Exhibit 2.1
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
by and among
FPL GROUP, INC.,
ENTERGY CORPORATION,
WCB HOLDING CORP.,
RANGER ACQUISITION CORP.
and
RING ACQUISITION CORP.
Dated as of July 30, 2000
TABLE OF CONTENTS
Page
ARTICLE I
The Mergers
SECTION 1.01. The Mergers 2
SECTION 1.02. Closing 3
SECTION 1.03. Effective Time of the Mergers. 3
SECTION 1.04. Effects of the Mergers 3
SECTION 1.05. Directors and Officers of FPL
and Entergy 4
SECTION 1.06. Board of Directors; Officers. 5
SECTION 1.07. Post-Merger Operations 5
ARTICLE II
Effect of the Mergers on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock 6
SECTION 2.02. Exchange of Certificates 8
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of
FPL 13
SECTION 3.02. Representations and Warranties of
Entergy 31
ARTICLE IV
Covenants
SECTION 4.01. Covenants of FPL 46
SECTION 4.02. Covenants of Entergy 53
SECTION 4.03. No Solicitation by FPL 59
SECTION 4.04. No Solicitation by Entergy 62
SECTION 4.05. Other Actions 65
SECTION 4.06. Coordination of Dividends 65
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Form S-4 and the
Joint Proxy Statement; Shareholders
Meetings 65
SECTION 5.02. Letters of FPL's Accountants 67
SECTION 5.03. Letters of Entergy's Accountants 67
SECTION 5.04. Access to Information; Confidentiality 67
SECTION 5.05. Regulatory Matters; Reasonable Best
Efforts 68
SECTION 5.06. Stock Options; Restricted Stock and
Equity Awards; Stock Plans 70
SECTION 5.07. Employee Matters; Stock Plans 73
SECTION 5.08. Indemnification, Exculpation and
Insurance 74
SECTION 5.09. Fees and Expenses 75
SECTION 5.10. Public Announcements 79
SECTION 5.11. Affiliates 79
SECTION 5.12. NYSE Listing 79
SECTION 5.13. Shareholder Litigation 79
SECTION 5.14. Tax Treatment 79
SECTION 5.15. Common Stock Repurchases 80
SECTION 5.16. Standstill Agreements; Confidentiality
Agreements 80
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation
To Effect the Mergers 81
SECTION 6.02. Conditions to Obligations of FPL 81
SECTION 6.03. Conditions to Obligations of Entergy 83
SECTION 6.04. Frustration of Closing Conditions 84
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination 85
SECTION 7.02. Effect of Termination 87
SECTION 7.03. Amendment 88
SECTION 7.04. Extension; Waiver 88
SECTION 7.05. Procedure for Termination, Amendment,
Extension or Waiver 88
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and
Warranties 89
SECTION 8.02. Notices 89
SECTION 8.03. Definitions 90
SECTION 8.04. Interpretation 91
SECTION 8.05. Counterparts 91
SECTION 8.06. Entire Agreement; No Third-Party
Beneficiaries 91
SECTION 8.07. Governing Law 92
SECTION 8.08. Assignment 92
SECTION 8.09. Enforcement 92
SECTION 8.10. Severability 93
SECTION 8.11. Waiver of Jury Trial 93
Exhibit A Form of Articles of Incorporation of the Company
as of the Effective Time
Exhibit B Form of By-laws of the Company as of the
Effective Time
Exhibit C Corporate Governance of the Company Following
the Effective Time
Exhibit D Form of Affiliate Letter
AGREEMENT AND PLAN OF MERGER dated as of July 30, 2000
(this "Agreement"), by and among FPL GROUP, INC., a Florida
corporation ("FPL"), ENTERGY CORPORATION, a Delaware
corporation ("Entergy"), WCB HOLDING CORP., a Delaware
corporation, 50% of whose outstanding capital stock is
owned by FPL and 50% of whose outstanding capital stock is
owned by Entergy (the "Company"), RANGER ACQUISITION CORP.,
a Florida corporation and a wholly-owned subsidiary of the
Company ("Merger Sub A"), and RING ACQUISITION CORP., a
Delaware corporation and a wholly-owned subsidiary of the
Company ("Merger Sub B").
WHEREAS the respective Boards of Directors of FPL, Entergy,
the Company, Merger Sub A and Merger Sub B have approved the
consummation of the business combination provided for in this
Agreement, pursuant to which Merger Sub A and Merger Sub B will merge
with and into FPL and Entergy, respectively, whereby, subject to the
terms of Article II, each share of common stock, par value $.01 per
share, of FPL (including, except as the context otherwise requires,
the associated FPL Rights as defined in Section 3.01(b), the "FPL
Common Stock") and each share of common stock, par value $.01 per
share, of Entergy (the "Entergy Common Stock") will be converted into
the right to receive the Merger Consideration (as defined in Section
2.02) (such transactions are referred to herein individually as the
"FPL Merger" and the "Entergy Merger", respectively, and collectively
as the "Mergers"), as a result of which the holders of FPL Common
Stock and Entergy Common Stock will together own all of the
outstanding shares of common stock, par value $.01 per share, of the
Company (the "Company Common Stock") (and the Company will, in turn,
own all of the outstanding shares of common stock, par value $.01 per
share, of the surviving corporation in the FPL Merger (the "Surviving
FPL Common Stock") and all of the outstanding shares of common stock,
par value $.01 per share, of the surviving corporation in the Entergy
Merger (the "Surviving Entergy Common Stock"));
WHEREAS the respective Boards of Directors of FPL and
Entergy have each determined that the Mergers and the other
transactions contemplated hereby are consistent with, and in
furtherance of, the best interests of their respective corporations
and shareholders and each of FPL's and Entergy's respective business
strategies and goals;
WHEREAS FPL and Entergy desire to make certain
representations, warranties, covenants and agreements in connection
with the Mergers and also to prescribe various conditions to the
Mergers; and
WHEREAS, for Federal income tax purposes, it is intended
that each of the Mergers will constitute a tax-free transaction
governed by Section 351 of the Internal Revenue Code of 1986, as
amended (the "Code"), and that the shareholders of FPL and Entergy
will recognize no gain or loss for Federal income tax purposes as a
result of the consummation of the Mergers.
NOW, THEREFORE, in consideration of the foregoing and of
the representations, warranties, covenants and agreements contained
in this Agreement, the parties agree as follows:
ARTICLE I
The Mergers
SECTION 1.01. The Mergers. Upon the terms and subject to
the conditions set forth in this Agreement:
(a) At the FPL Effective Time (as defined in Section
1.03), Merger Sub A shall be merged with and into FPL in
accordance with the Florida Business Corporation Act (the
"FBCA"). FPL shall be the surviving corporation in the FPL
Merger and shall continue its corporate existence under the laws
of the State of Florida and shall succeed to and assume all of
the rights and obligations of FPL and Merger Sub A in accordance
with the FBCA. As a result of the FPL Merger, FPL shall become
a wholly-owned subsidiary of the Company. The effects and the
consequences of the FPL Merger shall be as set forth in Section
1.04(a).
(b) At the Entergy Effective Time (as defined in Section
1.03), Merger Sub B shall be merged with and into Entergy in
accordance with the Delaware General Corporation Law (the
"DGCL"). Entergy shall be the surviving corporation in the
Entergy Merger and shall continue its corporate existence under
the laws of the State of Delaware and shall succeed to and
assume all of the rights and obligations of Entergy and Merger
Sub B in accordance with the DGCL. As a result of the Entergy
Merger, Entergy shall become a wholly-owned subsidiary of the
Company. The effects and the consequences of the Entergy Merger
shall be as set forth in Section 1.04(a).
SECTION 1.02. Closing. The closing of the Mergers (the
"Closing") will take place at 10:00 a.m., local time, on a date to be
specified by the parties (the "Closing Date"), which shall be no
later than the second business day after satisfaction or waiver of
the conditions set forth in Article VI, unless another time or date
is agreed to by the parties hereto. The Closing shall be held at
such location in The City of New York as is agreed to by the parties
hereto.
SECTION 1.03. Effective Time of the Mergers. Subject to
the provisions of this Agreement, as soon as practicable on or after
the Closing Date, (i) with respect to the FPL Merger, the parties
thereto shall deliver articles of merger (the "FPL Certificate of
Merger") executed in accordance with, and containing such information
as is required by, Section 607.1105 of the FBCA to the Department of
State of the State of Florida and shall make all other filings or
recordings required under the FBCA, and (ii) with respect to the
Entergy Merger, the parties thereto shall file a certificate of
merger (the "Entergy Certificate of Merger") executed in accordance
with, and containing such information as is required by, the relevant
provisions of Section 251 of the DGCL with the Secretary of State of
the State of Delaware and shall make all other filings or recordings
required under the DGCL. The FPL Merger shall become effective at
such time as the FPL Certificate of Merger is duly filed by the
Department of State of the State of Florida (the time the FPL Merger
becomes effective being hereinafter referred to as the "FPL Effective
Time") and the Entergy Merger shall become effective at such time as
the Entergy Certificate of Merger is duly filed with the Secretary of
State of the State of Delaware (the time the Entergy Merger becomes
effective being hereinafter referred to as the "Entergy Effective
Time"). The FPL Effective Time shall be the same date and time as
the Entergy Effective Time (such date and time referred to herein as
the "Effective Time").
SECTION 1.04. Effects of the Mergers. (a) The FPL Merger
and the Entergy Merger shall generally have the effects set forth in
the applicable provisions of the FBCA and the DGCL, respectively. In
addition, the Mergers shall have the following effects:
(i) At the Effective Time, (A) the articles of
incorporation of FPL, as in effect immediately prior to the
Effective Time, shall be the articles of incorporation of
FPL as the surviving corporation in the FPL Merger until
thereafter changed or amended as provided therein or by
applicable law and (B) the by-laws of FPL, as in effect
immediately prior to the FPL Effective Time, shall be the
by-laws of FPL as the surviving corporation in the FPL
Merger, until thereafter changed or amended as provided
therein, in the articles of incorporation of FPL or by
applicable law.
(ii) At the Effective Time, (A) the certificate
of incorporation of Entergy, as in effect immediately prior
to the Effective Time, shall be the certificate of
incorporation of Entergy as the surviving corporation in
the Entergy Merger until thereafter changed or amended as
provided therein or by applicable law and (B) the by-laws
of Entergy, as in effect immediately prior to the Entergy
Effective Time, shall be the by-laws of Entergy as the
surviving corporation in the Entergy Merger, until
thereafter changed or amended as provided therein, in the
certificate of incorporation of Entergy or by applicable
law.
(b) The parties shall take all appropriate action so that,
at the Effective Time, (i) the articles of incorporation of the
Company shall be in the form attached as Exhibit A hereto and (ii)
the by-laws of the Company shall be in the form attached as Exhibit B
hereto. Each of FPL and Entergy shall take all actions necessary to
cause the Company, Merger Sub A and Merger Sub B to take any actions
necessary in order to consummate the Mergers and the other
transactions contemplated hereby.
SECTION 1.05. Directors and Officers of FPL and Entergy.
(a) The directors of Merger Sub A at the Effective Time shall, from
and after the Effective Time, be the directors of FPL as the
surviving corporation in the FPL Merger until their successors have
been duly elected or appointed and qualified.
(b) Subject to Section 1.06, the officers of FPL at the
Effective Time shall, from and after the Effective Time, continue to
be the officers of FPL as the surviving corporation in the FPL Merger
until their successors have been duly elected or appointed and
qualified.
(c) The directors of Merger Sub B at the Effective Time
shall, from and after the Effective Time, be the directors of Entergy
as the surviving corporation in the Entergy Merger until their
successors have been duly elected or appointed and qualified.
(d) Subject to Section 1.06, the officers of Entergy at
the Effective Time shall, from and after the Effective Time, continue
to be the officers of Entergy as the surviving corporation in the
Entergy Merger until their successors have been duly elected or
appointed and qualified.
SECTION 1.06. Board of Directors; Officers. From and
after the Effective Time, the Board of Directors of the Company, the
committees of the Board of Directors of the Company and the
chairpersons thereof shall be as set forth in Exhibit C hereto and
the senior officers of the Company shall be as disclosed in Section
1.06 of the FPL Disclosure Letter (as defined in Section 3.01(a)).
SECTION 1.07. Post-Merger Operations. Following the
Effective Time, the Company shall conduct its operations in
accordance with the following:
(a) Name. At the Effective Time, the Company's name shall
be a new name agreed upon between the Board of Directors of FPL
and the Board of Directors of Entergy prior to the Effective
Time.
(b) Principal Corporate Offices. The Company shall
maintain its headquarters and principal corporate offices in
Juno Beach, Florida and shall maintain the headquarters of its
utility operations in New Orleans, Louisiana. Each of Florida
Power & Light Company, Entergy Arkansas, Inc., Entergy Gulf
States, Inc., Entergy Louisiana, Inc., Entergy Mississippi,
Inc., Entergy New Orleans, Inc. and System Energy Resources,
Inc. shall maintain its utility headquarters in its present
location.
(c) Charities. The parties agree that provision of
charitable contributions and community support in their
respective service areas serves a number of their important
corporate goals. During the two-year period immediately
following the Effective Time, the Company and its subsidiaries
taken as a whole intend to continue to provide charitable
contributions and community support within the service areas of
the parties and each of their respective subsidiaries at levels
substantially comparable to the levels of charitable
contributions and community support provided, directly or
indirectly, by FPL and Entergy within their service areas during
the two-year period immediately prior to the Effective Time.
(d) Transition Committee. The parties shall create a
special transition committee (the "Transition Committee") that
shall be headed by the Chief Executive Officer of FPL and shall
be composed of an equal number of designees of FPL and Entergy.
The Transition Committee shall examine various alternatives
regarding the manner in which to best organize and manage the
business of the Company after the Effective Time, subject to
applicable law.
ARTICLE II
Effect of the Mergers on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. (a) At the FPL
Effective Time, by virtue of the FPL Merger and without any action on
the part of the holder of any shares of FPL Common Stock or any
capital stock of Merger Sub A:
(i) Cancelation of Certain FPL Common Stock. Each
share of FPL Common Stock that is owned by FPL, Entergy or
the Company shall automatically be canceled and retired and
shall cease to exist, and no consideration shall be
delivered in exchange therefor.
(ii) Conversion of FPL Common Stock. Subject to
Section 2.02(e), each issued and outstanding share of FPL
Common Stock (other than shares to be canceled in
accordance with Section 2.01(a)(i)) shall be converted into
the right to receive 1 (the "FPL Ratio") fully paid and
nonassessable share of Company Common Stock. As of the FPL
Effective Time, all such shares of FPL Common Stock shall
no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each
holder of a certificate representing any such shares of FPL
Common Stock shall cease to have any rights with respect
thereto, except the right to receive the shares of Company
Common Stock (and cash in lieu of fractional shares of
Company Common Stock) to be issued or paid in consideration
therefor upon the surrender of such certificate in
accordance with Section 2.02, without interest.
(iii) Conversion of Merger Sub A Common Stock. The
aggregate of all shares of the capital stock of Merger Sub
A issued and outstanding immediately prior to the FPL
Effective Time (of which, as of the date of this Agreement,
1,000 shares of common stock, par value $.01 per share, are
issued and outstanding, each entitling the holder thereof
to vote on the approval of this Agreement) shall be
converted into the right to receive 1,000 shares of
Surviving FPL Common Stock.
(b) At the Entergy Effective Time, by virtue of the
Entergy Merger and without any action on the part of any holder of
Entergy Common Stock or any capital stock of Merger Sub B:
(i) Cancelation of Certain Entergy Common Stock. Each
share of Entergy Common Stock that is owned by Entergy, FPL
or the Company shall automatically be canceled and retired
and shall cease to exist, and no consideration shall be
delivered in exchange therefor.
(ii) Conversion of Entergy Common Stock. Subject to
Section 2.02(e), each issued and outstanding share of
Entergy Common Stock (other than shares to be canceled in
accordance with Section 2.01(b)(i)) shall be converted into
the right to receive 0.585 (the "Entergy Ratio", and
together with the FPL Ratio, the "Exchange Ratios") of a
fully paid and nonassessable share of Company Common Stock.
As of the Entergy Effective Time, all such shares of
Entergy Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease
to exist, and each holder of a certificate representing any
such shares of Entergy Common Stock shall cease to have any
rights with respect thereto, except the right to receive
the shares of Company Common Stock (and cash in lieu of
fractional shares of Company Common Stock) to be issued or
paid in consideration therefor upon the surrender of such
certificate in accordance with Section 2.02, without
interest.
(iii) Conversion of Merger Sub B Common Stock. The
aggregate of all shares of the capital stock of Merger Sub
B issued and outstanding immediately prior to the Entergy
Effective Time (of which, as of the date of this Agreement,
1,000 shares of common stock, without par value, are issued
and outstanding, each entitling the holder thereof to vote
on the approval of this Agreement) shall be converted into
the right to receive 1,000 shares of Surviving Entergy
Common Stock.
(c) At the Effective Time, by virtue of the Mergers and
without any action on the part of any holder of any capital stock of
FPL, Entergy or the Company, each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time shall
be canceled, and no consideration shall be delivered in exchange
therefor.
SECTION 2.02. Exchange of Certificates. (a) Exchange
Agent. As of the Effective Time, the Company shall enter into an
agreement with such bank or trust company as may be mutually agreed
by FPL and Entergy (the "Exchange Agent"), which agreement shall
provide that the Company shall deposit with the Exchange Agent as of
the Effective Time, for the benefit of the holders of shares of FPL
Common Stock and Entergy Common Stock, for exchange in accordance
with this Article II, through the Exchange Agent, certificates
representing the shares of Company Common Stock (such shares of
Company Common Stock, together with any dividends or distributions
with respect thereto with a record date after the Effective Time,
being hereinafter referred to as the "Exchange Fund") issuable
pursuant to Section 2.01 in exchange for outstanding shares of FPL
Common Stock and Entergy Common Stock.
(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 that
immediately prior to the Effective Time represented outstanding
shares of FPL Common Stock or Entergy Common Stock (the
"Certificates") whose shares were converted into the right to receive
shares of Company Common Stock pursuant to Section 2.01 (the "Merger
Consideration"), (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to
the Exchange Agent and shall be in such form and have such other
provisions as FPL and Entergy may reasonably specify) and (ii)
instructions for use in surrendering the Certificates in exchange for
the Merger Consideration. Upon surrender of a Certificate for
cancelation to the Exchange Agent, together with such letter of
transmittal, duly executed, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Company
Common Stock that such holder has the right to receive pursuant to
the provisions of this Article II, certain dividends or other
distributions in accordance with Section 2.02(c) and cash in lieu of
any fractional share of Company Common Stock in accordance with
Section 2.02(e), and the Certificate so surrendered shall forthwith
be canceled. In the event of a transfer of ownership of FPL Common
Stock or Entergy Common Stock that is not registered in the transfer
records of FPL or Entergy, as the case may be, a certificate
representing the proper number of shares of Company Common Stock may
be issued to a person other than the person in whose name the
Certificate so surrendered is registered if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the
person requesting such issuance shall pay any transfer or other taxes
required by reason of the issuance of shares of Company Common Stock
to a person other than the registered holder of such Certificate or
establish to the satisfaction of the Company that such tax has been
paid or is not applicable. Until surrendered as contemplated by this
Section 2.02, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such
surrender the Merger Consideration, which the holder thereof has the
right to receive in respect of such Certificate pursuant to the
provisions of this Article II, certain dividends or other
distributions in accordance with Section 2.02(c) and cash in lieu of
any fractional share of FPL Common Stock or Entergy Common Stock, as
the case may be, in accordance with Section 2.02(e). No interest
shall be paid or will accrue on the Merger Consideration or any cash
payable to holders of Certificates pursuant to the provisions of this
Article II.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Company Common Stock
with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the shares of
Company Common Stock issuable hereunder in respect thereof and no
cash payment in lieu of fractional shares shall be paid to any such
holder pursuant to Section 2.02(e), and all such dividends, other
distributions and cash in lieu of fractional shares of Company Common
Stock shall be paid by the Company to the Exchange Agent and shall be
included in the Exchange Fund, in each case until the surrender of
such Certificate in accordance with this Article II. Subject to the
effect of applicable escheat or similar laws, following surrender of
any such Certificate there shall be paid to the holder of the
certificate representing whole shares of Company Common Stock issued
in exchange therefor, without interest, (i) at the time of such
surrender, the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to
such whole shares of Company Common Stock and the amount of any cash
payable in lieu of a fractional share of Company Common Stock to
which such holder is entitled pursuant to Section 2.02(e) 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 such surrender and with a payment date subsequent to such
surrender payable with respect to such whole shares of Company Common
Stock.
(d) No Further Ownership Rights in FPL Common Stock or
Entergy Common Stock. All shares of Company Common Stock issued upon
the surrender for exchange of Certificates in accordance with the
terms of this Article II (including any cash paid pursuant to this
Article II) shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to the shares of FPL Common
Stock or Entergy Common Stock, as the case may be, theretofore
represented by such Certificates, subject, however, to FPL's and
Entergy's respective obligations to pay any dividends or make any
other distributions with a record date prior to the Effective Time
that may have been declared or made by FPL or Entergy, as the case
may be, on such shares of FPL Common Stock or Entergy Common Stock
that remain unpaid at the Effective Time, and there shall be no
further registration of transfers on the stock transfer books of FPL
or Entergy of the shares of FPL Common Stock and Entergy Common
Stock, respectively, that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are
presented to the Company, FPL, Entergy or the Exchange Agent for any
reason, they shall be canceled and exchanged as provided in this
Article II, except as otherwise provided by law.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of Company Common Stock shall be
issued upon the surrender for exchange of Certificates, no dividend
or distribution of the Company shall relate to such fractional share
interests and such fractional share interests will not entitle the
owner thereof to vote or to any rights of a shareholder of the
Company.
(ii) As promptly as practicable following the Effective
Time, the Exchange Agent shall determine the excess of (A) the number
of whole shares of Company Common Stock delivered to the Exchange
Agent by the Company pursuant to Section 2.02(a) over (B) the
aggregate number of whole shares of Company Common Stock to be
distributed to former holders of FPL Common Stock and Entergy Common
Stock pursuant to Section 2.02(b) (such excess being herein called
the "Excess Shares"). Following the Effective Time, the Exchange
Agent shall, on behalf of former shareholders of FPL and Entergy,
sell the Excess Shares at then-prevailing prices on the New York
Stock Exchange, Inc. ("NYSE"), all in the manner provided in Section
2.02(e)(iii).
