SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party Other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
[ ] Definitive Proxy Statement Rule 14a-6(e)(2))
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PACIFICORP
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
The Proxy Solicitation is made solely by the Proxy Statement/Prospectus, dated
May 6, 1999, and the related solicitation materials and is being made to all
record holders of PacifiCorp's Preferred Stock. PacifiCorp is not aware of any
jurisdiction where the making of the Proxy Solicitation and all related acts and
transactions incidental thereto is not in compliance with applicable law.
PacifiCorp
Notice of Solicitation of Proxies
For the 1999 Annual Meeting of Shareholders
From the Holders of Record of
Series CUSIP No.
------ -----------
Serial Preferred Stock
4.52% Series................................. 695114-20-7
4.56% Series................................. 695114-30-6
4.72% Series................................. 695114-40-5
5.00% Series................................. 695114-60-3
5.40% Series................................. 695114-70-2
6.00% Series................................. 695114-80-1
7.00% Series................................. 695114-88-4
No Par Serial Preferred Stock
$7.48 Series................................. 695114-65-2
$7.70 Series................................. 695114-67-8
$1.16 Series*................................ 695114-73-6
$1.18 Series*................................ 695114-74-4
$1.28 Series*................................ 695114-75-1
5% Preferred Stock.................................... 695114-50-4
------------------
* Will be redeemed prior to the Merger.
- -------------------------------------------------------------------------------
The 1999 Annual Meeting of Shareholders Will Be Held at
the Salt Lake City Hilton Hotel, 150 West 300 South, Salt Lake City, Utah,
at 1:30 P.M., Local Time, on June 17, 1999.
The Record Date for the Proxy Solicitation is April 30, 1999.
- -------------------------------------------------------------------------------
PacifiCorp, an Oregon corporation, is soliciting proxies (the "Proxy
Solicitation") pursuant to the Proxy Statement/Prospectus, dated May 6, 1999
(the "Proxy Statement"), from the record holders of shares of its Preferred
Stock specified above (collectively, the "Preferred Stock") in connection with
PacifiCorp's 1999 Annual Meeting of Shareholders (including any adjournment
thereof, the "Annual Meeting"). The Record Date for the solicitation is April
30, 1999. The Proxy Statement was first mailed to preferred shareholders on or
about May 6, 1999. Capitalized terms used but not defined herein have the
meaning ascribed to them in the Proxy Statement.
At the Annual Meeting, among other things, the record holders of the
Preferred Stock will consider and vote upon (i) a proposal (the "Merger
Proposal") to approve alternate forms of an agreement and plan of merger (the
"Merger Agreement") among PacifiCorp, Scottish Power plc and others (the
"Merger"), with PacifiCorp continuing as a subsidiary in the ScottishPower
group, and (ii) a proposal (the "Unsecured Debt Proposal") to approve an
increase of $5 billion in the amount of unsecured indebtedness permitted under
PacifiCorp's Third Restated Articles of Incorporation. Neither proposal is
conditioned on the approval of the other proposal. Approval of each proposal by
the record holders will occur if a majority of the voting power of the Preferred
Stock, voting together as a single class, votes in favor of that proposal. The
Merger Proposal also requires the approval of a majority of the outstanding
shares of PacifiCorp common stock.
The outstanding shares of Preferred Stock will not be converted in the
Merger and will continue to have the same rights and preferences they had before
the Merger. However, the Merger Agreement requires PacifiCorp to redeem the
$1.16, $1.18 and $1.28 series of No Par Serial Preferred Stock, in accordance
with their respective terms, before the Merger.
Special Cash Payments to Preferred Shareholders. If, but only if, the
Merger Proposal is approved at the Annual Meeting and all regulatory approvals
specified in the Merger Agreement have been obtained, PacifiCorp will make a
special cash payment in the amount of $1.00 per share ($0.25 per share for the
$1.16, $1.18 and $1.28 series) to each record holder that voted "FOR" the Merger
Proposal. In addition, if, but only if, the Unsecured Debt Proposal is approved
at the Annual Meeting, PacifiCorp will make a special cash payment in the amount
of $1.00 per share ($0.25 per share for the $1.16, $1.18 and $1.28 series) to
each record holder that voted "FOR" the Unsecured Debt Proposal. PacifiCorp
expects the Merger to occur later this year.
THE BOARD OF DIRECTORS OF PACIFICORP RECOMMENDS VOTING IN FAVOR OF THE
MERGER PROPOSAL AND THE UNSECURED DEBT PROPOSAL.
A holder whose shares are held by a broker, bank or other nominee and who
wishes to vote at the Annual Meeting must contact such nominee with instructions
as to how he or she desires to vote. Any record holder who wishes to vote at the
Annual Meeting and who does not expect to attend the Annual Meeting, must, on or
prior to the date of the Annual Meeting, complete and sign the applicable proxy
and mail or deliver it and any other required documents to the Information
Agent. Proxies may be revoked at any time prior to the Annual Meeting.
