth in Annex B hereto. VOTING OF PROXY CARDS GENERAL Only KCPL Shareholders of record on the record date are eligible to submit a proxy. Therefore, any KCPL Shareholder owning Shares held in the name of a brokerage firm, bank, or other institution should sign, date and return the [COLOR] proxy card to such brokerage firm, bank or other institution in the envelope provided by that firm. The accompanying [COLOR] proxy card will be voted in accordance with the KCPL Shareholder's instructions on such [COLOR] proxy card.
Appears in 1 contract
Sources: Proxy Statement
Field Operations. Integration of distribution operations--The combined company would have the ability to consolidate certain customer business offices and service centers in the eastern Kansas area where Western Resources and KCPL have contiguous service territories. The close proximity of these operations also enables customer service functions such as service initiation, service scheduling, etc. to be combined. The close proximity of the two companies would enable work to be reconfigured and resources to be shared in operations areas and with respect to customer calls and inquiries. . Integration of field and technical support functions--The combined company would be able to eliminate redundant functions in the area of distribution support, such as engineering, construction, operation and maintenance. Purchasing Economies . Streamlining of inventories and purchasing economies--The combined company can achieve savings through the centralization of purchasing and inventory functions related to construction, operation and maintenance at generating plants, service centers, warehouses and headquarters. The greater purchasing power and the relative quantity discounts that can be obtained as a result of the combination of the two companies would provide additional cost savings. Corporate and Administrative . Integration of facilities--The combined company would be able to consolidate certain duplicative facilities such as corporate headquarters and provide opportunities to consolidate energy control centers, service centers and warehouses. . Integration of corporate management and administrative functions--The combined company would be able to eliminate redundant functions in the areas of finance, accounting, purchasing, shareholder relations, human resources, corporate planning, public relations and administration among other areas. The payroll costs of such functions are relatively fixed and do not vary directly with an increase or decrease in the number of customers served. . Avoidance of future operating system expenditures--The combined company would be able to eliminate certain operational expenditures in the area of management information systems that would be made by each company on a stand-alone basis. These avoided expenditures relate to operating systems, such as the customer information and geographic information systems, that would not be wholly duplicated in the combined company. Additional expenditures could be reduced through the more efficient management of investment in other technology areas, such as in personal computers, mainframe upgrades and backup facilities. . Concentration of corporate programs and expenditures--The combined company would integrate corporate and administrative functions, thereby reducing certain non-labor costs, including insurance, audit and consulting fees, professional and trade association dues, stock transfer and other fees, vehicle expenses and various license fees, among others. The total cost savings, net of the costs necessary to achieve these reductions, are estimated to be approximately $43 million in 1998, $77 million in 1999, $94 million in 2000, $101 million in 2001, $108 million in 2002, $111 million in 2003, $117 million in 2004, $124 million in 2005, $131 million in 2006, and $137 million in 2007, for a cumulative total of approximately $1.043 billion during the first ten years following the Merger. The savings in 1998 and 1999 are lower than any subsequent year's savings due to the costs to achieve and phase-in of certain cost savings. A summary of the projected cost savings beginning January 1, 1998 is as follows: COST SAVINGS AS REFLECTED IN THE FORECAST (DOLLARS IN THOUSANDS) YEARS ENDING DECEMBER 31, --------------------------------------------- 2001- 1998 1999 2000 2007 TOTAL ------- ------- -------- ---------- GENERATION: Electric Dispatch............. $ 4,313 $ 4,714 $ 5,157 $ 50,209 $ 64,393 Capacity Deferrals............ -- -- 7,168 50,176 57,344 Generation Labor.............. 8,854 9,419 10,008 88,821 117,102 ------- ------- ------- -------- ---------- 13,167 14,133 22,333 189,206 238,839 FIELD OPERATIONS................ 6,569 7,366 8,198 83,892 106,025 PURCHASING ECONOMIES (NON-FUEL): Procurement................... 10,288 11,938 13,638 147,554 183,418 Inventory..................... 741 741 741 5,187 7,410 Contract Services............. 2,461 2,945 3,445 39,408 48,259 ------- ------- ------- -------- ---------- 13,490 15,624 17,824 192,149 239,087 CORPORATE & ADMINISTRATIVE: Information Services.......... 