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EXHIBIT 99.b
AGREEMENT AND PLAN OF MERGER
by and among
ONEOK, INC.,
OASIS ACQUISITION CORPORATION
and
SOUTHWEST GAS CORPORATION
dated as of
December 14, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGERS
Section 1.1 The Mergers............................................................................1
Section 1.2 Effective Time of the Mergers..........................................................2
Section 1.3 Closing................................................................................2
Section 1.4 Certificate of Incorporation; By-laws..................................................2
Section 1.5 Directors and Officers.................................................................3
ARTICLE II
CONVERSION OF SHARES
Section 2.1 Effect of the First Merger.............................................................3
Section 2.2 Exchange of Certificates...............................................................4
Section 2.3 Dissenter's Rights.....................................................................5
Section 2.4 Company Option Plans...................................................................6
Section 2.5 Effect of the Second Merger............................................................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization and Qualification.........................................................6
Section 3.2 Subsidiaries...........................................................................7
Section 3.3 Capitalization.........................................................................7
Section 3.4 Authority; Non-Contravention; Statutory Approvals; Compliance..........................8
Section 3.5 Reports and Financial Statements......................................................10
Section 3.6 Absence of Certain Changes or Events; Absence of
Undisclosed Liabilities..............................................................10
Section 3.7 Litigation............................................................................11
Section 3.8 Proxy Statement.......................................................................11
Section 3.9 Tax Matters...........................................................................11
Section 3.10 Employee Matters; ERISA...............................................................14
Section 3.11 Environmental.........................................................................16
Section 3.12 Regulation as a Utility...............................................................18
Section 3.13 Vote Required.........................................................................18
Section 3.14 Opinion of Financial Advisor..........................................................18
Section 3.15 Brokers...............................................................................19
Section 3.16 Insurance.............................................................................19
Section 3.17 Company Rights Agreement..............................................................19
Section 3.18 Year 2000.............................................................................19
Section 3.19 Hedging...............................................................................19
Section 3.20 Regulatory Proceedings................................................................19
Section 3.21 Title to Properties...................................................................19
Section 3.22 Condition of Assets...................................................................20
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 4.1 Organization and Qualification........................................................20
Section 4.2 Authority; Non-Contravention; Statutory Approvals; Compliance.........................20
Section 4.3 Information in Proxy Statement........................................................21
Section 4.4 No Prior Activities...................................................................21
Section 4.5 Brokers...............................................................................21
Section 4.6 1935 Act..............................................................................22
Section 4.7 Legal Proceedings.....................................................................22
Section 4.8 Consulting, Employment and Assumption Agreements......................................22
Section 4.9 Tax Opinion...........................................................................22
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGERS
Section 5.1 Conduct of Business of the Company....................................................22
Section 5.2 No Shopping...........................................................................26
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Access to Information.................................................................28
Section 6.2 Proxy Statement.......................................................................28
Section 6.3 Regulatory Approvals and Other Matters................................................29
Section 6.4 Shareholder Approval..................................................................29
Section 6.5 Directors' and Officers' Indemnification..............................................30
Section 6.6 Disclosure Schedules..................................................................31
Section 6.7 Public Announcements..................................................................31
Section 6.8 Employee Benefit Plans................................................................31
Section 6.9 Company Stock and Incentive Plans.....................................................33
Section 6.10 Expenses..............................................................................33
Section 6.11 Advisory Board........................................................................34
Section 6.12 Notification..........................................................................34
Section 6.13 Las Vegas Office......................................................................34
Section 6.14 Additional Statutory Approvals........................................................34
Section 6.15 Further Assurances....................................................................34
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligation to Effect the Mergers...........................35
Section 7.2 Conditions to Obligation of Parent to Effect the Mergers..............................35
Section 7.3 Conditions to Obligation of the Company to Effect the Mergers.........................37
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination...........................................................................37
Section 8.2 Effect of Termination.................................................................39
Section 8.3 Termination Fee; Expenses.............................................................39
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations, Warranties, Covenants
and Agreements......................................................................39
Section 9.2 Notices...............................................................................40
Section 9.3 Certain Definitions...................................................................42
Section 9.4 Miscellaneous.........................................................................42
Section 9.5 Interpretation........................................................................42
Section 9.6 Counterparts; Effect..................................................................42
Section 9.7 Parties in Interest...................................................................42
Section 9.8 Waiver of Jury Trial and Certain Damages..............................................43
Section 9.9 Enforcement...........................................................................43
Section 9.10 Amendment.............................................................................43
Section 9.11 Waiver................................................................................43
Section 9.12 No Remedy in Certain Circumstances....................................................43
Section 9.13 Further Assurances....................................................................44
Annex A Articles of Incorporation of the Company, as the surviving
corporation in the First Merger
Annex B By-laws of the Company, as the surviving corporation in the
First Merger
Disclosure Schedules:
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Company Disclosure Schedule
Parent Disclosure Schedule
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GLOSSARY OF TERMS
1935 Act...................................................................7
401(k) Plan...............................................................33
affiliate.................................................................42
Business Combination......................................................27
Certificates...............................................................4
CGCL.......................................................................1
Closing....................................................................2
Closing Agreement.........................................................12
Closing Date...............................................................2
Company....................................................................1
Company Benefit Plans.....................................................14
Company Common Stock.......................................................3
Company Disclosure Schedule...............................................31
Company Financial Statements..............................................10
Company Material Adverse Effect............................................7
Company Meeting...........................................................29
Company Option Plans.......................................................6
Company Options............................................................6
Company Preference Stock...................................................7
Company Preferred Stock....................................................7
Company Required Consents..................................................8
Company Required Statutory Approvals.......................................9
Company Rights.............................................................3
Company Rights Agreement...................................................3
Company SEC Reports.......................................................10
Company Shareholders' Approval............................................18
control...................................................................42
Disclosure Schedules......................................................31
Dissenting Shares..........................................................5
DOJ.......................................................................28
Effective Time.............................................................2
Effective Time of the First Merger.........................................2
Effective Time of the Second Merger........................................2
Environmental Claim.......................................................17
Environmental Laws........................................................18
Environmental Permits.....................................................16
ERISA.....................................................................14
Exchange Act..............................................................10
FERC.......................................................................6
Final Order...............................................................35
First Merger...............................................................1
First Merger Surviving Corporation Common Stock............................3
Foreign Qualifications.....................................................6
FTC.......................................................................28
GAAP......................................................................10
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Governmental Authority.....................................................9
Hazardous Materials.......................................................18
Indemnified Liabilities...................................................30
Indemnified Parties.......................................................30
Indemnified Party.........................................................30
Initial Termination Date..................................................37
IRS.......................................................................13
joint venture..............................................................7
Letter Agreement..........................................................28
Liens.....................................................................20
Merger Consideration.......................................................3
Merger Sub.................................................................1
Merger Sub Common Stock....................................................3
Mergers....................................................................1
▇▇▇▇▇▇▇ ▇▇▇▇▇.............................................................18
MIP.......................................................................31
OGCA.......................................................................2
Parent.....................................................................1
Parent Common Stock.......................................................33
Parent Disclosure Schedule................................................31
Parent Material Adverse Effect............................................21
Parent Required Consents..................................................21
Parent Required Statutory Approvals.......................................21
Paying Agent...............................................................4
PBGC......................................................................15
PCBs......................................................................18
Person....................................................................42
Power Act.................................................................10
Preferred Securities......................................................23
Proxy Statement...........................................................11
Qualified Plans...........................................................32
Releases..................................................................18
Representatives...........................................................28
SEC.......................................................................10
Second Merger..............................................................1
Securities Act............................................................10
SERP......................................................................32
Shares.....................................................................3
Southwest Division........................................................34
subsidiary.................................................................7
Superior Proposal.........................................................27
Surviving Corporation......................................................2
Tax Return................................................................11
Tax Ruling................................................................12
Taxes.....................................................................11
Violation..................................................................8
Welfare Plans.............................................................15
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 14, 1998, by and
among ONEOK, Inc., an Oklahoma corporation ("Parent"), Oasis Acquisition
Corporation, a California corporation and a wholly owned subsidiary of Parent
("Merger Sub"), and Southwest Gas Corporation, a California corporation (the
"Company").
RECITALS
WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company
have each approved, and deem it advisable and in the best interests of their
respective shareholders to consummate, the acquisition of the Company by Parent
upon the terms and subject to the conditions set forth herein; and
WHEREAS, in furtherance thereof, the respective Boards of Directors of
Parent, Merger Sub and the Company have approved this Agreement and the merger
of Merger Sub with and into the Company, with the Company being the surviving
corporation (the "First Merger"), and the merger of the Company, as the
surviving corporation in the First Merger, with and into Parent, with Parent
being the surviving corporation (the "Second Merger," and together with the
First Merger, the "Mergers");
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGERS
Section 1.1 The Mergers. Upon the terms and subject to the conditions
of this Agreement:
(a) At the Effective Time of the First Merger (as defined in Section
1.2), Merger Sub will be merged with and into the Company in accordance with the
laws of the State of California. The Company will be the surviving corporation
in the First Merger and will continue its corporate existence under the laws of
the State of California. The First Merger will have the effect as provided in
the applicable provisions of the California General Corporation Law ("CGCL").
Without limiting the generality of the foregoing, upon the First Merger, all the
rights, privileges, immunities, powers and franchises of the Company and Merger
Sub will vest in the Company, as the surviving corporation in the First Merger,
and all obligations, duties, debts and liabilities of the Company and Merger Sub
shall be the obligations, duties, debts and liabilities of the Company, as the
surviving corporation in the First Merger. Throughout this Agreement, the term
the "Company" refers to the Company prior to the First Merger or to the Company
as the surviving corporation in the First Merger, as the context requires.
(b) At the Effective Time of the Second Merger (as defined in Section
1.2), the Company, as the surviving corporation in the First Merger, will be
merged with and into Parent in accordance with the laws of the States of
Oklahoma and California. Parent will be the surviving corporation in the Second
Merger (the "Surviving Corporation") and will continue its
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corporate existence under the laws of the State of Oklahoma. The Second Merger
will have the effect as provided in the applicable provisions of the Oklahoma
General Corporation Act ("OGCA") and the CGCL. Without limiting the generality
of the foregoing, upon the Second Merger, all the rights, privileges,
immunities, powers and franchises of the Company and Parent will vest in the
Surviving Corporation and all obligations, duties, debts and liabilities of the
Company and Parent will be the obligations, duties, debts and liabilities of the
Surviving Corporation.
Section 1.2 Effective Time of the Mergers. On the Closing Date (as
defined in Section 1.3), with respect to the First Merger, this Agreement and
duly executed officers' certificates will be filed with the Secretary of State
of the State of California in accordance with the CGCL with respect to the First
Merger. The First Merger will become effective upon filing this Agreement and
the officers' certificates (the "Effective Time of the First Merger"). On the
Closing Date, with respect to the Second Merger, a certificate of ownership and
merger complying with the requirements of the OGCA will be executed and filed
with the Secretary of State of the State of Oklahoma and this Agreement and a
duly executed certificate of ownership complying with the requirements of the
CGCL will be filed with the Secretary of State of the State of California. The
Second Merger will become effective upon filing the certificate of ownership and
merger and this Agreement and the certificate of ownership (the "Effective Time
of the Second Merger"). Throughout this Agreement, "Effective Time" means the
Effective Time of the First Merger or the Effective Time of the Second Merger,
together or as applicable. The First Merger will occur immediately prior to the
Second Merger.
Section 1.3 Closing. Unless this Agreement has been terminated and the
transactions contemplated herein have been abandoned pursuant to Article VIII
hereof, the closing of the Mergers (the "Closing") will take place at 10:00
a.m., Central time, on a date (the "Closing Date") to be specified by the
parties, which shall be no later than the second business day after satisfaction
or waiver of all of the conditions set forth in Article VII hereof, at the
offices of Parent, unless another date or place is agreed to in writing by the
parties hereto.
Section 1.4 Certificate of Incorporation; By-laws. Pursuant to the
Mergers, (a) (i) the Articles of Incorporation of the Company, as the surviving
corporation in the First Merger, shall read as set forth in Annex A hereto,
until thereafter amended as provided by law and such Articles of Incorporation
and (ii) the By-laws of the Company, as the surviving corporation in the First
Merger, shall read as set forth in Annex B hereto, until thereafter amended as
provided by law, the Articles of Incorporation of the Company, as the surviving
corporation in the First Merger, and such By-laws and (b) (i) the Certificate of
Incorporation of Parent, as in effect immediately prior to the Effective Time of
the Second Merger, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and such Certificate of
Incorporation and (ii) the By-laws of Parent, as in effect immediately prior to
the Effective Time of the Second Merger, shall be the By-laws of the Surviving
Corporation until thereafter amended as provided by law, the Certificate of
Incorporation of the Surviving Corporation and such By-laws.
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Section 1.5 Directors and Officers.
(a) The directors and officers of Merger Sub immediately prior to the
Effective Time of the First Merger will be the directors and officers of the
Company, as the surviving corporation in the First Merger, each to hold office
in accordance with the Articles of Incorporation and By-laws of the Company, as
the surviving corporation in the First Merger.
(b) The directors and officers of Parent immediately prior to the
Effective Time of the Second Merger will be the directors and officers of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation; provided that, after the
Effective Time of the Second Merger, the Surviving Corporation will, following
the Effective Time of the Second Merger, elect to the Board of Directors of the
Surviving Corporation three individuals to be selected by Parent from the Board
of Directors of the Company immediately prior to the Effective Time of the First
Merger.
ARTICLE II
CONVERSION OF SHARES
Section 2.1 Effect of the First Merger. As of the Effective Time of the
First Merger, by virtue of the First Merger and without any action on the part
of the holders of any shares of common stock, par value $1.00 per share, of the
Company (referred to herein as "Shares" or "Company Common Stock") or of common
stock, no par value per share, of Merger Sub ("Merger Sub Common Stock"):
(a) Each issued and outstanding share of Company Common Stock (other
than Dissenting Shares (as defined in Section 2.3) covered by Section 2.3) and
each associated stock purchase right (the "Company Rights") issued pursuant to
the Rights Agreement, dated as of March 5, 1996, as amended, between the Company
and ▇▇▇▇▇▇ Trust Company, as Rights Agent (the "Company Rights Agreement"),
which will be terminated at the Effective Time of the First Merger (references
herein to Company Common Stock or Shares will be deemed to include the
associated Company Rights), will be converted into the right to receive $28.50
per share in cash, payable to the holder thereof, without interest (the "Merger
Consideration"), upon surrender of the certificate formerly representing such
share of Company Common Stock in the manner provided in Section 2.2. All such
shares of Company Common Stock, when so converted, shall no longer be
outstanding and shall be canceled and automatically converted into the right to
receive the Merger Consideration therefor upon the surrender of such certificate
in accordance with Section 2.2. Any payment made pursuant to this Section 2.1(a)
shall be made net of applicable withholding taxes to the extent such withholding
is required by law.