Designated Soliciting Dealer Fees. If, but only if, the Merger Proposal is
approved at the Annual Meeting and all regulatory approvals specified in the
Merger Agreement have been obtained, PacifiCorp will pay to each designated
Soliciting Dealer (including any Co-Solicitation Agent) a solicitation fee of
$1.00 per share ($0.25 per share for the $1.16, $1.18 and $1.28 series) for each
share of Preferred Stock that is voted "FOR" the Merger Proposal by a beneficial
owner holding 2,500 or fewer shares of Preferred Stock of a series (10,000 or
fewer shares for the $1.16, $1.18 and $1.28 series). In addition, if, but only
if, the Unsecured Debt Proposal is approved at the Annual Meeting, PacifiCorp
will pay to each designated Soliciting Dealer (including any Co-Solicitation
Agent) a solicitation fee of $1.00 per share ($0.25 per share for the $1.16,
$1.18 and $1.28 series) for each share of Preferred Stock that is voted "FOR"
the Unsecured Debt Proposal by a beneficial owner holding 2,500 or fewer shares
of Preferred Stock of a series (10,000 or fewer shares for the $1.16, $1.18 and
$1.28 series).
THE PROXY STATEMENT CONTAINS IMPORTANT INFORMATION REGARDING THE PROXY
SOLICITATION AND SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE REGARDING
THE PROXY SOLICITATION.
-------------
Questions with respect to completing and submitting a proxy and requests
for additional copies of the Proxy Statement and related solicitation materials
should be directed to the Information Agent. Questions regarding the terms of
the Proxy Solicitation, including the special cash payments to preferred
shareholders, should be directed to the Co-Solicitation Agents.
The Information Agent is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
All Others Call: 877-750-2689
The Co-Solicitation Agents are:
Salomon Smith Barney
390 Greenwich Street
New York, New York 10013
800-558-3745 or (212) 723-6106
Attention: Liability Management Group
Donaldson, Lufkin & Jenrette PaineWebber Incorporated
277 Park Avenue 1285 Avenue of the Americas
New York, New York 10172 New York, New York 10019
800-334-1604 or (212) 892-2964 800-609-1666 or (212) 713-3687
Attention: Jeff Dorst Attention: Liability Management Group
May 12, 1999
[Graphics omitted]
Dear Customer:
As you may already know, our two companies are proposing to merge. We believe
that together we can improve the way PacifiCorp does business and become a model
of excellent service, sound environmental practices, and positive community
involvement.
In our last letter, we outlined an unprecedented package of 15 customer service
improvements which we will implement when our proposed merger is approved.
Today, we'd like to share with you our plans for something that is vital to us
all: the environment.
Good corporate citizens are environmentally responsible.
Just as you do your part to protect the environment through conservation,
re-use, and recycling, corporations have an obligation to do theirs as well.
In our merger filing, currently under review by the Oregon Public Utility
Commission and regulators in other states, we have outlined a range of programs
and processes designed to increase PacifiCorp's environmental commitment and
create new opportunities for customers to "go green."
We'll create more power from renewable resources.
ScottishPower and PacifiCorp have been leaders in the development of renewable
energy sources. As a combined company, we anticipate spending $60 million over
the next five years to develop 50 megawatts of power from renewable resources,
including wind, solar, and geothermal power. With only 1 percent of the
country's electric customers, PacifiCorp will generate 5 to 10 percent of all
the new renewable energy currently planned in the U.S. This environmentally
friendly energy could serve the electricity needs of about 40,000 homes.
We'll give customers the option to "go green."
Many of you have told us that you'd like the option to purchase additional green
power. We're going to give you that opportunity. Our merger filing proposes a
green power offer, an optional program which would allow you to choose
electricity produced from clean sources such as wind and geothermal power.
Should you choose this option, you would pay slightly higher rates--less than a
quarter a day--which would be used to develop additional renewable "green"
power.
We'll expand PacifiCorp's environmental commitments.
In addition to PacifiCorp's current financial support for local environmental
projects through our GreenCorps and Earth Stewards programs, the merger will
enable us to:
o Explore the expansion of Blundell geothermal project in Utah
o Develop a process to gather outside input on environmental matters
such as the establishment of an Environmental Forum
o Contribute $100,000 to the Bonneville Environmental Foundation for use
in fish mitigation projects and developing new renewable resources
o Find ways to run our power plants in a more environmentally friendly
manner.
We'll track and report on our performance.
Following the example of ScottishPower in the United Kingdom, our newly merged
company will be publicly accountable for our environmental performance. Our
performance will be included in the ScottishPower Corporate Environmental
Report. Through this process, we'll show you where we've met the mark, and where
we need to improve.
We'll earn your trust and respect.
In the coming days, we'll tell you more about our community involvement and how
we plan to play an active role in the communities we serve. We're raising the
bar for utility performance and we want to include you in the process.
Sincerely,
/s/ Alan V. Richardson /s/ Richard T. O'Brien
Chief Executive Officer, Chief Operating Officer,
ScottishPower Inc. PacifiCorp
www.scottishpower.plc.uk www.pacificorp.com
[Graphics omitted]
Dear Customer:
As you may already know, our two companies are proposing to merge. We believe
that together we can improve the way PacifiCorp does business and become a model
of excellent service, sound environmental practices, and positive community
involvement.
