AGREEMENT AND PLAN OF MERGER
Between
THE EMPIRE DISTRICT ELECTRIC COMPANY
and
UTILICORP UNITED INC.
Dated as of May 10, 1999
TABLE OF CONTENTS
ARTICLE I THE MERGER 1
SECTION 1.01. THE MERGER 1
SECTION 1.02. CERTIFICATE OF INCORPORATION AND BYLAWS OF THE
SURVIVING CORPORATION 2
SECTION 1.03. DIRECTORS AND OFFICERS OF THE SURVIVING
CORPORATION 2
SECTION 1.04. ADVISORY BOARD 2
ARTICLE II CONVERSION OF CAPITAL STOCK 3
SECTION 2.01 UCU SHARES 3
SECTION 2.02 CONVERSION OF COMPANY COMMON STOCK 3
SECTION 2.03 CANCELLATION OF COMPANY TREASURY SHARES; REDEMPTION
OF COMPANY PREFERRED STOCK 6
SECTION 2.04. EXCHANGE OF CERTIFICATES 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 9
SECTION 3.01. ORGANIZATION AND POWER; REGULATION AS A PUBLIC
UTILITY 10
SECTION 3.02. CORPORATE AUTHORIZATION 10
SECTION 3.03. GOVERNMENTAL AUTHORIZATION 11
SECTION 3.04. NON-CONTRAVENTION 11
SECTION 3.05. CAPITALIZATION 12
SECTION 3.06. REPORTS AND FINANCIAL STATEMENTS 12
SECTION 3.07. NO UNDISCLOSED LIABILITIES 13
SECTION 3.08. LITIGATION 14
SECTION 3.09. ABSENCE OF CERTAIN CHANGES OR EVENTS 14
SECTION 3.10. COMPLIANCE WITH LAWS; NO DEFAULT 14
SECTION 3.11. TAXES 15
SECTION 3.12. INTELLECTUAL PROPERTY 16
SECTION 3.13. ENVIRONMENTAL MATTERS 17
SECTION 3.14. EMPLOYEE BENEFITS AND LABOR MATTERS 19
SECTION 3.15. TRANSACTIONS WITH AFFILIATES 21
SECTION 3.16. INFORMATION SUPPLIED 22
SECTION 3.17. OPINION OF FINANCIAL ADVISOR 22
SECTION 3.18. FINDERS' FEES 22
SECTION 3.19. TAKEOVER STATUTES 22
SECTION 3.20. RIGHTS AGREEMENT 23
SECTION 3.21. YEAR 2000 23
SECTION 3.22 INSURANCE 23
SECTION 3.23 NO DISSENTERS' RIGHTS 23
SECTION 3.24 OWNERSHIP OF UCU COMMON STOCK 23
SECTION 3.25 DEFINITION OF "KNOWLEDGE" 23
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF UCU 24
SECTION 4.01. ORGANIZATION AND POWER; REGULATION AS A PUBLIC
UTILITY 24
SECTION 4.02. CORPORATE AUTHORIZATION 24
SECTION 4.03. GOVERNMENTAL AUTHORIZATION 25
SECTION 4.04. NON-CONTRAVENTION 25
SECTION 4.05. CAPITALIZATION 25
SECTION 4.06. REPORTS AND FINANCIAL STATEMENTS 26
SECTION 4.07. NO UNDISCLOSED LIABILITIES 27
SECTION 4.08. LITIGATION 27
SECTION 4.09. ABSENCE OF CERTAIN CHANGES OR EVENTS 27
SECTION 4.10. COMPLIANCE WITH LAWS; NO DEFAULT 28
SECTION 4.11. TAXES 28
SECTION 4.12. ENVIRONMENTAL MATTERS 29
SECTION 4.13. EMPLOYEE BENEFITS 30
SECTION 4.14. DIVIDENDS 30
SECTION 4.15. TRANSACTIONS WITH AFFILIATES 30
SECTION 4.16. INFORMATION SUPPLIED 31
SECTION 4.17. FINDERS' FEES 31
SECTION 4.18. TAKEOVER STATUTES 31
SECTION 4.19. YEAR 2000 31
SECTION 4.20. OWNERSHIP OF COMPANY COMMON STOCK 31
SECTION 4.21. DEFINITION OF "KNOWLEDGE" 32
ARTICLE V CONDUCT OF BUSINESS 32
SECTION 5.01. CONDUCT OF THE COMPANY 32
SECTION 5.02. CONDUCT OF UCU 34
SECTION 5.03. REORGANIZATION 36
SECTION 5.04. RATE MATTERS 36
ARTICLE VI ADDITIONAL AGREEMENTS 37
SECTION 6.01. NO SOLICITATION 37
SECTION 6.02. PROXY STATEMENT; REGISTRATION STATEMENT 38
SECTION 6.03. STOCKHOLDERS' MEETING 40
SECTION 6.04. ACCESS TO INFORMATION 40
SECTION 6.05. NOTICES OF CERTAIN EVENTS 40
SECTION 6.06. APPROPRIATE ACTION; CONSENTS; FILINGS 41
SECTION 6.07. PUBLIC DISCLOSURE 41
SECTION 6.08. REORGANIZATION 41
SECTION 6.09. AFFILIATES 42
SECTION 6.10. LISTING OF STOCK 42
SECTION 6.11. INDEMNIFICATION OF DIRECTORS AND OFFICERS 42
SECTION 6.12. COMPANY STOCK OPTIONS AND RESTRICTED STOCK
AWARDS; ACKNOWLEDGMENT WITH RESPECT TO COMPANY
STOCK PLANS 43
SECTION 6.13. BENEFITS CONTINUATION; SEVERANCE 45
SECTION 6.14. OPERATION OF COMPANY'S BUSINESS AFTER CLOSING 47
SECTION 6.15. TAKEOVER STATUTES 47
SECTION 6.16. DISCLOSURE SCHEDULES 47
SECTION 6.17. CHARITABLE AND ECONOMIC DEVELOPMENT SUPPORT 47
SECTION 6.18 TRANSITION TASK FORCE 48
SECTION 6.19 TERMINATION OF DRIP 48
SECTION 6.20. DIVIDEND RECORD DATE 48
SECTION 6.21. REAL ESTATE TRANSFER TAXES 48
SECTION 6.22. ASSUMPTION OF DEBT OBLIGATIONS 49
SECTION 6.23. AMENDMENT OF FIRST MORTGAGE BOND INDENTURE 49
ARTICLE VII CONDITIONS TO MERGER 49
SECTION 7.01. CONDITIONS TO EACH PARTY'S OBLIGATIONS 49
SECTION 7.02. ADDITIONAL CONDITIONS TO OBLIGATIONS OF UCU 50
SECTION 7.03. ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE
COMPANY 51
ARTICLE VIII TERMINATION 52
SECTION 8.01. TERMINATION 52
SECTION 8.02. EFFECT OF TERMINATION 53
SECTION 8.03. FEES AND EXPENSES 53
SECTION 8.04. AMENDMENT 54
SECTION 8.05. EXTENSION; WAIVER 54
ARTICLE IX MISCELLANEOUS 54
SECTION 9.01. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS 54
SECTION 9.02. NOTICES 55
SECTION 9.03. INTERPRETATION 55
SECTION 9.04. DISCLOSURE SCHEDULES 56
SECTION 9.05. COUNTERPARTS 56
SECTION 9.06. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES 56
SECTION 9.07. GOVERNING LAW 56
SECTION 9.08. ASSIGNMENT 56
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of
May 10, 1999 between UTILICORP UNITED INC., a Delaware
corporation ("UCU"), and THE EMPIRE DISTRICT ELECTRIC COMPANY, a
Kansas corporation (the "Company").
RECITALS:
WHEREAS, the Boards of Directors of UCU and the Company deem
it advisable and in the best interests of each corporation and
its respective stockholders that UCU and the Company enter into a
strategic business combination in order to advance the long-term
business interests of UCU and the Company, and have therefore
approved this Agreement, the Merger (as defined in Section 1.01)
and the other transactions contemplated by this Agreement; and
WHEREAS, the combination of UCU and the Company shall be
effected by the terms of this Agreement through a transaction in
which the Company will merge with and into UCU, with UCU as the
surviving corporation, and the common stockholders of the Company
(other than those receiving solely Cash Consideration (as defined
in Section 2.02) and Dissenting Stockholders (as defined in
Section 2.02(j)) will become stockholders of UCU; and
WHEREAS, it is intended that, for federal income tax
purposes, the Merger shall qualify as a reorganization under the
provisions of Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code"); and
WHEREAS, UCU and the Company desire to make certain
representations, warranties, covenants and agreements in
connection with this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements
set forth below, the parties agree as follows:
ARTICLE I
The Merger
Section 1.01. The Merger. (a) Upon the terms and subject
to the conditions set forth in this Agreement, at the Effective
Time (as defined in Section 1.01(c)), the Company shall be merged
(the "Merger") with and into UCU in accordance with the General
Corporation Code of Kansas (the "KGCC") and the General
Corporation Law of the State of Delaware (the "DGCL"), whereupon
the separate existence of the Company shall cease, and UCU shall
continue as the surviving corporation (the "Surviving
Corporation").
(b) Upon the terms and subject to the conditions of
this Agreement, the closing of the Merger (the "Closing") shall
take place at 10:00 a.m. on a date to be specified by the parties
(the "Closing Date"), which date shall be no later than the
second business day after satisfaction of the conditions set
forth in Article VII, at the offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, unless
another time, date or place is agreed to in writing by the
parties hereto.
(c) Upon the Closing, the Company and UCU will file
(i) a certificate of merger with the Secretary of State of the
State of Kansas and make all other filings or recordings required
by the KGCC in connection with the Merger and (ii) a certificate
of merger with the Secretary of State of the State of Delaware
and make all other filings or recordings required by the DGCL in
connection with the Merger. The Merger shall become effective at
such time as the certificate of merger is duly filed with the
Secretary of State of the State of Delaware or at such later time
as is agreed to by UCU and the Company and specified in the
certificate of merger (the "Effective Time").
(d) The Merger shall have the effects set forth in
this Agreement and in Section 17-6709 of the KGCC and Section 259
of the DGCL.
Section 1.02. Certificate of Incorporation and Bylaws of
the Surviving Corporation The certificate of incorporation and
bylaws of UCU, as in effect immediately prior to the Effective
Time, shall be the certificate of incorporation and bylaws of the
Surviving Corporation.
Section 1.03. Directors and Officers of the Surviving
Corporation. The directors of UCU immediately prior to the
Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the
certificate of incorporation and bylaws of the Surviving
Corporation, and the officers of UCU immediately prior to the
Effective Time shall be the initial officers of the Surviving
Corporation, in each case until their respective successors are
duly elected or appointed.
Section 1.04. Advisory Board. The Surviving Corporation
(and any successor or assign of Surviving Corporation) shall
maintain an advisory board (the "Advisory Board"), for a period
of at least three years following the Closing Date. The Advisory
Board shall be comprised of five persons nominated in writing by
the Company and approved by UCU (which approval shall not be
unreasonably withheld) on or prior to the Closing Date ("Company
Designees"). Company Designees shall not be subject to removal
without cause by the Surviving Corporation absent their consent,
and any vacancy on the Advisory Board which arises after the
Effective Time shall be filled by a person selected by majority
vote of the remaining Company Designees and approved by UCU
(which approval shall not be unreasonably withheld) (and such
replacement person shall be deemed a "Company Designee" for all
purposes hereunder). The Advisory Board shall meet no less
frequently than quarterly, and the Surviving Corporation shall
consult with the Advisory Board with respect to the business
operations of the Surviving Corporation in the Company's current
service area (including consultations with the Advisory Board in
which the Advisory Board may review and make recommendations
consistent with Section 6.17 with respect to the civic,
charitable and business and customer development activities of
the Surviving Corporation in such area). Company Designees shall
receive an annual fee of $15,000 for serving on the Advisory
Board, and shall be reimbursed for reasonable out-of-pocket
expenses incurred in connection with their service on the
Advisory Board. The Surviving Corporation shall provide to
Company Designees indemnification rights to the same extent as
provided to Surviving Corporation's directors pursuant to the
Surviving Corporation's Certificate of Incorporation and bylaws.
ARTICLE II
Conversion of Capital Stock
2.01 UCU Shares. Each share of common stock of UCU issued
and outstanding immediately prior to the Effective Time shall
remain outstanding and unchanged by reason of the Merger as one
share of common stock of the Surviving Corporation.
2.02 Conversion of Company Common Stock.
(a) Outstanding Shares of Company Common Stock.
Subject to the other provisions of this Section 2.02, each share
of common stock, par value $1.00 per share of the Company (the
"Company Common Stock") issued and outstanding immediately prior
to the Effective Time, together with any associated Right (as
defined in Section 3.20) (other than shares to be canceled
pursuant to Section 2.03(a) and other than Dissenting Shares (as
such term is defined in Section 2.02(j)), shall be converted into
the right to receive (i) a number of shares of UCU Common Stock
equal to the Exchange Ratio (as such term is defined below),
subject to the payment of cash in lieu of any fractional share
(the "Stock Consideration"); or (ii) cash per share of Company
Common Stock equal to the Average Trading Price (as such term is
defined below) multiplied by the Exchange Ratio (the "Cash
Consideration"). The Stock Consideration together with the Cash
Consideration is collectively referred to as the "Merger
Consideration."
The "Exchange Ratio" shall be determined as follows:
(i) if the Average Trading Price of a share of UCU Common
Stock is less than $22.00, the Exchange Ratio shall equal 1.341;
(ii) if the Average Trading Price of a share of UCU Common Stock
is greater than or equal to $22.00, but less than or equal to
$26.00, the Exchange Ratio shall equal a fraction (rounded to the
nearest hundred-thousandth) determined by dividing $29.50 by the
Average Trading Price of a share of UCU Common Stock; and (iii)
if the Average Trading Price of a share of UCU Common Stock is
greater than $26.00, the Exchange Ratio shall equal 1.135. The
Exchange Ratio shall be subject to appropriate adjustment in the
event of a stock split, stock dividend or recapitalization after
the date of this Agreement applicable to shares of the UCU Common
Stock or the Company Common Stock.
"Average Trading Price" shall be equal to the average of the
daily closing prices per share of UCU Common Stock on the New
York Stock Exchange ("NYSE") Composite Transactions Reporting
System, as reported in The Wall Street Journal for the twenty
trading days ending on the date immediately prior to the second
full NYSE trading day immediately preceding the Closing Date.
35 (b) Election. Subject to the maximum amounts set
forth in Sections 2.02(c) and 2.02(d), each record holder of
Company Common Stock immediately prior to the Election Deadline
(as defined in Section 2.02(g)) shall be entitled to (i) elect to
receive the Cash Consideration (a "Cash Election"), (ii) elect
to receive the Stock Consideration (a "Stock Election"), or (iii)
indicate that such record holder has no preference as to the
receipt of Cash Consideration or Stock Consideration (all Company
Common Stock held by such record holder, "No Election Shares"),
for such holder's Company Common Stock. Elections shall be made
on a form designed for that purpose (a "Form of Election"). A
holder of record of shares of Company Common Stock who holds such
shares as nominee, trustee or in another representative capacity
(a "Representative") may submit multiple Forms of Election,
provided that such Representative certifies that each such Form
of Election covers all shares of Company Common Stock held by
such Representative for a particular beneficial owner. To the
extent not covered by a properly given Form of Election, all
Company Common Stock issued and outstanding immediately prior to
the Effective Time, shall be designated as No Election Shares and
shall, except as provided in Section 2.02(d) and 2.02(h), be
converted solely into UCU Common Stock.
(c) Maximum Cash Election Shares. Notwithstanding the
provisions of Section 2.02(b) and subject to Section 2.02(d) and
Section 2.02(h), the aggregate number of shares of Company Common
Stock that may be converted into the right to receive cash
(including the right to receive cash in lieu of fractional shares
as provided in this Section 2.02) in the Merger (the "Cash
Election Number") shall not exceed 50% of the shares of Company
Common Stock outstanding at 5:00 Eastern Time on the second day
prior to the Effective Time or such other number as shall be
determined in accordance with Section 2.02(h). If the aggregate
number of shares of Company Common Stock covered by Cash
Elections (the "Cash Election Shares") exceeds the Cash Election
Number, those holders that will be entitled to receive Cash
Consideration shall be selected by the Exchange Agent (as defined
in Section 2.04(a)) through a lottery among holders who made a
Cash Election up to the Cash Election Number and all other Cash
Election Shares shall be converted into the right to receive
Stock Consideration.
(d) Maximum Stock Consideration. The number of shares of
UCU Common Stock to be issued to holders of Company Common Stock
shall not, when added to the number of shares of UCU Common Stock
initially issuable pursuant to Sections 6.12 and 6.13, exceed
19.9% of the total number of shares of UCU Common Stock issued
and outstanding immediately preceding the Effective Time (the
"Maximum Stock Amount"). If the aggregate number of shares of
UCU Common Stock payable as Stock Consideration (the "Aggregate
Stock Amount") exceeds the Maximum Stock Amount, UCU shall have
the option to limit the aggregate Stock Consideration to the
Maximum Stock Amount (a "Proration Event") and to make a
corresponding increase in the aggregate Cash Consideration by
instructing the Exchange Agent to:
(A) convert a sufficient number of No Election
Shares into the right to receive the Cash Consideration, which No
Election Shares shall be selected pro rata from among all of the
holders thereof, based upon the aggregate number of No Election
Shares held by each such holder, such that the Aggregate Stock
Amount to be issued equals as close as practicable the Maximum
Stock Amount; and
(B) to the extent that such conversion of the No
Election Shares does not reduce the Aggregate Stock Amount to the
Maximum Stock Amount, convert a sufficient number of Stock
Election Shares into the right to receive the Cash Consideration,
which Stock Election Shares shall be selected pro rata from among
all of the holders thereof, based upon the aggregate number of
Stock Election Shares held by each such holder, such that the
amount of UCU Common Stock to be issued equals as close as
practicable the Maximum Stock Amount.