(b) Each issued and outstanding share of Merger Sub Common Stock shall
be converted into and become one fully paid and nonassessable share of common
stock, par value $1.00 per share, of the Company, as the surviving corporation
in the First Merger ("First Merger Surviving Corporation Common Stock").
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Section 2.2 Exchange of Certificates.
(a) Parent's registrar and transfer agent, or such other bank or trust
company as may be selected by Parent, will act as paying agent ("Paying Agent")
for the holders of Shares in connection with the First Merger, pursuant to an
agreement providing for the matters set forth in this Section 2.2 and such other
matters as may be appropriate and the terms of which shall be reasonably
satisfactory to Parent and the Company, to receive the funds to which holders of
Shares become entitled pursuant to Section 2.1(a). Following the Effective Time,
Parent will deposit in trust with the Paying Agent for the benefit of holders of
Company Common Stock the funds necessary to pay the aggregate Merger
Consideration as contemplated by Section 2.1(a) with respect to shares of
Company Common Stock.
(b) At the Effective Time of the First Merger, Parent will instruct the
Paying Agent to promptly, and in any event not later than three business days
following the Effective Time of the First Merger, mail (and to make available
for collection by hand) to each holder of record of a certificate or
certificates, which immediately prior to the Effective Time of the First Merger
represented outstanding shares of Company Common Stock (the "Certificates"),
whose Shares were converted pursuant to Section 2.1(a) into the right to receive
the Merger Consideration (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 Paying Agent and shall be in
such form and have such other provisions as Parent may reasonably specify) and
(ii) instructions (which shall provide that at the election of the surrendering
holder Certificates may be surrendered, and payment therefor collected, by hand
delivery) for use in effecting the surrender of the Certificates in exchange for
payment of the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to receive in exchange therefor
the Merger Consideration for each share of Company Common Stock formerly
represented by such Certificate, to be mailed (or made available for collection
by hand if so elected by the surrendering holder) within three business days of
receipt thereof, and the Certificate so surrendered shall forthwith be canceled.
If payment of the Merger Consideration is to be made to a Person other than the
Person in whose name the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the Person
requesting such payment shall have paid any transfer and other taxes required by
reason of the payment of the Merger Consideration to a Person other than the
registered holder of the Certificate surrendered or shall have established to
the satisfaction of the Company, as the surviving corporation in the First
Merger, or the Surviving Corporation that such tax either has been paid or is
not applicable. Until surrendered as contemplated by this Section 2.2, each
Certificate (other than Certificates representing Company Common Stock held by
Parent or Merger Sub, or any subsidiary of Parent or Merger Sub, or Dissenting
Shares) shall be deemed at any time after the Effective Time of the First Merger
to represent only the right to receive the Merger Consideration in cash as
contemplated by this Section 2.2.
(c) The Paying Agent shall invest the funds, as directed by Parent, in
(i) direct obligations of the United States of America, (ii) obligations for
which the full faith and credit of the United States of America is pledged to
provide for the payment of principal and interest or
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(iii) commercial paper rated the highest quality by either ▇▇▇▇▇'▇ Investors
Services, Inc. or Standard & Poor's Corporation. Any net earnings with respect
to such funds shall be the property of and paid over to Parent as and when
requested by Parent; provided, however, that any such investment or any such
payment of earnings may not delay the receipt by holders of Certificates of the
Merger Consideration.
(d) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with this Article II,
provided that the Person to whom the Merger Consideration is paid shall, as a
condition precedent to the payment thereof, give the Company or the Surviving
Corporation, as the case may be, a bond in such sum as it may direct or
otherwise indemnify the Company or the Surviving Corporation, as the case may
be, in a manner satisfactory to it against any claim that may be made against
the Company or the Surviving Corporation, as the case may be, with respect to
the Certificate claimed to have been lost, stolen or destroyed.
(e) After the Effective Time of the First Merger, the stock transfer
books of the Company shall be closed and there shall be no transfers on the
stock transfer books of the Company, as the surviving corporation in the First
Merger, or the Surviving Corporation of Shares that were outstanding immediately
prior to the Effective Time of the First Merger. If, after the Effective Time of
the First Merger, Certificates are presented to the Company, as the surviving
corporation in the First Merger, or the Surviving Corporation, they shall be
canceled and exchanged for the Merger Consideration as provided in this Article
II.
(f) Any portion of the funds held by the Paying Agent that remain
undistributed to the former shareholders of the Company for one year after the
Effective Time shall be delivered by the Paying Agent to the Surviving
Corporation, which shall thereafter act as the Paying Agent, and any former
shareholders of the Company who have not complied with this Article II prior to
one year after the Effective Time shall thereafter look only as a general
creditor to the Surviving Corporation for payment of their claim for the Merger
Consideration.
(g) The Surviving Corporation shall not be liable to any holder of
Company Common Stock for Merger Consideration delivered to a public official
pursuant to any applicable abandonment, escheat or similar law. Any amounts
remaining unclaimed by holders of any such shares six years after the Effective
Time (or such earlier date immediately prior to the time at which such amounts
would otherwise escheat to or become property of any Governmental Authority)
shall, to the extent permitted by applicable law, become the property of the
Surviving Corporation, free and clear of any claims or interests of any such
holders or their successors, assigns or personal representatives previously
entitled thereto.
Section 2.3 Dissenter's Rights. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the Effective
Time of the First Merger and constituting "dissenting shares" (as defined in
Section 1300 of CGCL) ("Dissenting Shares"), shall not be converted into the
right to receive the Merger Consideration, as provided in Section 2.1(a) hereof,
unless and until such holder fails to perfect or effectively withdraws or
otherwise loses his right to appraisal and payment under the CGCL. If, after the
Effective Time of the First
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Merger, any such holder fails to perfect or effectively withdraws or loses his
right to appraisal, such Dissenting Shares shall thereupon be treated as if they
had been converted as of the Effective Time of the First Merger into the right
to receive the Merger Consideration to which such holder is entitled, without
interest or dividends thereon. The Company shall give Parent prompt notice of
any demands received by the Company for appraisal of Shares, and, prior to the
Effective Time of the First Merger, Parent shall have the right to participate
in all negotiations and proceedings with respect to such demands. Prior to the
Effective Time of the First Merger, the Company shall not, except with the prior
written consent of Parent, make any payment with respect to or offer to settle,
any such demands.
Section 2.4 Company Option Plans.
(a) The Company shall take all actions necessary to provide that, upon
the Effective Time, each then outstanding option to purchase shares of Company
Common Stock or other similar interest (collectively, the "Company Options"),
granted under any of the Company's stock option plans or under any other plan or
arrangement (the "Company Option Plans"), whether or not then exercisable or
vested, all of which, together with the applicable exercise prices, are
disclosed in Section 3.10 of the Company Disclosure Schedule (or as otherwise
permitted from and after the date of this Agreement pursuant to Section 5.1(c)
or (i)), shall be adjusted such that, upon exercise of a Company Option, the
holder of such Company Option would be entitled to receive only an amount in
respect thereof equal to the product of (i) the excess, if any, of the Merger
Consideration over the per share exercise price thereof and (ii) the number of
shares of Company Common Stock subject thereto (such payment to be net of
applicable withholding taxes).
(b) The Company Option Plans will terminate as of the Effective Time of
the Second Merger in accordance with the terms thereof.
Section 2.5 Effect of the Second Merger. As of the Effective Time of
the Second Merger, by virtue of the Second Merger, each share of First Merger
Surviving Corporation Common Stock will automatically be canceled and retired
and will cease to exist, and no consideration will be delivered in exchange
therefor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub as
follows:
Section 3.1 Organization and Qualification. Each of the Company and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, has all requisite
corporate power and authority, and has been duly authorized by all necessary
approvals and orders of the California Public Utilities Commission, the Arizona
Corporations Commission, the Public Utilities Commission of Nevada and the
Federal Energy Regulatory Commission (the "FERC"), to own, lease and operate its
assets and properties and to carry on its business as it is now being conducted,
and is duly qualified and in good standing to do business in each jurisdiction
in which the nature of its business or the
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ownership or leasing of its assets and properties makes such qualification
necessary ("Foreign Qualifications") other than in such jurisdictions where the
failure to be so qualified and in good standing would not, when taken together
with all other such failures, reasonably be expected to have a material adverse
effect on the business, assets, properties (including intangible properties),
condition (financial or otherwise), results of operations, prospects,
liabilities or regulatory status of the Company and its subsidiaries taken as a
whole or on the consummation of this Agreement and the transactions contemplated
hereby (any such material adverse effect being hereinafter referred to as a
"Company Material Adverse Effect"). As used in this Agreement, the term
"subsidiary" of a Person (as defined in Section 9.3) shall mean any corporation
or other entity (including partnerships, limited liability entities and other
business associations and joint ventures) in which such Person directly or
indirectly owns at least a majority of the outstanding voting securities,
equity, partnership interests, membership interests or the like. True, accurate
and complete copies of the articles of incorporation and by-laws of the Company,
as in effect on the date hereof, have been delivered to Parent.
Section 3.2 Subsidiaries. Section 3.2 of the Company Disclosure
Schedule (as defined in Section 6.6) sets forth the name of each subsidiary and
joint venture of the Company, the state or jurisdiction of its incorporation or
formation, the states of any Foreign Qualifications and the Company's interest
therein. None of such entities is a "public utility company," a "holding
company," a "subsidiary company" or an "affiliate" of any public utility company
within the meaning of Section 2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11),
respectively, of the Public Utility Holding Company Act of 1935, as amended (the
"1935 Act"). Except as set forth in Section 3.2 of the Company Disclosure
Schedule, all of the issued and outstanding shares of capital stock or other
securities of, or interests in, each subsidiary or joint venture of the Company
are validly issued, fully paid, nonassessable and free of preemptive rights, are
owned directly or indirectly by the Company free and clear of any liens, claims,
encumbrances, security interests, equities, charges and options of any nature
whatsoever, and there are no outstanding subscriptions, options, calls,
contracts, voting trusts, proxies or other commitments, understandings,
restrictions, arrangements, rights or warrants, including any right of
conversion or exchange under any outstanding security, instrument or other
agreement, obligating any such subsidiary to issue, transfer or sell, or cause
to be issued, transferred or sold, any shares of its capital stock or other
equity interest or securities convertible into or exchangeable for such shares
or equity interests or obligating it to grant, extend or enter into any such
agreement or commitment. As used in this Agreement, the term "joint venture" of
a Person shall mean any corporation or other entity (including partnerships and
other business associations and joint ventures) in which such Person or one or
more of its subsidiaries owns an equity interest that is less than a majority of
any class of the outstanding voting securities or equity, other than equity
interests held for passive investment purposes that are less than 5% of any
class of the outstanding voting securities or equity of any such entity. Except
as set forth in Section 3.2 of the Company Disclosure Schedule, true, accurate
and complete copies of the articles of incorporation, by-laws or similar
governing documents of each subsidiary and joint venture of the Company, as in
effect on the date hereof, have been delivered to Parent.
Section 3.3 Capitalization. The authorized capital stock of the Company
consists of 45,000,000 shares of Company Common Stock, 5,000,000 shares of
preferred stock, no par value per share ("Company Preferred Stock"), and
2,000,000 shares of preference stock, par value $20 per share ("Company
Preference Stock"). As of the close of business on
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December 11, 1998, 30,389,128 shares of Company Common Stock and no shares of
Company Preferred Stock or Company Preference Stock were issued and outstanding.
All of the issued and outstanding shares of the capital stock of the Company are
validly issued, fully paid, nonassessable and free of preemptive rights. Except
as set forth in Section 3.3 of the Company Disclosure Schedule, there are no (a)
outstanding subscriptions, options, calls, contracts, voting trusts, proxies or
other commitments, understandings, restrictions, arrangements, rights or
warrants, including any right of conversion or exchange under any outstanding
security, instrument or other agreement obligating the Company or any of its
subsidiaries to issue, transfer or sell, or cause to be issued, transferred or
sold, any shares of capital stock or other equity interest in, the Company or
any of its subsidiaries or securities convertible into or exchangeable for such
shares or equity interests or obligating the Company or any of its subsidiaries
to grant, extend or enter into any such agreement or commitment, (b) contractual
obligations of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any capital stock of the Company or any subsidiary of the
Company or (c) voting trusts or similar agreements to which the Company or any
of its subsidiaries is a party with respect to the voting of the capital stock
of the Company or any of its subsidiaries.
Section 3.4 Authority; Non-Contravention; Statutory Approvals;
Compliance.
(a) Authority. The Company has all requisite power and authority to
enter into this Agreement, and, subject to the applicable Company Shareholders'
Approval (as defined in Section 3.13) and the Company Required Statutory
Approvals (as defined in subsection (c) of this Section 3.4), to consummate the
transactions contemplated hereby, including, without limitation, the Mergers.
The execution and delivery of this Agreement and the consummation by the Company
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company, subject to obtaining the
Company Shareholders' Approval. This Agreement has been duly and validly
executed and delivered by the Company, and assuming the due authorization,
execution and delivery hereof by Parent and Merger Sub, constitutes the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally and by general principles of equity.
(b) Non-Contravention. The execution and delivery of this Agreement by
the Company does not, and the consummation of the transactions contemplated
hereby, including, without limitation, the Mergers, will not, violate or result
in a breach of any provision of, or constitute a default (with or without notice
or lapse of time or both) under, or result in the termination or modification
of, or accelerate the performance required by, or result in a right of
termination, cancellation, or acceleration of any obligation or the loss of a
material benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets (any such
violation, breach, default, right of termination, modification, cancellation or
acceleration, loss or creation, a "Violation") of the Company or any of its
subsidiaries or joint ventures pursuant to any provisions of (i) the Articles of
Incorporation, Bylaws or similar governing documents of the Company or any of
its subsidiaries or joint ventures, (ii) subject to obtaining the Company
Required Statutory Approvals and the receipt of the Company Shareholders'
Approvals, any statute, law, ordinance, rule, regulation, judgment, decree,
order, injunction, writ, permit or license of any Governmental Authority (as
hereinafter
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defined) applicable to the Company or any of its subsidiaries or joint ventures
or any of their respective properties or assets or (iii) subject to obtaining
the third-party consents or other approvals set forth in Section 3.4(b) of the
Company Disclosure Schedule (the "Company Required Consents") and the Company
Required Statutory Approvals (as defined in clause (c) below), any easement or
other similar right to use or access real property, note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, concession, contract,
lease or other instrument, obligation or agreement of any kind to which the
Company or any of its subsidiaries or any joint venture of the Company is now a
party or by which it or any of its properties or assets may be bound or
affected, excluding from the foregoing clauses (ii) and (iii) such Violations
that would not, in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(c) Statutory Approvals. Except as described in Section 3.4(c) of the
Company Disclosure Schedule, no declaration, filing or registration with, or
notice to or authorization, consent or approval of, any court, governmental or
regulatory body (including a stock exchange or other self-regulatory body) or
authority, federal, state, local or foreign (each, a "Governmental Authority"),
is required to be obtained, made or given by or on behalf of the Company for the
execution and delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby, including, without
limitation, the Mergers, the failure of which to obtain, make or give would
have, in the aggregate, a Company Material Adverse Effect (the "Company Required
Statutory Approvals", it being understood that references in this Agreement to
"obtaining" such Company Required Statutory Approvals shall mean making such
declarations, filings or registrations; giving such notices; obtaining such
authorizations, consents or approvals; and having such waiting periods expire as
are necessary to avoid a violation of law).
