| Item 1.01 | Entry into a Material Definitive Agreement. |
On December 13, 2018, Alliant Energy Corporation (“Alliant Energy”) entered into forward sale agreements (each, a “Forward Sale Agreement”) with each of Goldman Sachs & Co. LLC and Bank of America, N.A. (each, a “Forward Counterparty”), relating to an aggregate of 7,268,673 shares (the “Forward Shares”) of Alliant Energy’s common stock, $0.01 par value (the “Common Stock”), to be borrowed from third parties and sold by the Forward Counterparties to the Underwriters (defined below). On December 14, 2018, Alliant Energy entered into additional forward sale agreements with each Forward Counterparty relating to an aggregate of 1,090,300 shares of Common Stock (each, an “Additional Forward Sale Agreement” and, unless the context otherwise requires, the term Forward Sale Agreement as used in this Current Report onForm 8-K includes each Additional Forward Sale Agreement).
On December 13, 2018, Alliant Energy entered into an Underwriting Agreement (the “Underwriting Agreement”) with Goldman Sachs & Co. LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as underwriters (the “Underwriters”), and the Forward Counterparties as forward sellers, pursuant to which the Forward Counterparties sold the Forward Shares to the Underwriters. As contemplated by the Forward Sale Agreements, the Forward Counterparties, acting as forward sellers, borrowed from third parties all such shares of Common Stock.
Each Forward Sale Agreement provides for settlement on a settlement date or dates to be specified at Alliant Energy’s discretion, but which is expected to occur on or prior to December 31, 2019. On a settlement date or dates, if Alliant Energy decides to physically settle one or more Forward Sale Agreements, Alliant Energy will issue shares of Common Stock to the relevant Forward Counterparty at the then-applicable forward sale price. The forward sale price will initially be $44.33 per share, which is the price at which the Underwriters have agreed to buy the shares of Common Stock pursuant to the Underwriting Agreement. Each Forward Sale Agreement provides that the initial forward sale price will be subject to increase or decrease based on the federal funds rate less a spread, and subject to price adjustment and other provisions of the forward sale agreements, including a decrease based on amounts related to expected dividends on the Common Stock on each of certain dates specified in the Forward Sale Agreements and if the cost to the Forward Counterparty of borrowing a number of shares of the Common Stock underlying the Forward Sale Agreement exceeds a specified amount.
Each Forward Sale Agreement will be physically settled, unless Alliant Energy elects to settle such Forward Sale Agreement in cash or to net share settle such Forward Sale Agreement (which Alliant Energy has the right to do, subject to certain conditions, other than in the limited circumstances described below). If Alliant Energy decides to physically settle or net share settle a Forward Sale Agreement, delivery of shares of Common Stock upon any physical settlement or net share settlement of the Forward Sale Agreement will result in dilution to Alliant Energy’s earnings per share. If Alliant Energy elects cash or net share settlement for all or a portion of the shares of Common Stock underlying a Forward Sale Agreement, Alliant Energy would expect the relevant Forward Counterparty or one of its affiliates to repurchase a number of shares of Common Stock equal to the portion for which Alliant Energy elects cash or net share settlement in order to satisfy its obligation to return the shares of Common Stock such Forward Counterparty had borrowed in connection with sales of Common Stock under the Underwriting Agreement and, if applicable in connection with net share settlement, to deliver shares of Common Stock to Alliant Energy. If the market value of Common Stock at the time of such purchase is above the forward sale price at that time, Alliant Energy will pay or deliver, as the case may be, to the relevant Forward Counterparty under its Forward Sale Agreement, an amount in cash, or a number of shares of Common Stock with a market value, equal to such difference. Any such difference could be significant. Conversely, if the market value of Common Stock at the time of such purchase is below the forward sale price at that time, such Forward Counterparty will pay or deliver, as the case may be, to Alliant Energy under its Forward Sale Agreement, an amount in cash, or a number of shares of Common Stock with a market value, equal to such difference.
Each Forward Counterparty will have the right to accelerate the applicable Forward Sale Agreement (with respect to a transaction under that particular Forward Sale Agreement that the relevant Forward Counterparty determines is affected by such event) and require Alliant Energy to physically settle or, if Alliant Energy so elects and the Forward Counterparty permits such election, cash settle or net share settle on a date specified by the relevant Forward Counterparty if:
