Exhibit (2)(a)
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
Between
THE EMPIRE DISTRICT ELECTRIC COMPANY
and
UTILICORP UNITED INC.
Dated as of May 10, 1999
TABLE OF CONTENTS
ARTICLE I THE MERGER..............................................................................................1
SECTION 1.01. THE MERGER......................................................................................1
SECTION 1.02. CERTIFICATE OF INCORPORATION AND BYLAWS OF THE SURVIVING CORPORATION............................2
SECTION 1.03. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.............................................2
SECTION 1.04. ADVISORY BOARD..................................................................................2
ARTICLE II CONVERSION OF CAPITAL STOCK............................................................................3
SECTION 2.01 UCU SHARES.....................................................................................3
SECTION 2.02 CONVERSION OF COMPANY COMMON STOCK.............................................................3
SECTION 2.03 CANCELLATION OF COMPANY TREASURY SHARES; REDEMPTION OF COMPANY
PREFERRED STOCK................................................................................6
SECTION 2.04. EXCHANGE OF CERTIFICATES........................................................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................9
SECTION 3.01. ORGANIZATION AND POWER; REGULATION AS A PUBLIC UTILITY.........................................10
SECTION 3.02. CORPORATE AUTHORIZATION........................................................................10
SECTION 3.03. GOVERNMENTAL AUTHORIZATION.....................................................................10
SECTION 3.04. NON-CONTRAVENTION..............................................................................11
SECTION 3.05. CAPITALIZATION.................................................................................11
SECTION 3.06. REPORTS AND FINANCIAL STATEMENTS...............................................................12
SECTION 3.07. NO UNDISCLOSED LIABILITIES.....................................................................13
SECTION 3.08. LITIGATION.....................................................................................13
SECTION 3.09. ABSENCE OF CERTAIN CHANGES OR EVENTS...........................................................14
SECTION 3.10. COMPLIANCE WITH LAWS; NO DEFAULT...............................................................14
SECTION 3.11. TAXES..........................................................................................14
SECTION 3.12. INTELLECTUAL PROPERTY..........................................................................16
SECTION 3.13. ENVIRONMENTAL MATTERS..........................................................................16
SECTION 3.14. EMPLOYEE BENEFITS AND LABOR MATTERS............................................................18
SECTION 3.15. TRANSACTIONS WITH AFFILIATES...................................................................21
SECTION 3.16. INFORMATION SUPPLIED...........................................................................21
SECTION 3.17. OPINION OF FINANCIAL ADVISOR...................................................................22
SECTION 3.18. FINDERS' FEES..................................................................................22
SECTION 3.19. TAKEOVER STATUTES..............................................................................22
SECTION 3.20. RIGHTS AGREEMENT...............................................................................22
SECTION 3.21. YEAR 2000......................................................................................22
SECTION 3.22 INSURANCE.....................................................................................23
SECTION 3.23 NO DISSENTERS' RIGHTS.........................................................................23
SECTION 3.24 OWNERSHIP OF UCU COMMON STOCK.................................................................23
SECTION 3.25 DEFINITION OF "KNOWLEDGE".....................................................................23
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF UCU.................................................................23
SECTION 4.01. ORGANIZATION AND POWER; REGULATION AS A PUBLIC UTILITY.........................................23
SECTION 4.02. CORPORATE AUTHORIZATION........................................................................24
SECTION 4.03. GOVERNMENTAL AUTHORIZATION.....................................................................24
SECTION 4.04. NON-CONTRAVENTION..............................................................................25
SECTION 4.05. CAPITALIZATION.................................................................................25
SECTION 4.06. REPORTS AND FINANCIAL STATEMENTS...............................................................26
SECTION 4.07. NO UNDISCLOSED LIABILITIES.....................................................................26
SECTION 4.08. LITIGATION.....................................................................................27
SECTION 4.09. ABSENCE OF CERTAIN CHANGES OR EVENTS...........................................................27
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SECTION 4.10. COMPLIANCE WITH LAWS; NO DEFAULT...............................................................27
SECTION 4.11. TAXES..........................................................................................28
SECTION 4.12. ENVIRONMENTAL MATTERS..........................................................................29
SECTION 4.13. EMPLOYEE BENEFITS..............................................................................29
SECTION 4.14. DIVIDENDS......................................................................................30
SECTION 4.15. TRANSACTIONS WITH AFFILIATES...................................................................30
SECTION 4.16. INFORMATION SUPPLIED...........................................................................30
SECTION 4.17. FINDERS' FEES..................................................................................30
SECTION 4.18. TAKEOVER STATUTES...............................................................................30
SECTION 4.19. YEAR 2000.....................................................................................31
SECTION 4.20. OWNERSHIP OF COMPANY COMMON STOCK..............................................................31
SECTION 4.21. DEFINITION OF "KNOWLEDGE......................................................................31
ARTICLE V CONDUCT OF BUSINESS....................................................................................31
SECTION 5.01. CONDUCT OF THE COMPANY.........................................................................31
SECTION 5.02. CONDUCT OF UCU.................................................................................34
SECTION 5.03. REORGANIZATION..................................................................................35
SECTION 5.04. RATE MATTERS....................................................................................35
ARTICLE VI ADDITIONAL AGREEMENTS.................................................................................36
SECTION 6.01. NO SOLICITATION................................................................................36
SECTION 6.02. PROXY STATEMENT; REGISTRATION STATEMENT........................................................37
SECTION 6.03. STOCKHOLDERS' MEETING..........................................................................39
SECTION 6.04. ACCESS TO INFORMATION..........................................................................39
SECTION 6.05. NOTICES OF CERTAIN EVENTS......................................................................39
SECTION 6.06. APPROPRIATE ACTION; CONSENTS; FILINGS..........................................................40
SECTION 6.07. PUBLIC DISCLOSURE..............................................................................40
SECTION 6.08. REORGANIZATION.................................................................................40
SECTION 6.09. AFFILIATES.....................................................................................40
SECTION 6.10. LISTING OF STOCK...............................................................................41
SECTION 6.11. INDEMNIFICATION OF DIRECTORS AND OFFICERS......................................................41
SECTION 6.12. COMPANY STOCK OPTIONS AND RESTRICTED STOCK AWARDS; ACKNOWLEDGMENT WITH RESPECT TO COMPANY STOCK
PLANS.........................................................................................42
SECTION 6.13. BENEFITS CONTINUATION; SEVERANCE...............................................................44
SECTION 6.14. OPERATION OF COMPANY'S BUSINESS AFTER CLOSING..................................................46
SECTION 6.15. TAKEOVER STATUTES..............................................................................46
SECTION 6.16. DISCLOSURE SCHEDULES...........................................................................46
SECTION 6.17. CHARITABLE AND ECONOMIC DEVELOPMENT SUPPORT....................................................46
SECTION 6.18 TRANSITION TASK FORCE..........................................................................46
SECTION 6.19 TERMINATION OF DRIP............................................................................47
SECTION 6.20. DIVIDEND RECORD DATE...........................................................................47
SECTION 6.21. REAL ESTATE TRANSFER TAXES.....................................................................47
SECTION 6.22. ASSUMPTION OF DEBT OBLIGATIONS.................................................................47
SECTION 6.23. AMENDMENT OF FIRST MORTGAGE BOND INDENTURE.....................................................47
ARTICLE VII CONDITIONS TO MERGER.................................................................................48
SECTION 7.01. CONDITIONS TO EACH PARTY'S OBLIGATIONS.........................................................48
SECTION 7.02. ADDITIONAL CONDITIONS TO OBLIGATIONS OF UCU....................................................49
SECTION 7.03. ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY............................................49
ARTICLE VIII TERMINATION.........................................................................................50
SECTION 8.01. TERMINATION....................................................................................50
SECTION 8.02. EFFECT OF TERMINATION..........................................................................51
SECTION 8.03. FEES AND EXPENSES..............................................................................51
SECTION 8.04. AMENDMENT......................................................................................52
SECTION 8.05. EXTENSION; WAIVER..............................................................................52
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ARTICLE IX MISCELLANEOUS.........................................................................................53
SECTION 9.01. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS......................................53
SECTION 9.02. NOTICES........................................................................................53
SECTION 9.03. INTERPRETATION.................................................................................54
SECTION 9.04. DISCLOSURE SCHEDULES...........................................................................54
SECTION 9.05. COUNTERPARTS...................................................................................54
SECTION 9.06. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES....................................................54
SECTION 9.07. GOVERNING LAW..................................................................................54
SECTION 9.08. ASSIGNMENT.....................................................................................55
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of May 10,
1999 between UTILICORP UNITED INC., a Delaware corporation ("UCU"), and THE
EMPIRE DISTRICT ELECTRIC COMPANY, a Kansas corporation (the "Company").
RECITALS:
WHEREAS, the Boards of Directors of UCU and the Company deem it
advisable and in the best interests of each corporation and its respective
stockholders that UCU and the Company enter into a strategic business
combination in order to advance the long-term business interests of UCU and the
Company, and have therefore approved this Agreement, the Merger (as defined in
Section 1.01) and the other transactions contemplated by this Agreement; and
WHEREAS, the combination of UCU and the Company shall be effected by
the terms of this Agreement through a transaction in which the Company will
merge with and into UCU, with UCU as the surviving corporation, and the common
stockholders of the Company (other than those receiving solely Cash
Consideration (as defined in Section 2.02) and Dissenting Stockholders (as
defined in Section 2.02(j)) will become stockholders of UCU; and
WHEREAS, it is intended that, for federal income tax purposes, the
Merger shall qualify as a reorganization under the provisions of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, UCU and the Company desire to make certain representations,
warranties, covenants and agreements in connection with this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, the
parties agree as follows:
ARTICLE I
The Merger
Section 1.01. The Merger. (a) Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time (as defined in
Section 1.01(c)), the Company shall be merged (the "Merger") with and into UCU
in accordance with the General Corporation Code of Kansas (the "KGCC") and the
General Corporation Law of the State of Delaware (the "DGCL"), whereupon the
separate existence of the Company shall cease, and UCU shall continue as the
surviving corporation (the "Surviving Corporation").
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(b) Upon the terms and subject to the conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at 10:00
a.m. on a date to be specified by the parties (the "Closing Date"), which date
shall be no later than the second business day after satisfaction of the
conditions set forth in Article VII, at the offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, unless another time, date or
place is agreed to in writing by the parties hereto.
(c) Upon the Closing, the Company and UCU will file (i) a
certificate of merger with the Secretary of State of the State of Kansas and
make all other filings or recordings required by the KGCC in connection with the
Merger and (ii) a certificate of merger with the Secretary of State of the State
of Delaware and make all other filings or recordings required by the DGCL in
connection with the Merger. The Merger shall become effective at such time as
the certificate of merger is duly filed with the Secretary of State of the State
of Delaware or at such later time as is agreed to by UCU and the Company and
specified in the certificate of merger (the "Effective Time").
(d) The Merger shall have the effects set forth in this
Agreement and in Section 17-6709 of the KGCC and Section 259 of the DGCL.
Section 1.02. Certificate of Incorporation and Bylaws of the Surviving
Corporation The certificate of incorporation and bylaws of UCU, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation and bylaws of the Surviving Corporation.
Section 1.03. Directors and Officers of the Surviving Corporation. The
directors of UCU immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold office in accordance with
the certificate of incorporation and bylaws of the Surviving Corporation, and
the officers of UCU immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed.
Section 1.04. Advisory Board. The Surviving Corporation (and any
successor or assign of Surviving Corporation) shall maintain an advisory board
(the "Advisory Board"), for a period of at least three years following the
Closing Date. The Advisory Board shall be comprised of five persons nominated in
writing by the Company and approved by UCU (which approval shall not be
unreasonably withheld) on or prior to the Closing Date ("Company Designees").
Company Designees shall not be subject to removal without cause by the Surviving
Corporation absent their consent, and any vacancy on the Advisory Board which
arises after the Effective Time shall be filled by a person selected by majority
vote of the remaining Company Designees and approved by UCU (which approval
shall not be unreasonably withheld) (and such replacement person shall be deemed
a "Company Designee" for all purposes hereunder). The Advisory Board shall meet
no less frequently than quarterly, and the Surviving Corporation shall consult
with the Advisory Board with respect to the business operations of the Surviving
Corporation in the Company's current service area (including consultations with
the Advisory Board in which the Advisory Board may review and make
recommendations consistent with Section 6.17 with respect to the civic,
charitable and business and customer development activities of the Surviving
Corporation in such area). Company Designees shall receive an
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annual fee of $15,000 for serving on the Advisory Board, and shall be reimbursed
for reasonable out-of-pocket expenses incurred in connection with their service
on the Advisory Board. The Surviving Corporation shall provide to Company
Designees indemnification rights to the same extent as provided to Surviving
Corporation's directors pursuant to the Surviving Corporation's Certificate of
Incorporation and bylaws.
ARTICLE II
Conversion of Capital Stock
2.01 UCU Shares. Each share of common stock of UCU issued and
outstanding immediately prior to the Effective Time shall remain outstanding and
unchanged by reason of the Merger as one share of common stock of the Surviving
Corporation.
2.02 Conversion of Company Common Stock.
(a) Outstanding Shares of Company Common Stock. Subject to the
other provisions of this Section 2.02, each share of common stock, par value
$1.00 per share of the Company (the "Company Common Stock") issued and
outstanding immediately prior to the Effective Time, together with any
associated Right (as defined in Section 3.20) (other than shares to be canceled
pursuant to Section 2.03(a) and other than Dissenting Shares (as such term is
defined in Section 2.02(j)), shall be converted into the right to receive (i) a
number of shares of UCU Common Stock equal to the Exchange Ratio (as such term
is defined below), subject to the payment of cash in lieu of any fractional
share (the "Stock Consideration"); or (ii) cash per share of Company Common
Stock equal to the Average Trading Price (as such term is defined below)
multiplied by the Exchange Ratio (the "Cash Consideration"). The Stock
Consideration together with the Cash Consideration is collectively referred to
as the "Merger Consideration."
The "Exchange Ratio" shall be determined as follows:
(i) if the Average Trading Price of a share of UCU Common Stock is less
than $22.00, the Exchange Ratio shall equal 1.341; (ii) if the Average Trading
Price of a share of UCU Common Stock is greater than or equal to $22.00, but
less than or equal to $26.00, the Exchange Ratio shall equal a fraction (rounded
to the nearest hundred-thousandth) determined by dividing $29.50 by the Average
Trading Price of a share of UCU Common Stock; and (iii) if the Average Trading
Price of a share of UCU Common Stock is greater than $26.00, the Exchange Ratio
shall equal 1.135. The Exchange Ratio shall be subject to appropriate adjustment
in the event of a stock split, stock dividend or recapitalization after the date
of this Agreement applicable to shares of the UCU Common Stock or the Company
Common Stock.
"Average Trading Price" shall be equal to the average of the daily
closing prices per share of UCU Common Stock on the New York Stock Exchange
("NYSE") Composite Transactions Reporting System, as reported in The Wall Street
Journal for the twenty trading days ending on the date immediately prior to the
second full NYSE trading day immediately preceding the Closing Date.
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(b) Election. Subject to the maximum amounts set forth in Sections
2.02(c) and 2.02(d), each record holder of Company Common Stock immediately
prior to the Election Deadline (as defined in Section 2.02(g)) shall be entitled
to (i) elect to receive the Cash Consideration (a "Cash Election"), (ii) elect
to receive the Stock Consideration (a "Stock Election"), or (iii) indicate that
such record holder has no preference as to the receipt of Cash Consideration or
Stock Consideration (all Company Common Stock held by such record holder, "No
Election Shares"), for such holder's Company Common Stock. Elections shall be
made on a form designed for that purpose (a "Form of Election"). A holder of
record of shares of Company Common Stock who holds such shares as nominee,
trustee or in another representative capacity (a "Representative") may submit
multiple Forms of Election, provided that such Representative certifies that
each such Form of Election covers all shares of Company Common Stock held by
such Representative for a particular beneficial owner. To the extent not covered
by a properly given Form of Election, all Company Common Stock issued and
outstanding immediately prior to the Effective Time, shall be designated as No
Election Shares and shall, except as provided in Section 2.02(d) and 2.02(h), be
converted solely into UCU Common Stock.
(c) Maximum Cash Election Shares. Notwithstanding the provisions of
Section 2.02(b) and subject to Section 2.02(d) and Section 2.02(h), the
aggregate number of shares of Company Common Stock that may be converted into
the right to receive cash (including the right to receive cash in lieu of
fractional shares as provided in this Section 2.02) in the Merger (the "Cash
Election Number") shall not exceed 50% of the shares of Company Common Stock
outstanding at 5:00 Eastern Time on the second day prior to the Effective Time
or such other number as shall be determined in accordance with Section 2.02(h).
If the aggregate number of shares of Company Common Stock covered by Cash
Elections (the "Cash Election Shares") exceeds the Cash Election Number, those
holders that will be entitled to receive Cash Consideration shall be selected by
the Exchange Agent (as defined in Section 2.04(a)) through a lottery among
holders who made a Cash Election up to the Cash Election Number and all other
Cash Election Shares shall be converted into the right to receive Stock
Consideration.