(iii) The sale of the Excess Shares by the Exchange Agent
shall be executed on the NYSE through one or more member firms of the
NYSE and shall be executed in round lots to the extent practicable.
The Exchange Agent shall use reasonable efforts to complete the sale
of the Excess Shares as promptly following the Effective Time as, in
the Exchange Agent's sole judgment, is practicable consistent with
obtaining the best execution of such sales in light of prevailing
market conditions. Until the net proceeds of such sale or sales have
been distributed to the holders of Certificates formerly representing
FPL Common Stock or Entergy Common Stock, as the case may be, the
Exchange Agent shall hold such proceeds in trust for such holders
(the "Common Shares Trust"). The Company shall pay all commissions,
transfer taxes and other out-of-pocket transaction costs, including
the expenses and compensation of the Exchange Agent incurred in
connection with such sale of the Excess Shares. The Exchange Agent
shall determine the portion of the Common Shares Trust to which each
former holder of FPL Common Stock or Entergy Common Stock is
entitled, if any, by multiplying the amount of the aggregate net
proceeds composing the Common Shares Trust by a fraction, the
numerator of which is the amount of the fractional share interest to
which such former holder of FPL Common Stock or Entergy Common Stock
is entitled (after taking into account all shares of FPL Common Stock
or Entergy Common Stock held at the Effective Time by such holder)
and the denominator of which is the aggregate amount of fractional
share interests to which all former holders of FPL Common Stock and
Entergy Common Stock are entitled.
(iv) Notwithstanding the provisions of Section 2.02(e)(ii)
and (iii), the Company may elect at its option, exercised prior to
the Effective Time, in lieu of the issuance and sale of Excess Shares
and the making of the payments herein above contemplated, to pay each
former holder of FPL Common Stock or Entergy Common Stock an amount
in cash equal to the product obtained by multiplying (A) the
fractional share interest to which such former holder (after taking
into account all shares of FPL Common Stock or Entergy Common Stock
held at the Effective Time by such holder) would otherwise be
entitled by (B) the closing price for a share of FPL Common Stock as
reported on the NYSE Composite Transaction Tape (as reported in The
Wall Street Journal, or, if not reported thereby, any other
authoritative source) on the Closing Date, and, in such case, all
references herein to the cash proceeds of the sale of the Excess
Shares and similar references shall be deemed to mean and refer to
the payments calculated as set forth in this Section 2.02(e)(iv).
(v) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of Certificates
formerly representing FPL Common Stock or Entergy Common Stock, as
the case may be, with respect to any fractional share interests, the
Exchange Agent shall make available such amounts to such holders of
Certificates formerly representing FPL Common Stock or Entergy Common
Stock, as the case may be, subject to and in accordance with the
terms of Section 2.02(c).
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund that remains undistributed to the holders of the
Certificates for six months after the Effective Time shall be
delivered to the Company, upon demand, and any holders of the
Certificates who have not theretofore complied with this Article II
shall thereafter look only to the Company for payment of their claim
for Merger Consideration, any dividends or distributions with respect
to Company Common Stock, and any cash in lieu of fractional shares of
Company Common Stock.
(g) No Liability. None of the Company, FPL, Entergy or
the Exchange Agent shall be liable to any person in respect of any
shares of Company Common Stock, any dividends or distributions with
respect thereto, any cash in lieu of fractional shares of Company
Common Stock or any cash from the Exchange Fund, in each case
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any Certificate shall not have
been surrendered prior to two years after the Effective Time (or
immediately prior to such earlier date on which any Merger
Consideration, any dividends or distributions payable to the holder
of such Certificate or any cash payable to the holder of such
Certificate formerly representing FPL Common Stock or Entergy Common
Stock, as the case may be, pursuant to this Article II, would
otherwise escheat to or become the property of any Governmental
Authority (as defined in Section 3.01(d)), any such Merger
Consideration, dividends or distributions in respect of such
Certificate or such cash shall, to the extent permitted by applicable
law, become the property of the Company, free and clear of all claims
or interest of any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by the
Company, on a daily basis. Any interest and other income resulting
from such investments shall be paid to the Company.
(i) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by the Company, the posting by such person
of a bond in such reasonable amount as the Company may direct as
indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent shall issue in exchange for
such lost, stolen or destroyed Certificate, the Merger Consideration
and, if applicable, any unpaid dividends and distributions on shares
of Company Common Stock deliverable in respect thereof and any cash
in lieu of fractional shares, in each case pursuant to this
Agreement.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of FPL. FPL
represents and warrants to Entergy as follows:
(a) Organization and Qualification. (i) Each of FPL and
its subsidiaries is duly organized, validly existing and in good
standing (with respect to jurisdictions that recognize the concept of
good standing) under the laws of its jurisdiction of incorporation
and has full corporate power and authority to conduct its business as
and to the extent now conducted and to own, use and lease its assets
and properties, except for such failures to be so organized, existing
and in good standing (with respect to jurisdictions that recognize
the concept of good standing) or to have such power and authority
that, individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect (as defined
in Section 8.03) on FPL. Each of FPL and its subsidiaries is duly
qualified, licensed or admitted to do business and is in good
standing (with respect to jurisdictions that recognize the concept of
good standing) in each jurisdiction in which the ownership, use or
leasing of its assets and properties, or the conduct or nature of its
business, makes such qualification, licensing or admission necessary,
except for such failures to be so qualified, licensed or admitted and
in good standing (with respect to jurisdictions that recognize the
concept of good standing) that, individually or in the aggregate,
have not had and could not reasonably be expected to have a material
adverse effect on FPL. Section 3.01(a) of the letter dated the date
of this Agreement and delivered to Entergy by FPL concurrently with
the execution and delivery of this Agreement (the "FPL Disclosure
Letter") sets forth as of the date of this Agreement the name and
jurisdiction of organization of each subsidiary of FPL.
(ii) Section 3.01(a) of the FPL Disclosure Letter sets
forth a description as of the date of this Agreement, of all FPL
Joint Ventures, including (x) the name of each such entity and (y) a
brief description of the principal line or lines of business
conducted by each such entity. For purposes of this Agreement:
(A) "Joint Venture" of a person or entity shall mean any
person that is not a subsidiary of such first person, in which
such first person or one or more of its subsidiaries owns
directly or indirectly an equity interest, other than equity
interests held for passive investment purposes that are less
than 5% of each class of the outstanding voting securities or
equity interests;
(B) "FPL Joint Venture" shall mean any Joint Venture of
FPL or any of its subsidiaries in which the fair market value of
FPL's or its subsidiaries' interest exceeds $60,000,000, as
reasonably determined by FPL; and
(C) "Entergy Joint Venture" shall mean the joint venture
(the "Koch JV") between Entergy and Koch Energy, Inc. and any
Joint Venture of Entergy or any of its subsidiaries in which the
fair market value of Entergy's or its subsidiaries' interest
exceeds $60,000,000, as reasonably determined by Entergy.
(iii) Except for interests in the subsidiaries of FPL,
the FPL Joint Ventures and interests acquired after the date of this
Agreement without violating any covenant, and except as disclosed in
the FPL SEC Reports (as defined in Section 3.01(e)) filed prior to
the date of this Agreement or Section 3.01(a) of the FPL Disclosure
Letter, FPL does not directly or indirectly own any equity or similar
interest in, or any interest convertible into or exchangeable or
exercisable for, any equity or similar interest in, any person, which
interest individually has a fair market value as of the date of this
Agreement in excess of $60,000,000, as reasonably determined by FPL.
(b) Capital Stock. (i) The authorized capital stock of
FPL consists of:
(A) 300,000,000 shares of FPL Common Stock, of which
177,752,585 shares were issued and outstanding as of July 30,
2000; and
(B) 100,000,000 shares of preferred stock, par value $.01
per share, none of which were issued and outstanding as of the
date of this Agreement (the "FPL Preferred Stock").
As of July 30, 2000, no shares of FPL Common Stock were
held in the treasury of FPL. As of the date of this Agreement, (x)
3,000,000 shares of FPL Preferred Stock are designated Series A
Junior Participating Preferred Stock (the "FPL Series A Preferred
Stock") and are reserved for issuance in accordance with the Rights
Agreement dated as of July 1, 1996, as amended, by and between FPL
and The First National Bank of Boston, as Rights Agent (the "FPL
Rights Agreement"), pursuant to which FPL has issued rights (the "FPL
Rights") to purchase such shares of FPL Series A Preferred Stock and
(y) 1,460,470 shares of FPL Common Stock were subject to outstanding
FPL Employee Stock Options (as defined in Section 5.06) and 1,032,145
additional shares of FPL Common Stock were reserved for issuance
pursuant to the 1994 Long-Term Incentive Plan (the "FPL Option
Plans"). All of the issued and outstanding shares of FPL Common
Stock are, and all shares reserved for issuance will be, upon
issuance in accordance with the terms specified in the instruments or
agreements pursuant to which they are issuable, duly authorized,
validly issued, fully paid and nonassessable. Except pursuant to the
FPL Rights Agreement, and except as disclosed in this Section 3.01(b)
or in Section 3.01(b) of the FPL Disclosure Letter, as of the date of
this Agreement there are no outstanding subscriptions, options,
warrants, rights (including stock appreciation rights), preemptive
rights or other contracts, commitments, understandings or
arrangements, including any right of conversion or exchange under any
outstanding security, instrument or agreement (together, "Options"),
obligating FPL or any of its subsidiaries to issue or sell any shares
of capital stock of FPL or to grant, extend or enter into any Option
with respect thereto.
(ii) Except as permitted by this Agreement and except as
disclosed in the FPL SEC Reports filed prior to the date of this
Agreement or Section 3.01(b) of the FPL Disclosure Letter, all of the
outstanding shares of capital stock of each subsidiary of FPL are
duly authorized, validly issued, fully paid and nonassessable and are
owned, beneficially and of record, by FPL or a subsidiary, free and
clear of any liens, claims, mortgages, encumbrances, pledges,
security interests, equities and charges of any kind (each a "Lien").
The shares of the Company owned by FPL are owned free and clear of
any Lien. Except as disclosed in the FPL SEC Reports filed prior to
the date of this Agreement or Section 3.01(b) of the FPL Disclosure
Letter, there are no (A) outstanding Options obligating FPL or any of
its subsidiaries to issue or sell any shares of capital stock of any
subsidiary of FPL or to grant, extend or enter into any such Option
or (B) voting trusts, proxies or other commitments, understandings,
restrictions or arrangements in favor of any person other than FPL or
a subsidiary wholly owned, directly or indirectly, by FPL with
respect to the voting of or the right to participate in dividends or
other earnings on any capital stock of any subsidiary of FPL.
(iii) Except for Florida Power & Light Company ("FPL
Utility"), as of the date of this Agreement, none of the subsidiaries
of FPL or the FPL Joint Ventures is a "public utility company", a
"holding company", a "subsidiary company" or an "affiliate" of any
public utility company within the meaning of Section 2(a)(5), 2(a)(8)
or 2(a)(11) of the Public Utility Holding Company Act of 1935, as
amended (the "1935 Act"), respectively. None of FPL, its
subsidiaries and the FPL Joint Ventures is registered under the 1935
Act.
(iv) Except as disclosed in Section 3.01(b)(iv) of the FPL
Disclosure Letter, as of the date of this Agreement, no bonds,
debentures, notes or other indebtedness of FPL or any of its
subsidiaries having the right to vote (or which are convertible into
or exercisable for securities having the right to vote)
(collectively, "FPL Voting Debt") on any matters on which FPL
shareholders may vote are issued or outstanding nor are there any
outstanding Options obligating FPL or any of its subsidiaries to
issue or sell any FPL Voting Debt or to grant, extend or enter into
any Option with respect thereto.
(c) Authority. FPL has full corporate power and authority
to enter into this Agreement, to perform its obligations hereunder
and, subject to obtaining FPL Shareholders Approval (as defined in
Section 3.01(p)), to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by FPL and
the consummation by FPL of the transactions contemplated hereby have
been duly and validly adopted and approved by the Board of Directors
of FPL, the Board of Directors of FPL has recommended approval of
this Agreement by the shareholders of FPL and directed that this
Agreement be submitted to the shareholders of FPL for their approval,
and no other corporate proceedings on the part of FPL or its
shareholders are necessary to authorize the execution, delivery and
performance of this Agreement by FPL and the consummation by FPL of
the FPL Merger and the other transactions contemplated hereby, other
than obtaining FPL Shareholders Approval. This Agreement has been
duly and validly executed and delivered by FPL and constitutes a
legal, valid and binding obligation of FPL enforceable against FPL in
accordance with its terms.
(d) No Conflicts; Approvals and Consents. (i) The
execution and delivery of this Agreement by FPL do not, and the
performance by FPL of its obligations hereunder and the consummation
of the Mergers and the other transactions contemplated hereby will
not, conflict with, result in a violation or breach of, constitute
(with or without notice or lapse of time or both) a default under,
result in or give to any person any right of payment or
reimbursement, termination, cancelation, modification or acceleration
of, or result in the creation or imposition of any Lien upon any of
the assets or properties of FPL or any of its subsidiaries or any of
the FPL Joint Ventures under, any of the terms, conditions or
provisions of (A) the certificates or articles of incorporation or
bylaws (or other comparable charter documents) of FPL or any of its
subsidiaries, or (B) subject to the obtaining of FPL Shareholders
Approval and the taking of the actions described in paragraph (ii) of
this Section 3.01(d) and obtaining the Entergy Required Statutory
Approvals, (x) any statute, law, rule, regulation or ordinance
(together, "laws"), or any judgment, order, writ or decree (together,
"orders"), of any Federal, state, local or foreign government or any
court of competent jurisdiction, administrative agency or commission
or other governmental authority or instrumentality, domestic or
foreign (each, a "Governmental Authority") applicable to FPL or any
of its subsidiaries or any of the FPL Joint Ventures or any of their
respective assets or properties, or (y) except as disclosed in
Section 3.01(d) of the FPL Disclosure Letter, any note, bond,
mortgage, security agreement, agreement, indenture, franchise,
concession, contract, lease or other instrument to which FPL or any
of its subsidiaries or any of the FPL Joint Ventures is a party or by
which FPL or any of its subsidiaries or any of the FPL Joint Ventures
or any of their respective assets or properties is bound, excluding
from the foregoing clauses (x) and (y) such items that, individually
or in the aggregate, have not had and could not reasonably be
expected to have a material adverse effect on FPL.
(ii) Except for (A) compliance with, and filings under,
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder (the "HSR Act"); (B) the
filing with and, to the extent required, the declaration of
effectiveness by the Securities and Exchange Commission (the "SEC")
of (1) a proxy statement relating to the approval of this Agreement
by FPL's shareholders (such proxy statement, together with the proxy
statement relating to the approval of this Agreement by Entergy's
shareholders, in each case as amended or supplemented from time to
time, the "Joint Proxy Statement") pursuant to the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "Exchange Act"), (2) the registration statement on
Form S-4 prepared in connection with the issuance of Company Common
Stock in the Mergers (the "Form S-4") and (3) such reports under the
Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby; (C) the filing of documents
with various state securities authorities that may be required in
connection with the transactions contemplated hereby; (D) such
filings with and approvals of the NYSE to permit the shares of
Company Common Stock that are to be issued pursuant to Article II to
be listed on the NYSE; (E) the registration, consents, approvals and
notices required under the 1935 Act; (F) notice to, and the consent
and approval of, the Federal Energy Regulatory Commission (the
"FERC") under Section 203 of the Federal Power Act, as amended (the
"Power Act"), or an order under the Power Act disclaiming
jurisdiction over the transactions contemplated hereby; (G) the
filing of an application to, and consent and approval of, and
issuance of any required licenses and license amendments by, the
Nuclear Regulatory Commission (the "NRC") under the Atomic Energy Act
of 1954, as amended (the "Atomic Energy Act"); (H) the filing of the
FPL Certificate of Merger and other appropriate merger documents
required by the FBCA with the Secretary of State of the State of
Florida and appropriate documents with the relevant authorities of
other states in which FPL is qualified to do business; (I) compliance
with and such filings as may be required under applicable
Environmental Laws (as defined in Section 3.01(n)); (J) to the extent
required, notice to and the approval of (1) the Florida Public
Service Commission ("FPSC"), (2) the Louisiana Public Service
Commission ("LPSC"), (3) the New Orleans City Council ("NOCC"), (4)
the Arkansas Public Service Commission ("APSC"), (5) the Public
Utility Commission of Texas ("PUCT"), (6) the Mississippi Public
Service Commission ("MPSC") and (7) municipalities or other local
governmental bodies in the State of Texas (the "Municipalities" and,
collectively with the FPSC, the LPSC, the NOCC, the APSC, the PUCT
and the MPSC, the "Applicable PSCs"); (K) required pre-approvals (the
"FCC Pre-Approvals") of license transfers with the Federal
Communications Commission (the "FCC"); and (L) such other items as
disclosed in Section 3.01(d) of the FPL Disclosure Letter (the items
set forth above in clauses (A) through (H) and (J)(1) through (J)(6),
together with the items identified with an "*" in Section 3.01(d) of
the FPL Disclosure Letter, collectively, the "FPL Required Statutory
Approvals"), no consent, approval, license, order or authorization
("Consents") or action of, registration, declaration or filing with
or notice to any Governmental Authority is necessary or required to
be obtained or made in connection with the execution and delivery of
this Agreement by FPL, the performance by FPL of its obligations
hereunder or the consummation of the Mergers and the other
transactions contemplated hereby, other than such items that the
failure to make or obtain, as the case may be, individually or in the
aggregate, could not reasonably be expected to have a material
adverse effect on FPL.
(e) SEC Reports, Financial Statements and Utility Reports.
(i) FPL and its subsidiaries have filed each form, report, schedule,
registration statement, registration exemption, if applicable,
definitive proxy statement and other document (together with all
amendments thereof and supplements thereto) required to be filed by
FPL or any of its subsidiaries pursuant to the Securities Act of 1933
and the rules and regulations thereunder (the "Securities Act") or
the Exchange Act with the SEC since January 1, 1997 (as such
documents have since the time of their filing been amended or
supplemented, the "FPL SEC Reports"). As of their respective dates,
the FPL SEC Reports (A) complied as to form in all material respects
with the requirements of the Securities Act or the Exchange Act, if
applicable, as the case may be, and (B) did not contain any untrue
statement of a material fact or omit to state a 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.
(ii) The audited consolidated financial statements and
unaudited interim consolidated financial statements (including, in
each case, the notes, if any, thereto) included in the FPL SEC
Reports (the "FPL Financial Statements") complied as to form in all
material respects with the published rules and regulations of the SEC
with respect thereto, were prepared in accordance with U.S. generally
accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved (except as may be indicated therein or in
the notes thereto and except with respect to unaudited statements as
permitted by Form 10-Q of the SEC) and fairly present (subject, in
the case of the unaudited interim financial statements, to normal,
recurring year-end audit adjustments that were not or are not
expected to be, individually or in the aggregate, materially adverse
to FPL) the consolidated financial position of FPL and its
consolidated subsidiaries as of the respective dates thereof and the
consolidated results of their operations and cash flows for the
respective periods then ended.
(iii) All filings (other than immaterial filings) required
to be made by FPL or any of its subsidiaries since January 1, 1997,
under the 1935 Act, the Power Act, the Atomic Energy Act, the
Communications Act of 1934 and applicable state laws and regulations,
have been filed with the SEC, the FERC, the Department of Energy (the
"DOE"), the NRC, the FCC or any applicable state public utility
commissions (including, to the extent required, the FPSC), as the
case may be, including all forms, statements, reports, agreements
(oral or written) and all documents, exhibits, amendments and
supplements appertaining thereto, including all rates, tariffs,
franchises, service agreements and related documents and all such
filings complied, as of their respective dates, with all applicable
requirements of the applicable statute and the rules and regulations
thereunder, except for filings the failure of which to make,
individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on FPL.
(f) Absence of Certain Changes or Events. Except as
disclosed in the FPL SEC Reports filed prior to the date of this
Agreement or Section 3.01(f) of the FPL Disclosure Letter, since
December 31, 1999, there has not been any change, event or
development that, individually or in the aggregate, has had or could
reasonably be expected to have a material adverse effect on FPL.
(g) Absence of Undisclosed Liabilities. Except for
matters reflected or reserved against in the balance sheet (or notes
thereto) as of December 31, 1999, included in FPL Financial
Statements or as disclosed in Section 3.01(g) of the FPL Disclosure
Letter, as of the date of this Agreement, neither FPL nor any of its
subsidiaries has any liabilities or obligations (whether absolute,
accrued, contingent, fixed or otherwise, or whether due or to become
due) of any nature that would be required by GAAP to be reflected on
a consolidated balance sheet of FPL and its consolidated subsidiaries
(including the notes thereto), except liabilities or obligations (i)
that were incurred in the ordinary course of business consistent with
past practice since December 31, 1999, or (ii) that, individually or
in the aggregate, have not had and could not reasonably be expected
to have a material adverse effect on FPL.
(h) Legal Proceedings. Except as disclosed in the FPL SEC
Reports filed prior to the date of this Agreement or in Section
3.01(h) of the FPL Disclosure Letter and except for environmental
matters that are governed by Section 3.01(n), as of the date of this
Agreement, (i) there are no actions, suits, arbitrations or
proceedings pending or, to the knowledge of FPL, threatened against,
relating to or affecting, nor to the knowledge of FPL are there any
Governmental Authority investigations or audits pending or threatened
against, relating to or affecting, FPL or any of its subsidiaries or
any of the FPL Joint Ventures or any of their respective assets and
properties that, in each case, individually or in the aggregate, have
had or could reasonably be expected to have a material adverse effect
on FPL, and (ii) neither FPL nor any of its subsidiaries is subject
to any order of any Governmental Authority that, individually or in
the aggregate, has had or could reasonably be expected to have a
material adverse effect on FPL.
(i) Information Supplied. None of the information
supplied or to be supplied by FPL for inclusion or incorporation by
reference in (i) the Form S-4 will, at the time the Form S-4 is filed
with the SEC, at any time it is amended or supplemented or at the
time it becomes effective under the Securities Act, 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 not misleading, or (ii) the Joint Proxy Statement
will, at the date it is first mailed to FPL's shareholders or
Entergy's shareholders or at the time of the FPL Shareholders Meeting
(as defined in Section 5.01) or the Entergy Shareholders Meeting (as
defined in Section 5.01), contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Joint
Proxy Statement will comply as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation is made by FPL with respect
to statements made or incorporated by reference therein based on
information supplied by or on behalf of Entergy for inclusion or
incorporation by reference in the Joint Proxy Statement.
