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_____________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
Amendment No. 20 to
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities Exchange Act of 1934
____________
KANSAS CITY POWER & LIGHT COMPANY
(Name of Subject Company)
KANSAS CITY POWER & LIGHT COMPANY
(Name of Person Filing Statement)
Common Stock, no par value
(Title of Class of Securities)
____________
485134100
(CUSIP Number of Class of Securities)
____________
Jeanie Sell Latz, Esq.
Senior Vice President-Corporate Services
Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106-2124
(816) 556-2200
(Name, address and telephone number of person authorized
to receive notice and communications on behalf
of the person filing statement)
____________
Copy to:
Nancy A. Lieberman, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
(212) 735-3000
_____________________________________________________________
This statement amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 of Kansas
City Power & Light Company, a Missouri corporation ("KCPL"),
filed with the Securities and Exchange Commission (the
"Commission") on July 9, 1996, as amended, (the "Schedule 14D-
9"), with respect to the exchange offer made by Western
Resources, Inc., a Kansas corporation ("Western Resources"), to
exchange Western Resources common stock, par value $5.00 per
share, for all of the outstanding shares of KCPL common stock, no
par value ("KCPL Common Stock"), on the terms and conditions set
forth in the prospectus of Western Resources dated July 3, 1996
and the related Letter of Transmittal.
Capitalized terms used and not defined herein shall have the
meanings assigned to such terms in the Schedule 14D-9.
Item 8. Additional Information to be Furnished
On July 25 and 26, 1996, the District Court in Kansas City
Power & Light Co. v. Western Resources, Inc., et al. heard evidence
and argument on the issues of the legality of the Merger
Agreement and its adoption. On August 2, 1996, the District
Court issued an order directed to the legality of the Merger
Agreement. While the District Court ruled that each of the
transactions contemplated by the Merger Agreement were legally
valid and authorized under Missouri law, it held that because the
result of the transactions would be a merger of KCPL and UCU, the
Missouri statute requiring approval of certain mergers by two-thirds of
the outstanding shares of the merging corporation's stock is
applicable to the Merger Agreement.
KCPL believes that the District Court's conclusion that
Missouri law requires the Merger Agreement to be approved by two-
thirds of KCPL's outstanding shares is erroneous, and continues
to believe that the only shareholder approval required is the
approval of the issuance of shares of Common Stock pursuant to
the Merger Agreement by a majority vote of the shares voting at
a meeting at which a quorum is present.
On August 5, 1996, the District Court indicated that it
would consider entering an order that would permit immediate
appeal of its August 2, 1996 ruling to the United States Court of
Appeals for the Eighth Circuit after the Special Meeting of KCPL
shareholders (the "Meeting") is held to consider and vote upon
the Mergers.
Also on August 5, 1996, KCPL announced that it was
postponing the Meeting which was scheduled to be held on
August 7, 1996. KCPL's press release announcing such
postponement and the reasons therefor is included herewith as
Exhibit 85 and is incorporated by reference herein.
Item 9. Material to be Filed as Exhibits.
The following Exhibits are filed herewith:
Exhibit 82 Advertisements appearing in newspapers
commencing August 4, 1996.
Exhibit 83 Excerpts from scripts for KCPL employee
information hotline bulletin issued on
August 5, 1996.
Exhibit 84 Order Denying KCPL's Partial Motion for
Summary Judgment (dated August 2, 1996, C.A.
No. 96-0552-CV-W-5, U.S. District Court for
the Western District of Missouri, Western
Division).
Exhibit 85 Press release issued by KCPL on August 5, 1996.
SIGNATURE
After reasonable inquiry and to the best of her knowledge
and belief, the undersigned certifies that the information set
forth in this Statement is true, complete and correct.
KANSAS CITY POWER & LIGHT COMPANY
By: /s/Jeanie Sell Latz
Jeanie Sell Latz
Senior Vice President-Corporate Services
Dated: August 5, 1996
EXHIBIT INDEX
Exhibit No. Description Page
__________ ____________________________________________________ ____
Exhibit 82 Advertisements appearing in newspapers commencing
August 4, 1996
Exhibit 83 Excerpts from scripts for KCPL employee information
hotline bulletin issued on August 5, 1996
Exhibit 84 Order Denying KCPL's Partial Motion for Summary
Judgment (dated August 2, 1996, C.A. No.