(e) Form of Election. To be effective, a Form of Election
must be properly completed, signed and submitted to the Exchange
Agent prior to the Election Deadline. UCU shall have the
discretion, which it may delegate in whole or in part to the
Exchange Agent, to determine whether Forms of Election have been
properly completed, signed and submitted or revoked and to
disregard immaterial defects in Forms of Election. The decision
of UCU (or the Exchange Agent) in such matters shall be
conclusive and binding, absent manifest error. Neither UCU nor
the Exchange Agent shall be under any obligation to notify any
person of any defect in a Form of Election submitted to the
Exchange Agent. The Exchange Agent shall also make all
computations contemplated by this Section 2.02, and all such
computations shall be conclusive and binding on the holders of
Company Common Stock.
(f) Deemed Non-Election. For purposes hereof, a holder of
Company Common Stock who does not submit a Form of Election that
is received by the Exchange Agent prior to the Election Deadline
shall be deemed not to have made an election in accordance with
this Section and the shares of Company Common Stock held by such
holder shall be classified as No Election Shares. If UCU or the
Exchange Agent shall determine that any purported Election was
not properly made, such purported Election shall be deemed to be
of no force and effect and the shares of Company Common Stock
covered by such purported Election shall be classified as No
Election Shares.
(g) Election Deadline. UCU and the Company shall each use
its reasonable efforts to cause copies of the Form of Election to
be mailed to the record holders of Company Common Stock not less
than 30 days prior to the Effective Time and to make the Form of
Election available to all persons who become record holders of
Company Common Stock subsequent to the date of such mailing but
prior to the Election Deadline. A Form of Election must be
received by the Exchange Agent by 5:00 p.m., Eastern Time, on the
last NYSE trading day prior to the third business day before the
anticipated Effective Time (the "Election Deadline") in order to
be effective. All elections may be revoked until the Election
Deadline in writing by the record holders submitting Forms of
Election. Any revocations or elections received after the
Election Deadline shall be null and void.
(h) Adjustment for Tax and Accounting Matters. If, after
having made the calculation under Section 2.02(c), the tax
opinions referred to in Sections 7.02(c) and 7.03(c) cannot be
rendered (as reasonably determined by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇), as a result of the
Merger possibly failing to satisfy continuity-of-interest
requirements under applicable federal income tax principles
relating to reorganizations described in Section 368(a) of the
Code, then UCU shall reduce, to the minimum extent necessary to
enable such tax opinions to be rendered, the amount of cash to be
delivered with respect to the Cash Election Shares (in accordance
with the lottery procedures outlined in Section 2.02(c) or in any
other manner considered by the Exchange Agent to be fair and
equitable) and in lieu thereof shall deliver the number of shares
of UCU Common Stock having an aggregate value, based on the
Average Trading Price, equal to the amount of such reduction, and
the Cash Election Number shall be appropriately adjusted to give
effect to such reduction.
(i) Adjustment to Prevent Dilution. If, prior to the
Effective Time, UCU shall declare a stock dividend or other
similar distribution of shares of UCU Common Stock or securities
convertible into shares of UCU Common Stock, or effect a stock
split, reclassification, recapitalization, stock combination or
other change with respect to the UCU Common Stock, the Exchange
Ratio and the Average Trading Price, if applicable, shall be
appropriately adjusted to reflect such dividend, distribution,
stock split, reclassification, recapitalization, stock
combination or other change.
(j) Shares of Dissenting Stockholders.
Notwithstanding anything in this Agreement to the contrary, if a
Proration Event shall have occurred, any issued and outstanding
shares of Company Common Stock held by a person (a "Dissenting
Stockholder") who shall not have voted to adopt this Agreement or
consented thereto in writing and who shall have properly demanded
appraisal for such shares in accordance with Section 17-6712 of
the KGCC ("Dissenting Shares") shall not be converted as
described in Section 2.02(a), unless such holder fails to perfect
or withdraws or otherwise loses its right to appraisal. If,
after the Effective Time, such Dissenting Stockholder fails to
perfect or withdraws or loses the right to appraisal, such
Dissenting Stockholder's shares of Company Common Stock shall no
longer be considered Dissenting Shares for the purposes of this
Agreement and shall thereupon be deemed to have been converted
into and to have become exchangeable for, at the Effective Time,
the right to receive for each such share (a "Nondissenting
Share") the number of shares of UCU Common Stock and the amount
in cash, without interest, that a holder of a No Election Share
who had not demanded appraisal would have received with respect
to such Nondissenting Share after giving effect to Sections
2.02(d) and (h) (it being understood that no adjustment shall be
made to the proration computation (if any) made following the
Election Deadline to give effect to the withdrawal of, or the
failure to perfect, the demand for appraisal with respect to such
Dissenting Shares). The Company shall give UCU (I) prompt notice
of any demands for appraisal of shares of Company Common Stock
received by the Company and (ii) the opportunity to participate
in and direct all negotiations and proceedings with respect to
any such demands. Except as required by law, the Company shall
not, without the prior written consent of UCU, make any payment
with respect to, or settle, offer to settle or otherwise
negotiate, any such demands.
2.03 Cancellation of Company Treasury Shares; Redemption of
Company Preferred Stock.
(a) As of the Effective Time, each share of Company
Common Stock (together with any associated Right) that is owned
by the Company as treasury stock or owned, directly or
indirectly, by the Company, UCU or any of their respective
Subsidiaries shall be canceled and shall cease to exist and no
UCU Common Stock or other consideration shall be delivered in
exchange therefor. For purposes of this Agreement, "Subsidiary"
means, with respect to any Person, any corporation or other
organization, whether incorporated or unincorporated, of which
directly or indirectly at least 50% of the securities or other
interests having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization
is directly or indirectly owned or controlled by such Person or
by any one or more of its Subsidiaries, or by such Person and one
or more of its Subsidiaries. For purposes of this Agreement,
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other
entity or organization, including a Governmental Authority (as
defined in Section 3.03).
(b) Prior to the Effective Time, the Board of
Directors of the Company shall call for redemption all
outstanding shares of Company Preferred Stock (as defined in
Section 3.05) at a redemption price equal to the amount provided
for in the Company's articles of incorporation or in a
certificate of designation on a particular series of Company
Preferred Stock, together with all dividends accrued and unpaid
to the date of such redemption. All shares of the Company
Preferred Stock shall be redeemed so that no such shares shall be
outstanding at the Effective Time.
Section 2.04. Exchange of Certificates. The procedures for
exchanging outstanding shares of Company Common Stock for Merger
Consideration shall be as follows:
(a) Exchange Agent. Prior to or at the Effective
Time, UCU shall deposit with an exchange agent as may be
designated by UCU and reasonably acceptable to the Company (the
"Exchange Agent"), for the benefit of the holders of shares of
Company Common Stock, for exchange in accordance with this
Section 2.04, certificates representing the shares of UCU Common
Stock issuable pursuant to Section 2.02 in exchange for
outstanding shares of Company Common Stock and cash payable
pursuant to Section 2.02 in exchange for outstanding shares of
Company Common Stock and shall deposit cash in an amount required
to be paid pursuant to subsections (c) and (e) of this Section
2.04 (such shares of UCU Common Stock and cash being hereinafter
referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Exchange Agent shall
mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock (each a "Certificate"
and, collectively, the "Certificates"), (i) a letter of
transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent and shall
be in such form and have such other provisions as UCU and the
Company may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the
Merger Consideration (comprised of certificates representing
shares of UCU Common Stock and cash in lieu of fractional shares
constituting the Stock Consideration and/or the Cash
Consideration) which the holder of such Certificate has a right
to receive. Upon surrender of a Certificate for cancellation to
the Exchange Agent, together with such letter of transmittal,
duly executed, the holder of record of such Certificate shall be
entitled to receive in exchange therefor (i) a check representing
the Cash Consideration, or (ii) (x) a certificate or certificates
representing that whole number of shares of UCU Common Stock
which such holder has the right to receive pursuant to the
provisions of this Article II in such denominations and
registered in such names as such holder may request in accordance
with the instructions set forth in such letter of transmittal and
(y) a check representing the amount of cash, if any, which such
holder has the right to receive pursuant to the provisions of
this Article II, after giving effect to any required withholding
tax, without interest. In the event of a transfer of ownership
of shares of Company Common Stock which is not registered on the
transfer records of the Company, (i) a check representing the
Cash Consideration or (ii) a certificate representing the proper
number of shares of UCU Common Stock, together with a check for
the cash to be paid in lieu of fractional shares, if any, without
interest, and unpaid dividends and distributions since the
Effective Time, if any, without interest, may be issued to such
transferee if the Certificate representing such shares of Company
Common Stock held by such transferee is presented to the Exchange
Agent, accompanied by all documents required to evidence and
effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
(c) Distributions with Respect to Unexchanged Shares.
Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared or made after the
Effective Time with respect to any shares of UCU Common Stock
having a record date after the Effective Time shall be paid to
the holder of any unsurrendered Certificate, and no cash payment
shall be paid to any such holder, until the holder of such
Certificate shall surrender such Certificate as provided in this
Section 2.04. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid
to the holder of the certificates representing whole shares of
UCU Common Stock issued in exchange therefor, without interest,
(i) at the time of such surrender, the amount of any cash payable
in lieu of a fractional share of UCU Common Stock to which such
holder is entitled pursuant to subsection (e) of this Section
2.04 and the amount of dividends or other distributions with a
record date after the Effective Time previously paid with respect
to such whole shares of UCU Common Stock, less the amount of any
withholding taxes which may be required thereon, and (ii) at the
appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender
payable with respect to such whole shares of UCU Common Stock,
less the amount of any withholding taxes which may be required
thereon.
(d) No Further Ownership Rights in Company Common
Stock. All shares of UCU Common Stock issued upon the surrender
for exchange of shares of Company Common Stock in accordance with
the terms hereof (including any cash paid pursuant to this
Article II) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company
Common Stock, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which may have
been declared or made by the Company on such shares of Company
Common Stock on or prior to the date hereof and which remain
unpaid at the Effective Time, and there shall be no further
registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock which
were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and
exchanged for the Merger Consideration as provided in this
Section 2.04.
(e) No Fractional Shares. No certificate or scrip
representing fractional shares of UCU Common Stock shall be
issued upon the surrender for exchange of Certificates, and such
fractional share interests will not entitle the owner thereof to
vote or to exercise any rights of a stockholder of UCU.
Notwithstanding any other provision of this Agreement, each
holder of shares of Company Common Stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a
fraction of a share of UCU Common Stock (after taking into
account all Certificates delivered by such holder) shall receive,
in lieu thereof, cash (without interest) in an amount equal to
such fractional part of a share of UCU Common Stock multiplied by
the Average Trading Price.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the stockholders of
the Company for one year after the Effective Time shall be
delivered to UCU (which shall thereafter act as Exchange Agent),
and any stockholders of the Company who have not previously
complied with this Section 2.04 shall thereafter look as a
general creditor only to UCU for payment of their claim for Cash
Consideration or shares of UCU Common Stock, any cash in lieu of
fractional shares of UCU Common Stock and any dividends or
distributions with respect to UCU Common Stock, none of which
shall bear interest.
(g) No Liability. The Surviving Corporation shall not
be liable to any holder of shares of Company Common Stock or UCU
Common Stock, as the case may be, for such shares (or dividends
or distributions with respect thereto) of UCU Common Stock or
cash from the Exchange Fund delivered to a public official as
required by any applicable abandoned property, escheat or similar
law. If any Certificates shall not have been surrendered
immediately prior to the date on which any Cash Consideration,
shares of UCU Common Stock, any dividends or distributions with
respect thereto, or any cash in lieu of fractional shares in
respect of such Certificate would otherwise escheat to or become
the property of, or otherwise become deliverable to, any
Governmental Authority, any such shares, dividends or
distributions or cash in respect of such Certificate shall, to
the extent permitted by applicable laws, become the property of
UCU, free and clear of all claims or interest of any Person
previously entitled thereto.
(h) Missing Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact and the providing of an
appropriate indemnity or surety bond by the Person claiming such
Certificate to be lost, stolen or destroyed, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed
Certificate, the Cash Consideration, or the Stock Consideration
and dividends and distributions deliverable in respect thereof
pursuant to this Agreement, less the amount of any withholding
taxes that may be required thereon, and without interest.
ARTICLE III
Representations and Warranties of the Company
The Company represents and warrants to UCU that the
statements contained in this Article III are true and correct,
except as set forth in the disclosure schedule delivered by the
Company to UCU prior to execution of this Agreement (the "Company
Disclosure Schedule") or as otherwise expressly permitted by this
Agreement. For purposes of this Agreement, "Company Material
Adverse Effect" means a material adverse effect (i) on the
business, properties, assets, liabilities (contingent or
otherwise), financial condition, results of operations or
prospects of the Company, taken as a whole, or (ii) on the
ability of the Company to perform its obligations under or to
consummate the transactions contemplated by this Agreement.
Section 3.01. Organization and Power; Regulation as a
Public Utility. (a) The Company is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, and has the requisite
corporate or other power and authority and governmental approvals
to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be
in good standing or have such power, authority or approvals would
not, individually or in the aggregate, be reasonably expected to
have a Company Material Adverse Effect. The Company is duly
qualified or licensed to do business and is in good standing in
each jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to
be so duly qualified or licensed and in good standing would not,
individually or in the aggregate, be reasonably expected to have
a Company Material Adverse Effect. As of the date hereof, the
Company has no Subsidiaries. True, accurate and complete copies
of the articles of incorporation and bylaws of the Company, as in
effect on the date hereof, have been delivered to UCU.
(b) The Company is not a "holding company," a
"subsidiary company" or an "affiliate" of any public utility
holding company within the meaning of Section 2(a)(7), 2(a)(8) or
2(a)(11) of the Public Utility Holding Company Act of 1935, as
amended ("PUHCA"), respectively. The Company is regulated as a
public utility in the States of Missouri, Oklahoma, Arkansas, and
Kansas and in no other state.
Section 3.02. Corporate Authorization. The Board of
Directors of the Company has (a) determined that the Merger is
fair and in the best interest of the Company and its
stockholders, (b) approved and adopted this Agreement, and (c)
resolved to recommend to the holders of the Company Common Stock
that they give the Company Stockholders' Approval (as defined
below). The execution and delivery by the Company of this
Agreement, and the consummation by the Company of the
transactions contemplated hereby, are within the Company's
corporate powers and, except as set forth in the next succeeding
sentence of this Section 3.02, have been duly authorized by all
necessary corporate action. The affirmative vote of a majority
of the outstanding shares of Company Common Stock (the "Company
Stockholders' Approval") is necessary to approve and adopt this
Agreement and the transactions contemplated by this Agreement.
This Agreement has been duly executed and delivered by the
Company and, subject to the receipt of the Company Stockholders'
Approval and, assuming the due authorization, execution and
delivery of this Agreement by UCU, constitutes a valid and
binding agreement of the Company, enforceable against the Company
in accordance with its terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws affecting creditors' rights generally from
time to time in effect and to general principles of equity,
regardless of whether in a proceeding at equity or at law).
Section 3.03. Governmental Authorization. The execution
and delivery by the Company of this Agreement, and the
consummation by the Company of the transactions contemplated
hereby, require no action by or in respect of, or filing with,
any federal, state or local government or any court,
administrative agency or commission or other governmental agency
or authority, whether domestic or foreign (a "Governmental
Authority"), other than (i) the filings of a certificate of
merger with respect to the Merger with the Kansas Secretary of
State, a certificate of merger with respect to the Merger with
the Delaware Secretary of State, and appropriate documents with
the relevant authorities of other states in which the Company is
qualified to do business; (ii) compliance with any applicable
requirements of the Federal Energy Regulatory Commission ("FERC")
and of the utility regulatory commissions of Arkansas, Kansas,
Missouri, and Oklahoma (the "Company Required Statutory
Approvals"); (iii) compliance with any applicable requirements of
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder
(the "HSR Act"); (iv) compliance with any applicable requirements
of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act"); (v)
compliance with any applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act"); (vi) compliance with
any other applicable securities laws; (vii) compliance with any
environmental, health or safety law or regulation requiring any
notification, disclosure or approval in connection with the
Merger; (viii) actions or filings which, if not taken or made,
would not, individually or in the aggregate, be reasonably
expected to have a Company Material Adverse Effect; and (ix)
filings and notices not required to be made or given until after
the Effective Time.
Section 3.04. Non-Contravention. The execution and
delivery of this Agreement by the Company does not, and the
consummation of the transactions contemplated hereby will not,
subject to the consents, approvals, orders, authorizations,
filings and registrations contemplated by Sections 3.02 and 3.03,
(i) conflict with, or result in any violation or breach of any
provision of the articles of incorporation or bylaws of the
Company; (ii) result in (A) any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a
default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any material benefit)
under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, contract or other agreement,
instrument or obligation to which the Company is a party or by
which any of them or any of their properties or assets may be
bound or (B) the creation of any Lien (as such term is defined
below) upon any of the properties or assets of the Company, or
(iii) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to the Company or any of its respective
properties or assets, except in the case of clauses (ii) and
(iii) for any such violations, breaches, defaults, terminations,
cancellations, accelerations or creations of Liens which would
not, individually or in the aggregate, be reasonably expected to
have a Company Material Adverse Effect. For purposes of this
Agreement, "Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset.
