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'S INFORMATION PACKAGE
FREQUENTLY ASKED QUESTIONS
1. How will staffing at various levels throughout the company be determined?
Several transition teams will be evaluating staffing levels required for the
combined companies. We are committed to communicating with employees about these
changes as decisions are made and managing this process in a sensitive and fair
manner.
2. In general, why is the merger of Exelon and PSEG good for employees?
The combination of our two firms will create the nation's largest utility. This
scale will provide new growth and developmental opportunities previously
unavailable to employees. The new company will have enhanced financial stability
and the combined company will be a significant competitive force in the
marketplace.
3. What will the combined company look like?
Both companies have similar operations and so the various functions would be
merged into one. Exelon Electric & Gas will emerge as the corporate parent and
assume the Exelon ticker on the NYSE. PSEG's parent company and parent name,
when merged into Exelon Electric & Gas upon closing, would be eliminated as
would its listing on the NYSE. The subsidiary operating companies of Exelon and
PSEG will retain their current names.
4. Why is the name changing? When will the new name take effect?
The new name Exelon Electric & Gas better reflects both the joint contribution
to our future business by both companies and the actual balance of the combined
energy portfolio. The regulated utilities -- PSE&G, ComEd and PECO -- will
retain their current names. The new name would become effective upon closing of
the transaction.
5. How will the merger impact 2005 labor contract negotiations?
Contract negotiations will proceed as usual and we fully expect to come to an
agreement with our unions within the next several months.
6. Why didn't you tell us about this sooner?
Because Exelon and PSEG are public companies, negotiations of this kind must be
kept confidential to prevent speculation in their stock price. We announced the
merger as soon as we could after approval by the Boards of Directors and we will
continue to keep you informed as we move forward toward closing.
7. Is this transaction a merger of equals, an acquisition by Exelon or what?
Although for financial accounting purposes it will be treated as an acquisition
by Exelon, it truly is a collaborative undertaking. The transaction has elements
of a merger of equals and an acquisition. The exchange ratio in the merger
reflects a reasonable
premium that allows shareholders of both companies to share in the synergies
made possible by the combination of the two companies. When the merger is
effective, former shareholders of PSEG will represent about 32% of the
shareholders of the merged company, and former directors of PSEG will hold
one-third of the seats on the merged company's board of directors.
8. In general, how does the merger affect electric and gas customers?
The delivery companies, including PSE&G, are expected to continue as the local
service providers. Customers ultimately should see more efficient processes for
customer care (call center, meter reading, billing, collections), new business
and reliability performance as a result of a merged company that will leverage
best practices.
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.