96-0552-CV-W-5, U.S. District Court for the Western
District of Missouri, Western Division)
Exhibit 85 Press release issued by KCPL on August 5, 1996.
Exhibit 82
[Advertisements appearing in newspapers commencing August 4,
1996]
AN IMPORTANT MESSAGE FOR KCPL SHAREHOLDERS.
KCPL EMPLOYEES DO
SUPPORT THE MERGER
WITH UTILICORP. WESTERN
RESOURCES IS WRONG, AGAIN.
[photograph of employees]
[photograph of employees holding sign "KCPL Employees Say
YES to the UtiliCorp Merger."]
[photograph of employees holding sign "KCPL Employees Say
YES to the UtiliCorp Merger."]
THERE IS STILL TIME TO SHOW YOUR SUPPORT. VOTE FOR THE
PROPOSED MERGER WITH UTILICORP ON THE WHITE PROXY CARD.
[KCPL logo]
If you have any questions about the merger or need
assistance completing the WHITE proxy card, please call KCPL
Investor Relations toll free at 1-800-245-5275, or our proxy
solicitor, D. F. King & Co., Inc. toll free at 1-800-714-
3312.
August 4, 1996
Exhibit 83
[Excerpts from scripts for KCPL employee information hotline
bulletins issued August 5, 1996.]
[Bulletin issued Monday morning, August 5, 1996]
Kansas City Power & Light Company announced on Friday that
the United States District Court for the Western District of
Missouri ruled that the KCPL/UtiliCorp merger, while lawful under
Missouri law, nevertheless is subject to the affirmative vote of
two-thirds of KCPL's outstanding shares.
It remains KCPL's position that the Merger as restructured
on May 20, 1996 does not require a two-thirds vote but rather
requires the approval of a majority of those shares voting at a
meeting. KCPL intends to immediately appeal the District Court's
decision to the United States Court of Appeals for the Eighth
Circuit.
The District Court did not enjoin the holding of KCPL's
Special Meeting of Shareholders currently scheduled for August 7,
1996. KCPL is currently reviewing its options and at the present
time intends to proceed with the August 7 Shareholders' Meeting.
This will enable the shareholder vote to be tabulated assuming
KCPL prevails in its appeal.
In a news release issued Friday, UtiliCorp United said it
anticipated joining with KCPL in an "expedited and aggressive
appeal" of the decision.
--------
[Bulletin issued Monday afternoon, August 5, 1996]
This is an update to the Hotline for Monday, August 5.
Kansas City Power & Light Company announced today that it is
postponing its Special Meeting of Shareholders which was
scheduled to be held on August 7, 1996. The Special Meeting is
being postponed after consideration of the views of the staff of
the U.S. Securities and Exchange Commission that it is necessary
to provide KCPL shareholders with additional time to consider
information concerning the August 2, 1996 order of the United
States District Court for the Western District of Missouri
regarding the required vote in KCPL's proposed merger with
UtiliCorp United Inc.
The Company also announced that the District Court indicated
today that it would consider entering an order that would permit
immediate appeal of its August 2, 1996 ruling to the Eighth
Circuit Court of Appeals after the Special Meeting of
Shareholders is held.
Shareholders will be notified in the next few days as to the
new time, date and place for the postponed Special Meeting.
Exhibit 84
[Filed 11:15 August 02, 1996
R. F. Connor, Clk, U.S. District
Court West District of Missouri]
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
KANSAS CITY POWER & LIGHT )
COMPANY,
Plaintiff, )
vs. ) No. 96-0552-CV-W-5
WESTERN RESOURCES, INC., )
et al.,
Defendants. )
ORDER
Before this Court are plaintiff Kansas City Power & Light
Company's ("KCPL") Motion for Partial Summary Judgment, defendant
Western Resources, Inc. and Robert L. Rives' ("Western") Hearing
Brief and Suggestion in Opposition to KCPL's Summary Judgment
Motion, Intervenor UtiliCorp United Inc.'s ("UtiliCorp")
Suggestions Regarding the Legality of the Proposed Merger,
Intervenor Jack R. Manson's ("Manson") Opposition to the Motion
for Partial Summary Judgment, KCPL's Reply, and Western's Reply.
On July 25 and 26, 1996, additional evidence on the briefed
issues was presented at a hearing.
