As filed with the Securities and Exchange Commission on April 30, 1999
Registration 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PUGET ENERGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Washington 4911 applied for
(State or other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or
Organization) Classification Code Number) Identification No.)
411--108th Avenue N.E.
Bellevue, Washington 98004-5515
(425) 454-6363
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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WILLIAM S. WEAVER
President and Chief Executive Officer
Puget Energy, Inc.
411-108th Avenue N.E.
Bellevue, Washington 98004-5515
(425) 454-6363
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copy to:
ANDREW BOR
Perkins Coie LLP
1201 Third Avenue, 48th Floor
Seattle, Washington 98101
(206) 583-8888
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Approximate date of commencement of proposed sale to the public: Upon the
effective date of the share exchange described in this registration statement.
If any of the securities being registered on this form are being offered in
connection with formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
CALCULATION OF REGISTRATION FEE
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Proposed
Title of Each Class Maximum Proposed Amount of
of Securities to Be Amount to be Offering Price Maximum Aggregate Registration
Registered Registered per Share(1) Offering Price(1) Fee
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Common Stock, $0.01 par
value per share....... 84,560,545 $24.09375 $2,037,380,631.00 $149,931(2)
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(1) Calculated pursuant to Rule 457(f) and Rule 457(c) under the Securities
Act using the average of the high and low sales prices of Puget Sound
Energy Inc.'s common stock on April 28, 1999.
(2) The $566,392.00 registration fee is offset by the filing fee of
$416,461.00 previously paid by Puget Sound Energy, Inc., pursuant to Rule
14a-6(i)(1) and 0-11 of the Securities Exchange Act of 1934, in connection
with the filing of preliminary proxy materials on March 9, 1999.
Accordingly, $149,931 is payable upon the filing of this registration
statement.
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The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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Proxy Statement of Puget Sound Energy, Inc.
and Prospectus of Puget Energy, Inc.
[LOGO OF PUGET SOUND] Notice of Annual Meeting of Shareholders
to Be Held on June 23, 1999
84,560,545 Shares of Common Stock
(Par Value $.01 Per Share)
Puget Sound Energy, Inc. is furnishing you this proxy statement and
prospectus because you are a holder of PSE common stock. The board of directors
of PSE is soliciting proxies for use at the PSE annual meeting of shareholders
and at any adjournments or postponements of the annual meeting. The annual
meeting will convene at 10:00 a.m., Pacific time, on June 23, 1999, at the
Meydenbauer Center, located at 11100 N.E. 6th Street, Bellevue, Washington. The
voting stock of PSE consists of common stock, with each share of common stock
being entitled to one vote per share. At the annual meeting, holders of record
of PSE common stock at the close of business on April 16, 1999 will vote upon
the following proposals:
. The formation of a holding company structure, to be implemented through a
plan of exchange whereby each share of PSE common stock will be
automatically exchanged on a one-for-one basis for shares of Puget
Energy, Inc. common stock, which shares will be listed on the New York
Stock Exchange under the symbol "PSD";
. The election of four directors who will each serve for a term of three
years expiring on the date of the 2002 annual meeting; and
. Any other business that may properly come before the meeting.
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Your board of directors has unanimously approved the formation of a holding
company and recommends that you vote "for" the holding company proposal and
"for" the election of the nominees for director.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this proxy statement and prospectus. Any representation
to the contrary is a criminal offense.
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This proxy statement and prospectus and the accompanying proxy card are
dated April 30, 1999, and are first being mailed on or about May 5, 1999, to
record holders of PSE common stock as of April 16, 1999.
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TABLE OF CONTENTS
Summary............................... 1
Background of Puget Sound Energy,
Inc. ............................... 1
Summary of the Holding Company
Proposal............................ 1
Annual Meeting Information............ 3
Solicitation of Proxies.............. 3
Record Date and Voting Rights........ 3
Quorum and Voting Requirements....... 3
Proposal Number 1: The Holding Company
Proposal............................. 5
Reasons for the Holding Company
Proposal............................ 5
Regulation of PSE and the Holding
Company............................. 6
Directors, Officers and Employees.... 7
Dividends............................ 7
Holding Company Capital Stock........ 8
Comparison of Shareholder Rights..... 8
Possible Antitakeover Effects of
Certain Provisions of the Articles
of Incorporation and Bylaws of the
Holding Company..................... 10
Washington Statute................... 11
Debt of PSE.......................... 11
Conditions to the Share Exchange..... 11
Amendment or Termination............. 12
Exchange of Stock Certificates....... 12
Listing of Holding Company Common
Stock............................... 12
Stock Plans.......................... 12
Material Federal Income Tax
Consequences........................ 12
Rights of Dissenting Shareholders.... 13
Validity of Holding Company Common
Stock............................... 15
Proposal Number 2: Election of
Directors............................ 16
Nominees Standing for Election....... 16
Continuing Directors................. 17
Structure and Compensation of Board
of Directors........................ 18
Director Compensation................ 19
Security Ownership of Directors and
Executive Officers................... 20
Beneficial Ownership Table........... 20
Section 16(a) Beneficial Ownership
Reporting Compliance................ 20
Executive Compensation................ 20
Compensation and Retirement Committee
Report.............................. 20
Stock Price Performance Graph........ 23
Summary Compensation Table........... 24
Year-End Option Stock Appreciation
Right Values........................ 26
Long-Term Incentive Plan Awards in
1998................................ 26
Retirement Benefits Statement........ 27
Employment Contracts, Termination of
Employment and Change-in-Control
Arrangements......................... 27
Agreements........................... 27
1995 Long-Term Incentive Compensation
Plan................................ 30
Stock Appreciation Rights............ 30
Independent Public Accountants........ 30
Shareholder Proposals................. 31
Additional Information................ 31
Appendix A--Plan of Exchange.......... A-1
Appendix B--Articles of
Incorporation........................ B-1
Appendix C--Chapter 23B.13 of the
Washington Business Corporation Act
(Dissenters' Rights)................. C-1
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You should rely only on the information contained or incorporated by
reference in this proxy statement and prospectus. We have not authorized anyone
to provide you with information that is different. This proxy statement and
prospectus does not constitute an offer to sell, or a solicitation of an offer
to purchase, the securities offered hereby. This proxy statement and prospectus
does not constitute the solicitation of a proxy, in any jurisdiction in which,
or to any person to whom, it is unlawful to make such offer or the solicitation
of an offer or a proxy. The delivery of this proxy statement and prospectus and
any distribution of the securities offered hereby shall not, under any
circumstances, create any implication that there has not been a change in the
affairs of PSE since April 30, 1999.
Summary
Background of Puget Sound Energy, Inc.
Puget Sound Energy, Inc. is an investor-owned public utility incorporated in
the state of Washington furnishing electric and gas service in a territory
covering approximately 6,000 square miles, principally in the Puget Sound
region of Washington State. On February 10, 1997, PSE completed a merger with
the Washington Energy Company and its principal subsidiary, Washington Natural
Gas Company. Seattle-based Washington Natural Gas provided natural gas
distribution service in an area east of Puget Sound that includes Seattle,
Tacoma, Everett, Bellevue and Olympia. Currently, PSE operates its utility
business subject to regulation by the Washington Utilities and Transportation
Commission, the Federal Energy Regulation Commission, and other governmental
agencies. PSE's executive office is located at 411-108th Avenue N.E., Bellevue,
Washington 98004-5515, and its telephone number is (425) 454-6363.
Summary of the Holding Company Proposal
The holding company proposal is to adopt a public utility holding company
structure for PSE and its subsidiaries. If the proposal is approved, PSE will
become a subsidiary of Puget Energy, Inc., which will own all the common stock
of PSE, and the current owners of PSE common stock will own Puget Energy common
stock which will be publicly traded on the New York Stock Exchange. Puget
Energy is referred to in this document as the "Holding Company."
The following summary highlights the key information relating to the holding
company proposal:
. Reasons for the Holding The primary purpose of the holding company
Company Proposal proposal is to allow PSE to separate its
regulated utility business from its other
businesses, which will enhance the Holding
Company's ability to respond to the changing
industry environment and will permit greater
financing flexibility.
. Management of the Holding Initially, the same persons elected to the PSE
Company board of directors will serve as the directors of
the Holding Company, and the senior officers of
the Holding Company also will be officers of PSE
or one or more other subsidiaries of the Holding
Company.
. Rights of Holding Company The rights of Holding Company shareholders will
Shareholders be governed by the Holding Company's articles of
incorporation and bylaws. The differences between
PSE's articles of incorporation and bylaws and
the Holding Company's articles of incorporation
and bylaws are described in the section called
"Comparison of Shareholder Rights" on page 10 of
this proxy statement and prospectus. PSE
preferred shareholders will remain holders of PSE
preferred stock.
. The Holding Company's Former holders of PSE common stock will receive
Dividend Policy dividends on Holding Company common stock
declared by the Holding Company board of
directors, which are expected to be paid
initially at the same annual rate of $1.84 per
share and on the same quarterly schedule as now
paid on PSE common stock.
1
. Implementation of the The holding company proposal will be implemented
Holding Company Proposal pursuant to the plan of exchange attached as
Appendix A to this proxy statement and
prospectus. We anticipate implementing the
holding company proposal in the fourth quarter of
1999. Implementation is subject to shareholder
approval, regulatory approvals that are
satisfactory to PSE's board of directors and the
listing of Holding Company common stock on the
New York Stock Exchange.
. Federal Tax Consequences In the opinion of Perkins Coie LLP, PSE's
counsel, no gain or loss will be recognized by
the Holding Company, PSE or the shareholders
participating in the share exchange under federal
income tax laws as a result of the implementation
of the holding company proposal. Shareholders who
properly exercise dissenters' rights and receive
cash will generally recognize gain or loss.
. Availability of Holders of PSE common stock have dissenters'
Dissenters' Rights rights, which may entitle them to receive cash
for their shares if they dissent from the holding
company proposal. In order to perfect dissenters'
rights, you will be required to follow the
procedure outlined in the section called "Rights
of Dissenting Shareholders" on page 13 of this
proxy statement and prospectus.
. Vote Required to Approve The holding company proposal must be approved by
the Holding Company vote of at least two-thirds of the outstanding
Proposal shares of PSE common stock.
The preceding summary of the key information of the holding company proposal
does not contain all information about the holding company proposal. Additional
information about the holding company proposal is also included in other
sections of this proxy statement and prospectus. To understand the holding
company proposal more fully, you should carefully read this entire document and
the documents we refer to.
2
Annual Meeting Information
Solicitation of Proxies
Persons Making the Solicitation
The board of directors of PSE is soliciting the proxies in the form
enclosed. William S. Weaver and James W. Eldredge, and each or either of them,
are named as proxies. We may solicit your proxy by mail, personal interview,
telephone, Internet and fax. We will request that banks, brokerage houses and
other custodians, nominees or fiduciaries forward soliciting materials to their
principals and obtain authorization for the execution of proxies. We will
reimburse them for their expenses in forwarding and collecting proxies. Our
officers, directors, employees and other agents may solicit proxies without
compensation, except for reimbursement of expenses. PSE will pay all costs of
solicitation of proxies.
If we receive a proper proxy, your shares will be voted as you direct. If
you do not provide any direction, your shares will be voted "for" all
management proposals. If any other matters are properly presented at the annual
meeting, the persons named in the proxy will vote in accordance with their best
judgment. We are not aware of any matter to be presented for action at the
annual meeting other than the election of directors and the holding company
proposal.
ChaseMellon Shareholder Services, L.L.C. will tabulate the votes and will
act as inspector of election. No one will disclose the identity and vote of any
shareholder unless legally required to do so.
Revocability of Proxy
You may revoke a proxy card at any time before it is voted by delivering a
written notice to the Corporate Secretary or by signing and delivering another
proxy card that is dated later. If you attend the annual meeting in person, you
may revoke the proxy by giving notice of revocation to an inspector of election
at the annual meeting or by voting at the annual meeting.
Record Date and Voting Rights
Record Date
Holders of record of outstanding common stock as of the close of business on
April 16 1999, the record date, are entitled to receive notice of the annual
meeting. As of April 16, 1999, there were approximately 84,560,545 shares of
common stock outstanding.
Voting Rights
You are entitled to one vote for each share of common stock you held on the
record date. In electing directors, however, you have the right to cumulate
your votes. This means that you can multiply the number of votes you have by
the number of directors to be elected, and then cast all your votes for one
candidate or distribute them among any two or more candidates.
Quorum and Voting Requirements
Quorum Requirements
The holders of a majority of the shares of PSE common stock, present in
person or represented by proxy at the annual meeting, constitute a quorum for
the transaction of business. There must be a quorum for the meeting to be held.
Voting Requirements
If a quorum is present at the annual meeting, the four nominees for election
as directors who receive the greatest number of votes cast by the shares
present in person or represented by proxy at the annual meeting will
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be elected directors. The holding company proposal must be approved by the
affirmative vote of at least two-thirds of the outstanding shares of PSE common
stock.
Effect of Broker Nonvotes and Abstentions
Because brokers have discretion to vote shares they hold on behalf of
beneficial owners in the election of directors, if they do not receive
instructions, they will vote the shares as they see fit. There will be no
broker nonvotes in the election of directors. Brokers do not have discretion to
vote your stock on the holding company proposal. Only you or someone authorized
in writing by you to do so can vote your stock. Abstentions and broker nonvotes
with respect to approval of the holding company proposal will have the
practical effect of a vote against approval of the holding company proposal.
4
Proposal Number 1:
The Holding Company Proposal
The Holding Company is a Washington corporation that was incorporated for
the purpose of implementing the holding company proposal. The mailing address
of the principal executive offices of the Holding Company is P.O. Box 97034,
Bellevue, Washington 98009-9734, and its telephone number is (425) 454-6363.
The Holding Company has not had any previous business operations. The currently
outstanding shares of Holding Company common stock are owned by PSE and will be
canceled when the holding company proposal is implemented.
After the share exchange, the Holding Company will own all the outstanding
PSE common stock, and it also will own all the outstanding interests in PSE's
subsidiaries. New businesses also may be operated as subsidiaries of, or as
joint ventures or under other arrangements with, the Holding Company's
subsidiaries and their affiliates. The investment performance of Holding
Company common stock will depend on the results of operations of PSE and the
Holding Company's other subsidiaries and affiliates.
The Holding Company will finance its operations, investments in its
subsidiaries and various transactions that may be undertaken, including
possible acquisitions of or investments in other assets or companies and
repurchases of Holding Company common stock, from dividends and other
distributions it receives from its subsidiaries, borrowings, and the sale of
equity or debt securities. As is the case under PSE's present corporate
structure, there can be no assurance that the subsidiaries of the Holding
Company will have earnings or pay any dividends to the Holding Company. PSE's
utility business is expected to constitute the principal part of the Holding
Company's earnings for the foreseeable future after the restructuring.
The holding company proposal will be implemented pursuant to the plan of
exchange attached as Appendix A to this proxy statement and prospectus. The
plan of exchange provides that each share of PSE common stock outstanding
immediately prior to the share exchange will be automatically exchanged for one
share of Holding Company common stock. Each person who owns PSE common stock
immediately before the share exchange will own the same number of shares of
Holding Company common stock immediately after the share exchange.
Reasons for the Holding Company Proposal
Your board of directors considers the proposed restructuring to be in the
best interests of PSE and its shareholders because it will insulate PSE's
utility business from its non utility businesses. At the same time, it will
permit greater financing flexibility to respond to the changing business
environment in the utility industry.
The holding company structure is a well-established form of organization for
companies engaging in multiple lines of business, and is increasingly prevalent
in the utility industry. Many utilities are organized under a public utility
holding company structure.
Changing Industry Environment
PSE has operated primarily as a traditional vertically integrated utility,
responsible for constructing, owning and operating the utility generation,
transmission and distribution facilities needed to serve its customers. The
regulation of utilities and the markets that PSE has traditionally served are
changing. The generation and sales activities of the traditional utility
business are becoming less regulated and more competitive; the energy options
for customers are expanding; and the challenges to existing utility operations
are intensifying.
In recent years, federal initiatives have promoted the development of
competition in the generation, transmission and sale of electricity. In
general, these initiatives have been designed to separate, or unbundle, the
vertically integrated services that electric utilities traditionally have
provided and to enable customers to
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purchase electricity directly from suppliers other than their local
transmission or distribution utilities. For example, in 1996 and 1997, the
Federal Energy Regulatory Commission issued its orders requiring electric
utilities, including PSE, to file open access transmission tariffs that will
make the utility transmission systems available to wholesale sellers and buyers
of electric energy on a nondiscriminatory basis. Also, in recent years there
have been legislative proposals for restructuring the retail electric industry
in Washington. While we cannot predict the outcome of these proposals, they may
lead to competition for retail electric sales in Washington.
The corporate separation and financing flexibility afforded by a holding
company structure will increase the Holding Company's ability to respond to
changes in the electric industry, markets and regulation. When new business
opportunities arise, we can operate them as Holding Company subsidiaries,
enhancing the separation between PSE and those businesses. Such separation will
insulate PSE and its customers from the risks associated with operating other
businesses.
With the exception of PSE, the Holding Company subsidiaries may encounter
competitive and other business factors and different, and perhaps greater,
investment risks than those involved in the utility business of PSE. Over time,
however, PSE may also be affected by competitive factors and regulatory
changes. There can be no assurance that these subsidiaries will be successful,
or if unsuccessful, that they will not have an adverse effect on the Holding
Company.
Financing Flexibility
We anticipate that the holding company structure also will permit the use of
financing techniques that are more directly suited to the particular
requirements, characteristics and risks of the Holding Company's other
businesses, without any impact on the capital structure of PSE. For example,
. the Holding Company, in addition to receiving dividends from PSE, will be
able to obtain funds through its own debt or equity financings. Its debt
and/or equity will not be subject to direct regulation by the Washington
Utilities and Transportation Commission or the Federal Energy Regulatory
Commission.
. PSE will be able to obtain funds through its own financings, which may
include the issuance of debt or preferred stock, as well as the issuance
of additional shares of PSE common stock to the Holding Company.
. the other businesses may obtain funds from the Holding Company, from
affiliates other than PSE or from their own outside financings.
Of course, any financings will depend on the financial and other conditions
of the entities involved and market conditions.
In contrast to a holding company structure, PSE's current corporate
structure cannot accommodate the same degree of financial separation because
all business activities must either be part of the utility itself or be
conducted in entities owned by the utility. As a result, any volatility in
earnings associated with these other businesses will continue to be reflected
in the present utility's financial results. In a holding company structure,
these other businesses will be operated as Holding Company subsidiaries. PSE
will be more effectively insulated from the potential volatility of these
operations because the activities of sister companies of PSE will not be
reflected in the utility's financial statements. Any unfavorable financial
results or liabilities of these companies generally will not adversely affect
PSE's equity capital.
Regulation of PSE and the Holding Company
Following the restructuring, PSE will continue to operate its utility
business subject to regulation by the Washington Utilities and Transportation
Commission, the Federal Energy Regulatory Commission and other governmental
agencies. The Utilities Commission regulates, among other things, PSE's rates
for electric and gas sales, rates for service at retail and its financings. The
FERC regulates, among other things, PSE's rates for electric sales at
wholesale, rates for electric transmission and interconnections with other
utilities.
6
Both the Utilities Commission and the FERC approval is required in order to
implement the holding company proposal. After the holding company proposal is
approved by PSE's shareholders, PSE will apply for those approvals. The
Utilities Commission and the FERC may impose restrictions on PSE or the Holding
Company as a condition to their approval.
The Holding Company will not be regulated by the Utilities Commission or the
FERC as to rates. The rules or orders of those agencies impose restrictions on
the Holding Company's transactions with PSE or PSE's transactions with the
Holding Company's other subsidiaries. These restrictions include prior approval
of some transactions. The Holding Company will be a "public utility holding
company" under the Public Utility Holding Company act of 1935, as amended, or
PUHCA.
The staff of the SEC administers PUHCA. It has recommended that PUHCA be
repealed. Several bills have been introduced in Congress to do this, but none
has been enacted to date. Unless or until PUHCA is repealed, we intend to file
an application with the SEC seeking an exemption under Section 3(a)(1) of PUHCA
on two grounds:
1. Both the Holding Company and PSE are organized and will carry on their
businesses substantially in the state of Washington; and
2. Neither the Holding Company nor PSE will derive any material part of its
income from a public utility company subsidiary either organized or carrying on
its business predominantly outside of the state of Washington.
This exemption is available even though Holding Company subsidiaries will
engage in interstate commerce. The exemption will exempt the Holding Company
from the provisions of PUHCA, except Section 9(a)(2), which requires SEC
approval for a direct or indirect acquisition of five percent or more of the
voting securities of any other electric or gas utility company. SEC regulation
under PUHCA is not expected to have a material impact on the Holding Company's
or its subsidiaries' operations. To maintain this exemption, the Holding
Company must file an exemption statement each year prior to March 1 with the
SEC. The exemption may be revoked by the SEC if a substantial question of law
or facts exists as to whether the Holding Company is within the parameters of
the exemption, or if it appears that the exemption may be detrimental to the
public interest or the interest of investors or consumers. PSE does not believe
there is any basis upon which the SEC would deny or revoke its exemption from
PUHCA.
Directors, Officers and Employees
The directors who serve on the PSE board of directors are also directors of
the Holding Company. In the future, the directors of PSE and the directors of
the Holding Company may or may not be the same persons.
Initially the senior officers of the Holding Company also will be officers
of PSE or one or more other subsidiaries of the Holding Company. The Holding
Company will initially have fewer than ten employees. In the future, the
Holding Company may employ additional officers and employees.
Dividends
Following implementation of the holding company proposal, former holders of
PSE common stock will hold Holding Company common stock and receive dividends
on Holding Company common stock when, as and if declared by the Holding Company
board of directors. Dividends declared on PSE common stock will be paid to the
Holding Company.
Dividends on Holding Company common stock are expected to be paid initially
at the same annual rate of $1.84 per share and on the same quarterly schedule
as dividends are now paid on PSE common stock. The most recent dividend paid on
PSE common stock was $.46 per share, on February 15, 1999.
7
Dividends on Holding Company common stock will depend primarily on the
dividends and other distributions that PSE and the other Holding Company
subsidiaries pay to the Holding Company as well as the capital requirements of
the Holding Company and its subsidiaries. The payment of dividends on PSE
common stock is restricted by provisions of certain covenants applicable to
preferred stock and long-term debt contained in PSE's restated articles of
incorporation and electric and gas mortgage indentures. Future dividends will
also depend on earnings, financial condition and other factors.
PSE and the Holding Company each may issue additional preferred stock in the
future to meet their capital requirements. Any Holding Company preferred stock
and any PSE preferred stock may have preferential dividend rights over the
common stock of such entities.
Holding Company Capital Stock
The articles of incorporation of the Holding Company, which are attached as
Appendix B to this proxy statement and prospectus, provide that the Holding
Company is authorized to issue up to 250,000,000 shares of common stock, par
value $.01 per share, and 50,000,000 shares of preferred stock, par value $.01
per share.
Immediately after the share exchange, the number of shares of Holding
Company common stock outstanding will be equal to the number of shares of PSE
common stock outstanding immediately prior to the share exchange. As of April
16, 1999, there were approximately 84,560,545 shares of PSE common stock
outstanding.
The Holding Company board of directors is authorized to issue Holding
Company preferred stock periodically in series. In connection with the creation
of each series, the Holding Company board of directors will determine the
number of shares of the series, and the designations, relative rights,
preferences and limitations of the series.
Liquidation Rights
Subject to any prior rights of Holding Company preferred stock (if any
becomes outstanding), upon liquidation of the Holding Company, any remaining
net assets of the Holding Company are distributable pro rata to the holders of
Holding Company common stock.
Voting Rights
Holders of Holding Company common stock are entitled to one vote for each
share.
Transfer Agent, Registrar and Dividend Agent
The transfer agent, registrar and dividend paying agent for Holding Company
common stock will be ChaseMellon Shareholder Services.
Immediately after the share exchange, the number of shares of Holding
Company common stock outstanding will be equal to the number of shares of PSE
common stock outstanding prior to the exchange.
Comparison of Shareholder Rights
Material differences between the rights of holders of Holding Company common
stock and those of holders of PSE common stock are summarized below.
Authorized Shares
The Holding Company articles of incorporation authorize the Holding Company
to issue 250,000,000 shares of Holding Company common stock. In contrast, PSE
is authorized to issue 150,000,000 shares of PSE common stock.
8
PSE is also authorized to issue 3,000,000 shares of preferred stock, par
value of $100 per share, 13,000,000 shares of preferred stock, par value of $25
per share, and 700,000 shares of preference stock, par value of $50 per share.
As of April 16, 1999, there were 656,619 shares of $100 preferred stock
outstanding, 3,600,000 shares of $25 preferred stock outstanding and no shares
of preference stock outstanding. The Holding Company is authorized to issue
50,000,000 shares of Holding Company preferred stock, none of which will be
outstanding immediately after the share exchange.
Purpose
The PSE restated articles of incorporation have a number of stated purposes.