(j) Permits; Compliance with Laws and Orders. Except as
disclosed in Section 3.01(j)(i) of the FPL Disclosure Letter, FPL,
its subsidiaries and the FPL Joint Ventures hold all permits,
licenses, certificates, authorizations and approvals of all
Governmental Authorities ("Permits") necessary for the lawful conduct
of their respective businesses, except for failures to hold such
Permits that, individually or in the aggregate, have not had and
could not reasonably be expected to have a material adverse effect on
FPL. FPL, its subsidiaries and the FPL Joint Ventures are in
compliance with the terms of their Permits, except failures so to
comply that, individually or in the aggregate, have not had and could
not reasonably be expected to have a material adverse effect on FPL.
Except as disclosed in the FPL SEC Reports filed prior to the date of
this Agreement or in Section 3.01(j)(ii) of the FPL Disclosure
Letter, FPL, its subsidiaries and the FPL Joint Ventures are not in
violation of or default under any law or order of any Governmental
Authority, except for such violations or defaults that, individually
or in the aggregate, have not had and could not reasonably be
expected to have a material adverse effect on FPL. This Section
3.01(j) does not relate to matters with respect to taxes, which are
the subject of Section 3.01(k), Environmental Laws, which are the
subject of Section 3.01(n), benefits plans, which are the subject of
Section 3.01(l), and nuclear power plants, which are the subject of
Section 3.01(o).
(k) Taxes. Except as disclosed in Section 3.01(k) of the
FPL Disclosure Letter:
(i) each of FPL, its subsidiaries, any predecessor thereof
and any member of any consolidated group of which any of the
foregoing is or has been a member (together, the "FPL
Taxpayers") has timely filed, or has caused to be timely filed
on its behalf, all Tax Returns (as defined below) required to be
filed by it, and all such Tax Returns are true, complete and
accurate, except to the extent any failures to file or any
inaccuracies in any filed Tax Returns, individually or in the
aggregate, have not had and could not reasonably be expected to
have a material adverse effect on FPL. All Taxes (as defined
below) shown to be due and owing on such Tax Returns have been
timely paid, except to the extent that any failure to pay,
individually or in the aggregate, has not had and could not
reasonably be expected to have a material adverse effect on FPL.
(ii) The most recent financial statements contained in the
FPL SEC Reports filed prior to the date of this Agreement
reflect, in accordance with GAAP, an adequate reserve for all
Taxes payable by the FPL Taxpayers for all Taxable periods
through the date of such financial statements, except to the
extent that the aggregate amount of such Taxes payable exceeds
the amount of such reserve by an amount that, individually or in
the aggregate, has not had or could not reasonably be expected
to have a material adverse effect on FPL. No deficiency with
respect to any Taxes has been proposed, asserted or assessed
against any FPL Taxpayer, and no requests for waivers of the
time to assess any such Taxes are pending, except to the extent
any such deficiency or request for waiver, individually or in
the aggregate, have not had and could not reasonably be expected
to have a material adverse effect on FPL.
(iii) The Federal income Tax Returns of the FPL Taxpayers
consolidated in such Tax Returns have been examined by and
settled with the United States Internal Revenue Service for all
years through 1985. All material assessments for Taxes due with
respect to such completed and settled examinations or any
concluded litigation have been fully paid.
(iv) There are no material Liens for Taxes (other than for
current Taxes not yet due and payable) on the assets of any FPL
Taxpayer. None of the FPL Taxpayers is bound by any agreement
with respect to Taxes.
(v) Neither FPL nor any of its Subsidiaries has taken or
agreed to take any action or knows of any fact, agreement, plan
or other circumstance that is reasonably likely to prevent or
impede the Mergers from constituting an exchange governed by
Section 351 of the Code.
(vi) For purposes of this Agreement:
"Taxes" means all forms of taxation, whenever created or
imposed, and whether of the United States or elsewhere, imposed
by any level of government or Governmental Authority, or in
connection with any agreement with respect to Taxes, including
any direct or indirect Taxes, whatever their nature, on income
or otherwise, together with all interest, surcharges and
penalties imposed with respect to such amounts.
"Tax Return" means all Tax returns, declarations,
statements, reports, schedules, forms and information to be
filed with any level of government or Governmental Authority of
the United States or elsewhere, and any amended Tax return
relating to Taxes.
(l) Employee Benefit Plans; ERISA. (i) Except (x) as
disclosed in the FPL SEC Reports filed prior to the date of this
Agreement or Section 3.01(l) of the FPL Disclosure Letter and (y) for
such matters that, individually or in the aggregate, have not had and
could not reasonably be expected to have a material adverse effect on
FPL, (A) all FPL Employee Benefit Plans are in compliance with all
applicable requirements of law, including ERISA and the Code, and (B)
except for regular contribution, funding and vesting requirements of
the FPL Employee Benefit Plans (as defined below), neither FPL nor
any of its subsidiaries has any liabilities or obligations with
respect to any such FPL Employee Benefit Plans, whether accrued,
contingent or otherwise, nor to the knowledge of FPL are any such
liabilities or obligations reasonably expected to be incurred.
Except as disclosed in Section 3.01(l) of the FPL Disclosure Letter,
the execution of this Agreement, and the transactions contemplated
hereby, will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any FPL
Employee Benefit Plan 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 employee of FPL. The
only material employment agreements, severance agreements or
severance policies applicable to FPL or any of its subsidiaries or
other FPL ERISA Affiliates (as defined below) are the agreements and
policies disclosed to in Section 3.01(l) of the FPL Disclosure
Letter.
(ii) As used herein:
(A) "FPL Employee Benefit Plan" means any Plan entered
into, established, maintained, sponsored, contributed to or
required to be contributed to by FPL or any of its subsidiaries
or other FPL ERISA Affiliates for the benefit of the current or
former employees or directors of FPL or any of its subsidiaries
or other FPL ERISA Affiliates and existing on the date of this
Agreement or at any time subsequent thereto and on or prior to
the FPL Effective Time and, in the case of a Plan that is
subject to Part 3 of Title I of the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations
thereunder ("ERISA"), Section 412 of the Code or Title IV of
ERISA, at any time during the five-year period preceding the
date of this Agreement with respect to which FPL or any of its
subsidiaries has or could reasonably be expected to have any
present or future actual or contingent liabilities;
(B) "Plan" means any employment, bonus, incentive
compensation, deferred compensation, long term incentive,
pension, profit sharing, retirement, stock purchase, stock
option, stock ownership, stock appreciation rights, phantom
stock, leave of absence, layoff, vacation, day or dependent
care, legal services, cafeteria, life, health, medical,
accident, disability, workmen's compensation or other insurance,
severance, separation, termination, change of control or other
benefit plan, agreement, practice, policy, program, scheme or
arrangement of any kind, whether written or oral, including any
"employee benefit plan" within the meaning of Section 3(3) of
ERISA; and
(C) "FPL ERISA Affiliate" means any person who, on or
before the FPL Effective Time, is under common control with FPL
within the meaning of Section 414 of the Code.
(iii) No event has occurred, and there exists no condition
or set of circumstances in connection with any FPL Employee Benefit
Plan, that has had or could reasonably be expected to have a material
adverse effect on FPL.
(iv) No transaction contemplated hereby could reasonably
be expected to result in liability to the Pension Benefit Guaranty
Corporation (the "PBGC") or otherwise under Section 302(c)(ii), 4062,
4063, 4064 or 4069 of ERISA, or otherwise, with respect to FPL, any
subsidiary or any corporation or organization controlled by or under
common control with any of the foregoing within the meaning of
Section 4001 of ERISA, and no event or condition exists or has
existed that could reasonably be expected to result in any such
liability with respect to FPL, any subsidiary or any such corporation
or organization.
(m) Labor Matters. Except as disclosed in the FPL SEC
Reports filed prior to the date of this Agreement or Section 3.01(m)
of the FPL Disclosure Letter, neither FPL nor any of its subsidiaries
is a party to any collective bargaining agreement or other labor
agreement with any union or labor organization. Except as disclosed
in the FPL SEC Reports filed prior to the date of this Agreement or
in Section 3.01(m) of the FPL Disclosure Letter, as of the date of
this Agreement, there are no disputes pending or, to the knowledge of
FPL, threatened between FPL or any of its subsidiaries and any trade
union or other representatives of its employees and there is no
charge or complaint pending or threatened in writing against FPL or
any of its subsidiaries before the National Labor Relations Board
(the "NLRB"), except in each case as, individually or in the
aggregate, have not had and could not reasonably be expected to have
a material adverse effect on FPL, and, to the knowledge of FPL, as of
the date of this Agreement, there are no material organizational
efforts presently being made involving any of the employees of FPL or
any of its subsidiaries. From December 31, 1996, to the date of this
Agreement, there has been no work stoppage, strike or other concerted
action by employees of FPL or any of its subsidiaries and, to the
knowledge of FPL, no such action has been threatened in writing,
except in each case as, individually or in the aggregate, have not
had and could not reasonably be expected to have a material adverse
effect on FPL. Except as disclosed in the FPL SEC Reports filed
prior to the date of this Agreement or in Section 3.01(m) of the FPL
Disclosure Letter, since January 1, 1994, neither FPL nor any of its
subsidiaries has engaged in any "plant closing" or "mass layoff", as
defined in the Worker Adjustment Retraining and Notification Act or
any comparable state or local law, without complying with the notice
requirements of such laws, except for such failures to comply with
the notice requirements of such laws that, individually or in the
aggregate, have not had and could not reasonably be expected to have
a material adverse effect on FPL.
(n) Environmental Matters. Except as disclosed in the FPL
SEC Reports filed prior to the date of this Agreement or Section
3.01(n) of the FPL Disclosure Letter:
(i) Each of FPL, its subsidiaries and the FPL Joint
Ventures has been and is in compliance with all applicable
Environmental Laws (as hereinafter defined), except where the
failure to be in such compliance, individually or in the
aggregate, has not had and could not reasonably be expected to
have a material adverse effect on FPL.
(ii) Each of FPL, its subsidiaries and the FPL Joint
Ventures has obtained all environmental Permits (collectively,
the "Environmental Permits") necessary for the construction of
their facilities and the conduct of their operations as of the
date of this Agreement, as applicable, and all such
Environmental Permits are in good standing or, where applicable,
a renewal application has been timely filed and is pending
agency approval, and FPL, its subsidiaries and the FPL Joint
Ventures are in compliance with all terms and conditions of the
Environmental Permits, except where the failure to obtain such
Environmental Permits, of such Permits to be in good standing
or, where applicable, of a renewal application to have been
timely filed and be pending or to be in such compliance,
individually or in the aggregate, has not had and could not
reasonably be expected to have a material adverse effect on FPL.
(iii) There is no Environmental Claim (as hereinafter
defined) pending:
(A) against FPL or any of its subsidiaries or any of the
FPL Joint Ventures;
(B) to the knowledge of FPL, against any person or entity
whose liability for such Environmental Claim FPL or any of its
subsidiaries or any of the FPL Joint Ventures has retained or
assumed either contractually or by operation of law; or
(C) against any real or personal property or operations
that FPL or any of its subsidiaries or any of the FPL Joint
Ventures owns, leases or manages, in whole or in part, or, to
the knowledge of FPL, formerly owned, leased or managed, in
whole or in part,
in each case, except for such Environmental Claims that,
individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on FPL.
(iv) To the knowledge of FPL, there have not been any
Releases (as hereinafter defined) of any Hazardous Material (as
hereinafter defined) that would be reasonably likely to form the
basis of any Environmental Claim against FPL or any of its
subsidiaries or any of the FPL Joint Ventures, in each case,
except for such Releases that, individually or in the aggregate,
have not had and could not reasonably be expected to have a
material adverse effect on FPL.
(v) As used in this Section 3.01(n) and in Section
3.02(n):
(A) "Environmental Claim" means any and all
administrative, regulatory or judicial actions, suits, orders,
demands, demand letters, directives, claims, liens,
investigations, proceedings or notices or noncompliance,
liability or violation (written or oral) by any person or entity
(including any Governmental Authority) alleging potential
liability (including potential responsibility or liability for
enforcement, investigatory costs, cleanup costs, governmental
response costs, removal costs, remedial costs, natural resources
damages, property damages, personal injuries or penalties)
arising out of, based on or resulting from
(1) the presence or Release into the environment of
any Hazardous Materials at any location;
(2) circumstances forming the basis of any actual or
alleged violation of, or liability under, any Environmental
Law or Environmental Permit; or
(3) any and all claims by any third party seeking
damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the
presence or Release of, or exposure to, any Hazardous
Materials;
(B) "Environmental Laws" means all domestic or foreign
Federal, state and local laws, principles of common law and
orders relating to pollution, the environment (including ambient
air, surface water, groundwater, land surface or subsurface
strata) or protection of human health as it relates to the
environment including laws relating to the presence or Release
of Hazardous Materials, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of, or exposure to, Hazardous
Materials;
(C) "Hazardous Materials" means (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam
insulation, and polychlorinated biphenyls; and (b) any chemical,
material, substance or waste that is now prohibited, limited or
regulated under any Environmental Law; and
(D) "Release" means any actual or threatened release,
spill, emission, leaking, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the atmosphere,
soil, surface water, groundwater or property.
(o) Operations of Nuclear Power Plants. Except as
disclosed in the FPL SEC Reports filed prior to the date of this
Agreement or Section 3.01(o) of the FPL Disclosure Letter, the
operations of the nuclear generation stations owned, in whole or
part, by FPL or its subsidiaries (collectively, the "FPL Nuclear
Facilities") are and have been conducted in compliance with all
applicable laws and Permits, except for such failures to comply that,
individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on FPL.
Each of the FPL Nuclear Facilities maintains, and is in material
compliance with, emergency plans designed to respond to an unplanned
Release (as defined in Section 3.01(n)) therefrom of radioactive
materials and each such plan conforms with the requirements of
applicable law in all material respects. The plans for the
decommissioning of each of the FPL Nuclear Facilities and for the
storage of spent nuclear fuel conform with the requirements of
applicable law in all material respects and, solely with respect to
the portion of the FPL Nuclear Facilities owned, directly or
indirectly, by FPL, are funded consistent with applicable law. The
operations of the FPL Nuclear Facilities are not the subject of any
outstanding notices of violation or requests for information from the
NRC or any other agency with jurisdiction over such facility, except
for such notices or requests for information that, individually or in
the aggregate, have not had and could not reasonably be expected to
have a material adverse effect on FPL. Liability insurance to the
full extent required by law for operating the FPL Nuclear Facilities
remains in full force and effect regarding such facilities, except
for failures to maintain such insurance in full force and effect
that, individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on FPL.
(p) Vote Required. Assuming the accuracy of the
representation and warranty contained in Section 3.02(s), the
affirmative vote of the holders of record of at least a majority of
the outstanding shares of FPL Common Stock, with respect to the
approval of this Agreement (the "FPL Shareholder Approval"), is the
only vote of the holders of any class or series of the capital stock
of FPL or its subsidiaries required to approve this Agreement, the
FPL Merger and the other transactions contemplated hereby.
(q) Opinion of Financial Advisor. FPL has received the
opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated, dated
the date of this Agreement, to the effect that, as of the date of
this Agreement, the FPL Exchange Ratio is fair from a financial point
of view to the shareholders of FPL.
(r) FPL Rights Agreement. As of the date of this
Agreement, FPL or the Board of Directors of FPL, as the case may be,
has (i) taken all necessary actions so that the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby will not result in a "Distribution Date" (as
defined in the FPL Rights Agreement) and (ii) amended the FPL Rights
Agreement to render it inapplicable to this Agreement, the FPL Merger
and other transactions contemplated hereby.
(s) Ownership of Entergy Capital Stock. Neither FPL nor
any of its subsidiaries or other affiliates beneficially owns any
shares of Entergy Capital Stock.
(t) Article VI of FPL's Articles of Incorporation and
Section 607.0901 of the FBCA Not Applicable. FPL has taken all
necessary actions, if any, so that neither the provisions of Article
VI of FPL's Articles of Incorporation nor the provisions of Section
607.0901 of the FBCA will, before the termination of this Agreement,
apply to this Agreement, the FPL Merger or the other transactions
contemplated hereby.
(u) Joint Venture Representations. Each representation or
warranty made by FPL in this Section 3.01 relating to an FPL Joint
Venture that is neither operated nor managed by FPL or an FPL
subsidiary shall be deemed made only to the knowledge of FPL.
(v) Insurance. Except as set forth in Section 3.01(v) of
the FPL Disclosure Letter and except for failures to maintain
insurance or self-insurance that, individually or in the aggregate,
have not had and could not reasonably be expected to have a material
adverse effect on FPL, from January 1, 1999, through the date of this
Agreement, each of FPL and its subsidiaries has been continuously
insured with financially responsible insurers or has self-insured, in
each case in such amounts and with respect to such risks and losses
as are customary for companies in the United States conducting the
business conducted by FPL and its subsidiaries during such time
period. Except as set forth in Section 3.01(v) of the FPL Disclosure
Letter, neither FPL nor any of its subsidiaries has received any
notice of cancelation or termination with respect to any insurance
policy of FPL or any of its subsidiaries, except with respect to any
cancelation or termination that, individually or in the aggregate,
has not had and could not reasonably be expected to have a material
adverse effect on FPL.
(w) Trading. FPL has established risk parameters, limits
and guidelines in compliance with the risk management policy approved
by the finance committee of FPL's Board of Directors (the "FPL
Trading Guidelines") to restrict the level of risk that FPL and its
subsidiaries are authorized to take with respect to, among other
things, the net position resulting from all physical commodity
transactions, exchange-traded futures and options transactions, over-
the-counter transactions and derivatives thereof and similar
transactions (the "Net FPL Position") and monitors compliance by FPL
and its subsidiaries with such risk parameters. FPL has provided the
FPL Trading Guidelines to Entergy prior to the date of this
Agreement. As of the date of this Agreement, (i) the Net FPL
Position is within the risk parameters that are set forth in the FPL
Trading Guidelines and (ii) the exposure of FPL and its subsidiaries
with respect to the Net FPL Position resulting from all such
transactions is not material to FPL and its subsidiaries taken as a
whole. From March 31, 2000 to the date of this Agreement, FPL and
its subsidiaries have not, in accordance with generally recognized
mark to market accounting policies, experienced an aggregate net loss
in its trading and related operations that would be material to FPL
and its subsidiaries taken as a whole.
SECTION 3.02. Representations and Warranties of Entergy.
Entergy represents and warrants to FPL as follows:
(a) Organization and Qualification. (i) Each of Entergy
and its subsidiaries is duly organized, validly existing and in good
standing (with respect to jurisdictions that recognize the concept of
good standing) under the laws of its jurisdiction of incorporation
and has full corporate power and authority to conduct its business as
and to the extent now conducted and to own, use and lease its assets
and properties, except for such failures to be so organized, existing
and in good standing (with respect to jurisdictions that recognize
the concept of good standing) or to have such power and authority
that, individually or in the aggregate, have not had and could not be
reasonably expected to have a material adverse effect (as defined in
Section 8.03) on Entergy. Each of Entergy and its subsidiaries is
duly qualified, licensed or admitted to do business and is in good
standing (with respect to jurisdictions that recognize the concept of
good standing) in each jurisdiction in which the ownership, use or
leasing of its assets and properties, or the conduct or nature of its
business, makes such qualification, licensing or admission necessary,
except for such failures to be so qualified, licensed or admitted and
in good standing (with respect to jurisdictions that recognize the
concept of good standing) that, individually or in the aggregate,
have not had and could not reasonably be expected to have a material
adverse effect on Entergy. Section 3.02(a) of the letter dated the
date of this Agreement and delivered to FPL by Entergy concurrently
with the execution and delivery of this Agreement (the "Entergy
Disclosure Letter") sets forth as of the date of this Agreement the
name and jurisdiction of organization of each subsidiary of Entergy.
(ii) Section 3.02(a) of the Entergy Disclosure Letter sets
forth a description as of the date of this Agreement, of all Entergy
Joint Ventures, including (x) the name of each such entity and (y) a
brief description of the principal line or lines of business
conducted by each such entity.
(iii) Except for interests in the subsidiaries of Entergy,
the Entergy Joint Ventures and interests acquired after the date of
this Agreement without violating any covenant, and except as
disclosed in the Entergy SEC Reports (as defined in Section 3.02(e))
filed prior to the date of this Agreement or Section 3.02(a) of the
Entergy Disclosure Letter, Entergy does not directly or indirectly
own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any equity or similar
interest in, any person, which interest individually has a fair
market value as of the date of this Agreement in excess of
$60,000,000, as reasonably determined by Entergy.
(b) Capital Stock. (i) The authorized capital stock of
Entergy consists of 500,000,000 shares of Entergy Common Stock, of
which 222,895,585 shares were issued and outstanding as of July 26,
2000. No shares of capital stock of Entergy were issued or
outstanding from July 26, 2000, to and including the date of this
Agreement.
As of July 30, 2000, 23,709,144 shares of Entergy Common
Stock were held in the treasury of Entergy. As of the date of this
Agreement, 12,471,609 shares of Entergy Common Stock were subject to
outstanding Entergy Employee Stock Options (as defined in Section
5.06) and 1,076,503 additional shares of Entergy Common Stock were
reserved for issuance pursuant to the Equity Ownership Plan of
Entergy Corporation and Subsidiaries, Equity Awards Plan of Entergy
Corporation and Subsidiaries, Entergy Service Recognition Program for
Outside Directors and Entergy Stock Plan for Outside Directors
(collectively, the "Entergy Option Plans"). All of the issued and
outstanding shares of Entergy Common Stock are, and all shares
reserved for issuance will be, upon issuance in accordance with the
terms specified in the instruments or agreements pursuant to which
they are issuable, duly authorized, validly issued, fully paid and
nonassessable. Except as disclosed in this Section 3.02(b) or in
Section 3.02(b) of the Entergy Disclosure Letter, on the date of this
Agreement there are no outstanding Options obligating Entergy or any
of its subsidiaries to issue or sell any shares of capital stock of
Entergy or to grant, extend or enter into any Option with respect
thereto.