(d) Maximum Stock Consideration. The number of shares of UCU Common
Stock to be issued to holders of Company Common Stock shall not, when added to
the number of shares of UCU Common Stock initially issuable pursuant to Sections
6.12 and 6.13, exceed 19.9% of the total number of shares of UCU Common Stock
issued and outstanding immediately preceding the Effective Time (the "Maximum
Stock Amount"). If the aggregate number of shares of UCU Common Stock payable as
Stock Consideration (the "Aggregate Stock Amount") exceeds the Maximum Stock
Amount, UCU shall have the option to limit the aggregate Stock Consideration to
the Maximum Stock Amount (a "Proration Event") and to make a corresponding
increase in the aggregate Cash Consideration by instructing the Exchange Agent
to:
(A) convert a sufficient number of No Election Shares
into the right to receive the Cash Consideration, which No Election Shares shall
be selected pro rata from among all of the holders thereof, based upon the
aggregate number of No Election Shares held by each such holder, such that the
Aggregate Stock Amount to be issued equals as close as practicable the Maximum
Stock Amount; and
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(B) to the extent that such conversion of the No
Election Shares does not reduce the
Aggregate Stock Amount to the Maximum Stock Amount, convert a sufficient number
of Stock Election Shares into the right to receive the Cash Consideration, which
Stock Election Shares shall be selected pro rata from among all of the holders
thereof, based upon the aggregate number of Stock Election Shares held by each
such holder, such that the amount of UCU Common Stock to be issued equals as
close as practicable the Maximum Stock Amount.
(e) Form of Election. To be effective, a Form of Election must be
properly completed, signed and submitted to the Exchange Agent prior to the
Election Deadline. UCU shall have the discretion, which it may delegate in whole
or in part to the Exchange Agent, to determine whether Forms of Election have
been properly completed, signed and submitted or revoked and to disregard
immaterial defects in Forms of Election. The decision of UCU (or the Exchange
Agent) in such matters shall be conclusive and binding, absent manifest error.
Neither UCU nor the Exchange Agent shall be under any obligation to notify any
person of any defect in a Form of Election submitted to the Exchange Agent. The
Exchange Agent shall also make all computations contemplated by this Section
2.02, and all such computations shall be conclusive and binding on the holders
of Company Common Stock.
(f) Deemed Non-Election. For purposes hereof, a holder of Company
Common Stock who does not submit a Form of Election that is received by the
Exchange Agent prior to the Election Deadline shall be deemed not to have made
an election in accordance with this Section and the shares of Company Common
Stock held by such holder shall be classified as No Election Shares. If UCU or
the Exchange Agent shall determine that any purported Election was not properly
made, such purported Election shall be deemed to be of no force and effect and
the shares of Company Common Stock covered by such purported Election shall be
classified as No Election Shares.
(g) Election Deadline. UCU and the Company shall each use its
reasonable efforts to cause copies of the Form of Election to be mailed to the
record holders of Company Common Stock not less than 30 days prior to the
Effective Time and to make the Form of Election available to all persons who
become record holders of Company Common Stock subsequent to the date of such
mailing but prior to the Election Deadline. A Form of Election must be received
by the Exchange Agent by 5:00 p.m., Eastern Time, on the last NYSE trading day
prior to the third business day before the anticipated Effective Time (the
"Election Deadline") in order to be effective. All elections may be revoked
until the Election Deadline in writing by the record holders submitting Forms of
Election. Any revocations or elections received after the Election Deadline
shall be null and void.
(h) Adjustment for Tax and Accounting Matters. If, after having made
the calculation under Section 2.02(c), the tax opinions referred to in Sections
7.02(c) and 7.03(c) cannot be rendered (as reasonably determined by ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇), as a result of the Merger
possibly failing to satisfy continuity-of-interest requirements under applicable
federal income tax principles relating to reorganizations described in Section
368(a) of the Code, then UCU shall reduce, to the minimum extent necessary to
enable such tax opinions to be rendered, the amount of cash to be delivered with
respect to the Cash Election Shares (in accordance with the lottery procedures
outlined in Section 2.02(c) or in
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any other manner considered by the Exchange Agent to be fair and equitable) and
in lieu thereof shall deliver the number of shares of UCU Common Stock having an
aggregate value, based on the Average Trading Price, equal to the amount of such
reduction, and the Cash Election Number shall be appropriately adjusted to give
effect to such reduction.
(i) Adjustment to Prevent Dilution. If, prior to the Effective
Time, UCU shall declare a stock dividend or other similar distribution of shares
of UCU Common Stock or securities convertible into shares of UCU Common Stock,
or effect a stock split, reclassification, recapitalization, stock combination
or other change with respect to the UCU Common Stock, the Exchange Ratio and the
Average Trading Price, if applicable, shall be appropriately adjusted to reflect
such dividend, distribution, stock split, reclassification, recapitalization,
stock combination or other change.
(j) Shares of Dissenting Stockholders. Notwithstanding
anything in this Agreement to the contrary, if a Proration Event shall have
occurred, any issued and outstanding shares of Company Common Stock held by a
person (a "Dissenting Stockholder") who shall not have voted to adopt this
Agreement or consented thereto in writing and who shall have properly demanded
appraisal for such shares in accordance with Section 17-6712 of the KGCC
("Dissenting Shares") shall not be converted as described in Section 2.02(a),
unless such holder fails to perfect or withdraws or otherwise loses its right to
appraisal. If, after the Effective Time, such Dissenting Stockholder fails to
perfect or withdraws or loses the right to appraisal, such Dissenting
Stockholder's shares of Company Common Stock shall no longer be considered
Dissenting Shares for the purposes of this Agreement and shall thereupon be
deemed to have been converted into and to have become exchangeable for, at the
Effective Time, the right to receive for each such share (a "Nondissenting
Share") the number of shares of UCU Common Stock and the amount in cash, without
interest, that a holder of a No Election Share who had not demanded appraisal
would have received with respect to such Nondissenting Share after giving effect
to Sections 2.02(d) and (h) (it being understood that no adjustment shall be
made to the proration computation (if any) made following the Election Deadline
to give effect to the withdrawal of, or the failure to perfect, the demand for
appraisal with respect to such Dissenting Shares). The Company shall give UCU
(I) prompt notice of any demands for appraisal of shares of Company Common Stock
received by the Company and (ii) the opportunity to participate in and direct
all negotiations and proceedings with respect to any such demands. Except as
required by law, the Company shall not, without the prior written consent of
UCU, make any payment with respect to, or settle, offer to settle or otherwise
negotiate, any such demands.
2.03 Cancellation of Company Treasury Shares; Redemption of Company
Preferred Stock.
(a) As of the Effective Time, each share of Company Common
Stock (together with any associated Right) that is owned by the Company as
treasury stock or owned, directly or indirectly, by the Company, UCU or any of
their respective Subsidiaries shall be canceled and shall cease to exist and no
UCU Common Stock or other consideration shall be delivered in exchange therefor.
For purposes of this Agreement, "Subsidiary" means, with respect to any Person,
any corporation or other organization, whether incorporated or unincorporated,
of which directly or indirectly at least 50% of the securities or other
interests
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having by their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such Person or by any one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries. For purposes of this Agreement, "Person" means
an individual, a corporation, a limited liability company, a partnership, an
association, a trust or any other entity or organization, including a
Governmental Authority (as defined in Section 3.03).
(b) Prior to the Effective Time, the Board of Directors of the
Company shall call for redemption all outstanding shares of Company Preferred
Stock (as defined in Section 3.05) at a redemption price equal to the amount
provided for in the Company's articles of incorporation or in a certificate of
designation on a particular series of Company Preferred Stock, together with all
dividends accrued and unpaid to the date of such redemption. All shares of the
Company Preferred Stock shall be redeemed so that no such shares shall be
outstanding at the Effective Time.
Section 2.04. Exchange of Certificates. The procedures for exchanging
outstanding shares of Company Common Stock for Merger Consideration shall be as
follows:
(a) Exchange Agent. Prior to or at the Effective Time, UCU
shall deposit with an exchange agent as may be designated by UCU and reasonably
acceptable to the Company (the "Exchange Agent"), for the benefit of the holders
of shares of Company Common Stock, for exchange in accordance with this Section
2.04, certificates representing the shares of UCU Common Stock issuable pursuant
to Section 2.02 in exchange for outstanding shares of Company Common Stock and
cash payable pursuant to Section 2.02 in exchange for outstanding shares of
Company Common Stock and shall deposit cash in an amount required to be paid
pursuant to subsections (c) and (e) of this Section 2.04 (such shares of UCU
Common Stock and cash being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Exchange Agent shall mail to each holder of record
of a certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (each a "Certificate"
and, collectively, the "Certificates"), (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as UCU and the
Company may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Consideration
(comprised of certificates representing shares of UCU Common Stock and cash in
lieu of fractional shares constituting the Stock Consideration and/or the Cash
Consideration) which the holder of such Certificate has a right to receive. Upon
surrender of a Certificate for cancellation to the Exchange Agent, together with
such letter of transmittal, duly executed, the holder of record of such
Certificate shall be entitled to receive in exchange therefor (i) a check
representing the Cash Consideration, or (ii) (x) a certificate or certificates
representing that whole number of shares of UCU Common Stock which such holder
has the right to receive pursuant to the provisions of this Article II in such
denominations and registered in such names as such holder may request in
accordance with the instructions set forth in such
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letter of transmittal and (y) a check representing the amount of cash, if any,
which such holder has the right to receive pursuant to the provisions of this
Article II, after giving effect to any required withholding tax, without
interest. In the event of a transfer of ownership of shares of Company Common
Stock which is not registered on the transfer records of the Company, (i) a
check representing the Cash Consideration or (ii) a certificate representing the
proper number of shares of UCU Common Stock, together with a check for the cash
to be paid in lieu of fractional shares, if any, without interest, and unpaid
dividends and distributions since the Effective Time, if any, without interest,
may be issued to such transferee if the Certificate representing such shares of
Company Common Stock held by such transferee is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid.
(c) Distributions with Respect to Unexchanged Shares.
Notwithstanding any other provisions of this Agreement, no dividends or other
distributions declared or made after the Effective Time with respect to any
shares of UCU Common Stock having a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate, and no cash payment
shall be paid to any such holder, until the holder of such Certificate shall
surrender such Certificate as provided in this Section 2.04. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificates representing whole shares of UCU
Common Stock issued in exchange therefor, without interest, (i) at the time of
such surrender, the amount of any cash payable in lieu of a fractional share of
UCU Common Stock to which such holder is entitled pursuant to subsection (e) of
this Section 2.04 and the amount of dividends or other distributions with a
record date after the Effective Time previously paid with respect to such whole
shares of UCU Common Stock, less the amount of any withholding taxes which may
be required thereon, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of UCU Common Stock, less the amount of any
withholding taxes which may be required thereon.
(d) No Further Ownership Rights in Company Common Stock. All
shares of UCU Common Stock issued upon the surrender for exchange of shares of
Company Common Stock in accordance with the terms hereof (including any cash
paid pursuant to this Article II) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common Stock,
subject, however, to the Surviving Corporation's obligation to pay any dividends
or make any other distributions with a record date prior to the Effective Time
which may have been declared or made by the Company on such shares of Company
Common Stock on or prior to the date hereof and which remain unpaid at the
Effective Time, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of Company
Common Stock which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged for the Merger
Consideration as provided in this Section 2.04.
(e) No Fractional Shares. No certificate or scrip representing
fractional shares of UCU Common Stock shall be issued upon the surrender for
exchange of Certificates,
8
and such fractional share interests will not entitle the owner thereof to vote
or to exercise any rights of a stockholder of UCU. Notwithstanding any other
provision of this Agreement, each holder of shares of Company Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of UCU Common Stock (after taking into account all
Certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of UCU
Common Stock multiplied by the Average Trading Price.
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the stockholders of the Company for one year
after the Effective Time shall be delivered to UCU (which shall thereafter act
as Exchange Agent), and any stockholders of the Company who have not previously
complied with this Section 2.04 shall thereafter look as a general creditor only
to UCU for payment of their claim for Cash Consideration or shares of UCU Common
Stock, any cash in lieu of fractional shares of UCU Common Stock and any
dividends or distributions with respect to UCU Common Stock, none of which shall
bear interest.
(g) No Liability. The Surviving Corporation shall not be
liable to any holder of shares of Company Common Stock or UCU Common Stock, as
the case may be, for such shares (or dividends or distributions with respect
thereto) of UCU Common Stock or cash from the Exchange Fund delivered to a
public official as required by any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered immediately
prior to the date on which any Cash Consideration, shares of UCU Common Stock,
any dividends or distributions with respect thereto, or any cash in lieu of
fractional shares in respect of such Certificate would otherwise escheat to or
become the property of, or otherwise become deliverable to, any Governmental
Authority, any such shares, dividends or distributions or cash in respect of
such Certificate shall, to the extent permitted by applicable laws, become the
property of UCU, free and clear of all claims or interest of any Person
previously entitled thereto.
(h) Missing Certificates. In the event any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact and the providing of an appropriate indemnity or surety bond by the Person
claiming such Certificate to be lost, stolen or destroyed, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate, the Cash
Consideration, or the Stock Consideration and dividends and distributions
deliverable in respect thereof pursuant to this Agreement, less the amount of
any withholding taxes that may be required thereon, and without interest.
ARTICLE III
Representations and Warranties of the Company
The Company represents and warrants to UCU that the statements contained in
this Article III are true and correct, except as set forth in the disclosure
schedule delivered by the Company to UCU prior to execution of this Agreement
(the "Company Disclosure Schedule") or as otherwise expressly permitted by this
Agreement. For purposes of this Agreement, "Company Material Adverse Effect"
means a material adverse effect (i) on the business, properties, assets,
liabilities (contingent or otherwise), financial condition, results of
operations
9
or prospects of the Company, taken as a whole, or (ii) on the ability of the
Company to perform its obligations under or to consummate the transactions
contemplated by this Agreement.
Section 3.01. Organization and Power; Regulation as a Public Utility.
(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has the
requisite corporate or other power and authority and governmental approvals to
own, lease and operate its properties and to carry on its business as now being
conducted, except where the failure to be in good standing or have such power,
authority or approvals would not, individually or in the aggregate, be
reasonably expected to have a Company Material Adverse Effect. The Company is
duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification or licensing necessary,
except where the failure to be so duly qualified or licensed and in good
standing would not, individually or in the aggregate, be reasonably expected to
have a Company Material Adverse Effect. As of the date hereof, the Company has
no Subsidiaries. True, accurate and complete copies of the articles of
incorporation and bylaws of the Company, as in effect on the date hereof, have
been delivered to UCU.
(b) The Company is not a "holding company," a "subsidiary
company" or an "affiliate" of any public utility holding company within the
meaning of Section 2(a)(7), 2(a)(8) or 2(a)(11) of the Public Utility Holding
Company Act of 1935, as amended ("PUHCA"), respectively. The Company is
regulated as a public utility in the States of Missouri, Oklahoma, Arkansas, and
Kansas and in no other state.
Section 3.02. Corporate Authorization. The Board of Directors of the
Company has (a) determined that the Merger is fair and in the best interest of
the Company and its stockholders, (b) approved and adopted this Agreement, and
(c) resolved to recommend to the holders of the Company Common Stock that they
give the Company Stockholders' Approval (as defined below). The execution and
delivery by the Company of this Agreement, and the consummation by the Company
of the transactions contemplated hereby, are within the Company's corporate
powers and, except as set forth in the next succeeding sentence of this Section
3.02, have been duly authorized by all necessary corporate action. The
affirmative vote of a majority of the outstanding shares of Company Common Stock
(the "Company Stockholders' Approval") is necessary to approve and adopt this
Agreement and the transactions contemplated by this Agreement. This Agreement
has been duly executed and delivered by the Company and, subject to the receipt
of the Company Stockholders' Approval and, assuming the due authorization,
execution and delivery of this Agreement by UCU, constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights generally
from time to time in effect and to general principles of equity, regardless of
whether in a proceeding at equity or at law).
Section 3.03. Governmental Authorization. The execution and delivery by
the Company of this Agreement, and the consummation by the Company of the
transactions contemplated hereby, require no action by or in respect of, or
filing with, any federal, state or
10
local government or any court, administrative agency or commission or other
governmental agency or authority, whether domestic or foreign (a "Governmental
Authority"), other than (i) the filings of a certificate of merger with respect
to the Merger with the Kansas Secretary of State, a certificate of merger with
respect to the Merger with the Delaware Secretary of State, and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business; (ii) compliance with any applicable requirements of
the Federal Energy Regulatory Commission ("FERC") and of the utility regulatory
commissions of Arkansas, Kansas, Missouri, and Oklahoma (the "Company Required
Statutory Approvals"); (iii) compliance with any applicable requirements of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder (the "HSR Act"); (iv) compliance with any
applicable requirements of the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder (the "Securities Act"); (v) compliance
with any applicable requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "Exchange
Act"); (vi) compliance with any other applicable securities laws; (vii)
compliance with any environmental, health or safety law or regulation requiring
any notification, disclosure or approval in connection with the Merger; (viii)
actions or filings which, if not taken or made, would not, individually or in
the aggregate, be reasonably expected to have a Company Material Adverse Effect;
and (ix) filings and notices not required to be made or given until after the
Effective Time.
Section 3.04. Non-Contravention. The execution and delivery of this
Agreement by the Company does not, and the consummation of the transactions
contemplated hereby will not, subject to the consents, approvals, orders,
authorizations, filings and registrations contemplated by Sections 3.02 and
3.03, (i) conflict with, or result in any violation or breach of any provision
of the articles of incorporation or bylaws of the Company; (ii) result in (A)
any violation or breach of, or constitute (with or without notice or lapse of
time, or both) a default (or give rise to a right of termination, cancellation
or acceleration of any obligation or loss of any material benefit) under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, contract or other agreement, instrument or obligation to which the
Company is a party or by which any of them or any of their properties or assets
may be bound or (B) the creation of any Lien (as such term is defined below)
upon any of the properties or assets of the Company, or (iii) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Company
or any of its respective properties or assets, except in the case of clauses
(ii) and (iii) for any such violations, breaches, defaults, terminations,
cancellations, accelerations or creations of Liens which would not, individually
or in the aggregate, be reasonably expected to have a Company Material Adverse
Effect. For purposes of this Agreement, "Lien" means, with respect to any asset,
any mortgage, lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset.