Section 3.05. Capitalization. (a) As of the date hereof,
the authorized capital stock of the Company consists of
100,000,000 shares of Company Common Stock, 5,000,000 shares of
Cumulative Preferred Stock, $10.00 par value ("Company Preferred
Stock"), and 2,500,000 shares of Preference Stock, without par
value ("Company Preference Stock"). As of March 31, 1999, (i)
17,138,486 shares of Company Common Stock were issued and
outstanding, (ii) -0- shares of Company Common Stock were held in
the treasury of the Company, (iii) the maximum number of shares
of Company Common Stock issuable pursuant to the Company Employee
Plans (as defined in Section 3.14(a)) and the Company Benefit
Arrangements (as defined in Section 3.14(d)) is 1,967,707 shares,
(iv) 500,000 shares of Company Preference Stock were available
for issuance under the Rights Agreement dated as of July 26, 1990
between the Company and ▇▇▇▇▇ ▇▇▇▇▇▇ Shareholder Services (the
"Rights Agreement"), (v) the maximum number of newly issued
shares of Company Common Stock issuable under the Dividend
Reinvestment and Stock Purchase Plan (the "DRIP") is 290,329
shares, (vi) the maximum number of shares of Company Common Stock
issuable to Directors under the Stock Unit Plan for Directors is
100,000 shares, (vii) 3,262,818 shares of Company Preferred Stock
were issued and outstanding, and (viii) no shares of Company
Preference Stock were issued and outstanding or reserved for
issuance other than as described in subsection (iv) above. No
change in such capitalization has occurred since such date except
as would have been permitted by Section 5.01(d) if it were to
have applied to such period. Section 3.05 of the Company
Disclosure Schedule sets forth a complete and accurate list of
all Company Benefit Arrangements pursuant to which shares of
Company Common Stock or rights thereto, may be issued, Company
Stock Options (as defined in Section 6.12(a)) and Company
Restricted Stock Awards (as defined in Section 6.12(c)). All
outstanding shares of the Company Common Stock are, and all
shares of Company Common Stock, subject to issuance as specified
above, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, shall be, duly
authorized, validly issued, fully paid and non-assessable, and
not subject to any preemptive right. There are no obligations,
contingent or otherwise, of the Company to repurchase, redeem or
otherwise acquire any shares of Company Common Stock.
(b) Except as set forth in Section 3.05(a), there are
no equity securities of any class of the Company, or any security
exchangeable into or exercisable for such equity securities,
issued, reserved for issuance or outstanding. Except as set
forth in Section 3.05(a), there are no options, warrants,
securities, calls, rights, commitments or agreements of any
character to which the Company is a party or by which any of them
are bound obligating the Company to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of
capital stock of the Company or obligating the Company to grant,
extend, accelerate the vesting of or enter into any such option,
warrant, equity security, call, right, commitment or agreement.
There are no voting trusts or other agreements or understandings
with respect to the shares of capital stock of the Company to
which the Company is a party.
Section 3.06. Reports and Financial Statements. (a) The
Company has filed all required reports, schedules, forms,
statements and other documents with the SEC since December 31,
1993 (the "Company SEC Reports").
(b) As of its filing date, each Company SEC Report
filed pursuant to the Exchange Act did not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, except to the extent that such statements
have been modified or superseded by a later filed Company SEC
Report.
(c) Each Company SEC Report that is a registration
statement, as amended or supplemented, if applicable, filed
pursuant to the Securities Act as of the date such registration
statement or amendment became effective did not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, except to the extent that such
statements have been modified or superseded by a later filed
Company SEC Report.
(d) The financial statements (including, in each case,
any related notes) contained in the Company SEC Reports complied
as to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto, were
prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as
permitted for presentation in Quarterly Reports on Form 10-Q),
and fairly presented in all material respects (subject in the
case of unaudited statements to normal, recurring audit
adjustments) the financial position of the Company as at the
respective dates and the results of its operations and cash flows
for the respective periods indicated. The audited balance sheet
of the Company as of December 31, 1998 is referred to herein as
the "Company Balance Sheet".
(e) Since December 31, 1993, the Company has made all
required filings with the FERC and any appropriate state public
utilities commission, except for such filings the failure to make
which would not, individually or in the aggregate, be reasonably
expected to have a Company Material Adverse Effect.
Section 3.07. No Undisclosed Liabilities. The Company does
not have any liabilities or obligations of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable
or otherwise, other than:
(a) liabilities or obligations which would not,
individually or in the aggregate, be reasonably expected to
have a Company Material Adverse Effect;
(b) liabilities or obligations disclosed or provided for
in the Company Balance Sheet or in the notes thereto or in the
Company SEC Reports filed prior to the date hereof;
(c) liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated by
this Agreement; or
(d) liabilities or obligations incurred since December
31, 1998 in the ordinary course of business consistent with
past practices.
Section 3.08. Litigation. Except as disclosed in the
Company SEC Reports filed prior to the date hereof:
(a) There is no action, suit, investigation or proceeding
pending against, or to the knowledge of the Company, threatened
against or affecting, the Company or any of its properties before
any Governmental Authority or arbitrator which, individually or
in the aggregate, would be reasonably expected to have a Company
Material Adverse Effect; and
(b) There is no judgment, decree, injunction, or order of
any Governmental Authority or arbitrator applicable to the
Company which, individually or in the aggregate, would be
reasonably expected to have a Company Material Adverse Effect.
Section 3.09. Absence of Certain Changes or Events. Since
the date of the Company Balance Sheet, except as permitted by or
as disclosed in this Agreement or the Company SEC Reports filed
prior to the date hereof, the Company has conducted its
businesses only in the ordinary course and in a manner consistent
with past practice and, since such date, there has not been (a)
any Company Material Adverse Effect or any event or development
(including in connection with the Merger) that would,
individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect, or (b) any event that would,
individually or in the aggregate, reasonably be expected to
prevent or materially delay the performance of this Agreement by
the Company.
Section 3.10. Compliance with Laws; No Default. Except as
disclosed in the Company SEC Reports filed prior to the date
hereof:
(a) (i) The Company is not in violation of and has not
violated or failed to comply with any statute, law, ordinance,
regulation, rule, judgment, decree, order, writ, injunction,
permit or license of any Governmental Authority or arbitrator
applicable to its business or operations, except for violations
and failures to comply that would not, individually or in the
aggregate, be reasonably expected to result in a Company Material
Adverse Effect and (ii) to the knowledge of the Company, the
Company has all permits, licenses, franchises and other
governmental authorizations, consents, approvals and exemptions
necessary to conduct its business as presently conducted and
which are material to the operation of such business.
(b) Each material agreement, contract or commitment to
which the Company is a party or by which the Company is bound or
to which any of their respective properties are subject ("Company
Contracts") is a valid, binding and enforceable obligation of the
Company and in full force and effect (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights
generally from time to time in effect and to general principles
of equity, regardless of whether in a proceeding at equity or at
law) except where the failure to be valid, binding and
enforceable and in full force and effect would not, individually
or in the aggregate, be reasonably expected to have a Company
Material Adverse Effect. The Company is not in default or
violation of any term, condition or provision of (i) its articles
of incorporation or by-laws or (ii) any Company Contract, except
in the case of clause (ii) for any defaults or violations that
would not, individually or in the aggregate, be reasonably
expected to have a Company Material Adverse Effect. The Company
is not subject to any agreement, whether written or oral,
restricting the ability of the Company to compete in any business
activity.
Section 3.11. Taxes. (a) The Company has timely filed or
will file or cause to be timely filed, all material Tax Returns
(as defined in Section 3.11(j)) required by applicable law to be
filed by it prior to or as of the Effective Time, and all such
material Tax Returns are, or will be at the time of filing,
complete in all material respects.
(b) The Company has paid or, where payment is not yet
due, has established or will establish or cause to be established
in accordance with generally accepted accounting principles on or
before the Effective Time an adequate accrual for the payment of,
all material Taxes (as defined in Section 3.11(j)) due with
respect to any period ending prior to or as of the Effective
Time.
(c) There are no (i) outstanding consents extending
the statute of limitations for the assessment of any Taxes of the
Company, or (ii) proposals, assertions or assessments against the
Company for deficiencies for any Taxes that have not been
satisfied or resolved.
(d) There are no material Tax claims pending against
the Company and the Company does not know of any threatened claim
for material Tax deficiencies or any basis for such claims, no
material issues have been raised in writing in any examination by
any taxing authority with respect to the Company which, by
application of similar principles, reasonably could be expected
to result in a material proposed deficiency for any other period
not so examined, and there is not now in force any waiver or
agreement by the Company for the extension of time for the
assessment of any material Tax, nor has any such waiver or
agreement been requested in writing by any taxing authority. The
Company has no liability with respect to any material United
States federal, state, local, foreign or other Taxes of any
corporation or entity other than the Company.
(e) No transaction contemplated by this Agreement is
subject to withholding under Section 1445 of the Code.
(f) Neither the Company nor any of its other
Affiliates (as defined in Section 3.15), has taken any action,
agreed to take any action, or failed to take any action, or has
knowledge of any fact or circumstance that (without regard to any
action taken or agreed to be taken by UCU or any of its
Affiliates) could reasonably be expected to cause the Merger to
fail to qualify as a "reorganization" within the meaning of
Section 368(a) of the Code.
(g) The Company has not made during the last 3 years,
nor will make prior to the Effective Time, an election to have a
stock purchase treated as an asset purchase under Section 338 of
the Code.
(h) The Company has not filed with the IRS, and will
not file with the IRS prior to the Effective Time, a statement
consenting to the recognition of gain on the disposition of its
"subsection (f) assets" under Section 341(f) of the Code.
(i) The Company has not made in the last 7 years, and
will not make prior to the Effective Time, any changes in
accounting method to which Section 481(a) of the Code may apply.
(j) "Taxes" shall mean any and all taxes, charges,
fees, levies or other assessments, including income, gross
receipts, excise, real or personal property, sales, withholding,
social security, retirement, unemployment, occupation, use, goods
and services, service use, license, value added, capital, net
worth, payroll, profits, withholding, franchise, transfer and
recording taxes, fees and charges, and any other taxes,
assessments or similar charges imposed by the IRS or any taxing
authority (whether domestic or foreign including any state,
county, local or foreign government or any subdivision or taxing
agency thereof (including a United States possession)) (a "Taxing
Authority"), whether computed on a separate, consolidated,
unitary, combined or any other basis; and such term shall include
any interest whether paid or received, fines, penalties or
additional amounts attributable to, or imposed upon, or with
respect to, any such taxes, charges, fees, levies or other
assessments. "Tax Return" shall mean any report, return,
document, declaration or other information or filing required to
be supplied to any Taxing Authority or jurisdiction (foreign or
domestic) with respect to Taxes, including information returns,
any documents with respect to or accompanying payments of
estimated Taxes, or with respect to or accompanying requests for
the extension of time in which to file any such report, return,
document, declaration or other information.
Section 3.12. Intellectual Property. (a) Except as set
forth in the Company SEC Reports filed prior to the date hereof,
the Company owns, is licensed or is otherwise legally entitled to
use, all patents, trade secrets, trademarks, trade names, service
marks, copyrights and mask works, all applications for and
registrations of such patents, trademarks, trade names, service
marks, copyrights and mask works, and all processes, formulae,
methods, schematics, technology, know-how, computer software
programs or applications and tangible or intangible proprietary
information utilized in the conduct of the business of the
Company as currently conducted (the "Company Intellectual
Property Rights") except to the extent that the failure to have
such rights would not, individually or in the aggregate, be
reasonably expected to have a Company Material Adverse Effect.
(b) Except as disclosed in the Company SEC Reports
filed prior to the date hereof, the Company (i) has not been sued
in any suit, action or proceeding which involves a claim of
infringement of any patent, trade secret, trademark, service ▇▇▇▇
or copyright or the violation of any trade secret or other
proprietary right of any third party and (ii) has no knowledge
that the manufacturing, importation, marketing, licensing, sale,
offer for sale, or use of any of its products infringes any
patent, trademark, service ▇▇▇▇, copyright, trade secret or other
proprietary right of any third party, which infringement,
individually or in the aggregate, would be reasonably expected to
have a Company Material Adverse Effect.
Section 3.13. Environmental Matters. Except as set forth in
the Company SEC Reports filed prior to the date hereof and
except for such as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect:
(a)(i) No notice, demand, request for information, request
for an investigation, notice of violation, citation, summons,
claim, complaint or order has been received by, is pending,
or, to the Company's knowledge, threatened by any Person
against the Company nor has any penalty been assessed and not
paid (or potentially settled), is pending or, to the Company's
knowledge, threatened against the Company relating to or
arising out of Environmental Laws (as defined in Section
3.13(b)(i)).
(ii) To the Company's knowledge, no property now or
previously owned, leased or operated by the Company nor any
property to which the Company has, directly or indirectly,
transported or arranged for the transportation of any
Hazardous Substance (as defined in Section 3.13(b)(ii)) is
subject to investigation or cleanup or is listed or proposed
for listing on any federal, state, local or foreign list of
sites requiring investigation or cleanup.
(iii) Except in material compliance with
Environmental Laws, there have been no Releases (as defined in
Section 3.13(b)(iii)) at any property now owned, leased or
operated by the Company.
(iv) To the Company's knowledge, there are no liabilities
or Environmental Claims (as defined in Section 3.13(b)(iv)) of
or relating to the Company of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or
otherwise, arising under or relating to Environmental Laws.
(v) The Company has or has applied for all permits or
licenses necessary to operate its facilities in compliance
with Environmental Laws and is currently in material
compliance with all applicable Environmental Laws.
(vi) Except in material compliance with Environmental
Laws, the Company has not generated, used, treated, recycled,
stored, disposed or transported Hazardous Substances.
(vii) To the Company's knowledge, the Company's
underground and aboveground storage tanks (hereinafter
"Tanks") located at any property currently owned, leased or
operated by the Company are now operated in material
compliance with all applicable Environmental Laws, and the
Company's Tanks located at any property formerly owned, leased
or operated by the Company at anytime after January 1, 1990,
were operated by the Company in material compliance with all
applicable Environmental Laws.
(viii) The Company has no liability or potential
liability for any former manufactured gas plant facility.
(b) For purposes of this Agreement, the following
terms shall have the meanings set forth below:
(i) "Environmental Laws" shall mean all applicable
statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, authorizations, judgments, decrees,
injunctions, and similar items, of all governmental agencies,
departments, commissions, boards, bureaus or instrumentalities of
the United States or other nations, and the states and political
subdivisions thereof, and all applicable principles of common law
pertaining to the regulation and protection of the environment,
human health, safety and damages to natural resources, including
without limitation, Releases and threatened Releases or otherwise
relating to the operation, manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
Hazardous Substances. Environmental Laws include, but are not
limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA");
the Federal Insecticide, Fungicide and Rodenticide Act, as
amended ("FIFRA"); the Resource Conservation and Recovery Act, as
amended ("RCRA"); the Toxic Substances Control Act, as amended
("TSCA"); the Clean Air Act, as amended ("CAA"); the Federal
Water Pollution Control Act, as amended ("FWPCA'); the Oil
Pollution Act of 1990, as amended ("OPA"); the Occupational
Safety and Health Act, as amended ("OSHA"); and the Safe Drinking
Water Act, as amended ("SDWA"); and their state and local
counterparts or equivalents, as amended from time to time.
(ii) "Hazardous Substance" shall mean (a) any chemicals,
materials, substances or wastes which are defined as or included
in the definition of "hazardous substances", "hazardous
materials", "toxic substances", "extremely hazardous substances",
"toxic pollutants", or words of similar import, under any
applicable Environmental Law; (b) any petroleum, petroleum
products (including, without limitation, crude oil or any
fraction thereof), natural gas, natural gas liquids, liquefied
natural gas or synthetic gas useable for fuel (or mixtures of
natural gas and such synthetic gas) or oil and gas exploration or
production waste, polychlorinated biphenyls ("PCBs"),
asbestos-containing materials, and mercury; and (c) any other
chemical, material, substance, or waste, exposure to which is
prohibited, limited or regulated by any governmental or
regulatory authority under any applicable Environmental Law.
(iii) "Release" means any emission, spill, seepage, leak,
escape, leaching, discharge, injection, pumping, pouring,
emptying, dumping, disposing or release of Hazardous Substances.
(iv) "Environmental Claims" shall mean any and all
administrative, regulatory or judicial actions or causes of
action, suits, obligations, liabilities, losses, proceedings,
decrees, judgments, penalties, fees, demands, demand letters,
orders, directives, claims (including any claims involving toxic
torts or liability in tort, strict, absolute or otherwise),
liens, notices of noncompliance or violation, or legal fees or
costs of investigations, monitoring or proceedings, relating to
any Environmental Law or any environmental permit issued under
any such Environmental Law, or arising from the presence, Release
or threatened Release (or alleged presence, Release or threatened
Release) into the environment of any Hazardous Substances
(hereinafter "Claims") including, without limitation, and
regardless of the merit of such Claim, any and all Claims by any
governmental or regulatory authority or by any third party for
enforcement, cleanup, remediation, removal, response or other
actions or damages, contribution, indemnification, cost recovery,
compensation or injunctive relief pursuant to any Environmental
Law or for any injury (including death of any person or persons)
or threat of injury to health, safety, natural resources or the
environment.
Section 3.14. Employee Benefits and Labor Matters. (a) The
Company Disclosure Schedule contains a list identifying each
"employee benefit plan" (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA")), which
is subject to any provision of ERISA and is maintained,
administered or contributed to by the Company and covers any
employee or former employee of the Company or under which the
Company has any liability (referred to collectively herein as the
"Company Employee Plans"). Copies of such plans (and, if
applicable, related trust agreements and insurance contracts) and
all amendments thereto have been made available to UCU together
with the summary plan description, the annual report (Form 5500
including, if applicable, Schedule B thereto) prepared in
connection with any such plan for the past three years and the
actuarial valuation report prepared in connection with any such
plan for the past three years. The only Company Employee Plans
which individually or collectively would constitute an "employee
pension benefit plan" (as defined in Section 3(2) of ERISA) are
identified as such in the list referred to above.
(b) No "accumulated funding deficiency" (as defined in
Section 412 of the Code) has been incurred with respect to any
Company Employee Plan subject to Title IV of ERISA, whether or
not waived. No "reportable event" (within the meaning of Section
4043 of ERISA) and no event described in Section 4041, 4042, 4062
or 4063 of ERISA has occurred in connection with any Company
Employee Plans subject to Title IV of ERISA other than any event
which would not, individually or in the aggregate, be reasonably
expected to have a Company Material Adverse Effect. No condition
exists and no event has occurred that could constitute grounds
for termination of any Company Employee Plans subject to Title IV
of ERISA other than any such terminations that would not,
individually or in the aggregate, be reasonably expected to have
a Company Material Adverse Effect. Neither Company nor any
Company ERISA Affiliate has any material unsatisfied or potential
liability under Title IV of ERISA in connection with the
termination of, or complete or partial withdrawal from, any plan
covered or previously covered by Title IV of ERISA. As of the
last day of the most recent plan year, the value of the assets of
each Company Employee Plan that is subject to Title IV of ERISA
equaled or exceeded the present value of the "benefit
liabilities" (as defined in Section 4001 (a)(16) of ERISA) of
each such Company Employee Plan, using the Company Employee Plan
assumptions for funding purposes in effect for such plan year.