For the reasons stated below, KCPL's Partial Motion for
Summary Judgment is denied. This Court finds that although
reverse triangular mergers and short-form mergers are provided
for under Missouri Law, when they are used in conjunction, the
merger statute requiring a shareholder vote is triggered.
Background
KCPL is a Missouri corporation with its headquarters and
principal place of business in Kansas City, Missouri. It is a
public utility that provides electricity to over 430,000
customers in Western Missouri and Eastern Kansas. Its stock is
publicly traded on the New York Stock Exchange. Western is a
Kansas corporation whose headquarters and principal place of
business are located in Topeka, Kansas. Western produces and
distributes electricity and sells natural gas. UtiliCorp is a
Delaware corporation but its principal place of business is also
in Missouri. The company provides energy services and sells
natural gas.
These companies, in anticipation of change within the energy
industry, started contemplating strategic mergers. In June of
1994, KCPL and Western exchanged confidential information and
began considering a business combination. KCPL's board, however,
determined that a merger with Western would not be in the
company's best interest. Beginning in May of 1995, KCPL's
chairman and chief executive officer, A. Drue Jennings (Jennings)
began meeting with Richard C. Green Jr. (Green), UtiliCorp's
president and chief executive officer, to discuss a merger. The
talks continued, teams were formed to explore opportunities, the
companies' Boards were consulted, and on January 19, 1996, the
KCPL Board approved a merger agreement with UtiliCorp.
Pursuant to this Original Merger Agreement, KCPL and
UtiliCorp would merge into a new Delaware corporation ("Newco").
Each share of KCPL stock would be converted into one Newco share,
and each share of UtiliCorp stock would be converted into 1.096
Newco shares. This merger plan was executed pursuant to the
General and Business Corporation Law of Missouri ("MGBCL"),
Section 351.410(1), and the transaction would have required the
affirmative vote of two-thirds of the outstanding KCPL shares.(2)
On April 9, 1996, KCPL announced that the shareholders would vote
upon the Original Merger Agreement at its annual meeting on
May 22, 1996.
On April 14, 1996, Western sent Jennings a letter proposing
a merger in which each KCPL shareholder would receive Western
common stock purportedly worth $28 for each KCPL share, subject
to a "collar" limiting the amount of Western stock that KCPL
shareholders could receive. Shortly after delivery, Western
released the letter to the media. The KCPL Board unanimously
rejected Western's proposal. Western countered by filing
preliminary proxy materials with the Securities Exchange
Commission to solicit KCPL shareholders to vote against approval
of the Original Merger Agreement at the May 22 meeting.
On May 9, 1996, the KCPL Board met to review the status of
the Original Merger Agreement. The Board received presentations
from management, financial advisors, and legal advisors. KCPL's
proxy solicitation firm reported that it would be difficult to
obtain the affirmative votes of two-thirds of all outstanding
shares. Additionally, Institutional Shareholders Service, an
independent organization, recommenced that KCPL shareholders vote
against the UtiliCorp merger.
The following week, Green and Jennings met to discuss ways
to improve the deal for KCPL shareholders. Eventually Green
offered KCPL shareholders an exchange ratio of 1 to 1, but
demanded that the merger be restructured. The KCPL Board
convened on May 20, 1996 to consider the revised agreement and,
after lengthy discussion, unanimously approved a Revised Merger
Agreement. The board also decided to cancel the May 22
shareholder vote.
The merger would now be carried out over two steps. The
first would be a reverse triangular merger. The second would
require a short-form merger. In order to effectuate the reverse
triangular merger, KCPL would form a wholly-owned subsidiary
("Sub") that would merge with and into UtiliCorp. Each
outstanding share of Sub stock would be converted into one share
of UtiliCorp stock (held by KCPL), and each outstanding share of
UtiliCorp stock would be converted into one share of KCPL stock
(held by UtiliCorp shareholders). UtiliCorp would be the
surviving corporation and a wholly-owned subsidiary of KCPL. The
reverse triangular merger is provided for under MGBCL Section
351.410(3). Section 351.185(3) also governs this transaction
because shares must be issued before the merger can take place.
This section does not require any shareholder vote. Id.
Step two would occur immediately after the merger of Sub and
UtiliCorp. UtiliCorp would be merged with and into KCPL. KCPL
would be the surviving corporation but would change its name to
Maxim Energies, Inc. The short-form merger is governed by MGBCL
Section 351.447.(4) Again, no vote or appraisal rights are afforded to
the shareholders. Id.