(ii) Except as permitted by this Agreement and except as
disclosed in the Entergy SEC Reports filed prior to the date of this
Agreement or Section 3.02(b) of the Entergy Disclosure Letter, all of
the outstanding shares of capital stock of each subsidiary of Entergy
are duly authorized, validly issued, fully paid and nonassessable and
are owned, beneficially and of record, by Entergy or a subsidiary,
free and clear of any Liens. The shares of the Company owned by
Entergy are owned free and clear of any Lien. Except as disclosed in
the Entergy SEC Reports filed prior to the date of this Agreement or
Section 3.02(b) of the Entergy Disclosure Letter, there are no (A)
outstanding Options obligating Entergy or any of its subsidiaries to
issue or sell any shares of capital stock of any subsidiary of
Entergy or to grant, extend or enter into any such Option or (B)
voting trusts, proxies or other commitments, understandings,
restrictions or arrangements in favor of any person other than
Entergy or a subsidiary wholly owned, directly or indirectly, by
Entergy with respect to the voting of or the right to participate in
dividends or other earnings on any capital stock of any subsidiary of
Entergy.
(iii) Except for Entergy Arkansas, Inc., Entergy Gulf
States, Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc.,
Entergy New Orleans, Inc., Entergy Power, Inc. and System Energy
Resources, Inc. (the "Entergy Utilities"), and except as disclosed in
Section 3.02(b) of the Entergy Disclosure Letter, as of the date of
this Agreement, none of the subsidiaries of Entergy or the Entergy
Joint Ventures is a "public utility company", a "holding company", a
"subsidiary company" or an "affiliate" of any public utility company
within the meaning of Section 2(a)(5), 2(a)(8) or 2(a)(11) of the
1935 Act, respectively. Except for Entergy, none of Entergy, its
subsidiaries and the Entergy Joint Ventures is registered under the
1935 Act.
(iv) Except as disclosed in Section 3.02(b)(iv) of the
Entergy Disclosure Letter, as of the date of this Agreement, no
bonds, debentures, notes or other indebtedness of Entergy or any of
its subsidiaries having the right to vote (or which are convertible
into or exercisable for securities having the right to vote)
(collectively, "Entergy Voting Debt") on any matters on which Entergy
shareholders may vote are issued or outstanding nor are there any
outstanding Options obligating Entergy or any of its subsidiaries to
issue or sell any Entergy Voting Debt or to grant, extend or enter
into any Option with respect thereto.
(c) Authority. Entergy has full corporate power and
authority to enter into this Agreement, to perform its obligations
hereunder and, subject to obtaining Entergy Shareholders Approval (as
defined in Section 3.02(p)), to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement by Entergy and the consummation by Entergy of the
transactions contemplated hereby have been duly and validly adopted
and approved by the Board of Directors of Entergy, the Board of
Directors of Entergy has recommended approval of this Agreement by
the shareholders of Entergy and directed that this Agreement be
submitted to the shareholders of Entergy for their approval, and no
other corporate proceedings on the part of Entergy or its
shareholders are necessary to authorize the execution, delivery and
performance of this Agreement by Entergy and the consummation by
Entergy of the Entergy Merger and the other transactions contemplated
hereby, other than obtaining Entergy Shareholders Approval. This
Agreement has been duly and validly executed and delivered by Entergy
and constitutes a legal, valid and binding obligation of Entergy
enforceable against Entergy in accordance with its terms.
(d) No Conflicts; Approvals and Consents. (i) The
execution and delivery of this Agreement by Entergy do not, and the
performance by Entergy of its obligations hereunder and the
consummation of the Mergers and the other transactions contemplated
hereby will not, conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a
default under, result in or give to any person any right of payment
or reimbursement, termination, cancelation, modification or
acceleration of, or result in the creation or imposition of any Lien
upon any of the assets or properties of Entergy or any of its
subsidiaries or any of the Entergy Joint Ventures under, any of the
terms, conditions or provisions of (A) the certificates or articles
of incorporation or bylaws (or other comparable charter documents) of
Entergy or any of its subsidiaries, or (B) subject to the obtaining
of Entergy Shareholders Approval and the taking of the actions
described in paragraph (ii) of this Section 3.02(d) and obtaining the
FPL Required Statutory Approvals, (x) any laws or orders of any
Governmental Authority applicable to Entergy or any of its
subsidiaries or any of the Entergy Joint Ventures or any of their
respective assets or properties, or (y) except as disclosed in
Section 3.02(d) of the Entergy Disclosure Letter, any note, bond,
mortgage, security agreement, agreement, indenture, license,
franchise, permit, concession, contract, lease or other instrument to
which Entergy or any of its subsidiaries or any of the Entergy Joint
Ventures is a party or by which Entergy or any of its subsidiaries or
any of the Entergy Joint Ventures or any of their respective assets
or properties is bound, excluding from the foregoing clauses (x) and
(y) such items that, individually or in the aggregate, have not had
and could not reasonably be expected to have a material adverse
effect on Entergy. Prior to the date of this Agreement, Entergy has
received the consent and waiver of Koch Industries, Inc. ("Koch") to
the execution and delivery by Entergy of this Agreement, the
performance by Entergy of its obligations hereunder and the
consummation of the Mergers and the other transactions contemplated
hereby, and such consent and waiver is in full force and effect.
Accordingly, the execution and delivery by Entergy of this Agreement
do not, and the performance by Entergy of its obligations hereunder
and the consummation of the Mergers and the other transactions
contemplated hereby will not, conflict with, result in a violation or
a breach of, constitute (with or without notice or lapse of time or
both) a default under, result in or give to any person any right of
payment or reimbursement, termination, cancelation, modification or
acceleration of, or result in any change in any rights or obligations
of Entergy or any of its subsidiaries or the Entergy Joint Ventures
with respect to, any of the terms, conditions or provisions of the
Contribution Agreement for Entergy-Koch, LP dated as of May 26, 2000
(the "Contribution Agreement"), between Koch, Koch Industries
International Limited and certain subsidiaries of Entergy and all
related agreements entered into, or to be entered into, in connection
therewith. Entergy has previously delivered to FPL true and correct
copies of the Contribution Agreement and all related agreements.
(ii) Except for (A) compliance with, and filings under,
the HSR Act; (B) the filing with, and to the extent required, the
declaration of effectiveness by, the SEC of (1) the Joint Proxy
Statement with the SEC pursuant to the Exchange Act, (2) the Form S-4
and (3) such reports under the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated
hereby; (C) the filing of documents with various state securities
authorities that may be required in connection with the transactions
contemplated hereby; (D) such filings with and approvals of the NYSE
to permit the shares of Company Common Stock that are to be issued
pursuant to Article II to be listed on the NYSE; (E) the
registration, consents, approvals and notices required under the 1935
Act; (F) notice to, and the consent and approval of, FERC under
Section 203 of the Power Act, or an order under the Power Act
disclaiming jurisdiction over the transactions contemplated hereby;
(G) the filing of an application to, and consent and approval of, and
issuance of any required licenses and license amendments by, the NRC
under the Atomic Energy Act; (H) the filing of the Entergy
Certificate of Merger and other appropriate merger documents required
by the DGCL with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states
in which Entergy is qualified to do business; (I) compliance with and
such filings as may be required under applicable Environmental Laws;
(J) to the extent required, notice to and the approval of, the
Applicable PSCs; (K) the FCC Pre-Approvals; and (L) such other items
as disclosed in Section 3.02(d) of the Entergy Disclosure Letter (the
items set forth above in clauses (A) through (H) and (J) (other than
with respect to the Municipalities), collectively, the "Entergy
Required Statutory Approvals"), no Consents or action of,
registration, declaration or filing with or notice to any
Governmental Authority is necessary or required to be obtained or
made in connection with the execution and delivery of this Agreement
by Entergy, the performance by Entergy of its obligations hereunder
or the consummation of the Mergers and the other transactions
contemplated hereby, other than such items that the failure to make
or obtain, as the case may be, individually or in the aggregate,
could not reasonably be expected to have a material adverse effect on
Entergy.
(e) SEC Reports, Financial Statements and Utility Reports.
(i) Entergy and its subsidiaries have filed each form, report,
schedule, registration statement, registration exemption, if
applicable, definitive proxy statement and other document (together
with all amendments thereof and supplements thereto) required to be
filed by Entergy or any of its subsidiaries pursuant to the
Securities Act or the Exchange Act with the SEC since January 1, 1997
(as such documents have since the time of their filing been amended
or supplemented, the "Entergy SEC Reports"). As of their respective
dates, the Entergy SEC Reports (A) complied as to form in all
material respects with the requirements of the Securities Act or the
Exchange Act, if applicable, as the case may be, and (B) did not
contain any untrue statement of a material fact or omit to state a
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.
(ii) The audited consolidated financial statements and
unaudited interim consolidated financial statements (including, in
each case, the notes, if any, thereto) included in the Entergy SEC
Reports (the "Entergy Financial Statements") complied as to form in
all material respects with the published rules and regulations of the
SEC with respect thereto, were prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as
may be indicated therein or in the notes thereto and except with
respect to unaudited statements as permitted by Form 10-Q of the SEC)
and fairly present (subject, in the case of the unaudited interim
financial statements, to normal, recurring year-end audit adjustments
that were not or are not expected to be, individually or in the
aggregate, materially adverse to Entergy) the consolidated financial
position of Entergy and its consolidated subsidiaries as of the
respective dates thereof and the consolidated results of their
operations and cash flows for the respective periods then ended.
(iii) All filings (other than immaterial filings) required
to be made by Entergy or any of its subsidiaries since January 1,
1997, under the 1935 Act, the Power Act, the Atomic Energy Act, the
Communications Act of 1934 and applicable state laws and regulations,
have been filed with the SEC, the FERC, the DOE, the NRC, the FCC or
any applicable state public utility commissions (including, to the
extent required, the Applicable PSCs other than the FPSC), as the
case may be, including all forms, statements, reports, agreements
(oral or written) and all documents, exhibits, amendments and
supplements appertaining thereto, including all rates, tariffs,
franchises, service agreements and related documents and all such
filings complied, as of their respective dates, with all applicable
requirements of the applicable statute and the rules and regulations
thereunder, except for filings the failure of which to make,
individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on Entergy.
(f) Absence of Certain Changes or Events. Except as
disclosed in the Entergy SEC Reports filed prior to the date of this
Agreement or Section 3.02(f) of the Entergy Disclosure Letter, since
December 31, 1999, there has not been any change, event or
development that, individually or in the aggregate, has had or could
reasonably be expected to have a material adverse effect on Entergy.
(g) Absence of Undisclosed Liabilities. Except for
matters reflected or reserved against in the balance sheet (or notes
thereto) as of December 31, 1999, included in Entergy Financial
Statements or as disclosed in Section 3.02(g) of the Entergy
Disclosure Letter, as of the date of this Agreement, neither Entergy
nor any of its subsidiaries has any liabilities or obligations
(whether absolute, accrued, contingent, fixed or otherwise, or
whether due or to become due) of any nature that would be required by
GAAP to be reflected on a consolidated balance sheet of Entergy and
its consolidated subsidiaries (including the notes thereto), except
liabilities or obligations (i) that were incurred in the ordinary
course of business consistent with past practice since December 31,
1999, or (ii) that, individually or in the aggregate, have not had
and could not reasonably be expected to have a material adverse
effect on Entergy.
(h) Legal Proceedings. Except as disclosed in the Entergy
SEC Reports filed prior to the date of this Agreement or in Section
3.02(h) of the Entergy Disclosure Letter and except for environmental
matters that are governed by Section 3.02(n), as of the date of this
Agreement, (i) there are no actions, suits, arbitrations or
proceedings pending or, to the knowledge of Entergy, threatened
against, relating to or affecting, nor to the knowledge of Entergy
are there any Governmental Authority investigations or audits pending
or threatened against, relating to or affecting, Entergy or any of
its subsidiaries or any of the Entergy Joint Ventures or any of their
respective assets and properties that, in each case, individually or
in the aggregate, have had or could reasonably be expected to have a
material adverse effect on Entergy, and (ii) neither Entergy nor any
of its subsidiaries is subject to any order of any Governmental
Authority that, individually or in the aggregate, has had or could
reasonably be expected to have a material adverse effect on Entergy.
(i) Information Supplied. None of the information
supplied or to be supplied by Entergy for inclusion or incorporation
by reference in (i) the Form S-4 will, at the time the Form S-4 is
filed with the SEC, at any time it is amended or supplemented or at
the time it becomes effective under the Securities Act, 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 not misleading, or (ii) the Joint Proxy Statement
will, at the date it is first mailed to FPL's shareholders or
Entergy's shareholders or at the time of the FPL Shareholders Meeting
or the Entergy Shareholders 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 are made, not
misleading. The Joint Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the
rules and regulations thereunder, except that no representation is
made by Entergy with respect to statements made or incorporated by
reference therein based on information supplied by or on behalf of
FPL for inclusion or incorporation by reference in the Joint Proxy
Statement.
(j) Permits; Compliance with Laws and Orders. Except as
disclosed in Section 3.02(j)(i) of the Entergy Disclosure Letter,
Entergy, its subsidiaries and the Entergy Joint Ventures hold all
Permits necessary for the lawful conduct of their respective
businesses, except for failures to hold such Permits that,
individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on Entergy.
Entergy, its subsidiaries and the Entergy Joint Ventures are in
compliance with the terms of their Permits, except failures so to
comply that, individually or in the aggregate, have not had and could
not reasonably be expected to have a material adverse effect on
Entergy. Except as disclosed in the Entergy SEC Reports filed prior
to the date of this Agreement or in Section 3.02(j)(ii) of the
Entergy Disclosure Letter, Entergy, its subsidiaries and the Entergy
Joint Ventures are not in violation of or default under any law or
order of any Governmental Authority, except for such violations or
defaults that, individually or in the aggregate, have not had and
could not reasonably be expected to have a material adverse effect on
Entergy. This Section 3.02(j) does not relate to matters with
respect to taxes, which are the subject of Section 3.02(k),
Environmental Laws, which are the subject of Section 3.02(n),
benefits plans, which are the subject of Section 3.02(l), and nuclear
power plants, which are the subject of Section 3.02(o).
(k) Taxes. Except as disclosed in Section 3.02(k) of the
Entergy Disclosure Letter:
(i) Each of Entergy, its subsidiaries, any predecessor
thereof and any member of any consolidated group of which any of
the foregoing is or has been a member (together, the "Entergy
Taxpayers") has timely filed, or has caused to be timely filed
on its behalf, all Tax Returns (as defined below) required to be
filed by it, and all such Tax Returns are true, complete and
accurate, except to the extent any failures to file or any
inaccuracies in any filed Tax Returns, individually or in the
aggregate, have not had and could not reasonably be expected to
have a material adverse effect on Entergy. All Taxes (as
defined below) shown to be due and owing on such Tax Returns
have been timely paid, except to the extent that any failure to
pay, individually or in the aggregate, has not had and could not
reasonably be expected to have a material adverse effect on
Entergy.
(ii) The most recent financial statements contained in the
Entergy SEC Reports filed prior to the date of this Agreement
reflect, in accordance with GAAP, an adequate reserve for all
Taxes payable by the Entergy Taxpayers for all Taxable periods
through the date of such financial statements, except to the
extent that the aggregate amount of such Taxes payable exceeds
the amount of such reserve by an amount that, individually or in
the aggregate, has not had or could not reasonably be expected
to have a material adverse effect on Entergy. No deficiency
with respect to any Taxes has been proposed, asserted or
assessed against any Entergy Taxpayer, and no requests for
waivers of the time to assess any such Taxes are pending, except
to the extent any such deficiency or request for waiver,
individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on
Entergy.
(iii) The Federal income Tax Returns of the Entergy
Taxpayers consolidated in such Tax Returns have been examined by
and settled with the United States Internal Revenue Service for
all years through 1994. All material assessments for Taxes due
with respect to such completed and settled examinations or any
concluded litigation have been fully paid.
(iv) There are no material Liens for Taxes (other than for
current Taxes not yet due and payable) on the assets of any
Entergy Taxpayer. None of the Entergy Taxpayers is bound by any
agreement with respect to Taxes.
(v) Neither Entergy nor any of its Subsidiaries has taken
or agreed to take any action or knows of any fact, agreement,
plan or other circumstance that is reasonably likely to prevent
or impede the Mergers from constituting an exchange governed by
Section 351 of the Code.
(l) Employee Benefit Plans; ERISA. (i) Except (x) as
disclosed in the Entergy SEC Reports filed prior to the date of this
Agreement or Section 3.02(l) of the Entergy Disclosure Letter and (y)
for such matters that, individually or in the aggregate, have not had
and could not reasonably be expected to have a material adverse
effect on Entergy, (A) all Entergy Employee Benefit Plans are in
compliance with all applicable requirements of law, including ERISA
and the Code, and (B) except for regular contribution, funding and
vesting requirements of the Entergy Employee Benefit Plans (as
defined below), neither Entergy nor any of its subsidiaries has any
liabilities or obligations with respect to any such Entergy Employee
Benefit Plans, whether accrued, contingent or otherwise, nor to the
knowledge of Entergy are any such liabilities or obligations
reasonably expected to be incurred. Except as disclosed in Section
3.02(l) of the Entergy Disclosure Letter, the execution of this
Agreement, and the transactions contemplated hereby, will not (either
alone or upon the occurrence of any additional or subsequent events)
constitute an event under any Entergy Employee Benefit Plan 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 employee of Entergy. The only material employment agreements,
severance agreements or severance policies applicable to Entergy or
any of its subsidiaries or other Entergy ERISA Affiliates (as defined
below) are the agreements and policies disclosed in Section 3.02(l)
of the Entergy Disclosure Letter.
(ii) As used herein:
(A) "Entergy Employee Benefit Plan" means any Plan entered
into, established, maintained, sponsored, contributed to or
required to be contributed to by Entergy or any of its
subsidiaries or other Entergy ERISA Affiliates for the benefit
of the current or former employees or directors of Entergy or
any of its subsidiaries or other Entergy ERISA Affiliates and
existing on the date of this Agreement or at any time subsequent
thereto and on or prior to the Entergy Effective Time and, in
the case of a Plan that is subject to Part 3 of Title I of
ERISA, Section 412 of the Code or Title IV of ERISA, at any time
during the five-year period preceding the date of this Agreement
with respect to which Entergy or any of its subsidiaries has or
could reasonably be expected to have any present or future
actual or contingent liabilities; and
(B) "Entergy ERISA Affiliate" means any person who, on or
before the Entergy Effective Time, is under common control with
Entergy within the meaning of Section 414 of the Code.
(iii) No event has occurred, and there exists no condition
or set of circumstances in connection with any Entergy Employee
Benefit Plan, that has had or could reasonably be expected to have a
material adverse effect on Entergy.
(iv) No transaction contemplated hereby could reasonably
be expected to result in liability to the PBGC or otherwise under
Section 302(c)(ii), 4062, 4063, 4064 or 4069 of ERISA, or otherwise,
with respect to Entergy, any subsidiary or any corporation or
organization controlled by or under common control with any of the
foregoing within the meaning of Section 4001 of ERISA, and no event
or condition exists or has existed that could reasonably be expected
to result in any such liability with respect to Entergy, any
subsidiary or any such corporation or organization.
(m) Labor Matters. Except as disclosed in the Entergy SEC
Reports filed prior to the date of this Agreement or Section 3.02(m)
of the Entergy Disclosure Letter, neither Entergy nor any of its
subsidiaries is a party to any collective bargaining agreement or
other labor agreement with any union or labor organization. Except
as disclosed in the Entergy SEC Reports filed prior to the date of
this Agreement or in Section 3.02(m) of the Entergy Disclosure
Letter, as of the date of this Agreement, there are no disputes
pending or, to the knowledge of Entergy, threatened between Entergy
or any of its subsidiaries and any trade union or other
representatives of its employees and there is no charge or complaint
pending or threatened in writing against Entergy or any of its
subsidiaries before the NLRB, except in each case as, individually or
in the aggregate, have not had and could not reasonably be expected
to have a material adverse effect on Entergy, and, to the knowledge
of Entergy, as of the date of this Agreement, there are no material
organizational efforts presently being made involving any of the
employees of Entergy or any of its subsidiaries. From December 31,
1996, to the date of this Agreement, there has been no work stoppage,
strike or other concerted action by employees of Entergy or any of
its subsidiaries and, to the knowledge of Entergy, no such action has
been threatened in writing, except in each case as, individually or
in the aggregate, have not had and could not reasonably be expected
to have a material adverse effect on Entergy. Except as disclosed in
the Entergy SEC Reports filed prior to the date of this Agreement or
in Section 3.02(m) of the Entergy Disclosure Letter, since January 1,
1994, neither Entergy nor any of its subsidiaries has engaged in any
"plant closing" or "mass layoff", as defined in the Worker Adjustment
Retraining and Notification Act or any comparable state or local law,
without complying with the notice requirements of such laws, except
for such failures to comply with the notice requirements of such laws
that, individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on Entergy.
(n) Environmental Matters. Except as disclosed in the
Entergy SEC Reports filed prior to the date of this Agreement or
Section 3.02(n) of the Entergy Disclosure Letter:
(i) Each of Entergy, its subsidiaries and the Entergy
Joint Ventures has been and is in compliance with all applicable
Environmental Laws, except where the failure to be in such
compliance, individually or in the aggregate, has not had and
could not reasonably be expected to have a material adverse
effect on Entergy.
(ii) Each of Entergy, its subsidiaries and the Entergy
Joint Ventures has obtained all Environmental Permits necessary
for the construction of their facilities and the conduct of
their operations as of the date of this Agreement, as
applicable, and all such Environmental Permits are in good
standing or, where applicable, a renewal application has been
timely filed and is pending agency approval, and Entergy, its
subsidiaries and the Entergy Joint Ventures are in compliance
with all terms and conditions of the Environmental Permits,
except where the failure to obtain such Environmental Permits,
of such Permits to be in good standing or, where applicable, of
a renewal application to have been timely filed and be pending
or to be in such compliance, individually or in the aggregate,
has not had and could not reasonably be expected to have a
material adverse effect on Entergy.