(d) Compliance. Except as set forth in Section 3.4(d) or Section 3.7 of
the Company Disclosure Schedule or as disclosed in the Company SEC Reports (as
defined in Section 3.5), neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any joint ventures of the Company, is in violation
of or, to the knowledge of the Company, is under investigation with respect to,
or has been given notice or been charged with any violation of, any law,
statute, order, rule, regulation, ordinance or judgments (including, without
limitation, applicable Environmental Laws, as hereinafter defined) of any
Governmental Authority, except for violations that, in the aggregate, do not
have, and, to the knowledge of the Company, would not reasonably be expected to
have, a Company Material Adverse Effect. Except as set forth in Section 3.4(d)
or Section 3.7 of the Company Disclosure Schedule, the Company and its
subsidiaries and any joint ventures have all easements or other similar rights
to use or access real property, permits, licenses, franchises and other
governmental authorizations, consents and approvals necessary to conduct their
businesses as currently conducted, except those of which the failure to obtain
would not, in the aggregate, reasonably be expected to have a Company Material
Adverse Effect. Except as set forth in Section 3.4(d) or Section 3.7 of the
Company Disclosure Schedule, neither the Company or any of its subsidiaries nor,
to the knowledge of the Company, any joint venture of the Company is in breach
or violation of or in default in the performance or observance of any term or
provision of, and no event has occurred which, with lapse of time or action by a
third party or both (i) would result in a default by the Company or any
subsidiary of the Company or, to the knowledge of the Company, any joint venture
of the Company under its articles of incorporation, by-laws or other governing
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documents or (ii) would reasonably be expected to result in a default by the
Company or any subsidiary of the Company or, to the knowledge of the Company,
any joint venture of the Company under any easement or other similar right to
use or access real property, contract, commitment, agreement, indenture,
mortgage, loan agreement, note, lease, bond, license, approval, permit,
franchise or other instrument to which it is a party or by which the Company or
any subsidiary or joint venture of the Company is bound or to which any of its
property is subject, except in the case of clause (ii) for possible violations,
breaches or defaults which individually or in the aggregate would not reasonably
be expected to have a Company Material Adverse Effect.
Section 3.5 Reports and Financial Statements. Since January 1, 1995,
the filings required to be made by the Company and its subsidiaries under the
Securities Act of 1933 (the "Securities Act"), the Securities Exchange Act of
1934 (the "Exchange Act"), applicable state laws and regulations regulating
public utilities or the Federal Power Act (the "Power Act") have been filed with
the Securities and Exchange Commission (the "SEC"), the California Public
Utilities Commission, the Arizona Corporations Commission, the Public Utilities
Commission of Nevada or the FERC, as the case may be, and complied in all
material respects with all applicable requirements of the appropriate act and
the rules and regulations thereunder. The Company has made available to Parent a
true and complete copy of each report, schedule, registration statement and
definitive proxy statement filed by the Company with the SEC since January 1,
1995 (as such documents have since the time of their filing been amended, the
"Company SEC Reports"). As of their respective dates, the Company SEC Reports
did not contain any untrue statement of a material fact or omit to state a
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. The audited consolidated financial statements and unaudited interim
financial statements of the Company included in the Company SEC Reports
(collectively, the "Company Financial Statements") have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis ("GAAP") (except as may be indicated therein or in the notes thereto and
except with respect to unaudited statements as permitted by Form 10-Q of the
SEC) and fairly present the financial position of the Company and its
subsidiaries as of the dates thereof and the results of their operations and
cash flows for the periods then ended, subject, in the case of the unaudited
interim financial statements, to normal, recurring audit adjustments.
Section 3.6 Absence of Certain Changes or Events; Absence of
Undisclosed Liabilities.
(a) Absence of Changes. Except as set forth in the Company SEC Reports
filed prior to the date of this Agreement or Section 3.6(a) of the Company
Disclosure Schedule, from December 31, 1997, through the date hereof, (i) each
of the Company and its subsidiaries has conducted its business only in the
ordinary course of business consistent with past practice, (ii) there has not
been, and no fact or condition exists which would have or, to the knowledge of
the Company, is reasonably expected to have, a Company Material Adverse Effect
and (iii) the Company and its subsidiaries have not taken action that if taken
after the date hereof would constitute a violation of Section 5.1 hereof.
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(b) No Undisclosed Liabilities. Neither the Company nor any of its
subsidiaries has any liabilities or obligations (whether absolute, accrued,
contingent or otherwise) of a nature required by GAAP to be reflected in a
consolidated corporate balance sheet, except liabilities, obligations or
contingencies that (i) are accrued or reserved against in the Company Financial
Statements or reflected in the notes thereto, (ii) were incurred in the ordinary
course of business, (iii) would not reasonably be expected, in the aggregate, to
have a Company Material Adverse Effect or (iv) are set forth in Section 3.6(b)
of the Company Disclosure Schedule.
Section 3.7 Litigation. Except as disclosed in the Company SEC Reports
filed prior to the date of this Agreement or as set forth in Section 3.7 of the
Company Disclosure Schedule, through the date hereof (i) there is no claim,
suit, action or proceeding pending, or, to the knowledge of the Company,
threatened, or, to the knowledge of the Company, any investigation or review
pending or threatened, relating to or affecting the Company or any of its
subsidiaries or joint ventures and (ii) there is no judgment, decree, injunction
or order of any court, governmental department, commission, agency,
instrumentality or authority or any arbitrator applicable to the Company or any
of its subsidiaries that, when taken together with any of the matters described
in clauses (i) or (ii), would reasonably be expected to have a Company Material
Adverse Effect. In addition, except as disclosed in the Company SEC Reports
filed prior to the date of this Agreement or as set forth in Section 3.7 of the
Company Disclosure Schedule, there have not been any developments since December
31, 1997, with respect to such disclosed claims, suits, actions, proceedings,
investigations or reviews, that, in the aggregate, would reasonably be expected
to have a Company Material Adverse Effect.
Section 3.8 Proxy Statement. None of the information supplied or to be
supplied by or on behalf of the Company in the proxy statement, in definitive
form, relating to the Company Meeting (as defined in Section 6.4) to be held in
connection with the First Merger (the "Proxy Statement") will, at the date
mailed to the Company's shareholders, at any time the Proxy Statement is amended
or supplemented and at the time of the Company Meeting (giving effect to any
documents incorporated by reference therein), 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 are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the applicable provisions
of the Exchange Act and the rules and regulations thereunder.
Section 3.9 Tax Matters. "Taxes," as used in this Agreement, means any
federal, state, county, local or foreign taxes, charges, fees, levies, or other
assessments, including all net income, gross income, sales and use, ad valorem,
transfer, gains, profits, excise, franchise, real and personal property, gross
receipt, capital stock, production, business and occupation, disability,
employment, payroll, license, estimated, stamp, custom duties, severance or
withholding taxes or charges imposed by any governmental entity, and includes
any interest and penalties (civil or criminal) on or additions to any such taxes
and any expenses incurred in connection with the determination, settlement or
litigation of any tax liability. "Tax Return," as used in this Agreement, means
a report, return or other information required to be supplied to a governmental
entity with respect to Taxes including, where permitted or required, combined or
consolidated returns for any group of entities that include the Company or any
of its subsidiaries.
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(a) Filing of Timely Tax Returns. The Company and each of its
subsidiaries have filed all material Tax Returns required to be filed by each of
them under applicable law. All Tax Returns were in all material respects (and,
as to Tax Returns not filed as of the date hereof, will be) true, complete and
correct and filed on a timely basis.
(b) Payment of Taxes. The Company and each of its subsidiaries have, in
all material respects, within the time and in the manner prescribed by law, paid
(and until the Closing Date will pay within the time and in the manner
prescribed by law) all material Taxes that are currently due and payable except
for those contested in good faith and for which adequate reserves have been
taken.
(c) Tax Liens. There are no material Tax liens upon the assets of the
Company or any of its subsidiaries except liens for Taxes not yet due.
(d) Withholding Taxes. The Company and each of its subsidiaries have
complied (and until the Closing Date will comply) in all material respects with
the provisions of the Code relating to the payment and withholding of Taxes,
including, without limitation, the withholding and reporting requirements under
Code Sections 1441 through 1446, 3401 through 3509, and 6041 and 6049, as well
as similar provisions under any other laws, and have, in all material respects,
within the time and in the manner prescribed by law, withheld from employee
wages and paid over to the proper governmental authorities all material amounts
required.
(e) Extensions of Time for Filing Tax Returns. Neither the Company nor
any of its subsidiaries has requested any extension of time within which to file
any Tax Return, which Tax Return has not since been filed.
(f) Waivers of Statute of Limitations. Neither the Company nor any of
its subsidiaries has executed any outstanding waivers or comparable consents
regarding the application of the statute of limitations with respect to any
Taxes or Tax Returns.
(g) Expiration of Statute of Limitations. Except as set forth in
Section 3.9(g) of the Company Disclosure Schedule, the statute of limitations
for the assessment of material Taxes has expired for all applicable Tax Returns
of the Company and each of its subsidiaries or those Tax Returns have been
examined by the appropriate taxing authorities for all periods through the date
hereof, and no deficiency for any material Taxes has been asserted or assessed
against the Company or any of its subsidiaries that has not been resolved and
paid in full.
(h) Audit, Administrative and Court Proceedings. Except as set forth in
Section 3.9(h) of the Company Disclosure Schedule, no audits or other
administrative proceedings or court proceedings are presently in process, and no
material issue raised by the Internal Revenue Service (the "IRS") or a state
taxing authority in a written notice delivered to the Company remains unsettled,
with regard to any Taxes or Tax Returns of the Company or any of its
subsidiaries.
(i) Powers of Attorney. Except as set forth in Section 3.9(i) of the
Company Disclosure Schedule, no power of attorney currently in force has been
granted by the Company or any of its subsidiaries concerning any Tax matter.
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(j) Tax Rulings. Neither the Company nor any of its subsidiaries has
received a Tax Ruling (as defined below) or entered into a Closing Agreement (as
defined below) with any taxing authority that would reasonably be expected to
result in a Company Material Adverse Effect after the Closing Date. "Tax
Ruling," as used in this Agreement, shall mean a written ruling of a taxing
authority relating to Taxes. "Closing Agreement," as used in this Agreement,
shall mean a written and legally binding agreement with a taxing authority
relating to Taxes.
(k) Availability of Tax Returns. The Company and its subsidiaries have
made available to Parent complete and accurate copies of (i) all material Tax
Returns, and any amendments thereto, filed by the Company or any of its
subsidiaries since January 1, 1990, (ii) all material audit reports received
from any taxing authority relating to any Tax Return filed by the Company or any
of its subsidiaries since January 1, 1990 and (iii) any Closing Agreements
entered into by the Company or any of its subsidiaries with any taxing authority
since January 1, 1990.
(l) Tax Sharing Agreements. Except as disclosed in Section 3.9(l) of
the Company Disclosure Schedule, no agreements relating to allocating or sharing
of Taxes exist between or among the Company and any of its subsidiaries.
(m) Code Section 341(f). Neither the Company nor any of its
subsidiaries has filed (or will file prior to the Closing) a consent pursuant to
Code Section 341(f) or has agreed to have Code Section 341(f)(2) apply to any
disposition of a subsection (f) asset (as that term is defined in Code Section
341(f)(4)) owned by the Company or any of its subsidiaries.
(n) Code Section 168. No material property of the Company or any of its
subsidiaries is property that the Company or any such subsidiary or any party to
this transaction is or will be required to treat as being owned by another
person pursuant to the provisions of Code Section 168(f)(8) (as in effect prior
to its amendment by the Tax Reform Act of 1986) or is "tax-exempt use property"
within the meaning of Code Section 168.
(o) Code Section 481 Adjustments. Except as set forth in Section 3.9(o)
of the Company Disclosure Schedule, neither the Company nor any of its
subsidiaries is required to include in income for any period ending after the
date of this Agreement any adjustment pursuant to Code Section 481(a) by reason
of a voluntary change in accounting method initiated by the Company or any of
its subsidiaries, and to the best of the knowledge of the Company, the Internal
Revenue Service (the "IRS") has not proposed any such adjustment or change in
accounting method.
(p) Code Sections 6661 and 6662. To the knowledge of the Company, all
transactions that could give rise to a material understatement of federal income
tax (within the meaning of Code Section 6661 or Code Section 6662) that would
reasonably be expected to result in a Company Material Adverse Effect have been
adequately disclosed (or, with respect to Tax Returns filed following the
Closing will be adequately disclosed) on the Tax Returns of the Company and its
subsidiaries in accordance with Code Section 6661(b)(2)(B) or Code Section
6662(d)(2)(B).
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(q) Code Section 280G. Except as set forth in Section 3.9(q) of the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries is
a party to any agreement, contract, or arrangement that as a direct consequence
of the transactions contemplated by this Agreement will result in the obligation
for any "excess parachute payments" within the meaning of Code Section 280G.
(r) Code Section 162(m). Except as set forth in Section 3.9(r) of the
Company Disclosure Schedule, the Company does not maintain any compensation
plan, program or arrangement the payment under which would not reasonably be
expected to be deductible as a result of the limitations of Code Section 162(m)
and the Treasury Regulations issued thereunder.
(s) Liability for Others. Except as set forth in Section 3.9(s) of the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries has
any material liability for Taxes of any person other than the Company and its
subsidiaries under Treasury Regulations Section 1.1502-6 (or any similar
provision of state, local or foreign law) as a transferee or successor, by
contract or otherwise.
Section 3.10 Employee Matters; ERISA.