The Holding Company articles of incorporation do not define purposes, allowing
the Holding Company to engage in any lawful activity for which corporations may
be formed under the Washington Business Corporation Act.
Classified Board
The Holding Company articles of incorporation and bylaws provide that the
board of directors shall consist of not less than nine or more than 15 persons.
In addition, those articles of incorporation and bylaws provide that the board
of directors will be divided into three classes, which shall be as nearly equal
in number as possible, with directors in each class being elected for a three-
year term. The PSE restated articles of incorporation and bylaws also provide
for a classified board, except that the PSE bylaws provide that the board of
directors may not consist of more than 25 persons.
Special Meetings of Shareholders
The Holding Company articles of incorporation provide that shareholders do
not have the right to call special meetings. The PSE bylaws provide that a
special meeting of shareholders may be called by the holders of 10% of the
shares entitled to vote on any issue proposed to be considered at the special
meeting.
Advance Notice Prior to Shareholders Meeting Required
The Holding Company bylaws require shareholders to provide advance notice of
any business to be brought before a shareholders meeting. Such advance notice
requirements may delay the ability of individuals to bring matters before
shareholder meetings.
The PSE articles of incorporation and bylaws, however, do not have advance
notice provisions except that advance notice is required under the PSE bylaws
for the nomination of directors.
Cumulative Voting
The Holding Company articles of incorporation do not provide for cumulative
voting. Holders of PSE common stock currently may cumulate their votes in the
election of directors.
Preemptive Rights and Other Rights
As is the case for holders of PSE common stock, the holders of Holding
Company common stock have no preemptive rights.
Indemnification and Limitation of Liability
The Holding Company articles of incorporation provide that directors and
officers shall be indemnified to the fullest extent permitted by applicable
law. The Holding Company bylaws provide that, to the fullest extent permitted
by applicable law, no director shall be personally liable to the Holding
Company or its shareholders for monetary damages resulting from any action
taken, or any failure to take any action, as a director. PSE's restated
articles of incorporation and bylaws provide for the same level of
indemnification for directors and officers.
9
Shareholder Rights Plan
On January 25, 1991, PSE adopted a shareholder rights plan pursuant to which
holders of PSE common stock have been granted one right on each outstanding
share of PSE common stock. The rights are not currently exercisable and will
become exercisable only upon a public announcement that a person or group of
affiliated or associated persons acquired beneficial ownership of 10% or more
of the outstanding shares of PSE common stock and/or ten business days (or a
later date determined by PSE's board of directors) following the commencement
of, or the announcement of an intention to make, a tender offer, the
consummation of which would result in the beneficial ownership by a person or
group of 10% or more of PSE common stock.
The rights could have certain antitakeover effects. The rights may cause
substantial dilution to a person or group that attempts to acquire PSE on terms
not approved by PSE's board of directors, except pursuant to an offer
conditioned on a substantial number of rights being acquired. The rights should
not interfere with any merger or other business combination approved by PSE's
board of directors prior to the time that a person or group has acquired
beneficial ownership of 10% or more of the PSE common stock because until such
time the right may be redeemed by the PSE board of directors.
The Holding Company has not adopted a similar plan, but may do so in the
future.
Possible Antitakeover Effects of Certain Provisions of the Articles of
Incorporation and
Bylaws of the Holding Company
Additional Common Stock
The Holding Company will be authorized to issue 100,000,000 more shares of
common stock than PSE. Although it is not the intention of the board of
directors to discourage legitimate offers to enhance shareholder value, the
existence of unissued Holding Company common stock and other provisions in the
Holding Company articles of incorporation and bylaws could permit the Holding
Company's board of directors to render more difficult or to discourage a
merger, tender offer, proxy contest or other transaction aimed at obtaining
control of the Holding Company.
"Blank Check" Preferred Stock
The Holding Company articles of incorporation authorize the issuance of
50,000,000 shares of Holding Company preferred stock. The board of directors
has the full authority to determine the terms of any series of the Holding
Company preferred stock. Although the Holding Company board of directors
currently has no intention of doing so, shares of Holding Company preferred
stock could be issued in a manner (for example, with disproportionate or class
voting rights) that could have the effect of discouraging takeover attempts.
No Cumulative Voting
The Holding Company articles of incorporation do not provide for cumulative
voting. The lack of cumulative voting could prevent directors from being
elected by a relatively small group of shareholders.
Classified Board
The classified board provisions in the Holding Company articles of
incorporation could have the effect of prolonging the time required for a
shareholder or shareholders with significant voting power to gain majority
representation on the board of directors. Where majority or supermajority board
of directors approval is important to facilitate the success of a transaction,
such as an interested shareholder business combination, the inability to
immediately gain a majority representation on the board of directors at an
annual meeting of shareholders could discourage takeovers and tender offers.
10
No Ability for Shareholders to Call Special Meetings
Under the Holding Company articles of incorporation, shareholders do not
have the ability to call a special meeting of shareholders. The Holding Company
bylaws provide that directors may only be removed for cause at a meeting called
for that purpose. As a result, Holding Company shareholders do not have the
ability to remove existing directors other than through election at annual
meetings.
Advance Notice Prior to Shareholders Meeting Required
The advance notice requirements contained in the Holding Company's bylaws
may delay the ability of shareholders to bring before shareholder meetings
matters other than those that the board of directors of the Holding Company
deems desirable and may provide sufficient time for the Holding Company to take
appropriate steps to respond to such matters, or to prevent such business from
being acted upon, if such response or prevention is thought to be necessary or
desirable for any reason.
Washington Statute
Washington law imposes restrictions on certain transactions between a
corporation and certain significant shareholders. Chapter 23B.19 of the
Washington Business Corporation Act prohibits a target corporation, with
certain exceptions, from engaging in certain significant business transactions
with an acquiring person, which is defined as a person or group of persons that
beneficially owns 10% or more of the voting securities of the target
corporation, for a period of five years after such acquisition, unless the
transaction or acquisition of shares is approved by a majority of the members
of the target corporation's board of directors prior to the time of
acquisition. Prohibited transactions include the following:
. a merger or consolidation with, disposition of assets to, or issuance or
redemption of stock to or from, the acquiring person;
. termination of 5% or more of the employees of the target corporation as a
result of the acquiring person's acquisition of 10% of more of the
shares; or
. allowing the acquiring person to receive any disproportionate benefit as
a shareholder.
After the five-year period, a "significant business transaction" may occur,
as long as it complies with certain "fair price" provisions of the statute. A
corporation may not "opt out" of this statute. This provision may have the
effect of delaying, deterring or preventing a change in control of the Holding
Company.
Debt of PSE
The debts of PSE will continue as obligations of PSE following
implementation of the holding company proposal. These debts will not become
obligations of the Holding Company or the Holding Company's other subsidiaries.
Conditions to the Share Exchange
In addition to approval of the holding company proposal by the holders of
PSE common stock, the implementation of the plan of exchange is subject to the
satisfaction of the following conditions:
. regulatory approvals: all necessary orders, authorizations, approvals,
exemptions or waivers from the Utilities Commission, the FERC, the SEC
and all other applicable regulatory bodies, boards or agencies will have
been received and remain in full force and effect, and will not include,
in the sole judgment of the PSE board of directors, unacceptable
conditions;
. shares of Holding Company common stock to be issued in connection with
the exchange will be listed, subject to official notice of issuance, by
the New York Stock Exchange; and
. the articles of share exchange will have been filed with the Secretary of
State of the State of Washington pursuant to Section 23B.11.050 of the
WBCA.
11
Amendment or Termination
The PSE board of directors and the Holding Company board of directors may
amend or terminate the plan of exchange or amend the Holding Company articles
of incorporation or bylaws at any time prior to implementation of the holding
company proposal. No amendment, however, may materially and adversely affect
the rights of PSE's shareholders, as determined in the sole judgment of the PSE
board of directors.
Exchange of Stock Certificates
If the holding company proposal is implemented, it will not be necessary for
holders of PSE common stock to exchange their existing stock certificates for
certificates of Holding Company common stock. The certificates that represent
shares of PSE common stock outstanding immediately before the implementation of
the holding company proposal will automatically represent an equal number of
shares of Holding Company common stock immediately after the implementation and
will no longer represent PSE common stock. Thereafter, new certificates bearing
the name of the Holding Company will be issued if and as certificates
representing shares of PSE common stock outstanding immediately before the
implementation of the holding company proposal are presented for exchange or
transfer.
Listing of Holding Company Common Stock
The Holding Company is applying to have Holding Company common stock listed
on the New York Stock Exchange to trade under the symbol "PSD." It is expected
that such listing will become effective when the holding company proposal is
implemented. Quotations will be carried in newspapers as they have been for PSE
common stock. Following implementation of the holding company proposal, PSE
common stock will no longer trade on any stock exchange.
Stock Plans
Pursuant to the plan of exchange, all shares of PSE common stock (including
uncertificated whole and fractional shares) held under PSE's stock purchase and
dividend reinvestment plan and PSE's other employee benefit plans holding PSE
common stock and all contingent awards of shares, options on shares and
deferred stock units under PSE's incentive and deferred compensation plans,
will be automatically exchanged for an equal number of shares, contingent
awards of shares, options on shares or deferred stock units for shares, of
Holding Company common stock. The plans will be amended to provide for
transactions in Holding Company common stock instead of PSE common stock.
Approval of the holding company proposal by the holders of the PSE common stock
will also be considered approval of this amendment to each of the plans.
Material Federal Income Tax Consequences
No ruling from the Internal Revenue Service concerning the federal income
tax consequences of the share exchange or the exercise of dissenters' rights
will be requested. PSE received an opinion from Perkins Coie LLP to the effect
that the share exchange qualifies, for federal income tax purposes, as a tax-
free transaction described under Section 351(a) of the Internal Revenue Code of
1986, as amended. The opinion is based upon certain assumptions set forth in
the opinion and representations by the management of PSE and the Holding
Company. The opinion referred to above neither binds nor precludes the IRS from
adopting a contrary position. No assurance can be given that contrary positions
will not be successfully asserted by the IRS or adopted by a court if the
issues are litigated.
The share exchange will be treated as a transfer of all the outstanding PSE
common stock by PSE shareholders to the Holding Company solely in exchange for
all the outstanding Holding Company common stock, in a tax-free exchange
described under Section 351 of the Code.
No gain or loss will be recognized for federal income tax purposes by
holders of PSE common stock who exchange their PSE common stock for Holding
Company common stock pursuant to the plan of exchange. The
12
aggregate tax basis of the Holding Company common stock received as a result of
the share exchange will be the same as the shareholder's aggregate tax basis in
the PSE common stock surrendered in the share exchange. The holding period of
the Holding Company common stock received will include the holding period of
the surrendered PSE common stock.
PSE preferred stock will remain outstanding as preferred stock of PSE and no
gain or loss will be recognized for federal income tax purposes by holders of
PSE preferred stock as a result of the share exchange.
Holders of PSE common stock who exercise dissenters' rights will recognize
capital gain or loss equal to the difference between the cash received upon the
exercise of their dissenters' rights and their tax basis in the PSE common
stock, unless the cash received is treated as a dividend, given each holder's
particular circumstances.
Shareholders should consult their tax advisors to determine if, under the
shareholders' particular circumstances, any cash received in connection with
their exercise of dissenters' rights will be characterized as a dividend under
Section 302 of the Code.
For federal income tax purposes, no gain or loss will be recognized by PSE
solely as a result of the share exchange. No gain or loss will be recognized by
the Holding Company for federal income tax purposes upon receipt of the PSE
common stock.
The United States federal income tax discussion set forth above is based on
current law and may not apply for certain taxpayers subject to special
treatment under the federal income tax laws (for example, foreign corporations
and individuals who are not citizens or residents of the United States). The
foregoing is not intended to be a comprehensive discussion of all possible
federal income tax consequences of the share exchange, nor does it address
those tax consequences that may be material to a shareholder based on his or
her particular tax circumstances. Furthermore, this proxy statement and
prospectus does not provide any information regarding the tax consequences of
the share exchange under the tax laws of any state or any local or foreign
jurisdiction. Holders of PSE common stock are urged to consult their own tax
advisors with respect to the specific tax consequences of the share exchange.
Rights of Dissenting Shareholders
A PSE shareholder who properly follows the procedures for dissenting and
demanding payment for his or her PSE common stock pursuant to Chapter 23B.13 of
the WBCA (as summarized below) may be entitled to receive in cash the "fair
value" of his or her PSE common stock in lieu of the consideration provided in
the Plan of exchange. The "fair value" of a dissenting PSE shareholder's shares
will be the value of such shares immediately prior to the effective time of the
exchange, excluding any appreciation or depreciation in anticipation of the
exchange, unless exclusion would be inequitable. The "fair value" could be more
than, equal to or less than the value of the consideration the shareholder
would have received pursuant to the plan of exchange if the shareholder had not
dissented. In the event the dissenting shareholder and the corporation cannot
agree on the "fair value" of the dissenter's PSE common stock, "fair value" may
ultimately be determined by a court in an appraisal proceeding.
A beneficial shareholder may assert dissenters' rights as to shares held on
the beneficial shareholder's behalf only if the following conditions are
satisfied:
. the beneficial shareholder submits to PSE the record shareholder's
written consent to dissent not later than the time the beneficial
shareholder asserts dissenters' rights and
. the beneficial shareholder does so with respect to all shares of which
such shareholder is the beneficial shareholder or over which such
shareholder has power to direct the vote.
13
To properly exercise dissenters' rights with respect to the plan of
exchange, a holder of PSE common stock must take the following steps:
Step 1: Deliver Written Notice of Intent to Demand Payment
In order to properly exercise dissenters' rights, a dissenting shareholder
must deliver written notice to PSE prior to the formal shareholder vote on the
holding company proposal. The notice must state that the shareholder intends to
demand payment of fair value of his or her shares. Written objections to the
plan of exchange by holders of PSE common stock should be addressed to the
Secretary of PSE at its headquarters at 411 108th Avenue N.E., 15th Floor,
Bellevue, Washington 98004-5515.
Step 2: Vote Against or Abstain From Voting on the Holding Company Proposal
Any holder of PSE common stock who wishes to dissent from the plan of
exchange and who executes and returns a proxy on the accompanying form must
specify that such holder's shares are to be voted against the plan of exchange,
or such proxy holder must abstain from voting such holder's shares in favor of
the plan of exchange. If the shareholder returns a proxy without voting
instructions, such holder's shares will automatically be voted in favor of the
plan of exchange, and the shareholder will lose any dissenters' rights.
Similarly, if the shareholder returns a proxy with instructions to vote in
favor of the plan of exchange, the shareholder will lose any dissenter's
rights.
Step 3: Timely Deliver a Demand For Payment
Within ten days after the effective time of the exchange, PSE will send a
written dissenter's notice to each holder of PSE common stock who satisfied the
requirements of the first two steps described above, which will include the
following information:
. where the payment demand must be sent;
. a form of payment demand that includes the date of the first announcement
to the news media or to shareholders of the terms of the plan of exchange
and requires the person asserting dissenters' rights to certify whether
or not such person acquired beneficial ownership of the shares before
that date;
. the date by which PSE must receive the payment demand, which date may not
be less than 30 or more than 60 days after the dissenter's notice is
delivered; and
. where and when PSE common stock share certificates must be deposited.
In order to exercise dissenters' rights, the demand for payment must be
properly completed and returned to PSE, along with the shareholder's PSE common
stock certificates, within the deadline set forth in the dissenters' notice.
Step 4: Accept or Timely Reject Payment by PSE
Within 30 days after the later of the effective time of the exchange or the
date the payment demand is received, PSE will pay each dissenter who complied
with the above conditions the amount that PSE estimates to be the fair value of
the shareholder's shares, plus accrued interest. The payment must be
accompanied by the following:
. PSE's balance sheet as of the end of a fiscal year ended not more than 16
months before the date of payment, an income statement for that year, a
statement of changes in shareholders' equity for that year, and the
latest available interim financial statements, if any, and
. an explanation of how PSE estimated the fair value of the shares and how
the interest was calculated.
Notwithstanding the foregoing, with respect to shares acquired after the
date of the first announcement to the news media or to shareholders of the
terms of the plan of exchange, PSE may elect to withhold payment of
14
the fair value of the dissenter's shares plus accrued interest, and, in such
event, PSE will estimate after the effective time the fair value of the shares,
plus accrued interest, and will offer to pay this amount to each dissenter who
agrees to accept it in full satisfaction of the dissenter's demand.
A dissenter may notify PSE in writing of the dissenter's own estimate of the
fair value of the dissenter's shares and the amount of interest due and demand
payment of the dissenter's estimate, less any payment made, or, with respect to
after-acquired shares for which PSE elected to withhold payment, reject PSE's
offer of the fair value determined for such shares and demand payment of the
dissenter's estimate of the fair value of the dissenter's shares and interest
due, if:
. The dissenter believes that the amount paid or offered is less than the
fair value of the dissenter's shares or that the interest due is
incorrectly calculated;
. PSE fails to make payment within 60 days after the date set for demanding
payment; or
. The plan of exchange is not effected, and PSE does not return the
deposited PSE certificates or release the transfer restrictions imposed
on uncertificated shares within 60 days after the date set for demanding
payment.
A dissenter will be deemed to have waived the right to demand payment unless
the dissenter notifies PSE of his or her demand in writing within 30 days after
PSE makes or offers payment for the dissenter's shares.
If a demand for payment remains unsettled, PSE will commence a proceeding in
the Superior Court of King County, Washington within 60 days after receiving
the payment demand and petition the court to determine the fair value of the
shares and accrued interest. If PSE does not commence such proceeding within
the 60-day period, it must pay each dissenter whose demand remains unsettled
the amount demanded.
PSE will make all dissenters, whether or not residents of Washington State,
whose demands remain unsettled parties to the proceeding as in an action
against their shares, and all parties must be served with a copy of the
petition. PSE may join as a party to the proceeding any shareholder who claims
to be a dissenter but who has not, in PSE's opinion, complied with the
provisions of Chapter 23B.13. If the court determines that such shareholder has
not complied with the provisions of Chapter 23B.13, the shareholder shall be
dismissed as a party. Each dissenter made a party to the proceeding will be
entitled to judgment for the amount, if any, by which the court finds the fair
value of the shares, plus interest, exceeds the amount paid by PSE or for the
fair value, plus accrued interest, of the dissenter's after-acquired shares for
which PSE elected to withhold payment.
The procedures set forth in Chapter 23B.13 must be followed exactly or
dissenters' rights may be lost. Any shareholder contemplating the exercise of
dissenters' rights is urged to review the full text of Chapter 23B.13, a copy
of which is attached to this proxy statement and prospectus as Appendix C.
Validity of Holding Company Common Stock
The validity of the shares of Holding Company common stock to be issued in
the share exchange will be passed upon by Perkins Coie LLP, Seattle,
Washington.
15
Proposal Number 2:
Election of Directors
The number of directors is determined by the board of directors, but it may
be changed by the shareholders. The board of directors has fixed the number of
directors at twelve.
The directors are divided into three classes so that each year approximately
one-third of the directors are elected for a three-year term. Directors are
elected to hold office until their successors are elected and qualified, or
until resignation or removal in the manner provided in our bylaws. At the
annual meeting, the shareholders will elect four directors to serve for a term
of three years expiring on the date of the 2002 annual meeting.
Nominees Standing for Election
Proxies will be voted for the nominees listed below. If any nominee becomes
unavailable to serve as a director, the persons named in the enclosed proxy can
vote for or against any other nominee in accordance with their best judgment.
Charles W. Bingham
Mr. Bingham served as Executive Vice President of Weyerhaeuser Company
(forest products industry) from 1981 until his retirement in July 1995 and
Senior Vice President from 1972 to 1981. Mr. Bingham, age 65, has been a
director of PSE since 1978.
Robert L. Dryden
Mr. Dryden has been a Director of PSE since the consummation of the merger
of Washington Energy Company and Washington Natural Gas Company into PSE on
February 10, 1997. Mr. Dryden, age 65, previously served as a director of
Washington Energy Company and Washington Natural Gas Company from 1991 through
February 10, 1997. He served as Executive Vice President, Airplane Production,
Boeing Commercial Airplane Group, Seattle, Washington, from 1990 until his
retirement in May 1998. Effective April 26, 1999, Mr. Dryden became President,
Chief Executive Officer and Director of ConneXt, Inc. (a subsidiary of PSE).
Mr. Dryden also serves as a director of U.S. Bancorp.
John D. Durbin
Mr. Durbin has been a principal in Olympic Capital Partners, Inc., an
investment banking firm in Seattle, Washington, since October 1996. He served
as President and Chief Executive Officer of Hostar International, Inc. from
1988 until his retirement in June 1995, and has been a General Partner of John
Durbin & Associates since 1969. His prior positions include Chairman and
President of CEC Equipment Company from 1982 to 1987 and Chairman of Spokane
Truck Sales, Inc. from 1983 to 1987. Mr. Durbin, age 63, has been a Director of
PSE since 1984 and also serves as a director of ConnexT, Inc. (a subsidiary of
PSE) and UTILX Corporation.
Sally G. Narodick
Ms. Narodick has been a director of PSE since the consummation of the merger
with Washington Energy Company and Washington Natural Gas Company. Ms.
Narodick, age 53, previously served as a director of Washington Energy Company
and Washington Natural Gas Company from 1989 through February 10, 1997. She is
Chief Executive Officer and President of Apex Online Learning, Inc., a venture-
backed internet distance learning company. Previously she served as a
Consultant on Strategic Planning For Educational Technology software for IBM
Corporation and was Chairman and Chief Executive Officer of Edmark Corporation
from October 1989 to September 1996. She also serves as a director of Penford
Corporation and Apex Online Learning, Inc.
16
Continuing Directors
The following directors are not standing for reelection at this time:
Douglas P. Beighle
Mr. Beighle served as Senior Vice President of The Boeing Company (aerospace
manufacturing and sales) from 1986 until his retirement on May 1, 1997. He
served The Boeing Company as Vice President from 1980 to 1986. Mr. Beighle, age
66, has been a director of PSE since 1981 and also serves as a director of
Washington Mutual, Inc., Active Voice Corporation and Simpson Investment
Company (a privately held company). Mr. Beighle's term expires in 2001.
Phyllis J. Campbell
Ms. Campbell has been President of U.S. Bank, Washington (a financial
institution) since 1993. She also served as Area President of U.S. Bank,
Washington for Seattle-King County from 1992 to 1993, Executive Vice President
and Manager from 1989 to 1992, and in various banking capacities since 1973.
Ms. Campbell, age 47, has been a director of PSE since 1993 and also serves as
a director of SAFECO Corporation, and she is a Regent of Washington State
University. Ms. Campbell's term expires in 2001.
Donald J. Covey
Mr. Covey has been a director of PSE since the consummation of the merger
with Washington Energy Company and Washington Natural Gas Company. Mr. Covey,
age 70, previously served as a director of Washington Energy Company and
Washington Natural Gas Company from 1982 through February 10, 1997. Mr. Covey
served as Chairman of the Board of UNICO Properties, Inc. (property
management), Seattle, Washington, from 1990 until his retirement in December
1994. Prior to that he served UNICO as Chief Executive Officer from 1983 to
1992 and President from 1975 to 1990. Mr. Covey's term expires in 2001.
John W. Ellis
Mr. Ellis has been Chairman of the Board and Chief Executive Officer of The
Baseball Club of Seattle since 1992. He served as Chairman of the Board of PSE
from 1987 to 1993 and as Chief Executive Officer from 1976 to 1992. Mr. Ellis,
age 70, has been a director of PSE since 1969 and also serves as a director of
SAFECO Corporation, Washington Mutual, Inc., UTILX Corporation and Associated
Electric & Gas Insurance Services, Ltd. Mr. Ellis is also Chairman of the Board
of Trustees of Seattle University. Mr. Ellis' term expires in 2000.
Daniel J. Evans
Mr. Evans has been Chairman of Daniel J. Evans Associates (consulting) since
1989. His prior positions include United States Senator, State of Washington,
from 1983 to 1989 and Chairman, Pacific Northwest Power and Conservation
Planning Council from 1981 to 1983. Mr. Evans, age 73, has been a director of
PSE since 1990 and also serves as a director of Attachmate, Inc., Flow
International Corporation, Tera Computer Company, Western Wireless Corporation
and National Information Consortium. Mr. Evans will be appointed to fill a
vacancy for a term that expires in 2000.
Tomio Moriguchi
Mr. Moriguchi has been a director of PSE since the consummation of the
merger with Washington Energy Company and Washington Natural Gas Company. Mr.
Moriguchi, age 62, previously served as a director of Washington Energy Company
and Washington Natural Gas Company from 1988 through February 10, 1997 and has
served as Chairman and Chief Executive Officer of Uwajimaya, Inc. (food and
merchandise distributor), Seattle, Washington, since December 1994. Previously,
he served as President of Uwajimaya, Inc.
17
from 1965 through December 1994. He also serves as a member of Seafirst
Advisory Council and is President, Town and Country Travel, Inc., Seattle,
Washington, President and Chairman of the Board of North American Post
Publishing Company, Seattle, Washington, and director, Federal Reserve Bank of
San Francisco/Seattle Branch. Mr. Moriguchi's term expires in 2000.