(iii) There is no Environmental Claim pending
(A) against Entergy or any of its subsidiaries or any of
the Entergy Joint Ventures;
(B) to the knowledge of Entergy, against any person or
entity whose liability for such Environmental Claim Entergy or
any of its subsidiaries or any of the Entergy Joint Ventures has
retained or assumed either contractually or by operation of law;
or
(C) against any real or personal property or operations
that Entergy or any of its subsidiaries or any of the Entergy
Joint Ventures owns, leases or manages, in whole or in part, or,
to the knowledge of Entergy, formerly owned, leased or arranged,
in whole or in part,
in each case, except for such Environmental Claims that,
individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on
Entergy.
(iv) To the knowledge of Entergy, there have not been any
Releases of any Hazardous Material that would be reasonably
likely to form the basis of any Environmental Claim against
Entergy or any of its subsidiaries or any of the Entergy Joint
Ventures, in each case, except for such Releases that,
individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on
Entergy.
(o) Operations of Nuclear Power Plants. Except as
disclosed in the Entergy SEC Reports filed prior to the date of this
Agreement or Section 3.02(o) of the Entergy Disclosure Letter, the
operations of the nuclear generation stations owned, in whole or
part, by Entergy or its subsidiaries (collectively, the "Entergy
Nuclear Facilities") are and have been conducted in compliance with
all applicable laws and Permits, except for such failures to comply
that, individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on Entergy.
Each of the Entergy Nuclear Facilities maintains, and is in material
compliance with, emergency plans designed to respond to an unplanned
Release (as defined in Section 3.02(n)) therefrom of radioactive
materials and each such plan conforms with the requirements of
applicable law in all material respects. The plans for the
decommissioning of each of the Entergy Nuclear Facilities and for the
storage of spent nuclear fuel conform with the requirements of
applicable law in all material respects and, solely with respect to
the portion of the Entergy Nuclear Facilities owned, directly of
indirectly, by Entergy, are funded consistent with applicable law.
The operations of the Entergy Nuclear Facilities are not the subject
of any outstanding notices of violation or requests for information
from the NRC or any other agency with jurisdiction over such
facility, except for such notices or requests for information that,
individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect on Entergy.
Liability insurance to the full extent required by law for operating
the Entergy Nuclear Facilities remains in full force and effect
regarding such facilities, except for failures to maintain such
insurance in full force and effect that, individually or in the
aggregate, have not had and could not reasonably be expected to have
a material adverse effect on Entergy.
(p) Vote Required. Assuming the accuracy of the
representation and warranty contained in Section 3.01(s), the
affirmative vote of the holders of record of at least a majority of
the outstanding shares of Entergy Common Stock, with respect to the
approval of this Agreement (the "Entergy Shareholder Approval"), is
the only vote of the holders of any class or series of the capital
stock of Entergy or its subsidiaries required to approve this
Agreement, the Entergy Merger and the other transactions contemplated
hereby.
(q) Opinion of Financial Advisor. Entergy has received
the opinions of Morgan Stanley Dean Witter & Co. and J.P. Morgan
Securities Inc. dated the date of this Agreement, to the effect that,
as of the date of this Agreement, the Entergy Exchange Ratio is fair
from a financial point of view to the shareholders of Entergy.
(r) Ownership of FPL Capital Stock. Neither Entergy nor
any of its subsidiaries or other affiliates beneficially owns any
shares of FPL Capital Stock.
(s) Section 203 of the DGCL Not Applicable. Entergy has
taken all necessary actions, if any, so that the provisions of
Section 203 of the DGCL will not, before the termination of this
Agreement, apply to this Agreement, the Entergy Merger or the other
transactions contemplated hereby.
(t) Joint Venture Representations. Each representation or
warranty made by Entergy in this Section 3.02 relating to an Entergy
Joint Venture that is neither operated nor managed by Entergy or an
Entergy subsidiary shall be deemed made only to the knowledge of
Entergy.
(u) Insurance. Except as set forth in Section 3.02(u) of
the Entergy Disclosure Letter and except for failures to maintain
insurance or self-insurance that, individually or in the aggregate,
have not had and could not reasonably be expected to have a material
adverse effect on Entergy, from January 1, 1999, through the date of
this Agreement, each of Entergy and its subsidiaries has been
continuously insured with financially responsible insurers or has
self-insured, in each case in such amounts and with respect to such
risks and losses as are customary for companies in the United States
conducting the business conducted by Entergy and its subsidiaries
during such time period. Except as set forth in Section 3.02(u) of
the Entergy Disclosure Letter, neither Entergy nor any of its
subsidiaries has received any notice of cancelation or termination
with respect to any insurance policy of Entergy or any of its
subsidiaries, except with respect to any cancelation or termination
that, individually or in the aggregate, has not had and could not
reasonably be expected to have a material adverse effect on Entergy.
(v) Trading. Entergy has established risk parameters,
limits and guidelines in compliance with the risk management policy
approved by Entergy's Board of Directors (the "Entergy Trading
Guidelines") to restrict the level of risk that Entergy and its
subsidiaries are authorized to take with respect to, among other
things, the net position resulting from all physical commodity
transactions, exchange-traded futures and options transactions, over-
the-counter transactions and derivatives thereof and similar
transactions (the "Net Entergy Position") and monitors compliance by
Entergy and its subsidiaries with such risk parameters. Entergy has
provided the Entergy Trading Guidelines to FPL prior to the date of
this Agreement. As of the date of this Agreement, (i) the Net
Entergy Position is within the risk parameters that are set forth in
the Entergy Trading Guidelines and (ii) the exposure of Entergy and
its subsidiaries with respect to the Net Entergy Position resulting
from all such transactions is not material to Entergy and its
subsidiaries taken as a whole. From March 31, 2000 to the date of
this Agreement, Entergy and its subsidiaries have not, in accordance
with generally recognized mark to market accounting policies,
experienced an aggregate net loss in its trading and related
operations that would be material to Entergy and its subsidiaries
taken as a whole.
ARTICLE IV
Covenants
SECTION 4.01. Covenants of FPL. From and after the date
of this Agreement until the FPL Effective Time, FPL covenants and
agrees as to itself and its subsidiaries that (except as expressly
contemplated or permitted by this Agreement, as set forth in Section
4.01 of the FPL Disclosure Letter or to the extent that Entergy shall
otherwise previously consent in writing):
(a) Ordinary Course. FPL and each of its subsidiaries
shall conduct their businesses in all material respects in the
ordinary course of business consistent with past practice. Without
limiting the generality of the foregoing, FPL and its subsidiaries
shall use commercially reasonable efforts to preserve intact in all
material respects their present business organizations, to maintain
in effect all existing Permits, subject to prudent management of
workforce and business needs, to keep available the services of their
key officers and employees, to maintain their assets and properties
in good working order and condition, ordinary wear and tear excepted,
to maintain insurance on their tangible assets and businesses in such
amounts and against such risks and losses as are currently in effect,
to preserve their relationships with Governmental Authorities,
customers and suppliers and others having significant business
dealings with them and to comply in all material respects with all
laws, orders and Permits of all Governmental Authorities applicable
to them.
(b) Charter Documents. FPL shall not amend or propose to
amend its or, other than in a manner that would not materially
restrict the operation of their businesses, its subsidiaries'
articles of incorporation or by-laws (or other comparable corporate
charter documents).
(c) Dividends. FPL shall not, nor shall it permit any of
its subsidiaries to, (i) declare, set aside or pay any dividends on
or make other distributions in respect of any of its capital stock or
share capital, except:
(A) that FPL may continue the declaration and payment of
regular quarterly cash dividends on FPL Common Stock, not to
exceed $0.54 per share, with usual record and payment dates for
such dividends in accordance with past dividend practice;
provided, that (1) dividends payable in respect of periods after
July 31, 2000, may exceed by up to 5% per share the dividend
payable during the prior 12-month period in respect of the
comparable time period and (2) if the FPL Effective Time does
not occur between a record date and payment date of a regular
quarterly dividend, a special dividend may be declared and paid
in respect of FPL Common Stock with respect to the quarter in
which the FPL Effective Time occurs with a record date in such
quarter and on or prior to the date on which the FPL Effective
Time occurs, which dividend does not exceed an amount equal to
the product of (i) a fraction the (x) numerator of which is
equal to the number of days between the last payment date of a
regular quarterly dividend and the record date of such special
dividend (excluding such last payment date but including the
record date of such special dividend) and (y) the denominator of
which is equal to the number of days between the last payment
date of a regular quarterly dividend and the same calendar day
in the third month after the month in which such last payment
date occurred (excluding such last payment date but including
such same calendar day), multiplied by (ii) the then permitted
quarterly dividend per share, and
(B) for the declaration and payment of dividends by a
direct or indirect wholly-owned subsidiary solely to its parent
corporation, or by a direct or indirect partially owned
subsidiary of FPL (provided that FPL or the FPL subsidiary
receives or is to receive its proportionate share of such
dividend or distribution), and
(C) for the declaration and payment of regular cash
dividends with respect to preferred stock of FPL's subsidiaries
outstanding as of the date of the Agreement or permitted to be
issued under the terms of this Agreement,
(ii) split, combine, reclassify or take similar action with
respect to any of its capital stock or share capital or issue or
authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its
capital stock or comprised in its share capital, (iii) adopt a
plan of complete or partial liquidation or resolutions providing
for or authorizing such liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or other
reorganization or (iv) except as disclosed in Section
4.01(c)(iv) of the FPL Disclosure Letter, directly or indirectly
redeem, repurchase or otherwise acquire any shares of its
capital stock or any Option with respect thereto except:
(A) in connection with intercompany purchases of
capital stock or share capital, or
(B) for the purpose of funding the FPL Option Plans or
employee stock ownership or dividend reinvestment and stock
purchase plans, or
(C) mandatory repurchases or redemptions of preferred
stock of FPL's subsidiaries in accordance with the terms
thereof, or
(D) in connection with the refinancing of capital
stock at a lower cost of funds, or
(E) the repurchase by FPL of shares of FPL Common
Stock as contemplated by Section 5.15.
(d) Share Issuances. FPL shall not, nor shall it permit
any of its subsidiaries to issue, deliver or sell, or authorize or
propose the issuance, delivery or sale of, any shares of its capital
stock or any Option with respect thereto (other than (i) the issuance
of FPL Common Stock upon the exercise of FPL Employee Stock Options
in accordance with their terms, (ii) the issuance of FPL Common Stock
in respect of target performance share awards, shareholder value
awards and restricted stock awards granted under the FPL Option Plans
in accordance with their terms, (iii) the issuance of FPL Employee
Stock Options and the grant of equity awards pursuant to the FPL
Option Plans in accordance with their terms providing, in aggregate,
up to an additional 3,400,000 shares of FPL Common Stock, provided,
however, that any FPL Employee Stock Options and equity awards
granted after the date of this Agreement (other than any such FPL
Employee Stock Options or equity awards granted to the FPL officers
whose names are set forth in Section 4.01(d) of the FPL Disclosure
Letter) shall be granted on terms pursuant to which such FPL Employee
Stock Options and equity awards shall not vest on the FPL Shareholder
Approval or otherwise on the occurrence of the transactions
contemplated hereby, and shall, at the FPL Effective Time, be
converted into options or equity-based awards to acquire or in
respect of, as applicable, Company Common Stock in the manner
contemplated by Section 5.06, (iv) the issuance of FPL Preferred
Stock in respect of FPL Rights, (v) the issuance of shares of capital
stock in connection with the refinancing of capital stock in
accordance with Section 4.01(c)(iv)(D) and (vi) the pro rata issuance
by a subsidiary of its capital stock to its shareholders), or modify
or amend any right of any holder of outstanding shares of capital
stock or Options with respect thereto other than to give effect to
Section 5.06.
(e) Acquisitions; Capital Expenditures. Except for (x)
acquisitions of, or capital expenditures relating to, the entities,
assets and facilities identified in Section 4.01(e) of the FPL
Disclosure Letter, (y) expenditures of amounts set forth in FPL's
capital expenditure plan included in Section 4.01(e) of the FPL
Disclosure Letter, and (z) capital expenditures (1) required by law
or Governmental Authorities or (2) incurred in connection with the
repair or replacement of facilities destroyed or damaged due to
casualty or accident (whether or not covered by insurance), FPL shall
not, nor shall it permit any of its subsidiaries to, make any capital
expenditures, or acquire or agree to acquire (whether by merger,
consolidation, purchase or otherwise) any person or assets, if the
amount to be expended pursuant thereto exceeds, in the aggregate (A)
during the period ending on the first anniversary of the date of this
Agreement, $350,000,000 (the "FPL First Year Expenditure Amount") and
(B) during the period commencing on the first anniversary of the date
of this Agreement and ending on the second anniversary of the date of
this Agreement, an amount equal to the sum of $350,000,000 and the
portion, if any, of the FPL First Year Expenditure Amount that
remains unspent on the first anniversary of the date of this
Agreement.
(f) Dispositions. Except as disclosed in Section 4.01(f)
of the FPL Disclosure Letter, FPL shall not, nor shall it permit any
of its subsidiaries to, sell, lease, grant any security interest in
or otherwise dispose of or encumber any of its assets or properties,
other than (i) dispositions of obsolete equipment or assets or
dispositions of assets being replaced, in each case in the ordinary
course of business consistent with past practice, (ii) dispositions
by FPL Utility of its utility assets in accordance with the terms of
restructuring and divestiture plans mandated or approved by
applicable local or state regulatory agencies or (iii) dispositions
having an aggregate value of less than $100,000,000.
(g) Indebtedness. Except as disclosed in Section 4.01(g)
of the FPL Disclosure Letter, FPL shall not, nor shall it permit any
of its subsidiaries to, (A) incur or guarantee any indebtedness or
enter into any "keep well" or other agreement to maintain any
financial condition of another person or enter into any arrangement
having the economic effect of any of the foregoing (including any
capital leases, "synthetic" leases or conditional sale or other title
retention agreements) other than (i) short-term borrowings incurred
in the ordinary course of business consistent with past practice,
(ii) letters of credit obtained in the ordinary course of business
consistent with past practice, (iii) borrowings made in connection
with the refunding of existing indebtedness or refinancing of capital
stock (x) at maturity or upon final mandatory redemption (without the
need for the occurrence of any special event) or (y) at a lower cost
of funds, (iv) borrowings to finance capital expenditures or
acquisitions permitted pursuant to Section 4.01(e), (v) other
borrowings in an aggregate principal amount not to exceed
$250,000,000 outstanding at any time, (vi) borrowings to finance
common stock repurchases contemplated by Section 5.15 or (vii)
continuation of guarantees existing as of the date of this Agreement,
or (B) make any loans or advances to any other person, other than in
the ordinary course of business consistent with past practice or to
any direct or indirect wholly owned subsidiary of FPL.
(h) Marketing of Energy; Trading. FPL shall not, nor
shall it permit any of its subsidiaries to, (i) permit any material
change in policies governing or otherwise relating to the trading or
marketing of energy other than as a result of acquisitions or capital
expenditures permitted pursuant to Section 4.01(e) or (ii) enter into
any physical commodity transactions, exchange-traded futures and
options transactions, over-the-counter transactions and derivatives
thereof or similar transactions other than as permitted by the FPL
Trading Guidelines.
(i) Employee Benefits. Except as required by law or the
terms of any collective bargaining agreement, or as disclosed in
Section 4.01(i) of the FPL Disclosure Letter, FPL shall not, nor
shall it permit any of its subsidiaries to, enter into, adopt, amend
or terminate any FPL Employee Benefit Plan, or other agreement,
arrangement, plan or policy between FPL or one of its subsidiaries
and one or more of its directors, officers or employees, or except
for normal increases in the ordinary course of business consistent
with past practice, increase in any manner the compensation or fringe
benefits of any director, executive officer or other employee, or pay
any benefit not required by any plan or arrangement in effect as of
the date of this Agreement, provided, however, that the foregoing
shall not restrict FPL or its subsidiaries from (i) entering into or
making available to newly hired officers and employees or to officers
and employees in the context of promotions based on job performance
or workplace requirements in the ordinary course of business
consistent with past practice, plans, agreements, benefits and
compensation arrangements (including incentive grants) that have,
consistent with past practice, been made available to newly hired or
promoted officers and employees, or (ii) entering into or amending
collective bargaining agreements with existing collective bargaining
representatives or newly certified bargaining units regarding
mandatory subjects of bargaining under applicable law, in each case
in a manner consistent with past practice to the extent permitted by
law.
(j) Regulatory Status. Except as disclosed in Section
4.01(j) of the FPL Disclosure Letter, FPL shall not, nor shall it
permit any of its subsidiaries to, agree or consent to any material
agreements or material modifications of existing agreements or course
of dealings with any Governmental Authority in respect of the
operations of their businesses, except (i) as required by law to
renew Permits or agreements in the ordinary course of business
consistent with past practice, (ii) as may be necessary or required
in connection with the consummation of any acquisition permitted
pursuant to Section 4.01(e) or (iii) to effect the consummation of
the transactions contemplated hereby.
(k) Accounting. FPL shall not, nor shall it permit any of
its subsidiaries to, make any changes in their accounting methods
materially affecting the reported consolidated assets, liabilities or
results of operations of FPL, except as required by law or GAAP.
(l) Transmission Reorganization. Notwithstanding any
other provision in this Agreement, this Agreement shall not in any
manner restrict FPL Utility from, directly or indirectly, (i)
transferring ownership or control, in whole or in part, whether by
sale, lease or otherwise, of its transmission and related assets to
an entity jointly owned by FPL and another person or persons, (ii)
transferring control of such assets to an independent system operator
or other similar entity or (iii) otherwise transferring ownership or
control of such assets for fair value (including in connection with a
public offering), in the case of each of clause (i), (ii) and (iii),
as part of an arrangement commonly understood to be a "transco" or
the formation of a regional transmission organization under the rules
and regulations of the FERC (any of the foregoing being referred to
as the "FPL RTO Formation"). So long as the FPL RTO Formation does
not cause the representation set forth in Section 3.01(k)(v) to be
untrue, the failure of the performance of the covenant set forth in
Section 5.14 or the failure of the conditions set forth in Sections
6.02(c) and 6.03(c), such FPL RTO Formation shall not constitute (x)
a breach of or failure to perform any of the representations,
warranties, covenants or other agreements contained in this Agreement
(including those contained in Section 4.03) or (y) otherwise result
in the failure of any condition set forth in Article VI hereof to be
satisfied.
(m) Insurance. FPL shall, and shall cause its
subsidiaries to, maintain with financially responsible insurance
companies (or through self-insurance, consistent with past practice)
insurance in such amounts and against such risks and losses as are
customary for companies engaged in their respective businesses.
SECTION 4.02. Covenants of Entergy. From and after the
date of this Agreement until the Entergy Effective Time, Entergy
covenants and agrees as to itself and its subsidiaries that (except
as expressly contemplated or permitted by this Agreement, as set
forth in Section 4.02 of the Entergy Disclosure Letter or to the
extent that FPL shall otherwise previously consent in writing):
(a) Ordinary Course. Entergy and each of its subsidiaries
shall conduct their businesses in all material respects in the
ordinary course of business consistent with past practice. Without
limiting the generality of the foregoing, Entergy and its
subsidiaries shall use commercially reasonable efforts to preserve
intact in all material respects their present business organizations,
to maintain in effect all existing Permits, subject to prudent
management of workforce and business needs, to keep available the
services of their key officers and employees, to maintain their
assets and properties in good working order and condition, ordinary
wear and tear excepted, to maintain insurance on their tangible
assets and businesses in such amounts and against such risks and
losses as are currently in effect, to preserve their relationships
with Governmental Authorities, customers and suppliers and others
having significant business dealings with them and to comply in all
material respects with all laws, orders and Permits of all
Governmental Authorities applicable to them.
(b) Charter Documents. Entergy shall not amend or propose
to amend its or, other than in a manner that would not materially
restrict the operation of their businesses, its subsidiaries'
certificate of incorporation or by-laws (or other comparable
corporate charter documents).
(c) Dividends. Entergy shall not, nor shall it permit any
of its subsidiaries to, (i) declare, set aside or pay any dividends
on or make other distributions in respect of any of its capital stock
or share capital, except:
(A) that Entergy may continue the declaration and payment
of regular quarterly cash dividends on Entergy Common Stock, not
to exceed $0.30 per share, with usual record and payment dates
for such dividends in accordance with past dividend practice;
provided, that (1) dividends payable in respect of periods after
July 31, 2000, may exceed by up to 5% per share the dividend
payable during the prior 12-month period in respect of the
comparable time period and (2) if the Entergy Effective Time
does not occur between a record date and payment date of a
regular quarterly dividend, a special dividend may be declared
and paid in respect of Entergy Common Stock with respect to the
quarter in which the Entergy Effective Time occurs with a record
date in such quarter and on or prior to the date on which the
Entergy Effective Time occurs, which dividend does not exceed an
amount equal to the product of (i) a fraction the (x) numerator
of which is equal to the number of days between the last payment
date of a regular quarterly dividend and the record date of such
special dividend (excluding such last payment date but including
the record date of such special dividend) and (y) the
denominator of which is equal to the number of days between the
last payment date of a regular quarterly dividend and the same
calendar day in the third month after the month in which such
last payment date occurred (excluding such last payment date but
including such same calendar day), multiplied by (ii) the then
permitted quarterly dividend per share, and
(B) for the declaration and payment of dividends by a
direct or indirect wholly-owned subsidiary solely to its parent
corporation, or by a direct or indirect partially owned
subsidiary of Entergy (provided that Entergy or the Entergy
subsidiary receives or is to receive its proportionate share of
such dividend or distribution), and
(C) for the declaration and payment of regular cash
dividends with respect to preferred stock of Entergy's
subsidiaries outstanding as of the date of the Agreement or
permitted to be issued under the terms of this Agreement,
(ii) split, combine, reclassify or take similar action with
respect to any of its capital stock or share capital or issue or
authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its
capital stock or comprised in its share capital, (iii) adopt a
plan of complete or partial liquidation or resolutions providing
for or authorizing such liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or other
reorganization or (iv) directly or indirectly redeem, repurchase
or otherwise acquire any shares of its capital stock or any
Option with respect thereto except:
(A) in connection with intercompany purchases of
capital stock or share capital, or
(B) for the purpose of funding the Entergy Option Plan
or employee stock ownership or dividend reinvestment and
stock purchase plans, or
(C) mandatory repurchases or redemptions of preferred
stock of Entergy's subsidiaries in accordance with the
terms thereof, or
(D) in connection with the refinancing of capital
stock at a lower cost of funds, or
(E) the repurchase by Entergy of shares of Entergy
Common Stock as contemplated by Section 5.15.