Nothing done or omitted to be done and no transaction or holding
of any asset under or in connection with any Company Employee
Plan has made or will make the Company or any officer or director
of the Company subject to any liability under Title I of ERISA or
liable for any tax pursuant to Section 4975 of the Code that
would, individually or in the aggregate, be reasonably expected
to have a Company Material Adverse Effect. For purposes of this
Section, "Company ERISA Affiliate" means any other Person which,
together with the Company, would be treated as a single employer
under Section 414 of the Code.
(c) Each Company Employee Plan that is intended to be
qualified under Section 401(a) of the Code has received a
determination letter from the IRS that it is so qualified and, to
the knowledge of the Company, is so qualified and has been so
qualified during the period since its adoption. To the knowledge
of the Company, each trust created under any such Company
Employee Plan is exempt from tax under Section 501(a) of the Code
and, to the knowledge of the Company, has been so exempt since
its creation. The Company has made available to UCU the most
recent determination letter of the IRS relating to each such
Company Employee Plan. The Company and all Company ERISA
Affiliates have performed all obligations required to be
performed by them with respect to each Company Employee Plan, and
each Company Employee Plan has been maintained in substantial
compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations, including,
but not limited to, ERISA and the Code, which are applicable to
such Company Employee Plan, excluding any instances of non-
performance or non-compliance that would not, individually or in
the aggregate, be reasonably expected to have a Company Material
Adverse Effect.
(d) The Company Disclosure Schedule contains a list of
each employment, severance or other similar contract, arrangement
or policy and each plan or arrangement (whether written or oral)
providing for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement
benefits or for deferred compensation, profit sharing, bonuses,
stock options, stock appreciation or other forms of incentive
compensation or post-retirement insurance, compensation or
benefits which is not a Company Employee Plan, is entered into,
maintained or contributed to, as the case may be, by the Company
and covers any employee or former employee of the Company. Such
contracts, plans and arrangements as are described above, copies
or descriptions of all of which (and, if applicable any related
trust agreement or insurance contract) have been furnished
previously to UCU, are referred to collectively herein as the
"Company Benefit Arrangements". The Company and all Company
ERISA Affiliates have performed all obligations required to be
performed by them with respect to each Company Benefit
Arrangement and each Company Benefit Arrangement has been
maintained in substantial compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules
and regulations that are applicable to such Company Benefit
Arrangement, excluding any instances of non-performance or non-
compliance that would not, individually or in the aggregate, be
reasonably expected to have a Company Material Adverse Effect.
(e) All contributions and other payments required to
be made by the Company pursuant to any Company Employee Plan or
Company Benefit Arrangement have been timely made or reflected on
the Company SEC Reports.
(f) Since January 1, 1999, there has been no amendment
to, material written interpretation of or announcement (whether
written or oral) by the Company or any of its Affiliates of any
amendment to, or material change in employee participation or
coverage under, any Company Employee Plan or Company Benefit
Arrangement.
(g) The execution of, and the performance of the
transactions contemplated in, this Agreement will not (either
alone or upon the occurrence of any additional or subsequent
events) constitute an event under any Company Employee Plan or
Company Benefit Arrangement that will or may result in any
payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any
current or former employee, director or consultant of the
Company, or result in the triggering or imposition of any
restrictions or limitations on the right of UCU or the Company to
amend or terminate any Company Employee Plans and receive the
full amount of any excess assets remaining or resulting from such
amendment or termination, subject to applicable taxes. There is
no contract, agreement, plan or arrangement covering any employee
or former employee of the Company that, individually or in the
aggregate, could give rise to the payment of any amount that
would not be deductible pursuant to the terms of Section 280G of
the Code. The Company does not maintain, contribute to, or have
any liability or obligation with respect to any plan, program or
arrangement providing post retirement or post employment health
or welfare benefits, other than as required by Part 6 of Title I
of ERISA or Section 4980B of the Code. With respect to any
Company Employee Plan that is an "employee welfare benefit plan"
(as defined in Section 3(1) of ERISA), including any such plan
covering former employees of the Company, the Company has
reserved the right to amend or terminate the plan at any time
without liability with respect to claims incurred after the date
of such amendment or termination, and to the knowledge of
Company, any such plan may be amended or terminated at any time
without liability with respect to claims incurred after the date
of such amendment or termination.
(h) There are no written actions, lawsuits or claims
by or on behalf of any of the Company Employee Plans or Company
Benefit Arrangements, by any employee or beneficiary covered
under any such Company Employee Plan or Company Benefit
Arrangement with respect to such Company Employee Plan or Company
Benefit Arrangement, or otherwise involving any Company Employee
Plan or Company Benefit Arrangement (other than routine claims
for benefits and routine expenses) pending or threatened which
could subject the Company, any officer or director, or any
employee of the Company to any liability that, individually or in
the aggregate, would reasonably be expected to have a Company
Material Adverse Effect.
(i) No work stoppage, labor strike or slowdown against
the Company is pending or, to the knowledge of the Company,
threatened and the Company is not involved in or, to the
knowledge of the Company, threatened with any labor dispute or
grievance which, individually or in the aggregate, has had or
would be reasonably expected to have a Company Material Adverse
Effect. To the knowledge of the Company there is no organizing
effort or representation question at issue with respect to any
employee of the Company. No collective bargaining agreement to
which the Company is or may be a party is currently under
negotiation or renegotiation and no existing collective
bargaining agreement is due for expiration, renewal or
renegotiation within the one year period after the date hereof;
provided, that the Collective Bargaining Agreements dated
November 1, 1996 with Local Union No. 1474 of the International
Brotherhood of Electrical Workers ("IBEW") is scheduled to expire
on October 31, 1999, and UCU agrees between the date of this
Agreement and the Effective Time the Company may, at its sole
option, negotiate and execute a new collective bargaining
agreement with IBEW on terms and conditions which shall be
determined by the Company in its sole discretion.
Section 3.15. Transactions with Affiliates. Since the date
of the Company's last proxy statement prior to the date of this
Agreement, there have been no transactions, agreements,
arrangements or understandings between the Company, on the one
hand, and the Company's Affiliates or other Persons, on the other
hand, that would be required to be disclosed under Item 404 of
Regulation S-K under the Securities Act. For purposes of this
Agreement, "Affiliate", when used with respect to any Person,
means any other Person directly or indirectly controlling,
controlled by, or under common control with such Person. As used
in the definition of "Affiliate," the term "control" means
possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract
or otherwise.
Section 3.16. Information Supplied. The information to be
supplied by the Company for inclusion in the registration
statement on Form S-4 or any amendment or supplement thereto
pursuant to which shares of UCU Common Stock issuable in the
Merger will be registered with the SEC (the "Registration
Statement") shall not at the time the Registration Statement is
declared effective by the SEC contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The information to be supplied by the
Company for inclusion in the proxy statement/prospectus or any
amendment or supplement thereto (the "Proxy Statement") to be
sent to the stockholders of the Company in connection with their
meeting to consider this Agreement and the Merger (the "Company
Stockholders' Meeting") shall not, on the date the Proxy
Statement is first mailed to the stockholders of the Company or
at the time of the Company Stockholders' Meeting, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
Section 3.17. Opinion of Financial Advisor. The financial
advisor of the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., has delivered
to the Company a written opinion dated the date of this Agreement
to the effect that, as of the date hereof, the Merger
Consideration to be received in the Merger is fair from a
financial point of view to the common stockholders of the
Company. The Company has delivered to UCU a copy of such
opinion.
Section 3.18. Finders' Fees. Other than ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., no investment banker, broker, finder, other
intermediary or other Person is entitled to any investment
banking, broker's, finder's or similar fee or commission from the
Company upon consummation of the transactions contemplated by
this Agreement.
Section 3.19. Takeover Statutes. The Company has opted out
of the provisions of Sections 17-1286 through 17-1298 of the KGCC
and such provisions shall not apply to control share acquisitions
of the Company's capital stock. To the best of the Company's
knowledge, no other "fair price", "moratorium" "control share
acquisition" or other similar anti-takeover statute or regulation
enacted under state or federal laws in the United States (each, a
"Takeover Statute") applicable to the Company is applicable to
the Merger or the other transactions contemplated hereby.
Section 3.20. Rights Agreement. The Company shall take all
necessary action with respect to the Rights Agreement to (i)
render the Rights Agreement inapplicable to the Merger and the
other transactions contemplated by this Agreement and (ii)
provide that UCU shall not be deemed an Acquiring Person (as
defined in the Rights Agreement), the Distribution Date (as
defined in the Rights Agreement) shall not be deemed to occur and
the rights issuable pursuant to the Rights Agreement (the
"Rights") will not separate from the shares of Company Common
Stock, as a result of entering into this Agreement or
consummating the Merger and the other transactions contemplated
hereby, and, thereafter, unless this Agreement shall be
terminated in accordance with Section 8.01, the Company shall
take no action to negate or nullify the foregoing.
Section 3.21. Year 2000. The Company has initiated a
review and assessment of the Year 2000 Problem (as defined
below), has developed a plan for addressing the Year 2000 Problem
on a timely basis and has to date implemented such plan, except
where the Company's failure to do so is not reasonably likely to
have a Company Material Adverse Effect. Except as would not
reasonably be expected to have a Company Material Adverse Effect,
to the knowledge of the Company none of the assets or equipment
owned or utilized by the Company will fail to perform because of,
or due in any way to, a Year 2000 Problem. To the knowledge of
the Company, no vendor, supplier or customer of the Company will
experience a Year 2000 Problem that, individually or in the
aggregate, could reasonably be expected to have a Company
Material Adverse Effect. The term "Year 2000 Problem" means the
material inability of any hardware, software or process to
recognize and correctly calculate dates on and after January 1,
2000, or the failure of computer systems, products or services to
perform any of their intended functions in a proper manner in
connection with data containing any date on or after January 1,
2000.
Section 3.22. Insurance. The Company is, and has been
continuously since January 1, 1995, self-insured or insured with
financially responsible insurers in such amounts and against such
risks and losses as are customary in all material respects for
companies conducting the business as conducted by the Company
during such time period. The Company has not received any notice
of cancellation or termination with respect to any insurance
policy of the Company. All material insurance policies of the
Company are valid and enforceable policies.
Section 3.23 No Dissenters' Rights. The holders of
Company Common Stock are not entitled to appraisal rights under
the KGCC or under the Articles of Incorporation of the Company
unless a Proration Event occurs.
Section 3.24 Ownership of UCU Common Stock. The Company
does not "beneficially own" (as such term is defined in Rule 13d-
3 under the Exchange Act) any shares of UCU Common Stock.
Section 3.25 Definition of "Knowledge". Wherever in this
Agreement the phrases "to the knowledge" of the Company, "to the
Company's knowledge", or similar phrases appear, "knowledge"
shall mean the actual knowledge of the senior management of the
Company.
ARTICLE IV
Representations and Warranties of UCU
UCU represents and warrants to the Company that the
statements contained in this Article IV are true and correct,
except as set forth in the disclosure schedule delivered by UCU
to the Company prior to the execution of this Agreement (the "UCU
Disclosure Schedule") or as otherwise expressly permitted by this
Agreement. For purposes of this Agreement, "UCU Material Adverse
Effect" means a material adverse effect (i) on the business,
properties, assets, liabilities (contingent or otherwise),
financial condition, results of operations or prospects of UCU
and its Subsidiaries, taken as a whole, or (ii) on the ability of
UCU to perform its obligations under or to consummate the
transactions contemplated by this Agreement.
Section 4.01. Organization and Power; Regulation as a
Public Utility. (a) Each of UCU and its Subsidiaries is a
corporation, partnership or other entity duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation or organization, and has the requisite
corporate or other power and authority and governmental approvals
to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be
in good standing or have such power, authority or approvals would
not, individually or in the aggregate, be reasonably expected to
have a UCU Material Adverse Effect. Each of UCU and its
Subsidiaries is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary,
except where the failure to be so duly qualified or licensed and
in good standing would not, individually or in the aggregate, be
reasonably expected to have a UCU Material Adverse Effect. True,
accurate and complete copies of the certificate of incorporation
and bylaws of UCU, as in effect on the date hereof, have been
delivered to the Company.
(b) Neither UCU nor any of its Subsidiaries is a
"holding company," a "subsidiary company" or an "affiliate" of
any public utility holding company within the meaning of Section
2(a)(7), 2(a)(8) or 2(a)(11) of PUHCA, respectively. UCU and/or
its Subsidiaries are regulated as a public utility in the States
of Colorado, Iowa, Kansas, Michigan, Minnesota, Missouri,
Nebraska, South Dakota and West Virginia (in each of which only
UCU is so regulated) and in no other state, the province of
British Columbia, Canada, and in no other province of Canada, and
the countries of New Zealand and Australia and in no other
country.
Section 4.02. Corporate Authorization. The Board of
Directors of UCU has (a) determined that the Merger is fair and
in the best interests of UCU and its stockholders and (b)
approved and adopted this Agreement. The execution and delivery
by UCU of this Agreement, and the consummation by UCU of the
transactions contemplated hereby, are within the corporate powers
of UCU and have been duly authorized by all necessary corporate
action. No approval by UCU stockholders is necessary to approve
and adopt this Agreement and the transactions contemplated by
this Agreement. This Agreement has been duly executed and
delivered by UCU and, assuming the due authorization, execution
and delivery of this Agreement by the Company, constitutes a
valid and binding agreement of UCU, enforceable against UCU in
accordance with its terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws affecting creditors' rights generally from
time to time in effect and to general principles of equity,
regardless of whether in a proceeding at equity or at law). The
shares of UCU Common Stock issued pursuant to the Merger, when
issued in accordance with the terms hereof, will be duly
authorized, validly issued, fully paid and non-assessable and
free of preemptive rights.
Section 4.03. Governmental Authorization. The execution
and delivery by UCU of this Agreement, and the consummation by
UCU of the transactions contemplated hereby, require no action by
or in respect of, or filing with, any Governmental Authority
other than (i) the filing of a certificate of merger with respect
to the Merger with the Kansas Secretary of State, a certificate
of merger with respect to the Merger with the Delaware Secretary
of State and appropriate documents with the relevant authorities
of other states in which UCU is qualified to do business; (ii)
compliance with any applicable requirements of the FERC and
requirements of the utility regulatory commissions of the states
of Missouri, Kansas, Colorado, Iowa, Michigan, Minnesota,
Nebraska, South Dakota and West Virginia (the "UCU Required
Statutory Approvals"); (iii) compliance with any applicable
requirements of the HSR Act; (iv) compliance with any applicable
requirements of the Securities Act; (v) compliance with any
applicable requirements of the Exchange Act; (vi) compliance with
any other applicable securities laws; (vii) compliance with any
environmental, health or safety law or regulation requiring any
notification, disclosure or approval in connection with the
Merger; (viii) actions or filings which, if not taken or made,
would not, individually or in the aggregate, be reasonably
expected to have a UCU Material Adverse Effect; and (ix) filings
and notices not required to be made or given until after the
Effective Time.
Section 4.04. Non-Contravention. The execution and
delivery of this Agreement by UCU does not, and the consummation
of the transactions contemplated hereby will not, subject to the
consents, approvals, orders, authorizations, filings and
registrations contemplated by Sections 4.02 and 4.03, (i)
conflict with, or result in any violation or breach of any
provision of the certificate of incorporation or bylaws of UCU,
(ii) result in any violation or breach of, or constitute (with or
without notice or lapse of time, or both) a default (or give rise
to a right of termination, cancellation or acceleration of any
obligation or loss of any material benefit) under any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, contract or other agreement, instrument or
obligation to which UCU or any of its Subsidiaries is a party or
by which any of them or any of their properties or assets may be
bound, or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to UCU or any of its
Subsidiaries or any of their respective properties or assets,
except in the case of clauses (ii) and (iii) for any such
violations, breaches, defaults, terminations, cancellations or
accelerations which would not, individually or in the aggregate,
be reasonably expected to have a UCU Material Adverse Effect.
Section 4.05. Capitalization. (a) As of the date hereof,
the authorized capital stock of UCU consists of 200,000,000
shares of UCU Common Stock, 20,000,000 shares of Class A Common
Stock, par value $1.00 per share ("UCU Class A Stock") and
10,000,000 shares of Preference Stock, without par value ("UCU
Preference Stock"). As of March 31, 1999, (i) 92,015,496 shares
of UCU Common Stock were issued and outstanding, (ii) 1,590,489
shares of UCU Common Stock were held in the treasury of UCU or by
Subsidiaries of UCU, (iii) 9,783,779 shares of UCU Common Stock
were reserved for issuance pursuant to the UCU employee plans and
the UCU benefit arrangements, (iv) no shares of UCU Class A Stock
were issued and outstanding and (v) no shares of UCU Preference
Stock were issued and outstanding. Since such date, UCU has not
issued any UCU Class A Stock. All outstanding shares of UCU
Common Stock are, and all shares of UCU Common Stock subject to
issuance as specified above, upon issuance on the terms and
conditions specified in the instruments pursuant to which they
are issuable, shall be, duly authorized, validly issued, fully
paid and nonassessable, and not subject to any preemptive rights.
There are no obligations, contingent or otherwise, of UCU or any
of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares of UCU Common Stock.
(b) Except as set forth in Section 4.05(a), there are
no equity securities of any class of UCU, or any security
exchangeable into or exercisable for such equity securities,
issued, reserved for issuance or outstanding. Except as set forth
in Section 4.05(a), there are no options, warrants, securities,
calls, rights, commitments or agreements of any character to
which UCU or any of its Subsidiaries is a party or by which any
of them are bound obligating UCU or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock of UCU or obligating UCU or
any of its Subsidiaries to grant, extend, accelerate the vesting
of or enter into any such option, warrant, equity security, call,
right, commitment or agreement. There are no voting trusts or
other agreements or understandings with respect to the shares of
capital stock of UCU to which UCU is a party.