In our last letter, we outlined an unprecedented package of 15 customer service
improvements which we will implement when our proposed merger is approved.
Today, we'd like to share with you our plans for something that is vital to us
all: the environment.
Good corporate citizens are environmentally responsible.
Just as you do your part to protect the environment through conservation,
re-use, and recycling, corporations have an obligation to do theirs as well.
In our merger filing, currently under review by the Wyoming Public Service
Commission and regulators in other states, we have outlined a range of programs
and processes designed to increase PacifiCorp's environmental commitment and
create new opportunities for customers to "go green."
We'll create more power from renewable resources.
ScottishPower and PacifiCorp have been leaders in the development of renewable
energy sources. As a combined company, we anticipate spending $60 million over
the next five years to develop 50 megawatts of power from renewable resources,
including wind, solar, and geothermal power. With only 1 percent of the
country's electric customers, PacifiCorp will generate 5 to 10 percent of all
the new renewable energy currently planned in the U.S. This environmentally
friendly energy could serve the electricity needs of about 40,000 homes.
We'll give customers the option to "go green."
Many of you have told us that you'd like the option to purchase additional green
power. We're going to give you that opportunity. Our merger filing proposes a
green power offer, an optional program which would allow you to choose
electricity produced from clean sources such as wind and geothermal power.
Should you choose this option, you would pay slightly higher rates--less than a
quarter a day--which would be used to develop additional renewable "green"
power.
We'll expand PacifiCorp's environmental commitments.
In addition to PacifiCorp's current financial support for local environmental
projects through our GreenCorps and Earth Stewards programs, the merger will
enable us to:
o Explore the expansion of Blundell geothermal project in Utah
o Develop a process to gather outside input on environmental matters
such as the establishment of an Environmental Forum
o Contribute $100,000 for use in fish mitigation projects and developing
new renewable resources
o Find ways to run our power plants in a more environmentally friendly
manner
We'll track and report on our performance.
Following the example of ScottishPower in the United Kingdom, our newly merged
company will be publicly accountable for our environmental performance. Our
performance will be included in the ScottishPower Corporate Environmental
Report. Through this process, we'll show you where we've met the mark, and where
we need to improve.
We'll earn your trust and respect.
In the coming days, we'll tell you more about our community involvement and how
we plan to play an active role in the communities we serve. We're raising the
bar for utility performance and we want to include you in the process.
Sincerely,
/s/ Alan V. Richardson /s/ Richard T. O'Brien
Chief Executive Officer, Chief Operating Officer,
ScottishPower Inc. PacifiCorp
www.scottishpower.plc.uk www.pacificorp.com
[Graphics omitted]
Dear Customers:
As you may already have heard, PacifiCorp, parent company of Utah Power, and
ScottishPower are proposing to merge. We believe together we can improve the way
Utah Power does business by better focusing our attention on you, our customer.
We envision introducing a broad range of initiatives, making Utah Power one of
the top ten performing utilities in the country by 2005. For example, we have
worked hard together to design a comprehensive customer service program which we
will implement when the merger is approved.
This summer, members of the Public Service Commission in Salt Lake, along with
regulators in other states, will decide on your behalf whether the merger will
benefit you as customers. Here's why we believe it will:
We believe good service is good business anywhere in the world.
We know that the best service is important to you, and so we have developed a
comprehensive package of 15 customer service standards, which is unprecedented
in the U.S. electric utility industry. We're making commitments to you similar
to those ScottishPower is already delivering to its customers in the United
Kingdom. Our improved customer service package, matched with electrical rates
that are already among the lowest in the nation, create a winning combination.
Here are some of the things you can expect from us once the merger is approved:
o We will keep all mutually agreed appointments or pay you $50.
o If you lose power, we will restore your electricity supply within 24
hours, barring extreme weather, or pay you $50. Plus, we'll pay you
$25 for every additional 12-hour delay.
o If you have a question about your bill, we'll respond within 15 days
or pay you $50.
o When you sign up as a customer, we will switch on your new power
supply within 24 hours, or pay you $50. Plus, we'll pay you $25 for
every additional 12-hour delay.
You can judge our performance by our actions.
We are very serious about holding ourselves accountable to you and we will spend
$55 million to phase-in these and other standards of excellence. We will also
publish details of our performance against these new standards, so that you can
judge for yourselves the improvements we are making.
We intend to earn your trust and your respect.
We're raising the bar for utility performance, and want to keep you informed of
our progress. Our new customer service package is just the beginning.
Sincerely,
/s/ Alan V. Richardson /s/ Richard Walje
Chief Executive Officer, Vice President,
ScottishPower Inc. Utah Power
www.scottishpower.plc.uk www.pacificorp.com
[Graphics omitted]
FOR INTERNAL USE ONLY -
NOT FOR DISTRIBUTION OUTSIDE THE FIRM
THIS INFORMATION MAY NOT BE COPIED, DISTRIBUTED OR SHOWN TO ANYONE OUTSIDE
SALOMON SMITH BARNEY. Under no circumstances should this sales memorandum be
provided to anyone outside Salomon Smith Barney. The contents of this memorandum
should not be discussed with anyone outside this firm (including the press)
other than institutional customers of the firm or the issuer.
