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) September 13, 1996
OHIO EDISON COMPANY
(Exact name of Registrant as specified in its charter)
Ohio 1-2578 34-0437786
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
76 South Main Street, Akron, Ohio 44308
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 330-384-5100
Item 5. Other Events
MERGER AGREEMENT WITH CENTERIOR ENERGY CORPORATION
On September 13, 1996, Ohio Edison Company, an Ohio
corporation ("Ohio Edison"), and Centerior Energy Corporation, an
Ohio corporation ("Centerior"), entered into an Agreement and Plan
of Merger, dated as of September 13, 1996 (the "Merger Agreement").
Pursuant to the Merger Agreement, Ohio Edison and
Centerior will form FirstEnergy Corp., a holding company which will
be an Ohio corporation ("FirstEnergy"), which, in turn, will form
two wholly-owned subsidiaries. Pursuant to the Merger Agreement,
one of such subsidiaries will merge with and into Ohio Edison (the
"Ohio Edison Merger"), with Ohio Edison continuing as the surviving
corporation, and the other will merge with and into Centerior (the
"Centerior Merger"), with Centerior continuing as the surviving
corporation. In connection with such mergers, each issued and
outstanding share of common stock, par value $9 per share, of Ohio
Edison ("Ohio Edison Common Stock"), and any Ohio Edison Right (as
defined in the Merger Agreement), and each issued and outstanding
share of common stock, without par value, of Centerior ("Centerior
Common Stock"), and any Centerior Right (as defined in the Merger
Agreement), will be converted into the right to receive common
stock, par value $0.10 per share, of FirstEnergy ("FirstEnergy
Common Stock"), except for shares or rights owned directly by, or
through a wholly-owned subsidiary of, Ohio Edison or Centerior,
which will be cancelled. Immediately after the Centerior Merger,
Centerior will merge with and into FirstEnergy, with FirstEnergy
continuing as the surviving corporation. The mergers described
above are collectively referred to herein as the "Merger."
Following the Merger, FirstEnergy will be a holding
company which will directly hold all of the issued and outstanding
common stock of Ohio Edison and all of the issued and outstanding
common stock of Centerior's direct subsidiaries, which include
among others, The Cleveland Electric Illuminating Company and The
Toledo Edison Company. As a result of the Merger, the respective
common stock shareholders of Ohio Edison and Centerior will own all
of the outstanding shares of FirstEnergy Common Stock. All other
classes of capital stock of Ohio Edison and its subsidiaries and of
the subsidiaries of Centerior will be unaffected by the Merger and
will remain outstanding.
Under the Merger Agreement, each outstanding share of Ohio
Edison Common Stock, including any Ohio Edison Right, will be
converted into a right to receive one share of FirstEnergy Common
Stock. Each outstanding share of Centerior Common Stock, including
any Centerior Right, will be converted into a right to receive
0.525 share of FirstEnergy Common Stock. As of August 31, 1996,
there were approximately 152.6 million shares of Ohio Edison Common
Stock outstanding and approximately 148.0 million shares of
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Centerior Common Stock outstanding. Based on such capitalization,
the Merger will result in the common stock shareholders of Ohio
Edison holding approximately 66.25% of the common stock equity of
FirstEnergy and the common stock shareholders of Centerior holding
approximately 33.75% of the common stock equity of FirstEnergy.
The Merger has been approved by the respective Boards of
Directors of Ohio Edison and Centerior and is expected to close
promptly after all of the conditions to the consummation of the
Merger, including the receipt of certain regulatory approvals, are
fulfilled or waived. Shareholder meetings to vote upon the Merger
are expected to be held in early 1997. The regulatory approval
process is expected to take approximately 12 to 18 months.
The parties expect that the dividend at the time of
consummation of the Merger (the "Effective Time") will be at least
equivalent to an indicated annual dividend of $1.50 per share of
Ohio Edison Common Stock and $.7875 per share of Centerior Common
Stock. Dividend action by Ohio Edison prior to the Effective Time
and dividend action by FirstEnergy after such time will be
determined by their respective boards of directors. The Merger
Agreement limits indicated annual dividends prior to the Effective
Time to $1.60 per share for Ohio Edison and $.80 per share for
Centerior. Ohio Edison currently has an indicated annual dividend
of $1.50 per share of Ohio Edison Common Stock and Centerior has an
indicated annual dividend of $.80 per share of Centerior Common
Stock.