10,106 12,454 13,744 96,252 132,556 Facilities.................... 1,711 1,711 1,711 11,977 17,110 Professional Services......... 1,358 1,399 1,441 11,370 15,568 Insurance..................... 1,114 1,148 1,182 9,329 12,773 Corporate & Administrative Labor........................ 17,853 20,699 21,816 188,293 248,661 Overheads & Benefits.......... 3,426 3,616 3,816 33,065 43,923 Other Corporate & Administrative Programs...... 1,627 1,673 1,719 13,460 18,479 ------- ------- ------- -------- ---------- 37,195 42,700 45,429 363,746 489,070 ------- ------- ------- -------- ---------- GROSS SAVINGS................... 70,421 79,823 93,784 828,993 1,073,021 Less: Costs to Achieve........ (27,157) (3,014) -- -- (30,171) ------- ------- ------- -------- ---------- NET SAVINGS..................... $43,264 $76,809 $93,784 $828,993 $1,042,850 ======= ======= ======= ======== ========== Western Resources selected Deloitte & Touche Consulting Group to assist in its cost savings study because Deloitte & Touche Consulting Group has a nationally recognized utilities consulting practice and has substantial experience in evaluating cost savings in utility mergers. Deloitte & Touche Consulting Group assisted Western Resources in the KPL/KGE merger and has provided cost savings advice in 13 of the last 16 announced utility mergers. Pursuant to a letter agreement dated February 9, 1996, Deloitte & Touche Consulting Group was engaged to assist Western Resources in the analysis of potential merger cost savings from the Merger. Under this agreement, Western Resources has agreed to pay Deloitte & Touche Consulting Group a fee based on certain hourly rates for actual work performed. Fees of approximately $422,000 are to be paid to Deloitte & Touche Consulting Group for its assistance on the cost savings analysis. Western Resources has also agreed to reimburse Deloitte & Touche Consulting Group for its out-of-pocket expenses and has agreed to indemnify Deloitte & Touche Consulting Group against certain liabilities and expenses in connection with its engagement. Deloitte & Touche Consulting Group has provided certain consulting services to Western Resources from time to time over the past two years. Based upon Western Resources' experience from the its previous merger with KGE, in which total payroll costs were significantly reduced without layoffs, and its knowledge of KCPL, Western Resources believes that the cost savings outlined above can be similarly achieved without layoffs by employing a combination of attrition, controlled hiring hiring, retraining, placements in growing unregulated subsidiaries, early retirements, voluntary separation and work better management programs (such as activity standardization or and technology substitution). Anticipated net cost savings from the Offer and the Merger are expected to exceed $1 billion compared to approximately $636 million (derived from the KC United Registration Statement (as defined below) and the KCPL/UtiliCorp Joint ApplicationWhen Western Resources merged with KGE on March 31, Docket No. ▇▇▇-▇▇▇-▇1992, filed with the KCC on February 2, 1996) estimated for the Proposed UtiliCorp/KCPL Transaction over a ten-year period. Cost savings are greater for the Merger than for the Proposed UtiliCorp/KCPL Transaction due to the scale differences between the individual companies, the contiguity and overlap of the KCPL KGE and Western Resources service territorieshad a combined workforce of 5,571 employees (excluding employees of WCNOC). As illustrated by the following chart, by May 1, 1992, the joint ownership or lease combined workforce had been reduced without layoffs by Western Resources as operating lessee a total of over $2 billion of generating facilities and the knowledge and experience of Western Resources in identifying and realizing expected cost savings. The anticipated merger cost savings for each proposed transaction are summarized below: ESTIMATED MERGER COST SAVINGS OVER TEN YEARS ----------------------------- WESTERN RESOURCES/KCPL UTILICORP/KCPL -------------- -------------- 598 positions ($ MILLIONS) Generation................................... $ 239 $315 Field Operations............................. 106 36 Purchasing Economies (non-fuelexcluding 16 new hires).............. 239 51 Corporate & Administrative (net of costs to achieve).................................... 