(a) Benefit Plans. Section 3.10(a) of the Company Disclosure Schedule
contains a true and complete list as of the date of this Agreement of each
employee benefit plan, program or arrangement sponsored, maintained or
contributed to by and covering employees, former employees, directors or former
directors of the Company (or any of its subsidiaries or any other entity which
would be treated under Section 414 of the Code as a single employer with the
Company) or any of their dependents or beneficiaries, or providing benefits to
such persons in respect of services provided to any such entity, or with respect
to which any such entity is treated as an employer under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), including, but not limited
to, any employee benefit plans within the meaning of Section 3(3) of ERISA, any
management, employment, deferred compensation, severance (including any payment,
right or benefit resulting from a change in control), bonus or other contract
for personal services with any current or former officer, director or employee,
any consulting contract with any person who prior to entering into such contract
was a director or officer of the Company or any of its subsidiaries or any plan,
agreement, arrangement or understanding similar to any of the foregoing
(collectively, the "Company Benefit Plans"). Except as set forth in Section
3.10(a) of the Company Disclosure Schedule, none of the Company Benefit Plans is
a multiemployer plan within the meaning of ERISA.
(b) Contributions. All contributions and other payments required to
have been made by the Company or any of its subsidiaries (including any pre- or
post-tax contributions or payments by employees or their dependents) to any
Company Benefit Plan (or to any person pursuant to the terms thereof) on or
prior to the date of this Agreement have been so made or the amount of such
payment or contribution obligation has been reflected in the Company Financial
Statements.
(c) Qualification; Compliance. Except as set forth in Section 3.10(c)
of the Company Disclosure Schedule, each of the Company Benefit Plans that is
intended to be "qualified" within the meaning of Code Section 401(a) has
received a favorable determination letter
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from the IRS and, to the knowledge of the Company, no circumstances exist that
are reasonably expected by the Company to result in the revocation of any such
determination. Except as set forth in Section 3.10(c) of the Company Disclosure
Schedule, the Company is in compliance in all material respects with, and each
of the Company Benefit Plans is or has been operated in compliance in all
material respects with, any applicable law, rule or regulation governing such
plan, including, without limitation, ERISA and the Code. For purposes of this
Section 3.10(c), the term "Company Benefit Plans" shall not include
multiemployer plans within the meaning of ERISA.
(d) Liabilities. Except as set forth in Section 3.10(d) of the Company
Disclosure Schedule, with respect to the Company Benefit Plans, individually and
in the aggregate, no event has occurred, and, to the knowledge of the Company,
there exists no condition or set of circumstances that could subject the Company
or any of its subsidiaries to any liabilities arising under the Code, ERISA or
any other applicable law (including, without limitation, any liability to any
such plan or the Pension Benefit Guaranty Corporation (the "PBGC")), or under
any indemnity agreement to which the Company is a party, excluding liability for
benefit claims and funding obligations payable in the ordinary course and
liability for premiums due to the PBGC, which liabilities, individually or in
the aggregate, would reasonably be expected to have a Company Material Effect.
(e) Welfare Plans. Except as set forth in Section 3.10(e) of the
Company Disclosure Schedule, none of the Company Benefit Plans that are "Welfare
Plans," within the meaning of Section 3(1) of ERISA, provides for any retiree
benefits, other than elective continuation required pursuant to Code Section
4980B or coverage that expires at the end of the calendar month following
termination of employment.
(f) Documents Made Available. With respect to each Company Benefit Plan
that is not a multiemployer plan within the meaning of ERISA, the Company has
made available to Parent a true and correct copy of (i) such plan and the most
recent summary plan description, (ii) the most recent annual report filed with
the IRS, (iii) each related trust agreement, insurance contract, service
provider or investment management agreement (including all amendments to each
such document), (iv) the most recent determination of the IRS with respect to
the qualified status of such plan and (v) the most recent actuarial report or
valuation. The Company shall make available to Parent as soon as practicable a
true and correct copy of each collective bargaining agreement in which the
Company or any of its direct or indirect subsidiaries is a party or under which
the Company has obligations.
(g) Payments Resulting from Merger. Except as set forth in Section
3.10(g) of the Company Disclosure Schedule, the consummation, announcement or
other action relating to the transactions contemplated by this Agreement will
not (either alone or upon the occurrence of any additional or further acts or
events) result in any (i) payment (whether of severance pay or otherwise)
becoming due from the Company or any of its subsidiaries to any officer,
employee, former employee, director or former director thereof or to the trustee
under any "rabbi trust" or similar arrangement, or (ii) benefit under any
Company Benefit Plan being established or being accelerated, vested or payable.
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(h) Funded Status of Plans. Except as set forth in Section 3.10(h) of
the Company Disclosure Schedule, the amount equal to the greatest of the
projected benefit obligations, the accumulated benefit obligations or actuarial
accrued liabilities under any Company Benefit Plan that is a "single employer"
plan within the meaning of Section 4001(a)(15) of ERISA did not, as of the date
of the most recent actuarial valuation for such plan, exceed the then fair
market value of the assets of such plan, based on the respective actuarial
assumptions and calculations set forth in such valuation, which actuarial
assumptions and calculations have been provided to Parent prior to the date of
this Agreement, and since the date of such most recent actuarial valuation,
there has been no material adverse change in the funding status of such Company
Benefit Plan.
(i) Certain Other Obligations. Except as set forth in Section 3.10(i)
of the Company Disclosure Schedule, the termination of, or withdrawal from, any
employee pension benefit plan within the meaning of Section 3(2) of ERISA
(including any single employer, multiple employer or multiemployer plan) or
subject to Title IV of ERISA by the Company or any corporation or other entity
that is, or at any time was, a subsidiary of the Company or would be treated
under Section 414 of the Code as single employer with the Company has not, and
will not, subject the Company (or any subsidiary of the Company) to any
liability of or to any governmental authority, corporation or other person or
such employee pension plan that individually or in the aggregate would have a
Company Material Adverse Effect.
(j) Modification or Termination of Plans. Except as may be required by
applicable law, neither the Company nor any subsidiary of the Company is subject
to any legal, contractual, equitable or other obligation to establish or
contribute to as of any date any new Company Benefit Plan or amend any existing
Company Benefit Plan.
(k) Labor Agreements. Except as disclosed in the Company SEC Reports
filed prior to the date of this Agreement or as set forth in Section 3.7 or
Section 3.10(k) of the Company Disclosure Schedule: (i) neither the Company nor
any of its subsidiaries is a party to any collective bargaining agreement or
other labor agreement with any union or labor organization; (ii) to the
knowledge of the Company, there is no current union representation question
involving employees of the Company or any of its subsidiaries, nor does the
Company or any of its subsidiaries know of any activity or proceeding of any
labor organization or employee group to organize any such employees; (iii) there
is no strike, dispute, slowdown, work stoppage or lockout pending, or to the
knowledge of the Company, threatened, against or involving the Company or any of
its subsidiaries that would reasonably be expected to have a Company Material
Adverse Effect; and (iv) the Company and each of its subsidiaries are in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment, wages, hours of work and
occupational safety and health, except for non-compliance which, in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
Section 3.11 Environmental.
(a) Compliance. Each of the Company and its subsidiaries is in
compliance with all applicable Environmental Laws (as hereinafter defined),
except where the failure to be in compliance would not reasonably be expected to
have a Company Material Adverse Effect.
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Neither the Company nor any of its subsidiaries has received any written
communication from any person or Governmental Authority that alleges that the
Company or any of its subsidiaries is not in compliance with applicable
Environmental Laws, except where the failure to be in compliance would not
reasonably be expected to have a Company Material Adverse Effect. To the
knowledge of the Company, neither the Company nor any of its subsidiaries has
used any waste disposal site, or otherwise disposed of, or transported, or
arranged for the transportation of, any Hazardous Materials to any location in
violation of any Environmental Law except where the effect of such violation
would not reasonably be expected to have a Company Material Adverse Effect.
(b) Environmental Permits. Except as set forth in Section 3.4(d) of the
Company Disclosure Schedule, each of the Company and its subsidiaries has
obtained or has applied for all environmental, health and safety permits and
authorizations (collectively, the "Environmental Permits") necessary for the
construction of their facilities or the conduct of their operations, and all
such permits are in good standing or, where applicable, a renewal application
has been timely filed and is pending agency approval, and the Company is in
material compliance with all terms and conditions of the Environmental Permits,
in each case except where the failure to obtain or be in compliance with such
Environmental Permit or the requirement to make any expenditure in connection
with such Environmental Permit would not have a Company Material Adverse Effect.
(c) Environmental Claims. To the knowledge of the Company, there is no
Environmental Claim (as hereinafter defined) pending (i) against the Company or
any of its subsidiaries or joint ventures, (ii) against any person or entity
whose liability for any Environmental Claim the Company or any of its
subsidiaries or joint ventures has retained or assumed either contractually or
by operation of law or (iii) against any real or personal property or operations
that the Company or any of its subsidiaries or joint ventures owns, leases or
manages, in whole or in part, which, in the case of clauses (i), (ii) and (iii)
would reasonably be expected to have, in the aggregate, a Company Material
Adverse Effect.
(d) Releases. Except as set forth in Section 3.7 of the Company
Disclosure Schedule, the Company has no knowledge of any Releases (as
hereinafter defined) of any Hazardous Material (as hereinafter defined) that
would reasonably be expected to form the basis of any Environmental Claims
against the Company or any subsidiaries or joint ventures of the Company, or
against any person or entity whose liability for any Environmental Claim the
Company or any subsidiaries or joint ventures of the Company has retained or
assumed either contractually or by operation of law, except for Releases of
Hazardous Materials, the liability for which would not reasonably be expected to
have, in the aggregate, a Company Material Adverse Effect.
(e) Predecessors. The Company has no knowledge, with respect to any
predecessor of the Company or any subsidiary or joint venture of the Company, of
any Environmental Claim pending or threatened, or of any Release of Hazardous
Materials that would reasonably be expected to form the basis of any
Environmental Claim, that would reasonably be expected to have a Company
Material Adverse Effect.
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(f) Disclosure. The Company has no knowledge of any material facts that
the Company reasonably believes would form the basis of a Company Material
Adverse Effect arising from (i) the cost of pollution control equipment
currently required or known to be required in the future or (ii) current
remediation costs or remediation costs known to be required in the future.
(g) As used in this Agreement:
(i) "Environmental Claim" means any and all written administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, investigations, proceedings or notices of noncompliance or violation
by any person or entity (including any Governmental Authority) alleging
potential liability (including, without limitation, potential liability for
enforcement, investigatory costs, damages, contribution, indemnification,
cost recovery, compensation, injunctive relief, cleanup costs, governmental
resource costs, removal costs, remedial costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based on
or resulting from (A) the presence, or Release or threatened Release into
the environment, of any Hazardous Materials at any location operated,
leased or managed by the Company or any subsidiary or joint venture of the
Company or at any other location to which the Company or any subsidiary or
joint venture of the Company sent, Released, disposed of or transported
Hazardous Materials generated, treated, stored or disposed of by the
Company or any subsidiary or joint venture of the Company; or (B) any
violation of any Environmental Law; or (C) any and all claims by any third
party resulting from the presence or release of any Hazardous Materials.
(ii) "Environmental Laws" means all federal, state, local laws,
rules and regulations relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata), including, without
limitation, laws and regulations relating to Releases or threatened
Releases of Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.
(iii) "Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation, and transformers or
other equipment that contain dielectric fluid containing polychlorinated
biphenyls ("PCBs"); and (b) any chemicals, materials or substances which
are now defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants," or
words, of similar import, under any Environmental Law; and (c) any other
chemical, material, substance or waste, exposure to which is now
prohibited, limited or regulated under Environmental Law in a jurisdiction
in which the Company or any subsidiary or joint venture of the Company
operates.
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(iv) "Releases" means any release, spill, emission, leaking,
injection, deposit, disposal, discharge, dispersal, leaching or migration
into the atmosphere, soil, surface water, groundwater or property.
Section 3.12 Regulation as a Utility. The Company is not subject to the
1935 Act (other than the provisions of Section 9(a)(2) thereof). The Company is
regulated as a public utility in the States of Arizona, California and Nevada
and in no other state. Neither the Company nor any "subsidiary company" or
"affiliate" (as those terms are defined in the ▇▇▇▇ ▇▇▇) of the Company is
subject to regulation as a public utility or public service company (or similar
designation) by any other state in the United States or any foreign country.
Section 3.13 Vote Required. At the Company Meeting, the Company will
seek the approval of the First Merger by a majority of the outstanding shares of
Company Common Stock (the "Company Shareholders' Approval"), and no other vote
of the holders of any class or series of the capital stock of the Company is
required to approve this Agreement and the First Merger.
Section 3.14 Opinion of Financial Advisor. The Company has received the
opinion of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"),
to the effect that, as of the date hereof, the Merger Consideration to be
received by holders of Company Common Stock pursuant to the transactions
contemplated by this Agreement is fair from a financial point of view to such
holders.
Section 3.15 Brokers. Except for ▇▇▇▇▇▇▇ ▇▇▇▇▇, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company or any of its
subsidiaries, that is or will be payable by the Company or any of its
subsidiaries. The Company is solely responsible for the fees and expenses of
▇▇▇▇▇▇▇ ▇▇▇▇▇ as and to the extent set forth in the engagement letter dated
October 5, 1998. The Company has previously delivered to Parent a complete and
correct copy of such engagement letter.
Section 3.16 Insurance. Each of the Company and its subsidiaries is
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 businesses conducted by the Company and its subsidiaries. Neither
the Company nor its subsidiaries have received any notice of cancellation or
termination with respect to any material insurance policy of the Company or its
subsidiaries. All material insurance policies of the Company and each of its
subsidiaries are valid and enforceable policies in all material respects.
Section 3.17 Company Rights Agreement. Prior hereto, the Company has
delivered to Parent and its designated counsel a true and complete copy of the
Company Rights Agreement. The consummation of the transactions contemplated by
this Agreement will not result in the triggering of any right or entitlement of
the holders of Company Common Stock or other Company securities under the
Company Rights Agreement or any similar agreement to which the Company or any of
its subsidiaries is a party.
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Section 3.18 Year 2000. Section 3.18 of the Company Disclosure Schedule
accurately summarizes the current status of the Company's computer applications
and components, compliance plan, communications with suppliers and vendors,
contingency plans and estimated cost of remediation as they relate to the Year
2000 issue. The Company has made available to Parent copies of all
correspondence between the Company and its third party suppliers and vendors
concerning their Year 2000 compliance.
Section 3.19 Hedging. Except as set forth in Section 3.19 of the
Company Disclosure Schedule, none of the Company or its subsidiaries engages in
any natural gas or other futures or options trading or is a party to any price
swaps, ▇▇▇▇▇▇, futures or similar instruments, except for transactions and
agreements entered into or hedge contracts for the purchase or sale of
hydrocarbons to which the Company or any of its subsidiaries is a party that are
in accordance with the general practices of other similarly situated companies
in the industry.
Section 3.20 Regulatory Proceedings. Other than purchase gas adjustment
provisions, none of the Company or its subsidiaries all or part of whose rates
or services are regulated by a Governmental Authority (a) has rates that have
been or are being collected subject to refund, pending final resolution of any
rate proceeding pending before a Governmental Authority or on appeal to the
courts, or (b) is a party to any rate proceeding before a Governmental Authority
that would reasonably be expected to result in orders having a Company Material
Adverse Effect.
