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FOR IMMEDIATE RELEASE
Media Contacts: Investor Contact:
Pam Levetzow David Myers
816 / 556-2926 816 / 556-2312
Phyllis Desbien
816 / 556-2903 Joele Frank/Dan Katcher
Abernathy MacGregor Group
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KCPL SENDS LETTER TO JOHN HAYES
KANSAS CITY, MISSOURI (July 31, 1996) -- Kansas City Power &
Light Company's (NYSE:KLT) Chairman of the Board, President and
Chief Executive Officer, Drue Jennings, today sent a letter to
John Hayes, Chairman and CEO of Western Resources.
Here is the text of Mr. Jennings' letter to Mr. Hayes:
July 31, 1996
Mr. John E. Hayes, Jr.
Chairman of the Board and
Chief Executive Officer
Western Resources, Inc.
818 Kansas Avenue
Topeka, Kansas 66612
Dear John:
I have read your July 30 letter, and can only conclude that
it was written at the insistence of your advisors in an eleventh
hour effort to posture for further litigation following the vote
of KCPL shareholders on August 7.
This has been a long and arduous battle between our two
companies, and from the tone of your letter it is evident that it
has taken its toll on you. But it is very important, especially
in these final days before the shareholders' meeting, that the
issues be addressed in a forthright and candid manner.
You obviously would have preferred KCPL shareholders to
accept all of Western's assertions and projections without
question or challenge. Our Board of Directors has an important
responsibility to our shareholders, and it is our obligation to
ensure they have all information necessary to make informed
decisions.
Western has repeatedly passed up the opportunity to respond
to the issues on the merits, and instead has persisted in its
efforts at corporate intimidation. I told you back in June that
these efforts would not succeed, and I can tell you today that
they haven't. KCPL's Board will continue to raise all legitimate
issues concerning Western's hostile offer, and we will continue
to protect the interests of our shareholders.
With regard to the issues raised in your July 30 letter, let
me advise you as follows:
1. Western's recently announced proposed rate reduction
settlement is not good news for KCPL shareholders. Our
shareholders will not be fooled by Western's assertion that
losing more than $300 million in revenue over the next five years
"confirms the viability of our offer." Similarly, they will not
be deluded by Western's simplistic efforts to equate accelerated
depreciation (a non-cash item) with the out-of-pocket loss of
real dollars.
2. Your assertion that this loss of more than $300 million of
revenue will not impact Western's ability to pay dividends at its
promised rate is not credible to us -- as Western would be
required to use in 1998 more than 90% of its earnings on a going
forward basis to cover dividend payments.
3. We have carefully reviewed the terms of Western's proposed
rate reduction settlement, and the fact of the matter is that it
will impact Western's future earnings -- and we have so informed
our shareholders.
4. After all these months, Western still has not provided KCPL
shareholders with an effective response to our very real concerns
about its overstated merger-related savings assumptions. Your
response to this in your July 30 letter seems to be nothing more
than a plea to our shareholders to trust you.
5. The "total return" comparisons between KCPL and Western
speak for themselves. The 8-year period was used to coincide
with my tenure as KCPL's Chief Executive Officer. Our financial
analysis is correct; you just didn't like the results.
6. You and your advisors have waged an increasingly nasty and
personal campaign against KCPL's Board and management, and
especially me. You know very well that in your April 14 letter
you offered me the same compensation from Western that I would
become entitled to following a KCPL/UtiliCorp merger. No amount
of "spin" can change that fact. We can only conclude that
Western's constant reference to compensation and termination
payments is a last ditch attempt to get shareholders to turn
their attention away from considering their own best interests in
deciding how to vote. As I have repeatedly said -- and will say
again -- I plan to lead Maxim Energies as Chairman for many years
to come and help build even more value for the shareholders.
Finally, I must comment on your paid advertisement which you
ran in the national press today. Western asserts in blaring
headlines that our employees have withdrawn their support for the
UtiliCorp merger. This is not true; you know it is not true; and
your Board of Directors knows it is not true. Our employees
overwhelmingly support the UtiliCorp merger, as you undoubtedly
will hear in the coming days. One business manager at one local
union chapter who previously endorsed the UtiliCorp merger,
recently decided to take a neutral position for his own personal
reasons. He does not speak for the local; he does not speak for
the union; and he does not speak for KCPL employees as a group.
Why would Western trumpet this one man's neutral position as a
withdrawal of employee support?
Is there anything Western won't say in its effort to get
votes?
Sincerely,
/s/ Drue Jennings
Kansas City Power & Light Company provides electric power to a
growing and diversified service territory encompassing
metropolitan Kansas City and parts of eastern Kansas and western
Missouri. KCPL is a low-cost producer and leader in fuel
procurement and plant technology. KLT Inc., a wholly-owned
subsidiary of KCPL, pursues opportunities in non-regulated,
primarily energy-related ventures.