Richard R. Sonstelie
Mr. Sonstelie has been Chairman of PSE since February 10, 1997. His prior
positions with the Company include President and Chief Executive Officer from
1992 to January 1998, President and Chief Operating Officer from 1991 to 1992,
President and Chief Financial Officer from 1987 to 1991 and Executive Vice
President from 1985 to 1987. Mr. Sonstelie, age 54, has been a Director of PSE
since 1987 and also serves as Chairman of the Board of the Federal Reserve Bank
of San Francisco/Seattle Branch and a director of ImageX.com (privately held),
Utech Venture Capital Corporation and Edison Electric Institute. Mr.
Sonstelie's term expires in 2000.
William S. Weaver
Mr. Weaver has been President and Chief Executive Officer of PSE since
January 13, 1998. He has also served as Vice Chairman and Chairman of
Unregulated Subsidiaries from February 10, 1997 to January 13, 1998. Prior to
that he served as Executive Vice President and Chief Financial Officer of PSE
since 1991. Before joining PSE, he was a partner in the law firm of Perkins
Coie LLP. Mr. Weaver, age 55, has been a director of PSE since 1991.
Mr. Weaver's term expires in 2001.
Structure and Compensation of Board of Directors
The PSE board of directors has four standing committees, which meet in
addition to regular board of directors meetings. The names of these committees,
their current memberships and a brief statement of their principal
responsibilities are presented below.
Board of Directors Meetings
The board of directors met seven times during 1998. Each director attended
at least 85% of these meetings and the meetings of committees on which he or
she served. Directors attended, on average, 95% of all board and committee
meetings during 1998.
Audit Committee
Douglas P. Beighle (Chairperson), Charles W. Bingham, Donald J. Covey, John
D. Durbin, Daniel J. Evans and Tomio Moriguchi serve on the audit committee.
The audit committee reviews the annual report of the independent auditors,
evaluates our external and internal audit functions, recommends to the full
board of directors the retention of independent auditors and oversees other
auditing matters. The audit committee met four times during 1998.
Director Affairs Committee
Daniel J. Evans (Chairperson), Phyllis J. Campbell and Donald J. Covey serve
on the director affairs committee. The director affairs committee acts and
makes recommendations regarding selection of director candidates, director
tenure, committee assignments and director compensation. Shareholders may
nominate candidates for election to the board of directors by notifying the
corporate secretary prior to each annual meeting. The committee seeks director
candidates with recognized achievements, skills and experience that will
enhance the board of directors. The director affairs committee met twice during
1998.
Compensation and Retirement Committee
Sally G. Narodick (Chairperson), Douglas P. Beighle, Phyllis J. Campbell,
Robert L. Dryden and John D. Durbin serve on the compensation and retirement
committee. The compensation and retirement committee acts
18
and makes recommendations to the board of directors with respect to executive
compensation, the retirement plan and other benefit plans for employees. The
compensation and retirement committee met five times during 1998.
Strategic Opportunities Committee
John D. Durbin (Chairperson), Douglas P. Beighle, Phyllis J. Campbell,
Robert L. Dryden, John W. Ellis and Sally G. Narodick serve on the strategic
opportunities committee. The strategic opportunities committee acts and makes
recommendations to the board of directors with respect to new business
development matters. The strategic opportunities committee met four times
during 1998.
Director Compensation
PSE pays directors who are not PSE employees a quarterly retainer of $6,250
plus $800 for each board and committee meeting the director attends. At least
40% of quarterly retainer payments are made in common stock. Directors can
elect to receive 100% of their retainer payments in common stock, or to defer
receipt of shares under the PSE Directors' Stock Plan. We also pay the
chairpersons of the board committees additional quarterly retainers of $500
each. We do not pay any compensation to directors who are also employees for
duties performed as directors. We pay Mr. Sonstelie, as Chairman of the Board,
under the terms of his employment agreement. See "Employment Contracts,
Termination of Employment and Change-in-Control Arrangements."
19
Security Ownership of Directors and Executive Officers
Beneficial Ownership Table
The following table shows the number of shares of common stock beneficially
owned on March 31, 1999 by each director and nominee, by each executive officer
named in the summary compensation table and by the directors and executive
officers as a group. No director or executive officer owns more than 1% of the
outstanding shares of common stock. We are not aware of any person who
beneficially owns 5% or more of the common stock.
Number of Number of
Beneficially Share Interests
Name Owned Shares Held
---- ------------ ---------------
Douglas P. Beighle........................... 3,718 487(1)
Charles W. Bingham........................... 3,415 380(1)
Phyllis J. Campbell.......................... 1,000 609(1)
Donald J. Covey.............................. 5,381 2,482(1)
Robert L. Dryden............................. 4,105 1,612(1)
John D. Durbin............................... 2,792 514(1)
John W. Ellis................................ 31,509(2) 487(1)
Daniel J. Evans.............................. 1,000 647(1)
Tomio Moriguchi.............................. 736 2,604(1)
Sally G. Narodick............................ 258 2,172(1)
Richard R. Sonstelie......................... 13,386(2) 6,996(3)
William S. Weaver............................ 23,174(2) 3,180(3)
Richard L. Hawley............................ 3,806(2) 504(3)
Timothy J. Hogan............................. 7,268(2) 17,720(3)(4)
Stephen A. McKeon............................ 5,135(2) 1,258(3)
Gary B. Swofford............................. 8,608(2) 1,590(3)
All directors and executive officers......... 115,290(2) 43,242(3)(4)
- --------
(1) Represents stock units under the PSE Directors' Stock Plan.
(2) Includes shares credited under the PSE Investment Plan for Employees.
(3) Represents vested and unvested stock units under the PSE Deferred
Compensation Plan.
(4) Includes 16,956 shares subject to unexercised stock options granted by the
Washington Energy Company prior its merger with PSE, which were converted
into options to purchase common stock at the Merger exchange ratio of .86
to 1.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers to report their stock holdings and transactions to the
Securities and Exchange Commission. To our knowledge, based on our review of
these reports and written representations that no other reports were required,
all our directors and officers who are subject to the Section 16 reporting
requirements filed the required reports on a timely basis in 1998.
Executive Compensation
Compensation and Retirement Committee Report
The board of directors delegates responsibility for executive compensation
to the compensation and retirement committee. The committee's members are Sally
G. Narodick (Chairperson), Douglas P. Beighle, Phyllis J. Campbell, Robert L.
Dryden and John D. Durbin, none of whom is an employee or participates in the
compensation programs described here for executives. The committee establishes
compensation for the
20
President and Chief Executive Officer and reviews and approves the President
and Chief Executive Officer's recommendations regarding compensation of the
other executive officers.
In determining executive compensation, the committee considers the pay
practices in comparable companies in the electric and combination gas and
electric utility industries. The committee believes that executive compensation
packages should do the following:
. attract and retain outstanding executives by providing compensation
opportunities consistent with those offered by the electric and
combination gas and electric utility industries for similar positions;
. place a significant portion of each executive's total pay at risk to
motivate executives to achieve Company and individual performance goals;
. tie incentive compensation to favorable operating results and align the
interests of executive officers with the long-term interests of the
shareholders;
In making compensation decisions, the committee reviews appropriate market
compensation indices. The principal source of this data is a selection of
comparable companies from the Edison Electric Institute's comprehensive,
industrywide annual survey of management pay. These companies are part of the
Edison Electric Institute's Combination Gas & Electric Investor-Owned Utilities
Index presented in the Stock Price Performance Graph on page 23.
The committee's compensation philosophy encompasses a mix of base salary and
annual and long-term incentive programs. The committee designs the total
package to provide participants with appropriate incentives to achieve current
performance goals as well as the long-term objective of enhancing shareholder
value. Long-term incentives comprise the largest portion of each executive's
incentive pay.
Base Salary
Generally, base salaries for executives are administered on a subjective
individual basis by the committee using as a guideline median salary levels in
the Edison Electric Institute's comprehensive, industrywide annual survey of
management pay for companies whose annual revenues are between 1.0 billion and
4.5 billion dollars. Base salaries are also determined with respect to two of
the named executive officers by the terms of their employment agreements.
Annual Incentive Compensation
In 1998, Mr. Weaver initiated a companywide effort to identify specific,
highly focused, commercially oriented goals and measures that, if achieved,
would lead to the attainment of PSE's broad strategic goals. As a result of
this process, the committee established goals and measures for participants in
PSE's annual Pay at Risk Plan.
All executive officers participate in the annual Pay at Risk Plan. This plan
is designed to provide financial incentives to executives for achieving desired
annual operating results. For 1998, the targeted opportunity for awards from
this plan varied by executive officer: Mr. Weaver's target was 45% of base
salary; Mr. Hawley's and Mr. McKeon's were 35%; Mr. Hogan's and Mr. Swofford's
were 30%; and Mr. Sonstelie's was 40%.
The primary measure for the named executive officers was earnings per share.
For Messrs. Weaver, Hawley and Sonstelie, 100% of the award was based on EPS
performance. For Mr. McKeon, 75% of the award was based on EPS, with the
remaining 25% divided among four other specific goals. For Messrs. Hogan and
Swofford, 50% of the award was based on EPS and 50% was based on the weather-
adjusted earnings contribution of the business units they each lead. EPS and
the applicable business unit earnings contribution did not achieve minimum
funding levels. Three of the four additional goals that comprise 25% of Mr.
McKeon's award did achieve funding status.
21
Long-Term Incentive Compensation
The 1995 Long-Term Incentive Compensation Plan, approved by shareholders in
1995, links compensation to the growth of shareholder value. Under this plan,
the committee awarded contingent grants of common stock to executives and key
employees. PSE will pay 1998 awards in stock at the end of a four-year period
ending December 31, 2001, based on PSE's cumulative four-year total shareholder
return relative to the Edison Electric Institute's Combination Gas & Electric
Investor-Owned Utilities Index used in the Stock Price Performance Graph. The
number of shares delivered at the end of the four-year cycle will range from
zero to 175% of the contingent grant. Dividend equivalents are accrued during
the performance period and paid out in cash when and to the extent the related
performance shares are paid. The Long-Term Incentive Plan Awards in 1998 table
shows the awards made in 1998 to the named executive officers for the four-year
performance cycle ending December 31, 2001. The Summary Compensation Table
shows the payout of awards for the four-year cycle ended December 31, 1998.
As part of its long-term incentive program, the committee has also
established stock ownership guidelines for officers and key managers that range
from 50% of base salary to two times base salary for the named executive
officers.
Before 1995, participants in PSE's Long Term Incentive Program for Senior
Management could receive Performance Share Units and Stock Appreciation Rights,
both of which are payable only in cash. The Summary Compensation Table shows
the payout of PSUs for the participating named executives for the four-year
performance cycle ended on December 31, 1997. No PSU awards were paid in 1996.
The Year-End Option/SAR Values table shows the year-end values of all
outstanding SARs held by the participating named executive officers.
Chief Executive Officer Compensation
Mr. Weaver was named Chief Executive Officer in January 1998. His base
salary was set at $550,000 on January 13, 1998.
During 1998, Mr. Weaver's leadership and focus on companywide goals resulted
in significant improvement in financial results and increased shareholder
value, with a net increase in EPS of 19% over the prior year (exclusive of
merger-related and other one-time charges). Earnings per share for 1998
exceeded the annual dividend rate. Mr. Weaver did not receive an annual
incentive award pursuant to the 1998 Pay at Risk Plan because EPS results were
below the challenging threshold established for an incentive payout. The
threshold would have been achieved except for the adverse effect of unusually
warm weather during the first quarter of 1998. Because this award was not paid,
Mr. Weaver's annual cash compensation for 1998 fell well below the median for
chief executive officers of comparable companies in the Edison Electric
Institute's survey.
Additional Information
Section 162(m) of the Internal Revenue Code of 1986 generally disallows a
tax deduction to public companies for compensation over $1 million paid to a
company's chief executive officer and four other most highly compensated
executive officers, unless that compensation is deferred or is considered
performance-based. The compensation disclosed in this proxy statement qualifies
for deductibility under Section 162(m), and we expect that executive
compensation for 1999 will qualify for deductibility. We intend to continue
structuring executive officer compensation to achieve maximum deductibility
under Section 162(m) with minimal sacrifices in flexibility and corporate
objectives.
Sally G. Narodick, Chairperson
Douglas P. Beighle
Phyllis J. Campbell
Robert L. Dryden
John D. Durbin
22
Stock Price Performance Graph
The chart below compares the five-year cumulative total shareholder return
(share price appreciation plus reinvested dividends) on our common stock to the
cumulative total return of the Standard & Poor's 500 Stock Index and the Edison
Electric Institute's Combination Gas & Electric Investor-Owned Utilities Index.
[PERFORMANCE GRAPH APPEARS HERE]
PERFORMANCE GRAPH DATA
Puget EEI Gas &
Sound Electric S&P 500
Year Energy Index INDEX
- ---- ------ --------- -------
1993 $100.00 $100.00 $100.00
1994 88.54 87.12 101.32
1995 110.90 110.96 139.40
1996 123.52 110.27 171.40
1997 166.20 142.54 228.59
1998 163.94 165.62 293.92
Five-Year Cumulative Total Return
This comparison assumes $100 were invested on December 31, 1993, in each of
the following:
. our common stock,
. the S&P 500 Stock Index, and
. the EEI Combination Gas & Electric Investor-Owned Utilities Index.
The graph then observes, in each case, stock price growth and dividends paid
(assuming dividends were reinvested) over five years.
The board of directors and its compensation and retirement committee
recognize that many factors influence the market price of stock, one of which
is PSE performance. The returns shown on the graph do not necessarily predict
future performance.
23
Summary Compensation Table
The following information is furnished for the years ended December 31,
1998, 1997 and 1996 with respect to PSE's President and Chief Executive
Officer, each of the four most highly compensated executive officers of PSE
during 1998, each of whose salary and bonus exceeded $100,000, and its Chairman
of the Board and former Chief Executive Officer. Annual compensation includes
amounts deferred at the officer's election.
Long-Term
Annual Compensation Compensation
------------------------------ ------------
Other Annual All Other
Name and Principal Salary Bonus Compensation LTIP Payouts Compensation
Position in 1998(1) Year ($) ($) $(2) ($) ($)
------------------- ---- ------ -------- ------------ ------------ ------------
W. Weaver............... 1998 $532,971 0 $109,933(3) $ 35,456(6)
President and 1997 299,598 0 208,046(4) 128,549
Chief Executive Officer 1996 260,004 $100,000 13,608
R. Hawley............... 1998 225,000 0 21,987(3) 81,985(7)
Vice President and
Chief Financial Officer
T. Hogan................ 1998 184,309 0 26,384(3) 13,458(8)
Vice President 1997 161,144 27,100 $31,360 84,329(5) 24,249
System Operations
S. McKeon............... 1998 283,941 25,800 43,516(3) 21,038(9)
Vice President and 1997 140,320 22,750 $ 29,154
General Counsel
G. Swofford............. 1998 189,429 0 54,967(3) 13,337(10)
Vice President and
Chief 1997 181,333 13,875 132,719(4) 130,851
Operating Officer--
Delivery 1996 165,000 45,000 6,593
R. Sonstelie............ 1998 500,091 0 241,853(3) 32,859(11)
Chairman 1997 483,903 0 466,310(4) 127,487
1996 400,008 155,000 17,604
- --------
(1) Mr. Hawley became an executive officer of PSE in March 1998. Mr. Hogan
became an executive officer of PSE in February 1997. The table includes
the following amounts paid to Mr. Hogan in 1997 by the Washington Energy
Company prior its merger with PSE: Salary, $11,334; Bonus, $13,600; and
LTIP payouts, $84,329. Mr. McKeon became an executive officer of PSE in
June 1997. Mr. Sonstelie was Chief Executive Officer of PSE until January
13, 1998, at which time Mr. Weaver became President and Chief Executive
Officer.
(2) Except as noted in the table, the aggregate amount of prerequisites or
personal benefits was less than the required reporting threshold (the
lesser of $50,000 and 10% of annual salary and bonus for the named
executive officer). The amount shown for Mr. Hogan includes $27,200 for a
one-time-only vehicle allowance associated with PSE's policy of not
providing executives with company-purchased automobiles.
24
(3) The amounts for 1998 represent payment of LTIP awards for the four-year
performance cycle ended on December 31, 1998, which consist of (a)
unrestricted shares and restricted shares, valued as of the December 31,
1998 closing price of $27.875, plus (b) a total dividend amount of $7.36
per share during the four-year performance period multiplied by the total
number of restricted and unrestricted shares. The number and value of
restricted and unrestricted shares for each of the named executive
officers is as follows:
Unrestricted Restricted
Shares Shares
-------------- --------------
Name Number Value Number Value
---- ------ ------- ------ -------
W. Weaver..................................... 1,560 $43,485 1,560 $43,485
R. Hawley..................................... 312 8,697 312 8,697
T. Hogan...................................... 374 10,425 374 10,425
S. McKeon..................................... 617 17,199 617 17,199
G. Swofford................................... 780 21,743 780 21,743
R. Sonstelie.................................. 3,432 95,667 3,432 95,667
(4) The amounts for 1997 represent payment of a performance share unit award
for the four-year cycle ended on December 31, 1997. The PSU award entitled
the holder to receive a cash payment equal to (a) the average market price
of one share of common stock during the month of December of the last year
of the four-year cycle, plus (b) the aggregate dividends with respect to
one share of common stock from January 1 of the year in which the PSU
award is made until the last day of the last month of the four-year cycle.
The number of PSUs on which values were paid was based on PSE's four-year
average total shareholder return relative to the companies in the EEI 100
Index of Investor-Owned Electrics.
(5) The amount for 1997 represents payment of performance shares granted by
the Washington Energy Company prior its merger with PSE, whose vesting was
accelerated upon consummation of the Merger.
(6) Represents $8,000 match under the Investment Plan for Employees; $18,333
match under the Investment Plan make-up; and $9,123 imputed income on life
insurance.
(7) Represents $7,500 match under the Investment Plan for Employees; $4,500
match under the Investment Plan make-up; $1,972 imputed income on life
insurance; $28,013 pursuant to Mr. Hawley's employment agreement to
compensate for LTIP payouts below $50,000; and $40,000 in connection with
the commencement of his employment.
(8) Represents $3,892 match under the Investment Plan for Employees; $7,976
match under the Investment Plan make-up; and $1,590 imputed income on life
insurance.
(9) Represents $7,624 match under the Investment Plan for Employees; $10,777
match under the Investment Plan make-up; and $2,637 imputed income on life
insurance.
(10) Represents $4,498 match under the Investment Plan for Employees; $7,700
match under the Investment Plan make-up; and $1,139 imputed income on life
insurance.
(11) Represents $6,000 match under the Investment Plan for Employees; $24,000
match under the Investment Plan make-up; and $2,859 imputed income on life
insurance.
25
Year-End Option/Stock Appreciation Right Values
The following table shows the number of outstanding unexercised options and
SARs held by the participating named executive officers at the end of 1998. No
options or SARs were granted or exercised in 1998.
Number of Shares Underlying Value of Unexercised In-the-
Unexercised Options/SARs at Money Options/SARs at Fiscal
Fiscal Year-End (#) Year-End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable(1)
---- --------------------------- ----------------------------
W. Weaver.......... 16,900/1,800 $43,796/25,650
R. Hawley.......... -- --
T. Hogan........... 16,957/0 131,363/0
S. McKeon.......... -- --
G. Swofford........ 4,400/1,200 8,614/8,550
R. Sonstelie....... 35,840/3,600 68,730/25,650
- --------
(1) Amounts are the number of options/SARs multiplied by the difference between
the closing price of the common stock on December 31, 1998 of $27.875 per
share, minus the exercise or base price for that option/SAR. There is no
guarantee that these options/SARs will have this value when and if they are
exercised.
Long-Term Incentive Plan Awards in 1998
The following table presents grants we made to the named executive officers
under our 1995 Long-Term Incentive Compensation Plan during 1998.
Estimated Future Share
Payouts
Number of Period Until ------------------------
Shares Maturation or Threshold Target Maximum
Name (#)(1) Payout (#) (#) (#)
---- --------- ------------- --------- ------ -------
W. Weaver................... 16,150 4 years 0 16,150 28,263
R. Hawley(2)................ 6,400 4 years 0 6,400 11,200
T. Hogan.................... 2,900 4 years 0 2,900 5,075
S. McKeon(3)................ 6,400 4 years 0 6,400 11,200
G. Swofford................. 2,900 4 years 0 2,900 5,075
R. Sonstelie................ 6,580 4 years 0 6,580 11,515
- --------
(1) Awards are contingent grants of common stock. The number of shares
delivered at the end of the four-year cycle will range from zero to 175% of
the contingent grant. The actual payout depends on our four-year total
shareholder return compared to the returns reported in the Edison Electric
Institute's Combination Gas & Electric Investor-Owned Utilities Index. To
receive 100% of the grant, we must perform at the 55th percentile among
Edison Electric Institute's 100 companies. To receive 175% of the grant, we
must perform at or above the 85th percentile ranking. Dividend equivalents
are accrued during the performance period and paid out in cash when and to
the extent the performance shares are paid.
(2) In addition to the 1998 grant shown here, Mr. Hawley also received 1,200
shares for the December 1995-1998 LTIP cycle, 2,800 shares for the 1996-
1999 cycle and 4,400 shares for the 1997-2000 cycle, reflecting a prorated
participation in those plan cycles.
(3) In addition to the 1998 grant shown here, Mr. McKeon also received 2,375
shares for the 1995-1998 LTIP cycle, 3,358 shares for the 1996-1999 cycle,
and 5,240 shares for the 1997-2000 cycle, reflecting a prorated
participation in those plan cycles.
26
Retirement Benefits Statement
The table below presents estimated retirement benefits for the named
executive officers, assuming retirement on January 1, 1999 at age 62 after
selected periods of service. The table lists the estimated aggregate values
under our funded pension plan, Supplemental Executive Retirement Plan,
Washington Natural Gas Nonqualified Retirement Plan benefits, the SERP pension-
type rollover accounts in the Deferred Compensation Plan and the Cash Balance
Restoration Matching Account within the Deferred Compensation Plan. Social
Security benefits will not be deducted from the amounts shown in the table.
Estimated Annual Benefit Upon Retirement at Age 62
Years of Credited Service
Final Average --------------------------
Compensation 5 10 15+
------------- -------- -------- --------
$100,000...................................... $ 16,667 $ 33,333 $ 50,000
200,000...................................... 33,333 66,667 100,000
300,000...................................... 50,000 100,000 150,000
400,000...................................... 66,667 133,333 200,000
500,000...................................... 83,333 166,667 250,000
600,000...................................... 100,000 200,000 300,000
The named executive officers have the following years of credited service as
of December 31, 1998: W. Weaver, 30.5; R. Hawley, 0.75; T. Hogan, 22.33; S.
McKeon, 1.58; G. Swofford, 31.42, and R. Sonstelie, 24.5. Under their
employment agreements, if Mr. Hawley and Mr. McKeon complete five years of
service they will be treated as if they have completed 15 years of credited
service.
Estimated aggregate benefits are based on the following formula: 3 1/3%
times years of credited service times average annual compensation (salary plus
bonus) for the highest three calendar years in the last five complete calendar
years prior to retirement, except that Mr. Weaver's benefits are based on the
average of his highest 24 consecutive months of compensation and Mr. Hawley's
and Mr. McKeon's benefits are based on the annual average of their highest 36
consecutive months of salary paid or payable plus the average of their highest
three annual bonuses paid or payable. Also, $50,000 of Mr. Hawley's LTIP-
related payouts are treated as salary. See the section called "Employment
Contracts, Termination of Employment and Change-in-Control Arrangements" below.
The three-year averages (24-consecutive-month average for Mr. Weaver and 36-
consecutive-month average for Messrs. Hawley and McKeon) as of December 31,
1998 for the named executive officers were: $499,271 for Mr. Weaver; $353,330
for Mr. Hawley; $189,853 for Mr. Hogan; $273,619 for Mr. McKeon; $282,322 for
Mr. Swofford; and $559,667 for Mr. Sonstelie.
Employment Contracts, Termination of Employment
and Change-in-Control Arrangements
Agreements
PSE has entered into agreements with Messrs. Weaver and Swofford under which
they will receive special payments and benefits if the following occur:
. in the case of Mr. Weaver, employment terminates for any reason sooner
than his normal retirement date which, in accordance with PSE's policy,
is when Mr. Weaver reaches the age of 62, and
. in the case of Mr. Swofford, prior to February 10, 2000, Mr. Swofford
terminates his employment for "good reason," PSE terminates his
employment "without cause" or his employment terminates due to death or
disability.