Section 3.21 Title to Properties. Except as set forth in Section 3.21
of the Company Disclosure Schedule, the Company and its subsidiaries own, or
have a right to use or a leasehold interest in all real property used by them in
the conduct of their respective businesses as such businesses are now being
conducted. Except as set forth in Section 3.21 of the Company Disclosure
Schedule, neither the Company's nor any subsidiaries' ownership of or leasehold
interest in any such property is subject to any mortgage, pledge, lien, option,
conditional sale agreement, encumbrance, security interest, title exception,
reversion or restriction or claim or charge of any kind ("Liens"), except for
such Liens as are not in the aggregate reasonably expected to have a Company
Material Adverse Effect. Except as set forth in Section 3.21 of the Company
Disclosure Schedule, all personal property owned by the Company or any of its
subsidiaries or used by any of them in the conduct of their respective
businesses is owned free and clear of any Liens, except for such Liens as are
not in the aggregate reasonably expected to have a Company Material Adverse
Effect. The assets of the Company and its subsidiaries are sufficient to enable
the Company and its subsidiaries to carry on the business of the Company and its
subsidiaries as currently conducted without interference, except to the extent
that such interference would not reasonably be expected to have a Company
Material Adverse Effect.
Section 3.22 Condition of Assets. Except as set forth in Section 3.22
of the Company Disclosure Schedule, to the knowledge of the Company, the
buildings, plant, structures and equipment of the Company and its subsidiaries
are in good working condition and repair and are suitable in all material
respects for the purposes for which they are now being used in the conduct of
the business of the Company and its subsidiaries, except to the extent that such
failure would not reasonably be expected to have a Company Material Adverse
Effect.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company, as of the
date hereof and as of the Closing Date, as follows:
Section 4.1 Organization and Qualification. Each of Parent and Merger
Sub and its subsidiaries is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation and has all
requisite corporate power and authority, and has been authorized by all
necessary approvals and orders to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted.
Section 4.2 Authority; Non-Contravention; Statutory Approvals;
Compliance.
(a) Authority. Each of Parent and Merger Sub has all requisite power
and authority to enter into this Agreement and, subject to the applicable Parent
Required Statutory Approvals (as hereinafter defined), if any, to consummate the
transactions contemplated hereby, including, without limitation, the Mergers.
The execution and delivery of this Agreement and the consummation by Parent and
Merger Sub of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of Parent and Merger Sub. This
Agreement has been duly and validly executed and delivered by each of Parent and
Merger Sub and, assuming the due authorization, execution and delivery hereof by
the Company, constitutes the valid and binding obligation of each of Parent and
Merger Sub, enforceable against them in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally and by general principles
of equity.
(b) Non-Contravention. The execution and delivery of this Agreement by
each of Parent and Merger Sub do not, and the consummation of the transactions
contemplated hereby will not, violate, conflict with, or result in a breach of
any provision of, or constitute a default (with or without notice or lapse of
time or both) under, or result in any Violation by Parent or Merger Sub pursuant
to any provisions of (i) the Certificate of Incorporation, By-laws or similar
governing documents of Parent or Merger Sub, (ii) subject to obtaining Parent
Required Statutory Approvals, any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of any Governmental
Authority applicable to Parent or Merger Sub, or any of their respective
properties or assets, or (iii) subject to obtaining the third-party consents or
other approvals set forth in Section 4.2(b) of Parent Disclosure Schedule (as
defined in Section 6.6) ("Parent Required Consents"), any note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, concession, contract,
lease or other instrument, obligation or agreement of any kind to which Parent
or Merger Sub is now a party or by which it or any of its properties or assets
may be bound or affected, excluding from the foregoing clauses (ii) and (iii)
such Violations that would not reasonably be expected to prevent or materially
impair or delay the consummation by Parent or Merger Sub of this Agreement and
the transactions contemplated hereby (any such material adverse effect being
hereinafter referred to as a "Parent Material Adverse Effect").
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(c) Statutory Approvals. Except as described in Section 4.2(c) of the
Parent Disclosure Schedule, no declaration, filing or registration with, or
notice to or authorization, consent or approval of, any Governmental Authority
is necessary for the execution and delivery of this Agreement by Parent or
Merger Sub or the consummation by Parent or Merger Sub of the transactions
contemplated hereby, the failure of which to obtain, make or give would have, in
the aggregate, a Parent Material Adverse Effect (the "Parent Required Statutory
Approvals," it being understood that references in this Agreement to "obtaining"
such Parent Required Statutory Approvals shall mean making such declarations,
filings or registrations; giving such notices; obtaining such authorizations,
consents or approvals; and having such waiting periods expire as are necessary
to avoid a violation of law).
Section 4.3 Information in Proxy Statement. None of the information
supplied in writing by or on behalf of Parent or Merger Sub specifically for
inclusion in the Proxy Statement will, at the date mailed to the Company's
shareholders, at any time the Proxy Statement is amended or supplemented and at
the time of the Company 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 the light of the circumstances under
which they are made, not misleading.
Section 4.4 No Prior Activities. Except for obligations or liabilities
incurred in connection with its incorporation or organization or the negotiation
and consummation of this Agreement and the transactions contemplated hereby
(including any financing), Merger Sub has not incurred any obligations or
liabilities, and has not engaged in any business or activities of any type or
kind whatsoever or entered into any agreements or arrangements with any Person
or entity.
Section 4.5 Brokers. Except for PaineWebber Incorporated, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Parent and Merger Sub, that is
or will be payable by the Company or any of its subsidiaries. Parent and Merger
Sub are solely responsible for the fees and expenses of PaineWebber
Incorporated.
Section 4.6 1935 Act. Neither Parent nor Merger Sub is a "holding
company," a "subsidiary company" or an "affiliate" of any public utility company
within the meaning of Section 2(a)(7), 2(a)(8) or 2(a)(11), respectively, of the
1935 Act.
Section 4.7 Legal Proceedings. There is (a) no claim, suit, action or
proceeding pending or, to the knowledge of Parent, threatened, relating to or
affecting Parent or any of its subsidiaries and (b) no judgment, decree,
injunction or order of any court, governmental department, commission, agency,
instrumentality or authority or any arbitrator applicable to Parent or any of
its subsidiaries that, when taken together with any of the matters described in
clauses (a) or (b), would reasonably be expected to have a Parent Material
Adverse Effect.
Section 4.8 Consulting, Employment and Assumption Agreements. Parent
has entered into a consulting agreement with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an employment
agreement with
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and assumption agreements with each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, all effective as of the Effective
Time of the First Merger.
Section 4.9 Tax Opinion. Parent has been informed by ▇▇▇▇▇, Day, ▇▇▇▇▇▇
& ▇▇▇▇▇, special counsel to Parent, that such firm is willing to deliver an
opinion to the effect that neither the First Merger nor the Second Merger will
be a taxable transaction for federal income tax purposes to either the Company
or Parent.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGERS
Section 5.1 Conduct of Business of the Company. After the date hereof
and prior to the Effective Time of the First Merger or earlier termination of
this Agreement, the Company agrees, each as to itself and to each of its
subsidiaries, except as expressly contemplated or permitted in this Agreement
and except as expressly contemplated or permitted in Section 5.1 of the Company
Disclosure Schedule, or to the extent Parent otherwise consents in writing
(which consent as to matters described in clause (m) shall not be unreasonably
withheld):
(a) Ordinary Course of Business. The Company shall, and shall cause its
subsidiaries to, carry on its and their respective businesses in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted and use all commercially reasonable efforts to (i) preserve intact its
and their present business organizations and goodwill, preserve the goodwill and
relationships with customers, suppliers and others having business dealings with
them, (ii) subject to prudent management of workforce needs and ongoing programs
currently in force, keep available the services of its and their present
officers and employees as a group and (iii) maintain and keep material
properties and assets in as good repair and condition as at present, subject to
ordinary wear and tear, and maintain supplies and inventories in quantities
consistent with past practice.
(b) Dividends. The Company shall not, nor shall it permit any of its
subsidiaries to: (i) declare or pay any dividends on or make other distributions
in respect of any of its or their capital stock other than (A) dividends by a
wholly-owned subsidiary to the Company or another wholly-owned subsidiary, (B)
dividends by a less than wholly-owned subsidiary consistent with past practice,
(C) regular quarterly dividends on Company Common Stock with usual record and
payment dates that do not exceed the current rate of $0.205 or (D) regular
cumulative cash distributions on Southwest Gas Capital I's 9.125% Trust
Originated Preferred Securities (the "Preferred Securities") not to exceed an
annual rate of 9.125% of the liquidation amount of $25 per Preferred Security;
(ii) split, combine or reclassify any capital stock or the capital stock of any
subsidiary or issue or authorize or propose the issuance of any other securities
in respect of, in lieu of, or in substitution for, shares of capital stock or
the capital stock of any subsidiary; or (iii) redeem, repurchase or otherwise
acquire any shares of capital stock or the capital stock of any subsidiary other
than (A) redemptions, repurchases and other acquisitions of shares of capital
stock in connection with the administration of employee benefit and dividend
reinvestment plans as in effect on the date hereof in the ordinary course of the
operation of such plans consistent with past practice or (B) intercompany
acquisitions of capital stock.
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(c) Issuance of Securities. The Company shall not, nor shall it permit
any of its subsidiaries to, issue, agree to issue, deliver, sell, award, pledge,
dispose of or otherwise encumber or authorize or propose the issuance, delivery,
sale, award, pledge, disposal or other encumbrance of, any shares of its or
their capital stock of any class or any securities convertible into or
exchangeable for, or any rights, warrants or options to acquire, any such shares
or convertible or exchangeable securities, other than as provided for in the
Company Benefit Plans (including options to be granted to directors of the
Company pursuant to such Company Benefit Plans) and any dividend reinvestment
plans of the Company in effect as of the date hereof.
(d) Charter Documents. Except as contemplated herein, the Company shall
not, and shall not permit any of its subsidiaries to, amend or propose to amend
its or their respective articles of incorporation, by-laws or similar governing
documents.
(e) Acquisitions. Other than in the ordinary course of business
consistent with past practice and except for acquisitions by Northern Pipeline
Construction Co. not to exceed an aggregate principal amount of $15 million
annually, the Company shall not, nor shall it permit any of its subsidiaries to,
acquire or agree to acquire, by merging or consolidating with, or by purchasing
a substantial equity interest in or a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, association
or business organization or division thereof, or otherwise acquire or agree to
acquire any material amount of assets.
(f) Capital Expenditures. Except as required by law, the Company shall
not, nor shall it permit any of its subsidiaries to, make capital expenditures
in excess of $5 million, other than in the ordinary course of business (not to
exceed $230 million annually).
(g) No Dispositions. The Company shall not, nor shall it permit any of
its subsidiaries to, sell, lease, license, encumber or otherwise dispose of, any
of its assets, other than encumbrances or dispositions in the ordinary course of
its business consistent with past practice.
(h) Indebtedness. The Company shall not, nor shall it permit any of its
subsidiaries to, incur or guarantee any indebtedness (including any debt
borrowed or guaranteed or otherwise assumed including, without limitation, the
issuance of debt securities or warrants or rights to acquire debt) or enter into
any "keep well" or other agreement to maintain any financial statement condition
of another person or enter into any arrangement having the economic effect of
any of the foregoing other than (i) short-term indebtedness in the ordinary
course of business consistent with past practice; (ii) arrangements between the
Company and its subsidiaries or among its subsidiaries; (iii) long-term
unsecured indebtedness ranking pari passu in right of payment with the Company's
current long-term unsecured indebtedness in an aggregate amount not to exceed
$50 million annually and having maturities of five years or less; (iv)
indebtedness incurred in connection with the renewal or replacement of existing
credit support or liquidity support facilities in a principal amount that does
not exceed the principal amount of indebtedness outstanding under existing
credit support or liquidity support facilities prior to such renewal or
replacement; (v) long-term indebtedness in a principal amount of up to $35
million evidencing the Company's obligations under industrial development
revenue bonds to be issued by ▇▇▇▇▇ County, Nevada; (vi) equipment financing by
Northern Pipeline Construction Co. in an aggregate principal amount not to
exceed $15 million annually; or (vii) in connection with the refunding of
existing indebtedness at a lower cost of funds.
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(i) Compensation, Benefits. Except as (i) may be required by applicable
law, (ii) may be required to facilitate or obtain a determination letter from
the IRS that a plan is "qualified" within the meaning of Section 401(a) of the
Code or (iii) specifically required by this Agreement, the Company shall not,
nor shall it permit any of its subsidiaries to, (A) enter into, adopt or amend
or increase the amount or accelerate the payment or vesting of any benefit or
amount payable under, any employee benefit plan, any bonus plan or arrangement
or other contract, agreement, commitment, arrangement, plan or policy covering
employees, former employees, directors or former directors or their
beneficiaries or providing benefits to such persons, or increase, or enter into
any contract, agreement, commitment or arrangement to increase in any manner,
the compensation or fringe benefits, or otherwise to extend, expand or enhance
the engagement, employment or any related rights of, or take any other action or
grant any benefit (including, without limitation, any stock options or stock
option plan) not required under the terms of any existing employee benefit plan,
any bonus plan or arrangement or other contract, agreement, commitment,
arrangement, plan or policy to or with any director, officer or other employee
of the Company or any of its subsidiaries, except for normal increases or grants
or actions in the ordinary course of business consistent with past practice or
(B) enter into or amend any employment, severance or special pay arrangements
with respect to the employment or termination of employment of any director or
officer or other employee. This subsection (i) is not intended to restrict the
Company from granting promotions to officers or employees based upon job
performance or workplace requirements and is not meant to restrict the Company's
ability to make available to employees the plans, benefits and arrangements that
have customarily and consistent with past practices been available to officers
and employees in the context of such merit-based promotion. It is agreed,
however, that no new officers shall be added to unqualified plans maintained by
the Company. This subsection (i) is also not meant to restrict the Company from
dealing with matters of employee retention in specific areas of expertise
through the use of specialized employment and benefits plans designed for that
specific purpose; provided, however, that, in the aggregate, the result of the
use of such specialized employment or benefit plans shall not, in the aggregate,
result in an annual increase in compensation in excess of $1 million.
(j) 1935 Act. The Company shall not, nor shall it permit any of its
subsidiaries to, engage in any activities that would cause a change in its
status, or that of its subsidiaries, under the 1935 Act.
(k) Accounting. The Company shall not, nor shall it permit any of its
subsidiaries to, make any changes in their accounting methods, except as
required by law, rule, regulation or GAAP.
(l) Affiliate Transactions. The Company shall not, nor shall it permit
any of its subsidiaries to, enter into any material agreement or arrangement
with any other person that, directly or indirectly, controls or is under common
control with or is controlled by the Company, or any of its respective
subsidiaries on terms to the Company or its subsidiaries materially less
favorable than could be reasonably expected to have been obtained with an
unaffiliated third party on an arm's-length basis.
(m) Rate Matters. The Company shall not, and shall cause its
subsidiaries not to, make any filing to change its or its subsidiaries' utility
rates on file with any Governmental
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Authority, or enter into any agreement, arrangement or consent to do so, that
would reasonably be expected to have a Company Material Adverse Effect.
(n) Tax-Exempt Status. The Company shall not, nor shall it permit any
subsidiary to, take any action that would likely jeopardize the exclusion from
gross income, for purposes of federal income taxation, of the interest on the
outstanding revenue bonds issued for the benefit of the Company or any of its
subsidiaries, which qualify on the date hereof under Code Section 142(a) as
"exempt facility bonds" or as tax-exempt industrial development bonds under
Section 103(b)(4) of the Internal Revenue Code of 1954, as amended prior to the
Tax Reform Act of 1986.
(o) Discharge of Liabilities. The Company shall not pay, discharge or
satisfy any material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary course of business consistent with
past practice (which includes the payment of final and unappealable judgments)
or in accordance with their terms, of liabilities reflected or reserved against
in, or contemplated by, the most recent consolidated financial statements (or
the notes thereto) of Company included in the Company SEC Reports, or incurred
in the ordinary course of business consistent with past practice.
(p) Contracts. The Company shall not, except in the ordinary course of
business consistent with past practice or as otherwise permitted hereunder or
required in order to consummate the transactions contemplated hereby, modify,
amend, terminate, renew or fail to use reasonable business efforts to renew any
material contract or agreement (including, without limitation, easements,
licenses, permits or other rights) to which the Company or any of its
subsidiaries is a party or waive, release or assign any material rights or
claims.
(q) Insurance. The Company shall, and shall cause its subsidiaries to,
maintain with financially responsible insurance companies insurance in such
amounts and against such risks and losses as are customary for companies engaged
in the gas utility industry.
(r) Permits. The Company shall, and shall cause its subsidiaries to,
use reasonable efforts to maintain in effect or renew all existing material
governmental franchises or permits pursuant to which the Company or its
subsidiaries operate.
(s) Tax Matters. The Company shall not, and shall not permit any of its
subsidiaries to, make or rescind any material express or deemed election
relating to Taxes, settle or compromise any material claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or controversy
relating to Taxes, or change in any material respect any of its methods of
reporting income or deductions for income Tax purposes from those employed in
the preparation of its income Tax Return for the prior taxable year, except as
may be required by applicable law.
Section 5.2 No Shopping. (a) The Company shall not, and shall not
authorize or permit any of its officers, directors, agents, financial advisers,
attorneys, accountants or other representatives to, directly or indirectly,
solicit, initiate or encourage submission of proposals or offers from any Person
relating to, or that could reasonably be expected to lead to, a Business
Combination or participate in any negotiations or discussions regarding, or
furnish to any other
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Person any information with respect to, or otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or attempt by
any other Person to do or seek a Business Combination; provided, however, that,
prior to the time at which the Company Shareholders' Approval has been obtained,
the Company may, in response to an unsolicited written proposal from a third
party with respect to a Business Combination that the Company's Board of
Directors determines, in its good faith judgment, after consultation with and
the receipt of the advice of its financial advisor and outside counsel, is a
Superior Proposal, (i) furnish information to, and negotiate, explore or
otherwise engage in substantive discussions with such third party, only if the
Company's Board of Directors determines, in its good faith judgment after
consultation with its financial advisors and outside legal counsel, that failing
to take such action would create a reasonable possibility of a breach of the
fiduciary duties of the Company's Board of Directors under applicable law and
(ii) take and disclose to the Company's shareholders a position with respect to
another Business Combination proposal, or amend or withdraw such position,
pursuant to Rules 14d-9 and 14e-2 under the Exchange Act. Prior to furnishing
any non-public information to, entering into negotiations with or accepting a
Superior Proposal from such third party, the Company will (x) provide prompt
notice to Parent to the effect that it is furnishing information to or entering
into discussions or negotiations with such third party and (y) receive from such
third party an executed confidentiality agreement in reasonably customary form
on terms not materially more favorable to such third party than the terms
contained in the Letter Agreement (as defined in Section 6.1). The Company will
immediately cease and cause to be terminated any existing solicitation,
initiation, encouragement, activity, discussion or negotiations with any parties
conducted heretofore by the Company or any of its representatives with respect
to any Business Combination.
(b) Except as expressly permitted by this Section 5.2(b), neither the
Company's Board of Directors nor any committee thereof may (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to Parent
or Merger Sub, the approval or recommendation by the Board of Directors or such
committee of the First Merger or this Agreement, (ii) approve or recommend, or
propose publicly to approve or recommend, a Business Combination or (iii) cause
the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement related to any Business
Combination. Notwithstanding the foregoing, prior to the time at which the
Company Shareholders' Approval has been obtained, in response to an unsolicited
Business Combination proposal from a third party, if the Company's Board of
Directors determines, in its good faith judgment, after consultation with and
the receipt of the advice of its financial advisor and outside counsel, that
such proposal is a Superior Proposal and that failure to do any of the actions
set forth in clauses (i), (ii) or (iii) above would create a reasonable
possibility of a breach of the fiduciary duties of the Company's Board of
Directors under applicable law, the Company's Board of Directors may (x)
withdraw or modify its approval or recommendation of the First Merger or this
Agreement, approve or recommend a Business Combination or cause the Company to
enter into a Business Combination and (y) negotiate with a third party with
respect to such Business Combination proposal and, subject to the Company having
paid to Parent the fees described in Section 8.3(a) and having entered into a
definitive agreement with respect to such Business Combination proposal,
terminate this Agreement pursuant to Section 8.1(e)(iii); provided, however,
that prior to entering into a definitive agreement with respect to a Business
Combination proposal, the Company shall give Parent at least five day's notice
thereof, and shall cause its respective financial and legal advisors to,
negotiate with Parent to make such adjustments in the terms and
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conditions of this Agreement as would enable the Company to proceed with the
transactions contemplated herein on such adjusted terms; provided, further, that
if the Company and Parent are unable to reach an agreement on such adjustments
within five days after such notice from the Company, the Company may enter into
such definitive agreement, subject to the provisions of Article VIII.
(c) The Company shall notify Parent orally and in writing of any such
inquiries, offers or proposals (including, without limitation, the terms and
conditions of any such offer or proposal and the identity of the Person making
it), within 24 hours of the receipt thereof, shall use all reasonable efforts to
keep Parent informed of the status and details of any such inquiry, offer or
proposal and shall give Parent two day's advance notice of the first delivery of
non-public information to such Person. If any such inquiry, offer or proposal is
in writing, the Company shall promptly deliver to Parent a copy of such inquiry,
offer or proposal.
(d) For purposes of this Agreement, (i) "Business Combination" means
(other than the transactions contemplated by this Agreement) (A) a merger,
consolidation or other business combination, share exchange, sale of shares of
capital stock, tender offer or exchange offer or similar transaction involving
the Company or any of its subsidiaries, (B) acquisition in any manner, directly
or indirectly, of a material interest in any voting securities of, or a material
equity interest in a substantial portion of the assets of, the Company or any of
its subsidiaries, including any single or multi-step transaction or series of
related transactions that is structured to permit a third party to acquire
beneficial ownership of a majority or greater equity interest in the Company, or
(C) the acquisition in any manner, directly or indirectly, of any material
portion of the business or assets (other than immaterial or insubstantial assets
or inventory in the ordinary course of business or assets held for sale) of the
Company and (ii) "Superior Proposal" means a proposed Business Combination
involving at least 50% of the shares of capital stock or a material portion of
the assets of the Company that the Company's Board of Directors determines,
after consulting with the Company's financial advisors and outside counsel is
financially superior to the transactions contemplated hereby and it appears that
the party making the proposal is reasonably likely to have the funds necessary
to consummate the Business Combination.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Access to Information. Upon reasonable notice and during
normal business hours, the Company shall, and shall cause its subsidiaries to,
afford to the officers, directors, employees, accountants, counsel, investment
bankers, financial advisors and other representatives (collectively,
"Representatives") of Parent reasonable access, throughout the period prior to
the Effective Time of the First Merger, to all of its properties, books,
contracts, commitments and records (including, but not limited to, Tax Returns)
in a manner that will not disrupt the operations of the Company or its
relationship with its customers, suppliers or employees. During such period, the
Company shall, and shall cause its subsidiaries to, furnish promptly to Parent
(i) a copy of each report, schedule and other document filed or received by it
or any of its subsidiaries pursuant to the requirements of federal or state
securities laws or filed with or sent to the SEC, the Department of Justice (the
"DOJ") and the Federal Trade Commission (the "FTC"), and any material reports,
schedules or other documents filed with or
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sent to the California Public Utilities Commission, the Arizona Corporations
Commission, the Public Utilities Commission of Nevada, the FERC and any other
federal or state regulatory agency or commission, and (ii) all information
concerning themselves, their subsidiaries, directors, officers and shareholders
and such other matters as may be reasonably requested by Parent in connection
with any filings, applications or approvals required or contemplated by this
Agreement. Any such investigation by Parent will not affect the representations
or warranties contained in this Agreement. Parent shall furnish promptly to the
Company all information concerning it, its subsidiaries, directors, officers and
shareholders and such other matters as may be reasonably requested by the
Company in connection with any filings, applications or approvals required or
contemplated by this Agreement. Parent shall from time to time at the request of
the Company discuss its financing arrangements for the Mergers with the Company
and shall furnish promptly to the Company such information concerning its
financial condition, together with the final drafts of its financing
arrangements for the Mergers. Each party shall, and shall cause its subsidiaries
and Representatives to, hold in strict confidence all Evaluation Material (as
defined in the Letter Agreement) concerning the other parties furnished to it in
connection with the transactions contemplated by this Agreement in accordance
with the Letter Agreement, dated as of November 20, 1998, between the Company
and Parent, as it may be amended from time to time (the "Letter Agreement").
Section 6.2 Proxy Statement.
(a) Preparation and Filing. As soon as reasonably practicable after the
date hereof, the Company will prepare and file with the SEC the Proxy Statement.
Each of the parties hereto shall furnish all information concerning itself that
is required or customary for inclusion in the Proxy Statement. The Company shall
use its best efforts to solicit from shareholders of the Company proxies in
favor of the First Merger and shall take all other action necessary or, in the
reasonable opinion of Parent, advisable to secure the Company Shareholders'
Approval. No representation, covenant or agreement is made by or on behalf of
any party hereto with respect to information supplied by any other party for
inclusion in the Proxy Statement. It shall be a condition to the mailing of the
Proxy Statement to the shareholders of the Company that the Company shall have
received an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇, dated the date of the Proxy Statement, to
the effect that, as of the date thereof, the Merger Consideration to be received
by holders of Company Common Stock pursuant to the transactions contemplated by
this Agreement is fair from a financial point of view to such holders.
(b) Amendments and Supplements. The Company shall advise
Parent, promptly after it receives notice thereof, of any request by the SEC for
amendment or supplement of the Proxy Statement or comments thereon and responses
thereto or requests by the SEC for additional information, and the Company shall
use all reasonable efforts to respond promptly to any comments made by the SEC
with respect to the Proxy Statement; provided, however, that the Company shall
not amend or supplement the Proxy Statement with respect to information
concerning Parent or Merger Sub or the description of this Agreement and related
agreements contained therein without the prior approval of Parent.
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Section 6.3 Regulatory Approvals and Other Matters.
(a) HSR Filings. Each party hereto shall file or cause to be filed with
the FTC and the DOJ any notifications required to be filed under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder with respect to the transactions
contemplated hereby. The parties will use all commercially reasonable efforts to
coordinate such filings and any responses thereto, to make such filings promptly
and to respond promptly to any requests for additional information made by
either of such agencies.
(b) Other Approvals. Each party hereto shall cooperate and use its
commercially reasonable efforts to promptly prepare and file all necessary
documentation, to effect all necessary applications, notices, petitions, filings
and other documents, and to use all commercially reasonable efforts to obtain
all necessary permits, consents, approvals and authorizations of all
Governmental Authorities and all other Persons necessary or advisable to
consummate the transactions contemplated by this Agreement, including, without
limitation, the Company Required Statutory Approvals, the Parent Required
Statutory Approvals, the Company Required Consents and the Parent Required
Consents. Each party shall have the right to review and approve in advance (such
approval not to be unreasonably withheld) all Governmental Authority filings or
applications to be made by the other parties in connection with the transactions
contemplated by this Agreement. The Company and Parent will consult with each
other with respect to the obtaining of all such necessary permits, consents,
approvals and authorizations of Governmental Authorities.
(c) Financing. Parent shall use all commercially reasonable efforts to
obtain financing for the transactions contemplated by this Agreement.
Section 6.4 Shareholder Approval.
(a) Company Meeting. Subject to the provisions of Section 6.4(b), the
Company shall, as soon as reasonably practicable after the date hereof (i) take
all steps necessary to duly call, give notice of, convene and hold a meeting of
its shareholders (the "Company Meeting") for the purpose of securing the Company
Shareholders' Approval, (ii) distribute to its shareholders the Proxy Statement
in accordance with applicable federal and state law and with its Articles of
Incorporation and By-laws, (iii) subject to the fiduciary duties of its Board of
Directors, recommend to its shareholders the approval of this Agreement and the
transactions contemplated hereby and (iv) cooperate and consult with Parent with
respect to each of the foregoing matters.
(b) Meeting Date. The Company Meeting for the purpose of securing the
Company Shareholders' Approval, including any adjournments thereof, will be held
on such date or dates as the Company and Parent mutually determine.
Section 6.5 Directors' and Officers' Indemnification.
(a) Indemnification. Without limiting any existing rights of
indemnification or other agreements or policies, from and after the Effective
Time, the Surviving Corporation
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shall, to the fullest extent permitted by applicable law, indemnify, defend and
hold harmless each person who is now, or has been at any time prior to the date
hereof, or who becomes prior to the Effective Time, an officer or director of
Parent or the Company, respectively, or any of their subsidiaries (each an
"Indemnified Party" and collectively, the "Indemnified Parties") against (i) all
losses, expenses (including reasonable attorneys' fees and expenses), claims,
damages or liabilities or, subject to the proviso of the next succeeding
sentence, amounts paid in settlement, arising out of actions or omissions
occurring at or prior to the Effective Time (and whether asserted or claimed
prior to, at or after the Effective Time) that are, in whole or in part, based
on or arising out of the fact that such person is or was a director or officer
of Parent or the Company or any of their subsidiaries (the "Indemnified
Liabilities"), and (ii) all Indemnified Liabilities to the extent they are based
on or arise out of or pertain to the transactions contemplated by this
Agreement. In the event of any such loss, expense, claim, damage or liability
(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 will be reasonably satisfactory to Parent
promptly after statements therefor are received and otherwise advance to such
Indemnified Party upon request reimbursement of documented expenses reasonably
incurred, (y) the Surviving Corporation shall cooperate in the defense of any
such matter and (z) any determination required to be made with respect to
whether an Indemnified Party's conduct complies with the standards set forth
under Oklahoma or California law, as applicable, and the articles of
incorporation, by-laws or similar governing documents must be made by
independent counsel mutually acceptable to the Surviving Corporation and the
Indemnified Party; provided, however, that the Surviving Corporation will not be
liable for any settlement effected without its written consent (which consent
shall not be unreasonably withheld). The Indemnified Parties as a group may
retain only one law firm with respect to each related matter except to the
extent there is, in the opinion of counsel to an Indemnified Party, under
applicable standards of professional conduct, a conflict on any significant
issue between positions of such Indemnified Party and any other Indemnified
Party or Indemnified Parties.
(b) Insurance. For a period of six years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect policies of
directors' and officers' liability insurance maintained by the Company and
Parent for the benefit of those persons who are covered by such policies as of
the Effective Time on terms no less favorable than the terms of such current
insurance coverage; provided, however, that the Surviving Corporation will not
be required to expend in any year an amount in excess of 200% of the annual
aggregate premiums currently paid by Parent or the Company, as the case may be,
for such insurance; provided, further, that if the annual premiums of such
insurance coverage exceed such amount, the Surviving Corporation will be
obligated to obtain a policy with the best coverage available, in the reasonable
judgment of the board of directors of Parent for a cost not exceeding such
amount.
(c) Successors. In the event the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
is not 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 provisions must be
made so that the successors and assigns of the Surviving Corporation will assume
the obligations set forth in this Section 6.5.
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(d) Survival of Indemnification. 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 Parent
or the Company and their subsidiaries with respect to their activities as such
prior to the Effective Time, as provided in their respective articles of
incorporation, by-laws or similar governing documents in effect on the date
hereof, or otherwise in effect on the date hereof, will survive the Mergers and
will continue in full force and effect for a period of not less than six years
from the Effective Time.
(e) Benefit. The provisions of this Section 6.5 are intended to be for
the benefit of, and are enforceable by, each Indemnified Party, his or her heirs
and his or her representatives.
Section 6.6 Disclosure Schedules. On the date hereof, the Company has
delivered to Parent a schedule (the "Company Disclosure Schedule"), accompanied
by a certificate signed by an executive officer of the Company stating the
Company Disclosure Schedule is being delivered pursuant to this Section 6.6 and
Parent has delivered to the Company a schedule (the "Parent Disclosure
Schedule"), accompanied by a certificate signed by an executive officer of
Parent stating the Parent Disclosure Schedule is being delivered pursuant to
this Section 6.6. The Company Disclosure Schedule and the Parent Disclosure
Schedule are collectively referred to herein as the "Disclosure Schedules." The
Disclosure Schedules 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 Disclosure Schedules.
Anything to the contrary contained herein or in the Disclosure Schedules
notwithstanding, any and all statements, representations, warranties or
disclosures set forth in the Disclosure Schedules will be deemed to have been
made on and as of the date hereof.
Section 6.7 Public Announcements. Subject to each party's disclosure
obligations imposed by law, (a) the Company and Parent will cooperate with each
other in the development and distribution of all news releases and other public
information disclosures with respect to this Agreement or any of the
transactions contemplated hereby and (b) may not issue any public announcement
or statement with respect hereto without the consent of the other party (which
consent will not be unreasonably withheld).
Section 6.8 Employee Benefit Plans. Except as may be required by
applicable law and except as provided in Section 2.4 with respect to Company
Option Plans and Section 6.9(c) with respect to the Company's Management
Incentive Plan (the "MIP"), each Company Benefit Plan in effect on the date
hereof (or as amended or established in accordance with or as permitted by this
Agreement) shall be maintained in effect with respect to the employees, former
employees, directors or former directors of the Company and any of its
subsidiaries who are covered by such plans or agreements immediately prior to
the Effective Time until Parent determines otherwise on or after the Effective
Time, and Parent shall assume as of the Effective Time each Company Benefit Plan
maintained by the Company immediately prior to the Effective Time and perform
such plan or agreement in the same manner and to the same extent that the
Company would be required to perform thereunder; provided, however, that nothing
herein contained, other than the provisions of Section 5.1(i), shall limit any
reserved right contained in any such Company Benefit Plan to amend, modify,
suspend, revoke or
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terminate any such plan or agreement; provided, further, that Parent or its
subsidiaries shall provide to each employee of the Company and any of its
subsidiaries (other than Northern Pipeline Construction Co.) who was covered by
Company Benefit Plans immediately prior to the Effective Time (i) for a period
of no less than one year following the Effective Time, (A) benefits under
employee benefit plans intended to qualify under Section 401(a) of the Code (the
"Qualified Plans") that are no less favorable in the aggregate than those
provided to the employee immediately prior to the Effective Time under Company
Benefit Plans that are Qualified Plans, (B) benefits under employee benefit
plans that are supplemental retirement benefit and deferred compensation plans
which are not Qualified Plans that are no less favorable in the aggregate than
those provided to the employee immediately prior to the Effective Time under
Company Benefit Plans that are supplemental retirement benefit and deferred
compensation plans which are not Qualified Plans, and (C) employer-provided
benefits under employee benefit plans that are welfare plans that are no less
favorable in the aggregate than those provided to the employee immediately prior
to the Effective Time under Company Benefit Plans that are welfare plans, and
(ii) thereafter, (A) benefits under Qualified Plans that are no less favorable
in the aggregate than those provided from time to time for similarly situated
employees of Parent in Oklahoma under Parent's employee benefit plans that are
Qualified Plans, (B) benefits under employee benefit plans that are supplemental
retirement benefit and deferred compensation plans which are not Qualified Plans
that are no less favorable in the aggregate than those provided from time to
time for similarly situated employees of Parent in Oklahoma under Parent's
employee benefit plans that are supplemental retirement benefit and deferred
compensation plans which are not Qualified Plans and (C) employer-provided
benefits under employee benefit plans that are welfare plans that are no less
favorable in the aggregate than those provided from time to time for similarly
situated employees of Parent in Oklahoma under Parent's employee benefit plans
that are welfare plans. Without limiting the foregoing, each participant in any
Company Benefit Plan who is an employee of the Company or any of its
subsidiaries (other than Northern Pipeline Construction Co.) shall receive
credit for purposes of eligibility to participate, vesting and eligibility to
receive benefits (but specifically excluding for benefit accrual purposes) under
any replacement benefit plan of Parent or any of its subsidiaries or affiliates
in which such Person becomes a participant for service credited for the
corresponding purpose under any such Company Benefit Plan; provided, however,
that such crediting of service shall not operate to cause any such plan or
agreement to fail to comply with the applicable provisions of the Code and
ERISA. No provision contained in this Section 6.8 shall be deemed to constitute
an employment contract between Parent or any of its subsidiaries and any
individual, or a waiver of Parent's or any of its subsidiaries' right to
discharge any employee at any time, with or without cause. Notwithstanding the
foregoing, Parent acknowledges that participants in the Company's Supplemental
Retirement Plan (the "SERP") shall continue to accrue benefits after the
Effective Time under terms at least as favorable as the terms of the SERP in
effect on the date of this Agreement, taking into account service compensation
earned while employed by Parent and its subsidiaries after the Effective Time.
Section 6.9 Company Stock and Incentive Plans.
(a) 401(k) Plan. With respect to the Company's 401(k) Savings Plan (the
"401(k) Plan"), under which the delivery of Company Common Stock is required
upon payment of benefits, (i) Parent shall take such action as may be necessary
so that, after the Effective Time, the 401(k) Plan provides for the issuance or
purchase in the open market only of common stock,
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par value $0.01 per share, of Parent ("Parent Common Stock") rather than Company
Common Stock, and (ii) Parent shall take all corporate action necessary or
appropriate to (A) obtain shareholder approval with respect to such plan to the
extent such approval is required for purposes of the Code or other applicable
law, or to the extent Parent deems it desirable, (B) reserve for issuance under
such plan or otherwise provide a sufficient number of shares of Parent Common
Stock for delivery upon payment of benefits and (C) as soon as practicable after
the Effective Time, file registration statements on Form S-8 (or any successor
or other appropriate form) with respect to the shares of Parent Common Stock
subject to the 401(k) Plan to the extent such registration statement is required
under applicable law, and Parent shall use its best efforts to maintain the
effectiveness of such registration statements (and maintain the current status
of the prospectus contained therein or related thereto) for so long as such
benefits remain payable.
(b) Dividend Reinvestment Plan. The dividend reinvestment plan of the
Company shall terminate as of the Effective Time of the First Merger.
(c) Management Incentive Plan. The Company and Parent shall take all
actions to provide that the MIP shall terminate as of the Effective Time, and
participants in the MIP immediately prior to the Effective Time shall be paid as
soon as practicable after the Effective Time (i) a cash amount equal to a
prorated portion of the then current year's award opportunity earned on the
basis of performance measures applied to the period ending on the Effective
Time, with such proration to be based on the number of days that have elapsed
for the performance year up to and including the Effective Time, (ii) a cash
amount equal to any award earned under the MIP but unpaid as of the Effective
Time for performance years ended prior to the Effective Time and (iii) a cash
amount equal to 100% of the outstanding performance shares awarded and held
under the MIP at the Effective Time in an amount equal to the Merger
Consideration per outstanding performance share. Participants in the MIP for the
performance year in which the Effective Time occurs will participate in the
Parent's annual incentive plan, commencing as of the Effective Time, based on
the terms and conditions thereof, except that any award opportunity will be
earned on the basis of performance measures applied to the portion of the
Parent's fiscal year occurring after the Effective Time and the amount of any
such award opportunity earned shall be prorated based on the number of days
occurring in the Parent's fiscal year occurring after the Effective Time.
Section 6.10 Expenses. Subject to Section 8.3, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby will be paid by the party incurring such expenses.
Section 6.11 Advisory Board. Following the Effective Time, the
Surviving Corporation shall establish an advisory board of directors consisting
of the current members of the Board of Directors of the Company, other than
Messrs. ▇▇▇▇▇▇ and ▇▇▇▇▇, to advise the Surviving Corporation regarding issues
of importance to the communities in which the Southwest Division operates, the
employees of the Southwest Division and the Arizona Corporations Commission, the
California Public Utilities Commission and the Public Utilities Commission of
Nevada. The term "Southwest Division" means the operations of the Surviving
Corporation in the states of California, Arizona and Nevada.
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Section 6.12 Notification. The Company shall (a) advise Parent of any
change or event that has had or, insofar as reasonably can be foreseen, is
reasonably likely to result in a Company Material Adverse Effect and (b)
promptly provide Parent with copies of all filings made by the Company or any of
its subsidiaries with any state or federal court, administrative agency,
commission or other Governmental Authority in connection with this Agreement and
the transactions contemplated hereby. Parent shall (x) advise Company of any
change or event that has had or, insofar as reasonably can be foreseen, is
reasonably likely to result in a Parent Material Adverse Effect, and (y)
promptly provide the Company with copies of all filings made by Parent or Merger
Sub with any state or federal court, administrative agency, commission or other
Governmental Authority in connection with this Agreement and the transactions
contemplated hereby.
Section 6.13 Las Vegas Office. The Surviving Corporation will establish
the headquarters of the Southwest Division in Las Vegas, Nevada and intends to
maintain such headquarters in Las Vegas, Nevada.
Section 6.14 Additional Statutory Approvals. Parent agrees not to (a)
become involved in, without agreeing to be a party to, or (b) agree to be a
party to, in either case, any transaction that would make it necessary for
Parent or the Company to make any declaration, filing or registration with, or
notice to or authorization, consent or approval of, any Governmental Authority
in connection with the consummation by Parent, Merger Sub or the Company of the
transactions contemplated by this Agreement, other than those set forth in
Section 4.2(c) of the Parent Disclosure Schedule or Section 3.4(c) of the
Company Disclosure Schedule (each, an "Additional Statutory Approval"). Parent
shall be in breach of this covenant and agreement only if either party
terminates this Agreement pursuant to Section 8.1(b) as a result of a
transaction contemplated by clause (a) above or the Company terminates this
Agreement pursuant to Section 8.1(c) as a result of a transaction contemplated
by clause (b) above.
Section 6.15 Further Assurances. Subject to the terms and conditions
herein provided, each of the parties hereto shall use its commercially
reasonable efforts, taking into account the circumstances and giving due weight
to the materiality of the matter involved or the action required, to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the Mergers and the transactions contemplated by
this Agreement.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligation to Effect the
Mergers. The respective obligations of each party to effect the Mergers is
subject to the satisfaction on or prior to the Closing Date of the following
conditions, except, to the extent permitted by applicable law, that such
conditions may be waived in writing pursuant to Section 9.11 by the joint action
of the parties hereto:
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(a) Shareholder Approval. The Company Shareholders' Approval shall have
been obtained.
(b) No Challenge. (i) No temporary restraining order or preliminary or
permanent injunction or other order by any federal or state court preventing
consummation of either of the Mergers shall have been issued and be continuing
in effect, (ii) there shall not be instituted or pending by any Governmental
Authority any action or proceeding before any governmental, regulatory or
administrative agency or commission of competent jurisdiction seeking any
injunction, order, decree, judgment or ruling having the effect set forth in
clause (i) above and (iii) the Mergers and the other transactions contemplated
hereby shall not have been prohibited under any applicable federal or state law
or regulation.
(c) Statutory Approvals. The Company Required Statutory Approvals
(which, for this purpose, shall not include easements, franchises or similar
rights), the Parent Required Statutory Approvals shall have been obtained at or
prior to the Effective Time of the First Merger, and such approvals shall have
become Final Orders (as defined below). 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, and as
to which all opportunities for rehearing, other than at the request of the
California Public Utilities Commission or the Arizona Corporations Commission,
are exhausted (whether or not any appeal is pending).
(d) Dissenter's Rights. Demands for payment of dissenters' rights by
shareholders of the Company with respect to the First Merger shall not equal or
exceed five percent of the outstanding shares of Company Common Stock entitled
to vote thereon.
Section 7.2 Conditions to Obligation of Parent to Effect the Mergers.
The obligation of Parent and Merger Sub to effect the Mergers is further subject
to the satisfaction, on or prior to the Closing Date, of the following
conditions, except as may be waived by Parent and Merger Sub in writing pursuant
to Section 9.11:
(a) Performance of Obligations of the Company. The Company (or its
appropriate subsidiaries) shall have performed in all material respects its
agreements and covenants contained in or contemplated by this Agreement to be
performed by it at or prior to the Effective Time of the First Merger.
