Document/Exhibit Description Pages Size
1: 8-K Current Report 9 31K
2: EX-1 Underwriting Agreement 84 290K
3: EX-2 Plan of Acquisition, Reorganization, Arrangement, 18 68K
Liquidation or Succession
4: EX-3 Articles of Incorporation/Organization or By-Laws 18 68K
5: EX-4 Instrument Defining the Rights of Security Holders 1 5K
6: EX-5 Opinion re: Legality 30 63K
7: EX-6 Opinion re: Discount on Capital Shares 27 63K
8: EX-7 Opinion re: Liquidation Preference 37 118K
9: EX-8 Opinion re: Tax Matters 6 21K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 28, 1995
NORTHERN STATES POWER COMPANY
(Exact name of registrant as specified in charter)
Minnesota
(State or other jurisdiction
of incorporation)
1-3034 41-0448030
(Commission File No.) (IRS employer
identification no.)
414 Nicollet Mall, Minneapolis, Minnesota 55401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 330-5500
ITEM 5. OTHER EVENTS
MERGER AGREEMENT WITH WISCONSIN ENERGY CORPORATION
Northern States Power Company, a Minnesota corpora-
tion ("NSP"), Wisconsin Energy Corporation, a Wisconsin corpo-
ration ("WEC"), Northern Power Wisconsin Corp., a Wisconsin
corporation and wholly-owned subsidiary of NSP ("New NSP") and
WEC Sub Corp., a Wisconsin corporation and wholly-owned sub-
sidiary of WEC ("WEC Sub"), have entered into an Agreement and
Plan of Merger, dated as of April 28, 1995 (the "Merger Agree-
ment"), which provides for a strategic business combination
involving NSP and WEC in a "merger-of-equals" transaction (the
"Transaction"). The Transaction, which was unanimously ap-
proved by the Boards of Directors of the constituent companies,
is expected to close shortly after all of the conditions to the
consummation of the Transaction, including obtaining applicable
regulatory approvals, are met or waived. The regulatory ap-
proval process is expected to take approximately 12 to 18
months.
In the Transaction, the holding company of the com-
bined enterprise will be registered under the Public Utility
Holding Company Act of 1935, as amended. The holding company
will be named Primergy Corporation ("Primergy") and will be the
parent company of both NSP (which, for regulatory reasons, will
reincorporate in Wisconsin) and of WEC's present principal
utility subsidiary, Wisconsin Electric Power Company ("WEPCO"),
which will be renamed "Wisconsin Energy Company." Wisconsin
Energy Company will include the operations of WEC's other
present utility subsidiary, Wisconsin Natural Gas Company,
which is anticipated to be merged into WEPCO by year-end 1995,
pending regulatory approval, as previously planned. It is an-
ticipated that, following the Transaction, NSP's Wisconsin
utility subsidiary, Northern States Power, a Wisconsin corpo-
ration ("NSP-W") will be merged into Wisconsin Energy Company.
The Merger Agreement, the press release issued in
connection therewith and the related Stock Option Agreements
(defined below) are filed as exhibits to this report and are
incorporated herein by reference. The descriptions of the
Merger Agreement and the Stock Option Agreements set forth
herein do not purport to be complete and are qualified in their
entirety by the provisions of the Merger Agreement and the
Stock Option Agreements, as the case may be.
Under the terms of the Merger Agreement, NSP will be
merged with and into New NSP and immediately thereafter WEC Sub
will be merged with and into New NSP, with New NSP being the
surviving corporation. Each outstanding share of Common Stock,
par value $2.50 per share, of NSP will be cancelled and con-
verted into the right to receive 1.626 shares of Common Stock,
par value $.01 per share, of Primergy ("Primergy Common
Stock"). The outstanding shares of WEC Common Stock, par value
$.01 per share, will remain outstanding, unchanged, as shares
of Primergy Common Stock. As of the date of the Merger Agree-
ment, NSP had 67.3 million common shares outstanding and WEC
had 109.4 million common shares outstanding. Based on such
capitalization, the Transaction would result in the common
shareholders of NSP receiving 50% of the common equity of
Primergy and the common shareholders of WEC owning the other
50% of the common equity of Primergy. Each outstanding share
of Cumulative Preferred Stock, par value $100.00 per share, of
NSP will be cancelled and converted into the right to receive
one share of Cumulative Preferred Stock, par value $100.00 per
share, of New NSP with identical rights (including dividend
rights) and designations. WEPCO's outstanding preferred stock
will remain outstanding and be unchanged in the Transaction.