3,159,440 Shares
[GRAPHIC OMITTED]
Preferred Stock Proxy Solicitation
Salomon Smith Barney (Lead)
Donaldson, Lufkin & Jenrette Paine Webber
- -------------------------------------------------------------------------------
Votes must be in by June 17, 1999
Record Date is April 30, 1999
- -------------------------------------------------------------------------------
Outstanding Outstanding
Series Rate Type CUSIP Par Shares ($ mm)
- ------ ------ ------------ ----------- --- ----------- -----------
4.520% 4.520% Perp 695114 20 7 100 2,065 $0.21
4.560% 4.560% Perp 695114 30 6 100 84,592 8.46
4.720% 4.720% Perp 695114 40 5 100 69,890 6.99
5.000% 5.000% Perp 695114 60 3 100 41,970 4.20
5.000% 5.000% Perp 695114 50 4 100 126,463 12.65
5.400% 5.400% Perp 695114 70 2 100 65,960 6.60
6.000% 6.000% Perp 695114 80 1 100 5,932 0.59
7.000% 7.000% Perp 695114 88 4 100 18,060 1.81
$1.160 4.640% Perp 695114 73 6 25 193,102 4.83
$1.180 4.720% Perp 695114 74 4 25 420,116 10.50
$1.280 5.120% Perp 695114 75 1 25 381,220 9.53
$7.480 7.480% Sinking Fund 695114 65 2 100 750,000 75.00
$7.700 7.700% Sinking Fund 695114 67 8 100 1,000,000 100.00
--------- ------
3,159,370 $241.36
TRANSACTION OVERVIEW
Merger Approval Unsecured Debt Consent
- -------------------- ---------------------------------------- ---------------------------------------------
Description Approve acquisition of PacifiCorp by Increase permitted amount of unsecured debt
ScottishPower, expected to close in 1999 by $5 billion
Cash Payment $1.00 per share for "YES" votes $1.00 per share for "YES" votes
to Shareholder ($0.25 per share for $25-par series) ($0.25 per share for $25-par series)
Vote Required Majority - not cross-conditional Majority - not cross-conditional
Rationale o PacifiCorp will benefit from o Enhances financial flexibility and
ScottishPower's commitment to best diversifies funding sources (e.g.
practices and customer satisfaction commercial paper, tax-exempt debt,
o Preferred stock not converted; sub debt and trust preferred)
existing rights and preferences o Will not result in a reduction of
preserved the current ratings of PacifiCorp
o Viewed as neutral-to-positive by preferred
Moody's and S&P (S&P has a positive o No intention to "lever up," company
outlook) targets "A" secured debt rating
Comment on Payment Most merger proxies are done without Consistent with precedent transactions
to Shareholders cash payments in utility industry
Payment Timing Shortly before the merger is completed Promptly after the PacifiCorp annual meeting
- -------------------- ---------------------------------------- --------------------------------------------
[GRAPHIC OMITTED]
Preferred Stock Proxy Solicitation
Salomon Smith Barney (Lead)
Donaldson, Lufkin & Jenrette Paine Webber
WHAT ACTIONS ARE NEEDED FROM THE SALESFORCE?
o Notify customers of transaction (see attached table of holders)
o Reflect all color to Phil Tremmel or Steve Cheeseman (723-6106).
o Voting is done through back offices and bank/broker custodians
ECONOMICS AND CALLING EFFORT:
o Economics are pre-set: There is no institutional designation.
o DLJ and PaineWebber will be calling accounts too.
FEES TO BROKERS FOR SOLICITATION:
For $100 par
------------
Less than
or equal to Greater than
2,500 sh 2,500 sh
Vote Fee to Brokers Fee to Us
---------------------------------------------------------------------
Merger $1.00 / sh $0.25 / sh
Unsecured Debt $1.00 / sh $0.25 / sh
---------------------------------------------------------------------
Total $2.00 / sh $0.50 / sh
---------------------------------------------------------------------
For $25 par
-----------
Less than
or equal to Greater than
10,000 sh 10,000 sh
Vote Fee to Brokers Fee to Us
---------------------------------------------------------------------
Merger $0.25 / sh $0.0625 / sh
Unsecured Debt $0.25 / sh $0.0625 / sh
---------------------------------------------------------------------
Total $0.50 / sh $0.125 / sh
---------------------------------------------------------------------
o Fee to Us are split 70/15/15 with PW and DLJ. There is no designation
available.
o Fees for the Merger and Unsecured Debt votes are independent of each
other.
o Fees paid for "YES" votes only.
o Merger Fee paid upon Merger closing; Unsecured Debt Fee paid upon
success.