Section 3.05. Capitalization. (a) As of the date hereof, the authorized
capital stock of the Company consists of 100,000,000 shares of Company Common
Stock, 5,000,000 shares of Cumulative Preferred Stock, $10.00 par value
("Company Preferred Stock"), and 2,500,000 shares of Preference Stock, without
par value ("Company Preference Stock"). As of March 31, 1999, (i) 17,138,486
shares of Company Common Stock were issued and outstanding, (ii) -0- shares of
Company Common Stock were held in the treasury of the Company, (iii) the maximum
number of shares of Company Common Stock issuable pursuant to the Company
Employee
11
Plans (as defined in Section 3.14(a)) and the Company Benefit Arrangements (as
defined in Section 3.14(d)) is 1,967,707 shares, (iv) 500,000 shares of Company
Preference Stock were available for issuance under the Rights Agreement dated as
of July 26, 1990 between the Company and ▇▇▇▇▇ ▇▇▇▇▇▇ Shareholder Services (the
"Rights Agreement"), (v) the maximum number of newly issued shares of Company
Common Stock issuable under the Dividend Reinvestment and Stock Purchase Plan
(the "DRIP") is 290,329 shares, (vi) the maximum number of shares of Company
Common Stock issuable to Directors under the Stock Unit Plan for Directors is
100,000 shares, (vii) 3,262,818 shares of Company Preferred Stock were issued
and outstanding, and (viii) no shares of Company Preference Stock were issued
and outstanding or reserved for issuance other than as described in subsection
(iv) above. No change in such capitalization has occurred since such date except
as would have been permitted by Section 5.01(d) if it were to have applied to
such period. Section 3.05 of the Company Disclosure Schedule sets forth a
complete and accurate list of all Company Benefit Arrangements pursuant to which
shares of Company Common Stock or rights thereto, may be issued, Company Stock
Options (as defined in Section 6.12(a)) and Company Restricted Stock Awards (as
defined in Section 6.12(c)). All outstanding shares of the Company Common Stock
are, and all shares of Company Common Stock, subject to issuance as specified
above, upon issuance on the terms and conditions specified in the instruments
pursuant to which they are issuable, shall be, duly authorized, validly issued,
fully paid and non-assessable, and not subject to any preemptive right. There
are no obligations, contingent or otherwise, of the Company to repurchase,
redeem or otherwise acquire any shares of Company Common Stock.
(b) Except as set forth in Section 3.05(a), there are no
equity securities of any class of the Company, or any security exchangeable into
or exercisable for such equity securities, issued, reserved for issuance or
outstanding. Except as set forth in Section 3.05(a), there are no options,
warrants, securities, calls, rights, commitments or agreements of any character
to which the Company is a party or by which any of them are bound obligating the
Company to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock of the Company or obligating the Company to
grant, extend, accelerate the vesting of or enter into any such option, warrant,
equity security, call, right, commitment or agreement. There are no voting
trusts or other agreements or understandings with respect to the shares of
capital stock of the Company to which the Company is a party.
Section 3.06. Reports and Financial Statements. (a) The Company has
filed all required reports, schedules, forms, statements and other documents
with the SEC since December 31, 1993 (the "Company SEC Reports").
(b) As of its filing date, each Company SEC Report filed
pursuant to the Exchange Act did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except to the extent that such
statements have been modified or superseded by a later filed Company SEC Report.
(c) Each Company SEC Report that is a registration statement,
as amended or supplemented, if applicable, filed pursuant to the Securities Act
as of the date such registration statement or amendment became effective did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
12
statements therein, in the light of the circumstances under which they were
made, not misleading, except to the extent that such statements have been
modified or superseded by a later filed Company SEC Report.
(d) The financial statements (including, in each case, any
related notes) contained in the Company SEC Reports complied as to form in all
material respects with the applicable published rules and regulations of the SEC
with respect thereto, were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited statements, as permitted for presentation in
Quarterly Reports on Form 10-Q), and fairly presented in all material respects
(subject in the case of unaudited statements to normal, recurring audit
adjustments) the financial position of the Company as at the respective dates
and the results of its operations and cash flows for the respective periods
indicated. The audited balance sheet of the Company as of December 31, 1998 is
referred to herein as the "Company Balance Sheet".
(e) Since December 31, 1993, the Company has made all required
filings with the FERC and any appropriate state public utilities commission,
except for such filings the failure to make which would not, individually or in
the aggregate, be reasonably expected to have a Company Material Adverse Effect.
Section 3.07. No Undisclosed Liabilities. The Company does not have any
liabilities or obligations of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, other than:
(a) liabilities or obligations which would not, individually or in the
aggregate, be reasonably expected to have a Company Material Adverse
Effect;
(b) liabilities or obligations disclosed or provided for in the Company
Balance Sheet or in the notes thereto or in the Company SEC Reports filed
prior to the date hereof;
(c) liabilities or obligations under this Agreement or incurred in
connection with the transactions contemplated by this Agreement; or
(d) liabilities or obligations incurred since December 31, 1998 in the
ordinary course of business consistent with past practices.
Section 3.08. Litigation. Except as disclosed in the Company SEC
Reports filed prior to the date hereof:
(a) There is no action, suit, investigation or proceeding pending
against, or to the knowledge of the Company, threatened against or affecting,
the Company or any of its properties before any Governmental Authority or
arbitrator which, individually or in the aggregate, would be reasonably expected
to have a Company Material Adverse Effect; and
13
(b) There is no judgment, decree, injunction, or order of any
Governmental Authority or arbitrator applicable to the Company which,
individually or in the aggregate, would be reasonably expected to have a Company
Material Adverse Effect.
Section 3.09. Absence of Certain Changes or Events. Since the date of
the Company Balance Sheet, except as permitted by or as disclosed in this
Agreement or the Company SEC Reports filed prior to the date hereof, the Company
has conducted its businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, there has not been (a) any
Company Material Adverse Effect or any event or development (including in
connection with the Merger) that would, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, or (b) any
event that would, individually or in the aggregate, reasonably be expected to
prevent or materially delay the performance of this Agreement by the Company.
Section 3.10. Compliance with Laws; No Default. Except as disclosed in
the Company SEC Reports filed prior to the date hereof:
(a) (i) The Company is not in violation of and has not violated or
failed to comply with any statute, law, ordinance, regulation, rule, judgment,
decree, order, writ, injunction, permit or license of any Governmental Authority
or arbitrator applicable to its business or operations, except for violations
and failures to comply that would not, individually or in the aggregate, be
reasonably expected to result in a Company Material Adverse Effect and (ii) to
the knowledge of the Company, the Company has all permits, licenses, franchises
and other governmental authorizations, consents, approvals and exemptions
necessary to conduct its business as presently conducted and which are material
to the operation of such business.
(b) Each material agreement, contract or commitment to which the
Company is a party or by which the Company is bound or to which any of their
respective properties are subject ("Company Contracts") is a valid, binding and
enforceable obligation of the Company and in full force and effect (subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally from time
to time in effect and to general principles of equity, regardless of whether in
a proceeding at equity or at law) except where the failure to be valid, binding
and enforceable and in full force and effect would not, individually or in the
aggregate, be reasonably expected to have a Company Material Adverse Effect. The
Company is not in default or violation of any term, condition or provision of
(i) its articles of incorporation or by-laws or (ii) any Company Contract,
except in the case of clause (ii) for any defaults or violations that would not,
individually or in the aggregate, be reasonably expected to have a Company
Material Adverse Effect. The Company is not subject to any agreement, whether
written or oral, restricting the ability of the Company to compete in any
business activity.
Section 3.11. Taxes. (a) The Company has timely filed or will file or
cause to be timely filed, all material Tax Returns (as defined in Section
3.11(j)) required by applicable law to be filed by it prior to or as of the
Effective Time, and all such material Tax Returns are, or will be at the time of
filing, complete in all material respects.
14
(b) The Company has paid or, where payment is not yet due, has
established or will establish or cause to be established in accordance with
generally accepted accounting principles on or before the Effective Time an
adequate accrual for the payment of, all material Taxes (as defined in Section
3.11(j)) due with respect to any period ending prior to or as of the Effective
Time.
(c) There are no (i) outstanding consents extending the
statute of limitations for the assessment of any Taxes of the Company, or (ii)
proposals, assertions or assessments against the Company for deficiencies for
any Taxes that have not been satisfied or resolved.
(d) There are no material Tax claims pending against the
Company and the Company does not know of any threatened claim for material Tax
deficiencies or any basis for such claims, no material issues have been raised
in writing in any examination by any taxing authority with respect to the
Company which, by application of similar principles, reasonably could be
expected to result in a material proposed deficiency for any other period not so
examined, and there is not now in force any waiver or agreement by the Company
for the extension of time for the assessment of any material Tax, nor has any
such waiver or agreement been requested in writing by any taxing authority. The
Company has no liability with respect to any material United States federal,
state, local, foreign or other Taxes of any corporation or entity other than the
Company.
(e) No transaction contemplated by this Agreement is subject
to withholding under Section 1445 of the Code.
(f) Neither the Company nor any of its other Affiliates (as
defined in Section 3.15), has taken any action, agreed to take any action, or
failed to take any action, or has knowledge of any fact or circumstance that
(without regard to any action taken or agreed to be taken by UCU or any of its
Affiliates) could reasonably be expected to cause the Merger to fail to qualify
as a "reorganization" within the meaning of Section 368(a) of the Code.
(g) The Company has not made during the last 3 years, nor will
make prior to the Effective Time, an election to have a stock purchase treated
as an asset purchase under Section 338 of the Code.
(h) The Company has not filed with the IRS, and will not file
with the IRS prior to the Effective Time, a statement consenting to the
recognition of gain on the disposition of its "subsection (f) assets" under
Section 341(f) of the Code.
(i) The Company has not made in the last 7 years, and will not
make prior to the Effective Time, any changes in accounting method to which
Section 481(a) of the Code may apply.
(j) "Taxes" shall mean any and all taxes, charges, fees,
levies or other assessments, including income, gross receipts, excise, real or
personal property, sales, withholding, social security, retirement,
unemployment, occupation, use, goods and services, service use, license, value
added, capital, net worth, payroll, profits, withholding, franchise,
15
transfer and recording taxes, fees and charges, and any other taxes, assessments
or similar charges imposed by the IRS or any taxing authority (whether domestic
or foreign including any state, county, local or foreign government or any
subdivision or taxing agency thereof (including a United States possession)) (a
"Taxing Authority"), whether computed on a separate, consolidated, unitary,
combined or any other basis; and such term shall include any interest whether
paid or received, fines, penalties or additional amounts attributable to, or
imposed upon, or with respect to, any such taxes, charges, fees, levies or other
assessments. "Tax Return" shall mean any report, return, document, declaration
or other information or filing required to be supplied to any Taxing Authority
or jurisdiction (foreign or domestic) with respect to Taxes, including
information returns, any documents with respect to or accompanying payments of
estimated Taxes, or with respect to or accompanying requests for the extension
of time in which to file any such report, return, document, declaration or other
information.
Section 3.12. Intellectual Property. (a) Except as set forth in the
Company SEC Reports filed prior to the date hereof, the Company owns, is
licensed or is otherwise legally entitled to use, all patents, trade secrets,
trademarks, trade names, service marks, copyrights and mask works, all
applications for and registrations of such patents, trademarks, trade names,
service marks, copyrights and mask works, and all processes, formulae, methods,
schematics, technology, know-how, computer software programs or applications and
tangible or intangible proprietary information utilized in the conduct of the
business of the Company as currently conducted (the "Company Intellectual
Property Rights") except to the extent that the failure to have such rights
would not, individually or in the aggregate, be reasonably expected to have a
Company Material Adverse Effect.
(b) Except as disclosed in the Company SEC Reports filed prior
to the date hereof, the Company (i) has not been sued in any suit, action or
proceeding which involves a claim of infringement of any patent, trade secret,
trademark, service ▇▇▇▇ or copyright or the violation of any trade secret or
other proprietary right of any third party and (ii) has no knowledge that the
manufacturing, importation, marketing, licensing, sale, offer for sale, or use
of any of its products infringes any patent, trademark, service ▇▇▇▇, copyright,
trade secret or other proprietary right of any third party, which infringement,
individually or in the aggregate, would be reasonably expected to have a Company
Material Adverse Effect.
Section 3.13. Environmental Matters. Except as set forth in the Company
SEC Reports filed prior to the date hereof and except for such as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect:
(a)(i) No notice, demand, request for information, request for an
investigation, notice of violation, citation, summons, claim, complaint or
order has been received by, is pending, or, to the Company's knowledge,
threatened by any Person against the Company nor has any penalty been
assessed and not paid (or potentially settled), is pending or, to the
Company's knowledge, threatened against the Company relating to or arising
out of Environmental Laws (as defined in Section 3.13(b)(i)).
(ii) To the Company's knowledge, no property now or previously owned,
leased or operated by the Company nor any property to which the Company
has, directly or indirectly,
16
transported or arranged for the transportation of any Hazardous Substance
(as defined in Section 3.13(b)(ii)) is subject to investigation or cleanup
or is listed or proposed for listing on any federal, state, local or
foreign list of sites requiring investigation or cleanup.
(iii) Except in material compliance with Environmental Laws, there have
been no Releases (as defined in Section 3.13(b)(iii)) at any property now
owned, leased or operated by the Company.
(iv) To the Company's knowledge, there are no liabilities or
Environmental Claims (as defined in Section 3.13(b)(iv)) of or relating to
the Company of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, arising under or relating to
Environmental Laws.
(v) The Company has or has applied for all permits or licenses
necessary to operate its facilities in compliance with Environmental Laws
and is currently in material compliance with all applicable Environmental
Laws.
(vi) Except in material compliance with Environmental Laws, the Company
has not generated, used, treated, recycled, stored, disposed or transported
Hazardous Substances.
(vii) To the Company's knowledge, the Company's underground and
aboveground storage tanks (hereinafter "Tanks") located at any property
currently owned, leased or operated by the Company are now operated in
material compliance with all applicable Environmental Laws, and the
Company's Tanks located at any property formerly owned, leased or operated
by the Company at anytime after January 1, 1990, were operated by the
Company in material compliance with all applicable Environmental Laws.
(viii) The Company has no liability or potential liability for any
former manufactured gas plant facility.
(b) For purposes of this Agreement, the following terms shall have the
meanings set forth below:
(i) "Environmental Laws" shall mean all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders, approvals,
authorizations, judgments, decrees, injunctions, and similar items, of all
governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States or other nations, and the states and
political subdivisions thereof, and all applicable principles of common law
pertaining to the regulation and protection of the environment, human health,
safety and damages to natural resources, including without limitation, Releases
and threatened Releases or otherwise relating to the operation, manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Substances. Environmental Laws include, but are not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"); the Federal Insecticide, Fungicide and
Rodenticide Act, as amended ("FIFRA"); the Resource Conservation and Recovery
Act, as amended ("RCRA"); the Toxic Substances Control Act, as amended ("TSCA");
the Clean Air Act, as amended ("CAA"); the Federal Water
17
Pollution Control Act, as amended ("FWPCA"); the Oil Pollution Act of 1990, as
amended ("OPA"); the Occupational Safety and Health Act, as amended ("OSHA");
and the Safe Drinking Water Act, as amended ("SDWA"); and their state and local
counterparts or equivalents, as amended from time to time.
(ii) "Hazardous Substance" shall mean (a) any chemicals, materials,
substances or wastes which are defined as or included in the definition of
"hazardous substances", "hazardous materials", "toxic substances", "extremely
hazardous substances", "toxic pollutants", or words of similar import, under any
applicable Environmental Law; (b) any petroleum, petroleum products (including,
without limitation, crude oil or any fraction thereof), natural gas, natural gas
liquids, liquefied natural gas or synthetic gas useable for fuel (or mixtures of
natural gas and such synthetic gas) or oil and gas exploration or production
waste, polychlorinated biphenyls ("PCBs"), asbestos-containing materials, and
mercury; and (c) any other chemical, material, substance, or waste, exposure to
which is prohibited, limited or regulated by any governmental or regulatory
authority under any applicable Environmental Law.
(iii) "Release" means any emission, spill, seepage, leak, escape,
leaching, discharge, injection, pumping, pouring, emptying, dumping, disposing
or release of Hazardous Substances.
(iv) "Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions or causes of action, suits, obligations,
liabilities, losses, proceedings, decrees, judgments, penalties, fees, demands,
demand letters, orders, directives, claims (including any claims involving toxic
torts or liability in tort, strict, absolute or otherwise), liens, notices of
noncompliance or violation, or legal fees or costs of investigations, monitoring
or proceedings, relating to any Environmental Law or any environmental permit
issued under any such Environmental Law, or arising from the presence, Release
or threatened Release (or alleged presence, Release or threatened Release) into
the environment of any Hazardous Substances (hereinafter "Claims") including,
without limitation, and regardless of the merit of such Claim, any and all
Claims by any governmental or regulatory authority or by any third party for
enforcement, cleanup, remediation, removal, response or other actions or
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief pursuant to any Environmental Law or for any injury (including
death of any person or persons) or threat of injury to health, safety, natural
resources or the environment.
Section 3.14. Employee Benefits and Labor Matters. (a) The Company
Disclosure Schedule contains a list identifying each "employee benefit plan" (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA")), which is subject to any provision of ERISA and is maintained,
administered or contributed to by the Company and covers any employee or former
employee of the Company or under which the Company has any liability (referred
to collectively herein as the "Company Employee Plans"). Copies of such plans
(and, if applicable, related trust agreements and insurance contracts) and all
amendments thereto have been made available to UCU together with the summary
plan description, the annual report (Form 5500 including, if applicable,
Schedule B thereto) prepared in connection with any such plan for the past three
years and the actuarial valuation report prepared in connection with any such
plan for the past three years. The only Company Employee Plans
18
which individually or collectively would constitute an "employee pension benefit
plan" (as defined in Section 3(2) of ERISA) are identified as such in the list
referred to above.
