EXHIBIT 99.1
[Southwest Gas Corporation letterhead]
CONFIDENTIAL
January 18, 2000
ONEOK, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxx, XX 00000
ATTN: Xxxx X. Xxxxxxxx, Xx.
Re: Agreement and Plan of Merger, dated December 14, 1998, Among
ONEOK, Inc., Oasis Acquisition Corporation, and Southwest Gas
Corporation, as amended (the "Agreement")
Gentlemen:
As we are all now aware, Xxxxxxx X. Xxxxx, the Director, Utilities Division of
the Arizona Corporation Commission (the "ACC") has given direct testimony to the
effect that the Staff of the ACC believes that approval of the merger of Oasis
Acquisition Corporation and Southwest Gas Corporation, as contemplated by the
Agreement, at this stage would be premature because ONEOK "has not provided
sufficient evidence to make an affirmative showing that the proposed merger is
in the public interest." In her direct testimony, Xx. Xxxxx stated that the
Staff was unable to recommend approval of the merger at this time because of:
... the concerns addressed in Xx. Xxxxxx' [Manager, Financial Analysis,
Utilities Division of the ACC] testimony regarding ONEOK's poor safety
record as compared to that of Southwest Gas; numerous consumer service
complaints; the potential financial liabilities, depending on the
outcome of the civil litigation matters; compounded by the allegations
set forth in the civil litigation; and the questionable conduct of
ONEOK representatives discussed above [in her direct testimony]....
ONEOK, Inc.
Page 2
January 18, 2000
In her direct testimony, Xx. Xxxxx makes several points that go to actions by
XXXXX and its executives. Xx. Xxxxx recounts evidence regarding XXXXX's actions
in connection with the drafting of Commissioner Xxxxx'x letter to the Southwest
Gas Board and XXXXX's relationship with Xx. Xxxx. Xx. Xxxxx concludes that
"[t]he evidence described above casts doubts on ONEOK's truthfulness and the
Company's [ONEOK'S] ability to identify inappropriate conduct and apparent
conflicts of interest, or of its disregard for such actions."
These assertions by Xx. Xxxxx, her recommendation to the ACC, and the stated
reasons therefor indicate that ONEOK has breached the Agreement because of its
failure to use all commercially reasonable efforts to obtain the required
regulatory approval from the ACC and to take all action and to do, or cause to
be done, all things necessary, proper, or advisable to consummate and make
effective the merger, all as required by the Agreement. We hereby demand that
you cure these breaches in accordance with the terms and conditions of the
Agreement.
We intend to continue to comply with our obligations under the Agreement,
reserving all our rights thereunder.
Very truly yours,
/s/ XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
c Xxxxxx X. Xxxxxx, Esq.
Xxxxxx X. Xxxxx, Esq.
Members of the Board of Directors of ONEOK, Inc.