459 234 ------ ---- Although limited information is available to fully compare each category, Western Resources believes the above table reflects a reasonable comparison. While figures for UtiliCorp and KCPL reflect the benefits of complete access to personnel and detailed data within those companies and the identification of specific cost savings categories, Western Resources has not had similar access. Nonetheless, Western Resources believes that upon inspection of similar data and discussions with KCPL personnel, additional cost savings categories can be identified. Because Western Resources was unable to discuss the above analyses with KCPL and did not have access to substantial material concerning KCPL's operations, these analyses were necessarily limited in scope. In addition, such analyses involve judgments and contain forward-looking statements with respect to, among other things, normal weather conditions, future national and regional economic and competitive conditions, inflation rates, regulatory treatment, future financial market conditions, interest rates, future business decisions and other uncertainties, which, though considered reasonable by Western Resources, are beyond Western Resources' control and difficult to predict. Accordingly, there can be no assurance that such cost savings will be realized, and actual cost savings may vary materially from those set forth above. In light of the uncertainties inherent in such analyses, the inclusion of estimated cost savings herein should not be regarded as a representation by Western Resources or any other person that such cost savings will be achieved. REGULATORY PLAN The allocation of the benefits and cost savings outlined above among the shareholders of Western Resources and KCPL and their respective customers will depend on the extent by which the rates of Western Resources and KCPL are adjusted to reflect such benefits. Although no assurances can be given, Western Resources anticipates that such adjustments will occur through approval of a regulatory plan (the "Regulatory Plan") that Western Resources has proposed in its application to the KCC seeking approval of the Offer and the Merger. The Regulatory Plan includes the following components: . An initial rate reduction of $21 million for cumulative rate reductions of $210 million for KCPL's retail electric customers in the first 10 years following the Merger. This is a 30% greater reduction in rates than in the Proposed UtiliCorp/KCPL Transaction. . An initial rate reduction of $10 million and a cumulative rate reduction of $100 million for KGE's retail electric customers in the first ten years following the Merger. . A five-year moratorium on electric rate increases for KCPL, KPL (as defined below), and KGE retail customers. The Regulatory Plan also includes Western Resources' current proposed rate reduction for KGE which reduces retail electric rates by $8.7 million annually beginning in August 1996, compounding to $60.9 million at the end of seven years (the "KGE Rate Plan"). The KGE Rate Plan also provides for acceleration of annual depreciation by $50 million for Wolf Creek (as defined below) for each of the next seven years and reduces depreciation by $11 million for certain other electric utility assets to reflect a more appropriate useful life for these properties. However, there can be no assurance that the Regulatory Plan will be implemented as described herein. In addition, Western Resources reserves the right to propose changes to the Regulatory Plan, including changes resulting from additional information about KCPL becoming available to Western Resources. REGULATORY APPROVALS Regulatory commissions reviewing the Offer and the Proposed UtiliCorp/KCPL Transaction will be asked to take into account the greater customer benefits of the Offer when deciding between the applications for approval. The consummation of the Offer and the Merger and the Proposed UtiliCorp/KCPL Transaction both would be subject to approval of the KCC, the MPSC, the Nuclear Regulatory Commission (the "NRC") and the FERC and the expiration or termination of the applicable waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and certain other miscellaneous filings. These are the only material regulatory approvals required to effect the Offer and the Merger. By contrast, in addition to all of the foregoing required regulatory approvals, the Proposed UtiliCorp/KCPL Transaction would also require approvals from utility regulators in Colorado, Iowa, Michigan, Minnesota, West Virginia and British Columbia and governmental approvals in Australia and New Zealand. On February 2, 1996, KCPL and UtiliCorp jointly filed with the MPSC and the KCC applications for approval of the Proposed UtiliCorp/KCPL Transaction. The MPSC and the KCC have scheduled hearings on the Proposed UtiliCorp/KCPL Transaction to begin, respectively, on October 7, 1996 and November 12, 1996. On March 29, 1996, KCPL and UtiliCorp jointly filed with the FERC an application for approval of the Proposed UtiliCorp/KCPL Transaction. As of April 22, 1996, the FERC had not set the application for hearing. On April 15, 1996, Western Resources filed an application with the KCC seeking approval of the Merger and a Petition to Intervene in the Proposed UtiliCorp/KCPL Transactions. In light of the superior value of the Offer and the benefits of the Regulatory Plan described above, Western Resources believes that it will be able to obtain the necessary regulatory approvals for the Offer on a timely basis and in a time frame at least as favorable as that in which UtiliCorp