The Merger is subject to customary closing conditions,
including, among other things, approvals by the shareholders of
Ohio Edison and Centerior, the receipt of certain governmental
approvals (which, subject to certain exceptions, will not impose
terms or conditions that would have, or as reasonably could be
foreseen, could have, a material adverse effect on FirstEnergy and
its subsidiaries or would be inconsistent with the agreements of
the parties contained in the Merger Agreement) and the making of
certain governmental filings. Such approvals include the Federal
Energy Regulatory Commission, the Securities and Exchange
Commission (the "SEC") under the Public Utility Holding Company Act
and the Nuclear Regulatory Commission, and such filings include 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 or termination of the applicable waiting periods
thereunder. The Merger is also subject to receipt of opinions of
counsel that the Merger, as to Ohio Edison, will qualify as a tax-
free transfer and, as to Centerior, will qualify as a tax-free
reorganization. In addition, the Merger is conditioned upon the
effectiveness of a registration statement to be filed with the SEC
with respect to the FirstEnergy Common Stock to be issued in the
Merger and the approval for listing of such shares on the New York
Stock Exchange. (See Article VIII of the Merger Agreement.)
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The Merger Agreement contains certain covenants regarding
conduct of the respective businesses of Ohio Edison and Centerior
pending the consummation of the Merger. Generally, the parties are
required to carry on their businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore
conducted. The Merger Agreement restricts, among other things, the
declaration and payment of dividends, the issuance of securities,
amendments to articles of incorporation and regulations,
acquisitions, capital expenditures, dispositions, incurrence of
indebtedness, certain increases in employee compensation and
benefits and affiliate transactions. (See Article VI of the Merger
Agreement.)
At the Effective Time, FirstEnergy's Board of Directors
will be designated by the Ohio Edison Board of Directors. Mr.
Willard R. Holland, who currently serves as President and Chief
Executive Officer of Ohio Edison, will serve as Chairman of the
Board, President and Chief Executive Officer of FirstEnergy from
the Effective Time until otherwise determined by FirstEnergy's
Board of Directors. Mr. Robert J. Farling, who currently serves as
Chairman of the Board, President and Chief Executive Officer of
Centerior, will serve as Vice Chairman of FirstEnergy from the
Effective Time until otherwise determined by FirstEnergy's Board of
Directors. All other officers of FirstEnergy and directors and
officers of FirstEnergy's subsidiaries will be designated by
FirstEnergy's Board of Directors. (See Article VII of the Merger
Agreement.)
The Merger Agreement may be terminated under certain
circumstances, as summarized below. Where indicated, termination
results in the payment of expenses and termination fees in the
amounts listed below. Circumstances for termination include (1) by
mutual written consent of the parties; (2) by either party if the
Merger is not consummated by June 30, 1998; (3) by either party if
Ohio Edison's or Centerior's shareholders vote against the Merger
and, if the vote follows a third-party offer of the type described
in clause (6) below that has not been rejected by the target and
its board of directors and withdrawn by the third party, a fee ($55
million plus out-of-pocket expenses and fees incurred by such other
party) will be payable by such third party or its affiliate in
connection with certain business combinations effected within two
and one-half years following such termination; (4) by either party
if any state or federal law, order, rule or regulation is adopted
or issued which has the effect, for such party, of prohibiting the
Merger; (5) by a non-breaching party if there exists a material
breach of any material representation, warranty, covenant or
agreement set forth in the Merger Agreement, and such breach is not
cured and adequate assurance of such cure has not been given within
ten business days after notice thereof ($10 million plus out-of-
pocket expenses and fees incurred by the non-breaching party)
except if pursuant to a non-curable breach of a representation or
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warranty, unless such breach was willful; and $55 million plus out-
of-pocket expenses and fees incurred by such other party in the
case of a material breach of the non-solicitation covenant
contained in the Merger Agreement, if the breach follows a third-
party offer of the type described in clause (6) below that has not
been rejected by the target and its board of directors and
withdrawn by the third party, payable by such third party or its
affiliate in connection with certain business combinations effected
within two and one-half years following such termination; (6) by
either party as a result of a third-party tender offer or business
combination proposal that such party's board of directors
determines in good faith that its fiduciary duties require it be
accepted, after the other party has first been given an opportunity
to make adjustments in the terms of the Merger Agreement so as to
enable the Merger to proceed ($55 million plus out-of-pocket
expenses and fees incurred by such other party). (See Article IX of
the Merger Agreement.)
The Merger Agreement and the joint press release issued in
connection therewith are filed as exhibits to this Current Report
on Form 8-K and are incorporated herein by reference. The brief
summaries of the material provisions of the Merger Agreement set
forth above do not purport to be complete and are qualified in
their entirety by reference to the Merger Agreement filed as an
exhibit hereto.
Item 7. Financial Statements and Exhibits.
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits.
(2.1) Agreement and Plan of Merger dated as of September 13,
1996, between Ohio Edison Company and Centerior Energy
Corporation.*
(99) Joint Press Release dated September 16, 1996 of Ohio Edison
Company and Centerior Energy Corporation.
* The schedules and exhibits to this document are not being
filed herewith. The Registrant agrees to furnish
supplementally a copy of any such omitted schedule or
exhibit to the Securities and Exchange Commission upon
request.
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SIGNATURE
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 thereunto duly authorized.
OHIO EDISON COMPANY
/s/ Harvey L. Wagner
--------------------------
Harvey L. Wagner
Comptroller
Dated: September 17, 1996