Although technically no shareholder vote would be required
to effectuate the revised merger under Missouri law, the New York
Stock Exchange ("NYSE") requires that a majority of the voting
shareholders must approve the issuance of shares in the first
step--the reverse triangular portion--of the transaction. The
Revised Merger Agreement is to be considered and voted upon at a
special meeting on August 7, 1996.
KCPL filed this lawsuit seeking a declaration that the
Revised Merger Agreement is valid under the laws of Missouri.
Western filed a counterclaim alleging that the KCPL Board of
Directors breached its fiduciary duty to the shareholders when it
canceled the May 22 vote and when it approved the Revised Merger
Agreement which totally eliminated the shareholders' right to
vote. The parties submitted briefs and presented evidence at the
hearing on these narrow issues. The subject of this Order,
however, will be limited to the legality of the Revised Merger
Agreement. All fiduciary duty claims will be addressed after the
shareholder classes have been established and all parties have
been named.
Discussion
KCPL asks for this Court's "stamp of approval" for its
Revised Merger Agreement with UtiliCorp, and argues that it is
entitled to partial summary judgment because the laws of the
State of Missouri provide for the two-step transaction. Not
surprisingly, UtiliCorp also asserts that Missouri law allows for
this type of merger. Western and Manson, however, argue that the
two steps result in the same outcome as contemplated under the
Original Merger Agreement. They then argue that Missouri's
general merger statute is triggered and the two-thirds vote would
still be required.
No party challenges the validity of the reverse triangular
merger or the short-form merger. The parties note that Missouri
law provides for these transactions and that important business
purposes are accomplished by them. The issue facing this Court
then, is what was the intent of the Missouri Legislature
regarding the use of these statutes in conjunction? Did the
lawmakers intend for each statute in the MGBCL to stand
independently or did they intend for these provisions to be
harmonized so that minority shareholder rights would be
protected? Lacking legal precedent or legislative history, this
Court must turn to the principles of statutory interpretation.(5)
KCPL urges this Court to adopt the doctrine of independent
legal significance. This doctrine, adopted in several states
including Delaware and Kansas, stands for the proposition that
actions taken pursuant to the authority of various sections of
the law constitute acts of independent legal significance and
their validity is not dependent on other sections of an act.
Hesston Corp. v. Kays, 870 P.2d 17, 40 (Kan. 1994). See also
Orzeck v. Englehart, 195 A.2d 375 (Del. 1963). The separate
sections of the corporation law are considered to be of equal
dignity, and a corporation is allowed to resort to one section
without having to meet the requirements of a different section.
Hesston Corp., 870 P.2d at 39-40.
The doctrine of independent legal significance, however, has
not been adopted in Missouri. KCPL cites one case, Kirtz v.
Grossman, 463 S.W.2d 541 (Mo. Ct. App. 1971), in support of their
contention that Missouri would be willing to adopt the doctrine.
In Kirtz, Essex International ("Essex") acquired over 97% of the
stock of Diatemp, voted all of its Diatemp stock in favor of
dissolution, and proposed paying the minority shareholders book
value for their shares even though the fair value of the
company's assets exceeded book value. Id. at 542-43. The
minority shareholders argued that because Essex intended to
continue the business with the same employees and at the same
location, the dissolution was really a consolidation and,
therefore, illegal. Id. at 543. The court held that even though
Essex intended to continue the business, Diatemp was not deprived
of its statutory right to dissolve. Id. The court did not refer
to the doctrine of independent legal significance or apply its
reasoning, and more importantly, the court's decision can be
fairly read as a straight interpretation of a dissolution statute
amendment.
In response to the Missouri Supreme Court's voiding of a
purported dissolution that resulted in joining assets and
operations of two mining corporations In re Doe Run Lead Co., 223
S.W. 600, the state legislature repealed a portion of a statute
which restricted the right of consolidation to manufacturing
corporations. Kirtz, 463 S.W.2d at 543 (citing Section 9759, Laws of
1921, p. 266). The amendment also stated, "[i]t shall be no
objection to any proceeding brought under the provisions of this
article, nor shall it be a violation of any statute relating to
the consolidation of corporations, that the property or assets of
the corporation sought to be dissolved may, after a decree of
dissolution, shall have been made, be acquired and thereafter
used by any other person or persons, natural or corporate, in the
same or a similar business." Id. It is more likely that the
court was simply applying this statute rather than adopting the
doctrine of independent legal significance.