27
Upon any such terminations, Messrs. Weaver and Swofford would be entitled to
receive the following payments and benefits:
a. annual base salary and accrued benefits earned through termination,
plus a pro rata share of any incentive compensation accrued through the
date of termination, regardless of whether such amounts are vested or
payable on that date;
b. an amount equal to three times annual base salary, plus any
additional compensation awarded for the year most recently ended;
c. continued participation for three years in employee benefit plans or
provision for substantially similar benefits;
d. a cash payment at normal retirement date of the actuarial equivalent
of the additional retirement compensation they would have earned had
employment continued for three more years;
e. a payment equal to the difference between the exercise prices of any
outstanding options or similar rights (whether or not then fully
exercisable) and the higher of (a) the market price of the common stock on
the date of termination and (b) the highest price per share actually paid
in connection with any change in control;
f. a payment equal to the value of the target number of shares payable
upon full vesting of all outstanding performance awards, whether or not
such awards were then fully vested or payable; and
g. a cash payment equal to any excise taxes payable by them due to
excess parachute payments, plus the tax expense to them resulting from this
payment.
In addition, Mr. Weaver's agreement provides that his benefits under the
SERP will be based on his average compensation for his highest consecutive 24
months of service. Mr. Swofford also will be paid a retention incentive benefit
based on continued employment for an extended period following the merger of
PSE and the Washington Energy Company equal to three times his annual base
salary in 1996, plus the bonus paid in 1996. The incentive benefit will vest in
three equal installments after one year, three years and five years of
continued employment after the merger. The vested portion of the incentive
benefit will be paid in equal monthly installments over a three-year period
beginning on the date his employment terminates.
Effective March 16, 1998, PSE entered into an employment agreement with Mr.
Hawley to secure his services as Vice President and Chief Financial Officer.
The agreement has a term of five years. Mr. Hawley will receive a minimum
annual base salary of $300,000. He also will participate in PSE's Pay at Risk
Plan, with a target award of at least 35% of base salary, and in PSE's 1995
Long-Term Incentive Compensation Plan, with a target of at least 40% of base
salary and grants of 1,200 performance units for the 1995-1998 cycle, 2,800
performance units for the 1996-1999 cycle, 4,400 performance units for the
1997-2000 cycle and 6,400 performance units for the 1998-2001 cycle, and a cash
payment of the difference between $50,000 and the settlement value for such
awards.
In addition, Mr. Hawley's agreement provides that if he completes five years
of service to the Company, then his benefits under the SERP will be calculated
as if he had completed 15 years of service to the Company (regardless of the
number of years of service he actually completes). His agreement also provides
that his benefits under the SERP will be based on the sum of (a) the annual
average of his highest 36 consecutive months of salary paid or payable and (b)
the average of his highest three annual bonuses paid or payable. Under his
agreement, the $50,000 minimum annual award to which Mr. Hawley is entitled
with respect to the 1995 Long-Term Incentive Compensation Plan will be treated
as salary for purposes of calculating his SERP benefits.
28
Mr. Hawley will receive special payments and benefits if his employment
terminates under certain circumstances. If PSE terminates Mr. Hawley's
employment without cause prior to the end of the term of the agreement, Mr.
Hawley will receive the following payments:
a. annual base salary and accrued benefits earned through termination,
plus a pro rata share of any incentive compensation accrued through the
date of termination, regardless of whether such amounts are vested or
payable on that date, and
b. continuation of his base salary for two years, plus $50,000 per year.
If Mr. Hawley's employment terminates for any reason within three years
after a change in control, Mr. Hawley will receive, in lieu of the benefits
described above, substantially the same type of payments and benefits as
described in sections (a) through (g) of the paragraph regarding benefits
payable to Messrs. Weaver and Swofford. Implementation of the holding company
proposal will not constitute a change in control for purposes of Mr. Hawley's
employment agreement.
Mr. Hogan entered into an agreement effective as of August 17, 1995 with the
Washington Energy Company that PSE has assumed. Under that agreement, Mr. Hogan
would receive the same type of payments and benefits as described in sections
(a) through (f) of the paragraph regarding benefits payable to Messrs. Weaver
and Swofford if he terminates his employment for good reason or PSE terminates
his employment without cause within three years following a change in control.
Implementation of the holding company proposal will not constitute a change in
control for purposes of Mr. Hogan's agreement.
Effective June 2, 1997, PSE entered into an employment agreement with Mr.
McKeon to secure his services as Vice President and General Counsel. The
agreement has an initial term of three years and will be extended for two more
one-year periods unless we or Mr. McKeon give written notice of termination not
less than six months before the applicable anniversary date. Mr. McKeon will
receive a minimum annual base salary of $260,000. He also will participate in
PSE's Pay at Risk Plan, with a target award of at least 35% of base salary, and
in PSE's 1995 Long-Term Incentive Compensation Plan, with a target of at least
35% of base salary and grants of 2,375 performance units for the 1995-1998
cycle, 3,358 performance units for the 1996-1999 cycle and 5,240 performance
units for the 1997-2000 cycle.
Mr. McKeon's agreement provides that if he completes five years of service
to the Company, then his benefits under the SERP will be calculated as if he
had completed 15 years of service to the Company (regardless of the number of
years of service he actually completes). His agreement also provides that his
benefits under the SERP will be based on the sum of (a) the annual average of
his highest 36 consecutive months of salary paid or payable and (b) the average
of his highest three annual bonuses paid or payable. Mr. McKeon would receive
substantially the same type of payments and benefits as described above for
Mr. Hawley if PSE terminates his employment without cause prior to the end of
the term of the agreement or if his employment terminates for any reason within
three years following a change in control. Implementation of the holding
company proposal will not constitute a change in control for purposes of Mr.
McKeon's employment agreement.
Mr. Sonstelie entered into an employment agreement with PSE effective as of
January 13, 1998. The agreement provides that Mr. Sonstelie will serve as
Chairman of the board of directors until January 2000 and perform other duties
properly requested by the board or the President and Chief Executive Officer.
The agreement, which terminates on March 31, 2000, requires Mr. Sonstelie to
devote his full working time to PSE.
Mr. Sonstelie will receive a base annual salary of $500,000. Mr. Sonstelie
also will participate in PSE's Pay at Risk Plan for 1998 and 1999, with a
target award of 40% of base salary, and in PSE's 1995 Long-Term Incentive
Compensation Plan, with grants of 6,580 performance units in the 1998-2001
cycle and 3,660 performance units in the 1999-2002 cycle. The value of these
awards will be based on our performance through March 31, 2000. Mr. Sonstelie
will receive an enhanced benefit under the SERP because his SERP benefit will
29
not be reduced for early commencement on April 1, 2000. Mr. Sonstelie will also
receive a severance payment upon his retirement equal to three times the base
annual salary described above, and medical, dental and life insurance benefits
for three years after his retirement. If we terminate the agreement (except
termination for cause), or Mr. Sonstelie's employment terminates due to death
or disability prior to the end of the term of the agreement, Mr. Sonstelie or
his estate will be entitled to receive all compensation and benefits through
March 31, 2000.
If Mr. Sonstelie's employment terminates due to a material adverse change in
the terms of his employment following a "change in control" (except termination
for cause or due to death or incapacity), Mr. Sonstelie will be entitled to
receive the following payments and benefits:
a. his annual base salary earned through termination and accrued
benefits;
b. an amount equal to his annual base salary, plus any additional
compensation awarded for the year most recently ended, multiplied by the
number of years or partial years remaining until March 31, 2000;
c. continued participation until March 31, 2000 in our employee benefit
plans or provision for substantially similar benefits;
d. a payment equal to the difference between the exercise prices of any
outstanding options or similar rights (whether or not then fully
exercisable) and the higher of (1) the market price of the common stock on
the date of termination and (2) the highest price per share actually paid
in connection with any change in control;
e. a payment equal to the value of the target number of shares payable
upon full vesting of all outstanding performance awards; and
f. a cash payment equal to any excise taxes payable by Mr. Sonstelie due
to excess parachute payments, plus the tax expense to him resulting from
this payment. Implementation of the holding company proposal will not
constitute a change in control for purposes of Mr. Sonstelie's employment
agreement.
1995 Long-Term Incentive Compensation Plan
Under the PSE 1995 Long-Term Incentive Compensation Plan, in the event of a
sale of substantially all the assets, liquidation of PSE or a merger or
consolidation of PSE in which shareholders receive cash, securities or other
property in exchange for their common stock, each stock award that is at the
time outstanding will automatically accelerate and become 100% vested. The plan
administrator may, at any time before a corporate transaction, take further
action to ensure fair and equitable treatment of awards.
Stock Appreciation Rights
Upon dissolution, liquidation, merger or consolidation of PSE in which
shareholders receive cash, securities or other property in exchange for their
common stock, all SARs will terminate. Each holder may exercise his or her SARs
immediately prior to the transaction, whether or not the SARs have vested.
Independent Public Accountants
The firm of PricewaterhouseCoopers LLP has examined the financial statements
of PSE since 1933. Representatives of the firm will attend the annual meeting,
with the opportunity to make a statement and answer appropriate shareholder
questions.
30
Shareholder Proposals
A shareholder who intends to present a proposal at the 2000 annual meeting
of shareholders and desires that information regarding the proposal be included
in the 2000 proxy statement and proxy must ensure that such information is
received by PSE in writing no later than January 2, 2000. In accordance with
PSE's bylaws, shareholders who intend to nominate candidates for election to
the board of directors must provide written notice of such nomination, in the
manner required by PSE's bylaws, by no later than January 10, 2000.
Pursuant to Rule 14a-4 under the Securities Exchange Act of 1934, as
amended, PSE intends to retain discretionary authority to vote proxies with
respect to shareholder proposals for which the proponent does not seek
inclusion of the proposed matter in PSE's proxy statement for PSE's 2000 annual
meeting of shareholders, except in circumstances where (i) PSE receives notice
of the proposed matter no later than March 18, 2000, and (ii) the proponent
complies with the other requirements set forth in Rule 14a-4.
Additional Information
The following documents, which have been previously filed with the SEC, are
incorporated by reference into this proxy statement and prospectus:
. PSE's annual report on Form 10-K for the year ended December 31, 1998;
. PSE's Form 10-K amendment, filed on April 30, 1999, which amends its
annual report on Form 10-K for the year ended December 31, 1998; and
. the current report on Form 8-K that was filed by PSE on March 5, 1999.
In addition, all documents filed by PSE pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this proxy statement and
prospectus and prior to the date of the PSE's 1999 annual meeting of
shareholders, shall be deemed to be incorporated by reference into this proxy
statement and prospectus.
Incorporation by reference means that PSE can disclose information to you,
which information in such document is deemed to be a part of this proxy
statement and prospectus, except for any information superseded by information
in this proxy statement and prospectus or in any other subsequently filed
document which is or is deemed to be incorporated by reference into this proxy
statement and prospectus.
The Holding Company has filed a registration statement on Form S-4 to
register with the SEC shares of Holding Company common stock. This proxy
statement and prospectus is a part of that registration statement and
constitutes a prospectus of the Holding Company as well as a proxy statement of
PSE. As permitted by SEC rules, this proxy statement and prospectus does not
contain all of the information contained in the registration statement or its
exhibits.
You may obtain the full registration statement and exhibits, or any or all
of the documents of PSE which are listed above, at the SEC sites listed below,
or you may also obtain such items free of charge, by contacting James W.
Eldredge. To ensure timely delivery, you must request this information from PSE
no later than May 31, 1999. You may read and copy any such reports or other
materials that PSE has filed, or that PSE or the Holding Company will file in
the future, at the SEC's public reference rooms at 450 Fifth Street,
Washington, D.C. 20549 or in New York, New York or Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. Such filings and other materials are also available from the SEC's
Internet Web site at "http://www.sec.gov."
April 30, 1999
Bellevue, Washington
By Order of the board of directors
/s/ William S. Weaver
William S. Weaver
President and Chief Executive
Officer
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APPENDIX A
PLAN OF EXCHANGE
THIS PLAN OF EXCHANGE (the "Plan of Exchange"), dated as of April 28, 1999,
is between Puget Sound Energy, Inc., a Washington corporation ("PSE"), the
corporation whose shares of Common Stock will be acquired pursuant to the
exchange provided for in this Plan of Exchange (the "Exchange"), and Puget
Energy, Inc., a Washington corporation ("Puget Energy"), the acquiring
corporation. PSE and Puget Energy are hereinafter referred to, collectively, as
the "Companies."
WITNESSETH:
WHEREAS, the authorized capital of PSE consists of (a) 150,000,000 shares of
Common Stock, stated value $10 per share ("PSE Common Stock"), of which
84,560,545 shares were issued and outstanding as of April 16, 1999, (b)
3,000,000 shares of Preferred Stock, par value $100 per share, of which 656,619
shares were issued and outstanding as of April 16, 1999, (c) 13,000,000 shares
of Preferred Stock, par value $25 per share, of which 3,600,000 shares were
issued and outstanding as of April 16, 1999, and (d) 700,000 shares of
Preference Stock, par value $50 per share, of which no shares were issued and
outstanding as of April 16, 1999; the number of shares of PSE Common Stock
being subject to increase to the extent that shares reserved for issuance are
issued prior to the Effective Time, as hereinafter defined.
WHEREAS, Puget Energy is a wholly-owned subsidiary of PSE with authorized
capital stock consisting of (a) 250,000,000 shares of Common Stock, par value
$.01 per share ("Puget Energy Common Stock"), of which one hundred (100) shares
are issued and outstanding and owned by PSE and (b) 50,000,000 shares of
Preferred Stock, par value $.01 per share, none of which are issued and
outstanding;
WHEREAS, the Boards of Directors of the Companies deem it desirable and in
the best interests of the Companies and the shareholders of PSE that, at the
Effective Time, each share of PSE Common Stock be exchanged for a share of
Puget Energy Common Stock with the result that Puget Energy becomes the owner
of all outstanding PSE Common Stock and that each holder of PSE Common Stock
becomes the owner of an equal number of shares of Puget Energy Common Stock,
all on the terms and conditions hereinafter set forth; and
WHEREAS, the Boards of Directors of the Companies have each approved and
adopted this Exchange, and the Board of Directors of PSE has recommended that
the shareholders of PSE approve this Exchange pursuant to Section 23B.11.030 of
the Washington Business Corporation Act (the "Act").
NOW, THEREFORE, the Companies hereby agree as follows:
ARTICLE I
This Exchange shall be submitted to the holders of PSE Common Stock for
approval as provided by Section 23B.11.030 of the Act. The affirmative vote of
the holders of at least two-thirds ( 2/3) of the outstanding shares of PSE
Common Stock shall be necessary to approve this Exchange.
ARTICLE II
Subject to the terms and conditions of this Exchange, the Exchange shall
become effective immediately following the close of business on the date of
filing with the Secretary of State of the State of Washington (the "Secretary
of State") of articles of share exchange pursuant to Section 23B.11.050 of the
Act (the "Articles"), or at such later time and date as may be stated in the
Articles (the time and date at and on which the Exchange becomes effective
being referred to herein as the "Effective Time").
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ARTICLE III
A. At the Effective Time:
(1) each share of PSE Common Stock issued and outstanding immediately
prior to the Effective Time shall be automatically exchanged for one share
of Puget Energy Common Stock, which shares shall be fully paid and
nonassessable;
(2) Puget Energy shall acquire and become the owner and holder of each
issued and outstanding share of PSE Common Stock so exchanged;
(3) each share of Puget Energy Common Stock issued and outstanding
immediately prior to the Effective Time shall be canceled and shall
thereupon constitute an authorized and unissued share of Puget Energy
Common Stock;
(4) each right to receive shares of PSE Common Stock or unexpired and
unexercised option to purchase PSE Common Stock (herein a "PSE Grant")
under the PSE Long Term Incentive Compensation Plan, the PSE Directors'
Stock Plan, the PSE Deferred Compensation Plan, the PSE Investment Plan for
Employees or the WECo Stock Option Plan (collectively, the "PSE Plans"),
whether vested or unvested, shall automatically be converted into the right
to acquire a number of shares of Puget Energy Common Stock or an option to
purchase a number of shares of Puget Energy Common Stock equal to the
number of shares of PSE Common Stock that could have been acquired or
purchased immediately prior to the Effective Time (assuming full vesting)
under such PSE Plans and, with respect to options, at a price per share of
Puget Energy Common Stock equal to the per share option exercise price
specified in such PSE Grant, and each such PSE Grant shall be subject to
the rights and benefits that are no more or less favorable than the rights
and benefits offered under the PSE Plans; and
(5) each share of PSE Common Stock held under the Stock Purchase and
Dividend Reinvestment Plan immediately prior to the Effective Time shall
automatically be exchanged for a like number of shares (including
fractional and uncertificated shares) of Puget Energy Common Stock, which
shares shall be held under and issued pursuant to the Stock Purchase and
Dividend Reinvestment Plan;
B. The former holders of PSE Common Stock shall be entitled only to receive
shares of Puget Energy Common Stock in exchange therefor as provided in this
Exchange or to their rights under Chapter 23B.13 of the Act.
C. As of the Effective Time, Puget Energy shall succeed to the Stock
Purchase and Dividend Reinvestment Plan as in effect prior to the Effective
Time, and the Stock Purchase and Dividend Reinvestment Plan shall be
appropriately amended to provide for the issuance and delivery of Puget Energy
Common Stock on and after the Effective Time.
D. As of the Effective Time, the PSE Long Term Incentive Compensation Plan,
the PSE Directors' Stock Plan, the PSE Deferred Compensation Plan, the PSE
Investment Plan for Employees, the WECo Stock Option Plan or the PSE Stock
Purchase and Dividend Reinvestment Plan shall be appropriately amended to
provide for the issuance and delivery of Puget Energy Common Stock on and after
the Effective Time.
ARTICLE IV
The filing of the Articles with the Secretary of State and the consummation
of the Exchange are subject to satisfaction of the following conditions
precedent:
A. the approval by the holders of PSE Common Stock provided for in
Article I of this Plan of Exchange;
B. the receipt of such orders, authorizations, approvals or waivers from
the Washington Utilities and Transportation Commission, the Federal Energy
Regulatory Commission, and all other regulatory bodies, boards or agencies
as are or may be required in connection with the Exchange and related
transactions,
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which orders, authorizations, approvals or waivers remain in full force and
effect, and do not include, in the sole judgment of the Board of Director
of PSE, unacceptable conditions;
C. the effectiveness of a registration statement under the Securities
Act of 1933 relating to Puget Energy Common Stock to be issued or reserved
for issuance in connection with the Exchange;
D. the approval for listing upon official notice of issuance, by the New
York Stock Exchange of Puget Energy Common Stock to be issued in connection
with the Exchange; and
E. the receipt of a favorable opinion of Perkins Coie LLP covering
certain United States federal income tax matters.
ARTICLE V
Following the Effective Time, each holder of an outstanding certificate or
certificates theretofore representing shares of PSE Common Stock may, but shall
not be required to, surrender the same to Puget Energy's transfer agent for
cancellation and reissuance of a new certificate or certificates in such
holder's name or for cancellation and transfer, and each such holder or
transferee shall be entitled to receive a certificate or certificates
representing the same number of Puget Energy Common Stock as the shares of PSE
Common Stock previously represented by the certificate or certificates
surrendered. Until so surrendered or presented for exchange or transfer, each
outstanding certificate which, immediately prior to the Effective Time,
represents PSE Common Stock shall be deemed and shall be treated for all
purposes to represent the ownership of the same number of shares of Puget
Energy Common Stock as though such surrender or exchange or transfer had taken
place. The holders of PSE Common Stock at the Effective Time shall have no
right at and after the Effective Time to have their shares of PSE Common Stock
transferred on the stock transfer books of PSE (such stock transfer books being
deemed closed for this purpose at the Effective Time), and at and after the
Effective Time such stock transfer books shall be deemed to be the stock
transfer books of Puget Energy.
ARTICLE VI
A. This Plan of Exchange may be amended, modified or supplemented, or
compliance with any provision hereof may be waived, at any time prior to the
Effective Time (including, without limitation, after receipt of the affirmative
vote of holders of PSE Common Stock as provided in Article I hereof), by the
mutual consent of the Boards of Directors of PSE and Puget Energy at any time
prior to the Effective Time; provided, however, that no such amendment,
modification, supplement or waiver would, in the sole judgment of the Board of
Directors of PSE, materially and adversely affect the shareholders of PSE.
B. This Plan of Exchange may be terminated and the Exchange and related
transactions abandoned, at any time prior to the Effective Time (including,
without limitation, after receipt of the affirmative vote of holders of PSE
Common Stock as provided in Article I hereof), if the Board of Directors of PSE
determines, in its sole judgment, that consummation of the Exchange would for
any reason be inadvisable or not in the best interests of PSE or its
shareholders.
IN WITNESS WHEREOF, each of the Companies, pursuant to authorization and
approval given by its Board of Directors, has caused this Exchange to be
executed as of the date first above written.
PUGET SOUND ENERGY, INC. PUGET ENERGY, INC.
/s/ William S. Weaver /s/ James W. Eldredge
By: _________________________________ By: _________________________________
William S. Weaver James W. Eldredge
President and Chief Executive Corporate Secretary
Officer
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APPENDIX B
ARTICLES OF INCORPORATION
OF
Puget Energy, Inc.
The undersigned, as incorporator of a corporation under the Washington
Business Corporation Act, adopts the following Articles of Incorporation:
ARTICLE 1. NAME
The name of this corporation is Puget Energy, Inc.
ARTICLE 2. SHARES
2.1 Authorized Capital
The total number of shares which the corporation is authorized to issue is
300,000,000, consisting of 250,000,000 shares of Common Stock having a par
value of $.01 per share and 50,000,000 shares of Preferred Stock having a par
value of $.01 per share. The Common Stock is subject to the rights and
preferences of the Preferred Stock as set forth below.
2.2 Issuance of Preferred Stock in Series
The Preferred Stock may be issued from time to time in one or more series in
any manner permitted by law and the provisions of these Articles of
Incorporation, as determined from time to time by the Board of Directors and
stated in the resolution or resolutions providing for its issuance, prior to
the issuance of any shares. The Board of Directors shall have the authority to
fix and determine and to amend, subject to these provisions, the designation,
preferences, limitations and relative rights of the shares of any series that
is wholly unissued or to be established. Unless otherwise specifically provided
in the resolution establishing any series, the Board of Directors shall further
have the authority, after the issuance of shares of a series whose number it
has designated, to amend the resolution establishing such series to decrease
the number of shares of that series, but not below the number of shares of such
series then outstanding.
ARTICLE 3. REGISTERED OFFICE AND AGENT
The name of the initial registered agent of this corporation and the address
of its initial registered office are as follows:
James W. Eldredge
411-108th Avenue N.E.
Bellevue, Washington 98004-5515
ARTICLE 4. INCORPORATOR
The name and address of the incorporator are as follows:
James W. Eldredge
411-108th Avenue N.E.
Bellevue, Washington 98004-5515
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ARTICLE 5. PREEMPTIVE RIGHTS
No preemptive rights shall exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
ARTICLE 6. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall not exist
with respect to shares of stock of this corporation.
ARTICLE 7. DIRECTORS
The number of Directors of this corporation shall not be less than nine nor
more than fifteen, the exact number to be determined in the manner provided by
the Bylaws and may be increased or decreased from time to time in the manner
provided therein. The Directors shall be divided into three classes, each class
to be as nearly equal in number as possible. The terms of the Directors in the
first class shall expire at the first annual shareholders' meeting after their
election, the terms of the Directors in the second class shall expire at the
second annual shareholders' meeting after their election, and the terms of the
Directors in the third class shall expire at the third annual shareholders'
meeting after their election. At each annual shareholders' meeting held
thereafter, the Directors shall be chosen for a term of three years to succeed
those whose terms expire. The Directors of this corporation may be removed only
for cause in the manner provided by the Bylaws.
ARTICLE 8. BYLAWS
The Board of Directors shall have the power to adopt, amend or repeal the
Bylaws of this corporation, subject to the power of the shareholders to amend
or repeal such Bylaws. The shareholders shall also have the power to amend or
repeal the Bylaws of this corporation and to adopt new Bylaws.
ARTICLE 9. AMENDMENTS TO ARTICLES OF INCORPORATION
This corporation reserves the right to amend or repeal any of the provisions
contained in these Articles of Incorporation in any manner now or hereafter
permitted by the Washington Business Corporation Act, and the rights of the
shareholders of this corporation are granted subject to this reservation.
ARTICLE 10. LIMITATION OF DIRECTOR LIABILITY
Except as such limitation or elimination of director liability is
specifically prohibited by the Washington Business Corporation Act, as now in
effect or as it may hereafter be amended, a Director of this corporation shall
not be liable to this corporation or its shareholders for monetary damages for
conduct as a Director. Any amendments to or repeal of this Article 10 shall not
adversely affect any right or protection of a Director of this corporation for
or with respect to any acts or omissions of such Director occurring prior to
such amendment or repeal.
ARTICLE 11. INDEMNIFICATION
11.1 Definitions
Capitalized terms used in this Article 11 have the meaning given to such
terms in Section 23B.08.500 of the Washington Business Corporation Act.
11.2 Indemnification
This corporation shall indemnify its Directors, officers, employees and
agents against Liability and Expenses and shall advance Expenses to its
Directors, officers, employees and agents in connection with any
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proceeding to the fullest extent permitted by the Washington Business
Corporation Act, as now in effect or as it may hereafter be amended.