would be able to obtain the necessary regulatory approvals for the Proposed UtiliCorp/KCPL Transaction. Accordingly, Western Resources believes that the Proposed UtiliCorp/KCPL Transaction offers no timing advantage over the Offer. Kansas Gas and Electric Company ("KGE"), a wholly owned subsidiary of Western Resources, is the joint owner or lessee with KCPL of the LaCygne Station (a coal-fired station consisting of two generating units aggregating approximately 1,344 mw capacity) and the Wolf Creek Generating Station ("Wolf Creek") (a nuclear powered generating station of approximately 1,166 mw capacity). KGE and KCPL are joint owners of the Wolf Creek Nuclear Operating Corporation ("WCNOC") which operates Wolf Creek. Western Resources, KGE and KCPL are members of the MOKAN and Southwest Power Pools and in the normal course of business make purchases and sales of power to each other. KCPL leases a 345kv transmission line from Wolf Creek to LaCygne Station from KGE. Western Resources, KGE and KCPL from time to time in the normal course of business enter into agreements or arrangements with respect to their business operations. WESTERN RESOURCES Western Resources and its wholly owned subsidiaries include KPL, a rate- regulated electric and gas division of Western Resources ("KPL"), KGE, a rate- regulated utility and wholly owned subsidiary of Western Resources, Westar Capital, Inc., Westar Consumer Services, Inc., Westar Business Services, Inc., and The Wing Group, Inc., non-utility subsidiaries, and Mid Continent Market Center, Inc., a regulated gas transmission service provider. KGE owns 47% of Wolf Creek Nuclear Operating Corporation, the operating company for Wolf Creek. Western Resources is engaged principally in the production, purchase, transmission, distribution and sale of electricity and the delivery and sale of natural gas. Western Resources serves approximately 601,000 electric customers in eastern and central Kansas and approximately 648,000 natural gas customers in Kansas and northeastern Oklahoma. Western Resources' non-utility subsidiaries market natural gas primarily to large commercial and industrial customers, provide electronic security services and provide other energy- related products and services. Western Resources owns 30,800,000 common shares, par value $.10 per share (the "ADT Shares"), of ADT Limited, a corporation organized under the laws of Bermuda ("ADT") representing 23.9% of the ADT Shares and as such applies the equity method of accounting. Western Resources holds the ADT Shares for investment purposes and continually reviews its investment in ADT and, based on its evaluation of market conditions, applicable regulatory requirements, ADT's business prospects and future developments, it may from time to time determine to increase or decrease its equity position in ADT. Western Resources was incorporated under the laws of the State of Kansas in 1924. Western Resources' corporate headquarters is located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and its telephone number is (▇▇▇) ▇▇▇-▇▇▇▇. Western Resources is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission. Reports, proxy statements and other information filed by Western Resources with the Commission may be inspected and copied at the public reference facilities maintained by the Commission at Judiciary Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ and at the public reference facilities in the Commission's Regional Offices at Seven World Trade Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and Citicorp Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Copies of information may be obtained from the Public Reference Section of the Commission at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ at prescribed rates. The Western Resources Common Stock is listed and traded on the NYSE. Reports, proxy statements and other information filed by Western Resources and KCPL with the Commission may be inspected at the offices of the NYSE, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Certain information concerning the directors and executive officers of Western Resources and other representatives of Western Resources who may solicit proxies from KCPL Shareholders is set forth in Annex A hereto. Certain information concerning the Shares held by the persons described in the preceding sentence and by Western Resources, and certain transactions between any of them and KCPL, is set forth in Annex B hereto. VOTING OF PROXY CARDS GENERAL Only KCPL Shareholders of record on the record date are eligible to submit a proxy. Therefore, any KCPL Shareholder owning Shares held in the name of a brokerage firm, bank, or other institution should sign, date and return the [COLOR] proxy card to such brokerage firm, bank or other institution in the envelope provided by that firm. The accompanying [COLOR] proxy card will be voted in accordance with the KCPL Shareholder's instructions on such [COLOR] proxy card.
Appears in 1 contract
Sources: Proxy Statement