Section 4.06. Reports and Financial Statements. (a) UCU
has filed all required reports, schedules, forms, statements and
other documents with the SEC since December 31, 1993 (the "UCU
SEC Reports").
(b) As of its filing date, each UCU SEC Report filed
pursuant to the Exchange Act did not contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, except to the extent that such statements have been
modified or superseded by a later filed UCU SEC Report.
(c) Each UCU SEC Report that is a registration
statement, as amended or supplemented, if applicable, filed
pursuant to the Securities Act as of the date such registration
statement or amendment became effective did not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, except to the extent that such
statements have been modified or superseded by a later filed UCU
SEC Report.
(d) The consolidated financial statements (including,
in each case, any related notes) contained in the UCU SEC Reports
complied as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto,
were prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as
permitted for presentation in Quarterly Reports on Form 10-Q),
and fairly presented in all material respects (subject in the
case of unaudited statements to normal, recurring audit
adjustments) the consolidated financial position of UCU and its
Subsidiaries as at the respective dates and the consolidated
results of its operations and cash flows for the respective
periods indicated. The audited balance sheet of UCU as of
December 31, 1998 is referred to herein as the "UCU Balance
Sheet".
(e) Since December 31, 1993, UCU and each of its
Subsidiaries has made all required filings with the FERC and any
appropriate public utilities commission, except for such filings
the failure to make which would not, individually or in the
aggregate, be reasonably expected to have a UCU Material Adverse
Effect.
Section 4.07. No Undisclosed Liabilities. UCU and its
Subsidiaries do not have any liabilities or obligations of any
kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, other than:
(a) liabilities or obligations which would not,
individually or in the aggregate, be reasonably expected to
have a UCU Material Adverse Effect;
(b) liabilities or obligations disclosed or provided for
in the UCU Balance Sheet or in the notes thereto or in the UCU
SEC Reports filed prior to the date hereof;
(c) liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated by this
Agreement; or
(d) liabilities or obligations incurred since December 31,
1998 in the ordinary course of business consistent with past
practices.
Section 4.08. Litigation. Except as disclosed in the UCU
SEC Reports filed prior to the date hereof:
(a) There is no action, suit, investigation or proceeding
pending against, or to the knowledge of UCU, threatened against
or affecting, UCU or any of its Subsidiaries or any of their
respective properties before any Governmental Authority or
arbitrator which, individually or in the aggregate, would be
reasonably expected to have a UCU Material Adverse Effect.
(b) There is no judgment, decree, injunction, or order of
any Governmental Authority or arbitrator applicable to UCU or any
of its Subsidiaries which, individually or in the aggregate,
would be reasonably expected to have a UCU Material Adverse
Effect.
Section 4.09. Absence of Certain Changes or Events. Since
the date of the UCU Balance Sheet, except as permitted by or as
disclosed in this Agreement or the UCU SEC Reports filed prior to
the date hereof, UCU and its Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent
with past practice and, since such date, (a) there has not been
any UCU Material Adverse Effect or any event or development
(including in connection with the Merger) that would,
individually or in the aggregate, reasonably be expected to have
a UCU Material Adverse Effect, (b) there has not been any event
that would, individually or in the aggregate, reasonably be
expected to prevent or materially delay the performance of this
Agreement by UCU, or (c) UCU has not consummated or agreed to
consummate any merger or any material acquisition or joint
venture.
Section 4.10. Compliance with Laws; No Default. Except as
disclosed in the UCU SEC Reports filed prior to the date hereof:
(a) (i) Neither UCU nor any of its Subsidiaries is in
violation of or has violated or failed to comply with any
statute, law, ordinance, regulation, rule, judgment, decree,
order, writ, injunction, permit or license of any Governmental
Authority or arbitrator applicable to its business or operations,
except for violations and failures to comply that would not,
individually or in the aggregate, be reasonably expected to
result in a UCU Material Adverse Effect and (ii) to UCU's
knowledge, UCU and its Subsidiaries have all permits, licenses,
franchises and other governmental authorizations, consents,
approvals and exemptions necessary to conduct their businesses as
presently conducted and which are material to the operation of
such businesses.
(b) Each material agreement, contract or commitment to
which UCU is a party or by which UCU is bound or to which its
properties are subject ("UCU Contracts") is a valid, binding and
enforceable obligation of UCU and in full force and effect
(subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws affecting
creditors' rights generally from time to time in effect and to
general principles of equity, regardless of whether in a
proceeding at equity or at law), except where the failure to be
valid, binding and enforceable and in full force and effect would
not, individually or in the aggregate, be reasonably expected to
have a UCU Material Adverse Effect. UCU is not in default or
violation of any term, condition or provisions of (i) its
certificate of incorporation or bylaws or (ii) any UCU Contract,
except in the case of clause (ii) for any defaults or violations
that would not, individually or in the aggregate, be reasonably
expected to have a UCU Material Adverse Effect.
Section 4.11. Taxes. (a) UCU has timely filed (or has had
timely filed on its behalf) or will file or cause to be timely
filed, all material Tax Returns required by applicable law to be
filed by it prior to or as of the Effective Time, and all such
material Tax Returns are, or will be at the time of filing,
complete in all material respects.
(b) UCU has paid (or has had paid on its behalf) or,
where payment is not yet due, has established (or has had
established on its behalf and for its sole benefit and recourse)
or will establish or cause to be established in accordance with
generally accepted accounting principles on or before the
Effective Time an adequate accrual for the payment of, all
material Taxes due with respect to any period ending prior to or
as of the Effective Time.
(c) There are no (i) outstanding consents extending
the statute of limitations for the assessment of any Taxes of
UCU, or (ii) proposals, assertions or assessments against UCU for
deficiencies for any Taxes that have not been satisfied or
resolved.
(d) There are no material Tax claims pending against
UCU and UCU does not know of any threatened claim for material
Tax deficiencies or any basis for such claims, no material issues
have been raised in writing in any examination by any taxing
authority with respect to UCU which, by application of similar
principles, reasonably could be expected to result in a material
proposed deficiency for any other period not so examined, and
there is not now in force any waiver or agreement by UCU for the
extension of time for the assessment of any material Tax, nor has
any such waiver or agreement been requested in writing by any
taxing authority. The Company has no liability with respect to
any material United States federal, state, local, foreign or
other Taxes of any corporation or entity other than UCU and its
Subsidiaries.
(e) Neither UCU nor any of its other Affiliates, has
taken any action, agreed to take any action, or failed to take
any action, or has knowledge of any fact or circumstance that
(without regard to any action taken or agreed to be taken by the
Company or any of its Affiliates) could reasonably be expected to
cause the Merger to fail to qualify as a "reorganization" within
the meaning of Section 368(a) of the Code.
(f) UCU has not made during the last 3 years, nor will
make prior to the Effective Time, an election to have a stock
purchase treated as an asset purchase under Section 338 of the
Code.
(g) UCU has not filed with the IRS, and will not file
with the IRS prior to the Effective Time, a statement consenting
to the recognition of gain on the disposition of its "subsection
(f) assets" under Section 341(f) of the Code.
(h) The Company has not made in the last 7 years, and
will not make prior to the Effective Time, any changes in
accounting method to which Section 481(a) of the Code may apply.
Section 4.12. Environmental Matters. Except as set forth
in UCU's SEC Reports filed prior to the date hereof and except
for such as would not, individually, or in the aggregate,
reasonably be expected to have a UCU Material Adverse Effect:
(a) UCU and, to UCU's knowledge, each of its Subsidiaries
is in material compliance with all applicable Environmental Laws
(as defined in Section 3.13(b)(i)).
(b) To UCU's knowledge, there are no liabilities or
Environmental Claims (as defined in Section 3.13(b)(iv)) of or
relating to UCU or its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable
or otherwise, arising under or relating to Environmental Laws.
Section 4.13. Employee Benefits. (a) The UCU Disclosure
Schedule contains a list identifying each "employee benefit plan"
(as defined in Section 3(3) of ERISA) which is subject to any
provision of ERISA and is maintained, administered or contributed
to by UCU and covers any employee or former employee of UCU or
under which UCU has any liability (referred to collectively
herein as the "UCU Employee Plans"). Copies of such plans and
all amendments thereto have been made available to the Company.
UCU and all UCU ERISA Affiliates have performed all obligations
required to be performed by it with respect to each UCU Employee
Plan, and each UCU Employee Plan has been maintained in
substantial compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and
regulations, including, but not limited to, ERISA and the Code,
which are applicable to such UCU Employee Plan, excluding any
instances of non-performance or non-compliance that would not,
individually or in the aggregate, be reasonably expected to have
a UCU Material Adverse Effect. For purposes of this Section, the
term "UCU ERISA Affiliate" means any other Person which, together
with the Company, would be treated as a single employer under
Section 414 of the Code.
(b) As of the last day of the most recent plan year,
the value of the assets of each UCU Employee Plan that is subject
to Title IV of ERISA equaled or exceeded the present value of the
"benefit liabilities" (as defined in Section 4001(a)(16) of
ERISA) of each such UCU Employee Plan, using the UCU Employee
Plan assumptions for funding purposes in effect for such plan
year.
(c) The UCU Disclosure Schedule contains a list of
each employment, severance or other similar contract, arrangement
or policy and each material plan or arrangement (whether written
or oral) providing for insurance coverage (including any self-
insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits or for deferred compensation, profit sharing,
bonuses, stock options, stock appreciation or other forms of
incentive compensation or post-retirement insurance, compensation
or benefits which is not a UCU Employee Plan, is entered into,
maintained or contributed to, as the case may be, by UCU and
covers any employee or former employee of UCU (referred to
collectively herein as the "UCU Benefit Arrangements"). Copies
of such plans and all amendments thereto have been made available
to the Company. UCU and all UCU ERISA Affiliates have performed
all obligations required to be performed by them with respect to
each UCU Benefit Arrangement, and each UCU Benefit Arrangement
has been maintained in substantial compliance with its terms and
with the requirements prescribed by any and all statutes, orders,
rules and regulations, including, but not limited to, ERISA and
the Code that are applicable to such UCU Benefit Arrangement,
excluding any instances of non-performance or non-compliance that
would not, individually or in the aggregate, be reasonably
expected to have a UCU Material Adverse Effect.
Section 4.14. Dividends. It is the present intention of
UCU's Board of Directors to maintain the dividends on UCU Common
Stock at not less than its current annual dividend rate.
Section 4.15. Transactions with Affiliates. Since the date
of UCU's last proxy statement prior to the date of this
Agreement, there have been no transactions, agreements,
arrangements or understandings between UCU or its Subsidiaries,
on the one hand, and UCU's Affiliates (other than wholly-owned
Subsidiaries of UCU) or other Persons, on the other hand, that
would be required to be disclosed under Item 404 of Regulation S-
K under the Securities Act.
Section 4.16. Information Supplied. Except for information
to be supplied by the Company as to which no representation is
made, the Registration Statement will not, at the time it is
declared effective or upon the filing of any post-effective
amendment related thereto, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The information to be supplied by UCU for
inclusion in the Proxy Statement to be sent to the stockholders
of the Company in connection with the Company Stockholders'
Meeting will not, on the date the Proxy Statement is first mailed
to the stockholders of the Company or at the time of the Company
Stockholders' Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
Section 4.17. Finders' Fees. No investment banker, broker,
finder, other intermediary or other Person is entitled to any
investment banking, broker's, finder's or similar fee or
commission from UCU or any of its Subsidiaries upon consummation
of the transactions contemplated by this Agreement.
Section 4.18. Takeover Statutes. The provisions of Section
203 of the DGCL do not apply to the Merger or the other
transactions contemplated hereby. To the best of UCU's
knowledge, no other Takeover Statute applicable to UCU or any of
its Subsidiaries is applicable to the Merger or the other
transactions contemplated hereby.
Section 4.l9. Year 2000. UCU has initiated a review and
assessment of the Year 2000 Problem with respect to itself and
its Subsidiaries, has developed a plan for addressing the Year
2000 Problem on a timely basis and has to date implemented such
plan, except where UCU's failure to do so is not reasonably
likely to have a UCU Material Adverse Effect. Except as would
not reasonably be expected to have a UCU Material Adverse Effect,
to the knowledge of UCU, none of the assets or equipment owned or
utilized by UCU or any of its Subsidiaries will fail to perform
because of, or due in any way to, a Year 2000 Problem. To the
knowledge of UCU, no vendor, supplier or customer of UCU or any
of its Subsidiaries will experience a Year 2000 Problem that,
individually or in the aggregate, could reasonably be expected to
have a UCU Material Adverse Effect.
Section 4.20. Ownership of Company Common Stock. UCU does
not "beneficially own" (as such term is defined in Rule 13d-3
under the Exchange Act) any shares of Company Common Stock.
Section 4.21. Definition of "Knowledge". Wherever in this
Agreement the phrases "to the knowledge" of UCU, "to UCU's
knowledge", or similar phrases appear, "knowledge" shall mean the
actual knowledge of the senior management of UCU.
ARTICLE V
Conduct of Business
Section 5.01. Conduct of the Company. The Company agrees
that from the date hereof until the Effective Time, (i) except as
set forth in the Company Disclosure Schedule or as otherwise
expressly permitted by this Agreement, (ii) except with the prior
written consent of UCU (which consent shall not be unreasonably
withheld), or (iii) except as described in the Company's 1998
Form 10-K, the Company and its Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and
shall use their reasonable best efforts to preserve intact their
business organizations and material relationships with third
parties and to keep available the services of their present
officers and employees (subject to ordinary and customary
retirements). Without limiting the generality of the foregoing,
from the date hereof until the Effective Time, except as set
forth in the Company Disclosure Schedule, the Company's 1998 Form
10-K or as expressly permitted by this Agreement, without the
prior written consent of UCU (which consent shall not be
unreasonably withheld), the Company will not:
(a) adopt or propose any change in its articles of
incorporation or bylaws without 30 days prior written notice to
UCU, or adopt or propose any such change that would be materially
adverse in any way to UCU or its stockholders;
(b) amend any term of any outstanding equity security
of the Company;
(c) merge or consolidate with any other Person;
(d) issue, sell, pledge, dispose of, grant, transfer,
lease, license, guarantee, encumber, or authorize the issuance,
sale, pledge, disposition, grant, transfer, lease, license,
guarantee or encumbrance of, (i) any shares of capital stock of
the Company, or securities convertible or exchangeable or
exercisable for any shares of such capital stock, or any options,
warrants or other rights of any kind to acquire any shares of
such capital stock or such convertible or exchangeable
securities, or any other ownership interest of the Company or
(ii) except in the ordinary course of business and in a manner
consistent with past practice, any property or assets (including,
without limitation, by merger, consolidation, spin-off or other
dispositions of stock or assets) of the Company, except in the
case of either clause (i) or (ii) (A) the issuance of Company
Common Stock to current or former officers, directors and
employees of the Company pursuant to the Company Stock Plans upon
the exercise by such officers, directors and employees of Company
Stock Options, set forth and identified in Section 3.05 of the
Company Disclosure Schedule or awarded in accordance with clause
(B) and the vesting of Company Restricted Stock Awards set forth
and identified in Section 3.05 of the Company Disclosure Schedule
or awarded in accordance with clause (B), (B) the award of stock
options or Company Restricted Stock Awards to employees and
directors, in each case under existing Company Stock Plans in the
ordinary course of business consistent with past practice or in
connection with promotions or new employee hires in the ordinary
course of business and consistent with past practice, provided
that such awards shall not exceed, in the aggregate, the amounts
set forth on Section 5.01(d) of the Company Disclosure Statement,
(C) the issuance of Company Common Stock pursuant to the DRIP in
the ordinary course of business and consistent with past
practice, (D) the issuance of Company Common Stock pursuant to
the terms of the Company's Stock Unit Plan for Directors, and (E)
pursuant to contracts or agreements in force at the date of this
Agreement, but in the case of (E) only to the extent set forth in
Section 5.01(d) of the Company Disclosure Statement.