# # #
[KCPL logo]
July 31, 1996
To all KCPL employees:
In the closing days of our solicitation of shareholders for
support of our strategic merger with UtiliCorp, you should
prepare yourselves for the last-ditch tactics of Western
Resources. You have already seen the beginning of such
campaign tactics in the form of misleading statements about
compensation and executives' motivations in pursuing the
UtiliCorp merger.
These tactics reached a new low this morning in a full-page
newspaper ad stating an outrageous fabrication that KCPL
employees "withdraw support for UtiliCorp merger."
That statement is simply not true. I know it. You know it.
And, believe me, Western knows it.
It's what I see as a desperate attempt to derail our merger
of equals with UtiliCorp. Western has seized on the
statements of one individual who, for whatever reasons of his
own, apparently declared himself to the media to be a
spokesman for all of KCPL's IBEW-represented employees. I
recognize that this action creates enormous discomfort for
members of our bargaining units, many of whom have reaffirmed
their support for the UtiliCorp merger to me personally over
the last few days. In fact, the vast majority of our
employees continue to be extremely supportive. I cannot tell
you enough how much I appreciate it.
Since our merger efforts began, I have received overwhelming
support from our employees. You know that, together, we're
building a company that will not only serve as a model of
honest, innovative leadership in a competitive deregulated
energy industry, but will also serve all who have a stake in
KCPL's success: our customers, our shareholders and you, our
employees.
From now until our shareholder vote on August 7, you may see
and hear many more misleading assertions and allegations from
Western about our management, board and even yourselves.
These are tactics designed to demoralize and fracture
support.
I will be glad when this distasteful struggle is behind us.
I look forward to working with you to build the best future
possible for Maxim Energies, while Western Resources is left
to explain its costly misadventures to its own stakeholders.
Thank you once again for your continuing support.
Sincerely,
/s/Drue Jennings
Drue Jennings
[Excerpt from script for KCPL employee information hotline
bulletin]
A special thanks to those of you who participated in the
video conferences yesterday. The two conferences gave employees
the opportunity to ask questions about the merger and get their
answers directly from Mr. Jennings.
Since the process began earlier in the year, employees have
expressed their support for the proposed merger with UtiliCorp in
different ways. Many of you showed your support by signing
endorsements. In addition, several locations rounded up their
employees for a photograph showing their support of the UCU
merger.
We appreciate your support of the merger with UtiliCorp.
Keep your eyes open in the near future for publicity featuring
employee support of the merger between KCPL and UtiliCorp.
--------
[Advertisements appearing in newspapers commencing August 1, 1996]
ATTENTION [KCPL logo] SHAREHOLDERS:
Q: WHEN WAS THE LAST TIME SOMEONE TOLD YOU LOSING MORE
THAN $300 MILLION IN REVENUE WAS GOOD NEWS?
A: LAST FRIDAY.
On July 26, the Kansas Corporation commission announced that
its staff had reached a proposed settlement with Western
Resources on rate reductions which would cut Western's
revenues by more that $300 million over the next five years.
Astonishingly, Western is attempting to portray this as a
positive development, announcing that this "confirms the
viability of our offer" for KCPL.*
IS THERE ANYTHING WESTERN WON'T SAY TO GET YOUR VOTE?
_____________________________________________________________________
The Special Meeting of Shareholders Will Be Held On August 7, 1996.
VOTE "FOR" THE KCPL/UTILICORP MERGER TODAY
ON THE WHITE PROXY CARD.
_____________________________________________________________________
If you have any questions and need assistance in voting your
KCPL Shares, call KCPL INVESTOR RELATIONS at 1-800-245-5275
or D.F. KING & CO., INC., toll free, at 1-800-714-3312.
*Western Resources Press Release, July 26, 1996.
August 1, 1996 KANSAS CITY POWER & LIGHT COMPANY
ATTENTION [KCPL logo] SHAREHOLDERS:
TAKE THE FAST TRACK TO VALUE
VOTE THE WHITE PROXY CARD
FOR [X]
A FAILURE to approve the KCPL/Utilicorp merger would DEPRIVE
you of its potential for growth in revenue, income and share
value--along with an 18% dividend increase.
There is NO ASSURANCE that Western's hostile exchange offer--which
has been unanimously rejected by your Board--will EVER BE COMPLETED.
_____________________________________________________________________
The Special Meeting of Shareholders Will Be Held on August 7, 1996.
VOTE "FOR" THE KCPL/UTILICORP MERGER TODAY ON THE WHITE PROXY CARD.
_____________________________________________________________________
If you have any questions or need assistance in voting your
KCPL Shares, call KCPL INVESTOR RELATIONS at 1-800-245-5275
or D.F. KING & CO., INC., toll free at 1-800-714-3312.
August 1, 1996 KANSAS CITY POWER & LIGHT COMPANY