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): June 14, 1999
Exact Name of
Commission Registrant as IRS Employer Registrants'
File Specified in its State of Identification Telephone
Number Charter Incorporation Number Number
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001-14786 CMP Group, Inc. Maine 01-0519429 207 623-3521
1-5139 Central Maine Maine 01-0042740 207 623-3521
Power Company
83 Edison Drive, Augusta, Maine 04336
(Address of principal executive offices) (zip code)
Item 1 through Item 4. Not applicable.
Item 5. Other Events.
On June 14, 1999, CMP Group, Inc. (the "Company") and Energy East
Corporation, a New York holding company which is an energy delivery, products
and services company doing business in New York, Massachusetts, Maine and New
Hampshire ("Energy East"), and EE Merger Corp., a Maine corporation that is a
wholly-owned subsidiary of Energy East, entered into an Agreement and Plan of
Merger, dated as of June 14, 1999 (the "Merger Agreement"), providing for a
merger transaction among the Company, Energy East and EE Merger Corp. The Merger
Agreement and the press release issued in connection with the Merger Agreement
are filed herewith as Exhibits 10 and 99 respectively, and are incorporated
herein by reference. The description of the Merger Agreement set forth herein
does not purport to be complete and is qualified in its entirety by the
provisions of the Merger Agreement.
Pursuant to the Merger Agreement, EE Merger Corp. will merge with and
into the Company (the "Merger"), with the Company being the surviving
corporation and becoming a wholly-owned subsidiary of Energy East. The Merger,
which was unanimously approved by the respective boards of directors of the
Company, Energy East and EE Merger Corp., is expected to occur shortly after all
of the conditions to the consummation of the Merger, including the receipt of
required regulatory and shareholder approvals, are satisfied. The Company
expects that decisions of regulatory agencies can be obtained within 12 months.
Under the terms of the Merger Agreement, each outstanding share of the
Company's common stock, $5.00 par value per share (the "Company Common Stock"),
other than any treasury shares or shares owned by any subsidiary of the Company,
Energy East or any subsidiary of Energy East, will be converted into the right
to receive $29.50 in cash (the "Merger Consideration"). Pursuant to the Merger
Agreement, approximately $957 million in cash will be paid to holders of shares
of Company Common Stock, with additional payments being made to holders of stock
options and performance shares awarded under the Company's performance incentive
plans.
The Board of Directors of the Company has received an opinion from its
financial advisor, Warburg Dillon Read LLC, to the effect that as of the date of
the Merger Agreement, the Merger Consideration to be received is fair from a
financial point of view to the holders of Company Common Stock.
The Merger is subject to certain customary closing conditions,
including without limitation, the receipt of the required approval of the
Company's shareholders and of all necessary governmental approvals and the
making of all necessary governmental filings. Approvals of the Maine Public
Utilities Commission, the Connecticut Department of Public Utility Control, the
Securities and Exchange Commission under the Public Utility Holding Company Act
of 1935, as amended, the Federal Energy Regulatory Commission, the Nuclear
Regulatory Commission and the Federal Communications Commission are necessary.
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 associated waiting period are also
required. A meeting of the Company's shareholders to vote on the Merger will be
convened as soon as practicable and is expected to be held in the third quarter
of 1999.
The Merger Agreement contains certain covenants of the parties pending
the consummation of the Merger. Generally, unless the parties have otherwise
agreed with respect to specified business activities, the Company and its
subsidiaries must carry on their respective businesses in the ordinary course
consistent with past practice and use all commercially reasonable efforts to
preserve intact their present business organizations and goodwill. The Company
is permitted to declare and pay its regular quarterly dividends, but may not
increase dividends or issue or repurchase any capital stock. The Merger
Agreement contains other restrictions or limitations on the Company's
activities, including amendments of its Articles of Incorporation or bylaws,
acquisitions and dispositions of assets, capital expenditures, incurrence of
indebtedness, modification of employee compensation and benefits, changes in
accounting methods, discharge of liabilities, and matters relating to the
Company's investment in NorthEast Optic Network, Inc.