ARTICLE 12. SHAREHOLDER ACTIONS
Any action required or permitted to be taken at a shareholders' meeting may
be taken without a meeting or a vote if the action is taken by all shareholders
entitled to vote on the action.
ARTICLE 13. SPECIAL MEETINGS
Shareholders shall not have the right to call a special meeting.
Dated: April 22, 1999
/s/ James W. Eldredge
_____________________________________
James W. Eldredge,
Incorporator
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APPENDIX C
CHAPTER 23B.13 OF THE WASHINGTON BUSINESS CORPORATION ACT
(DISSENTERS' RIGHTS)
23B.13.010 DEFINITIONS
As used in this chapter:
(1) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under RCW 23B.13.020 and who exercises that right when and in
the manner required by RCW 23B.13.200 through 23B.13.280.
(3) "Fair value," with respect to a dissenter's shares, means the value of
the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.
(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.
(6) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
23B.13.020 RIGHT TO DISSENT
(1) A shareholder is entitled to dissent from, and obtain payment of the
fair value of the shareholder's shares in the event of, any of the following
corporate actions:
(a) Consummation of a plan of merger to which the corporation is a party
(i) if shareholder approval is required for the merger by RCW 23B.11.030,
23B.11.080, or the articles of incorporation and the shareholder is
entitled to vote on the merger, or (ii) if the corporation is a subsidiary
that is merged with its parent under RCW 23B.11.040;
(b) Consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
(c) Consummation of a sale or exchange of all, or substantially all, of
the property of the corporation other than in the usual and regular course
of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to
the shareholders within one year after the date of sale;
(d) An amendment of the articles of incorporation that materially
reduces the number of shares owned by the shareholder to a fraction of a
share if the fractional share so created is to be acquired for cash under
RCW 23B.06.040; or
(e) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
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(2) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this chapter may not challenge the corporate action
creating the shareholder's entitlement unless the action fails to comply with
the procedural requirements imposed by this title, RCW 25.10.900 through
25.10.955, the articles of incorporation, or the bylaws, or is fraudulent with
respect to the shareholder or the corporation.
(3) The right of a dissenting shareholder to obtain payment of the fair
value of the shareholder's shares shall terminate upon the occurrence of any
one of the following events:
(a) The proposed corporate action is abandoned or rescinded;
(b) A court having jurisdiction permanently enjoins or sets aside the
corporate action; or
(c) The shareholder's demand for payment is withdrawn with the written
consent of the corporation.
23B.13.030 DISSENT BY NOMINEES AND BENEFICIAL OWNERS
(1) A record shareholder may assert dissenters' rights as to fewer than all
shares registered in the shareholder's name only if the shareholder dissents
with respect to all shares beneficially owned by any one person and notifies
the corporation in writing of the name and address of each person on whose
behalf the shareholder asserts dissenters' rights. The rights of a partial
dissenter under this subsection are determined as if the shares as to which
the dissenter dissents and the dissenter's other shares were registered in the
names of different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to shares
held on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder submits to the corporation the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder does so with respect to all shares of
which such shareholder is the beneficial shareholder or over which such
shareholder has power to direct the vote.
23B.13.200 NOTICE OF DISSENTERS' RIGHTS
(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is submitted to a vote at a shareholders' meeting, the meeting
notice must state that shareholders are or may be entitled to assert
dissenters' rights under this chapter and be accompanied by a copy of this
chapter.
(2) If corporate action creating dissenters' rights under RCW 23B.13.020 is
taken without a vote of shareholders, the corporation, within ten days after
effective date of such corporate action, shall notify in writing all
shareholders entitled to assert dissenters' rights that the action was taken
and send them the dissenters' notice described in RCW 23B.13.220.
23B.13.210 NOTICE OF INTENT TO DEMAND PAYMENT
(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is submitted to a vote at a shareholders' meeting, a shareholder
who wishes to assert dissenters' rights must (a) deliver to the corporation
before the vote is taken written notice of the shareholder's intent to demand
payment for the shareholder's shares if the proposed action is effected, and
(b) not vote such shares in favor of the proposed action.
(2) A shareholder who does not satisfy the requirements of subsection (1)
of this section is not entitled to payment for the shareholder's shares under
this chapter.
23B.13.220 DISSENTERS' NOTICE
(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of RCW 23B.13.210.
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(2) The dissenters' notice must be sent within ten days after the effective
date of the corporate action, and must:
(a) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not the person acquired beneficial
ownership of the shares before that date;
(d) Set a date by which the corporation must receive the payment demand,
which date may not be fewer than thirty nor more than sixty days after the
date the notice in subsection (1) of this section is delivered; and
(e) Be accompanied by a copy of this chapter.
23B.13.230 DUTY TO DEMAND PAYMENT
(1) A shareholder sent a dissenters' notice described in RCW 23B.13.220 must
demand payment, certify whether the shareholder acquired beneficial ownership
of the shares before the date required to be set forth in the dissenters'
notice pursuant to RCW 23B.13.220(2)(c), and deposit the shareholder's
certificates in accordance with the terms of the notice.
(2) The shareholder who demands payment and deposits the shareholder's share
certificates under subsection (1) of this section retains all other rights of a
shareholder until the proposed corporate action is effected.
(3) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
chapter.
23B.13.240 SHARE RESTRICTIONS
(1) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is effected or the restriction is released under RCW 23B.13.260.
(2) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until the effective date of
the proposed corporate action.
23B.13.250 PAYMENT
(1) Except as provided in RCW 23B.13.270, within thirty days of the later of
the effective date of the proposed corporate action, or the date the payment
demand is received, the corporation shall pay each dissenter who complied with
RCW 23B.13.230 the amount the corporation estimates to be the fair value of the
shareholder's shares, plus accrued interest.
(2) The payment must be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for
that year, and the latest available interim financial statements, if any;
(b) An explanation of how the corporation estimated the fair value of
the shares;
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(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under RCW
23B.13.280; and
(e) A copy of this chapter.
23B.13.260 FAILURE TO TAKE ACTION
(1) If the corporation does not effect the proposed action within sixty days
after the date set for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release any transfer
restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation wishes to undertake the proposed action, it must
send a new dissenters' notice under RCW 23B.13.220 and repeat the payment
demand procedure.
23B.13.270 AFTER-ACQUIRED SHARES
(1) A corporation may elect to withhold payment required by RCW 23B.13.250
from a dissenter unless the dissenter was the beneficial owner of the shares
before the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action.
(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of the dissenter's demand. The corporation shall send with its offer an
explanation of how it estimated the fair value of the shares, an explanation of
how the interest was calculated, and a statement of the dissenter's right to
demand payment under RCW 23B.13.280.
23B.13.280 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER
(1) A dissenter may notify the corporation in writing of the dissenter's own
estimate of the fair value of the dissenter's shares and amount of interest
due, and demand payment of the dissenter's estimate, less any payment under RCW
23B.13.250, or reject the corporation's offer under RCW 23B.13.270 and demand
payment of the dissenter's estimate of the fair value of the dissenter's shares
and interest due, if:
(a) The dissenter believes that the amount paid under RCW 23B.13.250 or
offered under RCW 23B.13.270 is less than the fair value of the dissenter's
shares or that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under RCW 23B.13.250 within
sixty days after the date set for demanding payment; or
(c) The corporation does not effect the proposed action and does not
return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty days after the date set for
demanding payment.
(2) A dissenter waives the right to demand payment under this section unless
the dissenter notifies the corporation of the dissenter's demand in writing
under subsection (1) of this section within thirty days after the corporation
made or offered payment for the dissenter's shares.
23B.13.300 COURT ACTION
(1) If a demand for payment under RCW 23B.13.280 remains unsettled, the
corporation shall commence a proceeding within sixty days after receiving the
payment demand and petition the court to determine the fair value of the shares
and accrued interest. If the corporation does not commence the proceeding
within the sixty-day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.
C-4
(2) The corporation shall commence the proceeding in the superior court of
the county where a corporation's principal office, or, if none in this state,
its registered office, is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic
corporation merged with or whose shares were acquired by the foreign
corporation was located.
(3) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled, parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(4) The corporation may join as a party to the proceeding any shareholder
who claims to be a dissenter but who has not, in the opinion of the
corporation, complied with the provisions of this chapter. If the court
determines that such shareholder has not complied with the provisions of this
chapter, the shareholder shall be dismissed as a party.
(5) The jurisdiction of the court in which the proceeding is commenced under
subsection (2) of this section is plenary and exclusive. The court may appoint
one or more persons as appraisers to receive evidence and recommend decision on
the question of fair value. The appraisers have the powers described in the
order appointing them, or in any amendment to it. The dissenters are entitled
to the same discovery rights as parties in other civil proceedings.
(6) Each dissenter made a party to the proceeding is entitled to judgment
(a) for the amount, if any, by which the court finds the fair value of the
dissenter's shares, plus interest, exceeds the amount paid by the corporation,
or (b) for the fair value, plus accrued interest, of the dissenter's after-
acquired shares for which the corporation elected to withhold payment under RCW
23B.13.270.
23B.13.310 COURT COSTS AND COUNSEL FEES
(1) The court in a proceeding commenced under RCW 23B.13.300 shall determine
all costs of the proceeding, including the reasonable compensation and expenses
of appraisers appointed by the court. The court shall assess the costs against
the corporation, except that the court may assess the costs against all or some
of the dissenters, in amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily, vexatiously, or not in good faith
in demanding payment under RCW 23B.13.280.
(2) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the
requirements of RCW 23B.13.200 through 23B.13.280; or
(b) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses
are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by chapter 23B.13 RCW.
(3) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these counsel reasonable fees to be paid out of the amounts
awarded the dissenters who were benefited.
C-5
PUGET ENERGY, INC.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended. Section 6 of
Puget Energy, Inc.'s bylaws provides for indemnification of the Puget Energy's
directors and officers to the maximum extent permitted by Washington law.
Section 23B.08.320 of the WBCA authorizes a corporation to eliminate or
limit a director's personal liability to the corporation or its shareholders
for monetary damages for conduct as a director, except in certain circumstances
involving acts or omissions, intentional misconduct by a director or knowing
violations of law by a director or distributions illegal under Washington law,
or any transaction from which the director will personally receive a benefit in
money, property or services to which the director is not legally entitled.
Article X of Puget Energy's articles of incorporation contains provisions
implementing, to the fullest extent permitted by Washington law, such
limitations on a director's liability to Puget Energy and its shareholders.
Officers and directors of Puget Energy are covered by insurance (with
certain exceptions and certain limitations) that indemnifies them against
losses and liabilities arising from certain alleged "wrongful acts," including
alleged errors or misstatements, or certain other alleged wrongful acts or
omissions constituting neglect or breach of duty.
The above discussion of the WBCA and the bylaws and articles of
incorporation is not intended to be exhaustive and is qualified in its entirety
by reference to such statute, the bylaws and the articles of incorporation.
Item 21. Exhibits and Financial Statement Schedules
Exhibit
Number Description
------- -----------
2.1 Plan of Exchange between Puget Sound Energy, Inc. and Puget Energy,
Inc. (Appendix A to the Proxy Statement/Prospectus included in this
registration statement)
3.1 Articles of Incorporation of Puget Energy, Inc. (Appendix B to the
proxy statement/prospectus included in this registration statement)
3.2 Bylaws of Puget Energy, Inc.*
3.3 Restated Articles of Incorporation of Puget Sound Energy, Inc.
(Included as Annex F to PSE's Joint Proxy Statement/Prospectus filed
February 1, 1996, Registration No. 333-617)
3.4 Restated Bylaws of PSE. (Exhibit 3 to PSE's Quarterly Report on Form
10-Q for the quarter ended June 30, 1997, Commission File No. 1-4393)
4.1 Fortieth through Seventy-seventh Supplemental Indentures defining the
rights of the holders of PSE's First Mortgage Bonds. (Exhibit 2-d to
PSE Registration No. 2-60200; Exhibit 4-c to PSE Registration No. 2-
13347; Exhibits 2-e through and including 2-k to PSE Registration No.
2-60200; Exhibit 4-h to PSE Registration No. 2-17465; Exhibits 2-l,
2-m and 2-n to PSE Registration No. 2-60200; Exhibits 2-m to PSE
Registration No. 2-37645; Exhibit 2-o through and including 2-s to
PSE Registration No. 2-60200; Exhibit 5-b to PSE Registration No. 2-
62883; Exhibit 2-h to PSE Registration No. 2-65831; Exhibit (4)-j-1
to PSE Registration No. 2-72061; Exhibit (4)-a to PSE Registration
No. 2-91516; Exhibit (4)-b to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1985, Commission File No. 1-4393;
Exhibits (4)(a) and (4)(b) to Company's Current Report on Form 8-K,
dated April 22, 1986; Exhibit (4)a to PSE's Current Report on Form 8-
K, dated September 5, 1986; Exhibit (4)-b to PSE's Quarterly Report
on Form 10-Q for
II-1
Exhibit
Number Description
------- -----------
the quarter ended September 30, 1986, Commission File No. 1-4393;
Exhibit (4)-c to PSE Registration No. 33-18506; Exhibit (4)-b to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1989, Commission File No. 1-4393; Exhibit (4)-b to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990,
Commission File No. 1-4393; Exhibits (4)-b and (4)-c to PSE
Registration No. 33-45916; Exhibit (4)-c to PSE Registration No. 33-
50788; Exhibit (4)-a to PSE Registration No. 33-53056; Exhibit 4.3 to
PSE Registration No. 33-63278; Exhibit 4.25 to PSE Registration No.
333-41181; and Exhibit 4.27 to Current Report on Form 8-K dated March
5, 1999.)
4.2 Pledge Agreement dated August 1, 1991, between PSE and The First
National Bank of Chicago, as Trustee. (Exhibit (4)-j to PSE
Registration No. 33-45916)
4.3 Loan Agreement dated August 1, 1991, between the City of Forsyth,
Rosebud County, Montana and PSE. (Exhibit (4)-k to PSE Registration
No. 33-45916)
4.4 Pledge Agreement, dated as of March 1, 1992, by and between PSE and
Chemical Bank relating to a series of first mortgage bonds. (Exhibit
4.15 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, Commission File No. 1-4393)
4.5 Pledge Agreement, dated as of April 1, 1993, by and between PSE and
The First National Bank of Chicago, relating to a series of first
mortgage bonds. (Exhibit 4.16 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993, Commission File No. 1-4393)
4.6 Indenture of First Mortgage dated as of April 1, 1957 (incorporated
herein by reference to Washington Natural Gas Company Exhibit 4-B,
Registration No. 2-14307).
4.7 Sixth Supplemental Indenture dated as of August 1, 1966 (incorporated
herein by reference to Washington Natural Gas Company Exhibit to Form
8-K for month of August 1966, File No. 0-951).
4.8 Twelfth Supplemental Indenture dated as of November 1, 1972
(incorporated herein by reference to Washington Natural Gas Company
Exhibit to Form 8-K for November 1972, File No. 0-951).
4.9 Seventeenth Supplemental Indenture dated as of August 9, 1978
(incorporated herein by reference to Washington Energy Company
Exhibit 5-K.18, Registration No. 2-64428).
4.10 Twenty-sixth Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.19, Form 10-K for the year ended September 30, 1990, File
No. 0-951).
4.11 Twenty-seventh Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.20, Form 10-K for the year ended September 30, 1988, File
No. 0-951).
4.12 Twenty-eighth Supplemental Indenture dated as of July 31, 1991
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-A, Form 10-Q for the quarter ended March 31, 1993, File No.
0-951).
4.13 Twenty-ninth Supplemental Indenture dated as of June 1, 1993
(incorporated herein by reference to Exhibit 4-A of Washington
Natural Gas Company's S-3 Registration Statement, Registration
No. 33-49599).
4.14 Thirtieth Supplemental Indenture dated as of August 15, 1995
(incorporated herein by reference to Exhibit 4-A of Washington
Natural Gas Company's S-3 Registration Statement, Registration
No. 33-61859).
5.1 Opinion of Perkins Coie LLP as to the legality of the securities being
registered*
8.1 Opinion of Perkins Coie LLP as to certain tax matters*
II-2
Exhibit
Number Description
------- -----------
10.1 Assignment and Agreement, dated as of August 13, 1964, between Public
Utility District No. 1 of Chelan County, Washington and PSE, relating
to the Rock Island Project. (Exhibit 13-b to PSE Registration No. 2-
24262)
10.2 First Amendment, dated as of October 4, 1961, to Power Sales Contract
between Public Utility District No. 1 of Chelan County, Washington
and PSE, relating to the Rocky Reach Project. (Exhibit 13-d to PSE
Registration No. 2-24252)
10.3 Assignment and Agreement, dated as of August 13, 1964, between Public
Utility District No. 1 of Chelan County, Washington and PSE, relating
to the Rocky Reach Project. (Exhibit 13-e to PSE Registration No. 2-
24252)
10.4 Assignment and Agreement, dated as of August 13, 1964, between Public
Utility District No. 2 of Grant County, Washington and PSE, relating
to the Priest Rapids Development. (Exhibit 13-j to PSE Registration
No. 2-24252)
10.5 Assignment and Agreement, dated as of August 13, 1964, between Public
Utility District No. 2 of Grant County, Washington and PSE, relating
to the Wanapum Development. (Exhibit 13-n to PSE Registration No. 2-
24252)
10.6 First Amendment, dated February 9, 1965, to Power Sales Contract
between Public Utility District No. 1 of Douglas County, Washington
and PSE, relating to the Wells Development. (Exhibit 13-p to PSE
Registration No. 2-24252)
10.7 First Amendment, executed as of February 9, 1965, to Reserved Share
Power Sales Contract between Public Utility District No. 1 of Douglas
County, Washington and PSE, relating to the Wells Development.
(Exhibit 13-r to PSE Registration No. 2-24252)
10.8 Assignment and Agreement, dated as of August 13, 1964, between Public
Utility District No. 1 of Douglas County, Washington and PSE,
relating to the Wells Development. (Exhibit 13-u to PSE Registration
No. 2-24252)
10.9 Pacific Northwest Coordination Agreement, executed as of September 15,
1964, among the United States of America, PSE and most of the other
major electrical utilities in the Pacific Northwest. (Exhibit 13-gg
to PSE Registration No. 2-24252)
10.10 Contract dated November 14, 1957, between Public Utility District No.
1 of Chelan County, Washington and PSE, relating to the Rocky Reach
Project. (Exhibit 4-1-a to PSE Registration No. 2-13979)
10.11 Power Sales Contract, dated as of November 14, 1957, between Public
Utility District No. 1 of Chelan County, Washington and PSE, relating
to the Rocky Reach Project. (Exhibit 4-c-1 to PSE Registration No. 2-
13979)
10.12 Power Sales Contract, dated May 21, 1956, between Public Utility
District No. 2 of Grant County, Washington and PSE, relating to the
Priest Rapids Project. (Exhibit 4-d to PSE Registration No. 2-13347)
10.13 First Amendment to Power Sales Contract dated as of August 5, 1958,
between PSE and Public Utility District No. 2 of Grant County,
Washington, relating to the Priest Rapids Development. (Exhibit 13-h
to PSE Registration No. 2-15618)
10.14 Power Sales Contract dated June 22, 1959, between Public Utility
District No. 2 of Grant County, Washington and PSE, relating to the
Wanapum Development. (Exhibit 13-j to PSE Registration No. 2-15618)
10.15 Reserve Share Power Sales Contract dated June 22, 1959, between Public
Utility District No. 2 of Grant County, Washington and PSE, relating
to the Priest Rapids Project. (Exhibit 13-k to PSE Registration No.
2-15618)
II-3
Exhibit
Number Description
------- -----------
10.16 Agreement to Amend Power Sales Contracts dated July 30, 1963, between
Public Utility District No. 2 of Grant County, Washington and PSE,
relating to the Wanapum Development. (Exhibit 13-1 to PSE
Registration No. 2-21824)
10.17 Power Sales Contract executed as of September 18, 1963, between Public
Utility District No. 1 of Douglas County, Washington and PSE,
relating to the Wells Development (Exhibit 13-r to PSE Registration
No. 2-21824)
10.18 Reserved Share Power Sales Contract executed as of September 18, 1963,
between Public Utility District No. 1 of Douglas County, Washington
and PSE, relating to the Wells Development. (Exhibit 13-s to PSE
Registration No. 2-21824)
10.19 Exchange Agreement dated April 12, 1963, between the United States of
America, Department of the Interior, acting through the Bonneville
Power Administration and Washington Public Power Supply System and
PSE, relating to the Hanford Project. (Exhibit 13-u to PSE
Registration 2-21824)
10.20 Replacement Power Sales Contract dated April 12, 1963, between the
United States of America, Department of the Interior, acting through
the Bonneville Power Administrator and PSE, relating to the Hanford
Project. (Exhibit 13-v to PSE Registration No. 2-21824)
10.21 Contract covering undivided interest in ownership and operation of
Centralia Thermal Plant, dated May 15, 1969. (Exhibit 5-b to PSE
Registration No. 2-3765)
10.22 Construction and Ownership Agreement dated as of July 30, 1971,
between The Montana Power Company and PSE. (Exhibit 5-b to PSE
Registration No. 2-45702)
10.23 Operation and Maintenance Agreement dated as of July 30, 1971, between
The Montana Power Company and PSE. (Exhibit 5-c to PSE Registration
No. 2-45702)
10.24 Coal Supply Agreement, dated as of July 30, 1971, among The Montana
Power Company, PSE and Western Energy Company. (Exhibit 5-d to PSE
Registration No. 2-45702)
10.25 Power Purchase Agreement with Washington Public Power Supply System
and the Bonneville Power Administration dated February 6, 1973.
(Exhibit 5-e to PSE Registration No. 2-49029)
10.26 Ownership Agreement among PSE, Washington Public Power Supply System
and others dated September 17, 1973. (Exhibit 5-a-29 to PSE
Registration No. 2-60200)
10.27 Contract dated June 19, 1974, between PSE and P.U.D No. 1 of Chelan
County. (Exhibit D to Form 8-K dated July 5, 1974)
10.28 Restated Financing Agreement among PSE, lessee, Chrysler Financial
Corporation, owner, Nevada National Bank and Bank of Montreal
(California), trustee, dated December 12, 1974 pertaining to a
combustion turbine generating unit trust. (Exhibit 5-a-35 to PSE
Registration No. 2-60200)
10.29 Restated Lease Agreement between PSE, lessee, and the Bank of
California, and National Association, lessor, dated December 12, 1974
for one combustion generating unit. (Exhibit 5-a-36 to PSE
Registration No. 2-60200)
10.30 Financing Agreement Supplement and Amendment among PSE, lessee,
Chrysler Financial Corporation, owner, The Bank of California,
National Association, trustee, Pacific Mutual Life Insurance Company,
Bankers Life Company, and The Franklin Life Insurance Company,
lenders, dated as of March 26, 1975, pertaining to a combustion
turbine generating unit trust. (Exhibit 5-a-37 to PSE Registration
No. 2-60200)
10.31 Lease Agreement Supplement and Amendment between PSE, lessee, and The
Bank of California, National Association, lessor, dated as of March
26, 1975 for one combustion turbine generating unit. (Exhibit 5-a-38
to PSE Registration No. 2-60200)
10.32 Exchange Agreement executed August 13, 1964, between the United States
of America, Columbia Storage Power Exchange and PSE, relating to
Canadian Entitlement. (Exhibit 13-ff to PSE Registration No. 2-24252)
II-4
Exhibit
Number Description
------- -----------
10.33 Loan Agreement dated as of December 1, 1980 and related documents
pertaining to Whitehorn turbine construction trust financing.
(Exhibit 10.52 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1980, Commission File No. 1-4393)
10.34 Letter Agreement dated March 31, 1980, between PSE and Manufacturers
Hanover Leasing Corporation. (Exhibit b-8 to PSE Registration No. 2-
68498)
10.35 Coal Supply Agreement for Colstrip 3 and 4, dated as of July 2, 1980;
Amendment No. 1 to Coal Supply Agreement, dated as of July 10, 1981,
and Coal Transportation Agreement dated as of July 10, 1981. (Exhibit
20-a to Quarterly Report on Form 10-Q for the quarter ended September
30, 1981, Commission File No. 1-4393)
10.36 Residential Purchase and Sale Agreement between PSE and the Bonneville
Power Administration, effective as of October 1, 1981. (Exhibit 20-b
to Quarterly Report on Form 10-Q for the quarter ended September 30,
1981, Commission File No. 1-4393)
10.37 Letter of Agreement to Participate in Licensing of Creston Generating
Station, dated September 30, 1981. (Exhibit 20-c to Quarterly Report
on Form 10-Q for the quarter ended September 30, 1981, Commission
File No. 1-4393)
10.38 Power sales contract dated August 27, 1982 between PSE and Bonneville
Power Administration. (Exhibit 10-a to Quarterly Report on Form 10-Q
for the quarter ended September 30, 1982, Commission File No. 1-4393)
10.39 Agreement executed as of April 17, 1984, between the United States of
America, Department of the Interior, acting through the Bonneville
Power Administration, and other utilities relating to extension
energy from the Hanford Atomic Power Plant No. 1. (Exhibit (10)-47 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1984, Commission File No. 1-4393)
10.40 Agreement for the Assignment of Output from the Centralia Thermal
Project, dated as of April 14, 1983, between PSE and Public Utility
District No. 1 of Grays Harbor. (Exhibit (10)-48 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1984,
Commission File No. 1-4393)
10.41 Settlement Agreement and Covenant Not to Sue executed by the United
States Department of Energy acting by and through the Bonneville
Power Administration and PSE dated September 17, 1985. (Exhibit (10)-
49 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1985, Commission File No. 1-4393)
10.42 Agreement to Dismiss Claims and Covenant Not to Sue dated September
17, 1985 between Washington Public Power Supply System and PSE.
(Exhibit (10)-50 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985, Commission File No. 1-4393)
10.43 Irrevocable Offer of Washington Public Power Supply System Nuclear
Project No. 3 Capability for Acquisition executed by PSE, dated
September 17, 1985. (Exhibit A of Exhibit (10)-50 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1985,
Commission File No. 1-4393)
10.44 Settlement Exchange Agreement ("Bonneville Exchange Power Contract")
executed by the United States of America Department of Energy acting
by and through the Bonneville Power Administration and PSE, dated
September 17, 1985. (Exhibit B of Exhibit (10)-50 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1985,
Commission File No. 1-4393)
10.45 Settlement Agreement and Covenant Not to Sue between PSE and Northern
Wasco County People's Utility District, dated October 16, 1985.
(Exhibit (10)-53 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985, Commission File No. 1-4393)
10.46 Settlement Agreement and Covenant Not to Sue between PSE and Tillamook
People's Utility District, dated October 16, 1985. (Exhibit (10)-54
to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1985, Commission File No. 1-4393)
II-5
Exhibit
Number Description
------- -----------
10.47 Settlement Agreement and Covenent Not to Sue between PSE and
Clatskanie People's Utility District, dated September 30, 1985.
(Exhibit (10)-55 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985, Commission File No. 1-4393)
10.48 Stipulation and Settlement Agreement between PSE and Muckleshoot Tribe
of the Muckleshoot Indian Reservation, dated October 31, 1986.
(Exhibit (10)-55 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1986, Commission File No. 1-4393)
10.49 Transmission Agreement dated April 17, 1981, between the Bonneville
Power Administration and PSE (Colstrip Project). (Exhibit (10)-55 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1987, Commission File No. 1-4393)
10.50 Transmission Agreement dated April 17, 1981, between the Bonneville
Power Administration and Montana Intertie Users (Colstrip Project).
(Exhibit (10)-56 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1987, Commission File No. 1-4393)
10.51 Ownership and Operation Agreement dated as of May 6, 1981, between PSE
and other Owners of the Colstrip Project (Colstrip 3 and 4). (Exhibit
(10)-57 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1987, Commission File No. 1-4393)
10.52 Colstrip Project Transmission Agreement dated as of May 6, 1981,
between PSE and Owners of the Colstrip Project. (Exhibit (10)-58 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1987, Commission File No. 1-4393)
10.53 Common Facilities Agreement dated as of May 6, 1981, between PSE and
Owners of Colstrip 1 and 2, and 3 and 4. (Exhibit (10)-59 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1987, Commission File No. 1-4393)
10.54 Agreement for the Purchase of Power dated as of October 29, 1984,
between South Fork II, Inc. and PSE (Weeks Falls Hydro-electric
Project). (Exhibit (10)-60 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, Commission File No. 1-4393)
10.55 Agreement for the Purchase of Power dated as of October 29, 1984,
between South Fork Resources, Inc. and PSE (Twin Falls Hydro-electric
Project). (Exhibit (10)-61 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, Commission File No. 1-4393)
10.56 Agreement for Firm Purchase Power dated as of January 4, 1988, between
the City of Spokane, Washington and PSE (Spokane Waste Combustion
Project). (Exhibit (10)-62 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, Commission File No. 1-4393)
10.57 Agreement for Evaluating, Planning and Licensing dated as of February
21, 1985 and Agreement for Purchase of Power dated as of February 21,
1985 between Pacific Hydropower Associates and PSE (Koma Kulshan
Hydro-electric Project). (Exhibit (10)-63 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987, Commission
File No. 1-4393)
10.58 Power Sales Agreement dated as of August 1, 1986, between Pacific
Power & Light Company ("PacifiCorp")and PSE. (Exhibit (10)-64 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1987, Commission File No. 1-4393)
10.59 Agreement for Purchase and Sale of Firm Capacity and Energy dated as
of August 1, 1986 between The Washington Water Power Company
("Avista") and PSE. (Exhibit (10)-65 to PSE's Annual Report on Form
10-K for the fiscal year ended December 31, 1987, Commission File No.
1-4393)
10.60 Amendment dated as of June 1, 1968, to Power Sales Contract between
Public Utility District No. 1 of Chelan County, Washington and PSE
(Rocky Reach Project). (Exhibit (10)-66 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987, Commission
File No. 1-4393)
10.61 Coal Supply Agreement dated as of October 30, 1970, between the
Washington Irrigation & Development Company and PSE and other Owners
of the Centralia Thermal Project (Centralia Generating Plant).
(Exhibit (10)-67 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1987, Commission File No. 1-4393)
II-6
Exhibit
Number Description
------- -----------
10.62 Interruptible Natural Gas Service Agreement dated as of May 14, 1980,
between Cascade Natural Gas Corporation and PSE (Whitehorn Combustion
Turbine). (Exhibit (10)-68 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, Commission File No. 1-4393)
10.63 Interruptible Natural Gas Service Agreement dated as of January 31,
1983, between Cascade Natural Gas Corporation and PSE (Fredonia
Generating Station). (Exhibit (10)-69 to PSE's Annual Report on Form
10-K for the fiscal year ended December 31, 1987, Commission File No.
1-4393)
10.64 Interruptible Gas Service Agreement dated May 14, 1981, between
Washington Natural Gas Company and PSE (Fredrickson Generating
Station). (Exhibit (10)-70 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, Commission File No. 1-4393)
10.65 Settlement Agreement dated April 24, 1987, between Public Utility
District No. 1 of Chelan County, the National Marine Fisheries
Service, the State of Washington, the State of Oregon, the
Confederated Tribes and Bands of the Yakima Indian Nation, Colville
Indian Reservation, Umatilla Indian Reservation, the National
Wildlife Federation and PSE (Rock Island Project). (Exhibit (10)-71
to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1987, Commission File No. 1-4393)
10.66 Amendment No. 2 dated as of September 1, 1981, and Amendment No. 3
dated September 14, 1987, to Coal Supply Agreement between Western
Energy Company and PSE and the other Owners of Colstrip 3 and 4.
(Exhibit (10)-72 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1987, Commission File No. 1-4393)
10.67 Amendatory Agreement No. 1 dated August 27, 1982, and Amendatory
Agreement No. 2 dated August 27, 1982, to the Power Sales Contract
between PSE and the Bonneville Power Administration dated August 27,
1982. (Exhibit (10)-73 to PSE's Annual Report on Form 10-K for the
fiscal year ended December 31, 1987, Commission File No. 1-4393)
10.68 Transmission Agreement dated as of December 30, 1987, between the
Bonneville Power Administration and PSE (Rock Island Project).
(Exhibit (10)-74 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1988, Commission File No. 1-4393)
10.69 Agreement for Purchase and Sale of Firm Capacity and Energy between
The Washington Water Power Company and PSE dated as of January 1,
1988. (Exhibit (10)-1 to Quarterly Report on Form 10-Q for the
quarter ended March 31, 1988, Commission File No. 1-4393)
10.70 Amendment dated as of August 10, 1988, to Agreement for Firm Purchase
Power dated as of January 4, 1988, between the City of Spokane,
Washington and PSE (Spokane Waste Combustion Project).(Exhibit (10)-
76 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988, Commission File No. 1-4393)
10.71 Agreement for Firm Power Purchase dated October 24, 1988, between
Northern Wasco People's Utility District and PSE (The Dalles Dam
North Fishway). (Exhibit (10)-77 to PSE's Annual Report on Form 10-K
for the fiscal year ended December 31, 1988, Commission File No. 1-
4393)
10.72 Agreement for the Purchase of Power dated as of October 27, 1988,
between Pacific Power & Light Company (PacifiCorp) and PSE. (Exhibit
(10)-78 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988, Commission File No. 1-4393)
10.73 Agreement for Sale and Exchange of Firm Power dated as of November 23,
1988, between the Bonneville Power Administration and PSE. (Exhibit
(10)-79 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988, Commission File No. 1-4393)
10.74 Agreement for Firm Power Purchase, dated as of February 24, 1989,
between Sumas Energy, Inc. and PSE. (Exhibit (10)-1 to Quarterly
Report on Form 10-Q for the quarter ended March 31, 1989, Commission
File No. 1-4393)
II-7
Exhibit
Number Description
------- -----------
10.75 Settlement Agreement, dated as of April 27, 1989, between Public
Utility District No. 1 of Douglas County, Washington, Portland
General Electric Company ("Enron"), PacifiCorp, The Washington Water
Power Company ("Avista") and PSE. (Exhibit (10)-1 to Quarterly Report
on Form 10-Q quarter ended September 30, 1989, Commission File No. 1-
4393)
10.76 Agreement for Firm Power Purchase (Thermal Project), dated as of June
29, 1989, between San Juan Energy Company and PSE. (Exhibit (10)-2 to
Quarterly Report on Form 10-Q for the quarter ended September 30,
1989, Commission File No. 1-4393)
10.77 Agreement for Verification of Transfer, Assignment and Assumption,
dated as of September 15, 1989, between San Juan Energy Company,
March Point Cogeneration Company and PSE. (Exhibit (10)-3 to
Quarterly Report on Form 10-Q for the quarter ended September 30,
1989, Commission File No. 1-4393)
10.78 Power Sales Agreement between The Montana Power Company and PSE, dated
as of October 1, 1989. (Exhibit (10)-4 to Quarterly Report on Form
10-Q for the quarter ended September 30, 1989, Commission File No. 1-
4393)
10.79 Conservation Power Sales Agreement dated as of December 11, 1989,
between Public Utility District No. 1 of Snohomish County and PSE.
(Exhibit (10)-87 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989, Commission File No. 1-4393)
10.80 Memorandum of Understanding dated as of January 24, 1990, between the
Bonneville Power Administration and The Washington Public Power
Supply System, Portland General Electric Company ("Enron"), Pacific
Power & Light Company ("PacifiCorp"), The Montana Power Company, and
PSE. (Exhibit (10)-88 to PSE's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989, Commission File No. 1-4393)
10.81 Amendment No. 1 to Agreement for the Assignment of Power from the
Centralia Thermal Project dated as of January 1, 1990, between Public
Utility District No. 1 of Grays Harbor County, Washington and PSE.
(Exhibit (10)-89 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990, Commission File No. 1-4393)
10.82 Preliminary Materials and Equipment Acquisition Agreement dated as of
February 9, 1990, between Northwest Pipeline Corporation and PSE.
(Exhibit (10)-90 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990, Commission File No. 1-4393)
10.83 Amendment No. 1 to the Colstrip Project Transmission Agreement dated
as of February 14, 1990, among the Montana Power Company, The
Washington Water Power Company ("Avista"), Portland General Electric
Company ("Enron"), PacifiCorp and PSE. (Exhibit (10)-91 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1990, Commission File No. 1-4393)
10.84 Settlement Agreement dated as of February 27, 1990, among United
States of America Department of Energy acting by and through the
Bonneville Power Administration, the Washington Public Power Supply
System, and PSE. (Exhibit (10)-92 to PSE's Annual Report on Form 10-K
for the fiscal year ended December 31, 1990, Commission File No. 1-
4393)
10.85 Amendment No. 1 to the Fifteen-Year Power Sales Agreement dated as of
April 18, 1990, between Pacificorp and PSE. (Exhibit (10)-93 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1990, Commission File No. 1-4393)
10.86 Settlement Agreement dated as of October 1, 1990, among Public Utility
District No. 1 of Douglas County, Washington, PSE, Pacific Power and
Light Company ("PacifiCorp"), The Washington Water Power Company
("Avista"), Portland General Electric Company ("Enron"), the
Washington Department of Fisheries, the Washington Department of
Wildlife, the Oregon Department of Fish and Wildlife, the National
Marine Fisheries Service, the U.S. Fish and Wildlife
II-8
Exhibit
Number Description
------- -----------
Service, the Confederated Tribes and Bands of the Yakima Indian
Nation, the Confederated Tribes of the Umatilla Reservation, and the
Confederated Tribes of the Colville Reservation. (Exhibit (10)-95 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1990, Commission File No. 1-4393)
10.87 Agreement for Firm Power Purchase dated July 23, 1990, between Trans-
Pacific Geothermal Corporation, a Nevada corporation, and PSE.
(Exhibit (10)-1 to Quarterly Report on Form 10-Q for the quarter
ended March 31, 1991, Commission File No. 1-4393)
10.88 Agreement for Firm Power Purchase dated July 18, 1990, between
Wheelabrator Pierce, Inc., a Delaware corporation, and PSE. (Exhibit
(10)-2 to Quarterly Report on Form 10-Q for the quarter ended March
31, 1991, Commission File No. 1-4393)
10.89 Agreement for Firm Power Purchase dated September 26, 1990, between
Encogen Northwest, L.P., a Delaware corporation, and PSE. (Exhibit
(10)-3 to Quarterly Report on Form 10-Q for the quarter ended March
31, 1991, Commission File No. 1-4393)
10.90 Agreement for Firm Power Purchase (Thermal Project) dated December 27,
1990, among March Point Cogeneration Company, a California general
partnership comprising San Juan Energy Company, a California
corporation; Texas-Anacortes Cogeneration Company, a Delaware
corporation; and PSE. (Exhibit (10)-4 to Quarterly Report on Form 10-
Q for the quarter ended March 31, 1991, Commission File No. 1-4393)
10.91 Agreement for Firm Power Purchase dated March 20, 1991, between
Tenaska Washington, Inc., a Delaware corporation, and PSE. (Exhibit
(10)-1 to Quarterly Report on Form 10-Q for the quarter ended June
30, 1991, Commission File No. 1-4393)
10.92 Letter Agreement dated April 25, 1991, between Sumas Energy, Inc. and
PSE, to amend the Agreement for Firm Power Purchase dated as of
February 24, 1989. (Exhibit (10)-2 to Quarterly Report on Form 10-Q
for the quarter ended June 30, 1991, Commission File No. 1-4393)
10.93 Amendment dated June 7, 1991, to Letter Agreement dated April 25,
1991, between Sumas Energy, Inc. and PSE. (Exhibit (10)-3 to
Quarterly Report on Form 10-Q for the quarter ended June 30, 1991,
Commission File No. 1-4393)
10.94 Amendatory Agreement No. 3, dated August 1, 1991, to the Pacific
Northwest Coordination Agreement, executed September 15, 1964, among
the United States of America, PSE and most of the other major
electrical utilities in the Pacific Northwest. (Exhibit (10)-4 to
Quarterly Report on Form 10-Q for the quarter ended June 30, 1991,
Commission File No. 1-4393)
10.95 Amendment dated July 11, 1991, to the Agreement for Firm Power
Purchase dated September 26, 1990, between Encogen Northwest, L.P., a
Delaware limited partnership, and PSE. (Exhibit (10)-1 to Quarterly
Report on Form 10-Q for the quarter ended September 30, 1991,
Commission File No. 1-4393)
10.96 Agreement between the 40 parties to the Western Systems Power Pool
(PSE being one party) dated July 27, 1991. (Exhibit (10)-2 to
Quarterly Report on Form 10-Q for the quarter ended September 30,
1991, Commission File No. 1-4393)
10.97 Memorandum of Understanding between PSE and the Bonneville Power
Administration dated September 18, 1991. (Exhibit (10)-3 to Quarterly
Report on Form 10-Q for the quarter ended September 30, 1991,
Commission File No. 1-4393)
10.98 Amendment of Seasonal Exchange Agreement, dated December 4, 1991,
between Pacific Gas and Electric Company and PSE. (Exhibit (10)-107
to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, Commission File No. 1-4393)
10.99 Capacity and Energy Exchange Agreement, dated as of October 4, 1991,
between Pacific Gas and Electric Company and PSE. (Exhibit (10)-108
to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, Commission File No. 1-4393)
II-9
Exhibit
Number Description
------- -----------
10.100 Intertie and Network Transmission Agreement, dated as of October 4,
1991, between Bonneville Power Administration and PSE. (Exhibit (10)-
109 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, Commission File No. 1-4393)
10.101 Amendatory Agreement No. 4, executed June 17, 1991, to the Power Sales
Agreement dated August 27, 1982, between the Bonneville Power
Administration and PSE. (Exhibit (10)-110 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1991, Commission
File No. 1-4393)
10.102 Amendment to Agreement for Firm Power Purchase, dated as of September
30, 1991, between Sumas Energy, Inc. and PSE. (Exhibit (10)-112 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1991, Commission File No. 1-4393)
10.103 Centralia Fuel Supply Agreement, dated as of January 1, 1991, between
Pacificorp Electric Operations and PSE and other Owners of the
Centralia Steam-Electric Power Plant. (Exhibit (10)-113 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1991, Commission File No. 1-4393)
10.104 Agreement for Firm Power Purchase dated August 10, 1992, between
Pyrowaste Corporation, Puget Sound Pyroenergy Corporation and PSE.
(Exhibit (10)-114 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Commission File No. 1-4393)
10.105 Memorandum of Termination dated August 31, 1992, between Encogen
Northwest, L.P. and PSE. (Exhibit (10)-115 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, Commission
File No. 1-4393)
10.106 Agreement Regarding Security dated August 31, 1992, between Encogen
Northwest, L.P. and PSE. (Exhibit (10)-116 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, Commission
File No. 1-4393)
10.107 Consent and Agreement dated December 15, 1992, between PSE, Encogen
Northwest, L.P. and The First National Bank of Chicago, as collateral
agent. (Exhibit (10)-117 to PSE's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, Commission File No. 1-4393)
10.108 Subordination Agreement dated December 17, 1992, between PSE, Encogen
Northwest, L.P., Rolls-Royce & Partners Finance Limited and The First
National Bank of Chicago. (Exhibit (10)-118 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, Commission
File No. 1-4393)
10.109 Letter Agreement dated December 18, 1992, between Encogen Northwest,
L.P. and PSE regarding arrangements for the application of insurance
proceeds. (Exhibit (10)-119 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992, Commission File No. 1-4393)
10.110 Guaranty of Ensearch Corporation in favor of PSE dated December 15,
1992. (Exhibit (10)-120 to PSE's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, Commission File No. 1-4393)
10.111 Letter Agreement dated October 12, 1992, between Tenaska Washington
Partners, L.P. and PSE regarding clarification of issues under the
Agreement for Firm Power Purchase. (Exhibit (10)-121 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992,
Commission File No. 1-4393)
10.112 Consent and Agreement dated October 12, 1992, between PSE and The
Chase Manhattan Bank, N.A., as agent. (Exhibit (10)-122 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1992, Commission File No. 1-4393)
10.113 Settlement Agreement dated December 29, 1992, between PSE and the
Bonneville Power Administration (BPA) providing for power purchase by
BPA. (Exhibit (10)-123 to PSE's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, Commission File No. 1-4393)
II-10
Exhibit
Number Description
------- -----------
10.114 Contract with W. S. Weaver, Executive Vice President & Chief Financial
Officer, dated April 24, 1991. (Exhibit 10.114 to PSE's Annual Report
on Form 10-K for the fiscal year ended December 31, 1993, Commission
File No. 1-4393)
10.115 General Transmission Agreement dated as of December 1, 1994, between
the Bonneville Power Administration and PSE (BPA Contract No. DE-
MS79-94BP93947) (Exhibit 10.115 to PSE's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, Commission File No. 1-
4393)
10.116 PNW AC Intertie Capacity Ownership Agreement dated as of October 11,
1994 between the Bonneville Power Administration and PSE (BPA
Contract No. DE-MS79-94BP94521) (Exhibit 10.116 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994,
Commission File No. 1-4393)
10.117 Power Exchange Agreement dated as of September 27, 1995, between
British Columbia Power Exchange Corporation and PSE. (Exhibit 10.117
to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, Commission File No. 1-4393)
10.118 Contract with W. S. Weaver, Executive Vice President and Chief
Financial Officer, dated October 18, 1996. (Exhibit 10.118 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1996, Commission File No. 1-4393)
10.119 Contract with S. M. Vortman, Senior Vice President Corporate and
Regulatory Relations, dated October 18, 1996. (Exhibit 10.119 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1996, Commission File No. 1-4393)
10.120 Contract with G. B. Swofford, Senior Vice President Customer
Operations, dated October 18, 1996. (Exhibit 10.120 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996,
Commission File No. 1-4393)
10.121 Service Agreement dated September 1, 1987 between Northwest Pipeline
Corporation and Washington Natural Gas Company for SGS-1 firm storage
service at Jackson Prairie (incorporated herein by reference to
Washington Natural Gas Company Exhibit 10-A Form 10-K for the year
ended September 30, 1994, File No. 11271).
10.122 Service Agreement dated April 14, 1993 between Questar Pipeline
Corporation and Washington Natural Gas Company for FSS-1 firm storage
service at Clay Basin (incorporated herein by reference to Washington
Natural Gas Company Exhibit 10-B Form 10-K for the year ended
September 30, 1994, File No. 11271).
10.123 Service Agreement dated November 1, 1989, with Northwest Pipeline
Corporation covering liquefaction storage gas service filed under
cover of Form SE dated December 27, 1989.
10.124 Firm Transportation Service Agreement dated October 1, 1990, between
Northwest Pipeline Corporation and Washington Natural Gas Company
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 10-D Form 10-K for the year ended September 30, 1994, File
No. 11271).
10.125 Gas Transportation Service Contract dated June 29, 1990, between
Washington Natural Gas Company and Northwest Pipeline Corporation
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-A Form 10-Q for the quarter ended March 31, 1993, File No.
0-951).
10.126 Gas Transportation Service Contract dated July 31, 1991, between
Washington Natural Gas Company and Northwest Pipeline Corporation
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-A Form 10-Q for the quarter ended March 31, 1993, File No.
0-951).
10.127 Amendment to Gas Transportation Service Contract dated July 31, 1991,
between Washington Natural Gas Company and Northwest Pipeline
Corporation (incorporated herein by reference to Washington Natural
Gas Company Exhibit 10-E.2, Form 10-K for the year ended September
30, 1995, File No. 1-11271).
II-11
Exhibit
Number Description
------- -----------
10.128 Gas Transportation Service Contract dated July 15, 1994, between
Washington Natural Gas Company and Northwest Pipeline Corporation
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 10-E-3, Form 10-K for the year ended September 30, 1995, File
No. 1-11271).
10.129 Amendment to Gas Transportation Service Contract dated August 15,
1994, between Washington Natural Gas Company and Northwest Pipeline
Corporation (incorporated herein by reference to Washington Natural
Gas Company Exhibit 10-E.4, Form 10-K for the year ended September
30, 1995, File No. 1-11271).
10.130 Washington Natural Gas Company Deferred Compensation Plan effective
September 1, 1995 (incorporated herein by reference to Washington
Natural Gas Company Exhibit 10-H, Form 10-K for the year ended
September 30, 1995, File No. 1-11271).
10.131 Form of Washington Natural Gas Company--Executive Retirement
Compensation Agreement reflecting all amendments through August 16,
1995 (incorporated herein by reference to Washington Natural Gas
Company Exhibit 10-I, Form 10-K for the year ended September 30,
1995, File No. 1-11271).
10.132 Second Washington Energy Company Performance Share Plan (amended and
restated effective October 1, 1991) (incorporated herein by reference
to Washington Energy Company Exhibit 10-L.1, Form 10-K for the year
ended September 30, 1991, File No. 0-8745).
10.133 Washington Energy Company Interim Performance Share Plan effective
December 7, 1994 (incorporated herein by reference to Washington
Energy Company Exhibit 10-J.2, Form 10-K for the year ended September
30, 1995, File No. 1-11227).
10.134 Washington Energy Company Stock Option Plan (incorporated herein by
reference to Exhibit 10-C Washington Energy Company Form 10-Q for the
quarter ended March 31, 1984, File No. 0-8745).
10.135 Amendment to Washington Energy Company Stock Option Plan (incorporated
herein by reference to Washington Energy Company Exhibit 10-S, Form
10-K for the year ended September 30, 1986, File No. 0-8745).
10.136 Amendment to Washington Energy Company Stock Option Plan dated as of
February 26, 1988 (incorporated herein by reference to Washington
Energy Company Form S-8, Registration No. 33-24221).
10.137 Washington Energy Company Stock Option Plan effective December 15,
1993 (incorporated herein by reference to Washington Energy Company
Exhibit 99, Registration No. 33-55381).
10.138 Washington Energy Company Directors Stock Bonus Plan (incorporated
herein by reference to Washington Energy Company Exhibit 10-O, Form
10-K for the year ended September 30, 1990, File No. 0-8745).