(b) Representations and Warranties. The representations and warranties
of the Company set forth in this Agreement are true and correct (i) on and as of
the date hereof and (ii) on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of the
Closing Date (except for representations and warranties that expressly speak
only as of a specific date or time other than the date hereof or the Closing
Date, which need only be true and correct as of such date or time) except in
each of cases (i) and (ii) for such failures of representations or warranties to
be true and correct (without regard to any materiality qualifications contained
therein) that would not be reasonably likely to result in a Company Material
Adverse Effect.
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(c) Closing Certificate. Parent and Merger Sub shall have received a
certificate signed by an executive officer of the Company, dated the Closing
Date, to the effect that, to the best of such officer's knowledge, the
conditions set forth in Section 7.2(a) and Section 7.2(b) have been satisfied.
(d) Company Required Consents. The Company Required Consents
(including, for this purpose, all third party consents or other approvals,
whether or not set forth in Section 3.4(b) of the Company Disclosure Schedule),
the failure of which to obtain would have a Company Material Adverse Effect,
shall have been obtained.
(e) Trigger of Company Rights. No event that would result in the
triggering of any right or entitlement of Company shareholders under the Company
Rights Agreement, including a "flip-in" or "flip-over" or similar event commonly
described in such rights plans shall have occurred, that, in the reasonable
judgment of Parent, would have or would reasonably be expected to result in a
Company Material Adverse Effect or materially change the number of outstanding
equity securities of the Company, and the Company Rights shall not have become
nonredeemable by any action of the Company's Board of Directors.
(f) Tax Opinion. Parent shall have received from its counsel an opinion
to the effect that neither the First Merger nor the Second Merger will be a
taxable transaction for federal income tax purposes to either the Company or
Parent; provided, however, that the failure of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ or
other counsel reasonably acceptable to Parent to deliver such an opinion shall
not be a condition to Parent's and Merger Sub's obligations to effect the Merger
unless the failure to deliver such opinion is the result of a change in, or
amendment to, the tax laws (or any regulations thereunder) of the United States
or any change in the official interpretation or application of such tax laws or
regulations, which change or amendment is announced or becomes effective after
the date of this Agreement.
(g) Regulatory Orders. The Final Orders of the California Public
Utilities Commission, the Arizona Corporations Commission, the Public Utilities
Commission of Nevada and the FERC (if required) with respect to the Mergers and
the transactions contemplated by this Agreement shall not impose terms or
conditions (in addition to existing laws, rules or regulations), which would
have, or would reasonably be expected to have a material adverse effect on the
business, assets, properties (including intangible properties), condition
(financial or otherwise), results of operations, prospects or liabilities of the
Southwest Division.
(h) Additional Statutory Approvals. Any Additional Statutory Approvals
shall have been obtained at or prior to the Effective Time, and such approvals
shall become Final Orders.
Section 7.3 Conditions to Obligation of the Company to Effect the
Mergers. The obligation of the Company to effect the Mergers is further subject
to the satisfaction, on or prior to the Closing Date, of the following
conditions, except as may be waived by the Company in writing pursuant to
Section 9.11:
(a) Performance of Obligations of Parent and Merger Sub. Each of Parent
and Merger Sub (or its appropriate subsidiaries) shall have performed in all
material respects its
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agreements and covenants contained in or contemplated by this Agreement to be
performed by it at or prior to the Effective Time of the First Merger.
(b) Representations and Warranties. The representations and warranties
of Parent and Merger Sub in Sections 4.1, 4.2, 4.6, 4.7 and 4.8 of this
Agreement are true and correct on and as of the date hereof and on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date, except in each case for such
failures of representations and warranties to be true that would not be
reasonably likely to result in a Parent Material Adverse Effect.
(c) Closing Certificate. The Company shall have received a certificate
signed by an executive officer of Parent, dated the Closing Date, to the effect
that, to the best of such officer's knowledge, the conditions set forth in
Section 7.3(a) and (b) have been satisfied.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated and the
Mergers abandoned at any time prior to the Closing Date, whether before or after
approval by the shareholders of the Company contemplated by this Agreement:
(a) by mutual written consent of the Boards of Directors of the Company
and Parent;
(b) by any party hereto, by written notice to the other parties, if the
Effective Time of the First Merger has not occurred on or before the first
anniversary of the date hereof (the "Initial Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 8.1(b)
will not be available to any party that is in material breach of its
representations, warranties, covenants or agreements contained herein; and
provided, further, that if on the Initial Termination Date (i) the conditions to
the Closing set forth in Section 7.1(c) shall not have been fulfilled or (ii)
any Additional Statutory Approval of the type described in Section 6.14(a) shall
not have been obtained and such approval shall not have become a Final Order,
but all other conditions to the Closing shall be fulfilled or shall be capable
of being fulfilled, then the Initial Termination Date will be extended to the
date that is 18 months after the date hereof;
(c) by the Company, by written notice to Parent, at the earlier of (i)
60 days after the time at which all other conditions to the Closing have been
fulfilled or (ii) the date that is 18 months after the date of this Agreement,
if any Additional Statutory Approval of the type described in Section 6.14(b)
shall not have been obtained and such approval shall not have become a Final
Order.
(d) by any party hereto, by written notice to the other parties, if the
Company Shareholders' Approval shall not have been obtained at a duly held
Company Meeting, including any adjournments thereof;
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(e) by any party hereto, if any state or federal law, order, rule or
regulation is adopted or issued that has the effect, as supported by the written
opinion of outside counsel for such party, of prohibiting the First Merger or
the Second Merger, or by any party hereto if any court of competent jurisdiction
in the United States or any State shall have issued an order, judgment or decree
permanently restraining, enjoining or otherwise prohibiting the First Merger or
the Second Merger, and such order, judgment or decree shall have become final
and nonappealable;
(f) by the Company, by written notice to Parent, (i) if there exist
breaches of the representations and warranties of Parent made herein as of the
date hereof, which breaches, individually or in the aggregate, would or would be
reasonably likely to result in a Parent Material Adverse Effect, and such
breaches shall not have been remedied within 30 days after receipt by Parent of
notice in writing from the Company, specifying the nature of such breaches and
requesting that they be remedied; (ii) if Parent (or its appropriate
subsidiaries) shall have failed to perform and comply with, in all material
respects, its agreements and covenants hereunder and such failure to perform or
comply shall not have been remedied within 30 days after receipt by Parent of
notice in writing from the Company, specifying the nature of such failure and
requesting that it be remedied; or (iii) in accordance with Section 5.2(b);
provided, however, that the termination described in this clause (iii) shall not
be effective unless and until the Company shall have paid to Parent the fee
described in Section 8.3(a) and the Company has entered into a definitive
agreement with respect to a Business Combination proposal;
(g) by Parent, by written notice to the Company, if (i) there exist
breaches of the representations and warranties of the Company made herein as of
the date hereof which breaches, individually or in the aggregate, would or would
be reasonably likely to result in a Company Material Adverse Effect, and such
breaches shall not have been remedied within 30 days after receipt by the
Company of notice in writing from Parent, specifying the nature of such breaches
and requesting that they be remedied; (ii) the Company (or its appropriate
subsidiaries) shall have failed to perform and comply with, in all material
respects, its agreements and covenants hereunder, and such failure to perform or
comply shall not have been remedied within 30 days after receipt by the Company
of notice in writing from Parent, specifying the nature of such failure and
requesting that it be remedied; or (iii) the Board of Directors of the Company
or any committee thereof (A) withdraws or modifies, or proposes publicly to
withdraw or modify, in a manner adverse to Parent or Merger Sub, the approval or
recommendation by the Board of Directors or such committee of the First Merger
or this Agreement, (B) approves or recommends, or proposes publicly to approve
or recommend, a Business Combination, (C) causes the Company to enter into a
definitive agreement related to any Business Combination or (D) resolves to take
any of the actions specified in clause (A), (B) or (C);
(h) by the Company, by written notice to Parent, at the earlier of (i)
60 days after the time at which all other conditions to the Closing have been
fulfilled or (ii) the date that is 18 months after the date of this Agreement,
without any liability on the part of either Parent or Merger Sub or their
respective officers or directors, if, notwithstanding Parent's compliance with
its agreement contained in Section 6.3(c), Parent or Merger Sub is unable to
deliver the amount of cash to the Paying Agent required pursuant to Section
2.2(a) as a direct result of the inability of Parent to obtain financing for the
transactions contemplated by this Agreement because of the occurrence of
significant disruptions in the financial and capital markets that make it
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impracticable for a company having financial characteristics similar to those of
Parent as of the date of this Agreement to finance a transaction of the size and
nature of the transactions contemplated by this Agreement; or
(i) by Parent, by written notice to the Company, if a third party,
including a group (as defined under the Exchange Act), acquires securities
representing greater than 50% of the voting power of the outstanding voting
securities of the Company.
Section 8.2 Effect of Termination. Subject to Section 9.1 and the
proviso of this Section 8.2, in the event of termination of this Agreement by
either the Company or Parent pursuant to Section 8.1, there will be no liability
on the part of either the Company or Parent or their respective officers or
directors hereunder, except that Sections 6.10, 6.14, 8.3, 9.8 and 9.9 and the
agreement contained in the last sentence of Section 6.1 will survive the
termination; provided, however, that nothing herein shall relieve any party from
liability for any breach of this Agreement.
Section 8.3 Termination Fee; Expenses.
(a) Termination Fee. If this Agreement is terminated pursuant to
Section 8.1(f)(iii), Section 8.1(g)(iii) or Section 8.1(i), then the Company
shall pay to Parent promptly (but not later than five business days after notice
is received from Parent) an amount equal to $30 million in cash.
(b) Expenses. The parties agree that the agreements contained in this
Section 8.3 are an integral part of the transactions contemplated by this
Agreement and constitute liquidated damages and not a penalty. Notwithstanding
anything to the contrary contained in this Section 8.3, if the Company fails to
promptly pay to Parent any fee due under this Section 8.3, in addition to any
amounts paid or payable pursuant to such Section, the Company, as the defaulting
party, shall pay the costs and expenses (including legal fees and expenses) in
connection with any action, including the filing of any lawsuit or other legal
action, taken to collect payment, together with interest on the amount of any
unpaid fee at the publicly announced prime rate of Bank of America National
Trust and Savings Association from the date such fee was required to be paid.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations, Warranties, Covenants and
Agreements. All representations, warranties, covenants and agreements in this
Agreement will not survive the Mergers, except the covenants and agreements
contained in this Section 9.1 and in Article II, the last sentence of Section
6.1 and Sections 6.5, 6.8, 6.9, 6.11, 6.13, 9.8 and 9.9, each of which shall
survive in accordance with its terms.
Section 9.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if (a) delivered personally, (b)
sent by overnight courier service (receipt confirmed in writing), (c) delivered
by facsimile transmission (with receipt
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confirmed) or (d) five days after being 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):
If to Parent, to:
ONEOK, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Merger Sub, to:
Oasis Acquisition Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company, to:
Southwest Gas Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
O'Melveny & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.3 Certain Definitions. For purposes of this Agreement (unless
otherwise provided herein), the term:
(a) "affiliate" of a Person means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned Person;
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(b) "control" (including the terms "controlled by" and "under common
control with") means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of stock, as trustee or executor, by contract or credit
arrangement or otherwise; and
(c) "Person" means an individual, corporation, partnership, limited
liability company, association, trust or any unincorporated organization.
Section 9.4 Miscellaneous. This Agreement (including the documents and
instruments referred to herein) (a) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof
other than the Letter Agreement; (b) may not be assigned by operation of law or
otherwise; and (c) shall be governed by and construed in accordance with the
laws of the State of Oklahoma applicable to contracts executed in and to be
fully performed in such State, without giving effect to its conflicts of law,
rules or principles.
Section 9.5 Interpretation. When a reference is made in this Agreement
to Sections or Exhibits, such reference shall be to a Section or Exhibit of this
Agreement, respectively, 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 9.6 Counterparts; Effect. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
Section 9.7 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and, except for (a) rights
of Indemnified Parties as set forth in Section 6.5 and (b) as set forth in
Section 6.8, 6.9 and 6.11, nothing in this Agreement, express or implied, is
intended to confer upon any persons, any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
Section 9.8 Waiver of Jury Trial and Certain Damages. Each party to
this Agreement waives, to the fullest extent permitted by applicable law, (a)
any right it may have to a trial by jury in respect of any action, suit or
proceeding arising out of or relating to this Agreement and (b) without
limitation to Section 8.3, any right it may have to receive damages from any
other party based on any theory of liability for any special indirect,
consequential (including lost profits) or punitive damages.
Section 9.9 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties are entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which they are entitled at law or in equity.
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Section 9.10 Amendment. This Agreement may be amended by the parties
hereto by written agreement executed and delivered by duly authorized officers
of the respective parties, at any time before or after the Company Shareholders'
Approval has been obtained the Company and prior to the Effective Time of the
First Merger, but after such shareholder approval, no such amendment may (a)
alter or change the rights or any of the proceedings of the treatment of shares
under Article II, or (b) alter or change any of the terms and conditions of this
Agreement if any of the alterations or changes, alone or in the aggregate, would
materially adversely affect the rights of holders of Company capital stock,
except for alterations or changes that could otherwise be adopted by the Board
of Directors of the Company, without the further approval of such shareholders.
Section 9.11 Waiver. At any time prior to the Effective Time of the
First Merger, the parties hereto may (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein, to the extent permitted by applicable
law. Any agreement on the part of a party hereto to any such extension or waiver
will be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights hereunder or otherwise shall not constitute a waiver of such rights.
Section 9.12 No Remedy in Certain Circumstances. Each party agrees
that, should any court or other competent authority hold any provision of this
Agreement or part to be null, void or unenforceable, or order any party to take
any action inconsistent herewith or not to take an action consistent herewith or
required hereby, the validity, legality and enforceability of the remaining
provision and obligations contained or set forth herein shall not in any way be
affected or impaired thereby, unless the foregoing inconsistent action or the
failure to take an action constitutes a material breach of this Agreement or
makes this agreement impossible to perform, in which case this Agreement shall
be terminated pursuant to Article VIII hereof. Except as otherwise contemplated
by this Agreement, to the extent that a party hereto took any action
inconsistent herewith or failed to take action consistent herewith or required
hereby pursuant to an order or judgment of a court or other competent authority,
such party shall not incur any liability or obligation unless such party
breached its obligations under Section 6.3(a) or (b) or did not in good faith
seek to resist or object to the imposition or entering of such order or
judgment.
Section 9.13 Further Assurances. Each party will execute such further
documents and instruments and take such further actions as may reasonably be
requested by any other party in order to consummate the Mergers in accordance
with the terms hereof.
[signature page follows]
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
ONEOK, INC.
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
OASIS ACQUISITION CORPORATION
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
SOUTHWEST GAS CORPORATION
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
45