- -------------------------------------------------------------------------------
FOR INTERNAL USE ONLY
- -------------------------------------------------------------------------------
May 12, 1999
Co-Solicitation Agent
PACIFICORP
Preferred Stock
Proxy Solicitations
- -------------------------------------------------------------------------------
Solicitations Summary
The Company: PacifiCorp (the "Company")
The Preferred Shares: o 4.52%, 4.56%, 4.72%, 5.00%, 5.40%, 6.00%,
7.00% Serial Preferred Stock ($100 Stated
Value)
o $7.48, $7.70 Series No Par Serial Preferred
Stock ($100 Stated Value)
o $1.16, $1.18, $1.28 Series No Par Serial
Preferred Stock ($25 Stated Value)
o 5.00% Preferred Stock ($100 Stated Value)
Expiration Date of Thursday, June 17, 1999 at 3:30 P.M., New York
Proxy Solicitation: City Time
Purpose of Proxy The Company is soliciting proxies in connection
Solicitation: with the 1999 Annual Meeting of shareholders of
PacifiCorp to obtain the consent of a majority of
the voting power of the Preferred Stock, voting
together as a single class:
(i) to approve alternative forms of an agreement
and plan of Merger among PacifiCorp, Scottish
Power plc and others (the "Merger Proposal") and,
separately,
(ii) to an increase of $5 billion in the amount of
unsecured indebtedness permitted under
PacifiCorp's Third Restated Articles of
Incorporation (the "Unsecured Debt Proposal").
Special Cash Payments To If, but only if, the Merger is approved at the
Preferred Shareholders: PacifiCorp Annual Meeting and all regulatory
approvals for the Merger required under the Merger
Agreement have been obtained, the Company will
make a special cash payment to preferred holders
in the amount of $1.00 per share ($0.25 per share
for the $1.16, $1.18 and $1.28 series) to each
record holder that voted "FOR" the Merger
Proposal. These Merger Proposal special cash
payments will be paid promptly after receipt of
the last regulatory approval for the Merger but
prior to the Merger.
Separately, if, but only if, the Unsecured Debt
Proposal is approved, the Company will make a
separate special cash payment in the amount of
$1.00 per share ($0.25 per share for the $1.16,
$1.18 and $1.28 series) to each record holder that
voted "FOR" the Unsecured Debt Proposal. These
Unsecured Debt Proposal special cash payments will
be paid promptly after the PacifiCorp Annual
Meeting.
Designated Soliciting The Company will pay $1.00 per share ($0.25 per
Dealer Fees: share for the $1.16, $1.18 and $1.28 series) to
brokers who solicit votes FOR the Unsecured Debt
Proposal and $1.00 per share ($0.25 per share for
the $1.16, $1.18 and $1.28 series) to brokers who
solicit votes FOR the Merger Proposal. These two
fees amount to possibly $2.00 for the $100 shares
(or $0.50 for the $25 shares) per share in total,
if the preferred holder votes FOR both proposals.
See "Soliciting Dealer Fees".
Co-Solicitation Agents: PaineWebber Incorporated
Salomon Smith Barney Inc. (Lead)
Donaldson, Lufkin and Jenrette
Investment Banking: Roberts W. Brokaw III (212) 713-1071
Jeremy McGuire (212) 713-3687
Joan Tan (212) 713-6205
Tim Laslavic (212) 713-9995
Fernando Vinzons (212) 713-3415
- -------------------------------------------------------------------------------
THIS MEMORANDUM CONTAINS A SUMMARY OF CERTAIN INFORMATION CONTAINED IN THE
COMPLETE PROXY STATEMENT/PROSPECTUS, WHICH PROXY STATEMENT/PROSPECTUS IS
INCORPORATED BY REFERENCE HEREIN. REFERENCE SHOULD BE MADE TO SUCH PROXY
STATEMENT/PROSPECTUS FOR MORE DETAILED INFORMATION REGARDING THE COMPANY
AND THE SECURITIES BEING SOLICITED.
THE INFORMATION CONTAINED IN THIS MEMORANDUM IS FOR THE EXCLUSIVE USE OF THE
FIRM'S REGISTERED REPRESENTATIVES AND OTHER AUTHORIZED PERSONNEL. UNDER NO
CIRCUMSTANCES IS THIS MEMORANDUM TO BE SHOWN OR GIVEN TO EMPLOYEES OF
COMPETITIVE FIRMS, CUSTOMERS, OR MEMBERS OF THE GENERAL PUBLIC.
- -------------------------------------------------------------------------------
1
PACIFICORP
THE COMPANY
- -----------
PacifiCorp is a publicly held electricity company in the United States and
Australia. In the United States, PacifiCorp conducts a retail electric utility
business and engages in power production and sales on a wholesale basis.
PacifiCorp indirectly owns 100% of Powercor Australia Ltd., the largest of the
five electric distribution companies in Victoria, Australia, and a 19.9%
interest in the 1,600 megawatt, brown coal-fired thermal Hazelwood power station
and adjacent brown coal mine in Victoria.