This Court is hesitant to impose a doctrine on the state of
Missouri with little to no indication of acceptance, especially
when Missouri has clearly adopted a different rule of statutory
construction. The general rule in Missouri has been to consider
an entire legislative act together and to harmonize all
provisions. City of Willow Springs v. Missouri State Librarian,
596 S.W.2d 441, 446 (Mo. 1980)(en banc)(citing McCord v. Missouri
Crooked River Backwater Levee Dist., 295 S.W.2d 42, 45 (Mo.
1956)). "Furthermore, it is an established rule of statutory
construction that when a general statute...and a specific
statute...deal with the same subject matter, the specific statute
prevails over the general one." State ex rel. Osborne v. Goeke,
806 S.W.2d 670, 672 (Mo. 1991)(en banc)(citing State ex rel.
Burlington N. v. Forder, 787 S.W.2d 725, 726-27 (Mo. 1990)(en
banc)).
The court in AHI Metnall v. J.C. Nichols Co., 891 F.Supp.
1352 (W.D. Mo. 1995), applied these Missouri principles and
interpreted the MGBCL as one unified legislative scheme. A
minority shareholder argued that MGBCL Section 351.245(2) prevented the
corporation's controlling shareholder from voting shares that had
been pledged to the corporation as security for a loan. Id. at
1358. Section 351.245(2) provides that "[n]o person shall be
admitted to vote on any shares belonging or hypothecated to the
corporation which issued the shares." Id. The controlling
shareholder argued that it could vote the shares under MGBCL
351.260(4), which provides that "a shareholder whose shares are
pledged shall be entitled to vote such shares until the shares
have been transferred into the name pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred."
Id.
The court concluded that because Section 351.260(4) "merely
addresses the general situation where a pledgee is allowed to
vote his or her stock even though it is pledged to a third-party,
such as a lending institution...the general provisions of Section
351.260(4) are trumped by the narrowly-tailored provisions of
Section 351.245(2)," which applies to shares pledged to
corporations, the type of transaction at issue. Id.
Step one of KCPL and UtiliCorp's transaction is governed by
MGBCL Section 351.185. This general statute addresses consideration
for shares and is contained in the "Capital, Surplus and
Stockholders" section of Chapter 351. In contrast, Section 351.410
positioned in the "Merger and Consolidation" section specifically
addresses the elements necessary to effectuate a merger.
Included is the requirement that a merger plan be submitted for a
vote at a meeting of shareholders. Id. Further, Section 351.425, also
contained under the merger heading, sets out the specific two-
third voting requirement. Unfortunately, Missouri's statutory
construction principles cannot be simply and neatly applied in
this instance because the short-form merger statute which
eliminates a shareholder vote is contained in the same merger
section. It too is specific.
This Court, however, cannot ignore the outcome of the whole
revised transaction--step one plus step two. It is the entire
process and the eventual outcome that must be contemplated in
light of the statutes. KCPL's Original Merger Agreement would
have resulted in one corporation--the equal combination of KCPL
and UtiliCorp. All assets and liabilities would have been
absorbed into Newco. Although the Revised Merger Agreement
creates a two-step merger and utilizes two different statutes,
the outcome is exactly the same. One corporation with all the
assets and liabilities of UtiliCorp and KCPL will result. Aside
from the increased ratio of shares to KCPL stockholders, the only
change from the Original Merger Agreement is the destruction of
the KCPL shareholders' right to vote and their appraisal rights.
In light of Missouri's statutory interpretation principles,
this Court must view the MGBCL as one legislative unit and seek
to "harmonize" the statues at issue. The only way in which this
task may be accomplished is by reading the MGBCL as requiring a
vote of outstanding shares when the reverse triangular merger and
the short-form merger are used together to accomplish the same
result contemplated by Missouri's specific merger statutes.(6)
This interpretation does not violate Missouri's stated
principles. When Sections 351.410(3), 351.185, and 351.447 are
used individually, they are particularly suited to the
transactions at hand.(7) However, when they are used in
conjunction to achieve the same type of merger that would
normally be governed by Section 351.410, the more specific statute must
trump the general ones, and a vote is required. See Flarsheim v.
