Tax Consequences of Merger

In Accordance with the merger agreement , the following are the tax consequences of the merger to CSW shareholders:

  1. the aggregate basis of the AEP Shares received by a CSW stockholder in the Merger (including any fractional share deemed received) will be the same as the aggregate basis of the CSW Shares surrendered in exchange therefore;
  2. the holding period of the AEP Shares received by a CSW stockholder in the Merger (including any fractional share deemed received) will include the holding period of the CSW Shares surrendered in exchange therefore,
  3. a stockholder of CSW who receives cash in lieu of a fractional share will recognize gain or loss equal to the difference, if any, between such stockholder's basis in the fractional share (as described in paragraph (c) above) and the amount of cash received. Such gain or loss will be eligible for long-term capital gain or loss treatment if the CSW shares would have been eligible for the capital gain or loss treatment under current IRS regulations.

Tax matters can be complicated and the tax consequences of the merger to you will depend on the facts of your own situation. You should consult your own tax advisors to fully understand the tax consequences of the merger to you.