THE SOLICITATIONS
- -----------------
PacifiCorp, an Oregon Corporation, is soliciting proxies (the "Proxy
Solicitation") pursuant to the Proxy Statement/Prospectus dated May 6, 1999 (the
"Proxy Statement"), from the record holders of shares of its Preferred Stock
specified above (collectively, the "Preferred Stock") in connection with the
Company's 1999 Annual Meeting of Shareholders (including any adjournment
thereof, the "Annual Meeting"). The Proxy Statement was first mailed to
preferred shareholders on or about May 6, 1999. Capitalized terms used but not
defined herein have the meaning ascribed to them in the Proxy Statement/
Prospectus.
At the Annual Meeting, among other things, the record holders of the Preferred
Stock will consider and vote upon (i) a proposal (the "Merger Proposal") to
approve alternate forms of an agreement and plan of Merger (the "Merger
Agreement") among PacifiCorp, Scottish Power plc and others (the "Merger"), with
PacifiCorp continuing as a subsidiary in the ScottishPower group, and (ii) a
proposal (the "Unsecured Debt Proposal") to approve an increase of $5 billion in
the amount of unsecured indebtedness permitted under PacifiCorp's Third Restated
Articles of Incorporation. Neither proposal is conditioned on the approval of
the other proposal. Approval of each proposal by the preferred shareholders will
occur if a majority of the voting power of the Preferred Stock, voting together
as a single class, votes in favor of that proposal. The Merger Proposal also
requires the approval of a majority of the outstanding shares of PacifiCorp
common stock.
The outstanding shares of Preferred Stock will not be converted in the Merger
and will continue to have the same rights and preferences they had before the
Merger. However, the Merger Agreement requires PacifiCorp to redeem the $1.16,
$1.18 and $1.28 series of No Par Serial Preferred Stock before the Merger.
THE BOARD OF DIRECTORS OF PACIFICORP RECOMMENDS VOTING IN FAVOR OF THE MERGER
PROPOSAL AND THE UNSECURED DEBT PROPOSAL.
VOTING SECURITIES
- -----------------
Stated Value Shares Votes Per Share
------------ ------ ---------------
Series CUSIP Number Per Share Outstanding Per Proposal
------ ------------ --------- ----------- ------------
4.52% Series 695114-20-7 $100 2,065 1
4.56% Series 695114-30-6 $100 84,592 1
4.72% Series 695114-40-5 $100 69,890 1
5.00% Series 695114-60-3 $100 41,970 1
5.40% Series 695114-70-2 $100 65,960 1
6.00% Series 695114-80-1 $100 5,932 1
7.00% Series 695114-88-4 $100 18,060 1
$7.48 Series 695114-65-2 $100 750,000 1
$7.70 Series 695114-67-8 $100 1,000,000 1
$1.16 Series* 695114-73-6 $25 193,102 1/4
$1.18 Series* 695114-74-4 $25 420,116 1/4
$1.28 Series* 695114-75-1 $25 381,220 1/4
5% Preferred Stock 695114-50-4 $100 126,463 1
* The Merger Agreement requires PacifiCorp to redeem these series prior to the Merger.
VOTING PROCEDURES
- -----------------
Each holder of record of PacifiCorp 5% Preferred Stock, PacifiCorp Serial
Preferred Stock, PacifiCorp $7.48 No Par Serial Preferred Stock and PacifiCorp
$7.70 No Par Serial Preferred Stock on the PacifiCorp record date is entitled to
cast one vote per share on the Merger Proposal and the Unsecured Debt Proposal
at the PacifiCorp Annual Meeting. Each holder of record of PacifiCorp $1.16,
$1.18 or $1.28 No Par Serial Preferred Stock on the PacifiCorp record date is
entitled to cast one-quarter vote per share on the approval of the Merger
Proposal and the Unsecured Debt Proposal at the PacifiCorp Annual Meeting.
In order to vote FOR the Merger Proposal and the Unsecured Debt Proposal,
stockholders should simply check the box on the proxy instruction form "FOR" the
Merger Proposal and the box "FOR" the Unsecured Debt Proposal. Stockholders
should mail the proxy instruction form as soon as possible so that such voting
instructions can be communicated to PacifiCorp before June
2
PACIFICORP
17, 1999. [The proxy instruction form is the second half of the "green"
four-page Solicitation of Proxies document that was mailed to the holder.]
SPECIAL CASH PAYMENTS TO PREFERRED SHAREHOLDERS WHO VOTE "FOR" PROPOSALS
- ------------------------------------------------------------------------
If, but only if, the Merger Proposal is approved at the Annual Meeting and all
regulatory approvals specified in the Merger Agreement have been obtained,
PacifiCorp will make a special cash payment in the amount of $1.00 per share
($0.25 per share for the $1.16, $1.18 and $1.28 series) to each record holder
that voted "FOR" the Merger Proposal. These Merger Proposal special cash
payments will be paid promptly after receipt of the last regulatory approval for
the Merger but prior to the Merger. PacifiCorp expects the Merger to occur by
the end of this year.
In addition, if, but only if, the Unsecured Debt Proposal is approved at the
Annual Meeting, PacifiCorp will make a special cash payment in the amount of
$1.00 per share ($0.25 per share for the $1.16, $1.18 and $1.28 series) to each
record holder that voted "FOR" the Unsecured Debt Proposal. These Unsecured Debt
Proposal special cash payments will be paid promptly after the PacifiCorp Annual
Meeting.
A holder whose shares are held by a broker, bank or other nominee (like
PaineWebber) and who wishes to vote at the Annual Meeting must contact such
nominee with instructions as to how he or she desires to vote. Such instructions
can be conveyed on the "green" Solicitation of Proxies document (see "Voting
Procedures" above). Any record holder of shares who holds the preferred shares
in his or her own name and wishes to vote at the Annual Meeting and who does not
expect to attend the Annual Meeting, must, on or prior to the date of the Annual
Meeting, complete and sign the applicable "yellow" Form of Proxy document that
was sent to that holder and mail or deliver it and any other required documents
to the Information Agent. Proxies may be revoked at any time prior to the Annual
Meeting.
UNITED STATES INCOME TAX CONSIDERATIONS
- ---------------------------------------
Holders of PacifiCorp preferred stock should consult their own tax advisors in
light of their particular circumstances as to the application of United States
income tax laws, as well as the effect of any state, local or foreign tax laws,
to the special cash payments.
PacifiCorp believes that the special cash payments are dividends for U.S. income
tax purposes, and will treat such payments accordingly.
The amount of the special cash payment paid to a holder of PacifiCorp preferred
stock will be reported to the holder and to the Internal Revenue Service in the
same way all cash dividends are reported. Backup withholding at a rate of 31%
will apply to any such payments made to holders for whom backup withholding
applies with regards to the payment of regular cash dividends.
SOLICITING DEALER FEES FOR THE MERGER PROPOSAL'S APPROVAL
- ---------------------------------------------------------
If, but only if, the Merger Proposal is approved at the Annual Meeting and all
regulatory approvals specified in the Merger Agreement have been obtained,
PacifiCorp will pay to each designated Soliciting Dealer (including any
Co-Solicitation Agent) a solicitation fee of $1.00 per share ($0.25 per share
for the $1.16, $1.18 and $1.28 series) for each share of Preferred Stock that is
voted "FOR" the Merger Proposal by a beneficial owner holding 2,500 or fewer
shares of Preferred Stock of a series (10,000 or fewer shares for the $1.16,
$1.18 and $1.28 series).
The solicitation fees for these Merger Proposal FOR votes will be paid promptly
after the Merger is completed. PacifiCorp expects the Merger to occur by the end
of this year.
SOLICITING DEALER FEES FOR THE UNSECURED DEBT PROPOSAL'S APPROVAL
- ------------------------------------------------------------------
In addition, if, but only if, the Unsecured Debt Proposal is approved at the
Annual Meeting, PacifiCorp will pay to each designated Soliciting Dealer
(including any Co-Solicitation Agent) a solicitation fee of $1.00 per share
($0.25 per share for the $1.16, $1.18 and $1.28 series) for each share of
Preferred Stock that is voted "FOR" the Unsecured Debt Proposal by a beneficial
owner holding 2,500 or fewer shares of Preferred Stock of a series (10,000 or
fewer shares for the $1.16, $1.18 and $1.28 series).
If the Unsecured Debt Proposal is approved, solicitation fees for the Unsecured
Debt Proposal FOR votes will be paid promptly after the PacifiCorp Annual
Meeting.
3
PACIFICORP
No assurances can be made to either the clients or the brokers that either
- --------------------------------------------------------------------------
solicitation will ultimately be successful, or that "all regulatory approvals"
- ------------------------------------------------------------------------------
will ultimately be received for the Merger. If such success or Merger approval
- ------------------------------------------------------------------------------
is not received, no payment will be made.
- -----------------------------------------
LEGAL RESTRICTIONS
- ------------------
Before any oral solicitation of any owner of PacifiCorp Preferred Stock is made,
you must confirm that the owner has received a copy of the Proxy Statement/
Prospectus, and if you have been advised that the Proxy Statement/Prospectus
has been amended or supplemented, that such Amendment or Supplement has been
received. You should strongly encourage holders of Preferred Stock to read the
Proxy Statement/Prospectus to obtain a complete and balanced understanding of
the two proposals.
INFORMATION AGENT
- -----------------
Additional copies of the Proxy Solicitation/Prospectus may be obtained by
contacting:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Banks and Brokers Call Collect: (212) 750-5833
All Others Call: (877) 750-2689
ADDITIONAL INFORMATION
- ----------------------
For additional information, call PaineWebber at 1-800-609-1666. Additionally,
any of the Investment Banking people listed at the bottom of this document's
first page can be called. Also, information is accessible via the TFI WOO
System.
MEMORANDUM
DATE: May 12, 1999
TO: Corporate Sales Force
FROM: DLJ High Grade Capital Markets
SUBJECT: PacifiCorp Preferred Stock Proxy Solicitation
PacifiCorp ("PPW") is soliciting proxies for use at its annual meeting of
PPW's common and preferred stockholders to be held on Thursday, June 17, 1999.
In addition to the normal course of business, there are two proposals that
preferred shareholders are asked to consider and vote upon:
1) A proposal to approve alternate forms of an agreement and plan of
merger among PacifiCorp, Scottish Power plc and others (the "Merger
Vote").
2) Obtain the approval of a majority of the voting power of PacifiCorp
preferred stock, voting together as a class to an increase of $5
billion in the amount of unsecured indebtedness permitted under
PacifiCorp's Third Restated Articles of Incorporation (the "Unsecured
Debt Limitation Vote").
The Board of Directors of PacifiCorp recommends voting in favor of the
Merger Vote and the Unsecured Debt Limitation Vote.
Each of the above proposals requires a majority of the voting power of
PacifiCorp preferred stock, voting together as a class for approval. Each
proposal is independent of the other. Salomon Smith Barney, DLJ and PaineWebber
are acting as co-solicitation agents for the transaction
Transaction Summary
- -------------------------------------------------------------------------------
Amount Outstanding: 3,159,400 shares representing 2,413,571 votes
Annual Meeting Date: Thursday, June 17, 1999
Purpose of the PacifiCorp believes that the Unsecured Debt
Unsecured Debt Limitation Vote is key to meeting the objectives
Limitation Vote: of flexibility and favorable cost structure.
Historically, PacifiCorp's debt financing
generally has been accomplished through the
issuance of long-term first mortgage bonds. First
mortgage bonds represent secured indebtedness
because PacifiCorp's mortgage, under which its
first mortgage bonds are issued, creates a first
priority lien on substantially all of PacifiCorp's
utility assets. PacifiCorp expects to continue to
rely on first mortgage bond financings, but
approval of the Unsecured Debt Limitation Vote
will provide PacifiCorp with greater flexibility
in matching its financing requirements to
prevailing capital market conditions. PacifiCorp
has managed, and expects to continue to manage,
its capital structure through policies intended to
result in an "A" rating for its long-term secured
debt.
Special Cash Payments If the Merger Vote is approved and all regulatory
to Investors: approvals specified in the merger agreement have
been obtained, shareholders will receive $1.00 per
$100 stated value per share or $0.25 per $25
stated value per share voted FOR the Merger Vote.
If the Unsecured Debt Limitation Vote is approved,
shareholders will receive $1.00 per $100 stated
value per share or $0.25 per $25 stated value per
share voted FOR the Unsecured Debt Limitation
Vote.
Page 1
Record Date: Only holders of record on April 30, 1999 are
eligible to vote at the annual meeting
Solicitation Fees: Salespersons who have accounts who vote FOR the
proposals are eligible to receive a solicitation
fee equal to 1% of the stated value for positions
of 2,500 or fewer shares (10,000 or fewer shares
for the $25 stated value series)
Salespersons who have accounts who vote FOR the
proposals are eligible to receive a solicitation
fee equal to 0.25% of the stated value for
positions greater than 2,500 shares (10,000 shares
for the $25 stated value series).
Solicitation fees related to the Merger Vote are
payable if, but only if, the Merger Vote is
approved at the annual meeting and all regulatory
approvals specified in the merger agreement have
been obtained. Solicitation fees related to the
Unsecured Debt Limitation Vote are payable if, and
only if the Unsecured Debt Limitation Vote is
approved at the annual meeting.
Rating Agencies: Moody's Investors Service and Standard & Poor's
Ratings Services have been advised of the
Unsecured Debt Limitation Vote. The rating
agencies have advised PacifiCorp that approval of
the Unsecured Debt Limitation Vote, in and of
itself, will not result in a reduction of the
current rating of the PacifiCorp preferred stock.
- -------------------------------------------------------------------------------
PacifiCorp Cumulative Preferred Stock ($100 stated value, unless specified)
-------------------------------------------------------------------------------
Shares CUSIP Voting rights
Series Outstanding Number (per share)
------ ----------- ----------- ---------------
Serial Preferreds
4.52% Series 2,065 695114 20 7 1 Vote
4.56% Series 84,592 695114 30 6 1 Vote
4.72% Series 69,890 695114 40 5 1 Vote
5.00% Series 42,000 695114 60 3 1 Vote
5.40% Series 65,960 695114 70 2 1 Vote
6.00% Series 5,932 695114 80 1 1 Vote
7.00% Series 18,060 695114 88 4 1 Vote
No Par Preferreds
$7.48 Series 750,000 695114 65 2 1 Vote
$7.70 Series 1,000,000 695114 67 8 1 Vote
$1.16 Series ($25) 193,102 695114 73 6 1/4 Vote
$1.18 Series ($25) 420,116 695114 74 4 1/4 Vote
$1.28 Series ($25) 381,220 695114 75 1 1/4 Vote
5% Preferred Stock 126,463 695114 50 4 1 Vote
-------------------------------------------------------------------------------
Totals 3,159,400 2,413,571 Votes
-------------------------------------------------------------------------------
Any questions may be addressed to the following:
------------------------------------------------------
High Grade Financial
Capital Markets Engineering
------------------------------------------------------
Chris Lynch Paul Galant
Saundra Gulley Tim Lu
Michael Davis x6224 Jeff Dorst x2964
Jeremy Murphy x2336
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