10.139 Form of Conditional Executive Employment Contract, filed under cover
of Form SE dated December 27, 1988 (incorporated herein by reference
to Washington Natural Gas Company Exhibit 10-M.2, Form 10-K for the
year ended September 30, 1994, File No. 1-11271).
10.140 Amended and restated Washington Energy Company and subsidiaries Annual
Incentive Plan for Vice Presidents and above, dated October 1994
(incorporated herein by reference to Washington Energy Company
Exhibit 10-M.3, Form 10-K for the year ended September 30, 1995, File
No. 1-11227).
10.141 Interest Rate Swap Agreement dated September 27, 1989 between Thermal
Resources, Inc. and the First National Bank of Chicago, filed under
cover of Form SE dated December 27, 1989, (incorporated herein by
reference to Washington Natural Gas Company Exhibit 10-N, Form 10-K
for the year ended September 30, 1994, File No. 1-11271).
II-12
Exhibit
Number Description
------- -----------
10.142 Firm Transportation Service Agreement dated March 1, 1992 between
Northwest Pipeline Corporation and Washington Natural Gas Company
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 10-O, Form 10-K for the year ended September 30, 1994, File
No. 1-11271).
10.143 Firm Transportation Service Agreement dated January 12, 1994 between
Northwest Pipeline Corporation and Washington Natural Gas Company for
firm transportation service from Jackson Prairie (incorporated herein
by reference to Washington Natural Gas Company Exhibit 10-P, Form 10-
K for the year ended September 30, 1994, File No. 1-11271).
10.144 Firm Transportation Service Agreement dated January 12, 1994 between
Northwest Pipeline Corporation and Washington Natural Gas Company for
firm transportation service from Jackson Prairie (incorporated herein
by reference to Washington Natural Gas Company Exhibit 10-Q, Form 10-
K for the year ended September 30, 1994, File No. 1-11271).
10.145 Firm Transportation Service Agreement dated January 12, 1994 between
Northwest Pipeline Corporation and Washington Natural Gas Company for
firm transportation service from Plymouth, LNG (incorporated herein
by reference to Washington Natural Gas Company Exhibit 10-R, Form 10-
K for the year ended September 30, 1994, File No. 1-11271).
10.146 Service Agreement dated July 9, 1991 with Northwest Pipeline
Corporation for SGS-2F Storage Service filed under cover of Form SE
dated December 23, 1991 (incorporated herein by reference to
Washington Natural Gas Company Exhibit 10-S, Form 10-K for the year
ended September 30, 1994, File No. 1-11271).
10.147 Firm Transportation Agreement dated October 27, 1993 between Pacific
Gas Transmission Company and Washington Natural Gas Company for firm
transportation service from Kingsgate (incorporated herein by
reference to Washington Natural Gas Company Exhibit 10-T, Form 10-K
for the year ended September 30, 1994, File No. 1-11271).
10.148 Firm Storage Service Agreement and Amendment dated April 30, 1991
between Questar Pipeline Company and Washington Natural Gas Company
for firm storage service at Clay Basin filed under cover of Form SE
dated December 23, 1991.
10.149 Employment agreement with R. R. Sonstelie, Chairman of the Board,
dated January 13, 1998. (Exhibit 10.150 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, Commission
File No. 1-4393)
10.150 Change in control agreement with T. J. Hogan, dated August 17, 1995.
(Exhibit 10.152 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997, Commission File No. 1-4393)
10.151 Asset Purchase Agreement between PP&L Global, Inc. and PSE. (Exhibit
2a to Current Report on Form 8-K dated November 13, 1998)
10.152 Employment agreement with S. A. McKeon, Vice President and General
Counsel, dated May 27, 1997 (Exhibit 10.152 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, Commission
File No. 1-4393).
10.153 Employment agreement with R. L. Hawley, Vice President and Chief
Financial Officer, dated March 16, 1998 (Exhibit 10.153 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1998, Commission File No. 1-4393).
23.1 Consent of Perkins Coie LLP (contained in opinion referenced as
Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP*
23.3 Consent of Arthur Andersen LLP*
24.1 Power of attorney (contained on signature page of registration
statement on page II-16)
99.1 Form of Proxy*
- --------
* Filed herewith.
II-13
Item 22. Undertakings
The undersigned Registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(1) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(2) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(3) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement:"
(b) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registration's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement will be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time will be deemed to be the initial
bona fide offering thereof;
(e) that prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to information called for by the other items of
the applicable form;
(f) that every prospectus (i) that is filed pursuant to the preceding
paragraph, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to
the registration statement and will not be used until such amendment is
effective and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment will be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time will be deemed to
be the initial bona fide offering thereof;
(g) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request; and
II-14
(h) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim, for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunder duly authorized, in the City of Bellevue, State of
Washington, on April 30, 1999.
/s/ William S. Weaver
By: _________________________________
William S. Weaver
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes and
appoints Richard L. Hawley and James W. Eldridge, and each of them, with full
power of substitution and resubstitution and full power to act without the
other, as his or her true and lawful attorney-in-fact and agent to act in his
or her name, place and stead and to execute in the name and on behalf of each
person, individually and in each capacity stated below, and to file, any and
all amendments to this Registration Statement, including any and all post-
effective amendments, or any Registration Statements to be filed in connection
with this Registration Statement pursuant to Rule 462 under the Securities Act
of 1933, as amended, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing, ratifying and
confirming all that said attorneys-in-fact and agents or any of them or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated below on the April 30, 1999.
Signature Title
--------- -----
/s/ William S. Weaver President, Chief Executive Officer and
___________________________________________ Director (Principal Executive Officer)
William S. Weaver
/s/ Richard L. Hawley Vice President and Chief Financial Officer
___________________________________________ (Principal Financial Officer)
Richard L. Hawley
/s/ James W. Eldredge Corporate Secretary and Controller
___________________________________________ (Principal Accounting Officer)
James W. Eldredge
/s/ Douglas P. Beighle Director
___________________________________________
Douglas P. Beighle
/s/ Charles W. Bingham Director
___________________________________________
Charles W. Bingham
/s/ Phyllis J. Campbell Director
___________________________________________
Phyllis J. Campbell
II-16
Signature Title
--------- -----
/s/ Donald J. Covey Director
___________________________________________
Donald J. Covey
/s/ Robert L. Dryden Director
___________________________________________
Robert L. Dryden
Director
___________________________________________
John D. Durbin
/s/ John W. Ellis Director
___________________________________________
John W. Ellis
/s/ Daniel J. Evans Director
___________________________________________
Daniel J. Evans
/s/ Tomio Moriguchi Director
___________________________________________
Tomio Moriguchi
/s/ Sally G. Narodick Director
___________________________________________
Sally G. Narodick
/s/ Richard R. Sonstelie Director
___________________________________________
Richard R. Sonstelie
II-17
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
2.1 Plan of Exchange between Puget Sound Energy, Inc. and Puget Energy,
Inc. (Appendix A to the Proxy Statement/Prospectus included in this
registration statement)
3.1 Articles of Incorporation of Puget Energy, Inc. (Appendix B to the
proxy statement/prospectus included in this registration statement)
3.2 Bylaws of Puget Energy, Inc.*
3.3 Restated Articles of Incorporation of Puget Sound Energy, Inc.
(Included as Annex F to PSE's Joint Proxy Statement/Prospectus filed
February 1, 1996, Registration No. 333-617)
3.4 Restated Bylaws of PSE. (Exhibit 3 to PSE's Quarterly Report on Form
10-Q for the quarter ended June 30, 1997, Commission File No. 1-4393)
4.1 Fortieth through Seventy-seventh Supplemental Indentures defining the
rights of the holders of PSE's First Mortgage Bonds. (Exhibit 2-d to
PSE Registration No. 2-60200; Exhibit 4-c to PSE Registration No. 2-
13347; Exhibits 2-e through and including 2-k to PSE Registration No.
2-60200; Exhibit 4-h to PSE Registration No. 2-17465; Exhibits 2-l,
2-m and 2-n to PSE Registration No. 2-60200; Exhibits 2-m to PSE
Registration No. 2-37645; Exhibit 2-o through and including 2-s to
PSE Registration No. 2-60200; Exhibit 5-b to PSE Registration No. 2-
62883; Exhibit 2-h to PSE Registration No. 2-65831; Exhibit (4)-j-1
to PSE Registration No. 2-72061; Exhibit (4)-a to PSE Registration
No. 2-91516; Exhibit (4)-b to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1985, Commission File No. 1-4393;
Exhibits (4)(a) and (4)(b) to Company's Current Report on Form 8-K,
dated April 22, 1986; Exhibit (4)a to PSE's Current Report on Form 8-
K, dated September 5, 1986; Exhibit (4)-b to PSE's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1986, Commission
File No. 1-4393; Exhibit (4)-c to PSE Registration No. 33-18506;
Exhibit (4)-b to PSE's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989, Commission File No. 1-4393; Exhibit (4)-b to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1990, Commission File No. 1-4393; Exhibits (4)-b and (4)-c to PSE
Registration No. 33-45916; Exhibit (4)-c to PSE Registration No. 33-
50788; Exhibit (4)-a to PSE Registration No. 33-53056; Exhibit 4.3 to
PSE Registration No. 33-63278; Exhibit 4.25 to PSE Registration No.
333-41181; and Exhibit 4.27 to Current Report on Form 8-K dated March
5, 1999.)
4.2 Pledge Agreement dated August 1, 1991, between PSE and The First
National Bank of Chicago, as Trustee. (Exhibit (4)-j to PSE
Registration No. 33-45916)
4.3 Loan Agreement dated August 1, 1991, between the City of Forsyth,
Rosebud County, Montana and PSE. (Exhibit (4)-k to PSE Registration
No. 33-45916)
4.4 Pledge Agreement, dated as of March 1, 1992, by and between PSE and
Chemical Bank relating to a series of first mortgage bonds. (Exhibit
4.15 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, Commission File No. 1-4393)
4.5 Pledge Agreement, dated as of April 1, 1993, by and between PSE and
The First National Bank of Chicago, relating to a series of first
mortgage bonds. (Exhibit 4.16 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993, Commission File No. 1-4393)
4.6 Indenture of First Mortgage dated as of April 1, 1957 (incorporated
herein by reference to Washington Natural Gas Company Exhibit 4-B,
Registration No. 2-14307).
4.7 Sixth Supplemental Indenture dated as of August 1, 1966 (incorporated
herein by reference to Washington Natural Gas Company Exhibit to Form
8-K for month of August 1966, File No. 0-951).
4.8 Twelfth Supplemental Indenture dated as of November 1, 1972
(incorporated herein by reference to Washington Natural Gas Company
Exhibit to Form 8-K for November 1972, File No. 0-951).
Exhibit
Number Description
------- -----------
4.9 Seventeenth Supplemental Indenture dated as of August 9, 1978
(incorporated herein by reference to Washington Energy Company
Exhibit 5-K.18, Registration No. 2-64428).
4.10 Twenty-sixth Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.19, Form 10-K for the year ended September 30, 1990, File
No. 0-951).
4.11 Twenty-seventh Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.20, Form 10-K for the year ended September 30, 1988, File
No. 0-951).
4.12 Twenty-eighth Supplemental Indenture dated as of July 31, 1991
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-A, Form 10-Q for the quarter ended March 31, 1993, File No.
0-951).
4.13 Twenty-ninth Supplemental Indenture dated as of June 1, 1993
(incorporated herein by reference to Exhibit 4-A of Washington
Natural Gas Company's S-3 Registration Statement, Registration
No. 33-49599).
4.14 Thirtieth Supplemental Indenture dated as of August 15, 1995
(incorporated herein by reference to Exhibit 4-A of Washington
Natural Gas Company's S-3 Registration Statement, Registration
No. 33-61859).
5.1 Opinion of Perkins Coie LLP as to the legality of the securities being
registered*
8.1 Opinion of Perkins Coie LLP as to certain tax matters*
10.1 Assignment and Agreement, dated as of August 13, 1964, between Public
Utility District No. 1 of Chelan County, Washington and PSE, relating
to the Rock Island Project. (Exhibit 13-b to PSE Registration No. 2-
24262)
10.2 First Amendment, dated as of October 4, 1961, to Power Sales Contract
between Public Utility District No. 1 of Chelan County, Washington
and PSE, relating to the Rocky Reach Project. (Exhibit 13-d to PSE
Registration No. 2-24252)
10.3 Assignment and Agreement, dated as of August 13, 1964, between Public
Utility District No. 1 of Chelan County, Washington and PSE, relating
to the Rocky Reach Project. (Exhibit 13-e to PSE Registration No. 2-
24252)
10.4 Assignment and Agreement, dated as of August 13, 1964, between Public
Utility District No. 2 of Grant County, Washington and PSE, relating
to the Priest Rapids Development. (Exhibit 13-j to PSE Registration
No. 2-24252)
10.5 Assignment and Agreement, dated as of August 13, 1964, between Public
Utility District No. 2 of Grant County, Washington and PSE, relating
to the Wanapum Development. (Exhibit 13-n to PSE Registration No. 2-
24252)
10.6 First Amendment, dated February 9, 1965, to Power Sales Contract
between Public Utility District No. 1 of Douglas County, Washington
and PSE, relating to the Wells Development. (Exhibit 13-p to PSE
Registration No. 2-24252)
10.7 First Amendment, executed as of February 9, 1965, to Reserved Share
Power Sales Contract between Public Utility District No. 1 of Douglas
County, Washington and PSE, relating to the Wells Development.
(Exhibit 13-r to PSE Registration No. 2-24252)
10.8 Assignment and Agreement, dated as of August 13, 1964, between Public
Utility District No. 1 of Douglas County, Washington and PSE,
relating to the Wells Development. (Exhibit 13-u to PSE Registration
No. 2-24252)
10.9 Pacific Northwest Coordination Agreement, executed as of September 15,
1964, among the United States of America, PSE and most of the other
major electrical utilities in the Pacific Northwest. (Exhibit 13-gg
to PSE Registration No. 2-24252)
Exhibit
Number Description
------- -----------
10.10 Contract dated November 14, 1957, between Public Utility District No.
1 of Chelan County, Washington and PSE, relating to the Rocky Reach
Project. (Exhibit 4-1-a to PSE Registration No. 2-13979)
10.11 Power Sales Contract, dated as of November 14, 1957, between Public
Utility District No. 1 of Chelan County, Washington and PSE, relating
to the Rocky Reach Project. (Exhibit 4-c-1 to PSE Registration No. 2-
13979)
10.12 Power Sales Contract, dated May 21, 1956, between Public Utility
District No. 2 of Grant County, Washington and PSE, relating to the
Priest Rapids Project. (Exhibit 4-d to PSE Registration No. 2-13347)
10.13 First Amendment to Power Sales Contract dated as of August 5, 1958,
between PSE and Public Utility District No. 2 of Grant County,
Washington, relating to the Priest Rapids Development. (Exhibit 13-h
to PSE Registration No. 2-15618)
10.14 Power Sales Contract dated June 22, 1959, between Public Utility
District No. 2 of Grant County, Washington and PSE, relating to the
Wanapum Development. (Exhibit 13-j to PSE Registration No. 2-15618)
10.15 Reserve Share Power Sales Contract dated June 22, 1959, between Public
Utility District No. 2 of Grant County, Washington and PSE, relating
to the Priest Rapids Project. (Exhibit 13-k to PSE Registration No.
2-15618)
10.16 Agreement to Amend Power Sales Contracts dated July 30, 1963, between
Public Utility District No. 2 of Grant County, Washington and PSE,
relating to the Wanapum Development. (Exhibit 13-1 to PSE
Registration No. 2-21824)
10.17 Power Sales Contract executed as of September 18, 1963, between Public
Utility District No. 1 of Douglas County, Washington and PSE,
relating to the Wells Development (Exhibit 13-r to PSE Registration
No. 2-21824)
10.18 Reserved Share Power Sales Contract executed as of September 18, 1963,
between Public Utility District No. 1 of Douglas County, Washington
and PSE, relating to the Wells Development. (Exhibit 13-s to PSE
Registration No. 2-21824)
10.19 Exchange Agreement dated April 12, 1963, between the United States of
America, Department of the Interior, acting through the Bonneville
Power Administration and Washington Public Power Supply System and
PSE, relating to the Hanford Project. (Exhibit 13-u to PSE
Registration 2-21824)
10.20 Replacement Power Sales Contract dated April 12, 1963, between the
United States of America, Department of the Interior, acting through
the Bonneville Power Administrator and PSE, relating to the Hanford
Project. (Exhibit 13-v to PSE Registration No. 2-21824)
10.21 Contract covering undivided interest in ownership and operation of
Centralia Thermal Plant, dated May 15, 1969. (Exhibit 5-b to PSE
Registration No. 2-3765)
10.22 Construction and Ownership Agreement dated as of July 30, 1971,
between The Montana Power Company and PSE. (Exhibit 5-b to PSE
Registration No. 2-45702)
10.23 Operation and Maintenance Agreement dated as of July 30, 1971, between
The Montana Power Company and PSE. (Exhibit 5-c to PSE Registration
No. 2-45702)
10.24 Coal Supply Agreement, dated as of July 30, 1971, among The Montana
Power Company, PSE and Western Energy Company. (Exhibit 5-d to PSE
Registration No. 2-45702)
10.25 Power Purchase Agreement with Washington Public Power Supply System
and the Bonneville Power Administration dated February 6, 1973.
(Exhibit 5-e to PSE Registration No. 2-49029)
10.26 Ownership Agreement among PSE, Washington Public Power Supply System
and others dated September 17, 1973. (Exhibit 5-a-29 to PSE
Registration No. 2-60200)
Exhibit
Number Description
------- -----------
10.27 Contract dated June 19, 1974, between PSE and P.U.D No. 1 of Chelan
County. (Exhibit D to Form 8-K dated July 5, 1974)
10.28 Restated Financing Agreement among PSE, lessee, Chrysler Financial
Corporation, owner, Nevada National Bank and Bank of Montreal
(California), trustee, dated December 12, 1974 pertaining to a
combustion turbine generating unit trust. (Exhibit 5-a-35 to PSE
Registration No. 2-60200)
10.29 Restated Lease Agreement between PSE, lessee, and the Bank of
California, and National Association, lessor, dated December 12, 1974
for one combustion generating unit. (Exhibit 5-a-36 to PSE
Registration No. 2-60200)
10.30 Financing Agreement Supplement and Amendment among PSE, lessee,
Chrysler Financial Corporation, owner, The Bank of California,
National Association, trustee, Pacific Mutual Life Insurance Company,
Bankers Life Company, and The Franklin Life Insurance Company,
lenders, dated as of March 26, 1975, pertaining to a combustion
turbine generating unit trust. (Exhibit 5-a-37 to PSE Registration
No. 2-60200)
10.31 Lease Agreement Supplement and Amendment between PSE, lessee, and The
Bank of California, National Association, lessor, dated as of March
26, 1975 for one combustion turbine generating unit. (Exhibit 5-a-38
to PSE Registration No. 2-60200)
10.32 Exchange Agreement executed August 13, 1964, between the United States
of America, Columbia Storage Power Exchange and PSE, relating to
Canadian Entitlement. (Exhibit 13-ff to PSE Registration No. 2-24252)
10.33 Loan Agreement dated as of December 1, 1980 and related documents
pertaining to Whitehorn turbine construction trust financing.
(Exhibit 10.52 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1980, Commission File No. 1-4393)
10.34 Letter Agreement dated March 31, 1980, between PSE and Manufacturers
Hanover Leasing Corporation. (Exhibit b-8 to PSE Registration No. 2-
68498)
10.35 Coal Supply Agreement for Colstrip 3 and 4, dated as of July 2, 1980;
Amendment No. 1 to Coal Supply Agreement, dated as of July 10, 1981,
and Coal Transportation Agreement dated as of July 10, 1981. (Exhibit
20-a to Quarterly Report on Form 10-Q for the quarter ended September
30, 1981, Commission File No. 1-4393)
10.36 Residential Purchase and Sale Agreement between PSE and the Bonneville
Power Administration, effective as of October 1, 1981. (Exhibit 20-b
to Quarterly Report on Form 10-Q for the quarter ended September 30,
1981, Commission File No. 1-4393)
10.37 Letter of Agreement to Participate in Licensing of Creston Generating
Station, dated September 30, 1981. (Exhibit 20-c to Quarterly Report
on Form 10-Q for the quarter ended September 30, 1981, Commission
File No. 1-4393)
10.38 Power sales contract dated August 27, 1982 between PSE and Bonneville
Power Administration. (Exhibit 10-a to Quarterly Report on Form 10-Q
for the quarter ended September 30, 1982, Commission File No. 1-4393)
10.39 Agreement executed as of April 17, 1984, between the United States of
America, Department of the Interior, acting through the Bonneville
Power Administration, and other utilities relating to extension
energy from the Hanford Atomic Power Plant No. 1. (Exhibit (10)-47 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1984, Commission File No. 1-4393)
10.40 Agreement for the Assignment of Output from the Centralia Thermal
Project, dated as of April 14, 1983, between PSE and Public Utility
District No. 1 of Grays Harbor. (Exhibit (10)-48 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1984,
Commission File No. 1-4393)
Exhibit
Number Description
------- -----------
10.41 Settlement Agreement and Covenant Not to Sue executed by the United
States Department of Energy acting by and through the Bonneville
Power Administration and PSE dated September 17, 1985. (Exhibit (10)-
49 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1985, Commission File No. 1-4393)
10.42 Agreement to Dismiss Claims and Covenant Not to Sue dated September
17, 1985 between Washington Public Power Supply System and PSE.
(Exhibit (10)-50 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985, Commission File No. 1-4393)
10.43 Irrevocable Offer of Washington Public Power Supply System Nuclear
Project No. 3 Capability for Acquisition executed by PSE, dated
September 17, 1985. (Exhibit A of Exhibit (10)-50 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1985,
Commission File No. 1-4393)
10.44 Settlement Exchange Agreement ("Bonneville Exchange Power Contract")
executed by the United States of America Department of Energy acting
by and through the Bonneville Power Administration and PSE, dated
September 17, 1985. (Exhibit B of Exhibit (10)-50 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1985,
Commission File No. 1-4393)
10.45 Settlement Agreement and Covenant Not to Sue between PSE and Northern
Wasco County People's Utility District, dated October 16, 1985.
(Exhibit (10)-53 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985, Commission File No. 1-4393)
10.46 Settlement Agreement and Covenant Not to Sue between PSE and Tillamook
People's Utility District, dated October 16, 1985. (Exhibit (10)-54
to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1985, Commission File No. 1-4393)
10.47 Settlement Agreement and Covenent Not to Sue between PSE and
Clatskanie People's Utility District, dated September 30, 1985.
(Exhibit (10)-55 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985, Commission File No. 1-4393)
10.48 Stipulation and Settlement Agreement between PSE and Muckleshoot Tribe
of the Muckleshoot Indian Reservation, dated October 31, 1986.
(Exhibit (10)-55 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1986, Commission File No. 1-4393)
10.49 Transmission Agreement dated April 17, 1981, between the Bonneville
Power Administration and PSE (Colstrip Project). (Exhibit (10)-55 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1987, Commission File No. 1-4393)
10.50 Transmission Agreement dated April 17, 1981, between the Bonneville
Power Administration and Montana Intertie Users (Colstrip Project).
(Exhibit (10)-56 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1987, Commission File No. 1-4393)
10.51 Ownership and Operation Agreement dated as of May 6, 1981, between PSE
and other Owners of the Colstrip Project (Colstrip 3 and 4). (Exhibit
(10)-57 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1987, Commission File No. 1-4393)
10.52 Colstrip Project Transmission Agreement dated as of May 6, 1981,
between PSE and Owners of the Colstrip Project. (Exhibit (10)-58 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1987, Commission File No. 1-4393)
10.53 Common Facilities Agreement dated as of May 6, 1981, between PSE and
Owners of Colstrip 1 and 2, and 3 and 4. (Exhibit (10)-59 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1987, Commission File No. 1-4393)
10.54 Agreement for the Purchase of Power dated as of October 29, 1984,
between South Fork II, Inc. and PSE (Weeks Falls Hydro-electric
Project). (Exhibit (10)-60 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, Commission File No. 1-4393)
Exhibit
Number Description
------- -----------
10.55 Agreement for the Purchase of Power dated as of October 29, 1984,
between South Fork Resources, Inc. and PSE (Twin Falls Hydro-electric
Project). (Exhibit (10)-61 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, Commission File No. 1-4393)
10.56 Agreement for Firm Purchase Power dated as of January 4, 1988, between
the City of Spokane, Washington and PSE (Spokane Waste Combustion
Project). (Exhibit (10)-62 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, Commission File No. 1-4393)
10.57 Agreement for Evaluating, Planning and Licensing dated as of February
21, 1985 and Agreement for Purchase of Power dated as of February 21,
1985 between Pacific Hydropower Associates and PSE (Koma Kulshan
Hydro-electric Project). (Exhibit (10)-63 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987, Commission
File No. 1-4393)
10.58 Power Sales Agreement dated as of August 1, 1986, between Pacific
Power & Light Company ("PacifiCorp")and PSE. (Exhibit (10)-64 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1987, Commission File No. 1-4393)
10.59 Agreement for Purchase and Sale of Firm Capacity and Energy dated as
of August 1, 1986 between The Washington Water Power Company
("Avista") and PSE. (Exhibit (10)-65 to PSE's Annual Report on Form
10-K for the fiscal year ended December 31, 1987, Commission File No.
