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) February 11, 1997
(February 7, 1997)
KANSAS CITY POWER & LIGHT COMPANY
(Exact name of registrant as specified in its charter)
1-707
(Commission file number)
Missouri 44-0308720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification-No.)
1201 Walnut Street
Kansas City, Missouri 64106-2124
(Address of principal executive offices) (Zip Code)
(816) 556-2200
(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name or former address, if changed since last report)
FORM 8 - K
KANSAS CITY POWER & LIGHT COMPANY
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ITEM 5. OTHER EVENTS
MERGER AGREEMENT WITH WESTERN RESOURCES, INC.
Kansas City Power & Light Company, a Missouri corporation ("KCPL") and
Western Resources, Inc., a Kansas corporation ("Western"), have entered into an
Agreement and Plan of Merger, dated as of February 7, 1997 (the "Merger
Agreement"), which provides for a strategic business combination involving KCPL
and Western (the "Transaction"). The Transaction, which was unanimously
approved 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 Merger Agreement and the press release issued in connection
therewith are filed as exhibits to this report and are incorporated
herein by reference. The descriptions of the Merger Agreement set forth herein
do not purport to be complete and are qualified in their entirety by the
provisions of the Merger Agreement.
Under the terms of the Merger Agreement, KCPL will be merged
with and into Western, with Western being the surviving corporation. Each
outstanding share of Common Stock, no par value per share, of KCPL ("KCPL
Common Stock") will be cancelled and converted into the right to receive the
number of fully paid and nonassessable shares of Common Stock, par value $5.00
per share, of Western ("Western Common Stock") equal to the Conversion Ratio.
The "Conversion Ratio" means the quotient (rounded to the nearest 1/100,000)
determined by dividing $32.00 by the average of the high and low sales prices
of Western Common Stock (as reported on the New York Stock Exchange Composite
Transactions reporting system as published in the Wall Street Journal or, if
not published therein, in another authoritative source) on each of the twenty
consecutive trading days ending the tenth trading day immediately preceding
the date on which the Transaction shall become effective (the "Effective Time"),
divided by twenty; provided, however, that the Conversion Ratio, except as
provided in the Merger Agreement, shall not be less than 0.917 nor greater than
1.100. In connection with the Transaction, KCPL's outstanding preferred stock
will be redeemed by KCPL prior to the Effective Time. (See Article II of the
Merger Agreement.)
The Transaction is subject to various closing conditions, including,
without limitation, (1) the receipt of required shareholder approvals of KCPL
and Western, (2) the making of all necessary governmental filings, (3) the
receipt of all necessary governmental approvals, including approvals of state
utility regulators in Missouri, Kansas, and Oklahoma, and the Federal Energy
Regulatory Commission, the Federal Communication Commission, the Securities and
Exchange Commission (the "SEC") and the Nuclear Regulatory Commission, and (4)
the filing of the requisite notification with the Federal Trade Commission and
the Department of Justice under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the expiration of the applicable waiting period
thereunder. The Transaction is also subject to receipt of opinions of counsel
that the Transaction will qualify as a tax-free reorganization, the assurance
from Western's independent accountants that the Transaction will qualify as a
pooling of interests for accounting purposes, the aggregate number of dissenting
shares being less than 5.5% of the outstanding shares of KCPL Common Stock at
the Effective Time, conditions relating to regulatory approvals, and Western's
satisfaction that after the closing it will be exempt from the Public Utility
Holding Company Act of 1935 ("PUHCA"). In addition, the Transaction is
conditioned upon the effectiveness of a registration statement to be filed by
Western with the SEC with respect to the shares of Western Common Stock to be
issued in the Transaction and the approval for listing of such shares on the
New York Stock Exchange upon official notice of issuance. Shareholder meetings
to vote upon the Transaction are expected to be held in the second quarter of
1997. (See Article VIII of the Merger Agreement.) The Merger Agreement contains
certain covenants of KCPL pending the consummation of the Transaction. Subject
to the fiduciary obligations of its Board of Directors, KCPL covenants that it
will not initiate or facilitate any business combination proposal with a third
party. In addition, KCPL covenants that it will carry on its businesses in the
ordinary course consistent with past practice, not increase dividends and not
issue any capital stock except as set forth in the Merger Agreement. The
Merger Agreement also contains restrictions on KCPL relating to, among other
things, charter and bylaw amendments, capital expenditures, acquisitions,
dispositions, incurring indebtedness, certain increases in employee
compensation and benefits, maintenance of insurance, and affiliate
transactions. (See Article VI of the Merger Agreement.)
The Merger Agreement provides that, at the Effective Time, the
headquarters of the KCPL division of Western and the electric utility operations
of Western will be located in Kansas City, Missouri and the headquarters of
Western will be in Topeka, Kansas. Following the Effective Time, the Western
Board of Directors will take such action as may be necessary to appoint to the
Western Board of Directors up to six persons presently serving on the KCPL Board
of Directors who are willing and qualified to serve on the Western Board of
Directors. After the Effective Time, Western currently intends to provide
charitable contributions and community support within the service areas of KCPL
and Western at annual levels substantially comparable to the annual levels of
charitable contributions and community support provided by KCPL and Western
within their service areas during 1994 and 1995. (See Article VII of the Merger
Agreement.)
The Merger Agreement may be terminated under certain circumstances,
including: (1) by mutual consent of the parties; (2) by either party if the
other party breaches any of its representations, warranties or covenants
contained in the Merger Agreement, 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) business days after notice; (3) by
either party if the KCPL Board of Directors (i) withdraws or adversely
modifies its recommendation of the Merger Agreement, (ii) fails to reaffirm
such approval upon Western's request, or (iii) approves or recommends any
acquisition of KCPL or a material portion of its assets or any tender offer
for shares of capital stock of KCPL, in each case, other than by Western or
an affiliate thereof; (4) by either party (i) upon the adoption or issuance
of any law which has the effect of prohibiting the Transaction, or (ii) upon
the final and nonappealable order, judgment or decree of any court of competent
jurisdiction permanently restraining, enjoining or otherwise prohibiting the
Transaction; (5) by any party if the Transaction is not consummated by June 30,
1998 (the "Termination Date") (provided, however, that such Termination Date
shall be extended to June 30, 1999 if all conditions to closing the
Transaction, other than the receipt of certain consents and/or statutory
approvals by either of the parties, have not been satisfied by June 30, 1998);
(6) by either party if either KCPL's or Western's shareholders do not approve
the Transaction; (7) by KCPL, if as a result of a third party tender offer or
business combination proposal which, in the opinion of KCPL's counsel and after
giving consideration to concessions which may be offered by Western, the KCPL
Board of Directors determines in good faith that acceptance of such offer or
proposal is necessary for the KCPL Board of Directors to act in a manner
consistent with their fiduciary duties under applicable law; or (8) by KCPL
if the Western Resources Index Price (as defined in the Merger Agreement) is
less than $27.64; provided, however, that the termination right described in
the preceding clause (8) may not be exercised if the decline in Western's
stock price is not more than 5% greater than any decline in Standard & Poor's
Electric Companies Index over the same measuring period; and provided, further,
that such termination shall have no effect if Western notifies KCPL that the
Conversion Ratio shall be adjusted to equal the product of (i) the quotient of
$30.40 divided by the Western Resources Index Price and (ii) the Electric
Companies Ratio (as defined in the Merger Agreement). (See Article IX of the
Merger Agreement).
The Merger Agreement provides for the payment of a $50 million termination
fee by KCPL to Western if the Merger Agreement is terminated because (1) of a
breach by KCPL of its representations, warranties or covenants, (2) the KCPL
Board determines that acceptance of a third party tender offer or business
combination proposal is necessary for the KCPL Board to act in a manner
consistent with its fiduciary duties, (3) of KCPL's failure to (i) convene a
shareholder meeting for the purpose of voting on the Merger, (ii) distribute
proxy materials relating thereto, or (iii) recommend approval of the Merger,
or (4) KCPL shareholders do not approve the Merger Agreement, and prior to
such termination or shareholder meeting as set forth in the preceding clauses
(1), (2), (3) or (4) a third party shall have made a proposal to acquire KCPL
and such proposal is consummated (or a written offer relating thereto is
accepted by KCPL) within two and one-half years of the termination of the
Merger Agreement. If on or before the Termination Date all of the conditions
to the closing of the Transaction other than certain conditions have been
satisfied, and Western declines to waive such conditions, Western shall
reimburse KCPL for its expenses up to (1) $5 million, if the unsatisfied
conditions relate to Western's receipt of an opinion regarding the tax-free
treatment of the Transaction or obtaining the required approvals of state
regulators without material adverse conditions attached thereto, (2) $25
million, if the unsatisfied conditions relate to obtaining pooling of
interests treatment of the Transaction or obtaining the approval of the Federal
Energy Regulatory Commission without material adverse conditions attached
thereto, or (3) $35 million, if the unsatisfied condition relates to obtaining
the necessary exemption from PUHCA. (See Article IX of the Merger Agreement.)
If the Merger Agreement is terminated (1) by mutual consent of the
parties, (2) by KCPL because of a breach by Western of any of its
representations or covenants, (3) by either party because of any law or
injunction that permanently prohibits the Merger, (4) by either party at the
Termination Date, so long as certain unsatisfied conditions to Western's
obligation to close are not the result of KCPL's failure to perform certain
of its obligations under the Merger Agreement or (5) by either party because
Western's shareholders do not approve the Merger, then Western may not, for a
period of three years following such termination, acquire, agree to acquire or
make any proposal to acquire, directly or indirectly, any securities or
property of KCPL or any of its subsidiaries or otherwise act to seek to
control or influence the management, Board of Directors or policies of KCPL;
provided, however, that the provisions set forth in the preceding sentence
will cease to apply in the event that a third party, not acting in concert
with Western or an affiliate of Western, makes a proposal to acquire KCPL or
all or substantially all of the assets of KCPL, or acquires 10% of KCPL's
Common Stock. (See Article IX of the Merger Agreement.)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibit Number
(2)-1 Agreement and Plan of Merger, dated as of
February 7, 1997, by and among KCPL and Western. (2)
(99)-l Joint Press Release, dated February 7, 1997 of KCPL
and Western.
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(2) The registrant agrees to furnish supplementally any omitted exhibits or
schedules to the Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KANSAS CITY POWER & LIGHT COMPANY
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(Registrant)
/S/ JEANIE SELL LATZ
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Date: February 11, 1997 SERVICES AND CORPORATE SECRETARY