(d) Share Issuances. Entergy shall not, nor shall it
permit any of its subsidiaries to issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares of
its capital stock or any Option with respect thereto (other than (i)
the issuance of Entergy Common Stock upon the exercise of Entergy
Employee Stock Options in accordance with their terms, (ii) the
issuance of Entergy Common Stock in respect of target performance
share awards, shareholder value awards and restricted stock awards
granted under the Entergy Option Plans in accordance with their
terms, (iii) the issuance of Entergy Employee Stock Options and the
grant of equity awards pursuant to the Entergy Option Plans in
accordance with their terms providing, in aggregate, up to an
additional 15,000,000 shares of Entergy Common Stock, provided,
however, that any Entergy Employee Stock Options and equity awards
granted after the date of this Agreement (other than any such Entergy
Employee Stock Options or equity awards granted to the Entergy
officers whose names are set forth in Section 4.02(d) of the Entergy
Disclosure Letter) shall be granted on terms pursuant to which such
Entergy Employee Stock Options and equity awards shall not vest on
the Entergy Shareholders Approval or otherwise on the occurrence of
the transactions contemplated hereby, and shall, at the Entergy
Effective Time, be converted into options or equity-based awards to
acquire or in respect of, as applicable, Company Common Stock in the
manner contemplated by Section 5.06, (iv) the issuance of shares of
capital stock in connection with the refinancing of capital stock in
accordance with Section 4.02(c)(iv)(D) and (v) the pro rata issuance
by a subsidiary of its capital stock to its shareholders), or modify
or amend any right of any holder of outstanding shares of capital
stock or Options with respect thereto other than to give effect to
Section 5.06.
(e) Acquisitions; Capital Expenditures. Except for (x)
acquisitions of, or capital expenditures relating to, the entities,
assets and facilities identified in Section 4.02(e) of the Entergy
Disclosure Letter, (y) expenditures of amounts set forth in Entergy's
capital expenditure plan included in Section 4.02(e) of the Entergy
Disclosure Letter, and (z) capital expenditures (1) required by law
or Governmental Authorities or (2) incurred in connection with the
repair or replacement of facilities destroyed or damaged due to
casualty or accident (whether or not covered by insurance), Entergy
shall not, nor shall it permit any of its subsidiaries to, make any
capital expenditures, or acquire or agree to acquire (whether by
merger, consolidation, purchase or otherwise) any person or assets,
if the amount to be expended pursuant thereto exceeds, in the
aggregate (A) during the period ending on the first anniversary of
the date of this Agreement, $350,000,000 (the "Entergy First Year
Expenditure Amount") and (B) during the period commencing on the
first anniversary of the date of this Agreement and ending on the
second anniversary of the date of this Agreement, an amount equal to
the sum of $350,000,000 and the portion, if any, of the Entergy First
Year Expenditure Amount that remains unspent on the first anniversary
of the date of this Agreement.
(f) Dispositions. Except as disclosed in Section 4.02(f)
of the Entergy Disclosure Letter, Entergy shall not, nor shall it
permit any of its subsidiaries to, sell, lease, grant any security
interest in or otherwise dispose of or encumber any of its assets or
properties, other than (i) dispositions of obsolete equipment or
assets or dispositions of assets being replaced, in each case in the
ordinary course of business consistent with past practice, (ii)
dispositions by any of the Entergy Utilities of their respective
utility assets in accordance with the terms of restructuring and
divestiture plans mandated or approved by applicable local or state
regulatory agencies or (iii) dispositions having an aggregate value
of less than $100,000,000.
(g) Indebtedness. Except as disclosed in Section 4.02(g)
of the Entergy Disclosure Letter, Entergy shall not, nor shall it
permit any of its subsidiaries to, (A) incur or guarantee any
indebtedness or enter into any "keep well" or other agreement to
maintain any financial condition of another person or enter into any
arrangement having the economic effect of any of the foregoing
(including any capital leases, "synthetic" leases or conditional sale
or other title retention agreements) other than (i) short-term
borrowings incurred in the ordinary course of business consistent
with past practice, (ii) letters of credit obtained in the ordinary
course of business consistent with past practice, (iii) borrowings
made in connection with the refunding of existing indebtedness or
refinancing of capital stock (x) at maturity or upon final mandatory
redemption (without the need for the occurrence of any special event)
or (y) at a lower cost of funds, (iv) borrowings to finance capital
expenditures or acquisitions permitted pursuant to Section 4.02(e),
(v) other borrowings in an aggregate principal amount not to exceed
$250,000,000 outstanding at any time, (vi) borrowings to finance
common stock repurchases contemplated by Section 5.15 or (vii)
continuation of guarantees existing as of the date of this Agreement,
or (B) make any loans or advances to any other person, other than in
the ordinary course of business consistent with past practice or to
any direct or indirect wholly owned subsidiary of Entergy.
(h) Marketing of Energy; Trading. Entergy shall not, nor
shall it permit any of its subsidiaries to, permit any material
change in policies governing or otherwise relating to the trading or
marketing of energy other than as a result of acquisitions or capital
expenditures permitted pursuant to Section 4.02(e). Entergy shall
use its reasonable efforts to promptly establish for the Koch JV and
its subsidiaries policies governing or otherwise relating to the
trading or marketing of energy that are comparable to policies
established by other companies engaged in similar businesses as the
Koch JV. Entergy shall not, nor shall it permit any of its
subsidiaries, and shall use its reasonable efforts to cause the Koch
JV and its subsidiaries not to, enter into any physical commodity
transactions, exchange-traded futures and options transactions, over-
the-counter transactions and derivatives thereof or similar
transactions other than as permitted by the Entergy Trading
Guidelines or the policies to be established for the Koch JV and its
subsidiaries, as applicable.
(i) Employee Benefits. Except as required by law or the
terms of any collective bargaining agreement, or as disclosed in
Section 4.02(i) of the Entergy Disclosure Letter, Entergy shall not,
nor shall it permit any of its subsidiaries to, enter into, adopt,
amend or terminate any Entergy Employee Benefit Plan, or other
agreement, arrangement, plan or policy between Entergy or one of its
subsidiaries and one or more of its directors, officers or employees,
or except for normal increases in the ordinary course of business
consistent with past practice, increase in any manner the
compensation or fringe benefits of any director, executive officer or
other employee, or pay any benefit not required by any plan or
arrangement in effect as of the date of this Agreement, provided,
however, that the foregoing shall not restrict Entergy or its
subsidiaries from (i) entering into or making available to newly
hired officers and employees or to officers and employees in the
context of promotions based on job performance or workplace
requirements in the ordinary course of business consistent with past
practice, plans, agreements, benefits and compensation arrangements
(including incentive grants) that have, consistent with past
practice, been made available to newly hired or promoted officers and
employees, or (ii) entering into or amending collective bargaining
agreements with existing collective bargaining representatives or
newly certified bargaining units regarding mandatory subjects of
bargaining under applicable law, in each case in a manner consistent
with past practice to the extent permitted by law.
(j) Regulatory Status. Except as disclosed in Section
4.02(j) of the Entergy Disclosure Letter, Entergy shall not, nor
shall it permit any of its subsidiaries to, agree or consent to any
material agreements or material modifications of existing agreements
or course of dealings with any Governmental Authority in respect of
the operations of their businesses, except (i) as required by law to
renew Permits or agreements in the ordinary course of business
consistent with past practice, (ii) as may be necessary or required
in connection with the consummation of any acquisition permitted
pursuant to Section 4.02(e) or (iii) to effect the consummation of
the transactions contemplated hereby.
(k) Accounting. Entergy shall not, nor shall it permit
any of its subsidiaries to, make any changes in their accounting
methods materially affecting the reported consolidated assets,
liabilities or results of operations of Entergy, except as required
by law or GAAP.
(l) Transmission Reorganization. Notwithstanding any
other provision in this Agreement, this Agreement shall not in any
manner restrict the Entergy Utilities from, directly or indirectly,
(i) transferring ownership or control, in whole or in part, whether
by sale, lease or otherwise, of its transmission and related assets
to an entity jointly owned by Entergy and another person or persons,
(ii) transferring control of such assets to an independent system
operator or other similar entity or (iii) otherwise transferring
ownership or control of such assets for fair value (including in
connection with a public offering), in the case of each of clause
(i), (ii) and (iii), as part of an arrangement commonly understood to
be a "transco" or the formation of a regional transmission
organization under the rules and regulations of the FERC (any of the
foregoing being referred to as the "Entergy RTO Formation"). So long
as the Entergy RTO Formation does not cause the representation set
forth in Section 3.02(k)(v) to be untrue, the failure of the
performance of the covenant set forth in Section 5.14 or the failure
of the conditions set forth in Sections 6.02(c) and 6.03(c), such
Entergy RTO Formation shall not constitute (x) a breach of or failure
to perform any of the representations, warranties, covenants or other
agreements contained in this Agreement (including those contained in
Section 4.04) or (y) otherwise result in the failure of any condition
set forth in Article VI hereof to be satisfied.
(m) Insurance. Entergy shall, and shall cause its
subsidiaries to, maintain with financially responsible insurance
companies (or through self-insurance, consistent with past practice)
insurance in such amounts and against such risks and losses as are
customary for companies engaged in their respective businesses.
SECTION 4.03. No Solicitation by FPL. (a) FPL shall not,
nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any of its directors, officers or employees to,
and shall use its reasonable best efforts to cause any investment
banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries not to,
directly or indirectly, (i) solicit, initiate or knowingly encourage
(including by way of furnishing information), or knowingly take any
other action designed to facilitate, any inquiries or the making of
any proposal that constitutes an FPL Takeover Proposal (as defined
below) or (ii) participate in any negotiations or substantive
discussions regarding any FPL Takeover Proposal; provided, however,
that if, at any time prior to receipt of the FPL Shareholder Approval
(the "FPL Applicable Period"), the Board of Directors of FPL
determines in good faith, after consultation with its legal and
financial advisors, that an FPL Takeover Proposal that was not
solicited by it and that did not otherwise result from a breach of
this Section 4.03(a) is, or is reasonably likely to result in, an FPL
Superior Proposal (as defined in Section 4.03(b)), and subject to
providing prior written notice of its decision to take such action to
Entergy (the "FPL Information Notice") and compliance with Section
4.03(c), FPL may (x) furnish information with respect to FPL and its
subsidiaries to the person making such proposal (and its
representatives) pursuant to a customary confidentiality agreement
containing terms no less favorable to FPL than those set forth in the
Confidentiality Agreement (the "Confidentiality Agreement") dated
June 8, 2000, between FPL and Entergy (provided that such
confidentiality agreement shall not in any way restrict FPL from
complying with its disclosure obligations under this Agreement,
including with respect to such proposal, but such confidentiality
agreement may allow such party to submit to FPL a proposal or offer
relating to a transaction) and (y) participate in discussions or
negotiations regarding such proposal. FPL, its subsidiaries and
their representatives immediately shall cease and cause to be
terminated any existing activities, discussions or negotiations with
any parties with respect to any FPL Takeover Proposal. For purposes
of this Agreement, "FPL Takeover Proposal" means any inquiry,
proposal or offer from any person relating to (i) any direct or
indirect acquisition or purchase of a business (an "FPL Material
Business") that constitutes 20% or more of the net revenues, net
income or the assets (including equity securities) of FPL and its
subsidiaries, taken as a whole, (ii) any direct or indirect
acquisition or purchase of 20% or more of any class of voting
securities of FPL or any subsidiary of FPL owning, operating or
controlling an FPL Material Business, (iii) any tender offer or
exchange offer that if consummated would result in any person
beneficially owning 20% or more of any class of voting securities of
FPL or any subsidiary of FPL owning, operating or controlling an FPL
Material Business or (iv) any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving FPL or any such subsidiary of FPL owning,
operating or controlling an FPL Material Business, in each case other
than the transactions contemplated by this Agreement.
(b) Except as contemplated by this Section 4.03, neither
the Board of Directors of FPL nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to Entergy, the approval or recommendation by such
Board of Directors or such committee of this Agreement or the FPL
Merger, (ii) approve or recommend, or propose publicly to approve or
recommend, any FPL Takeover Proposal, or (iii) cause FPL to enter
into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, an "FPL Acquisition
Agreement") related to any FPL Takeover Proposal. Notwithstanding
the foregoing, in response to an FPL Takeover Proposal that was not
solicited by it and that did not otherwise result from a breach of
Section 4.03(a), during the FPL Applicable Period, the Board of
Directors of FPL may, if it determines in good faith, after
consulting with outside counsel, that the failure to take such action
would be reasonably likely to result in a breach of the Board of
Directors' fiduciary obligations to the shareholders of FPL under
applicable law, (i) withdraw or modify, or propose publicly to
withdraw or modify, the approval or recommendation by such Board of
Directors or any committee thereof of this Agreement or the FPL
Merger, (ii) approve or recommend, or propose to approve or
recommend, any FPL Superior Proposal, or (iii) terminate this
Agreement pursuant to Section 7.01(d), but only if (x) in the case of
each of clauses (ii) or (iii), such Board of Directors determines in
good faith that such FPL Takeover Proposal constitutes an FPL
Superior Proposal, and (y) in the case of clause (iii), (A) FPL has
notified Entergy in writing of the determination that such FPL
Takeover Proposal constitutes an FPL Superior Proposal and (B) at
least seven business days following receipt by Entergy of such
notice, the Board of Directors of FPL determines that such FPL
Superior Proposal remains an FPL Superior Proposal. For purposes of
this Agreement, an "FPL Superior Proposal" means any written FPL
Takeover Proposal that the Board of Directors of FPL determines in
good faith (based on the written opinion, with only customary
qualifications, of a financial advisor of nationally recognized
reputation) to be more favorable (taking into account (i) all
financial and strategic considerations, including relevant legal,
financial, regulatory and other aspects of such FPL Takeover Proposal
and the Mergers and the other transactions contemplated by this
Agreement deemed relevant by the Board of Directors, (ii) the
identity of the third party making such FPL Takeover Proposal and
(iii) the conditions and prospects for completion of such FPL
Takeover Proposal) to FPL's shareholders than the FPL Merger and the
other transactions contemplated by this Agreement (taking into
account all of the terms of any proposal by Entergy to amend or
modify the terms of the FPL Merger and the other transactions
contemplated by this Agreement), except that (x) the reference to
"20%" in clauses (i), (ii) and (iii) of the definition of "FPL
Takeover Proposal" in Section 4.03(a) shall be deemed to be a
reference to "50%", (y) an "FPL Takeover Proposal" shall only be
deemed to refer to a transaction involving FPL, and not any of its
subsidiaries or FPL Material Businesses alone, and (z) the references
to "or any subsidiary of FPL owning, operating or controlling an FPL
Material Business" in clauses (ii), (iii) and (iv) shall be deemed to
be deleted.
(c) In addition to the obligations of FPL set forth in
paragraphs (a) and (b) of this Section 4.03, FPL shall immediately
advise Entergy, orally and in writing, of any request for information
or of any FPL Takeover Proposal, the principal terms and conditions
of such request or FPL Takeover Proposal and the identity of the
person making such request or FPL Takeover Proposal. FPL shall keep
Entergy informed of the status and details (including amendments or
proposed amendments) of any such request or FPL Takeover Proposal.
(d) Nothing contained in this Section 4.03 shall prohibit
FPL from (i) taking and disclosing to its shareholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
from making any disclosure to FPL's shareholders if, in the good
faith judgment of the Board of Directors of FPL, after consultation
with outside counsel, failure so to disclose would be inconsistent
with its obligations under applicable law or (ii) taking actions
permitted by Sections 4.01(f) or 4.01(l).
SECTION 4.04. No Solicitation by Entergy. (a) Entergy
shall not, nor shall it permit any of its subsidiaries to, nor shall
it authorize or permit any of its directors, officers or employees
to, and shall use its reasonable best efforts to cause any investment
banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries not to,
directly or indirectly, (i) solicit, initiate or knowingly encourage
(including by way of furnishing information), or knowingly take any
other action designed to facilitate, any inquiries or the making of
any proposal that constitutes an Entergy Takeover Proposal (as
defined below) or (ii) participate in any negotiations or substantive
discussions regarding any Entergy Takeover Proposal; provided,
however, that if, at any time prior to receipt of the Entergy
Shareholder Approval (the "Entergy Applicable Period"), the Board of
Directors of Entergy determines in good faith, after consultation
with its legal and financial advisors, that an Entergy Takeover
Proposal that was not solicited by it and that did not otherwise
result from a breach of this Section 4.04(a) is, or is reasonably
likely to result in, an Entergy Superior Proposal (as defined in
Section 4.04(b)), and subject to providing prior written notice of
its decision to take such action to FPL (the "Entergy Information
Notice") and compliance with Section 4.04(c), Entergy may (x) furnish
information with respect to Entergy and its subsidiaries to the
person making such proposal (and its representatives) pursuant to a
customary confidentiality agreement containing terms no less
favorable to Entergy than those set forth in the Confidentiality
Agreement (provided that such confidentiality agreement shall not in
any way restrict Entergy from complying with its disclosure
obligations under this Agreement, including with respect to such
proposal, but such confidentiality agreement may allow such party to
submit to Entergy a proposal or offer relating to a transaction) and
(y) participate in discussions or negotiations regarding such
proposal. Entergy, its subsidiaries and their representatives
immediately shall cease and cause to be terminated any existing
activities, discussions or negotiations with any parties with respect
to any Entergy Takeover Proposal. For purposes of this Agreement,
"Entergy Takeover Proposal" means any inquiry, proposal or offer from
any person relating to (i) any direct or indirect acquisition or
purchase of a business (an "Entergy Material Business") that
constitutes 20% or more of the net revenues, net income or the assets
(including equity securities) of Entergy and its subsidiaries, taken
as a whole, (ii) any direct or indirect acquisition or purchase of
20% or more of any class of voting securities of Entergy or any
subsidiary of Entergy owning, operating or controlling an Entergy
Material Business, (iii) any tender offer or exchange offer that if
consummated would result in any person beneficially owning 20% or
more of any class of voting securities of Entergy or any subsidiary
of Entergy owning, operating or controlling an Entergy Material
Business or (iv) any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving Entergy or any such subsidiary of Entergy owning, operating
or controlling an Entergy Material Business, in each case other than
the transactions contemplated by this Agreement.
(b) Except as contemplated by this Section 4.04, neither
the Board of Directors of Entergy nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to FPL, the approval or recommendation by such Board
of Directors or such committee of this Agreement or the Entergy
Merger, (ii) approve or recommend, or propose publicly to approve or
recommend, any Entergy Takeover Proposal, or (iii) cause Entergy to
enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, an "Entergy Acquisition
Agreement") related to any Entergy Takeover Proposal.
Notwithstanding the foregoing, in response to an Entergy Takeover
Proposal that was not solicited by it and that did not otherwise
result from a breach of Section 4.04(a), during the Entergy
Applicable Period, the Board of Directors of Entergy may, if it
determines in good faith, after consulting with outside counsel, that
the failure to take such action would be reasonably likely to result
in a breach of the Board of Directors' fiduciary obligations to the
shareholders of Entergy under applicable law, (i) withdraw or modify,
or propose publicly to withdraw or modify, the approval or
recommendation by such Board of Directors or any committee thereof of
this Agreement or the Entergy Merger, (ii) approve or recommend, or
propose to approve or recommend, any Entergy Superior Proposal, or
(iii) terminate this Agreement pursuant to Section 7.01(g), but only
if (x) in the case of each of clauses (ii) or (iii), such Board of
Directors determines in good faith that such Entergy Takeover
Proposal constitutes an Entergy Superior Proposal, and (y) in the
case of clause (iii), (A) Entergy has notified FPL in writing of the
determination that such Entergy Takeover Proposal constitutes an
Entergy Superior Proposal and (B) at least seven business days
following receipt by FPL of such notice, the Board of Directors of
Entergy determines that such Entergy Superior Proposal remains an
Entergy Superior Proposal. For purposes of this Agreement, an
"Entergy Superior Proposal" means any written Entergy Takeover
Proposal that the Board of Directors of Entergy determines in good
faith (based on the written opinion, with only customary
qualifications, of a financial advisor of nationally recognized
reputation) to be more favorable (taking into account (i) all
financial and strategic considerations, including relevant legal,
financial, regulatory and other aspects of such Entergy Takeover
Proposal and the Mergers and the other transactions contemplated by
this Agreement deemed relevant by the Board of Directors, (ii) the
identity of the third party making such Entergy Takeover Proposal and
(iii) the conditions and prospects for completion of such Entergy
Takeover Proposal) to Entergy's shareholders than the Entergy Merger
and the other transactions contemplated by this Agreement (taking
into account all of the terms of any proposal by FPL to amend or
modify the terms of the Entergy Merger and the other transactions
contemplated by this Agreement), except that (x) the reference to
"20%" in clauses (i), (ii) and (iii) of the definition of "Entergy
Takeover Proposal" in Section 4.04(a) shall be deemed to be a
reference to "50%", (y) an "Entergy Takeover Proposal" shall only be
deemed to refer to a transaction involving Entergy, and not any of
its subsidiaries or Entergy Material Businesses alone, and (z) the
references to "or any subsidiary of Entergy owning, operating or
controlling an Entergy Material Business" in clauses (ii), (iii) and
(iv) shall be deemed to be deleted.
(c) In addition to the obligations of Entergy set forth in
paragraphs (a) and (b) of this Section 4.04, Entergy shall
immediately advise FPL, orally and in writing, of any request for
information or of any Entergy Takeover Proposal, the principal terms
and conditions of such request or Entergy Takeover Proposal and the
identity of the person making such request or Entergy Takeover
Proposal. Entergy shall keep FPL informed of the status and details
(including amendments or proposed amendments) of any such request or
Entergy Takeover Proposal.
(d) Nothing contained in this Section 4.04 shall prohibit
Entergy from (i) taking and disclosing to its shareholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
from making any disclosure to Entergy's shareholders if, in the good
faith judgment of the Board of Directors of Entergy, after
consultation with outside counsel, failure so to disclose would be
inconsistent with its obligations under applicable law or (ii) taking
actions permitted by Sections 4.02(f) or 4.02(l).
SECTION 4.05. Other Actions. FPL and Entergy shall not,
and shall not permit any of their respective subsidiaries to, take
any action that would, or that could reasonably be expected to,
result in (i) any of the representations and warranties of such party
set forth in this Agreement that is qualified as to materiality
becoming untrue, (ii) any of such representations and warranties that
is not so qualified becoming untrue in any material respect or (iii)
any condition to the Mergers set forth in Article VI not being
satisfied.
SECTION 4.06. Coordination of Dividends. Each of FPL and
Entergy shall coordinate with the other regarding the declaration and
payment of dividends in respect of FPL Common Stock and Entergy
Common Stock and the record dates and payment dates relating thereto,
it being the intention of FPL and Entergy that no holder of FPL
Common Stock, Entergy Common Stock or Company Common Stock shall
receive two dividends, or fail to receive one dividend, for any
single calendar quarter with respect to its shares of FPL Common
Stock or Entergy Common Stock, as the case may be, and/or any shares
of Company Common Stock any such holder receives in exchange therefor
pursuant to the Mergers.
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Form S-4 and the Joint
Proxy Statement; Shareholders Meetings. (a) As soon as practicable
following the date of this Agreement, FPL and Entergy shall prepare
and file with the SEC the Joint Proxy Statement and FPL, Entergy and
the Company shall prepare and file with the SEC the Form S-4, in
which the Joint Proxy Statement will be included. Each of FPL,
Entergy and the Company shall use its reasonable best efforts to have
the Form S-4 declared effective under the Securities Act as promptly
as practicable after such filing. FPL will use its reasonable best
efforts to cause the Joint Proxy Statement to be mailed to FPL's
shareholders, and Entergy will use its reasonable best efforts to
cause the Joint Proxy Statement to be mailed to Entergy's
shareholders, in each case as promptly as practicable after the Form
S-4 is declared effective under the Securities Act. Each party
hereto shall also take any action required to be taken under any
applicable state or provincial securities laws in connection with the
issuance of Company Common Stock in the Mergers and each party shall
furnish all information concerning itself and its shareholders as may
be reasonably requested in connection with any such action. Each
party will advise the others, promptly after it receives notice
thereof, of the time when the Form S-4 has become effective or any
supplement or amendment has been filed, the issuance of any stop
order, the suspension of the qualification of the Company Common
Stock issuable in connection with the Mergers for offering or sale in
any jurisdiction, or any request by the SEC for amendment of the
Joint Proxy Statement or the Form S-4 or comments thereon and
responses thereto or requests by the SEC for additional information.
If prior to the Effective Time any event occurs with respect to FPL,
Entergy or any subsidiary of FPL or Entergy, respectively, or any
change occurs with respect to information supplied by or on behalf of
FPL or Entergy, respectively, for inclusion in the Joint Proxy
Statement or the Form S-4 that, in each case, is required to be
described in an amendment of, or a supplement to, the Joint Proxy
Statement or the Form S-4, FPL or Entergy, as applicable, shall
promptly notify the other and the Company of such event, and FPL or
Entergy, as applicable, shall cooperate with the Company in the
prompt filing with the SEC of any necessary amendment or supplement
to the Joint Proxy Statement and the Form S-4 and, as required by
law, in disseminating the information contained in such amendment or
supplement to FPL's shareholders and to Entergy's shareholders.
(b) FPL shall, as soon as reasonably practicable following
the date of this Agreement, duly call, give notice of, convene and
hold a meeting of its shareholders (the "FPL Shareholders Meeting")
for the purpose of obtaining the FPL Shareholder Approval. Without
limiting the generality of the foregoing, FPL agrees that its
obligations pursuant to the first sentence of this Section 5.01(b)
shall not be affected by (i) the commencement, public proposal,
public disclosure or communication to FPL of any FPL Takeover
Proposal, (ii) the withdrawal or modification by the Board of
Directors of FPL of its approval or recommendation of this Agreement,
the FPL Merger or the other transactions contemplated hereby or (iii)
the approval or recommendation of any FPL Superior Proposal.
(c) Entergy shall, as soon as reasonably practicable
following the date of this Agreement, duly call, give notice of,
convene and hold a meeting of its shareholders (the "Entergy
Shareholders Meeting") for the purpose of obtaining the Entergy
Shareholder Approval. Without limiting the generality of the
foregoing, Entergy agrees that its obligations pursuant to the first
sentence of this Section 5.01(c) shall not be affected by (i) the
commencement, public proposal, public disclosure or communication to
Entergy of any Entergy Takeover Proposal, (ii) the withdrawal or
modification by the Board of Directors of Entergy of its approval or
recommendation of this Agreement, the Entergy Merger or the other
transactions contemplated hereby or (iii) the approval or
recommendation of any Entergy Superior Proposal.
(d) FPL and Entergy will use their reasonable best efforts
to hold the Entergy Shareholders Meeting and the FPL Shareholders
Meeting on the same date and as soon as practicable after the date of
this Agreement.
SECTION 5.02. Letters of FPL's Accountants. FPL shall use
its reasonable best efforts to cause to be delivered to Entergy two
letters from FPL's independent accountants, one dated a date within
two business days before the date on which the Form S-4 shall become
effective and one dated a date within two business days before the
Closing Date, each addressed to Entergy, in form and substance
reasonably satisfactory to Entergy and customary in scope and
substance for comfort letters delivered by independent public
accountants in connection with registration statements similar to the
Form S-4.
SECTION 5.03. Letters of Entergy's Accountants. Entergy
shall use its reasonable best efforts to cause to be delivered to FPL
two letters from Entergy's independent accountants, one dated a date
within two business days before the date on which the Form S-4 shall
become effective and one dated a date within two business days before
the Closing Date, each addressed to FPL, in form and substance
reasonably satisfactory to FPL and customary in scope and substance
for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.
SECTION 5.04. Access to Information; Effect of Review.
(a) Access. Subject to the Confidentiality Agreement, to the extent
permitted by applicable law, each of FPL and Entergy shall, and shall
cause each of its respective subsidiaries to, and, so long as
consistent with its confidentiality obligations under its applicable
agreements, shall use its respective reasonable best efforts to cause
the FPL Joint Ventures and Entergy Joint Ventures, respectively, to,
afford to the other party and to the officers, employees,
accountants, counsel, financial advisors and other representatives of
such other party reasonable access during normal business hours
during the period prior to the Effective Time to all their respective
properties, books, contracts, commitments, personnel and records and,
during such period, to the extent permitted by applicable law, each
of FPL and Entergy shall, and shall cause each of its respective
subsidiaries to, and, so long as consistent with its confidentiality
obligations under its applicable agreements, shall use its respective
reasonable best efforts to cause the FPL Joint Ventures and Entergy
Joint Ventures, respectively, to, (i) confer on a regular and
frequent basis with one or more representatives of the other party to
discuss material operational and regulatory matters and the general
status of its ongoing operations, (ii) advise the other party of any
change or event that has had or could reasonably be expected to have
a material adverse effect on such party and (iii) furnish promptly
all other information concerning its business, properties and
personnel, in each case as such other party may reasonably request;
provided, however, that no actions shall be taken pursuant to this
Section 5.04(a) that would result in a waiver of the attorney/client
privilege. Notwithstanding the foregoing, if a party requests access
to proprietary information of the other party, the disclosure of
which would have a material adverse effect on the other party if the
Closing were not to occur (giving effect to the requesting party's
obligations under the Confidentiality Agreement), such information
shall only be disclosed to the extent reasonably agreed upon by the
chief financial officers (or their designees) of FPL and Entergy.
All information exchanged pursuant to this Section 5.04(a) shall be
subject to the Confidentiality Agreement.
(b) Effect of Review. No review pursuant to this Section
5.04 shall have an effect for the purpose of determining the accuracy
of any representation or warranty given by any of the parties hereto
to any of the other parties hereto.
SECTION 5.05. Regulatory Matters; Reasonable Best Efforts.
(a) Regulatory Approvals. Each party hereto shall cooperate and
promptly prepare and file all necessary documentation, to effect all
necessary applications, notices, petitions and filings, and shall use
reasonable best efforts to obtain all necessary approvals and
authorizations of all Governmental Authorities, necessary or
advisable to consummate and make effective, in the most expeditious
manner reasonably practicable, the Mergers and the other transactions
contemplated by this Agreement, including the FPL Required Statutory
Approvals and the Entergy Required Statutory Approvals; provided,
however, that FPL shall have primary responsibility for the
preparation and filing of any related applications, filings or other
materials with the FPSC and, provided, further, that Entergy shall
have primary responsibility for the preparation and filing of any
related applications, filings or other materials with all Applicable
PSCs, other than the FPSC, and the SEC with respect to the 1935 Act.
FPL shall have the right to review and approve in advance all
characterizations of the information relating to FPL, on the one
hand, and Entergy shall have the right to review and approve in
advance all characterizations of the information relating to Entergy,
on the other hand, in either case, that appear in any application,
notice, petition or filing made in connection with the Mergers or the
other transactions contemplated by this Agreement. FPL and Entergy
agree that they will consult and cooperate with each other with
respect to the obtaining of all such necessary approvals and
authorizations of Governmental Authorities.
(b) Further Actions. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to
use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things reasonably necessary or
advisable to consummate and make effective, in the most expeditious
manner reasonably practicable, the Mergers and the other transactions
contemplated by this Agreement, including (i) the defending of any
lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated by this Agreement, including seeking to
have any stay or temporary restraining order entered by any court or
other Governmental Authority vacated or reversed, and (ii) the
execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by this Agreement.
(c) State Anti-Takeover Statutes. Without limiting the
generality of Section 5.05(b), FPL and Entergy shall (i) take all
action necessary to ensure that no state anti-takeover statute or
similar statute or regulation is or becomes applicable to the
Mergers, this Agreement or any of the other transactions contemplated
by this Agreement and (ii) if any state anti-takeover statute or
similar statute or regulation becomes applicable to the Mergers, this
Agreement or any other transaction contemplated by this Agreement,
take all action necessary to ensure that the Mergers and the other
transactions contemplated by this Agreement may be consummated as
promptly as reasonably practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or
regulation on the Mergers and the other transactions contemplated by
this Agreement.
SECTION 5.06. Stock Options; Restricted Stock and Equity
Awards; Stock Plans. (a) Prior to the FPL Effective Time, the Board
of Directors of FPL (or, if appropriate, any committee administering
the FPL Option Plans) shall adopt such resolutions or take such other
actions as may be required to effect the following:
(i) adjust the terms of all outstanding stock options (the
"FPL Employee Stock Options") granted under the FPL Option
Plans, whether vested or unvested, as necessary to provide that,
at the Effective Time, each FPL Employee Stock Option
outstanding immediately prior to the Effective Time shall be
amended and converted into an option to acquire, on the same
terms and conditions as were applicable under such FPL Employee
Stock Option, including vesting (taking into account any
acceleration of vesting that may occur as a result of the FPL
Shareholder Approval or the transactions contemplated hereby),
the same number of shares of Company Common Stock at the same
price per share of Company Common Stock (each, as so adjusted, a
"FPL Adjusted Option");
(ii) ensure that the conversion pursuant to Section
2.01(a) of the FPL Common Stock held by any director or officer
of FPL and the conversion pursuant to this Section 5.06(a) into
Company Stock Options of FPL Employee Stock Options held by any
director or officer of FPL will be eligible for exemption under
Rule 16b-3(e);
(iii) make such other changes to the FPL Option Plans as
FPL and Entergy may agree are appropriate to give effect to the
FPL Merger, including as provided in Section 5.07;
(iv) provide that each restricted share of FPL Common Stock
shall be converted into a restricted share of Company Common
Stock, on the same terms and conditions as were applicable to
such share of FPL Common Stock, including vesting; and
(v) except as disclosed in Section 5.06(a) of the FPL
Disclosure Letter, adjust the terms of all outstanding FPL
equity or equity-based awards (other than FPL Employee Stock
Options and restricted shares of FPL Common Stock), whether
vested or unvested, as necessary to provide that each such award
outstanding immediately prior to the Effective Time shall be
amended and converted into an equity or equity-based award in
respect of the same number of shares of Company Common Stock, on
the same terms and conditions as were applicable to such FPL
equity or equity-based award, including vesting.
(b) Prior to the Entergy Effective Time, the Board of
Directors of Entergy (or, if appropriate, any committee administering
the Entergy Option Plans) shall adopt such resolutions or take such
other actions as may be required to effect the following:
(i) adjust the terms of all outstanding stock options (the
"Entergy Employee Stock Options") granted under the Entergy
Option Plans, whether vested or unvested, as necessary to
provide that, at the Effective Time, each Entergy Employee Stock
Option outstanding immediately prior to the Effective Time shall
be amended and converted into an option to acquire, on the same
terms and conditions as were applicable under such Entergy
Employee Stock Option, including vesting (taking into account
any acceleration of vesting that may occur as a result of the
Entergy Shareholder Approval or the transactions contemplated
hereby), the same number of shares of Company Common Stock
(rounded down to the nearest whole share) as the holder of such
Entergy Employee Stock Option would have been entitled to
receive pursuant to the Entergy Merger had such holder been
vested and exercised such Entergy Employee Stock Option in full
immediately prior to the Effective Time, at a price per share of
Company Common Stock (rounded up to the nearest cent) equal to
(A) the aggregate exercise price for the shares of Entergy
Common Stock otherwise purchasable pursuant to such Entergy
Employee Stock Option divided by (B) the aggregate number of
shares of Company Common Stock deemed purchasable pursuant to
such Entergy Employee Stock Option (each, as so adjusted, a
"Entergy Adjusted Option", and, together with the FPL Adjusted
Options, the "Adjusted Options");
(ii) ensure that the conversion pursuant to Section 2.01(b)
of the Entergy Common Stock held by any director or officer of
Entergy and the conversion pursuant to this Section 5.06(b) into
Company Stock Options of Entergy Employee Stock Options held by
any director or officer of Entergy will be eligible for
exemption under Rule 16b-3(e);
(iii) make such other changes to the Entergy Option Plans as
FPL and Entergy may agree are appropriate to give effect to the
Entergy Merger, including as provided in Section 5.07;
(iv) provide that each restricted share of Entergy Common
Stock shall be converted into a number of restricted shares of
Company Common Stock equal to the Entergy Ratio, on the same
terms and conditions as were applicable to such share of Entergy
Common Stock, including vesting; and
(v) except as disclosed in Section 5.06(b) of the Entergy
Disclosure Letter, adjust the terms of all outstanding Entergy
equity or equity-based awards (other than Entergy Employee Stock
Options and restricted shares of Entergy Common Stock), whether
vested or unvested, as necessary to provide that each such award
outstanding immediately prior to the Effective Time shall be
amended and converted into an equity or equity-based award in
respect of a number of shares of Company Common Stock equal to
the number of shares of Entergy Common Stock represented by such
award multiplied by the Entergy Ratio, on the same terms and
conditions as were applicable to such Entergy equity or equity-
based award, including vesting.
(c) As soon as practicable after the Effective Time, the
Company shall deliver to the holders of FPL Employee Stock Options
and Entergy Employee Stock Options (collectively, the "Stock
Options") appropriate notices setting forth such holders' rights
pursuant to the respective FPL Option Plans or Entergy Option Plans,
as the case may be (collectively, the "Stock Plans"), and the
agreements evidencing the grants of such Stock Options, and that such
Stock Options and agreements shall be assumed by the Company and
shall continue in effect on the same terms and conditions (subject to
the adjustments required by this Section 5.06 after giving effect to
the Mergers).
(d) Except as otherwise contemplated by this Section 5.06
and except to the extent required under the respective terms of the
Stock Options, all restrictions or limitations on transfer and
vesting with respect to Stock Options awarded under the Stock Plans,
or any other plan, program or arrangement of FPL, Entergy or any of
their subsidiaries, to the extent that such restrictions or
limitations shall not have already lapsed, shall remain in full force
and effect with respect to such Stock Options after giving effect to
the Mergers and the assumption by the Company as set forth above.
(e) At the Effective Time, by virtue of the Mergers, the
Stock Plans shall be assumed by the Company, with the result that all
obligations of FPL and Entergy under the Stock Plans, including with
respect to awards outstanding at the Effective Time under each Stock
Plan, shall be obligations of the Company following the Effective
Time. Prior to the Effective Time, the Company shall take all
necessary actions for the assumption of the Stock Plans, including
the reservation, issuance and listing of Company Common Stock in a
number at least equal to the number of shares of Company Common Stock
that will be subject to Adjusted Options. As promptly as practicable
following the Effective Time, the Company shall prepare and file with
the SEC a registration statement on Form S-8 (or another appropriate
form) registering a number of shares of Company Common Stock
determined in accordance with the preceding sentence. Such
registration statement shall be kept effective (and the current
status of the prospectus or prospectuses required thereby shall be
maintained) at least for so long as Adjusted Options remain
outstanding.
SECTION 5.07. Employee Matters. (a) Following the
Effective Time, the Company will (subject to this Section 5.07 and
Section 5.08) cause its subsidiaries to honor all obligations under
any contracts, agreements, collective bargaining agreements, plans
(as such may be amended in accordance with this Agreement) and
commitments of FPL and Entergy and their respective subsidiaries that
exist on the date of this Agreement (or as established or amended in
accordance with or permitted by this Agreement) that apply to any
current or former employee, or current or former director, of either
of the parties hereto or any of their subsidiaries; provided,
however, that this undertaking is not intended to prevent the Company
from enforcing such contracts, agreements, collective bargaining
agreements, plans (as such may be amended in accordance with this
Agreement) and commitments in accordance with their terms, including
any reserved right to amend, modify, suspend, revoke or terminate any
such contract, agreement, collective bargaining agreement or
commitment.
(b) At the Effective Time, it shall be the intent of the
Company, that (subject to obligations under applicable law and
applicable collective bargaining agreements) (i) any reductions in
the employee work force of the Company and its subsidiaries shall be
made on a fair and equitable basis (as determined by the Company and
its subsidiaries), in light of the circumstances and the objectives
to be achieved, giving consideration to previous work history, job
experience and qualifications, without regard to whether employment
prior to the Effective Time was with FPL and its subsidiaries or
Entergy and its subsidiaries, and any employees whose employment is
terminated or jobs are eliminated by the Company or any of its
subsidiaries during such period shall be entitled to participate on a
fair and equitable basis (as determined by the Company and its
subsidiaries) in the job opportunity and employment placement
programs offered by the Company or any of its subsidiaries for which
they are eligible and (ii) employees shall be entitled to participate
in all job training, career development and educational programs of
the Company and its subsidiaries for which they are eligible, and
shall be entitled to fair and equitable consideration (as determined
by the Company and its subsidiaries) in connection with any job
opportunities with the Company and its subsidiaries, in each case
without regard to whether employment prior to the Effective Time was
with FPL and its subsidiaries or Entergy and its subsidiaries.
(c) Subject to its obligations under applicable law and
applicable collective bargaining agreements, the Company and its
subsidiaries shall give credit under each of their respective
employee benefit plans, programs and arrangements to employees for
all service prior to the Effective Time with FPL or Entergy or their
respective subsidiaries, as applicable, or any predecessor employer
(to the extent that such credit was given by FPL or Entergy or any of
their respective subsidiaries, as applicable) for all purposes for
which such service was taken into account or recognized by FPL or
Entergy or their respective subsidiaries, as applicable, but not to
the extent crediting such service would result in duplication of
benefits (including for benefit accrual purposes under defined
benefit pension plans).
SECTION 5.08. Indemnification, Exculpation and Insurance.
(a) Each of the Company, Merger Sub A and Merger Sub B agrees that
all rights to indemnification and exculpation from liabilities for
acts or omissions occurring at or prior to the Effective Time now
existing in favor of the current or former directors, officers,
employees or fiduciaries under benefit plans currently indemnified of
FPL and its subsidiaries or Entergy and its subsidiaries, as the case
may be, as provided in their respective certificates of
incorporation, by-laws (or comparable organizational documents) or
other agreements providing indemnification shall survive the Mergers
and shall continue in full force and effect in accordance with their
terms. In addition, from and after the Effective Time, directors,
officers, employees and fiduciaries under benefit plans currently
indemnified of FPL or Entergy or their respective subsidiaries who
become directors, officers, employees or fiduciaries under benefit
plans of the Company will be entitled to the indemnity rights and
protections afforded to directors, officers, employees and
fiduciaries under benefit plans of the Company.
(b) For six years after the Effective Time, the Company
shall maintain in effect the directors' and officers' liability (and
fiduciary) insurance policies currently maintained by FPL and Entergy
covering acts or omissions occurring prior to the Effective Time with
respect to those persons who are currently covered by FPL's and
Entergy's respective directors' and officers' liability insurance
policies on terms with respect to such coverage and in amounts no
less favorable than those set forth in the relevant policy in effect
on the date of this Agreement. If such insurance coverage cannot be
maintained, the Company shall maintain the most advantageous policies
of directors' and officers' insurance otherwise obtainable.
(c) The provisions of Section 5.08(a) (i) are intended to
be for the benefit of, and will be enforceable by, each indemnified
party, his or her heirs and his or her representatives and (ii) are
in addition to, and not in substitution for, any other rights to
indemnification or contribution that any such person may have by
contract or otherwise.
SECTION 5.09. Fees and Expenses. (a) Except as provided
in this Section 5.09, all fees and expenses incurred in connection
with the Mergers, this Agreement and the transactions contemplated by
this Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Mergers are consummated, except that
each of FPL and Entergy shall bear and pay one-half of the costs and
expenses incurred in connection with (1) the filing, printing and
mailing of the Form S-4 and the Joint Proxy Statement (including SEC
filing fees) and (2) the filings of the premerger notification and
report forms under the HSR Act (including filing fees). The Company
shall file any return with respect to, and shall pay, any state or
local taxes (including any penalties or interest with respect
thereto), if any, that are attributable to (i) the transfer of the
beneficial ownership of FPL's or Entergy's real property and (ii) the
transfer of FPL Common Stock or Entergy Common Stock pursuant to this
Agreement as a result of the Mergers. FPL and Entergy shall
cooperate with the Company in the filing of such returns, including
supplying any information that is reasonably necessary to complete
such returns.