Twenty Five Thirty Two Broadway Corp., 432 S.W.2d 245, 251 (Mo.
1968)("Statutes relating to the same subject must be read
together, and provisions of one having special application to a
particular subject will be deemed a qualification to another
statute in its general terms.")(citations omitted).
This interpretation also better reflects the well-documented
protection of shareholder rights. KCPL and UtiliCorp have
stressed that if a two-thirds vote is required, a small minority
could thwart the will of the majority.(8) This fact is of little
consequence for the law supports minority shareholder rights. At
common law, unanimous shareholder approval was required for
mergers. Flarsheim, 432 S.W.2d at 251. A statutory enactment
lowered the requirement to a three-fourths approval. Id.
Although the margin was again lowered to two-thirds, the still
rigorous requirement reflects an intention on the part of
Missouri's General Assembly to preserve minority shareholder
rights.
Additionally, Missouri courts have warned that "courts
should be careful not to weaken or fritter away by construction
the protection given minority shareholders...." Id. at 252.
This Court has held that a Missouri statute requiring a two-
thirds vote for the sale of corporate assets and similar statutes
"are designed primarily for the purpose of protecting the
interests of the shareholders of the corporation, particularly
those of dissenting shareholders, and they are not based upon
consideration of the public welfare." Wooster Republican
Printing Co., 533 F. Supp. 601, 617 (W.D. Mo. 1981)(citing
Beaufort Transfer Co. v. Fisher Trucking Co., 451 S.W.2d 40, 43
(Mo. 1970); Flarsheim, 432 S.W.2d at 252; Still v. Travelers
Indemnity Co., 374 S.W.2d 95, 100 (Mo. 1963)).(9)
In light of the statutory construction principles already
adopted in Missouri and of the importance of protecting
shareholder rights, this Court finds that KCPL's Revised Merger
Agreement is subject to an affirmative vote of at least two-
thirds of its outstanding shares.
Conclusion
For the reasons outlined above,
It is hereby
ORDERED that KCPL's Motion for Partial Summary Judgment is
denied.
/s/ Scott O. Wright
SCOTT O. WRIGHT
Senior United States District Judge
August 2, 1996.
_______________________________
(1) Any two or more domestic corporations may merge into one of
the corporations in the following manner: The board of directors
of each corporation shall approve a plan of merger and direct the
submission of the plan to a vote at a meeting of shareholders.
The plan of merger shall set forth:
(1) The names of the corporations proposing to merge, and the
name of the corporation into which they propose to merge, which
is herein designated as "the surviving corporation";
(2) The terms and conditions of the proposed merger and the
mode of carrying it into effect;
(3) The manner and basis of converting the shares of each
merging corporation into cash, property, shares or other
securities or obligations of the surviving corporation, or (if
any shares of any merging corporation are not to be converted
solely into cash, property, shares or other securities or
obligations of the surviving corporation) into cash, property,
shares or other securities or obligations of any other domestic
or foreign corporation, which cash, property, shares or other
securities or obligations of any other domestic or foreign
corporation may be in addition to or completely in lieu of cash,
property, shares or other securities or obligations of the
surviving corporation;
(4) A statement of any changes in the articles of incorporation
of the surviving corporation to be effected by the merger;
(5) Such other provisions with respect to the proposed merger
as are deemed necessary or desirable.
Mo. Ann. Stat. 351.410 (Vernon 1991).
(2) At each such meeting a vote of the shareholders entitled to
vote thereat shall be taken on the proposed plan of merger or
consolidation. The plan of merger or consolidation shall be
approved upon receiving the affirmative vote of the holders of at
least two-thirds of the outstanding shares entitled to vote at
such meeting, of each of such corporations.
Mo. Ann. Stat. 351.425 (Vernon 1991).
(3) 1. Shares having a par value shall be issued for such
consideration not less than the par value thereof as shall be
fixed from time to time by the board of directors. Shares
without par value may be issued for such consideration as may be
fixed from time to time by the board of directors unless the
articles of incorporation reserve to the shareholders the right
to fix the consideration. Shares of a corporation issued and
thereafter acquired by it may be disposed of by the corporation
for such consideration as may be fixed from time to time by the
directors. That part of the surplus of a corporation which is
transferred to stated capital upon the issuance of a share
dividend shall be deemed to be the consideration for the issuance
of such shares.