(e) create or incur any material Lien on any material
asset other than in the ordinary course of business and
consistent with past practice;
(f) make any material loan, advance or capital
contributions to or investments in any Person;
(g) declare, set aside, make or pay any dividend or
other distribution, payable in cash, stock, property or
otherwise, with respect to any of its capital stock except for
(i) dividends paid on each series of Company Preferred Stock at
the rates provided for by their terms, (ii) regular quarterly
cash dividends of not more than $.32 per share on the Company
Common Stock, and (iii) a special dividend payment to be paid, if
necessary, in accordance with the agreements in Section 6.20, or
enter into any agreement with respect to the voting of its
capital stock;
(h) reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its
capital stock, except for (i) purchases made in connection with
the Company's DRIP, and (ii) redemption of Company Preferred
Stock pursuant to the provisions of Section 2.03(b);
(i) (i) acquire (including, without limitation, by
merger, consolidation, spin-off or acquisition of stock or
material assets) any interest in any Person or any division
thereof or any material assets, other than acquisitions of assets
in the ordinary course of the Company's regulated utility
business and consistent with past practice, (ii) incur any
material indebtedness for borrowed money or guarantee any
indebtedness of another Person, or issue or sell any debt
securities or warrants or other rights to acquire any debt
security of the Company, except for indebtedness for borrowed
money incurred in the ordinary course of the Company's regulated
utility business and consistent with past practice or to
refinance obligations of the Company at a lower cost of money, to
refinance indebtedness in accordance with its terms or to redeem
the Company Preferred Stock or in connection with transactions
otherwise permitted under this Section 5.01, (iii) terminate,
cancel, waive any material rights under or request any material
change in, or agree to any material change in, any material
Company Contract or, except in connection with transactions
permitted under this Section 5.01(i), enter into any contract or
agreement material to the business, results of operations or
financial condition of the Company, taken as a whole, in either
case other than in the ordinary course of the Company's regulated
utility business and consistent with past practice, (iv) make or
authorize capital expenditures during any fiscal year in excess
of 110% of the aggregate amount budgeted by the Company for such
fiscal year (together with any unused portion of the capital
expenditure budget from the prior year if such unused portion is
carried over) as disclosed to UCU by the Company for capital
expenditures, except for unplanned capital expenditures due to
emergency conditions, unanticipated catastrophic events, extreme
weather, and unscheduled unit outages or (v) enter into or amend
any contract, agreement, commitment or arrangement that, if fully
performed, would not be permitted under this Section 5.01(i);
(j) make any material change with respect to
accounting policies or procedures, other than actions in the
ordinary course of business and consistent with past practice or
except as allowed by changes in generally accepted accounting
principles;
(k) make any material Tax election or take any
position on any Tax Return filed on or after the date of this
Agreement or adopt any method therefor that is inconsistent with
elections made, positions taken or methods used in preparing or
filing similar Tax Returns in prior periods except as required by
applicable law;
(l) except as may be required by the contractual
commitments or corporate policies with respect to severance or
termination pay in existence on the date hereof and described in
Section 5.01(l) of the Company Disclosure Schedule, (i) increase
the compensation payable or to become payable to its officers or
employees (except for increases in the ordinary course of
business and consistent with past practice in salaries or wages
of officers or employees of the Company), (ii) establish, adopt,
enter into or amend any collective bargaining, bonus, profit
sharing, thrift, compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for
the benefit of any director, officer or employee, except as
contemplated by this Agreement (including without limitation,
Section 3.14 hereof) or to the extent required by applicable law
or the terms of a collective bargaining agreement, (iii) increase
the benefits payable under any existing severance or termination
pay policies or employment or other agreements or (iv) take any
affirmative action to accelerate the vesting of any stock based
compensation;
(m) take any action that, individually or in the
aggregate, would reasonably be expected to result in a material
breach of this Agreement or knowingly make any representation and
warranty of the Company hereunder untrue in any material respect
at, or as of any time prior to, the Effective Time;
(n) other than the proposed sale of the assets
associated with the water distribution business of the Company,
enter into a new line of business or make any material change in
the line of business in which it engages as of the date of this
Agreement; or
(o) agree or commit to do any of the foregoing.
Section 5.02. Conduct of UCU. UCU agrees that from the
date hereof until the Effective Time, UCU will conduct its
business consistent with past practice, and, without limiting the
generality of the foregoing, from the date hereof to the
Effective Time, except as set forth in Section 5.02 of the UCU
Disclosure Schedule or as otherwise expressly permitted by this
Agreement, or as set forth in the UCU SEC Reports filed prior to
the date hereof, without the prior written consent of the Company
(which consent shall not be unreasonably withheld), UCU will not:
(a) adopt or propose any change in its certificate of
incorporation or bylaws that would be materially adverse to the
Company or its stockholders;
(b) issue any UCU Class A Stock;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock (other than a dividend on
UCU Common Stock payable in UCU Common Stock), property or
otherwise, with respect to any of its capital stock (except for
regular quarterly cash dividends on the UCU Common Stock) or
enter into any agreement with respect to the voting of its
capital stock;
(d) reclassify, directly or indirectly, any of its UCU Common
Stock or UCU Class A Stock;
(e) make any material change with respect to accounting policies
or procedures, other than actions in the ordinary course of
business and consistent with past practice or except as allowed
by changes in generally accepted accounting principles;
(f) take any action that, individually or in the aggregate,
would reasonably be expected to result in a material breach of
this Agreement or knowingly make any representation and warranty
of UCU hereunder untrue in any material respect at, or as of any
time prior to, the Effective Time;
(g) take any action, or agree to take any action, that would
result in the holders of Company Common Stock receiving anything
other than (i) the Merger Consideration in exchange for their
Company Common Stock, or (ii) the securities or other
consideration that UCU Common Stock may be converted into prior
to the Effective Time as though the Company Common Stock had been
converted into UCU Common Stock prior to such action or agreement
to act;
(h) take any action, or agree to take any action that would,
individually or in the aggregate, reasonably be expected to have
a material adverse effect on the interests of holders of Company
Common Stock unless (i) UCU shall have received a written
fairness opinion of an investment banker of national reputation
to the effect that such action is fair to the holders of UCU
Common Stock and (ii) such action would not have an adverse
effect on holders of Company Common Stock that would be
disproportionately more adverse than the effect on holders of UCU
Common Stock;
(i) consummate repurchases of UCU Common Stock other than
repurchases of UCU Common Stock made in the ordinary course of
UCU's stock repurchase policy consistent with past practice,
except that UCU may consummate other repurchases of UCU Common
Stock so long as such repurchases combined with repurchases made
in accordance with UCU's stock repurchase policy do not reduce
the number of outstanding shares of UCU Common Stock below the
number of shares outstanding on the date hereof; or
(j) agree or commit to do any of the foregoing.
Section 5.03. Reorganization. During the period from the
date of this Agreement through the Effective Time, unless the
other parties hereto shall otherwise agree in writing, none of
UCU (including its Subsidiaries) or the Company shall knowingly
take or fail to take any action which action or failure would
result in the failure of the Merger to qualify as a
reorganization within the meaning of Section 368(a) of the Code
or would cause any of the representations and warranties set
forth in the Company Tax Certificate (as defined in Section
7.02(c)) or the UCU Tax Certificate (as defined in Section
7.02(c)) to be untrue or incorrect in any material respect.
Section 5.04. Rate Matters. Other than currently pending
rate filings, each of UCU and the Company shall discuss with the
other any changes planned in the states of Missouri and Kansas in
its regulated electricity rates or charges, standards of service
or accounting from those in effect in those states on the date
hereof and consult with the other prior to making any filing (or
any amendment thereto), or effecting any agreement, commitment,
arrangement or consent, whether written or oral, formal or
informal, with respect thereto, and neither UCU nor the Company
shall make any filing to change its rates on file with any public
utility commission regulatory authority in such states or the
FERC that would have a material adverse effect on the benefits
associated with the Merger.
ARTICLE VI
Additional Agreements
Section 6.01. No Solicitation (a) The Company agrees
that, from and after the date hereof, it shall not, nor shall it
authorize or permit any officer, director or employee or any
investment banker, attorney, accountant, agent or other advisor
or representative of the Company (collectively, the
"Representatives" of the Company) to, (i) solicit, initiate or
knowingly encourage the submission of any Takeover Proposal (as
defined below), (ii) enter into any agreement with respect to a
Takeover Proposal or (iii) participate in any discussions or
negotiations regarding any proposal that constitutes, or may
reasonably be expected to lead to, any Takeover Proposal;
provided, however, that if at any time prior to receipt of the
Company Stockholders' Approval the Board of Directors of the
Company determines in good faith, after consultation with outside
counsel and financial advisors, that failing to take such action
could reasonably be expected to be a breach of its fiduciary
duties to the Company's stockholders under applicable law, and
subject to providing 3 days prior written notice of its decision
to take such action to UCU, the Company may, in response to a
Takeover Proposal made after the date of this Agreement which was
not solicited by it or its Representatives and which did not
otherwise result from a breach of this Section 6.01 (x) furnish
information with respect to the Company to any person pursuant to
a customary confidentiality agreement (as determined by the
Company after consultation with outside counsel) and (y)
participate in discussions, investigations and/or negotiations
regarding such Takeover Proposal. For all purposes of this
Agreement, "Takeover Proposal" means any proposal or offer to
acquire, directly or indirectly, in one transaction or a series
of related transactions, 20% or more of the shares of Company
Common Stock outstanding (whether, in either case, by purchase,
merger, consolidation, share exchange, business combination or
other similar transaction) or 20% or more of the assets of the
Company, other than the Merger or the transactions contemplated
by Section 6.01(a) of the Company Disclosure Schedule. The
Company immediately upon execution of this Agreement shall cease
and cause to be terminated all existing discussions or
negotiations with any Persons conducted heretofore with respect
to, or that could reasonably be expected to lead to, any Takeover
Proposal, subject to the Company's rights pursuant to this
Section 6.01.
(b) The Board of Directors of the Company shall
promptly recommend the adoption and approval of this Agreement
and the Merger in accordance with Section 6.03, and, except as
set forth in this Section 6.01, neither the Board of Directors of
the Company nor any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, the approval
or recommendation by such Board of Directors or such committee of
the Merger or this Agreement; (ii) approve or recommend, or
propose publicly to approve or recommend, any Takeover Proposal
or (iii) cause the Company to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") related to any
Takeover Proposal. Notwithstanding the foregoing, if at any time
prior to receipt of the Company Stockholders' Approval the Board
of Directors of the Company determines in good faith, after
consultation with outside counsel and financial advisors, that it
has received a Takeover Proposal that constitutes a Superior
Proposal and that failure to terminate this Agreement and accept
such Superior Proposal could reasonably be expected to be a
breach of its fiduciary duties to the Company's stockholders
under applicable law the Board of Directors of the Company may
(x) withdraw or modify its approval or recommendation of the
Merger and this Agreement, (y) approve or recommend a Superior
Proposal or (z) terminate this Agreement (and concurrently with
or after such termination, if it so chooses, cause the Company to
enter into an Acquisition Agreement with respect to any Superior
Proposal), but in each case only at a time prior to receipt of
the Company Stockholders' Approval and only at a time that is
after the third business day following receipt of written notice
advising UCU that the Board of Directors of the Company has
received a Takeover Proposal that constitutes a Superior
Proposal, specifying the material terms and conditions of such
Superior Proposal and identifying the person making such Superior
Proposal. For all purposes of this Agreement, "Superior Proposal"
means a bona fide proposal made by a third party not affiliated
with the Company to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, more than 50%
of the shares of Company Common Stock then outstanding (whether
pursuant to a tender or exchange offer, a merger, a share
exchange or other business combination) or all or substantially
all of the assets of the Company and otherwise on terms which the
Board of Directors of the Company determines in good faith (based
on the written advice of an independent financial advisor, which
may include ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc.) to be more favorable to
the Company and its stockholders than the Merger (taking into
account any changes to the financial and other contractual terms
of this Agreement proposed by UCU in response to such proposal
and all other relevant financial and strategic considerations,
including, but not limited to, relevant legal, financial,
regulatory and other aspects of the proposal, the third party
making such proposal, the conditions and prospects for completion
of such proposal, the strategic direction and benefits sought by
the Company and any changes to this Agreement proposed by UCU in
response to such proposal).
(c) Nothing contained in this Section 6.01 shall prohibit
the Company from taking and disclosing to its stockholders a
position contemplated by Rules 14d-9 and 14e-2 promulgated under
the Exchange Act or from making any disclosure to the Company's
stockholders if, in the good faith judgment of the Board of
Directors of the Company, after consultation with outside
counsel, such disclosure is required under applicable law;
provided, that no such position shall be taken or disclosed in a
manner that is inconsistent with the recommendation in favor of
approval and adoption of this Agreement and the Merger unless
permitted by the provisions of Sections 6.01(a) and 6.01(b).
Section 6.02. Proxy Statement; Registration Statement. (a)
As promptly as practicable after the execution of this Agreement,
UCU and the Company shall cooperate in preparing and filing with
the SEC the Proxy Statement and the Registration Statement (in
which the Proxy Statement will be included). UCU and the Company
shall use their reasonable best efforts to cause the Registration
Statement to become effective under the Securities Act as soon
after such filing as practicable and UCU shall also take such
action as may be reasonably required to cause the shares of UCU
Common Stock issuable in connection with the Merger to be
registered or to obtain an exemption from registration under
applicable state "blue sky" or securities laws. Each of the
Company and UCU shall furnish all information concerning itself
that is required or customary for inclusion in the Proxy
Statement and the Registration Statement. No representation,
covenant or agreement contained in this Agreement is made by the
Company or UCU with respect to information supplied by the other
for inclusion in the Proxy Statement or the Registration
Statement. The Company and UCU shall take such actions as may be
reasonably required to cause the Proxy Statement and the
Registration Statement to comply as to form in all material
respects with the Securities Act and the Exchange Act. The Proxy
Statement shall include the recommendation of the Board of
Directors of the Company in favor of approval and adoption of
this Agreement and the Merger, except to the extent the Board of
Directors of the Company shall have withdrawn or modified its
approval or recommendation of this Agreement and the Merger as
permitted by Section 6.01(b). The Company shall use reasonable
best efforts to cause the Proxy Statement to be mailed to its
stockholders, as promptly as practicable after the Registration
Statement becomes effective.
(b) UCU and the Company shall make all necessary
filings with respect to the Merger and the transactions
contemplated thereby under the Securities Act and the Exchange
Act and applicable state blue sky laws and the rules and
regulations thereunder. No filing of, or amendment or supplement
to, the Registration Statement or the Proxy Statement will be
made by UCU or the Company without providing the other party the
opportunity to review and comment thereon. UCU or the Company
will advise the other party, promptly after it receives notice
thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification
of the UCU Common Stock issuable in connection with the Merger
for offering or sale in any jurisdiction, or any request by the
SEC for amendment of the Proxy Statement or the Registration
Statement or comments thereon and responses thereto or requests
by the SEC for additional information. If at any time prior to
the Effective Time any information relating to UCU or the
Company, or any of their respective affiliates, officers or
directors, should be discovered by UCU or the Company which
should be set forth in an amendment or supplement to any of the
Registration Statement or the Proxy Statement, so that any of
such documents would not include any misstatement of a material
fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, the party which discovers such
information shall promptly notify the other party hereto and an
appropriate amendment or supplement describing such information
shall be promptly filed with the SEC and, to the extent required
by law, disseminated to the stockholders of UCU and the Company.
(c) The Company shall use best efforts to cause to be
delivered to the Company and UCU a letter of
PricewaterhouseCoopers LLP dated a date within two (2) business
days before the effective date of the Registration Statement and
addressed to the Company and UCU, in form and substance
reasonably satisfactory to the Company and UCU and customary in
scope and substance for "cold comfort" letters delivered by
independent public accountants in connection with registration
statements and proxy statements similar to the Proxy Statement
and Registration Statement.
(d) UCU shall use best efforts to cause to be delivered to
the Company and UCU a letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP dated a date
within two (2) business days before the effective date of the
Registration Statement and addressed to UCU and the Company, in
form and substance reasonably satisfactory to UCU and the Company
and customary in scope and substance for "cold comfort" letters
delivered by independent public accountants in connection with
registration statements and proxy statements similar to the Proxy
Statement and Registration Statement.
(e) It shall be a condition to the mailing of the Proxy
Statement to the stockholders of the Company that the Company
shall have received an opinion from ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.,
dated the date of the Proxy Statement, to the effect that, as of
the date thereof, the Merger Consideration is fair to the holders
of Company Common Stock.
Section 6.03. Stockholders' Meeting. Except to the extent
that the Board of Directors of the Company shall have withdrawn
or modified its approval or recommendation of this Agreement and
the Merger as permitted by Section 6.01(b), the Company shall
take all steps reasonably necessary to duly call, give notice of,
convene and hold the Company Stockholders' Meeting, will
recommend to its stockholders adoption and approval of this
Agreement and the Merger, will use reasonable best efforts to
hold the Company Stockholders' Meeting as soon as practicable
after the date hereof and will use reasonable best efforts to
solicit from its stockholders proxies in favor of this Agreement
and the Merger.
Section 6.04. Access to Information. Upon reasonable
notice and subject to applicable law and other legal obligations,
each of the Company and UCU shall afford to the officers,
employees, accountants, counsel and other representatives of the
other, reasonable access, during normal business hours during the
period prior to the Effective Time, to all its properties, books,
contracts, commitments and records and, during such period, each
of the Company and UCU shall furnish promptly to the other (a) a
copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to
the requirements of federal securities laws and (b) all other
information concerning its business, properties and personnel as
such other party may reasonably request. Any such information
furnished pursuant to this Section 6.04 shall be subject to the
Confidentiality Agreement dated as of October 26, 1998, between
UCU and the Company (the "Confidentiality Agreement") which shall
continue in full force and effect until the Effective Time. No
information or knowledge obtained in any investigation pursuant
to this Section 6.04 shall affect or be deemed to modify any
representation or warranty contained in this Agreement or the
conditions to the obligations of the parties to consummate the
Merger.
Section 6.05. Notices of Certain Events. (a) UCU and the
Company shall promptly notify each other of:
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be required
in connection with the transactions contemplated by this
Agreement; and
(ii) any notice or other communication from any
Governmental Authority in connection with the transactions
contemplated by this Agreement.
(b) the Company shall promptly notify UCU of any
actions, suits, claims, investigations or proceedings commenced
or, to its knowledge, threatened against, relating to or
involving or otherwise affecting the Company which, if pending on
the date of this Agreement, would have been required to have been
disclosed pursuant to Section 3.08 or which relate to the
consummation of the transactions contemplated by this Agreement.
(c) UCU shall (i) promptly notify the Company of any
actions, suits, claims, investigations or proceedings commenced
or, to its knowledge, threatened against, relating to or
involving or otherwise affecting UCU or any of its Subsidiaries
which, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 4.08 or which
relate to the consummation of the transactions contemplated by
this Agreement and (ii) use its reasonable efforts to inform the
Company of the consummation of, or agreement to consummate, any
merger or any material acquisition or joint venture to the extent
UCU is permitted to so notify the Company unless such merger,
acquisition or joint venture shall have been included in a UCU
SEC Report or otherwise publicly disclosed.
Section 6.06. Appropriate Action; Consents; Filings. (a)
Subject to the terms and conditions of this Agreement UCU and the
Company shall use their reasonable best efforts to (A) take, or
cause to be taken, all reasonable actions, and do, or cause to be
done, all reasonable things, necessary, proper or advisable under
applicable laws to consummate the Merger and the other
transactions contemplated by this Agreement as promptly as
practicable, or (B) obtain from any Governmental Authority any
consents, licenses, permits, waivers, approvals, authorizations
or orders required to be obtained or made by UCU and the Company
in connection with the authorization, execution and delivery of
this Agreement and the consummation of the transactions
contemplated herein, and (C) make all necessary filings, and
thereafter make any other required submissions, with respect to
this Agreement and the Merger required under applicable public
utility laws and regulations, the Securities Act, the Exchange
Act and any other applicable law;
(b) UCU and the Company shall give any notices to
third parties, and use reasonable best efforts to obtain any
third party consents (A) necessary, proper or advisable in order
to consummate the transactions contemplated by this Agreement or
(B) required, individually or in the aggregate, to prevent a UCU
Material Adverse Effect or a Company Material Adverse Effect from
occurring prior to or after the Effective Time.