(b) No "accumulated funding deficiency" (as defined in Section
412 of the Code) has been incurred with respect to any Company Employee Plan
subject to Title IV of ERISA, whether or not waived. No "reportable event"
(within the meaning of Section 4043 of ERISA) and no event described in Section
4041, 4042, 4062 or 4063 of ERISA has occurred in connection with any Company
Employee Plans subject to Title IV of ERISA other than any event which would
not, individually or in the aggregate, be reasonably expected to have a Company
Material Adverse Effect. No condition exists and no event has occurred that
could constitute grounds for termination of any Company Employee Plans subject
to Title IV of ERISA other than any such terminations that would not,
individually or in the aggregate, be reasonably expected to have a Company
Material Adverse Effect. Neither Company nor any Company ERISA Affiliate has any
material unsatisfied or potential liability under Title IV of ERISA in
connection with the termination of, or complete or partial withdrawal from, any
plan covered or previously covered by Title IV of ERISA. As of the last day of
the most recent plan year, the value of the assets of each Company Employee Plan
that is subject to Title IV of ERISA equaled or exceeded the present value of
the "benefit liabilities" (as defined in Section 4001 (a)(16) of ERISA) of each
such Company Employee Plan, using the Company Employee Plan assumptions for
funding purposes in effect for such plan year. Nothing done or omitted to be
done and no transaction or holding of any asset under or in connection with any
Company Employee Plan has made or will make the Company or any officer or
director of the Company subject to any liability under Title I of ERISA or
liable for any tax pursuant to Section 4975 of the Code that would, individually
or in the aggregate, be reasonably expected to have a Company Material Adverse
Effect. For purposes of this Section, "Company ERISA Affiliate" means any other
Person which, together with the Company, would be treated as a single employer
under Section 414 of the Code.
(c) Each Company Employee Plan that is intended to be
qualified under Section 401(a) of the Code has received a determination letter
from the IRS that it is so qualified and, to the knowledge of the Company, is so
qualified and has been so qualified during the period since its adoption. To the
knowledge of the Company, each trust created under any such Company Employee
Plan is exempt from tax under Section 501(a) of the Code and, to the knowledge
of the Company, has been so exempt since its creation. The Company has made
available to UCU the most recent determination letter of the IRS relating to
each such Company Employee Plan. The Company and all Company ERISA Affiliates
have performed all obligations required to be performed by them with respect to
each Company Employee Plan, and each Company Employee Plan has been maintained
in substantial compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations, including, but not limited
to, ERISA and the Code, which are applicable to such Company Employee Plan,
excluding any instances of non-performance or non-compliance that would not,
individually or in the aggregate, be reasonably expected to have a Company
Material Adverse Effect.
(d) The Company Disclosure Schedule contains a list of each
employment, severance or other similar contract, arrangement or policy and each
plan or arrangement (whether written or oral) providing for insurance coverage
(including any self-insured
19
arrangements), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits or for deferred
compensation, profit sharing, bonuses, stock options, stock appreciation or
other forms of incentive compensation or post-retirement insurance, compensation
or benefits which is not a Company Employee Plan, is entered into, maintained or
contributed to, as the case may be, by the Company and covers any employee or
former employee of the Company. Such contracts, plans and arrangements as are
described above, copies or descriptions of all of which (and, if applicable any
related trust agreement or insurance contract) have been furnished previously to
UCU, are referred to collectively herein as the "Company Benefit Arrangements".
The Company and all Company ERISA Affiliates have performed all obligations
required to be performed by them with respect to each Company Benefit
Arrangement and each Company Benefit Arrangement has been maintained in
substantial compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations that are applicable to such
Company Benefit Arrangement, excluding any instances of non-performance or
non-compliance that would not, individually or in the aggregate, be reasonably
expected to have a Company Material Adverse Effect.
(e) All contributions and other payments required to be made
by the Company pursuant to any Company Employee Plan or Company Benefit
Arrangement have been timely made or reflected on the Company SEC Reports.
(f) Since January 1, 1999, there has been no amendment to,
material written interpretation of or announcement (whether written or oral) by
the Company or any of its Affiliates of any amendment to, or material change in
employee participation or coverage under, any Company Employee Plan or Company
Benefit Arrangement.
(g) The execution of, and the performance of the transactions
contemplated in, this Agreement will not (either alone or upon the occurrence of
any additional or subsequent events) constitute an event under any Company
Employee Plan or Company Benefit Arrangement that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any current or former employee, director or consultant
of the Company, or result in the triggering or imposition of any restrictions or
limitations on the right of UCU or the Company to amend or terminate any Company
Employee Plans and receive the full amount of any excess assets remaining or
resulting from such amendment or termination, subject to applicable taxes. There
is no contract, agreement, plan or arrangement covering any employee or former
employee of the Company that, individually or in the aggregate, could give rise
to the payment of any amount that would not be deductible pursuant to the terms
of Section 280G of the Code. The Company does not maintain, contribute to, or
have any liability or obligation with respect to any plan, program or
arrangement providing post retirement or post employment health or welfare
benefits, other than as required by Part 6 of Title I of ERISA or Section 4980B
of the Code. With respect to any Company Employee Plan that is an "employee
welfare benefit plan" (as defined in Section 3(1) of ERISA), including any such
plan covering former employees of the Company, the Company has reserved the
right to amend or terminate the plan at any time without liability with respect
to claims incurred after the date of such amendment or termination, and to the
knowledge of Company, any such plan may be amended
20
or terminated at any time without liability with respect to claims incurred
after the date of such amendment or termination.
(h) There are no written actions, lawsuits or claims by or on
behalf of any of the Company Employee Plans or Company Benefit Arrangements, by
any employee or beneficiary covered under any such Company Employee Plan or
Company Benefit Arrangement with respect to such Company Employee Plan or
Company Benefit Arrangement, or otherwise involving any Company Employee Plan or
Company Benefit Arrangement (other than routine claims for benefits and routine
expenses) pending or threatened which could subject the Company, any officer or
director, or any employee of the Company to any liability that, individually or
in the aggregate, would reasonably be expected to have a Company Material
Adverse Effect.
(i) No work stoppage, labor strike or slowdown against the
Company is pending or, to the knowledge of the Company, threatened and the
Company is not involved in or, to the knowledge of the Company, threatened with
any labor dispute or grievance which, individually or in the aggregate, has had
or would be reasonably expected to have a Company Material Adverse Effect. To
the knowledge of the Company there is no organizing effort or representation
question at issue with respect to any employee of the Company. No collective
bargaining agreement to which the Company is or may be a party is currently
under negotiation or renegotiation and no existing collective bargaining
agreement is due for expiration, renewal or renegotiation within the one year
period after the date hereof; provided, that the Collective Bargaining
Agreements dated November 1, 1996 with Local Union No. 1474 of the International
Brotherhood of Electrical Workers ("IBEW") is scheduled to expire on October 31,
1999, and UCU agrees between the date of this Agreement and the Effective Time
the Company may, at its sole option, negotiate and execute a new collective
bargaining agreement with IBEW on terms and conditions which shall be determined
by the Company in its sole discretion.
Section 3.15. Transactions with Affiliates. Since the date of the
Company's last proxy statement prior to the date of this Agreement, there have
been no transactions, agreements, arrangements or understandings between the
Company, on the one hand, and the Company's Affiliates or other Persons, on the
other hand, that would be required to be disclosed under Item 404 of Regulation
S-K under the Securities Act. For purposes of this Agreement, "Affiliate", when
used with respect to any Person, means any other Person directly or indirectly
controlling, controlled by, or under common control with such Person. As used in
the definition of "Affiliate," the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
Section 3.16. Information Supplied. The information to be supplied by
the Company for inclusion in the registration statement on Form S-4 or any
amendment or supplement thereto pursuant to which shares of UCU Common Stock
issuable in the Merger will be registered with the SEC (the "Registration
Statement") shall not at the time the Registration Statement is declared
effective by the SEC contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in
21
light of the circumstances under which they were made, not misleading. The
information to be supplied by the Company for inclusion in the proxy
statement/prospectus or any amendment or supplement thereto (the "Proxy
Statement") to be sent to the stockholders of the Company in connection with
their meeting to consider this Agreement and the Merger (the "Company
Stockholders' Meeting") shall not, on the date the Proxy Statement is first
mailed to the stockholders of the Company or at the time of the Company
Stockholders' Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
Section 3.17. Opinion of Financial Advisor. The financial advisor of
the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., has delivered to the Company a written
opinion dated the date of this Agreement to the effect that, as of the date
hereof, the Merger Consideration to be received in the Merger is fair from a
financial point of view to the common stockholders of the Company. The Company
has delivered to UCU a copy of such opinion.
Section 3.18. Finders' Fees. Other than ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., no
investment banker, broker, finder, other intermediary or other Person is
entitled to any investment banking, broker's, finder's or similar fee or
commission from the Company upon consummation of the transactions contemplated
by this Agreement.
Section 3.19. Takeover Statutes. The Company has opted out of the
provisions of Sections 17-1286 through 17-1298 of the KGCC and such provisions
shall not apply to control share acquisitions of the Company's capital stock. To
the best of the Company's knowledge, no other "fair price", "moratorium",
"control share acquisition" or other similar anti-takeover statute or regulation
enacted under state or federal laws in the United States (each, a "Takeover
Statute") applicable to the Company is applicable to the Merger or the other
transactions contemplated hereby.
Section 3.20. Rights Agreement. The Company shall take all necessary
action with respect to the Rights Agreement to (i) render the Rights Agreement
inapplicable to the Merger and the other transactions contemplated by this
Agreement and (ii) provide that UCU shall not be deemed an Acquiring Person (as
defined in the Rights Agreement), the Distribution Date (as defined in the
Rights Agreement) shall not be deemed to occur and the rights issuable pursuant
to the Rights Agreement (the "Rights") will not separate from the shares of
Company Common Stock, as a result of entering into this Agreement or
consummating the Merger and the other transactions contemplated hereby, and,
thereafter, unless this Agreement shall be terminated in accordance with Section
8.01, the Company shall take no action to negate or nullify the foregoing.
Section 3.21. Year 2000. The Company has initiated a review and
assessment of the Year 2000 Problem (as defined below), has developed a plan for
addressing the Year 2000 Problem on a timely basis and has to date implemented
such plan, except where the Company's failure to do so is not reasonably likely
to have a Company Material Adverse Effect. Except as would not reasonably be
expected to have a Company Material Adverse Effect, to the knowledge of the
Company none of the assets or equipment owned or utilized by the Company will
fail to
22
perform because of, or due in any way to, a Year 2000 Problem. To the knowledge
of the Company, no vendor, supplier or customer of the Company will experience a
Year 2000 Problem that, individually or in the aggregate, could reasonably be
expected to have a Company Material Adverse Effect. The term "Year 2000 Problem"
means the material inability of any hardware, software or process to recognize
and correctly calculate dates on and after January 1, 2000, or the failure of
computer systems, products or services to perform any of their intended
functions in a proper manner in connection with data containing any date on or
after January 1, 2000.
Section 3.22. Insurance. The Company is, and has been continuously
since January 1, 1995, self-insured or insured with financially responsible
insurers in such amounts and against such risks and losses as are customary in
all material respects for companies conducting the business as conducted by the
Company during such time period. The Company has not received any notice of
cancellation or termination with respect to any insurance policy of the Company.
All material insurance policies of the Company are valid and enforceable
policies.
Section 3.23 No Dissenters' Rights. The holders of Company Common Stock
are not entitled to appraisal rights under the KGCC or under the Articles of
Incorporation of the Company unless a Proration Event occurs.
Section 3.24 Ownership of UCU Common Stock. The Company does not
"beneficially own" (as such term is defined in Rule 13d-3 under the Exchange
Act) any shares of UCU Common Stock.
Section 3.25 Definition of "Knowledge". Wherever in this Agreement the
phrases "to the knokwledge" of the Company, "to the Company's knowledge", or
similar phrases appear, "knowledge" shall mean the actual knowledge of the
senior management of the Company.
ARTICLE IV
Representations and Warranties of UCU
UCU represents and warrants to the Company that the statements
contained in this Article IV are true and correct, except as set forth in the
disclosure schedule delivered by UCU to the Company prior to the execution of
this Agreement (the "UCU Disclosure Schedule") or as otherwise expressly
permitted by this Agreement. For purposes of this Agreement, "UCU Material
Adverse Effect" means a material adverse effect (i) on the business, properties,
assets, liabilities (contingent or otherwise), financial condition, results of
operations or prospects of UCU and its Subsidiaries, taken as a whole, or (ii)
on the ability of UCU to perform its obligations under or to consummate the
transactions contemplated by this Agreement.
Section 4.01. Organization and Power; Regulation as a Public Utility.
(a) Each of UCU and its Subsidiaries is a corporation, partnership or other
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization, and has the requisite
corporate or other power and authority and governmental approvals to own, lease
and operate its properties and to carry on its business as now being conducted,
except where the failure to be in good standing or have such power, authority or
approvals would not, individually or in the aggregate, be reasonably expected to
have a UCU
23
Material Adverse Effect. Each of UCU and its Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing would not,
individually or in the aggregate, be reasonably expected to have a UCU Material
Adverse Effect. True, accurate and complete copies of the certificate of
incorporation and bylaws of UCU, as in effect on the date hereof, have been
delivered to the Company.
(b) Neither UCU nor any of its Subsidiaries is a "holding
company," a "subsidiary company" or an "affiliate" of any public utility holding
company within the meaning of Section 2(a)(7), 2(a)(8) or 2(a)(11) of PUHCA,
respectively. UCU and/or its Subsidiaries are regulated as a public utility in
the States of Colorado, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska,
South Dakota and West Virginia (in each of which only UCU is so regulated) and
in no other state, the province of British Columbia, Canada, and in no other
province of Canada, and the countries of New Zealand and Australia and in no
other country.
Section 4.02. Corporate Authorization. The Board of Directors of UCU
has (a) determined that the Merger is fair and in the best interests of UCU and
its stockholders and (b) approved and adopted this Agreement. The execution and
delivery by UCU of this Agreement, and the consummation by UCU of the
transactions contemplated hereby, are within the corporate powers of UCU and
have been duly authorized by all necessary corporate action. No approval by UCU
stockholders is necessary to approve and adopt this Agreement and the
transactions contemplated by this Agreement. This Agreement has been duly
executed and delivered by UCU and, assuming the due authorization, execution and
delivery of this Agreement by the Company, constitutes a valid and binding
agreement of UCU, enforceable against UCU in accordance with its terms (subject
to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally from time
to time in effect and to general principles of equity, regardless of whether in
a proceeding at equity or at law). The shares of UCU Common Stock issued
pursuant to the Merger, when issued in accordance with the terms hereof, will be
duly authorized, validly issued, fully paid and non-assessable and free of
preemptive rights.
Section 4.03. Governmental Authorization. The execution and delivery by
UCU of this Agreement, and the consummation by UCU of the transactions
contemplated hereby, require no action by or in respect of, or filing with, any
Governmental Authority other than (i) the filing of a certificate of merger with
respect to the Merger with the Kansas Secretary of State, a certificate of
merger with respect to the Merger with the Delaware Secretary of State and
appropriate documents with the relevant authorities of other states in which UCU
is qualified to do business; (ii) compliance with any applicable requirements of
the FERC and requirements of the utility regulatory commissions of the states of
Missouri, Kansas, Colorado, Iowa, Michigan, Minnesota, Nebraska, South Dakota
and West Virginia (the "UCU Required Statutory Approvals"); (iii) compliance
with any applicable requirements of the HSR Act; (iv) compliance with any
applicable requirements of the Securities Act; (v) compliance with any
applicable requirements of the Exchange Act; (vi) compliance with any other
applicable securities laws; (vii) compliance with any environmental, health or
safety law or regulation requiring any notification, disclosure or approval in
connection with the Merger; (viii) actions or filings which,
24
if not taken or made, would not, individually or in the aggregate, be reasonably
expected to have a UCU Material Adverse Effect; and (ix) filings and notices not
required to be made or given until after the Effective Time.
Section 4.04. Non-Contravention. The execution and delivery of this
Agreement by UCU does not, and the consummation of the transactions contemplated
hereby will not, subject to the consents, approvals, orders, authorizations,
filings and registrations contemplated by Sections 4.02 and 4.03, (i) conflict
with, or result in any violation or breach of any provision of the certificate
of incorporation or bylaws of UCU, (ii) result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a default (or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of any material benefit) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, contract or other
agreement, instrument or obligation to which UCU or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound,
or (iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to UCU or any of its Subsidiaries or any of their
respective properties or assets, except in the case of clauses (ii) and (iii)
for any such violations, breaches, defaults, terminations, cancellations or
accelerations which would not, individually or in the aggregate, be reasonably
expected to have a UCU Material Adverse Effect.
Section 4.05. Capitalization. (a) As of the date hereof, the authorized
capital stock of UCU consists of 200,000,000 shares of UCU Common Stock,
20,000,000 shares of Class A Common Stock, par value $1.00 per share ("UCU Class
A Stock") and 10,000,000 shares of Preference Stock, without par value ("UCU
Preference Stock"). As of March 31, 1999, (i) 92,015,496 shares of UCU Common
Stock were issued and outstanding, (ii) 1,590,489 shares of UCU Common Stock
were held in the treasury of UCU or by Subsidiaries of UCU, (iii) 9,783,779
shares of UCU Common Stock were reserved for issuance pursuant to the UCU
employee plans and the UCU benefit arrangements, (iv) no shares of UCU Class A
Stock were issued and outstanding and (v) no shares of UCU Preference Stock were
issued and outstanding. Since such date, UCU has not issued any UCU Class A
Stock. All outstanding shares of UCU Common Stock are, and all shares of UCU
Common Stock subject to issuance as specified above, upon issuance on the terms
and conditions specified in the instruments pursuant to which they are issuable,
shall be, duly authorized, validly issued, fully paid and nonassessable, and not
subject to any preemptive rights. There are no obligations, contingent or
otherwise, of UCU or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of UCU Common Stock.