The Merger Agreement prevents the Company and its subsidiaries from
initiating, soliciting or encouraging any inquiry or offer that constitutes or
may reasonably be expected to lead to any alternative business combination
proposal, or engaging in discussions or negotiations with or providing any
confidential information to any third party relating to an alternative proposal.
The Company must notify Energy East of any such inquiry, offer or proposal.
Prior to the time of any approval by the Company's shareholders of the Merger
Agreement, the Company may enter into discussions or negotiations with a third
party that were not initiated, solicited or encouraged by the Company and
furnish confidential business information to such third party if (i) the Company
gives Energy East at least two business days' prior notice, (ii) the third party
has made an alternative proposal that is financially superior to the terms of
the Merger and the proposal can be financed, (iii) the Company's Board of
Directors concludes, based on the advice of outside counsel, that failure to
engage in such discussions or negotiations or provide such information could
constitute a breach of fiduciary duty, (iv) the Company provides Energy East a
reasonable opportunity to respond to the alternative proposal, and (v) the
Company executes a confidentiality agreement with the third party. Upon five
days' prior notice to Energy East, the Company may terminate the Merger
Agreement to accept a superior alternative proposal upon paying a termination
fee of $33.5 million plus expenses, except that prior to any such termination,
the Company must negotiate with Energy East to attempt to make adjustments in
the terms and conditions of the Merger Agreement that would enable the
transactions contemplated therein to proceed.
On the consummation of the Merger, the Company's President and Chief
Executive Officer David T. Flanagan, and two current directors of the Company
will be elected as members of the Board of Directors of Energy East. At that
time, Mr. Flanagan will become President of Energy East, and Arthur W. Adelberg,
who serves as Executive Vice President of the Company, will become Senior Vice
President and Chief Financial Officer of Energy East. Sara J. Burns, who
currently serves as President of Central Maine Power Company ("Central Maine"),
the Company's principal subsidiary, will continue serving as President of
Central Maine after consummation of the Merger. F. Michael McClain, the
Company's Vice President, Corporate Development, will serve as the President of
one or more subsidiaries after the Merger becomes effective.
In addition to the circumstances described above, the Merger Agreement
may be terminated by mutual consent of the parties; by either party if the
Merger is not consummated by June 14, 2000, with an automatic six-month
extension if all required statutory approvals have not been obtained by June 14,
2000 but all other conditions to closing have been satisfied; by either party if
the approval of the Company's shareholders is not obtained at a special meeting
of the shareholders; by either party if any state or federal law, regulation or
order that is adopted or issued has the effect of prohibiting the Merger; or by
a non-breaching party for an uncured material breach of any representation,
warranty, covenant or agreement contained in the Merger Agreement. Upon
termination of the Merger Agreement by a party for a non-willful breach, the
breaching party must reimburse the non-breaching party up to $10 million of
out-of-pocket fees and expenses incurred in connection with the Merger Agreement
or the Merger. In addition to recovery of such out-of-pocket fees and expenses,
a non-breaching party may pursue all available legal remedies in the event of a
willful breach of the Merger Agreement by the other party.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
10 Agreement and Plan of Merger by and among CMP Group, Inc., Energy
East Corporation and EE Merger Corp. dated as of June 14, 1999
99 Joint press release of the Company and Energy East issued
June 15, 1999
Item 6 through Item 9. Not applicable.
Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CMP GROUP, INC.
By /s/ David E. Marsh
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David E. Marsh
Chief Financial Officer
CENTRAL MAINE POWER COMPANY
By /s/Curtis I. Call
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Curtis I. Call
Treasurer
Dated: June 16, 1999
EXHIBIT INDEX
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Exhibit Description
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10 Agreement and Plan of Merger by and among CMP Group, Inc.,
Energy East Corporation and EE Merger Corp. dated as of
June 14, 1999
99 Joint press release of the Company and Energy East issued
June 15, 1999