It is anticipated that Primergy will adopt NSP's
dividend payment level adjusted for the exchange ratio. NSP
currently pays $2.64 per share annually, and WEC's annual div-
idend rate is currently $1.47 per share. Based on the exchange
ratio and NSP's current dividend rate, the pro forma dividend
rate for Primergy would be $1.62 per share.
The Transaction is subject to customary closing con-
ditions, including, without limitation, the receipt of required
shareholder approvals of WEC and NSP; and the receipt of all
necessary governmental approvals and the making of all neces-
sary governmental filings, including approvals of state utility
regulators in Wisconsin, Minnesota and certain other states,
the approval of the Federal Energy Regulatory Commission, the
Securities and Exchange Commission (the "SEC"), the Nuclear
Regulatory Commission, and the filing of the requisite notifi-
cation with the Federal Trade Commission and the Department of
Justice under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the expiration of the applicable
waiting period thereunder. The Transaction is also subject to
receipt of assurances from the Internal Revenue Service and
opinions of counsel that the Transaction will qualify as a tax-
free reorganization, and the assurances from the parties' in-
dependent accountants, that the Transaction will qualify as a
pooling of interests for accounting purposes. In addition, the
Transaction is conditioned upon the effectiveness of a regis-
tration statement to be filed by WEC with the SEC with respect
to the Primergy Common Stock to be issued in the Transaction
and the approval for listing of such shares on the New York
Stock Exchange. (See Article VIII of the Merger Agreement.)
-2-
Shareholder meetings to vote upon the Transaction will be con-
vened as soon as practicable and are expected to be held in the
third or fourth quarter of 1995.
The Merger Agreement contains certain covenants of
the parties pending the consummation of the Transaction. Gen-
erally, the parties must carry on their businesses in the or-
dinary course consistent with past practice, may not increase
dividends on common stock beyond specified levels, and may not
issue any capital stock beyond certain limits. The Merger
Agreement also contains restrictions on, among other things,
charter and bylaw amendments, capital expenditures, acquisi-
tions, dispositions, incurrence of indebtedness, certain in-
creases in employee compensation and benefits, and affiliate
transactions. (See Article VI of the Merger Agreement.)
The Merger Agreement provides that, after the ef-
fectiveness of the Transaction (the "Effective Time"), the
corporate headquarters and principal executive offices of
Primergy and NSP will be located in Minneapolis, Minnesota, and
the headquarters of Wisconsin Energy Company will remain in
Milwaukee, Wisconsin. Primergy's Board of Directors, which
will be divided into three classes, will consist of a total of
12 directors, 6 of whom will be designated by WEC and 6 of whom
will be designated by NSP. Mr. James J. Howard, the current
Chairman of the Board, President and Chief Executive Officer
("CEO") of NSP, will serve as CEO of Primergy from the Effec-
tive Time until the later of 16 months after the Effective Time
or the date of the annual meeting of shareholders of Primergy
that occurs in 1998, and Chairman of Primergy until the later
of July 1, 2000 or two years after he ceases to be CEO. Mr.
Abdoo, the current Chairman of the Board, President and CEO of
WEC, will serve as Vice Chairman of the Board, President and
Chief Operating Officer of Primergy until the date when Mr.
Howard ceases to be CEO, at which time he will be entitled to
assume the additional role of CEO. Mr. Abdoo will assume the
position of Chairman when Mr. Howard ceases to be Chairman.