(b) Except as set forth in Section 4.05(a), there are no
equity securities of any class of UCU, or any security exchangeable into or
exercisable for such equity securities, issued, reserved for issuance or
outstanding. Except as set forth in Section 4.05(a), there are no options,
warrants, securities, calls, rights, commitments or agreements of any character
to which UCU or any of its Subsidiaries is a party or by which any of them are
bound obligating UCU or any of its Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock of UCU
or obligating UCU or any of its Subsidiaries to grant, extend, accelerate the
vesting of or enter into any such option, warrant, equity security, call, right,
commitment or agreement. There are no voting trusts or other agreements or
understandings with respect to the shares of capital stock of UCU to which UCU
is a party.
25
Section 4.06. Reports and Financial Statements. (a) UCU has filed all
required reports, schedules, forms, statements and other documents with the SEC
since December 31, 1993 (the "UCU SEC Reports").
(b) As of its filing date, each UCU SEC Report filed pursuant
to the Exchange Act did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except to the extent that such statements have been
modified or superseded by a later filed UCU SEC Report.
(c) Each UCU SEC Report that is a registration statement, as
amended or supplemented, if applicable, filed pursuant to the Securities Act as
of the date such registration statement or amendment became effective did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except to the extent that such statements have been modified or superseded by a
later filed UCU SEC Report.
(d) The consolidated financial statements (including, in each
case, any related notes) contained in the UCU SEC Reports complied as to form in
all material respects with the applicable published rules and regulations of the
SEC with respect thereto, were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited statements, as permitted for presentation in
Quarterly Reports on Form 10-Q), and fairly presented in all material respects
(subject in the case of unaudited statements to normal, recurring audit
adjustments) the consolidated financial position of UCU and its Subsidiaries as
at the respective dates and the consolidated results of its operations and cash
flows for the respective periods indicated. The audited balance sheet of UCU as
of December 31, 1998 is referred to herein as the "UCU Balance Sheet".
(e) Since December 31, 1993, UCU and each of its Subsidiaries
has made all required filings with the FERC and any appropriate public utilities
commission, except for such filings the failure to make which would not,
individually or in the aggregate, be reasonably expected to have a UCU Material
Adverse Effect.
Section 4.07. No Undisclosed Liabilities. UCU and its Subsidiaries do
not have any liabilities or obligations of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, other than:
(a) liabilities or obligations which would not, individually or in the
aggregate, be reasonably expected to have a UCU Material Adverse Effect;
(b) liabilities or obligations disclosed or provided for in the UCU
Balance Sheet or in the notes thereto or in the UCU SEC Reports filed prior
to the date hereof;
26
(c) liabilities or obligations under this Agreement or incurred in
connection with the transactions contemplated by this Agreement; or
(d) liabilities or obligations incurred since December 31, 1998 in the
ordinary course of business consistent with past practices.
Section 4.08. Litigation. Except as disclosed in the UCU SEC Reports
filed prior to the date hereof:
(a) There is no action, suit, investigation or proceeding pending
against, or to the knowledge of UCU, threatened against or affecting, UCU or any
of its Subsidiaries or any of their respective properties before any
Governmental Authority or arbitrator which, individually or in the aggregate,
would be reasonably expected to have a UCU Material Adverse Effect.
(b) There is no judgment, decree, injunction, or order of any
Governmental Authority or arbitrator applicable to UCU or any of its
Subsidiaries which, individually or in the aggregate, would be reasonably
expected to have a UCU Material Adverse Effect.
Section 4.09. Absence of Certain Changes or Events. Since the date of
the UCU Balance Sheet, except as permitted by or as disclosed in this Agreement
or the UCU SEC Reports filed prior to the date hereof, UCU and its Subsidiaries
have conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, (a) there has not been any
UCU Material Adverse Effect or any event or development (including in connection
with the Merger) that would, individually or in the aggregate, reasonably be
expected to have a UCU Material Adverse Effect, (b) there has not been any event
that would, individually or in the aggregate, reasonably be expected to prevent
or materially delay the performance of this Agreement by UCU, or (c) UCU has not
consummated or agreed to consummate any merger or any material acquisition or
joint venture.
Section 4.10. Compliance with Laws; No Default. Except as disclosed in
the UCU SEC Reports filed prior
to the date hereof:
(a) (i) Neither UCU nor any of its Subsidiaries is in violation of or
has violated or failed to comply with any statute, law, ordinance, regulation,
rule, judgment, decree, order, writ, injunction, permit or license of any
Governmental Authority or arbitrator applicable to its business or operations,
except for violations and failures to comply that would not, individually or in
the aggregate, be reasonably expected to result in a UCU Material Adverse Effect
and (ii) to UCU's knowledge, UCU and its Subsidiaries have all permits,
licenses, franchises and other governmental authorizations, consents, approvals
and exemptions necessary to conduct their businesses as presently conducted and
which are material to the operation of such businesses.
(b) Each material agreement, contract or commitment to which UCU is a
party or by which UCU is bound or to which its properties are subject ("UCU
Contracts") is a valid, binding and enforceable obligation of UCU and in full
force and effect (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws affecting creditors'
rights generally from time to time in effect and to general principles of
27
equity, regardless of whether in a proceeding at equity or at law), except where
the failure to be valid, binding and enforceable and in full force and effect
would not, individually or in the aggregate, be reasonably expected to have a
UCU Material Adverse Effect. UCU is not in default or violation of any term,
condition or provisions of (i) its certificate of incorporation or bylaws or
(ii) any UCU Contract, except in the case of clause (ii) for any defaults or
violations that would not, individually or in the aggregate, be reasonably
expected to have a UCU Material Adverse Effect.
Section 4.11. Taxes. (a) UCU has timely filed (or has had timely filed
on its behalf) or will file or cause to be timely filed, all material Tax
Returns required by applicable law to be filed by it prior to or as of the
Effective Time, and all such material Tax Returns are, or will be at the time of
filing, complete in all material respects.
(b) UCU has paid (or has had paid on its behalf) or, where
payment is not yet due, has established (or has had established on its behalf
and for its sole benefit and recourse) or will establish or cause to be
established in accordance with generally accepted accounting principles on or
before the Effective Time an adequate accrual for the payment of, all material
Taxes due with respect to any period ending prior to or as of the Effective
Time.
(c) There are no (i) outstanding consents extending the
statute of limitations for the assessment of any Taxes of UCU, or (ii)
proposals, assertions or assessments against UCU for deficiencies for any Taxes
that have not been satisfied or resolved.
(d) There are no material Tax claims pending against UCU and
UCU does not know of any threatened claim for material Tax deficiencies or any
basis for such claims, no material issues have been raised in writing in any
examination by any taxing authority with respect to UCU which, by application of
similar principles, reasonably could be expected to result in a material
proposed deficiency for any other period not so examined, and there is not now
in force any waiver or agreement by UCU for the extension of time for the
assessment of any material Tax, nor has any such waiver or agreement been
requested in writing by any taxing authority. The Company has no liability with
respect to any material United States federal, state, local, foreign or other
Taxes of any corporation or entity other than UCU and its Subsidiaries.
(e) Neither UCU nor any of its other Affiliates, has taken any
action, agreed to take any action, or failed to take any action, or has
knowledge of any fact or circumstance that (without regard to any action taken
or agreed to be taken by the Company or any of its Affiliates) could reasonably
be expected to cause the Merger to fail to qualify as a "reorganization" within
the meaning of Section 368(a) of the Code.
(f) UCU has not made during the last 3 years, nor will make
prior to the Effective Time, an election to have a stock purchase treated as an
asset purchase under Section 338 of the Code.
28
(g) UCU has not filed with the IRS, and will not file with the
IRS prior to the Effective Time, a statement consenting to the recognition of
gain on the disposition of its "subsection (f) assets" under Section 341(f) of
the Code.
(h) The Company has not made in the last 7 years, and will not
make prior to the Effective Time, any changes in accounting method to which
Section 481(a) of the Code may apply.
Section 4.12. Environmental Matters. Except as set forth in UCU's SEC
Reports filed prior to the date hereof and except for such as would not,
individually, or in the aggregate, reasonably be expected to have a UCU Material
Adverse Effect:
(a) UCU and, to UCU's knowledge, each of its Subsidiaries is in
material compliance with all applicable Environmental Laws (as defined in
Section 3.13(b)(i)).
(b) To UCU's knowledge, there are no liabilities or Environmental
Claims (as defined in Section 3.13(b)(iv)) of or relating to UCU or its
Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, arising under or relating to
Environmental Laws.
Section 4.13. Employee Benefits. (a) The UCU Disclosure Schedule
contains a list identifying each "employee benefit plan" (as defined in Section
3(3) of ERISA) which is subject to any provision of ERISA and is maintained,
administered or contributed to by UCU and covers any employee or former employee
of UCU or under which UCU has any liability (referred to collectively herein as
the "UCU Employee Plans"). Copies of such plans and all amendments thereto have
been made available to the Company. UCU and all UCU ERISA Affiliates have
performed all obligations required to be performed by it with respect to each
UCU Employee Plan, and each UCU Employee Plan has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including, but not limited to, ERISA
and the Code, which are applicable to such UCU Employee Plan, excluding any
instances of non-performance or non-compliance that would not, individually or
in the aggregate, be reasonably expected to have a UCU Material Adverse Effect.
For purposes of this Section, the term "UCU ERISA Affiliate" means any other
Person which, together with the Company, would be treated as a single employer
under Section 414 of the Code.
(b) As of the last day of the most recent plan year, the value
of the assets of each UCU Employee Plan that is subject to Title IV of ERISA
equaled or exceeded the present value of the "benefit liabilities" (as defined
in Section 4001(a)(16) of ERISA) of each such UCU Employee Plan, using the UCU
Employee Plan assumptions for funding purposes in effect for such plan year.
(c) The UCU Disclosure Schedule contains a list of each
employment, severance or other similar contract, arrangement or policy and each
material plan or arrangement (whether written or oral) providing for insurance
coverage (including any self-insured arrangements), workers' compensation,
disability benefits, supplemental unemployment benefits, vacation
29
benefits, retirement benefits or for deferred compensation, profit sharing,
bonuses, stock options, stock appreciation or other forms of incentive
compensation or post-retirement insurance, compensation or benefits which is not
a UCU Employee Plan, is entered into, maintained or contributed to, as the case
may be, by UCU and covers any employee or former employee of UCU (referred to
collectively herein as the "UCU Benefit Arrangements"). Copies of such plans and
all amendments thereto have been made available to the Company. UCU and all UCU
ERISA Affiliates have performed all obligations required to be performed by them
with respect to each UCU Benefit Arrangement, and each UCU Benefit Arrangement
has been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations,
including, but not limited to, ERISA and the Code that are applicable to such
UCU Benefit Arrangement, excluding any instances of non-performance or
non-compliance that would not, individually or in the aggregate, be reasonably
expected to have a UCU Material Adverse Effect.
Section 4.14. Dividends. It is the present intention of UCU's Board of
Directors to maintain the dividends on UCU Common Stock at not less than its
current annual dividend rate.
Section 4.15. Transactions with Affiliates. Since the date of UCU's
last proxy statement prior to the date of this Agreement, there have been no
transactions, agreements, arrangements or understandings between UCU or its
Subsidiaries, on the one hand, and UCU's Affiliates (other than wholly-owned
Subsidiaries of UCU) or other Persons, on the other hand, that would be required
to be disclosed under Item 404 of Regulation S-K under the Securities Act.
Section 4.16. Information Supplied. Except for information to be
supplied by the Company as to which no representation is made, the Registration
Statement will not, at the time it is declared effective or upon the filing of
any post-effective amendment related thereto, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The information to be
supplied by UCU for inclusion in the Proxy Statement to be sent to the
stockholders of the Company in connection with the Company Stockholders' Meeting
will not, on the date the Proxy Statement is first mailed to the stockholders of
the Company or at the time of the Company Stockholders' Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Section 4.17. Finders' Fees. No investment banker, broker, finder,
other intermediary or other Person is entitled to any investment banking,
broker's, finder's or similar fee or commission from UCU or any of its
Subsidiaries upon consummation of the transactions contemplated by this
Agreement.
Section 4.18. Takeover Statutes. The provisions of Section 203 of the
DGCL do not apply to the Merger or the other transactions contemplated hereby.
To the best of UCU's knowledge, no other Takeover Statute applicable to UCU or
any of its Subsidiaries is applicable to the Merger or the other transactions
contemplated hereby.
30
Section 4.l9. Year 2000. UCU has initiated a review and assessment of
the Year 2000 Problem with respect to itself and its Subsidiaries, has developed
a plan for addressing the Year 2000 Problem on a timely basis and has to date
implemented such plan, except where UCU's failure to do so is not reasonably
likely to have a UCU Material Adverse Effect. Except as would not reasonably be
expected to have a UCU Material Adverse Effect, to the knowledge of UCU, none of
the assets or equipment owned or utilized by UCU or any of its Subsidiaries will
fail to perform because of, or due in any way to, a Year 2000 Problem. To the
knowledge of UCU, no vendor, supplier or customer of UCU or any of its
Subsidiaries will experience a Year 2000 Problem that, individually or in the
aggregate, could reasonably be expected to have a UCU Material Adverse Effect.
Section 4.20. Ownership of Company Common Stock. UCU does not
"beneficially own" (as such term is defined in Rule 13d-3 under the Exchange
Act) any shares of Company Common Stock.
Section 4.21. Definition of "Knowledge". Wherever in this Agreement the
phrases "to the knowledge" of UCU, "to UCU's knowledge", or similar phrases
appear, "knowledge" shall mean the actual knowledge of the senior management of
UCU.
ARTICLE V
Conduct of Business
Section 5.01. Conduct of the Company. The Company agrees that from the
date hereof until the Effective Time, (i) except as set forth in the Company
Disclosure Schedule or as otherwise expressly permitted by this Agreement, (ii)
except with the prior written consent of UCU (which consent shall not be
unreasonably withheld), or (iii) except as described in the Company's 1998 Form
10-K, the Company and its Subsidiaries shall conduct their business in the
ordinary course consistent with past practice and shall use their reasonable
best efforts to preserve intact their business organizations and material
relationships with third parties and to keep available the services of their
present officers and employees (subject to ordinary and customary retirements).
Without limiting the generality of the foregoing, from the date hereof until the
Effective Time, except as set forth in the Company Disclosure Schedule, the
Company's 1998 Form 10-K or as expressly permitted by this Agreement, without
the prior written consent of UCU (which consent shall not be unreasonably
withheld), the Company will not:
(a) adopt or propose any change in its articles of
incorporation or bylaws without 30 days prior written notice to UCU, or adopt or
propose any such change that would be materially adverse in any way to UCU or
its stockholders;
(b) amend any term of any outstanding equity security of
the Company;
(c) merge or consolidate with any other Person;
31
(d) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license, guarantee or encumbrance of, (i)
any shares of capital stock of the Company, or securities convertible or
exchangeable or exercisable for any shares of such capital stock, or any
options, warrants or other rights of any kind to acquire any shares of such
capital stock or such convertible or exchangeable securities, or any other
ownership interest of the Company or (ii) except in the ordinary course of
business and in a manner consistent with past practice, any property or assets
(including, without limitation, by merger, consolidation, spin-off or other
dispositions of stock or assets) of the Company, except in the case of either
clause (i) or (ii) (A) the issuance of Company Common Stock to current or former
officers, directors and employees of the Company pursuant to the Company Stock
Plans upon the exercise by such officers, directors and employees of Company
Stock Options, set forth and identified in Section 3.05 of the Company
Disclosure Schedule or awarded in accordance with clause (B) and the vesting of
Company Restricted Stock Awards set forth and identified in Section 3.05 of the
Company Disclosure Schedule or awarded in accordance with clause (B), (B) the
award of stock options or Company Restricted Stock Awards to employees and
directors, in each case under existing Company Stock Plans in the ordinary
course of business consistent with past practice or in connection with
promotions or new employee hires in the ordinary course of business and
consistent with past practice, provided that such awards shall not exceed, in
the aggregate, the amounts set forth on Section 5.01(d) of the Company
Disclosure Statement, (C) the issuance of Company Common Stock pursuant to the
DRIP in the ordinary course of business and consistent with past practice, (D)
the issuance of Company Common Stock pursuant to the terms of the Company's
Stock Unit Plan for Directors, and (E) pursuant to contracts or agreements in
force at the date of this Agreement, but in the case of (E) only to the extent
set forth in Section 5.01(d) of the Company Disclosure Statement.