Mo. Ann. Stat. 351.185 (Vernon 1991).
(4) 1. In any case in which at least ninety percent of the
outstanding shares of each class of a corporation or corporations
is owned by another corporation and one of the corporations is a
domestic corporation and the other or others are domestic
corporations, or foreign corporations if the laws of the
jurisdictions of their incorporation permit a corporation of that
jurisdiction to merge with a corporation of another jurisdiction,
the corporation having such share ownership may either merge the
other corporation or corporations into itself and assume all of
its or their obligations, or merge itself, or itself and one or
more of the other corporations, into one of the other
corporations without any vote of the shareholders of any domestic
corporation...
Mo. Ann. Stat. 351.447 (Vernon 1991).
(5) KCPL attempted to show through its briefing and testimony
that, unlike a merger with Western, a joint venture with
UtiliCorp created a better strategic fit and would better protect
the future of the company. Similarly, Western attempted to show
that their proposal would best serve the interest of the
shareholders. The "value" of either deal is irrelevant to this
Court's interpretation of Missouri's laws. This Order in no way
attempts to evaluate merger proposals before the KCPL
shareholders.
(6) This Court is only addressing the narrow fact scenario
presented in this case.
(7) Mergers carried out pursuant to these statutes individually
serve important business purposes. For example, the reverse
triangular merger results in two corporations--a parent and a
subsidiary. These entities, however, remain separate which
creates liability and tax advantages. Additionally, it makes
sense that a shareholder vote would not be required for a short-
form merger because a wholly-owned subsidiary is being absorbed
into a parent corporation.
(8) KCPL also argues that due to the NYSE rule, a majority of
shareholders will in fact be required to effectuate the merger
and that appraisal rights will be protected due to shareholders'
ability to sell their publicly traded stock. This argument is
also unpersuasive. Section 351.425 requires that a merger be
approved by the affirmative vote of at least two-thirds of all
outstanding shares. All shares not voted are counted as votes
against the merger. The NYSE rule only requires a majority vote
of a quorum. In this instance, as little as 25% of the
shareholders plus one could be enough to approve the merger
agreement. Further, minority shareholders in a corporation whose
stock was not traded on the New York Stock Exchange would be left
with no voting or appraisal rights whatsoever.
(9) This Court did not ignore the cases cited by KCPL in
support of its argument. The cases merely do not lend guidance
because they do not contain the factual situation presented in
this lawsuit. For example, in Equity Group Holdings v. DMG,
Inc., 576 F. Supp. 1197 (S.D. Fla. 1983), the court was deciding
whether a two-thirds vote of a parent corporation's shareholders
as required to carry out a triangular merger. This transaction
amounted to only step one of KCPL's plan. Two corporations,
rather than one, resulted. Id. Similar three-party mergers were
analyzed in Terry v. Penn. Cen. Corp., 527 F. Supp. 118 (E.D.
Penn. 981), Wanvig v. Johnson Controls, Inc., No. 663-487, slip
op. (Wis. Ct. App. March 24, 1985), and Perl v. IU Int'l Corp.,
607 P.2d 1036 (Haw. 1980).
Exhibit 85
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 Scanlon
212 / 371-5999
KCPL POSTPONES AUGUST 7, 1996
SPECIAL MEETING OF SHAREHOLDERS
KANSAS CITY, MISSOURI (AUGUST 5, 1996) -- Kansas City Power &
Light Company (NYSE: KLT) announced today that it is postponing
its Special Meeting of Shareholders which was scheduled to be
held on August 7, 1996. The Special Meeting is being postponed
after consideration of the views of the staff of the U.S.
Securities and Exchange Commission that it is necessary to
provide KCPL shareholders with additional time to consider
information concerning the August 2, 1996 order of the United
States District Court for the Western District of Missouri
regarding the required vote in KCPL's proposed merger with
UtiliCorp United Inc. (NYSE: UCU).
The Company also announced that the District Court indicated
today that it would consider entering an order that would permit
immediate appeal of its August 2, 1996 ruling to the Eighth
Circuit Court of Appeals after the Special Meeting of
Shareholders is held.
Shareholders will be notified in the next few days as to the new
time, date and place for the postponed Special Meeting.
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.
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