Section 6.07. Public Disclosure. UCU and the Company shall
cooperate with each other in the development of and consult with
each other before issuing any press release or otherwise making
any public statement with respect to the Merger or this Agreement
or the transactions contemplated hereby and shall not issue any
such press release without the consent of the other party (which
consent shall not be unreasonably withheld or delayed), except as
may be required by law, court process or by stock exchange rules.
Section 6.08. Reorganization. UCU and the Company shall
each use its reasonable best efforts to cause the Merger to be
treated as a reorganization within the meaning of Section 368(a)
of the Code, and UCU and the Company shall use their reasonable
best efforts to obtain the opinion of their respective counsel
referred to in Sections 7.02(c) and 7.03(c).
Section 6.09. Affiliates. Within a reasonable time, but
not less than 30 days, before the Closing Date, the Company will
provide UCU with a list of those Persons who as of the Closing
Date will be, in the Company's reasonable judgment, "affiliates"
of the Company within the meaning of Rule 145 under the
Securities Act or under any applicable accounting rules ("Rule
145 Affiliates"). The Company shall use its reasonable best
efforts to deliver or cause to be delivered to UCU on or prior to
the Closing Date from each of the Rule 145 Affiliates, an
executed letter agreement, in a form reasonably acceptable to UCU
and the Company.
Section 6.10. Listing of Stock. UCU shall use its
reasonable best efforts to cause the shares of UCU Common Stock
to be issued in the Merger to be approved for listing on the NYSE
on or prior to the Closing Date, subject to official notice of
issuance.
Section 6.11. Indemnification of Directors and Officers.
(a) To the fullest extent permitted by law, from and after the
Effective Time, all rights to indemnification as of the date
hereof in favor of the employees, agents, directors and officers
of the Company with respect to their activities as such prior to
the Effective Time, as provided in its articles of incorporation
and by-laws in effect on the date thereof, or otherwise in effect
on the date hereof, shall survive the Merger and shall continue
in full force and effect for a period of not less than six years
from the Effective Time.
(b) To the extent, if any, not provided by an existing
right of indemnification or other agreement or policy, after the
Effective Time, the Surviving Corporation shall, to the fullest
extent permitted by applicable law, indemnify and hold harmless,
each present and former director, officer, employee or agent of
the Company (collectively, the "Indemnified Parties") against all
costs and expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action,
suit, proceeding or investigation (whether arising before or
after the Effective Time), whether civil, administrative or
investigative, arising out of or pertaining to any action or
omission in their capacity as a director, officer, employee or
agent (including serving on the board of directors or similar
governing body of a third party at the request of, or as a
designated director) of the Company, in each case occurring
before the Effective Time (including the transactions
contemplated by this Agreement); provided, however, that the
Surviving Corporation shall not be liable for any settlement
effected without its written consent (which consent shall not be
unreasonably withheld). In the event of any such costs,
expenses, judgments, fines, losses, claims, damages, liabilities
or settlement amounts (whether or not arising before the
Effective Time), (x) the Surviving Corporation shall pay the
reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably
satisfactory to the Surviving Corporation, promptly after
statements therefor are received, and otherwise advance to the
Indemnified Parties upon request reimbursement of documented
expenses reasonably incurred, in either case, to the extent not
prohibited by the applicable law and (y) the Surviving
Corporation shall cooperate in the defense of any such matter.
The Indemnified Parties as a group may retain only one law firm
(other than local counsel) with respect to each related matter
except to the extent there is, in the sole opinion of counsel to
an Indemnified Party, under applicable standards of professional
conduct, a conflict on any significant issue between positions of
any two or more Indemnified Parties, in which case each
Indemnified Party with a conflicting position on such significant
issue shall be entitled to separate counsel reasonably
satisfactory to the Surviving Corporation. In the event any
Indemnified Party is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is
successful in such action, the Surviving Corporation shall
reimburse such Indemnified Party for all of its reasonable
expenses in bringing and pursuing such action.
(c) For a period of six (6) years after the Effective
Time, the Surviving Corporation shall cause to be maintained in
effect the policies of directors' and officers' liability
insurance policy maintained by the Company; provided that the
Surviving Corporation may substitute therefor policies of at
least the same coverage containing terms and conditions which are
substantially equivalent with respect to matters occurring prior
to the Effective Time and provided further that if the existing
D&O Insurance expires or is canceled during such period, the
Surviving Corporation shall use its reasonable best efforts to
obtain substantially similar liability insurance with respect to
matters occurring at or prior to the Effective Time to the extent
such liability insurance can be maintained annually at a cost to
the Surviving Corporation not greater than 200% of the annual
aggregate premiums currently paid by the Company for such
insurance, and provided, further, that if the annual premiums of
such insurance coverage exceed such amount, the Surviving
Corporation shall maintain or obtain a policy with the best
coverage available, in the reasonable judgment of the Board of
Directors of the Surviving Corporation, for a cost not exceeding
such amount.
(d) In the Event the Surviving Corporation or any of
its successors or assigns (i) consolidates with or merges into
any other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii)
transfers all or substantially all of its properties and assets
to any person, then and in either such case, proper provision
shall be made so that the successors and assigns of the Surviving
Corporation shall assume the obligations set forth in this
Section 6.11. This Section 6.11 is intended to benefit (and shall
be enforceable by) the Indemnified Parties and their respective
heirs, executors and personal representatives.
Section 6.12. Company Stock Options and Restricted Stock
Awards; Acknowledgment with Respect to Company Stock Plans. (a)
At the Effective Time, all rights with respect to outstanding
options, to purchase or other rights to acquire shares of Company
Common Stock (the "Company Stock Options") granted under any
plan or arrangement providing for the grant of options,
restricted stock awards, stock units or other rights to acquire
stock to current or former officers, directors, employees or
consultants of the Company (the "Company Stock Plans"), whether
or not then exercisable, shall be converted into and become
rights with respect to UCU Common Stock, and UCU shall assume
each Company Stock Option in accordance with the terms of the
Company Stock Plan under which it was issued and any stock option
or similar agreement by which it is evidenced. From and after
the Effective Time, (i) each Company Stock Option assumed by UCU
shall be exercised solely for shares of UCU Common Stock; (ii)
the number of shares of UCU Common Stock subject to each Company
Stock Option shall be equal to the number of shares of Company
Common Stock subject to such Company Stock Option immediately
prior to the Effective Time multiplied by the Exchange Ratio and
(iii) the per share exercise price under each Company Stock
Option shall be adjusted by dividing the per share exercise price
under such Company Stock Option by the Exchange Ratio and
rounding to the nearest cent (each, as so adjusted, an "Adjusted
Option"); provided, that the terms of each Company Stock Option
shall be subject to further adjustment as appropriate to reflect
any stock split, stock dividend, recapitalization or other
similar transaction subsequent to the Effective Time; and,
provided further, that the number of shares of UCU Common Stock
that may be purchased upon exercise of any Adjusted Option shall
not include any fractional share and, upon exercise of such
Adjusted Option, a cash payment shall be made for any fractional
share based upon the closing price of a share of UCU Common Stock
on the NYSE on the last trading day of the calendar month
immediately preceding the date of exercise.
(b) The adjustments provided herein with respect to
any Company Stock Options that are "incentive stock options" as
defined in Section 422 of the Code shall be and are intended to
be effected in a manner which is consistent with Section 424(a)
of the Code.
(c) At the Effective Time, all restricted stock awards
("Company Restricted Stock Awards") granted by the Company under
a Company Stock Plan, whether or not then vested, shall be
converted into UCU Common Stock and shall thereafter be free of
any and all restrictions (whether on transferability or
otherwise). The number of shares of UCU Common Stock into which
each Company Restricted Stock Award shall be converted shall be
equal to the number of shares of Company Common Stock subject to
such Company Restricted Stock Award immediately prior to the
Effective Time multiplied by the Exchange Ratio; except that in
lieu of any fractional share of UCU Common Stock resulting from
such conversion, the holder of the Company Restricted Stock Award
shall be entitled to cash (without interest) in an amount equal
to such fractional part of a share of UCU Common Stock multiplied
by the Average Trading Price.
(d) At the Effective Time, all stock units in respect
of shares of Company Common Stock ("Company Stock Units") granted
by the Company under the Company's Stock Unit Plan for Directors
shall be converted into stock units in respect of shares of UCU
Common Stock. The number of shares of UCU Common Stock covered
by such stock units after the conversion shall be equal to the
number of shares of Company Common Stock covered by the Company
Stock Units immediately prior to the Effective Time multiplied by
the Exchange Ratio, except that in lieu of any fractional share
of UCU Common Stock resulting from such conversion, the holder of
the Company Stock Units shall be entitled to cash (without
interest) in an amount equal to such fractional part of a share
of UCU Common Stock multiplied by the Average Trading Price.
(e) As soon as practicable following the Effective
Time, UCU shall prepare and file with the SEC a registration
statement on Form S-8 (or another appropriate form) registering a
number of shares of UCU Common Stock equal to the number of
shares subject to the Adjusted Options (or shall cause such
Adjusted Options to be deemed options issued pursuant to a UCU
stock option plan for which shares of UCU Common Stock have
previously been registered pursuant to an appropriate
registration form). Such registration statement shall be kept
effective (and the current status of the initial offering
prospectus or prospectuses required thereby shall be maintained)
for at least as long as any Adjusted Options remain outstanding.
(f) Except as otherwise contemplated by this Section
6.12 and except to the extent required under the respective terms
of the Company Stock Options or other applicable agreements, all
restrictions or limitations on transfer with respect to Company
Stock Options awarded under the Company Stock Plans, to the
extent that such restrictions or limitations shall not have
already lapsed, shall remain in full force and effect with
respect to such options after giving effect to the Merger and the
assumption of such options by UCU as set forth above.
(g) UCU acknowledges that the consummation of the
Merger will constitute a "change in control" as such term is
defined in those Company Stock Plans listed on Schedule 6.12.
(h) With respect to those individuals who, subsequent
to the Merger, shall be subject to the reporting requirements
under Section 16(a) of the Exchange Act, the Surviving
Corporation shall administer the Company Stock Plans, where
applicable, in a manner that complies with Rule 16b-3 under the
Exchange Act.
Section 6.13. Benefits Continuation; Severance. (a)
Comparable Benefits. For not less than eighteen months following
the Effective Time, UCU shall provide, or shall cause its
Subsidiaries to provide benefits that are, on a benefit-by-
benefit basis, no less favorable than as provided under the
Company Benefit Arrangements and the Company Employee Plans as in
effect on the date hereof, for employees of the Company as of the
Closing Date ("Affected Employees") and for former employees of
the Company ("Former Employees"), and shall provide access to
UCU's employee stock purchase plan as soon as permissible
following the Closing Date under the law and such plan.
Following the period described in the first sentence of this
Section 6.13, UCU and its Subsidiaries shall provide, to the
extent permitted by law, employee benefits to the Affected
Employees that are no less favorable than those provided by UCU
to other similarly situated employees of UCU. UCU shall comply
with the terms of all the Company Employee Plans, Company Benefit
Arrangements and other contractual commitments in effect
immediately prior to the Effective Time between the Company and
Affected Employees or Former Employees, subject to any reserved
right to amend or terminate any Company Employee Plan, Company
Benefit Arrangement or other severance or contractual obligation;
provided, however, that no such amendment or termination may be
inconsistent with UCU's obligations pursuant to the first two
sentences of this Section 6.13. Without limiting the generality
of the foregoing, UCU agrees to honor all obligations for
severance pay and other severance benefits to Affected Employees
according to their terms, subject to any reserved right to amend
or terminate any Company Employee Plan, Company Benefit
Arrangement or other severance or contractual obligation;
provided, however, that no such amendment or termination may be
inconsistent with UCU's obligations pursuant to the first two
sentences of this Section 6.13. UCU shall honor all vacation,
holiday, sickness and personal days accrued by Affected Employees
and, to the extent applicable, Former Employees as of the
Effective Time. Following the period described in the first
sentence of this Section 6.13, and for so long as UCU or any
successor or Subsidiary maintains any health plan covering any
active or former employee, UCU or its Subsidiaries will provide
health and life benefits, (but no accidental death and
dismemberment benefits) to existing retirees of the Company as of
the Closing Date and Affected Employees who retire within
eighteen months of the Closing Date (and who meet the eligibility
requirements of the Company's retiree health and life plans)
which are, in the aggregate, at least comparable to the benefits
provided to similarly situated retirees of UCU or, if better, the
benefits provided to active employees of UCU or any successor
(except that coverage provided past the age of 65 shall be
coordinated with Medicare in a manner similar to that currently
in effect with respect to such Company retirees), and with UCU
having the right, following the period described in the first
sentence of this Section 6.13, to increase the portion of the
premiums paid by such Company retirees by 15% per year until the
portion of the premium paid by such Company retirees is
comparable in percentage to the portion of the premium paid by
similarly situated UCU retirees (except that the portion of the
premium paid by such Company retirees past the age of 65 shall be
increased in the same manner as the portion of the premium paid
by such Company retirees younger than age 65); provided, however,
that UCU may modify the cost sharing ratio and premium rates in
accordance with the past practice of the Company. Former
Employees and Affected Employees shall be offered the option to
purchase UCU dental and vision plan coverage at premiums equal to
those paid by retired and active UCU employees, respectively,
during the first open enrollment period following the period
described in the first sentence of this Section 6.13.
(b) Participation in Benefit Plans. Employees shall
be given credit for all service with the Company (or service
credited by the Company) under all employee benefit plans and
arrangements currently maintained by UCU or any of its
Subsidiaries (and, with respect to any employee benefit plan
established by UCU or any of its Subsidiaries in the future to
the extent that similarly situated employees of UCU are given
credit for their service with UCU) in which they are or become
participants for purposes of eligibility, vesting, benefit
accrual, level of participation contribution, and for purposes of
qualifying for early retirement or other benefits tied to periods
of service, subject to an offset, if necessary, to avoid
duplication of benefits, to the same extent as if rendered to UCU
or any of its Subsidiaries. UCU shall waive or cause to be
waived any preexisting condition limitation applicable to an
Affected Employee other than any limitation already in effect
with respect to such Affected Employee that has not been
satisfied as of the Closing Date under the similar Company
Employee Plan or Company Benefit Arrangement. UCU agrees to
recognize (or cause to be recognized) the dollar amount of all
expenses incurred by Affected Employees during the calendar year
in which the Effective Time occurs for purposes of satisfying the
calendar year deductibles and co-payment limitations for such
year under the relevant benefit plans of UCU and its
Subsidiaries. Following the period described in the first
sentence of this subsection (b), UCU and its Subsidiaries shall
provide, to the extent permitted by applicable law, employee
benefits to the Affected Employees that are no less favorable
than those provided by UCU to other similarly situated employees
of UCU.
(c) No provision in this Section 6.13 shall be deemed
to constitute an employment contract between the Surviving
Corporation and any individual, or a waiver of the Surviving
Corporation's right to discharge any employee at any time, with
or without cause.
(d) Non-discrimination. Subject to applicable
collective bargaining agreements, for a period of two years
following the Effective Time, any reductions in workforce in
respect of employees of the Surviving Corporation shall be made
on a fair and equitable basis, in light of the circumstances and
the objectives to be achieved without regard to whether
employment was with the Company or UCU, and any employees whose
employment is terminated or jobs are eliminated by the Surviving
Corporation during such period shall be entitled to participate
on a fair and equitable basis in any job opportunity employment
placement programs offered by the Surviving Corporation. Any
workforce reductions carried out following the Effective Time by
the Surviving Corporation shall be done in accordance with all
applicable collective bargaining agreements, and all laws and
regulations governing the employment relationship thereof
including, without limitation, the Worker Adjustment and
Retraining Notification Act and regulations promulgated
thereunder, and any comparable state or local law.
Section 6.14. Operation of Company's Business after
Closing. UCU will conduct the Company's business to maintain the
efficient and high quality service provided by the Company and to
this end will consult with the Advisory Board designated pursuant
to Section 1.04 on matters relating to the business in the
Company's current service areas. UCU will continue an office in
Joplin.
Section 6.15. Takeover Statutes. If any Takeover Statute
is or may become applicable to the Merger, each of UCU and the
Company shall take such actions as are necessary so that the
Merger and the other transactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize
the effects of any Takeover Statute on the Merger and such other
transactions.
Section 6.16. Disclosure Schedules. On or before the date
of this Agreement, (i) the Company has delivered to UCU the
Company Disclosure Schedule accompanied by a certificate signed
by a duly authorized financial officer of the Company stating
that the Company Disclosure Schedule is being delivered pursuant
to this Section 6.16 and (ii) UCU has delivered to the Company
the UCU Disclosure Schedule accompanied by a certificate signed
by a duly authorized financial officer of UCU stating that the
UCU Disclosure Schedule is being delivered pursuant to this
Section 6.16. The Company Disclosure Schedule and the UCU
Disclosure Schedule constitute an integral part of this Agreement
and modify the respective representations, warranties, covenants
or agreements of the parties hereto contained herein to the
extent that such representations, warranties, covenants or
agreements expressly refer to the Company Disclosure Schedule or
the UCU Disclosure Schedule. Any and all statements,
representations, warranties or disclosures set forth in the
Company Disclosure Schedule and the UCU Disclosure Schedule shall
be deemed to have been made on and as of the date of this
Agreement.
Section 6.17. Charitable and Economic Development Support.
The parties agree that provision of charitable contributions and
community support in the service area of the Company serves a
number of important goals. For a period of at least five years
following the Effective Time, the Surviving Corporation shall
provide, directly or indirectly, charitable contributions and
community support within the service area of the Company at
levels substantially comparable to and no less than the levels of
charitable contributions and community support provided by the
Company within the Company's service area within the two-year
period immediately prior to the Effective Time.
Section 6.18. Transition Task Force.