(e) create or incur any material Lien on any material asset
other than in the ordinary course of business and consistent with past practice;
(f) make any material loan, advance or capital contributions
to or investments in any Person;
(g) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock except for (i) dividends paid on each series of Company
Preferred Stock at the rates provided for by their terms, (ii) regular quarterly
cash dividends of not more than $.32 per share on the Company Common Stock, and
(iii) a special dividend payment to be paid, if necessary, in accordance with
the agreements in Section 6.20, or enter into any agreement with respect to the
voting of its capital stock;
(h) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock, except
for (i) purchases made in connection with the Company's DRIP, and (ii)
redemption of Company Preferred Stock pursuant to the provisions of Section
2.03(b);
32
(i) (i) acquire (including, without limitation, by merger,
consolidation, spin-off or acquisition of stock or material assets) any interest
in any Person or any division thereof or any material assets, other than
acquisitions of assets in the ordinary course of the Company's regulated utility
business and consistent with past practice, (ii) incur any material indebtedness
for borrowed money or guarantee any indebtedness of another Person, or issue or
sell any debt securities or warrants or other rights to acquire any debt
security of the Company, except for indebtedness for borrowed money incurred in
the ordinary course of the Company's regulated utility business and consistent
with past practice or to refinance obligations of the Company at a lower cost of
money, to refinance indebtedness in accordance with its terms or to redeem the
Company Preferred Stock or in connection with transactions otherwise permitted
under this Section 5.01, (iii) terminate, cancel, waive any material rights
under or request any material change in, or agree to any material change in, any
material Company Contract or, except in connection with transactions permitted
under this Section 5.01(i), enter into any contract or agreement material to the
business, results of operations or financial condition of the Company, taken as
a whole, in either case other than in the ordinary course of the Company's
regulated utility business and consistent with past practice, (iv) make or
authorize capital expenditures during any fiscal year in excess of 110% of the
aggregate amount budgeted by the Company for such fiscal year (together with any
unused portion of the capital expenditure budget from the prior year if such
unused portion is carried over) as disclosed to UCU by the Company for capital
expenditures, except for unplanned capital expenditures due to emergency
conditions, unanticipated catastrophic events, extreme weather, and unscheduled
unit outages or (v) enter into or amend any contract, agreement, commitment or
arrangement that, if fully performed, would not be permitted under this Section
5.01(i);
(j) make any material change with respect to accounting
policies or procedures, other than actions in the ordinary course of business
and consistent with past practice or except as allowed by changes in generally
accepted accounting principles;
(k) make any material Tax election or take any position on any
Tax Return filed on or after the date of this Agreement or adopt any method
therefor that is inconsistent with elections made, positions taken or methods
used in preparing or filing similar Tax Returns in prior periods except as
required by applicable law;
(l) except as may be required by the contractual commitments
or corporate policies with respect to severance or termination pay in existence
on the date hereof and described in Section 5.01(l) of the Company Disclosure
Schedule, (i) increase the compensation payable or to become payable to its
officers or employees (except for increases in the ordinary course of business
and consistent with past practice in salaries or wages of officers or employees
of the Company), (ii) establish, adopt, enter into or amend any collective
bargaining, bonus, profit sharing, thrift, compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee, except as
contemplated by this Agreement (including without limitation, Section 3.14
hereof) or to the extent required by applicable law or the terms of a collective
bargaining agreement, (iii) increase the benefits payable under any existing
severance or termination pay policies or employment or other agreements or (iv)
take any affirmative action to accelerate the vesting of any stock based
compensation;
33
(m) take any action that, individually or in the aggregate,
would reasonably be expected to result in a material breach of this Agreement or
knowingly make any representation and warranty of the Company hereunder untrue
in any material respect at, or as of any time prior to, the Effective Time;
(n) other than the proposed sale of the assets associated with
the water distribution business of the Company, enter into a new line of
business or make any material change in the line of business in which it engages
as of the date of this Agreement; or
(o) agree or commit to do any of the foregoing.
Section 5.02. Conduct of UCU. UCU agrees that from the date hereof
until the Effective Time, UCU will conduct its business consistent with past
practice, and, without limiting the generality of the foregoing, from the date
hereof to the Effective Time, except as set forth in Section 5.02 of the UCU
Disclosure Schedule or as otherwise expressly permitted by this Agreement, or as
set forth in the UCU SEC Reports filed prior to the date hereof, without the
prior written consent of the Company (which consent shall not be unreasonably
withheld), UCU will not:
(a) adopt or propose any change in its certificate of incorporation
or bylaws that would be materially adverse to the Company or its
stockholders;
(b) issue any UCU Class A Stock;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock (other than a dividend on
UCU Common Stock payable in UCU Common Stock), property or
otherwise, with respect to any of its capital stock (except for
regular quarterly cash dividends on the UCU Common Stock) or
enter into any agreement with respect to the voting of its
capital stock;
(d) reclassify, directly or indirectly, any of its UCU Common Stock
or UCU Class A Stock;
(e) make any material change with respect to accounting policies or
procedures, other than actions in the ordinary course of business
and consistent with past practice or except as allowed by changes
in generally accepted accounting principles;
(f) take any action that, individually or in the aggregate, would
reasonably be expected to result in a material breach of this
Agreement or knowingly make any representation and warranty of
UCU hereunder untrue in any material respect at, or as of any
time prior to, the Effective Time;
(g) take any action, or agree to take any action, that would result
in the holders of Company Common Stock receiving anything other
than (i) the Merger Consideration in exchange for their Company
Common Stock, or (ii)
34
the securities or other consideration that UCU Common Stock may
be converted into prior to the Effective Time as though the
Company Common Stock had been converted into UCU Common Stock
prior to such action or agreement to act;
(h) take any action, or agree to take any action that would,
individually or in the aggregate, reasonably be expected to have
a material adverse effect on the interests of holders of Company
Common Stock unless (i) UCU shall have received a written
fairness opinion of an investment banker of national reputation
to the effect that such action is fair to the holders of UCU
Common Stock and (ii) such action would not have an adverse
effect on holders of Company Common Stock that would be
disproportionately more adverse than the effect on holders of UCU
Common Stock;
(i) consummate repurchases of UCU Common Stock other than repurchases
of UCU Common Stock made in the ordinary course of UCU's stock
repurchase policy consistent with past practice, except that UCU
may consummate other repurchases of UCU Common Stock so long as
such repurchases combined with repurchases made in accordance
with UCU's stock repurchase policy do not reduce the number of
outstanding shares of UCU Common Stock below the number of shares
outstanding on the date hereof; or
(j) agree or commit to do any of the foregoing.
Section 5.03. Reorganization. During the period from the date of this
Agreement through the Effective Time, unless the other parties hereto shall
otherwise agree in writing, none of UCU (including its Subsidiaries) or the
Company shall knowingly take or fail to take any action which action or failure
would result in the failure of the Merger to qualify as a reorganization within
the meaning of Section 368(a) of the Code or would cause any of the
representations and warranties set forth in the Company Tax Certificate (as
defined in Section 7.02(c)) or the UCU Tax Certificate (as defined in Section
7.02(c)) to be untrue or incorrect in any material respect.
Section 5.04. Rate Matters. Other than currently pending rate filings,
each of UCU and the Company shall discuss with the other any changes planned in
the states of Missouri and Kansas in its regulated electricity rates or charges,
standards of service or accounting from those in effect in those states on the
date hereof and consult with the other prior to making any filing (or any
amendment thereto), or effecting any agreement, commitment, arrangement or
consent, whether written or oral, formal or informal, with respect thereto, and
neither UCU nor the Company shall make any filing to change its rates on file
with any public utility commission regulatory authority in such states or the
FERC that would have a material adverse effect on the benefits associated with
the Merger.
35
ARTICLE VI
Additional Agreements
Section 6.01. No Solicitation (a) The Company agrees that, from and
after the date hereof, it shall not, nor shall it authorize or permit any
officer, director or employee or any investment banker, attorney, accountant,
agent or other advisor or representative of the Company (collectively, the
"Representatives" of the Company) to, (i) solicit, initiate or knowingly
encourage the submission of any Takeover Proposal (as defined below), (ii) enter
into any agreement with respect to a Takeover Proposal or (iii) participate in
any discussions or negotiations regarding any proposal that constitutes, or may
reasonably be expected to lead to, any Takeover Proposal; provided, however,
that if at any time prior to receipt of the Company Stockholders' Approval the
Board of Directors of the Company determines in good faith, after consultation
with outside counsel and financial advisors, that failing to take such action
could reasonably be expected to be a breach of its fiduciary duties to the
Company's stockholders under applicable law, and subject to providing 3 days
prior written notice of its decision to take such action to UCU, the Company
may, in response to a Takeover Proposal made after the date of this Agreement
which was not solicited by it or its Representatives and which did not otherwise
result from a breach of this Section 6.01 (x) furnish information with respect
to the Company to any person pursuant to a customary confidentiality agreement
(as determined by the Company after consultation with outside counsel) and (y)
participate in discussions, investigations and/or negotiations regarding such
Takeover Proposal. For all purposes of this Agreement, "Takeover Proposal" means
any proposal or offer to acquire, directly or indirectly, in one transaction or
a series of related transactions, 20% or more of the shares of Company Common
Stock outstanding (whether, in either case, by purchase, merger, consolidation,
share exchange, business combination or other similar transaction) or 20% or
more of the assets of the Company, other than the Merger or the transactions
contemplated by Section 6.01(a) of the Company Disclosure Schedule. The Company
immediately upon execution of this Agreement shall cease and cause to be
terminated all existing discussions or negotiations with any Persons conducted
heretofore with respect to, or that could reasonably be expected to lead to, any
Takeover Proposal, subject to the Company's rights pursuant to this Section
6.01.
(b) The Board of Directors of the Company shall promptly
recommend the adoption and approval of this Agreement and the Merger in
accordance with Section 6.03, and, except as set forth in this Section 6.01,
neither the Board of Directors of the Company nor any committee thereof shall
(i) withdraw or modify, or propose publicly to withdraw or modify, the approval
or recommendation by such Board of Directors or such committee of the Merger or
this Agreement; (ii) approve or recommend, or propose publicly to approve or
recommend, any Takeover Proposal or (iii) cause the Company to enter into any
letter of intent, agreement in principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") related to any Takeover Proposal.
Notwithstanding the foregoing, if at any time prior to receipt of the Company
Stockholders' Approval the Board of Directors of the Company determines in good
faith, after consultation with outside counsel and financial advisors, that it
has received a Takeover Proposal that constitutes a Superior Proposal and that
failure to terminate this Agreement and accept such Superior Proposal could
reasonably be expected to be a breach of its fiduciary duties to the Company's
stockholders under applicable law the Board of Directors of the Company may (x)
withdraw or modify its approval or recommendation of the Merger and
36
this Agreement, (y) approve or recommend a Superior Proposal or (z) terminate
this Agreement (and concurrently with or after such termination, if it so
chooses, cause the Company to enter into an Acquisition Agreement with respect
to any Superior Proposal), but in each case only at a time prior to receipt of
the Company Stockholders' Approval and only at a time that is after the third
business day following receipt of written notice advising UCU that the Board of
Directors of the Company has received a Takeover Proposal that constitutes a
Superior Proposal, specifying the material terms and conditions of such Superior
Proposal and identifying the person making such Superior Proposal. For all
purposes of this Agreement, "Superior Proposal" means a bona fide proposal made
by a third party not affiliated with the Company to acquire, directly or
indirectly, for consideration consisting of cash and/or securities, more than
50% of the shares of Company Common Stock then outstanding (whether pursuant to
a tender or exchange offer, a merger, a share exchange or other business
combination) or all or substantially all of the assets of the Company and
otherwise on terms which the Board of Directors of the Company determines in
good faith (based on the written advice of an independent financial advisor,
which may include ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc.) to be more favorable to the
Company and its stockholders than the Merger (taking into account any changes to
the financial and other contractual terms of this Agreement proposed by UCU in
response to such proposal and all other relevant financial and strategic
considerations, including, but not limited to, relevant legal, financial,
regulatory and other aspects of the proposal, the third party making such
proposal, the conditions and prospects for completion of such proposal, the
strategic direction and benefits sought by the Company and any changes to this
Agreement proposed by UCU in response to such proposal).
(c) Nothing contained in this Section 6.01 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rules
14d-9 and 14e-2 promulgated under the Exchange Act or from making any disclosure
to the Company's stockholders if, in the good faith judgment of the Board of
Directors of the Company, after consultation with outside counsel, such
disclosure is required under applicable law; provided, that no such position
shall be taken or disclosed in a manner that is inconsistent with the
recommendation in favor of approval and adoption of this Agreement and the
Merger unless permitted by the provisions of Sections 6.01(a) and 6.01(b).
Section 6.02. Proxy Statement; Registration Statement. (a) As promptly
as practicable after the execution of this Agreement, UCU and the Company shall
cooperate in preparing and filing with the SEC the Proxy Statement and the
Registration Statement (in which the Proxy Statement will be included). UCU and
the Company shall use their reasonable best efforts to cause the Registration
Statement to become effective under the Securities Act as soon after such filing
as practicable and UCU shall also take such action as may be reasonably required
to cause the shares of UCU Common Stock issuable in connection with the Merger
to be registered or to obtain an exemption from registration under applicable
state "blue sky" or securities laws. Each of the Company and UCU shall furnish
all information concerning itself that is required or customary for inclusion in
the Proxy Statement and the Registration Statement. No representation, covenant
or agreement contained in this Agreement is made by the Company or UCU with
respect to information supplied by the other for inclusion in the Proxy
Statement or the Registration Statement. The Company and UCU shall take such
actions as may be reasonably required to cause the Proxy Statement and the
Registration Statement to
37
comply as to form in all material respects with the Securities Act and the
Exchange Act. The Proxy Statement shall include the recommendation of the Board
of Directors of the Company in favor of approval and adoption of this Agreement
and the Merger, except to the extent the Board of Directors of the Company shall
have withdrawn or modified its approval or recommendation of this Agreement and
the Merger as permitted by Section 6.01(b). The Company shall use reasonable
best efforts to cause the Proxy Statement to be mailed to its stockholders, as
promptly as practicable after the Registration Statement becomes effective.
(b) UCU and the Company shall make all necessary filings with
respect to the Merger and the transactions contemplated thereby under the
Securities Act and the Exchange Act and applicable state blue sky laws and the
rules and regulations thereunder. No filing of, or amendment or supplement to,
the Registration Statement or the Proxy Statement will be made by UCU or the
Company without providing the other party the opportunity to review and comment
thereon. UCU or the Company will advise the other party, promptly after it
receives notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, the issuance of any
stop order, the suspension of the qualification of the UCU Common Stock issuable
in connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Proxy Statement or the Registration
Statement or comments thereon and responses thereto or requests by the SEC for
additional information. If at any time prior to the Effective Time any
information relating to UCU or the Company, or any of their respective
affiliates, officers or directors, should be discovered by UCU or the Company
which should be set forth in an amendment or supplement to any of the
Registration Statement or the Proxy Statement, so that any of such documents
would not include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other party hereto and an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law, disseminated to
the stockholders of UCU and the Company.
(c) The Company shall use best efforts to cause to be delivered to the
Company and UCU a letter of PricewaterhouseCoopers LLP dated a date within two
(2) business days before the effective date of the Registration Statement and
addressed to the Company and UCU, in form and substance reasonably satisfactory
to the Company and UCU and customary in scope and substance for "cold comfort"
letters delivered by independent public accountants in connection with
registration statements and proxy statements similar to the Proxy Statement and
Registration Statement.
(d) UCU shall use best efforts to cause to be delivered to the Company
and UCU a letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP dated a date within two (2) business
days before the effective date of the Registration Statement and addressed to
UCU and the Company, in form and substance reasonably satisfactory to UCU and
the Company and customary in scope and substance for "cold comfort" letters
delivered by independent public accountants in connection with registration
statements and proxy statements similar to the Proxy Statement and Registration
Statement.
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(e) It shall be a condition to the mailing of the Proxy Statement to
the stockholders of the Company that the Company shall have received an opinion
from ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., dated the date of the Proxy Statement, to the
effect that, as of the date thereof, the Merger Consideration is fair to the
holders of Company Common Stock.
Section 6.03. Stockholders' Meeting. Except to the extent that the
Board of Directors of the Company shall have withdrawn or modified its approval
or recommendation of this Agreement and the Merger as permitted by Section
6.01(b), the Company shall take all steps reasonably necessary to duly call,
give notice of, convene and hold the Company Stockholders' Meeting, will
recommend to its stockholders adoption and approval of this Agreement and the
Merger, will use reasonable best efforts to hold the Company Stockholders'
Meeting as soon as practicable after the date hereof and will use reasonable
best efforts to solicit from its stockholders proxies in favor of this Agreement
and the Merger.
Section 6.04. Access to Information. Upon reasonable notice and subject
to applicable law and other legal obligations, each of the Company and UCU shall
afford to the officers, employees, accountants, counsel and other
representatives of the other, reasonable access, during normal business hours
during the period prior to the Effective Time, to all its properties, books,
contracts, commitments and records and, during such period, each of the Company
and UCU shall furnish promptly to the other (a) a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws and (b) all other
information concerning its business, properties and personnel as such other
party may reasonably request. Any such information furnished pursuant to this
Section 6.04 shall be subject to the Confidentiality Agreement dated as of
October 26, 1998, between UCU and the Company (the "Confidentiality Agreement")
which shall continue in full force and effect until the Effective Time. No
information or knowledge obtained in any investigation pursuant to this Section
6.04 shall affect or be deemed to modify any representation or warranty
contained in this Agreement or the conditions to the obligations of the parties
to consummate the Merger.
Section 6.05. Notices of Certain Events. (a) UCU and the Company shall
promptly notify each other of:
(i) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement; and
(ii) any notice or other communication from any Governmental Authority
in connection with the transactions contemplated by this Agreement.
(b) the Company shall promptly notify UCU of any actions,
suits, claims, investigations or proceedings commenced or, to its knowledge,
threatened against, relating to or involving or otherwise affecting the Company
which, if pending on the date of this Agreement, would have been required to
have been disclosed pursuant to Section 3.08 or which relate to the consummation
of the transactions contemplated by this Agreement.
39
(c) UCU shall (i) promptly notify the Company of any actions,
suits, claims, investigations or proceedings commenced or, to its knowledge,
threatened against, relating to or involving or otherwise affecting UCU or any
of its Subsidiaries which, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 4.08 or which relate to
the consummation of the transactions contemplated by this Agreement and (ii) use
its reasonable efforts to inform the Company of the consummation of, or
agreement to consummate, any merger or any material acquisition or joint venture
to the extent UCU is permitted to so notify the Company unless such merger,
acquisition or joint venture shall have been included in a UCU SEC Report or
otherwise publicly disclosed.