The Merger Agreement may be terminated under certain
circumstances, including (1) by mutual consent of the parties;
(2) by any party if the Transaction is not consummated by April
30, 1997 (provided, however, that such termination date shall
be extended to October 31, 1997 if all conditions to closing
the Transaction, other than the receipt of certain consents
and/or statutory approvals by any of the parties, have been
satisfied by April 30, 1997); (3) by any party if either NSP's
or WEC's shareholders vote against the Transaction or if any
state or federal law or court order prohibits the Transaction;
(4) by a non-breaching party if there exist breaches of any
representations or warranties contained in the Merger Agreement
-3-
as of the date thereof which breaches, individually or in the
aggregate, would result in a material adverse effect on the
breaching party and which is not cured within twenty (20) days
after notice; (5) by a non-breaching party if there occur
breaches of specified covenants or material breaches of any
covenant or agreement which are not cured within twenty (20)
days after notice; (6) by either party if the Board of Direc-
tors of the other party shall withdraw or adversely modify its
recommendation of the Transaction or shall approve any compet-
ing transaction; or (7) by either party, under certain circum-
stances, as a result of a third-party tender offer or business
combination proposal which such party's board of directors de-
termines in good faith that their fiduciary duties require be
accepted, after the other party has first been given an oppor-
tunity to make concessions and adjustments in the terms of the
Merger Agreement.
The Merger Agreement provides that if a breach de-
scribed in clause (4) or (5) of the previous paragraph occurs,
then, if such breach is not willful, the non-breaching party is
entitled to reimbursement of its out-of-pocket expenses, not to
exceed $10 million. In the event of a willful breach, the non-
breaching party will be entitled to its out-of-pocket expenses
(which shall not be limited to $10 million) and any remedies it
may have at law or in equity, provided that if, at the time of
the breaching party's willful breach, there shall have been a
third party tender offer or business combination proposal which
shall not have been rejected by the breaching party and with-
drawn by the third party, and within two and one-half years of
any termination by the non-breaching party, the breaching party
accepts an offer to consummate or consummates a business com-
bination with such third party, then such breaching party, upon
the signing of a definitive agreement relating to such a busi-
ness combination, or, if no such agreement is signed then at
the closing of such business combination, will pay to the non-
breaching party an additional fee equal to $75 million. The
Merger Agreement also requires payment of a termination fee of
$75 million (and reimbursement of out-of-pocket expenses) by
one party (the "Payor") to the other in certain circumstances,
if (i) the Merger Agreement is terminated (x) as a result of
the acceptance by the Payor of a third-party tender offer or
business combination proposal, (y) following a failure of the
shareholders of the Payor to grant their approval to the
Transaction or (z) as a result of the Payor's material failure
to convene a shareholder meeting, distribute proxy materials
and, subject to its board of directors' fiduciary duties, rec-
ommend the Transaction to its shareholders; (ii) at the time of
such termination or prior to the meeting of such party's
shareholders there shall have been a third-party tender offer
-4-
or business combination proposal which shall not have been re-
jected by the Payor and withdrawn by such third party; and
(iii) within two and one-half years of any such termination
described in clause (i) above, the Payor accepts an offer to
consummate or consummates a business combination with such
third party. Such termination fee and out-of-pocket expenses
referred to in the previous sentence shall be paid upon the
signing of a definitive agreement between the Payor and the
third party, or, if no such agreement is signed, then at the
closing of such third-party business combination. The termi-
nation fees payable by NSP or WEC under these provisions and
the aggregate amount which could be payable by NSP or WEC upon
a required purchase of the options granted pursuant to the
Stock Option Agreements (defined below) may not exceed $125
million in the aggregate. (See Article IX of the Merger
Agreement.)
Concurrently with the Merger Agreement, the parties
have entered into reciprocal stock option agreements (the
"Stock Option Agreements") each granting the other an irrevo-
cable option to purchase up to that number of shares of common
stock of the other company which equals 19.9% of the number of
shares of common stock of the other company outstanding on
April 28, 1995 at an exercise price of $44.075 per share, in
the case of NSP common stock, or $27.675 per share, in the case
of WEC common stock, under certain circumstances if the Merger
Agreement becomes terminable by one party as a result of the
other party's breach or as a result of the other party becoming
the subject of a third-party proposal for a business combina-
tion. Any party whose option becomes exercisable (the "Exer-
cising Party") may request the other party to repurchase from
it all or any portion of the Exercising Party's option at the
price specified in the Stock Option Agreements. (See the Stock
Option Agreements.)
A preliminary estimate indicates that the Transaction
will result in net savings of approximately $2.0 billion in
costs over 10 years. It is anticipated that the synergies
created by the Transaction will allow the companies to imple-
ment a modest reduction in electric retail rates followed by a
rate freeze for electric retail customers through the year
2000. The allocation of the net savings between ratepayers and
shareholders of NSP will be determined by various regulatory
agencies.
Both NSP and WEC recognize that the divestiture of
their existing gas operations and certain non-utility opera-
tions is a possibility under the new registered holding company
structure, but will seek approval from the SEC to maintain such
businesses. If divestiture is ultimately required, the SEC has
-5-
historically allowed companies sufficient time to accomplish
divestitures in a manner that protects shareholder value.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS. The following exhibits are filed herewith:
(2)-1 Agreement and Plan of Merger, dated as of
April 28, 1995, by and among Northern
States Power Company, Wisconsin Energy
Corporation, Northern Power Wisconsin Corp.
and WEC Sub Corp. ("Merger Agreement)1
2 WEC Stock Option Agreement, dated as of
April 28, 1995, by and among Northern
States Power Company and Wisconsin Energy
Corporation
3 NSP Stock Option Agreement, dated as of
April 28, 1995, by and among Wisconsin En-
ergy Corporation and Northern States Power
Company
4 Committees of the Board of Directors of
Primergy Corporation (Exhibit 7.13 to the
Agreement and Plan of Merger)
5 Form of Employment Agreement of James J.
Howard (Exhibit 7.15.1 to the Agreement and
Plan of Merger)
6 Form of Employment Agreement with Richard
A. Abdoo (Exhibit 7.15.2 to the Agreement
and Plan of Merger)
7 Form of Amended and Restated Articles of
Incorporation of Northern Power Wisconsin
Corp. (Exhibit 7.20(b) to the Agreement and
Plan of Merger)
(99)-1 Press Release, dated May 1, 1995, of Nort-
hern States Power Company
_____________________
1 The registrant agrees to furnish supplementally any omit-
ted exhibit to the Commission upon request.
-6-
NORTHERN STATES POWER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Ex-
change Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
NORTHERN STATES POWER COMPANY
(Registrant)
/s/ EDWARD J. MCINTYRE
Date: May 3, 1995 Edward J. McIntyre, Vice
President and Chief Financial
Officer
NORTHERN STATES POWER COMPANY
EXHIBIT INDEX
Current Report on Form 8-K
Report Dated May 3, 1995
Exhibit
Number
(2)-l Agreement and Plan of Merger, dated as of April 28,
1995, by and among Northern States Power Company,
Wisconsin Energy Corporation, Northern Power Wiscon-
sin Corp. and WEC Sub Corp.
2 WEC Stock Option Agreement, dated as of April 28,
1995, by and among Northern States Power Company and
Wisconsin Energy Corporation
3 NSP Stock Option Agreement, dated as of April 28,
1995, by and among Wisconsin Energy Corporation and
Northern States Power Company
4 Committees of the Board of Directors of Primergy
Corporation (Exhibit 7.13 to the Agreement and Plan
of Merger)
5 Form of Employment Agreement of James J. Howard (Ex-
hibit 7.15.1 to the Agreement and Plan of Merger)
6 Form of Employment Agreement with Richard A. Abdoo
(Exhibit 7.15.2 to the Agreement and Plan of Merger)
7 Form of Amended and Restated Articles of Incorpora-
tion of Northern Power Wisconsin Corp. (Exhibit
7.20(b) to the Agreement and Plan of Merger)
(99)-1 Press Release, dated May 1, 1995, of Northern States
Power Company.
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘8-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 7/1/00 | | 4 | | | | | None on these Dates |
| | 10/31/97 | | 4 |
| | 4/30/97 | | 4 |
| Filed on: | | 5/3/95 | | 8 | | 9 |
| | 5/1/95 | | 7 | | 9 |
| For Period End: | | 4/28/95 | | 1 | | 9 |
| List all Filings |
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