*
a. The Company and UCU shall create a special transition
task force to be led by ▇▇▇ ▇▇▇▇▇▇, and in addition, to consist
of two members nominated by the Company and two additional
members nominated by UCU.
b. The functions of the task force shall include (i)
serving as a conduit for the flow of information and documents
between the parties, (ii) development of transition plans and
such other matters as may be appropriate and (iii) otherwise
assisting the Company and UCU in making an orderly transition.
c. The Company and UCU will cooperate fully with the
transition task force.
Section 6.19. Termination of DRIP. The Company shall
either (i) terminate the DRIP no later than 30 days prior to the
anticipated Effective Time or (ii) cause the DRIP to be
administered only as an "open market" purchase plan (i.e. shares
issuable under the DRIP would be purchased in the open market)
during the 30 days prior to the anticipated Effective Time.
Section 6.20. Dividend Record Date. The Company agrees to
coordinate with UCU in establishing the record date in the
quarter in which the Closing occurs for the payment of any
dividends on the Company Common Stock in order to assure that the
holders of record of Company Common Stock (i) are entitled to
receive a dividend on either Company Common Stock or UCU Common
Stock received in the Merger in the quarter in which the Closing
occurs, and (ii) are not entitled to receive a dividend in such
quarter on both Company Common Stock and UCU Common Stock
received in the Merger.
Section 6.21. Real Estate Transfer Taxes. The Surviving
Corporation shall pay all state or local real property transfer,
gains or similar Taxes, if any (collectively, the "Transfer
Taxes"), attributable to the transfer of the beneficial ownership
of the Company's and its Subsidiaries' real properties, and any
penalties or interest with respect thereto, payable in connection
with the consummation of the Merger. Prior to the Effective
Time, the Company shall cooperate with UCU in the preparation of
any returns that will be filed with respect to the Transfer
Taxes, including supplying in a timely manner a complete list of
all real property interests held by the Company and its
Subsidiaries and any information with respect to such properties
that is reasonably necessary to complete such returns. The
portion of the consideration allocable to the real properties of
the Company and its Subsidiaries shall be determined by UCU in
its reasonable discretion. The stockholders of the Company (who
are intended third-party beneficiaries of this Section 6.21)
shall be deemed to have agreed to be bound by the allocation
established pursuant to this Section 6.21 in the preparation of
any return with respect to the Transfer Taxes.
Section 6.22. Assumption of Debt Obligations. The Company
and UCU shall cooperate with one another to cause the Surviving
Corporation to expressly assume, at the Effective Time, any
indebtedness of the Company which requires express assumption of
the Company's obligations as set forth in Section 3.04 of the
Company Disclosure Schedule.
Section 6.23. Amendment of First Mortgage Bond Indenture.
The Company shall use its best efforts to obtain within 120 days
of the date hereof the consent of the requisite number of holders
of bonds issued under the Company's Indenture of Mortgage and
Deed of Trust, as amended (the "Indenture") to amend the
Indenture in a manner reasonably acceptable to UCU to delete the
last sentence of Section 4.11 of the Indenture and to make any
appropriate conforming changes at a total cost (including consent
payments to the bondholders and legal and financial advisor fees)
reasonably acceptable to UCU. If such consents are not obtained
within the applicable time period at a cost reasonably acceptable
to UCU, UCU, in its sole discretion, may terminate this Agreement
as provided on Section 6.23 of each of the Company Disclosure
Schedule and the UCU Disclosure Schedule.
ARTICLE VII
Conditions to Merger
Section 7.01. Conditions to Each Party's Obligations. The
respective obligations of each party to this Agreement to
consummate the Merger and the transactions contemplated hereby
shall be subject to the satisfaction of the following conditions:
(a) Company Stockholders' Approval. The Company
Stockholders' Approval shall have been obtained.
(b) Waiting Periods; Required Statutory Approvals.
The waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated and the
Company Required Statutory Approvals and the UCU Required
Statutory Approvals shall have been obtained, such approvals
shall have become Final Orders (as defined below), and none of
such approvals or Final Orders shall require or be conditioned
upon any requirement that any of the Company, UCU or the
Surviving Corporation provide any undertaking or agreement, or
change or dispose of any assets or business operations, or take
or refrain from taking any other action, which would cause,
individually or in the aggregate, either (i) a UCU Material
Adverse Effect, or (ii) a material adverse effect on the
financial condition, income, assets, business or prospects of the
business operations presently owned and operated by the Company.
For purposes of this Section, the determination of UCU Material
Adverse Effect may, without limitation, include the failure of
the Public Service Commission of the State of Missouri ("MPSC")
to articulate prior to Closing, its policy on the extent to which
the Surviving Corporation may recover the Premium (as defined
below) related to this transaction. The term "Premium" means
the excess of (xx) the value, as of the Effective Time, of the
UCU Common Stock issued to holders of Company Common Stock as a
result of consummation of the Merger plus all amounts paid in
lieu of fractional shares under Article II and all Cash
Consideration paid to holders of Company Common Stock pursuant to
Section 2.02, over (yy) the net book value of the Company's
assets subject to regulation by the MPSC. A "Final Order" means
action by the relevant regulatory authority which has not been
reversed, stayed, enjoined, set aside, annulled or suspended,
with respect to which any waiting period prescribed by law before
the transactions contemplated hereby may be consummated has
expired, and as to which all conditions to the consummation of
such transactions prescribed by law, regulation or order have
been satisfied.
(c) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other
legal or regulatory restraint shall prohibit the consummation of
the Merger.
(d) Registration Statement. The Registration
Statement shall have become effective under the Securities Act
and shall not be the subject of any stop order or proceedings
seeking a stop order.
(e) Listing of Stock. The shares of UCU Common Stock
to be issued in the Merger (including shares of UCU Common Stock
issued or issuable in respect of Company Stock Options and
Company Restricted Stock Awards) shall have been approved for
listing on the NYSE, subject to official notice of issuance.
Section 7.02. Additional Conditions to Obligations of UCU.
The obligations of UCU to consummate the Merger and the
transactions contemplated hereby shall be subject to the
satisfaction of the following additional conditions, any of which
may be waived in writing exclusively by UCU:
(a) Representations and Warranties. The
representations and warranties of the Company set forth in this
Agreement that are qualified by the Company Material Adverse
Effect shall be true and correct as of the Closing Date and the
representations and warranties that are not so qualified, taken
together, shall be true and correct in all material respects, in
each case as though made on and as of the Closing Date (except to
the extent any such representation or warranty expressly speaks
as of an earlier date); and UCU shall have received a certificate
signed on behalf of the Company by the chief executive officer of
the Company to such effect.
(b) Performance of Obligations. The Company shall
have performed in all material respects each obligation and
agreement and shall have complied in all material respects with
each covenant required to be performed and complied with by it
under this Agreement at or prior to the Effective Time; and UCU
shall have received a certificate signed on behalf of the Company
by the chief executive officer of the Company to such effect.
(c) Tax Opinion. UCU shall have received a written
opinion from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, counsel to UCU,
to the effect that the Merger will be treated for federal income
tax purposes as a reorganization within the meaning of Section
368(a) of the Code. In rendering such opinion, such counsel may
require and rely upon reasonable representations and certificates
of UCU (including, without limitation, representations contained
in a certificate of UCU) (the "UCU Tax Certificate") and the
Company (including, without limitation, representations contained
in a certificate of the Company (the "Company Tax Certificate").
(d) Company Material Adverse Effect. No Company
Material Adverse Effect shall have occurred and there shall exist
no fact or circumstance which is reasonably likely to have a
Company Material Adverse Effect.
(e) Amendment of Indenture. The Indenture shall have
been amended as described in Section 6.23.
Section 7.03. Additional Conditions to Obligations of the
Company. The obligation of the Company to effect the Merger is
subject to the satisfaction of each of the following additional
conditions, any of which may be waived in writing exclusively by
the Company:
(a) Representations and Warranties. The
representations and warranties of UCU set forth in this Agreement
that are qualified by the UCU Material Adverse Effect shall be
true and correct as of the Closing Date and the representations
and warranties that are not so qualified, taken together, shall
be true and correct in all material respects, in each case as
though made on and as of the Closing Date (except to the extent
any such representation or warranty expressly speaks as of an
earlier date); and the Company shall have received a certificate
signed on behalf of UCU by the chief executive officer of UCU to
such effect.
(b) Performance of Obligations. UCU shall have
performed in all material respects each obligation and agreement
and shall have complied in all material respects with each
covenant required to be performed or complied with by it under
this Agreement at or prior to the Effective Time; and the Company
shall have received a certificate signed on behalf of UCU by the
chief executive officer of UCU to such effect.
(c) Tax Opinion. The Company shall have received a
written opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the
Company, to the effect that the Merger will be treated for
federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code. In rendering such
opinion, such counsel may require and rely upon reasonable
representations and certificates of UCU (including, without
limitation, representations contained in the UCU Tax Certificate)
and the Company (including, without limitation, representations
contained in the Company Tax Certificate); and UCU and the
Company agree that, to the extent they can truthfully do so, they
will make such representations and deliver such certificates.
(d) UCU Material Adverse Effect. No UCU Material
Adverse Effect shall have occurred and there shall exist no fact
or circumstance which is reasonably likely to have a UCU Material
Adverse Effect.
ARTICLE VIII
Termination
Section 8.01. Termination. This Agreement may be
terminated at any time prior to the Effective Time by written
notice by the terminating party to the other party, whether
before or after approval of the matters presented in connection
with the Merger by the stockholders of the Company:
(a) by mutual written consent of UCU and the Company;
or
(b) by either UCU or the Company, if the Effective
Time shall not have occurred on or before June 1, 2000 (the
"Termination Date"); provided, however, that if on the
Termination Date the conditions to the Closing set forth in
Section 7.01(b) shall not have been fulfilled but all other
conditions to the Closing shall have been fulfilled or shall be
capable of being fulfilled, then the Termination Date shall be
extended to December 31, 2000; and provided, further, that the
right to terminate the Agreement under this Section 8.01(b) shall
not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or
before the Termination Date; or
(c) by either UCU or the Company, if a court of
competent jurisdiction or other Governmental Authority shall have
issued a final, non-appealable order, decree or ruling, or taken
any other action, having the effect of permanently restraining,
enjoining or otherwise prohibiting the Merger; or
(d) by either UCU or the Company if, at the Company
Stockholders' Meeting (including any adjournment or postponement
thereof), the requisite vote of the stockholders of the Company
in favor of this Agreement and the Merger shall not have been
obtained; or
(e) by UCU, if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of
the Company set forth in this Agreement shall have occurred which
would cause the conditions set forth in Sections 7.02(a) or
7.02(b) not to be satisfied, and such breach or failure shall not
have been remedied within 45 business days after receipt by the
Company of notice in writing from UCU specifying the nature of
such breach and requesting that it be remedied or UCU shall not
have received adequate assurance of a cure of such breach within
such 45 business-day period; or
(f) by UCU, if the Board of Directors of the Company
(i) shall not have recommended or shall have withdrawn or
modified its recommendation of this Agreement and the Merger or
(ii) shall have approved or recommended a Takeover Proposal,
other than the Merger; or
(g) by UCU, if the Company or any of its Affiliates
shall have materially and knowingly breached the covenant
contained in Section 6.01; or
(h) by the Company in accordance with Section 6.01(b);
provided, that it has complied with the notice provisions
thereof; or
(i) by the Company, if a breach of or failure to
perform any representation, warranty, covenant or agreement on
the part of UCU set forth in this Agreement shall have occurred
which would cause the conditions set forth in Sections 7.03(a) or
7.03(b) not to be satisfied, and such breach or failure shall not
have been remedied within 20 business days after receipt by UCU
of notice in writing from the Company, specifying the nature of
such breach and requesting that it be remedied or the Company
shall not have received adequate assurance of a cure of such
breach within such 20 business-day period.
Section 8.02. Effect of Termination. In the event of
termination of this Agreement pursuant to Section 8.01, there
shall be no liability or obligation on the part of UCU, the
Company, or their respective officers, directors, stockholders or
Affiliates, except as set forth in Section 8.03 and except to the
extent that such termination results from the willful breach by a
party of any of its representations, warranties, covenants or
agreements contained in this Agreement; provided that the
provisions of Sections 8.02, 8.03, 9.02 and 9.07 of this
Agreement and the Confidentiality Agreement shall remain in full
force and effect and survive any termination of this Agreement.
Section 8.03. Fees and Expenses. (a) Except as set forth
in this Section 8.03, all fees and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses,
whether or not the Merger is consummated; provided, however, that
UCU and the Company shall share equally all fees and expenses,
other than attorneys' and accounting fees and expenses, incurred
in relation to the printing and filing of the Proxy Statement
(including any related preliminary materials) and the
Registration Statement (including financial statements and
exhibits) and any amendments or supplements thereto.
(b) If this Agreement is terminated by UCU pursuant to
Section 8.01(e) or by the Company pursuant to Section 8.01(i),
the non-terminating party shall reimburse the other party for all
reasonable costs and expenses incurred by it in connection with
this Agreement and the transactions contemplated hereby,
including without limitation, fees and expenses of counsel,
financial advisors, accountants, actuaries and consultants and
the other party's share of all printing and filing fees. Such
amounts shall be payable only upon due presentation by the
terminating party of a written summary of such expenses, in
reasonable detail, within 30 days after the date of termination,
and in no event shall the aggregate amount payable under this
Section 8.03(b) exceed $1.75 million.
(c) If this Agreement is terminated by UCU pursuant to
Section 8.01(f) or Section 8.01(g), the Company shall pay to UCU
a termination fee of $15 million in cash within five business
days after such termination.
(d) If this Agreement is terminated by the Company
pursuant to Section 8.01(h), the Company shall pay to UCU a
termination fee of $15 million in cash within five business days
after such termination.
(e) If this Agreement is terminated by either UCU or
the Company pursuant to Section 8.01(d), a Takeover Proposal
shall have been made prior to the date of the Company
Stockholders' Meeting, and, if within 24 months of such
termination the Company shall enter into an Acquisition Agreement
relating to such Takeover Proposal, the Company shall pay to UCU
a termination fee of $15 million in cash within five business
days after the execution of such Acquisition Agreement.
Section 8.04. Amendment. This Agreement may be amended by
the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after
approval of the matters presented in connection with the Merger
by the stockholders of the Company, but, after any such approval,
no amendment shall be made which by law requires further approval
by such stockholders without such further approval. This
Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
Section 8.05. Extension; Waiver. At any time prior to the
Effective Time, either party hereto may, to the extent legally
allowed, (i) extend the time for the performance of any of the
obligations or other acts of the other party hereto contained
herein, (ii) waive any inaccuracies in the representations and
warranties of the other party hereto contained herein or in any
document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions of the other party
hereto contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set
forth in a written instrument signed on behalf of such party.
ARTICLE IX
Miscellaneous
Section 9.01. Non-survival of Representations, Warranties
and Agreements. None of the representations, warranties,
covenants and agreements in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective
Time, except for Section 6.11 and the other covenants and
agreements which, by their terms, are to be performed after the
Effective Time. The Confidentiality Agreement shall survive the
execution and delivery of this Agreement but shall terminate and
be of no further force and effect as of the Effective Time.
Section 9.02. Notices. All notices and other
communications hereunder shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed) or
mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to UCU, to
UtiliCorp United Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, to:
The Empire District Electric Company
▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.03. Interpretation. When a reference is made in
this Agreement to a section, such reference shall be to a Section
of this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or'"including" are used in this Agreement
they shall be deemed to be followed by the words "without
limitation."
Section 9.04. Disclosure Schedules. Each exception to a
section of this Agreement set forth in the UCU Disclosure
Schedule or the Company Disclosure Schedule will specifically
refer (including by cross-reference) to the section of the
Agreement to which it relates. Any item disclosed in the UCU
Disclosure Schedule or the Company Disclosure Schedule under any
specific section number thereof or disclosed in reference to any
specific section hereof shall be deemed to have been disclosed by
UCU or the Company, as appropriate, for all purposes of this
Agreement in response to other sections of either the UCU
Disclosure Schedule or the Company Disclosure Schedule, as the
case may be, to the extent that such disclosure is specifically
cross-referenced to such other section(s).
Section 9.05. Counterparts. This Agreement may be executed
in counterparts, all of which shall be considered one and the
same agreement and shall become effective when the counterparts
have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same
counterpart.
Section 9.06. Entire Agreement; Third Party Beneficiaries.
This Agreement (including the documents and the instruments
referred to herein) (i) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter
hereof, and (ii) except as provided in Sections 1.04 and 6.11 and
this Section 9.06, is not intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.
Section 9.07. Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the State
of Kansas without regard to any applicable conflicts of law
rules. Each party hereto irrevocably and unconditionally
consents and submits to the jurisdiction of the courts of the
State of Missouri and of the United States of America located in
the State of Missouri for any actions, suits or proceedings
arising out of or relating to this Agreement and the transactions
contemplated hereby, and further agrees that service of any
process, summons, notice or document by U.S. registered or
certified mail to the party at the address specified in Section
9.02, shall be effective service of process for any action, suit
or proceeding brought against such party in any such court. Each
party hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or
proceeding arising out of this agreement or the transactions
contemplated hereby, in the courts of the State of Missouri
located in Kansas City, Missouri or the United States of America
located in Kansas City, Missouri, and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in
any such court that any such action, suit or proceeding brought
in any such court has been brought in an inconvenient forum. If
any provision of this Agreement is held to be unenforceable for
any reason, it shall be modified rather than voided, if possible,
in order to achieve the intent of the parties to the extent
possible. In any event, all other provisions of this Agreement
shall be deemed valid and enforceable to the extent possible.
Section 9.08. Assignment. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be
assigned by either party hereto (whether by operation of law or
otherwise) without the prior written consent of the other party,
and any attempted assignment thereof without such consent shall
be null and void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and
assigns.
IN WITNESS WHEREOF, UCU and the Company have caused this
Agreement to be signed by their respective officers thereunto
duly authorized as of the date first written above.
UTILICORP UNITED INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Operating Officer
THE EMPIRE DISTRICT ELECTRIC COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer