Filed by Public Service Enterprise Group Incorporated
Pursuant to Rule 425 under the Securities Act of 1933
and Deemed Filed Pursuant to Rule 14a-12 under
the Securities Exchange Act of 1934
Subject Company:
Public Service Enterprise Group Incorporated
(Commission File No. 001-09120)
MANAGER DEAL SUMMARY AND TALKING POINTS
DEAL SUMMARY:
o Exelon and PSEG to merge to create Exelon Electric & Gas
o Combined company to be the nation's largest utility, serving 7 million
electric customers and 2 million gas customers in Illinois, New Jersey and
Pennsylvania
o We will serve a joint population of some 18 million people across the eastern
half of the United States.
o Combined company to have total assets of $79 billion and approximately $27
billion in annual revenues and a generation portfolio of 52,000 megawatts of
domestic capacity
o Separate two-year Nuclear Operating Services Contract securing Exelon services
for PSEG starting January 2005
o Exelon CEO remains CEO with full responsibility for the oversight of
day-to-day operations
o PSEG CEO becomes non-executive Chairman of the Board of the combined entity
o PSEG appoints 6 and Exelon appoints 12 of the initial directors of combined
entity
o Unanimously approved by both boards
o Shareholders of each company must approve
o Multiple regulatory approvals/clearances required
o Expected closing in 12-15 months
Strategic Rationale:
o Improved nuclear performance
o It presents an opportunity to combine two very strong companies to create the
largest utility in the United States.
o Complementary operations
o Contiguous service territories
o Improved T&D efficiency
o Improved balance in energy portfolio (gas & electric)
o Common regulatory framework
o Improved financial performance driven by significant synergies and enhanced
base and scope
o Manageable regulatory approvals
o Bigger opportunities for employees
Employees will be treated fairly:
o Employees will know about changes as soon as possible
o Full performance of union contracts
o Maximum use of retirements and normal attrition to offset job losses
o Severance benefits for affected employees
Elected officials should support the deal:
o Enhanced value for current stockholders and continued financial strength for
current bondholders
o No impact on retirees
o Continued major presence in New Jersey
o Continued civic support
TALKING POINTS:
o PSEG's major objective is to increase the value of our company by ensuring
consistent profitability and growth while at the same time maintaining the
very high standards of service and reliability we provide our customers.
o Right now, the primary question on your mind may be what effect, if any, the
merger might have on you and your job. For the next year, the answer is,
"probably not much".
o But whenever two companies come together, they look for savings in certain
costs. These reductions will come from both companies and we'll work to
minimize the effects on our workforce through careful planning, attrition,
retirements and separation plans.
o For represented employees, aside from what may result from our current labor
negotiations, little will change. If there are any changes in the future, they
will occur as a result of the collective bargaining process.
o All union contracts will be honored.
o For some, the merger will produce opportunities for new jobs, growth and
development as part of a much larger organization.
NEXT STEPS:
o As you might imagine, there's a lot that needs to be accomplished during the
next year. Seven regulatory agencies as well as each company's shareholders
must approve the merger. We expect the merger to close within 12-15 months.
o A transition team made up of employees from both companies will be established
to work through all the details.
o During this time, each company will continue to work independently, serving
customers in its respective operating territory.
o That's where we need your help. We have to maintain our focus on our
day-to-day work, even though there will be a tendency for us to get distracted
by all the merger activity and perhaps rumors of staff reductions, cost
cutting, etc.
o Frequent communications will be more important than ever. I will do my best to
keep you informed about major developments every step of the way. You'll have
to help us by letting us know what is on your mind and what information you
need.
o At this point, I know you probably have lots of questions about what the
merger means to you and the work you do. While we've thought through some of
the answers, it will take time to develop others. All of you should have
received a copy of the SPECIAL EDITION of PSEG OUTLOOK. It contains a lot of
information about the announcement -- including answers to some initial
questions. Please take the time to read it.
o Other information sources include the company's website, www.pseg.com and
InfoCentral.
o If you have a specific question or comment, you can leave a message on PSEG's
employee hotline -- 1 800 218-PSEG (7734). Corporate Communications will
compile the most commonly asked questions and communicate the answers to all
employees.
o I also encourage you to reach out to me or to your immediate supervisor with
any questions you may have. We'll make every effort to get the answers back to
you as quickly as possible.
LEGEND REQUIRED BY THE SECURITIES AND EXCHANGE COMMISSION
This document includes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, for example, statements regarding benefits of the proposed
merger, integration plans, and expected synergies, anticipated future financial
and operating performance and results, including estimates for growth. There are
a number of risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements made herein. A discussion of
some of these risks and uncertainties is contained or referred to in the Current
Reports on Form 8-K filed with the SEC on December 21, 2004 by Exelon and PSEG,
respectively. These risks, as well as other risks associated with the merger,
will be more fully discussed in the joint proxy statement/prospectus that will
be included in the Registration Statement on Form S-4 that Exelon will file with
the SEC in connection with the proposed merger. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date of this document. Neither Exelon nor PSEG undertakes any obligation to
publicly release any revision to its forward-looking statements to reflect
events or circumstances after the date of this document.
This communication is not a solicitation of a proxy from any security holder of
Exelon or PSEG. Exelon intends to file with the Securities and Exchange
Commission a registration statement that will include a joint proxy
statement/prospectus and other relevant documents to be mailed to security
holders in connection with the proposed merger of Exelon and PSEG. WE URGE
INVESTORS AND SECURITY HOLDERS TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND
ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION about Exelon, PSEG and the proposed merger.
Investors and security holders will be able to obtain these materials (when they
are available) and other documents filed with the SEC free of charge at the
SEC's website, www.sec.gov. In addition, a copy of the joint proxy
statement/prospectus (when it becomes available) may be obtained free of charge
from Exelon, Investor Relations, 10 South Dearborn Street, P.O. Box 805398,
Chicago, Illinois 60680-5398, or from PSEG, Investor Relations, 80 Park Plaza,.
P.O. Box 1171, Newark, New Jersey 07101-1171.
The respective directors and executive officers of Exelon and PSEG and other
persons may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information regarding Exelon's directors
and executive officers is available in its proxy statement filed with the SEC by
Exelon on March 12, 2004, and information regarding PSEG's directors and
executive officers is available in its proxy statement filed with the SEC by
PSEG on March 10, 2004. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained the joint proxy
statement/prospectus and other relevant materials to be filed with the SEC when
they become available.