Section 6.06. Appropriate Action; Consents; Filings. (a) Subject to the
terms and conditions of this Agreement UCU and the Company shall use their
reasonable best efforts to (A) take, or cause to be taken, all reasonable
actions, and do, or cause to be done, all reasonable things, necessary, proper
or advisable under applicable laws to consummate the Merger and the other
transactions contemplated by this Agreement as promptly as practicable, or (B)
obtain from any Governmental Authority any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained or made by UCU and
the Company in connection with the authorization, execution and delivery of this
Agreement and the consummation of the transactions contemplated herein, and (C)
make all necessary filings, and thereafter make any other required submissions,
with respect to this Agreement and the Merger required under applicable public
utility laws and regulations, the Securities Act, the Exchange Act and any other
applicable law;
(b) UCU and the Company shall give any notices to third
parties, and use reasonable best efforts to obtain any third party consents (A)
necessary, proper or advisable in order to consummate the transactions
contemplated by this Agreement or (B) required, individually or in the
aggregate, to prevent a UCU Material Adverse Effect or a Company Material
Adverse Effect from occurring prior to or after the Effective Time.
Section 6.07. Public Disclosure. UCU and the Company shall cooperate
with each other in the development of and consult with each other before issuing
any press release or otherwise making any public statement with respect to the
Merger or this Agreement or the transactions contemplated hereby and shall not
issue any such press release without the consent of the other party (which
consent shall not be unreasonably withheld or delayed), except as may be
required by law, court process or by stock exchange rules.
Section 6.08. Reorganization. UCU and the Company shall each use its
reasonable best efforts to cause the Merger to be treated as a reorganization
within the meaning of Section 368(a) of the Code, and UCU and the Company shall
use their reasonable best efforts to obtain the opinion of their respective
counsel referred to in Sections 7.02(c) and 7.03(c).
Section 6.09. Affiliates. Within a reasonable time, but not less than
30 days, before the Closing Date, the Company will provide UCU with a list of
those Persons who as of the Closing Date will be, in the Company's reasonable
judgment, "affiliates" of the Company within the meaning of Rule 145 under the
Securities Act or under any applicable accounting rules ("Rule 145 Affiliates").
The Company shall use its reasonable best efforts to deliver or cause to be
40
delivered to UCU on or prior to the Closing Date from each of the Rule 145
Affiliates, an executed letter agreement, in a form reasonably acceptable to UCU
and the Company.
Section 6.10. Listing of Stock. UCU shall use its reasonable best
efforts to cause the shares of UCU Common Stock to be issued in the Merger to be
approved for listing on the NYSE on or prior to the Closing Date, subject to
official notice of issuance.
Section 6.11. Indemnification of Directors and Officers. (a) To the
fullest extent permitted by law, from and after the Effective Time, all rights
to indemnification as of the date hereof in favor of the employees, agents,
directors and officers of the Company with respect to their activities as such
prior to the Effective Time, as provided in its articles of incorporation and
by-laws in effect on the date thereof, or otherwise in effect on the date
hereof, shall survive the Merger and shall continue in full force and effect for
a period of not less than six years from the Effective Time.
(b) To the extent, if any, not provided by an existing right
of indemnification or other agreement or policy, after the Effective Time, the
Surviving Corporation shall, to the fullest extent permitted by applicable law,
indemnify and hold harmless, each present and former director, officer, employee
or agent of the Company (collectively, the "Indemnified Parties") against all
costs and expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages, liabilities and settlement amounts paid in connection
with any claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time), whether civil, administrative or
investigative, arising out of or pertaining to any action or omission in their
capacity as a director, officer, employee or agent (including serving on the
board of directors or similar governing body of a third party at the request of,
or as a designated director) of the Company, in each case occurring before the
Effective Time (including the transactions contemplated by this Agreement);
provided, however, that the Surviving Corporation shall not be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably withheld). In the event of any such costs, expenses, judgments,
fines, losses, claims, damages, liabilities or settlement amounts (whether or
not arising before the Effective Time), (x) the Surviving Corporation shall pay
the reasonable fees and expenses of counsel selected by the Indemnified Parties,
which counsel shall be reasonably satisfactory to the Surviving Corporation,
promptly after statements therefor are received, and otherwise advance to the
Indemnified Parties upon request reimbursement of documented expenses reasonably
incurred, in either case, to the extent not prohibited by the applicable law and
(y) the Surviving Corporation shall cooperate in the defense of any such matter.
The Indemnified Parties as a group may retain only one law firm (other than
local counsel) with respect to each related matter except to the extent there
is, in the sole opinion of counsel to an Indemnified Party, under applicable
standards of professional conduct, a conflict on any significant issue between
positions of any two or more Indemnified Parties, in which case each Indemnified
Party with a conflicting position on such significant issue shall be entitled to
separate counsel reasonably satisfactory to the Surviving Corporation. In the
event any Indemnified Party is required to bring any action to enforce rights or
to collect moneys due under this Agreement and is successful in such action, the
Surviving Corporation shall reimburse such Indemnified Party for all of its
reasonable expenses in bringing and pursuing such action.
41
(c) For a period of six (6) years after the Effective Time,
the Surviving Corporation shall cause to be maintained in effect the policies of
directors' and officers' liability insurance policy maintained by the Company;
provided that the Surviving Corporation may substitute therefor policies of at
least the same coverage containing terms and conditions which are substantially
equivalent with respect to matters occurring prior to the Effective Time and
provided further that if the existing D&O Insurance expires or is canceled
during such period, the Surviving Corporation shall use its reasonable best
efforts to obtain substantially similar liability insurance with respect to
matters occurring at or prior to the Effective Time to the extent such liability
insurance can be maintained annually at a cost to the Surviving Corporation not
greater than 200% of the annual aggregate premiums currently paid by the Company
for such insurance, and provided, further, that if the annual premiums of such
insurance coverage exceed such amount, the Surviving Corporation shall maintain
or obtain a policy with the best coverage available, in the reasonable judgment
of the Board of Directors of the Surviving Corporation, for a cost not exceeding
such amount.
(d) In the Event the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in either such case, proper
provision shall be made so that the successors and assigns of the Surviving
Corporation shall assume the obligations set forth in this Section 6.11. This
Section 6.11 is intended to benefit (and shall be enforceable by) the
Indemnified Parties and their respective heirs, executors and personal
representatives.
Section 6.12. Company Stock Options and Restricted Stock Awards;
Acknowledgment with Respect to Company Stock Plans. (a) At the Effective Time,
all rights with respect to outstanding options, to purchase or other rights to
acquire shares of Company Common Stock (the "Company Stock Options") granted
under any plan or arrangement providing for the grant of options, restricted
stock awards, stock units or other rights to acquire stock to current or former
officers, directors, employees or consultants of the Company (the "Company Stock
Plans"), whether or not then exercisable, shall be converted into and become
rights with respect to UCU Common Stock, and UCU shall assume each Company Stock
Option in accordance with the terms of the Company Stock Plan under which it was
issued and any stock option or similar agreement by which it is evidenced. From
and after the Effective Time, (i) each Company Stock Option assumed by UCU shall
be exercised solely for shares of UCU Common Stock; (ii) the number of shares of
UCU Common Stock subject to each Company Stock Option shall be equal to the
number of shares of Company Common Stock subject to such Company Stock Option
immediately prior to the Effective Time multiplied by the Exchange Ratio and
(iii) the per share exercise price under each Company Stock Option shall be
adjusted by dividing the per share exercise price under such Company Stock
Option by the Exchange Ratio and rounding to the nearest cent (each, as so
adjusted, an "Adjusted Option"); provided, that the terms of each Company Stock
Option shall be subject to further adjustment as appropriate to reflect any
stock split, stock dividend, recapitalization or other similar transaction
subsequent to the Effective Time; and, provided further, that the number of
shares of UCU Common Stock that may be purchased upon exercise of any Adjusted
Option shall not include any fractional share and, upon exercise of such
Adjusted Option, a cash payment shall be made
42
for any fractional share based upon the closing price of a share of UCU Common
Stock on the NYSE on the last trading day of the calendar month immediately
preceding the date of exercise.
(b) The adjustments provided herein with respect to any
Company Stock Options that are "incentive stock options" as defined in Section
422 of the Code shall be and are intended to be effected in a manner which is
consistent with Section 424(a) of the Code.
(c) At the Effective Time, all restricted stock awards
("Company Restricted Stock Awards") granted by the Company under a Company Stock
Plan, whether or not then vested, shall be converted into UCU Common Stock and
shall thereafter be free of any and all restrictions (whether on transferability
or otherwise). The number of shares of UCU Common Stock into which each Company
Restricted Stock Award shall be converted shall be equal to the number of shares
of Company Common Stock subject to such Company Restricted Stock Award
immediately prior to the Effective Time multiplied by the Exchange Ratio; except
that in lieu of any fractional share of UCU Common Stock resulting from such
conversion, the holder of the Company Restricted Stock Award shall be entitled
to cash (without interest) in an amount equal to such fractional part of a share
of UCU Common Stock multiplied by the Average Trading Price.
(d) At the Effective Time, all stock units in respect of
shares of Company Common Stock ("Company Stock Units") granted by the Company
under the Company's Stock Unit Plan for Directors shall be converted into stock
units in respect of shares of UCU Common Stock. The number of shares of UCU
Common Stock covered by such stock units after the conversion shall be equal to
the number of shares of Company Common Stock covered by the Company Stock Units
immediately prior to the Effective Time multiplied by the Exchange Ratio, except
that in lieu of any fractional share of UCU Common Stock resulting from such
conversion, the holder of the Company Stock Units shall be entitled to cash
(without interest) in an amount equal to such fractional part of a share of UCU
Common Stock multiplied by the Average Trading Price.
(e) As soon as practicable following the Effective Time, UCU
shall prepare and file with the SEC a registration statement on Form S-8 (or
another appropriate form) registering a number of shares of UCU Common Stock
equal to the number of shares subject to the Adjusted Options (or shall cause
such Adjusted Options to be deemed options issued pursuant to a UCU stock option
plan for which shares of UCU Common Stock have previously been registered
pursuant to an appropriate registration form). Such registration statement shall
be kept effective (and the current status of the initial offering prospectus or
prospectuses required thereby shall be maintained) for at least as long as any
Adjusted Options remain outstanding.
(f) Except as otherwise contemplated by this Section 6.12 and
except to the extent required under the respective terms of the Company Stock
Options or other applicable agreements, all restrictions or limitations on
transfer with respect to Company Stock Options awarded under the Company Stock
Plans, to the extent that such restrictions or limitations shall not have
already lapsed, shall remain in full force and effect with respect to such
options after giving effect to the Merger and the assumption of such options by
UCU as set forth above.
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(g) UCU acknowledges that the consummation of the Merger will
constitute a "change in control" as such term is defined in those Company Stock
Plans listed on Schedule 6.12.
(h) With respect to those individuals who, subsequent to the
Merger, shall be subject to the reporting requirements under Section 16(a) of
the Exchange Act, the Surviving Corporation shall administer the Company Stock
Plans, where applicable, in a manner that complies with Rule 16b-3 under the
Exchange Act.
Section 6.13. Benefits Continuation; Severance. (a) Comparable
Benefits. For not less than eighteen months following the Effective Time, UCU
shall provide, or shall cause its Subsidiaries to provide benefits that are, on
a benefit-by-benefit basis, no less favorable than as provided under the Company
Benefit Arrangements and the Company Employee Plans as in effect on the date
hereof, for employees of the Company as of the Closing Date ("Affected
Employees") and for former employees of the Company ("Former Employees"), and
shall provide access to UCU's employee stock purchase plan as soon as
permissible following the Closing Date under the law and such plan. Following
the period described in the first sentence of this Section 6.13, UCU and its
Subsidiaries shall provide, to the extent permitted by law, employee benefits to
the Affected Employees that are no less favorable than those provided by UCU to
other similarly situated employees of UCU. UCU shall comply with the terms of
all the Company Employee Plans, Company Benefit Arrangements and other
contractual commitments in effect immediately prior to the Effective Time
between the Company and Affected Employees or Former Employees, subject to any
reserved right to amend or terminate any Company Employee Plan, Company Benefit
Arrangement or other severance or contractual obligation; provided, however,
that no such amendment or termination may be inconsistent with UCU's obligations
pursuant to the first two sentences of this Section 6.13. Without limiting the
generality of the foregoing, UCU agrees to honor all obligations for severance
pay and other severance benefits to Affected Employees according to their terms,
subject to any reserved right to amend or terminate any Company Employee Plan,
Company Benefit Arrangement or other severance or contractual obligation;
provided, however, that no such amendment or termination may be inconsistent
with UCU's obligations pursuant to the first two sentences of this Section 6.13.
UCU shall honor all vacation, holiday, sickness and personal days accrued by
Affected Employees and, to the extent applicable, Former Employees as of the
Effective Time. Following the period described in the first sentence of this
Section 6.13, and for so long as UCU or any successor or Subsidiary maintains
any health plan covering any active or former employee, UCU or its Subsidiaries
will provide health and life benefits, (but no accidental death and
dismemberment benefits) to existing retirees of the Company as of the Closing
Date and Affected Employees who retire within eighteen months of the Closing
Date (and who meet the eligibility requirements of the Company's retiree health
and life plans) which are, in the aggregate, at least comparable to the benefits
provided to similarly situated retirees of UCU or, if better, the benefits
provided to active employees of UCU or any successor (except that coverage
provided past the age of 65 shall be coordinated with Medicare in a manner
similar to that currently in effect with respect to such Company retirees), and
with UCU having the right, following the period described in the first sentence
of this Section 6.13, to increase the portion of the premiums paid by such
Company retirees by 15% per year until the portion of the premium paid
44
by such Company retirees is comparable in percentage to the portion of the
premium paid by similarly situated UCU retirees (except that the portion of the
premium paid by such Company retirees past the age of 65 shall be increased in
the same manner as the portion of the premium paid by such Company retirees
younger than age 65); provided, however, that UCU may modify the cost sharing
ratio and premium rates in accordance with the past practice of the Company.
Former Employees and Affected Employees shall be offered the option to purchase
UCU dental and vision plan coverage at premiums equal to those paid by retired
and active UCU employees, respectively, during the first open enrollment period
following the period described in the first sentence of this Section 6.13.
(b) Participation in Benefit Plans. Employees shall be given
credit for all service with the Company (or service credited by the Company)
under all employee benefit plans and arrangements currently maintained by UCU or
any of its Subsidiaries (and, with respect to any employee benefit plan
established by UCU or any of its Subsidiaries in the future to the extent that
similarly situated employees of UCU are given credit for their service with UCU)
in which they are or become participants for purposes of eligibility, vesting,
benefit accrual, level of participation contribution, and for purposes of
qualifying for early retirement or other benefits tied to periods of service,
subject to an offset, if necessary, to avoid duplication of benefits, to the
same extent as if rendered to UCU or any of its Subsidiaries. UCU shall waive or
cause to be waived any preexisting condition limitation applicable to an
Affected Employee other than any limitation already in effect with respect to
such Affected Employee that has not been satisfied as of the Closing Date under
the similar Company Employee Plan or Company Benefit Arrangement. UCU agrees to
recognize (or cause to be recognized) the dollar amount of all expenses incurred
by Affected Employees during the calendar year in which the Effective Time
occurs for purposes of satisfying the calendar year deductibles and co-payment
limitations for such year under the relevant benefit plans of UCU and its
Subsidiaries. Following the period described in the first sentence of this
subsection (b), UCU and its Subsidiaries shall provide, to the extent permitted
by applicable law, employee benefits to the Affected Employees that are no less
favorable than those provided by UCU to other similarly situated employees of
UCU.
(c) No provision in this Section 6.13 shall be deemed to
constitute an employment contract between the Surviving Corporation and any
individual, or a waiver of the Surviving Corporation's right to discharge any
employee at any time, with or without cause.
(d) Non-discrimination. Subject to applicable collective
bargaining agreements, for a period of two years following the Effective Time,
any reductions in workforce in respect of employees of the Surviving Corporation
shall be made on a fair and equitable basis, in light of the circumstances and
the objectives to be achieved without regard to whether employment was with the
Company or UCU, and any employees whose employment is terminated or jobs are
eliminated by the Surviving Corporation during such period shall be entitled to
participate on a fair and equitable basis in any job opportunity employment
placement programs offered by the Surviving Corporation. Any workforce
reductions carried out following the Effective Time by the Surviving Corporation
shall be done in accordance with all applicable collective bargaining
agreements, and all laws and regulations governing the employment relationship
thereof including, without limitation, the Worker Adjustment and Retraining
Notification Act and regulations promulgated thereunder, and any comparable
state or local law.
45
Section 6.14. Operation of Company's Business after Closing. UCU will
conduct the Company's business to maintain the efficient and high quality
service provided by the Company and to this end will consult with the Advisory
Board designated pursuant to Section 1.04 on matters relating to the business in
the Company's current service areas. UCU will continue an office in Joplin.
Section 6.15. Takeover Statutes. If any Takeover Statute is or may
become applicable to the Merger, each of UCU and the Company shall take such
actions as are necessary so that the Merger and the other transactions
contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated hereby and otherwise act to eliminate or minimize the
effects of any Takeover Statute on the Merger and such other transactions.
Section 6.16. Disclosure Schedules. On or before the date of this
Agreement, (i) the Company has delivered to UCU the Company Disclosure Schedule
accompanied by a certificate signed by a duly authorized financial officer of
the Company stating that the Company Disclosure Schedule is being delivered
pursuant to this Section 6.16 and (ii) UCU has delivered to the Company the UCU
Disclosure Schedule accompanied by a certificate signed by a duly authorized
financial officer of UCU stating that the UCU Disclosure Schedule is being
delivered pursuant to this Section 6.16. The Company Disclosure Schedule and the
UCU Disclosure Schedule constitute an integral part of this Agreement and modify
the respective representations, warranties, covenants or agreements of the
parties hereto contained herein to the extent that such representations,
warranties, covenants or agreements expressly refer to the Company Disclosure
Schedule or the UCU Disclosure Schedule. Any and all statements,
representations, warranties or disclosures set forth in the Company Disclosure
Schedule and the UCU Disclosure Schedule shall be deemed to have been made on
and as of the date of this Agreement.
Section 6.17. Charitable and Economic Development Support. The parties
agree that provision of charitable contributions and community support in the
service area of the Company serves a number of important goals. For a period of
at least five years following the Effective Time, the Surviving Corporation
shall provide, directly or indirectly, charitable contributions and community
support within the service area of the Company at levels substantially
comparable to and no less than the levels of charitable contributions and
community support provided by the Company within the Company's service area
within the two-year period immediately prior to the Effective Time.
Section 6.18. Transition Task Force.
a. The Company and UCU shall create a special transition task force to
be led by ▇▇▇ ▇▇▇▇▇▇, and in addition, to consist of two members nominated by
the Company and two additional members nominated by UCU.
b. The functions of the task force shall include (i) serving as a
conduit for the flow of information and documents between the parties, (ii)
development of transition plans and such other matters as may be appropriate and
(iii) otherwise assisting the Company and UCU in making an orderly transition.
46
c. The Company and UCU will cooperate fully with the transition task
force.
Section 6.19. Termination of DRIP. The Company shall either (i)
terminate the DRIP no later than 30 days prior to the anticipated Effective Time
or (ii) cause the DRIP to be administered only as an "open market" purchase plan
(i.e. shares issuable under the DRIP would be purchased in the open market)
during the 30 days prior to the anticipated Effective Time.
Section 6.20. Dividend Record Date. The Company agrees to coordinate
with UCU in establishing the record date in the quarter in which the Closing
occurs for the payment of any dividends on the Company Common Stock in order to
assure that the holders of record of Company Common Stock (i) are entitled to
receive a dividend on either Company Common Stock or UCU Common Stock received
in the Merger in the quarter in which the Closing occurs, and (ii) are not
entitled to receive a dividend in such quarter on both Company Common Stock and
UCU Common Stock received in the Merger.
Section 6.21. Real Estate Transfer Taxes. The Surviving Corporation
shall pay all state or local real property transfer, gains or similar Taxes, if
any (collectively, the "Transfer Taxes"), attributable to the transfer of the
beneficial ownership of the Company's and its Subsidiaries' real properties, and
any penalties or interest with respect thereto, payable in connection with the
consummation of the Merger. Prior to the Effective Time, the Company shall
cooperate with UCU in the preparation of any returns that will be filed with
respect to the Transfer Taxes, including supplying in a timely manner a complete
list of all real property interests held by the Company and its Subsidiaries and
any information with respect to such properties that is reasonably necessary to
complete such returns. The portion of the consideration allocable to the real
properties of the Company and its Subsidiaries shall be determined by UCU in its
reasonable discretion. The stockholders of the Company (who are intended
third-party beneficiaries of this Section 6.21) shall be deemed to have agreed
to be bound by the allocation established pursuant to this Section 6.21 in the
preparation of any return with respect to the Transfer Taxes.
Section 6.22. Assumption of Debt Obligations. The Company and UCU shall
cooperate with one another to cause the Surviving Corporation to expressly
assume, at the Effective Time, any indebtedness of the Company which requires
express assumption of the Company's obligations as set forth in Section 3.04 of
the Company Disclosure Schedule.
Section 6.23. Amendment of First Mortgage Bond Indenture. The Company
shall use its best efforts to obtain within 120 days of the date hereof the
consent of the requisite number of holders of bonds issued under the Company's
Indenture of Mortgage and Deed of Trust, as amended (the "Indenture") to amend
the Indenture in a manner reasonably acceptable to UCU to delete the last
sentence of Section 4.11 of the Indenture and to make any appropriate conforming
changes at a total cost (including consent payments to the bondholders and legal
and financial advisor fees) reasonably acceptable to UCU. If such consents are
not obtained within the applicable time period at a cost reasonably acceptable
to UCU, UCU, in its sole discretion, may terminate this Agreement as provided on
Section 6.23 of each of the Company Disclosure Schedule and the UCU Disclosure
Schedule.
47
ARTICLE VII
Conditions to Merger
Section 7.01. Conditions to Each Party's Obligations. The respective
obligations of each party to this Agreement to consummate the Merger and the
transactions contemplated hereby shall be subject to the satisfaction of the
following conditions:
(a) Company Stockholders' Approval. The Company Stockholders'
Approval shall have been obtained.
(b) Waiting Periods; Required Statutory Approvals. The waiting
period applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated and the Company Required Statutory Approvals and the
UCU Required Statutory Approvals shall have been obtained, such approvals shall
have become Final Orders (as defined below), and none of such approvals or Final
Orders shall require or be conditioned upon any requirement that any of the
Company, UCU or the Surviving Corporation provide any undertaking or agreement,
or change or dispose of any assets or business operations, or take or refrain
from taking any other action, which would cause, individually or in the
aggregate, either (i) a UCU Material Adverse Effect, or (ii) a material adverse
effect on the financial condition, income, assets, business or prospects of the
business operations presently owned and operated by the Company. For purposes of
this Section, the determination of UCU Material Adverse Effect may, without
limitation, include the failure of the Public Service Commission of the State of
Missouri ("MPSC") to articulate prior to Closing, its policy on the extent to
which the Surviving Corporation may recover the Premium (as defined below)
related to this transaction. The term "Premium" means the excess of (xx) the
value, as of the Effective Time, of the UCU Common Stock issued to holders of
Company Common Stock as a result of consummation of the Merger plus all amounts
paid in lieu of fractional shares under Article II and all Cash Consideration
paid to holders of Company Common Stock pursuant to Section 2.02, over (yy) the
net book value of the Company's assets subject to regulation by the MPSC. A
"Final Order" means action by the relevant regulatory authority which has not
been reversed, stayed, enjoined, set aside, annulled or suspended, with respect
to which any waiting period prescribed by law before the transactions
contemplated hereby may be consummated has expired, and as to which all
conditions to the consummation of such transactions prescribed by law,
regulation or order have been satisfied.
(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint shall prohibit the
consummation of the Merger.
(d) Registration Statement. The Registration Statement shall
have become effective under the Securities Act and shall not be the subject of
any stop order or proceedings seeking a stop order.
(e) Listing of Stock. The shares of UCU Common Stock to be
issued in the Merger (including shares of UCU Common Stock issued or issuable in
respect of Company
48
Stock Options and Company Restricted Stock Awards) shall have been approved for
listing on the NYSE, subject to official notice of issuance.
Section 7.02. Additional Conditions to Obligations of UCU. The
obligations of UCU to consummate the Merger and the transactions contemplated
hereby shall be subject to the satisfaction of the following additional
conditions, any of which may be waived in writing exclusively by UCU:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement that are qualified by the
Company Material Adverse Effect shall be true and correct as of the Closing Date
and the representations and warranties that are not so qualified, taken
together, shall be true and correct in all material respects, in each case as
though made on and as of the Closing Date (except to the extent any such
representation or warranty expressly speaks as of an earlier date); and UCU
shall have received a certificate signed on behalf of the Company by the chief
executive officer of the Company to such effect.
(b) Performance of Obligations. The Company shall have
performed in all material respects each obligation and agreement and shall have
complied in all material respects with each covenant required to be performed
and complied with by it under this Agreement at or prior to the Effective Time;
and UCU shall have received a certificate signed on behalf of the Company by the
chief executive officer of the Company to such effect.
(c) Tax Opinion. UCU shall have received a written opinion
from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, counsel to UCU, to the effect that the
Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code. In rendering such opinion,
such counsel may require and rely upon reasonable representations and
certificates of UCU (including, without limitation, representations contained in
a certificate of UCU) (the "UCU Tax Certificate") and the Company (including,
without limitation, representations contained in a certificate of the Company
(the "Company Tax Certificate").
(d) Company Material Adverse Effect. No Company Material
Adverse Effect shall have occurred and there shall exist no fact or circumstance
which is reasonably likely to have a Company Material Adverse Effect.
(e) Amendment of Indenture. The Indenture shall have
been amended as described in Section 6.23.
Section 7.03. Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is subject to the satisfaction of
each of the following additional conditions, any of which may be waived in
writing exclusively by the Company:
(a) Representations and Warranties. The representations and
warranties of UCU set forth in this Agreement that are qualified by the UCU
Material Adverse Effect shall be true and correct as of the Closing Date and the
representations and warranties that are not so qualified, taken together, shall
be true and correct in all material respects, in each case as though made on and
as of the Closing Date (except to the extent any such representation or warranty
49
expressly speaks as of an earlier date); and the Company shall have received a
certificate signed on behalf of UCU by the chief executive officer of UCU to
such effect.
(b) Performance of Obligations. UCU shall have performed in
all material respects each obligation and agreement and shall have complied in
all material respects with each covenant required to be performed or complied
with by it under this Agreement at or prior to the Effective Time; and the
Company shall have received a certificate signed on behalf of UCU by the chief
executive officer of UCU to such effect.
(c) Tax Opinion. The Company shall have received a written
opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Company, to the effect that
the Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code. In rendering such opinion,
such counsel may require and rely upon reasonable representations and
certificates of UCU (including, without limitation, representations contained in
the UCU Tax Certificate) and the Company (including, without limitation,
representations contained in the Company Tax Certificate); and UCU and the
Company agree that, to the extent they can truthfully do so, they will make such
representations and deliver such certificates.
(d) UCU Material Adverse Effect. No UCU Material Adverse
Effect shall have occurred and there shall exist no fact or circumstance which
is reasonably likely to have a UCU Material Adverse Effect.
ARTICLE VIII
Termination
Section 8.01. Termination. This Agreement may be terminated at any time
prior to the Effective Time by written notice by the terminating party to the
other party, whether before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company:
(a) by mutual written consent of UCU and the Company; or
(b) by either UCU or the Company, if the Effective Time shall
not have occurred on or before June 1, 2000 (the "Termination Date"); provided,
however, that if on the Termination Date the conditions to the Closing set forth
in Section 7.01(b) shall not have been fulfilled but all other conditions to the
Closing shall have been fulfilled or shall be capable of being fulfilled, then
the Termination Date shall be extended to December 31, 2000; and provided,
further, that the right to terminate the Agreement under this Section 8.01(b)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before the Termination Date; or
(c) by either UCU or the Company, if a court of competent
jurisdiction or other Governmental Authority shall have issued a final,
non-appealable order, decree or ruling,
50
or taken any other action, having the effect of permanently restraining,
enjoining or otherwise prohibiting the Merger; or
(d) by either UCU or the Company if, at the Company
Stockholders' Meeting (including any adjournment or postponement thereof), the
requisite vote of the stockholders of the Company in favor of this Agreement and
the Merger shall not have been obtained; or
(e) by UCU, if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of the Company set
forth in this Agreement shall have occurred which would cause the conditions set
forth in Sections 7.02(a) or 7.02(b) not to be satisfied, and such breach or
failure shall not have been remedied within 45 business days after receipt by
the Company of notice in writing from UCU specifying the nature of such breach
and requesting that it be remedied or UCU shall not have received adequate
assurance of a cure of such breach within such 45 business-day period; or
(f) by UCU, if the Board of Directors of the Company (i) shall
not have recommended or shall have withdrawn or modified its recommendation of
this Agreement and the Merger or (ii) shall have approved or recommended a
Takeover Proposal, other than the Merger; or
(g) by UCU, if the Company or any of its Affiliates shall have
materially and knowingly breached the covenant contained in Section 6.01; or
(h) by the Company in accordance with Section 6.01(b);
provided, that it has complied with the notice provisions thereof; or
(i) by the Company, if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of UCU set forth in
this Agreement shall have occurred which would cause the conditions set forth in
Sections 7.03(a) or 7.03(b) not to be satisfied, and such breach or failure
shall not have been remedied within 20 business days after receipt by UCU of
notice in writing from the Company, specifying the nature of such breach and
requesting that it be remedied or the Company shall not have received adequate
assurance of a cure of such breach within such 20 business-day period.
Section 8.02. Effect of Termination. In the event of termination of
this Agreement pursuant to Section 8.01, there shall be no liability or
obligation on the part of UCU, the Company, or their respective officers,
directors, stockholders or Affiliates, except as set forth in Section 8.03 and
except to the extent that such termination results from the willful breach by a
party of any of its representations, warranties, covenants or agreements
contained in this Agreement; provided that the provisions of Sections 8.02,
8.03, 9.02 and 9.07 of this Agreement and the Confidentiality Agreement shall
remain in full force and effect and survive any termination of this Agreement.
Section 8.03. Fees and Expenses. (a) Except as set forth in this
Section 8.03, all fees and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such expenses, whether or not the Merger is
51
consummated; provided, however, that UCU and the Company shall share equally all
fees and expenses, other than attorneys' and accounting fees and expenses,
incurred in relation to the printing and filing of the Proxy Statement
(including any related preliminary materials) and the Registration Statement
(including financial statements and exhibits) and any amendments or supplements
thereto.
(b) If this Agreement is terminated by UCU pursuant to Section
8.01(e) or by the Company pursuant to Section 8.01(i), the non-terminating party
shall reimburse the other party for all reasonable costs and expenses incurred
by it in connection with this Agreement and the transactions contemplated
hereby, including without limitation, fees and expenses of counsel, financial
advisors, accountants, actuaries and consultants and the other party's share of
all printing and filing fees. Such amounts shall be payable only upon due
presentation by the terminating party of a written summary of such expenses, in
reasonable detail, within 30 days after the date of termination, and in no event
shall the aggregate amount payable under this Section 8.03(b) exceed $1.75
million.
(c) If this Agreement is terminated by UCU pursuant to Section
8.01(f) or Section 8.01(g), the Company shall pay to UCU a termination fee of
$15 million in cash within five business days after such termination.
(d) If this Agreement is terminated by the Company pursuant to
Section 8.01(h), the Company shall pay to UCU a termination fee of $15 million
in cash within five business days after such termination.
(e) If this Agreement is terminated by either UCU or the
Company pursuant to Section 8.01(d), a Takeover Proposal shall have been made
prior to the date of the Company Stockholders' Meeting, and, if within 24 months
of such termination the Company shall enter into an Acquisition Agreement
relating to such Takeover Proposal, the Company shall pay to UCU a termination
fee of $15 million in cash within five business days after the execution of such
Acquisition Agreement.
Section 8.04. Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of the Company, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
Section 8.05. Extension; Waiver. At any time prior to the Effective
Time, either party hereto may, to the extent legally allowed, (i) extend the
time for the performance of any of the obligations or other acts of the other
party hereto contained herein, (ii) waive any inaccuracies in the
representations and warranties of the other party hereto contained herein or in
any document delivered pursuant hereto and (iii) waive compliance with any of
the agreements or conditions of the other party hereto contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
52
ARTICLE IX
Miscellaneous
Section 9.01. Non-survival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and agreements in
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for Section 6.11 and the other covenants and
agreements which, by their terms, are to be performed after the Effective Time.
The Confidentiality Agreement shall survive the execution and delivery of this
Agreement but shall terminate and be of no further force and effect as of the
Effective Time.
Section 9.02. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to UCU, to
UtiliCorp United Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, to:
The Empire District Electric Company
▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
53
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.03. Interpretation. When a reference is made in this
Agreement to a section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement they shall be deemed to be
followed by the words "without limitation."
Section 9.04. Disclosure Schedules. Each exception to a section of this
Agreement set forth in the UCU Disclosure Schedule or the Company Disclosure
Schedule will specifically refer (including by cross-reference) to the section
of the Agreement to which it relates. Any item disclosed in the UCU Disclosure
Schedule or the Company Disclosure Schedule under any specific section number
thereof or disclosed in reference to any specific section hereof shall be deemed
to have been disclosed by UCU or the Company, as appropriate, for all purposes
of this Agreement in response to other sections of either the UCU Disclosure
Schedule or the Company Disclosure Schedule, as the case may be, to the extent
that such disclosure is specifically cross-referenced to such other section(s).
Section 9.05. Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when the counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.
Section 9.06. Entire Agreement; Third Party Beneficiaries. This
Agreement (including the documents and the instruments referred to herein) (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (ii) except as provided in Sections 1.04 and 6.11 and
this Section 9.06, is not intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
Section 9.07. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Kansas without regard to
any applicable conflicts of law rules. Each party hereto irrevocably and
unconditionally consents and submits to the jurisdiction of the courts of the
State of Missouri and of the United States of America located in the State of
Missouri for any actions, suits or proceedings arising out of or relating to
this Agreement and the transactions contemplated hereby, and further agrees that
service of any process, summons, notice or document by U.S. registered or
certified mail to the party at the address specified in Section 9.02, shall be
effective service of process for any action, suit or proceeding brought against
such party in any such court. Each party hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this
54
agreement or the transactions contemplated hereby, in the courts of the State of
Missouri located in Kansas City, Missouri or the United States of America
located in Kansas City, Missouri, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be modified rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the extent possible.
Section 9.08. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either party hereto
(whether by operation of law or otherwise) without the prior written consent of
the other party, and any attempted assignment thereof without such consent shall
be null and void. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
IN WITNESS WHEREOF, UCU and the Company have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
UTILICORP UNITED INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Operating Officer
THE EMPIRE DISTRICT ELECTRIC COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
55