1-4393)
10.60 Amendment dated as of June 1, 1968, to Power Sales Contract between
Public Utility District No. 1 of Chelan County, Washington and PSE
(Rocky Reach Project). (Exhibit (10)-66 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987, Commission
File No. 1-4393)
10.61 Coal Supply Agreement dated as of October 30, 1970, between the
Washington Irrigation & Development Company and PSE and other Owners
of the Centralia Thermal Project (Centralia Generating Plant).
(Exhibit (10)-67 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1987, Commission File No. 1-4393)
10.62 Interruptible Natural Gas Service Agreement dated as of May 14, 1980,
between Cascade Natural Gas Corporation and PSE (Whitehorn Combustion
Turbine). (Exhibit (10)-68 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, Commission File No. 1-4393)
10.63 Interruptible Natural Gas Service Agreement dated as of January 31,
1983, between Cascade Natural Gas Corporation and PSE (Fredonia
Generating Station). (Exhibit (10)-69 to PSE's Annual Report on Form
10-K for the fiscal year ended December 31, 1987, Commission File No.
1-4393)
10.64 Interruptible Gas Service Agreement dated May 14, 1981, between
Washington Natural Gas Company and PSE (Fredrickson Generating
Station). (Exhibit (10)-70 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987, Commission File No. 1-4393)
10.65 Settlement Agreement dated April 24, 1987, between Public Utility
District No. 1 of Chelan County, the National Marine Fisheries
Service, the State of Washington, the State of Oregon, the
Confederated Tribes and Bands of the Yakima Indian Nation, Colville
Indian Reservation, Umatilla Indian Reservation, the National
Wildlife Federation and PSE (Rock Island Project). (Exhibit (10)-71
to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1987, Commission File No. 1-4393)
10.66 Amendment No. 2 dated as of September 1, 1981, and Amendment No. 3
dated September 14, 1987, to Coal Supply Agreement between Western
Energy Company and PSE and the other Owners of Colstrip 3 and 4.
(Exhibit (10)-72 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1987, Commission File No. 1-4393)
10.67 Amendatory Agreement No. 1 dated August 27, 1982, and Amendatory
Agreement No. 2 dated August 27, 1982, to the Power Sales Contract
between PSE and the Bonneville Power Administration dated August 27,
1982. (Exhibit (10)-73 to PSE's Annual Report on Form 10-K for the
fiscal year ended December 31, 1987, Commission File No. 1-4393)
Exhibit
Number Description
------- -----------
10.68 Transmission Agreement dated as of December 30, 1987, between the
Bonneville Power Administration and PSE (Rock Island Project).
(Exhibit (10)-74 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1988, Commission File No. 1-4393)
10.69 Agreement for Purchase and Sale of Firm Capacity and Energy between
The Washington Water Power Company and PSE dated as of January 1,
1988. (Exhibit (10)-1 to Quarterly Report on Form 10-Q for the
quarter ended March 31, 1988, Commission File No. 1-4393)
10.70 Amendment dated as of August 10, 1988, to Agreement for Firm Purchase
Power dated as of January 4, 1988, between the City of Spokane,
Washington and PSE (Spokane Waste Combustion Project).(Exhibit (10)-
76 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988, Commission File No. 1-4393)
10.71 Agreement for Firm Power Purchase dated October 24, 1988, between
Northern Wasco People's Utility District and PSE (The Dalles Dam
North Fishway). (Exhibit (10)-77 to PSE's Annual Report on Form 10-K
for the fiscal year ended December 31, 1988, Commission File No. 1-
4393)
10.72 Agreement for the Purchase of Power dated as of October 27, 1988,
between Pacific Power & Light Company (PacifiCorp) and PSE. (Exhibit
(10)-78 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988, Commission File No. 1-4393)
10.73 Agreement for Sale and Exchange of Firm Power dated as of November 23,
1988, between the Bonneville Power Administration and PSE. (Exhibit
(10)-79 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988, Commission File No. 1-4393)
10.74 Agreement for Firm Power Purchase, dated as of February 24, 1989,
between Sumas Energy, Inc. and PSE. (Exhibit (10)-1 to Quarterly
Report on Form 10-Q for the quarter ended March 31, 1989, Commission
File No. 1-4393)
10.75 Settlement Agreement, dated as of April 27, 1989, between Public
Utility District No. 1 of Douglas County, Washington, Portland
General Electric Company ("Enron"), PacifiCorp, The Washington Water
Power Company ("Avista") and PSE. (Exhibit (10)-1 to Quarterly Report
on Form 10-Q quarter ended September 30, 1989, Commission File No. 1-
4393)
10.76 Agreement for Firm Power Purchase (Thermal Project), dated as of June
29, 1989, between San Juan Energy Company and PSE. (Exhibit (10)-2 to
Quarterly Report on Form 10-Q for the quarter ended September 30,
1989, Commission File No. 1-4393)
10.77 Agreement for Verification of Transfer, Assignment and Assumption,
dated as of September 15, 1989, between San Juan Energy Company,
March Point Cogeneration Company and PSE. (Exhibit (10)-3 to
Quarterly Report on Form 10-Q for the quarter ended September 30,
1989, Commission File No. 1-4393)
10.78 Power Sales Agreement between The Montana Power Company and PSE, dated
as of October 1, 1989. (Exhibit (10)-4 to Quarterly Report on Form
10-Q for the quarter ended September 30, 1989, Commission File No. 1-
4393)
10.79 Conservation Power Sales Agreement dated as of December 11, 1989,
between Public Utility District No. 1 of Snohomish County and PSE.
(Exhibit (10)-87 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989, Commission File No. 1-4393)
10.80 Memorandum of Understanding dated as of January 24, 1990, between the
Bonneville Power Administration and The Washington Public Power
Supply System, Portland General Electric Company ("Enron"), Pacific
Power & Light Company ("PacifiCorp"), The Montana Power Company, and
PSE. (Exhibit (10)-88 to PSE's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989, Commission File No. 1-4393)
Exhibit
Number Description
------- -----------
10.81 Amendment No. 1 to Agreement for the Assignment of Power from the
Centralia Thermal Project dated as of January 1, 1990, between Public
Utility District No. 1 of Grays Harbor County, Washington and PSE.
(Exhibit (10)-89 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990, Commission File No. 1-4393)
10.82 Preliminary Materials and Equipment Acquisition Agreement dated as of
February 9, 1990, between Northwest Pipeline Corporation and PSE.
(Exhibit (10)-90 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990, Commission File No. 1-4393)
10.83 Amendment No. 1 to the Colstrip Project Transmission Agreement dated
as of February 14, 1990, among the Montana Power Company, The
Washington Water Power Company ("Avista"), Portland General Electric
Company ("Enron"), PacifiCorp and PSE. (Exhibit (10)-91 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1990, Commission File No. 1-4393)
10.84 Settlement Agreement dated as of February 27, 1990, among United
States of America Department of Energy acting by and through the
Bonneville Power Administration, the Washington Public Power Supply
System, and PSE. (Exhibit (10)-92 to PSE's Annual Report on Form 10-K
for the fiscal year ended December 31, 1990, Commission File No. 1-
4393)
10.85 Amendment No. 1 to the Fifteen-Year Power Sales Agreement dated as of
April 18, 1990, between Pacificorp and PSE. (Exhibit (10)-93 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1990, Commission File No. 1-4393)
10.86 Settlement Agreement dated as of October 1, 1990, among Public Utility
District No. 1 of Douglas County, Washington, PSE, Pacific Power and
Light Company ("PacifiCorp"), The Washington Water Power Company
("Avista"), Portland General Electric Company ("Enron"), the
Washington Department of Fisheries, the Washington Department of
Wildlife, the Oregon Department of Fish and Wildlife, the National
Marine Fisheries Service, the U.S. Fish and Wildlife Service, the
Confederated Tribes and Bands of the Yakima Indian Nation, the
Confederated Tribes of the Umatilla Reservation, and the Confederated
Tribes of the Colville Reservation. (Exhibit (10)-95 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990,
Commission File No. 1-4393)
10.87 Agreement for Firm Power Purchase dated July 23, 1990, between Trans-
Pacific Geothermal Corporation, a Nevada corporation, and PSE.
(Exhibit (10)-1 to Quarterly Report on Form 10-Q for the quarter
ended March 31, 1991, Commission File No. 1-4393)
10.88 Agreement for Firm Power Purchase dated July 18, 1990, between
Wheelabrator Pierce, Inc., a Delaware corporation, and PSE. (Exhibit
(10)-2 to Quarterly Report on Form 10-Q for the quarter ended March
31, 1991, Commission File No. 1-4393)
10.89 Agreement for Firm Power Purchase dated September 26, 1990, between
Encogen Northwest, L.P., a Delaware corporation, and PSE. (Exhibit
(10)-3 to Quarterly Report on Form 10-Q for the quarter ended March
31, 1991, Commission File No. 1-4393)
10.90 Agreement for Firm Power Purchase (Thermal Project) dated December 27,
1990, among March Point Cogeneration Company, a California general
partnership comprising San Juan Energy Company, a California
corporation; Texas-Anacortes Cogeneration Company, a Delaware
corporation; and PSE. (Exhibit (10)-4 to Quarterly Report on Form 10-
Q for the quarter ended March 31, 1991, Commission File No. 1-4393)
10.91 Agreement for Firm Power Purchase dated March 20, 1991, between
Tenaska Washington, Inc., a Delaware corporation, and PSE. (Exhibit
(10)-1 to Quarterly Report on Form 10-Q for the quarter ended June
30, 1991, Commission File No. 1-4393)
Exhibit
Number Description
------- -----------
10.92 Letter Agreement dated April 25, 1991, between Sumas Energy, Inc. and
PSE, to amend the Agreement for Firm Power Purchase dated as of
February 24, 1989. (Exhibit (10)-2 to Quarterly Report on Form 10-Q
for the quarter ended June 30, 1991, Commission File No. 1-4393)
10.93 Amendment dated June 7, 1991, to Letter Agreement dated April 25,
1991, between Sumas Energy, Inc. and PSE. (Exhibit (10)-3 to
Quarterly Report on Form 10-Q for the quarter ended June 30, 1991,
Commission File No. 1-4393)
10.94 Amendatory Agreement No. 3, dated August 1, 1991, to the Pacific
Northwest Coordination Agreement, executed September 15, 1964, among
the United States of America, PSE and most of the other major
electrical utilities in the Pacific Northwest. (Exhibit (10)-4 to
Quarterly Report on Form 10-Q for the quarter ended June 30, 1991,
Commission File No. 1-4393)
10.95 Amendment dated July 11, 1991, to the Agreement for Firm Power
Purchase dated September 26, 1990, between Encogen Northwest, L.P., a
Delaware limited partnership, and PSE. (Exhibit (10)-1 to Quarterly
Report on Form 10-Q for the quarter ended September 30, 1991,
Commission File No. 1-4393)
10.96 Agreement between the 40 parties to the Western Systems Power Pool
(PSE being one party) dated July 27, 1991. (Exhibit (10)-2 to
Quarterly Report on Form 10-Q for the quarter ended September 30,
1991, Commission File No. 1-4393)
10.97 Memorandum of Understanding between PSE and the Bonneville Power
Administration dated September 18, 1991. (Exhibit (10)-3 to Quarterly
Report on Form 10-Q for the quarter ended September 30, 1991,
Commission File No. 1-4393)
10.98 Amendment of Seasonal Exchange Agreement, dated December 4, 1991,
between Pacific Gas and Electric Company and PSE. (Exhibit (10)-107
to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, Commission File No. 1-4393)
10.99 Capacity and Energy Exchange Agreement, dated as of October 4, 1991,
between Pacific Gas and Electric Company and PSE. (Exhibit (10)-108
to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, Commission File No. 1-4393)
10.100 Intertie and Network Transmission Agreement, dated as of October 4,
1991, between Bonneville Power Administration and PSE. (Exhibit (10)-
109 to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, Commission File No. 1-4393)
10.101 Amendatory Agreement No. 4, executed June 17, 1991, to the Power Sales
Agreement dated August 27, 1982, between the Bonneville Power
Administration and PSE. (Exhibit (10)-110 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1991, Commission
File No. 1-4393)
10.102 Amendment to Agreement for Firm Power Purchase, dated as of September
30, 1991, between Sumas Energy, Inc. and PSE. (Exhibit (10)-112 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1991, Commission File No. 1-4393)
10.103 Centralia Fuel Supply Agreement, dated as of January 1, 1991, between
Pacificorp Electric Operations and PSE and other Owners of the
Centralia Steam-Electric Power Plant. (Exhibit (10)-113 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1991, Commission File No. 1-4393)
10.104 Agreement for Firm Power Purchase dated August 10, 1992, between
Pyrowaste Corporation, Puget Sound Pyroenergy Corporation and PSE.
(Exhibit (10)-114 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Commission File No. 1-4393)
10.105 Memorandum of Termination dated August 31, 1992, between Encogen
Northwest, L.P. and PSE. (Exhibit (10)-115 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, Commission
File No. 1-4393)
Exhibit
Number Description
------- -----------
10.106 Agreement Regarding Security dated August 31, 1992, between Encogen
Northwest, L.P. and PSE. (Exhibit (10)-116 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, Commission
File No. 1-4393)
10.107 Consent and Agreement dated December 15, 1992, between PSE, Encogen
Northwest, L.P. and The First National Bank of Chicago, as collateral
agent. (Exhibit (10)-117 to PSE's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, Commission File No. 1-4393)
10.108 Subordination Agreement dated December 17, 1992, between PSE, Encogen
Northwest, L.P., Rolls-Royce & Partners Finance Limited and The First
National Bank of Chicago. (Exhibit (10)-118 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, Commission
File No. 1-4393)
10.109 Letter Agreement dated December 18, 1992, between Encogen Northwest,
L.P. and PSE regarding arrangements for the application of insurance
proceeds. (Exhibit (10)-119 to PSE's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992, Commission File No. 1-4393)
10.110 Guaranty of Ensearch Corporation in favor of PSE dated December 15,
1992. (Exhibit (10)-120 to PSE's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, Commission File No. 1-4393)
10.111 Letter Agreement dated October 12, 1992, between Tenaska Washington
Partners, L.P. and PSE regarding clarification of issues under the
Agreement for Firm Power Purchase. (Exhibit (10)-121 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992,
Commission File No. 1-4393)
10.112 Consent and Agreement dated October 12, 1992, between PSE and The
Chase Manhattan Bank, N.A., as agent. (Exhibit (10)-122 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1992, Commission File No. 1-4393)
10.113 Settlement Agreement dated December 29, 1992, between PSE and the
Bonneville Power Administration (BPA) providing for power purchase by
BPA. (Exhibit (10)-123 to PSE's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, Commission File No. 1-4393)
10.114 Contract with W. S. Weaver, Executive Vice President & Chief Financial
Officer, dated April 24, 1991. (Exhibit 10.114 to PSE's Annual Report
on Form 10-K for the fiscal year ended December 31, 1993, Commission
File No. 1-4393)
10.115 General Transmission Agreement dated as of December 1, 1994, between
the Bonneville Power Administration and PSE (BPA Contract No. DE-
MS79-94BP93947) (Exhibit 10.115 to PSE's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, Commission File No. 1-
4393)
10.116 PNW AC Intertie Capacity Ownership Agreement dated as of October 11,
1994 between the Bonneville Power Administration and PSE (BPA
Contract No. DE-MS79-94BP94521) (Exhibit 10.116 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994,
Commission File No. 1-4393)
10.117 Power Exchange Agreement dated as of September 27, 1995, between
British Columbia Power Exchange Corporation and PSE. (Exhibit 10.117
to PSE's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, Commission File No. 1-4393)
10.118 Contract with W. S. Weaver, Executive Vice President and Chief
Financial Officer, dated October 18, 1996. (Exhibit 10.118 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1996, Commission File No. 1-4393)
10.119 Contract with S. M. Vortman, Senior Vice President Corporate and
Regulatory Relations, dated October 18, 1996. (Exhibit 10.119 to
PSE's Annual Report on Form 10-K for the fiscal year ended December
31, 1996, Commission File No. 1-4393)
Exhibit
Number Description
------- -----------
10.120 Contract with G. B. Swofford, Senior Vice President Customer
Operations, dated October 18, 1996. (Exhibit 10.120 to PSE's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996,
Commission File No. 1-4393)
10.121 Service Agreement dated September 1, 1987 between Northwest Pipeline
Corporation and Washington Natural Gas Company for SGS-1 firm storage
service at Jackson Prairie (incorporated herein by reference to
Washington Natural Gas Company Exhibit 10-A Form 10-K for the year
ended September 30, 1994, File No. 11271).
10.122 Service Agreement dated April 14, 1993 between Questar Pipeline
Corporation and Washington Natural Gas Company for FSS-1 firm storage
service at Clay Basin (incorporated herein by reference to Washington
Natural Gas Company Exhibit 10-B Form 10-K for the year ended
September 30, 1994, File No. 11271).
10.123 Service Agreement dated November 1, 1989, with Northwest Pipeline
Corporation covering liquefaction storage gas service filed under
cover of Form SE dated December 27, 1989.
10.124 Firm Transportation Service Agreement dated October 1, 1990, between
Northwest Pipeline Corporation and Washington Natural Gas Company
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 10-D Form 10-K for the year ended September 30, 1994, File
No. 11271).
10.125 Gas Transportation Service Contract dated June 29, 1990, between
Washington Natural Gas Company and Northwest Pipeline Corporation
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-A Form 10-Q for the quarter ended March 31, 1993, File No.
0-951).
10.126 Gas Transportation Service Contract dated July 31, 1991, between
Washington Natural Gas Company and Northwest Pipeline Corporation
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-A Form 10-Q for the quarter ended March 31, 1993, File No.
0-951).
10.127 Amendment to Gas Transportation Service Contract dated July 31, 1991,
between Washington Natural Gas Company and Northwest Pipeline
Corporation (incorporated herein by reference to Washington Natural
Gas Company Exhibit 10-E.2, Form 10-K for the year ended September
30, 1995, File No. 1-11271).
10.128 Gas Transportation Service Contract dated July 15, 1994, between
Washington Natural Gas Company and Northwest Pipeline Corporation
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 10-E-3, Form 10-K for the year ended September 30, 1995, File
No. 1-11271).
10.129 Amendment to Gas Transportation Service Contract dated August 15,
1994, between Washington Natural Gas Company and Northwest Pipeline
Corporation (incorporated herein by reference to Washington Natural
Gas Company Exhibit 10-E.4, Form 10-K for the year ended September
30, 1995, File No. 1-11271).
10.130 Washington Natural Gas Company Deferred Compensation Plan effective
September 1, 1995 (incorporated herein by reference to Washington
Natural Gas Company Exhibit 10-H, Form 10-K for the year ended
September 30, 1995, File No. 1-11271).
10.131 Form of Washington Natural Gas Company--Executive Retirement
Compensation Agreement reflecting all amendments through August 16,
1995 (incorporated herein by reference to Washington Natural Gas
Company Exhibit 10-I, Form 10-K for the year ended September 30,
1995, File No. 1-11271).
10.132 Second Washington Energy Company Performance Share Plan (amended and
restated effective October 1, 1991) (incorporated herein by reference
to Washington Energy Company Exhibit 10-L.1, Form 10-K for the year
ended September 30, 1991, File No. 0-8745).
10.133 Washington Energy Company Interim Performance Share Plan effective
December 7, 1994 (incorporated herein by reference to Washington
Energy Company Exhibit 10-J.2, Form 10-K for the year ended September
30, 1995, File No. 1-11227).
Exhibit
Number Description
------- -----------
10.134 Washington Energy Company Stock Option Plan (incorporated herein by
reference to Exhibit 10-C Washington Energy Company Form 10-Q for the
quarter ended March 31, 1984, File No. 0-8745).
10.135 Amendment to Washington Energy Company Stock Option Plan (incorporated
herein by reference to Washington Energy Company Exhibit 10-S, Form
10-K for the year ended September 30, 1986, File No. 0-8745).
10.136 Amendment to Washington Energy Company Stock Option Plan dated as of
February 26, 1988 (incorporated herein by reference to Washington
Energy Company Form S-8, Registration No. 33-24221).
10.137 Washington Energy Company Stock Option Plan effective December 15,
1993 (incorporated herein by reference to Washington Energy Company
Exhibit 99, Registration No. 33-55381).
10.138 Washington Energy Company Directors Stock Bonus Plan (incorporated
herein by reference to Washington Energy Company Exhibit 10-O, Form
10-K for the year ended September 30, 1990, File No. 0-8745).
10.139 Form of Conditional Executive Employment Contract, filed under cover
of Form SE dated December 27, 1988 (incorporated herein by reference
to Washington Natural Gas Company Exhibit 10-M.2, Form 10-K for the
year ended September 30, 1994, File No. 1-11271).
10.140 Amended and restated Washington Energy Company and subsidiaries Annual
Incentive Plan for Vice Presidents and above, dated October 1994
(incorporated herein by reference to Washington Energy Company
Exhibit 10-M.3, Form 10-K for the year ended September 30, 1995, File
No. 1-11227).
10.141 Interest Rate Swap Agreement dated September 27, 1989 between Thermal
Resources, Inc. and the First National Bank of Chicago, filed under
cover of Form SE dated December 27, 1989, (incorporated herein by
reference to Washington Natural Gas Company Exhibit 10-N, Form 10-K
for the year ended September 30, 1994, File No. 1-11271).
10.142 Firm Transportation Service Agreement dated March 1, 1992 between
Northwest Pipeline Corporation and Washington Natural Gas Company
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 10-O, Form 10-K for the year ended September 30, 1994, File
No. 1-11271).
10.143 Firm Transportation Service Agreement dated January 12, 1994 between
Northwest Pipeline Corporation and Washington Natural Gas Company for
firm transportation service from Jackson Prairie (incorporated herein
by reference to Washington Natural Gas Company Exhibit 10-P, Form 10-
K for the year ended September 30, 1994, File No. 1-11271).
10.144 Firm Transportation Service Agreement dated January 12, 1994 between
Northwest Pipeline Corporation and Washington Natural Gas Company for
firm transportation service from Jackson Prairie (incorporated herein
by reference to Washington Natural Gas Company Exhibit 10-Q, Form 10-
K for the year ended September 30, 1994, File No. 1-11271).
10.145 Firm Transportation Service Agreement dated January 12, 1994 between
Northwest Pipeline Corporation and Washington Natural Gas Company for
firm transportation service from Plymouth, LNG (incorporated herein
by reference to Washington Natural Gas Company Exhibit 10-R, Form 10-
K for the year ended September 30, 1994, File No. 1-11271).
10.146 Service Agreement dated July 9, 1991 with Northwest Pipeline
Corporation for SGS-2F Storage Service filed under cover of Form SE
dated December 23, 1991 (incorporated herein by reference to
Washington Natural Gas Company Exhibit 10-S, Form 10-K for the year
ended September 30, 1994, File No. 1-11271).
10.147 Firm Transportation Agreement dated October 27, 1993 between Pacific
Gas Transmission Company and Washington Natural Gas Company for firm
transportation service from Kingsgate (incorporated herein by
reference to Washington Natural Gas Company Exhibit 10-T, Form 10-K
for the year ended September 30, 1994, File No. 1-11271).
Exhibit
Number Description
------- -----------
10.148 Firm Storage Service Agreement and Amendment dated April 30, 1991
between Questar Pipeline Company and Washington Natural Gas Company
for firm storage service at Clay Basin filed under cover of Form SE
dated December 23, 1991.
10.149 Employment agreement with R. R. Sonstelie, Chairman of the Board,
dated January 13, 1998. (Exhibit 10.150 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, Commission
File No. 1-4393)
10.150 Change in control agreement with T. J. Hogan, dated August 17, 1995.
(Exhibit 10.152 to PSE's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997, Commission File No. 1-4393)
10.151 Asset Purchase Agreement between PP&L Global, Inc. and PSE. (Exhibit
2a to Current Report on Form 8-K dated November 13, 1998)
10.152 Employment agreement with S. A. McKeon, Vice President and General
Counsel, dated May 27, 1997 (Exhibit 10.152 to PSE's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, Commission
File No. 1-4393).
10.153 Employment agreement with R. L. Hawley, Vice President and Chief
Financial Officer, dated March 16, 1998 (Exhibit 10.153 to PSE's
Annual Report on Form 10-K for the fiscal year ended December 31,
1998, Commission File No. 1-4393).
23.1 Consent of Perkins Coie LLP (contained in opinion referenced as
Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP*
23.3 Consent of Arthur Andersen LLP*
24.1 Power of attorney (contained on signature page of registration
statement on page II- )
99.1 Form of Proxy*
- --------
* Filed herewith.