(b) In the event that (i) following the FPL Shareholder
Approval, an FPL Takeover Proposal shall have been made known to FPL
or any of its subsidiaries or shall have been made directly to FPL's
shareholders or any person shall have publicly announced an intention
(whether or not conditional) to make an FPL Takeover Proposal and
thereafter this Agreement is terminated by either FPL or Entergy
pursuant to Section 7.01(b)(i), (ii) prior to or during the FPL
Shareholders Meeting (or any subsequent meeting of FPL shareholders
at which it is proposed that the FPL Merger be approved), an FPL
Takeover Proposal shall have been publicly disclosed or any person
shall have publicly announced an intention (whether or not
conditional) to make an FPL Takeover Proposal and thereafter this
Agreement is terminated by either FPL or Entergy pursuant to Section
7.01(b)(iii), (iii) this Agreement is terminated by FPL pursuant to
Section 7.01(d) or (iv) this Agreement is terminated by Entergy
pursuant to Section 7.01(j)(i) or (iii), then FPL shall immediately
pay Entergy a fee equal to $215,000,000 (the "Termination Fee"),
payable by wire transfer of same day funds; provided, however, that
no Termination Fee shall be payable to Entergy (x) pursuant to clause
(i) of this paragraph (b) unless and until within 12 months of such
termination FPL or any of its subsidiaries enters into any FPL
Acquisition Agreement or consummates any FPL Takeover Proposal, in
either case with the person (or an affiliate of such person) that
made the FPL Takeover Proposal referred to in clause (i) of this
paragraph (b), or (y) pursuant to clause (ii) of this paragraph (b)
unless and until within 24 months of such termination FPL or any of
its subsidiaries enters into any FPL Acquisition Agreement or
consummates any FPL Takeover Proposal (for the purposes of the
foregoing proviso the terms "FPL Acquisition Agreement" and "FPL
Takeover Proposal" shall have the meanings assigned to such terms in
Section 4.03 except that the references to "20%" in the definition of
"FPL Takeover Proposal" in Section 4.03(a) shall be deemed to be
references to "35%"), in which event the Termination Fee shall be
immediately payable upon the first to occur of such events.
(c) In the event that (i) following the Entergy
Shareholder Approval, an Entergy Takeover Proposal shall have been
made known to Entergy or any of its subsidiaries or shall have been
made directly to Entergy's shareholders generally or any person shall
have publicly announced an intention (whether or not conditional) to
make an Entergy Takeover Proposal and thereafter this Agreement is
terminated by either FPL or Entergy pursuant to Section 7.01(b)(i),
(ii) prior to or during the Entergy Shareholders Meeting (or any
subsequent meeting of Entergy shareholders at which it is proposed
that the Entergy Merger be approved), an Entergy Takeover Proposal
shall have been publicly disclosed or any person shall have publicly
announced an intention (whether or not conditional) to make an
Entergy Takeover Proposal and thereafter this Agreement is terminated
by either FPL or Entergy pursuant to Section 7.01(b)(ii), (iii) this
Agreement is terminated by Entergy pursuant to Section 7.01(g) or
(iv) this Agreement is terminated by FPL pursuant to Section
7.01(i)(i) or (iii), then Entergy shall immediately pay FPL the
Termination Fee, payable by wire transfer of same day funds;
provided, however, that no Termination Fee shall be payable to FPL
(x) pursuant to clause (i) of this paragraph (b) unless and until
within 12 months of such termination Entergy or any of its
subsidiaries enters into any Entergy Acquisition Agreement or
consummates any Entergy Takeover Proposal, in either case with the
person (or an affiliate of such person) that made the Entergy
Takeover Proposal referred to in clause (i) of this paragraph (c), or
(y) pursuant to clause (ii) of this paragraph (c) unless and until
within 24 months of such termination Entergy or any of its
subsidiaries enters into any Entergy Acquisition Agreement or
consummates any Entergy Takeover Proposal (for the purposes of the
foregoing proviso the terms "Entergy Acquisition Agreement" and
"Entergy Takeover Proposal" shall have the meanings assigned to such
terms in Section 4.04 except that the references to "20%" in the
definition of "Entergy Takeover Proposal" in Section 4.04(a) shall be
deemed to be references to "35%"), in which event the Termination Fee
shall be immediately payable upon the first to occur of such events.
(d) If this Agreement is terminated by FPL or Entergy
pursuant to Section 7.01(b)(i) (after an FPL Takeover Proposal shall
have been made known to FPL or any of its subsidiaries or has been
made directly to FPL's shareholders or any person shall have publicly
announced an intention (whether or not conditional) to make an FPL
Takeover Proposal) or Section 7.01(b)(iii) (after the public
disclosure of an FPL Takeover Proposal or the announcement by any
person of the intention whether or not conditional) to make an FPL
Takeover Proposal), by Entergy pursuant to Section 7.01(j)(i) or
(iii) or by FPL pursuant to Section 7.01(d), FPL shall reimburse
Entergy promptly upon demand, but in no event later than three
business days after the date of such demand, by wire transfer of same
day funds, for all fees and expenses, incurred or paid by or on
behalf of, Entergy in connection with the Mergers or the transactions
contemplated by this Agreement, including all fees and expenses of
counsel, investment banking firms, accountants, experts and
consultants to Entergy; provided, however, that FPL shall not be
obligated to make payments pursuant to this Section 5.09(d) in excess
of $25,000,000 in the aggregate.
(e) If this Agreement is terminated by FPL or Entergy
pursuant to Section 7.01(b)(i) (after an Entergy Takeover Proposal
shall have been made known to Entergy or any of its subsidiaries or
has been made directly to Entergy's shareholders or any person shall
have publicly announced an intention (whether or not conditional) to
make an Entergy Takeover Proposal) or Section 7.01(b)(ii) (after the
public disclosure of an Entergy Takeover Proposal or the announcement
by any person of the intention (whether or not conditional) to make
an Entergy Takeover Proposal), by FPL pursuant to Section 7.01(i)(i)
or (iii) or by Entergy pursuant to Section 7.01(g), Entergy shall
reimburse FPL promptly upon demand, but in no event later than three
business days after the date of such demand, by wire transfer of same
day funds, for all fees and expenses incurred, or paid by or on
behalf of, FPL in connection with the Mergers or the transactions
contemplated by this Agreement, including all fees and expenses of
counsel, investment banking firms, accountants, experts and
consultants to FPL; provided, however, that Entergy shall not be
obligated to make payments pursuant to this Section 5.09(e) in excess
of $25,000,000 in the aggregate.
(f) FPL acknowledges that the agreements contained in
Sections 5.09(b) and 5.09(d) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements,
Entergy would not enter into this Agreement; accordingly, if FPL
fails promptly to pay the amount due pursuant to Section 5.09(b) or
5.09(d), and, in order to obtain such payment, Entergy commences a
suit that results in a judgment against FPL for the fees set forth in
Section 5.09(b) or 5.09(d), FPL shall pay to Entergy its costs and
expenses (including attorneys' fees and expenses) in connection with
such suit, together with interest on the amount of the fee at the
prime rate of Citibank N.A. in effect on the date such payment was
required to be made.
(g) Entergy acknowledges that the agreements contained in
Sections 5.09(c) and 5.09(e) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements,
FPL would not enter into this Agreement; accordingly, if Entergy
fails promptly to pay the amount due pursuant to Section 5.09(c) or
5.09(e), and, in order to obtain such payment, FPL commences a suit
that results in a judgment against Entergy for the fees set forth in
Section 5.09(c) or 5.09(e), Entergy shall pay to FPL its costs and
expenses (including attorneys' fees and expenses) in connection with
such suit, together with interest on the amount of the fee at the
prime rate of Citibank N.A. in effect on the date such payment was
required to be made.
SECTION 5.10. Public Announcements. FPL and Entergy will
consult with each other before issuing, and provide each other the
reasonable opportunity to review, comment upon and concur with, any
press release or other public statements with respect to the
transactions contemplated by this Agreement, including the Mergers,
and shall not issue any such press release or make any such public
statement prior to such consultation, except as any party, after
consultation with counsel, may determine is required by applicable
law.
SECTION 5.11. Affiliates. As soon as practicable after
the date of this Agreement, FPL shall deliver to Entergy, and Entergy
shall deliver to FPL, a letter identifying all persons who are, at
the time this Agreement is submitted for adoption by the respective
shareholders of Entergy and FPL, "affiliates" of FPL or Entergy, as
the case may be, for purposes of Rule 145 under the Securities Act.
FPL and Entergy shall use their respective reasonable best efforts to
cause each such person to deliver to the Company as of the Closing
Date, a written agreement substantially in the form attached as
Exhibit D hereto.
SECTION 5.12. NYSE Listing. The Company shall use its
reasonable best efforts to cause the shares of Company Common Stock
issuable to FPL's shareholders and Entergy's shareholders as
contemplated by this Agreement to be approved for listing on the
NYSE, subject to official notice of issuance, as promptly as
practicable after the date of this Agreement, and in any event prior
to the Closing Date.
SECTION 5.13. Shareholder Litigation. Each of FPL and
Entergy shall give the other the reasonable opportunity to consult
concerning the defense of any shareholder litigation against FPL or
Entergy, as applicable, or any of their respective directors relating
to the transactions contemplated by this Agreement.
SECTION 5.14. Tax Treatment. Each of FPL and Entergy
shall not, and shall not permit any of their respective subsidiaries
to, voluntarily take any action, or fail to take any action, that
would, or would reasonably be expected to, result in (i) the
inability of either of the Mergers to constitute a tax-free
transaction governed by Section 351 of the Code or (ii) the inability
of FPL or Entergy to obtain the opinions of counsel referred to in
Sections 6.02(c) and 6.03(c).
SECTION 5.15. Common Stock Repurchases. FPL shall use
commercially reasonable efforts to purchase prior to the Closing at
prevailing market prices to the extent possible shares of FPL Common
Stock for an aggregate consideration of $570,000,000 (which amount
includes amounts remaining from FPL's common stock repurchase program
announced prior to the date of this Agreement), and Entergy shall use
commercially reasonable efforts to purchase prior to the Closing at
prevailing market prices to the extent possible shares of Entergy
Common Stock for an aggregate consideration of $430,000,000 (which
amount includes amounts remaining from Entergy's common stock
repurchase program announced prior to the date of this Agreement).
Notwithstanding the foregoing, FPL or Entergy, as applicable, shall
not be required to make any such purchases to the extent that (after
considering factors including (i) the performance of the FPL Common
Stock or the Entergy Common Stock, as applicable, in relation to the
Standard & Poor's Electric Utility Index, (ii) whether such purchases
are consistent with establishing with Standard & Poor's Corporation a
BBB+ credit rating for the Company and maintaining with Standard &
Poor's Corporation satisfactory credit ratings for FPL and its
subsidiaries or Entergy and its subsidiaries, as applicable, (iii)
the likelihood of the Closing occurring, (iv) whether such purchases
would allow adequate resources to fund capital expenditures and (v)
whether such purchases would be consistent with applicable law) FPL
or Entergy, as applicable, reasonably determines that it would be
imprudent to make such repurchases. FPL and Entergy shall consult on
a regular basis concerning the purchases described in the first
sentence of this Section 5.15 and cooperate in connection therewith.
Neither FPL nor Entergy shall purchase shares pursuant to this
Section 5.15 if it is reasonably likely that such purchases would
result in the failure of the closing conditions set forth in Sections
6.02(c) and 6.03(c) or the failure of the Mergers and the other
transactions contemplated hereby to be treated as a "purchase" of
Entergy by FPL under GAAP.
SECTION 5.16. Standstill Agreements; Confidentiality
Agreements. During the period from the date of this Agreement
through the Effective Time, neither FPL nor Entergy shall terminate,
amend, modify or waive any provision of any confidentiality or
standstill agreement to which it or any of its respective
subsidiaries is a party unless required by applicable law. During
such period, FPL or Entergy, as the case may be, shall enforce, to
the fullest extent permitted under applicable law, the provisions of
any such agreement, including by obtaining injunctions to prevent any
breaches of such agreements and to enforce specifically the terms and
provisions thereof.
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation To
Effect the Mergers. The respective obligation of each party to
effect the Mergers is subject to the satisfaction or waiver on or
prior to the Closing Date of the following conditions:
(a) Shareholder Approvals. Each of the Entergy
Shareholder Approval and the FPL Shareholder Approval shall have
been obtained.
(b) No Injunctions or Restraints. No (i) temporary
restraining order or preliminary or permanent injunction or
other order by any Federal or state court of competent
jurisdiction preventing consummation of either of the Mergers or
(ii) applicable Federal or state law prohibiting consummation of
either of the Mergers (collectively, "Restraints") shall be in
effect.
(c) Form S-4. The Form S-4 shall have become effective
under the Securities Act and shall not be the subject of any
stop order or proceedings seeking a stop order.
(d) NYSE Listing. The shares of Company Common Stock
issuable to FPL's shareholders and Entergy's shareholders as
contemplated by this Agreement shall have been approved for
listing on the NYSE, subject to official notice of issuance.
SECTION 6.02. Conditions to Obligations of FPL. The
obligation of FPL to effect the FPL Merger is further subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations
and warranties of Entergy set forth herein shall be true and
correct both when made and at and as of the Closing Date, as if
made at and as of such time (except to the extent expressly made
as of an earlier date, in which case as of such date), except
where the failure of such representations and warranties to be
so true and correct (without giving effect to any limitation as
to "materiality" or "material adverse effect" set forth therein)
does not have, and could not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on
Entergy.
(b) Performance of Obligations of Entergy. Entergy shall
have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the
Closing Date.
(c) Tax Opinion. FPL shall have received from Cravath,
Swaine & Moore, counsel to FPL, on the Closing Date, its opinion
dated as of such date or no more than two days prior thereto,
stating that the FPL Merger will be treated for Federal income
tax purposes as a tax-free transaction governed by Section 351
of the Code. In rendering such opinion, counsel for FPL shall
be entitled to rely upon representations of officers of FPL and
Entergy substantially in the form set forth in Section 6.02(c)
of the Entergy Disclosure Letter.
(d) Statutory Approvals. The FPL Required Statutory
Approvals and the Entergy Required Statutory Approvals shall
have been obtained (including, in each case, the expiration or
termination of the waiting periods (and any extensions thereof)
under the HSR Act applicable to the Mergers and the transactions
contemplated by this Agreement) at or prior to the Effective
Time, such approvals shall have become Final Orders (as defined
below) and such Final Orders shall not impose terms or
conditions that, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on (i)
the Company and its prospective subsidiaries taken as a whole or
(ii) Entergy and its subsidiaries taken as a whole. A "Final
Order" means action by the relevant Governmental Authority that
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.
(e) No Material Adverse Effect. Except as disclosed in
the Entergy SEC Reports filed prior to the date of this
Agreement or Section 3.02(f) of the Entergy Disclosure Letter,
since December 31, 1999, there shall not have been any change,
event or development that, individually or in the aggregate, has
had or could reasonably be expected to have a material adverse
effect on Entergy.
(f) Closing Certificates. FPL shall have received a
certificate signed by an executive officer of Entergy, dated the
Effective Time, to the effect that, to such officer's knowledge,
the conditions set forth in Sections 6.02(a), 6.02(b) and
6.02(e) have been satisfied.
SECTION 6.03. Conditions to Obligations of Entergy. The
obligation of Entergy to effect the Entergy Merger is further subject
to satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations
and warranties of FPL set forth herein shall be true and correct
both when made and at and as of the Closing Date, as if made at
and as of such time (except to the extent expressly made as of
an earlier date, in which case as of such date), except where
the failure of such representations and warranties to be so true
and correct (without giving effect to any limitation as to
"materiality" or "material adverse effect" set forth therein)
does not have, and could not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on
FPL.
(b) Performance of Obligations of FPL. FPL shall have
performed in all material respects all obligations required to
be performed by it under this Agreement at or prior to the
Closing Date.
(c) Tax Opinion. Entergy shall have received from
Skadden, Arps, Slate, Meagher & Flom LLP, counsel to Entergy, on
the Closing Date, its opinion, dated as of such date or no more
than two days prior thereto, stating that the Entergy Merger
will be treated for Federal income tax purposes as a tax-free
transaction governed by Section 351 of the Code. In rendering
such opinion, counsel for Entergy shall be entitled to rely upon
representations of officers of FPL and Entergy substantially in
the form set forth in Section 6.02(c) of the Entergy Disclosure
Letter.
(d) Statutory Approvals. The FPL Required Statutory
Approvals and the Entergy Required Statutory Approvals shall
have been obtained (including, in each case, the expiration or
termination of the waiting periods (and any extensions thereof)
under the HSR Act applicable to the Mergers and the transactions
contemplated by this Agreement) at or prior to the Effective
Time, such approvals shall have become Final Orders and such
Final Orders shall not impose terms or conditions that,
individually or in the aggregate, could reasonably be expected
to have a material adverse effect on (i) the Company and its
prospective subsidiaries taken as a whole or (ii) FPL and its
subsidiaries taken as a whole.
(e) No Material Adverse Effect. Except as disclosed in
the FPL SEC Reports filed prior to the date of this Agreement or
Section 3.01(f) of the FPL Disclosure Letter, since December 31,
1999, there shall not have been any change, event or development
that, individually or in the aggregate, has had or could
reasonably be expected to have a material adverse effect on FPL.
(f) Closing Certificates. Entergy shall have received a
certificate signed by an executive officer of FPL, dated the
Effective Time, to the effect that, to such officer's knowledge,
the conditions set forth in Sections 6.03(a), 6.03(b) and
6.03(e) have been satisfied.
SECTION 6.04. Frustration of Closing Conditions. Neither
FPL nor Entergy may rely on the failure of any condition set forth in
Section 6.01, 6.02 or 6.03, as the case may be, to be satisfied if
such failure was caused by such party's failure to use reasonable
best efforts to consummate the Mergers and the other transactions
contemplated by this Agreement, to the extent required by and subject
to Section 5.05.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether before or
(other than pursuant to clauses (d) and (g) below) after the Entergy
Shareholder Approval or the FPL Shareholder Approval:
(a) by mutual written consent of FPL and Entergy;
(b) by either FPL or Entergy:
(i) if the Mergers shall not have been consummated by
April 30, 2002 (the "Initial Termination Date"); provided,
however, that the right to terminate this Agreement
pursuant to this Section 7.01(b)(i) shall not be available
to any party whose failure to perform any of its
obligations under this Agreement results in the failure of
the Mergers to be consummated by such time; and provided,
further, that, if on the Initial Termination Date the
conditions to the Closing set forth in Sections 6.02(d)
and/or 6.03(d) 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 Initial
Termination Date shall be extended to October 31, 2002;
(ii) if the Entergy Shareholder Approval shall not
have been obtained at an Entergy Shareholders Meeting duly
convened therefor or at any adjournment or postponement
thereof;
(iii) if the FPL Shareholder Approval shall not
have been obtained at an FPL Shareholders Meeting duly
convened therefor or at any adjournment or postponement
thereof;
(iv) if any Restraint having any of the effects set
forth in Section 6.01(b) shall be in effect and shall have
become final and nonappealable; provided that the party
seeking to terminate this Agreement pursuant to this
Section 7.01(b)(iv) shall have used its reasonable best
efforts to prevent the entry of and to remove such
Restraint; or
(v) if any condition to the obligation of such party
to consummate the FPL Merger or the Entergy Merger, as
applicable, set forth in Section 6.02 (in the case of FPL)
or in Section 6.03 (in the case of Entergy) becomes
incapable of satisfaction prior to the Initial Termination
Date (or, if the Initial Termination Date is extended in
accordance with the second proviso to Section 7.01(b)(i),
such date as extended); provided, however, in the case of
Section 6.02(d) and 6.03(d), the Initial Termination Date
shall refer to such date as it may be extended pursuant to
the second proviso to Section 7.01(b)(i); and provided
further, that the failure of any such condition to be
capable of satisfaction is not the result of a material
breach of this Agreement by the party seeking to terminate
this Agreement.
(c) by FPL, if Entergy shall have breached or failed to
perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this
Agreement, which breach or failure to perform (A) would give
rise to the failure of a condition set forth in Section 6.02(a)
or (b), and (B) is incapable of being cured by Entergy or is not
cured by Entergy within 30 days following receipt of written
notice from FPL of such breach or failure to perform;
(d) by FPL in accordance with Section 4.03(b); provided
that, in order for the termination of this Agreement pursuant to
this paragraph (d) to be deemed effective, FPL shall have
complied with Section 4.03 and with applicable requirements,
including the payment of the Termination Fee, of Section 5.09;
(e) by FPL, if Entergy or any of its directors or officers
shall participate in discussions or negotiations in breach
(other than in immaterial respects) of Section 4.04;
(f) by Entergy, if FPL shall have breached or failed to
perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this
Agreement, which breach or failure to perform (A) would give
rise to the failure of a condition set forth in Section 6.03(a)
or (b), and (B) is incapable of being cured by FPL or is not
cured by FPL within 30 days following receipt of written notice
from Entergy of such breach or failure to perform;
(g) by Entergy in accordance with Section 4.04(b); provided
that, in order for the termination of this Agreement pursuant to
this paragraph (g) to be deemed effective, Entergy shall have
complied with Section 4.04 and with applicable requirements,
including the payment of the Termination Fee, of Section 5.09;
(h) by Entergy, if FPL or any of its directors or officers
shall participate in discussions or negotiations in breach
(other than in immaterial respects) of Section 4.03;
(i) by FPL, if the Board of Directors of Entergy (or any
committee thereof) (i) shall have withdrawn or modified, or
proposed publicly to withdraw or modify, the approval or
recommendation by such Board of Directors of this Agreement or
the Entergy Merger, (ii) shall fail to reaffirm such approval or
recommendation within 10 business days of receipt of FPL's
written request at any time when an Entergy Takeover Proposal
shall have been made and not rejected by the Board of Directors
of Entergy or (iii) shall have approved or recommended, or
proposed to approve or recommend, an Entergy Takeover Proposal;
or
(j) by Entergy, if the Board of Directors of FPL (or any
committee thereof) (i) shall have withdrawn or modified, or
proposed publicly to withdraw or modify, the approval or
recommendation by such Board of Directors of this Agreement or
the FPL Merger, (ii) shall fail to reaffirm such approval or
recommendation within 10 business days of receipt of Entergy's
written request at any time when an FPL Takeover Proposal shall
have been made and not rejected by the Board of Directors of FPL
or (iii) shall have approved or recommended, or proposed to
approve or recommend, an FPL Takeover Proposal.
SECTION 7.02. Effect of Termination. In the event of
termination of this Agreement by either Entergy or FPL as provided in
Section 7.01, this Agreement shall forthwith become null and void and
have no effect, without any liability or obligation on the part of
FPL or Entergy, other than the provisions of Section 5.09, this
Section 7.02 and Article VIII, which provisions survive such
termination, and except to the extent that such termination results
from the willful and material breach by a party of any of its
representations, warranties, covenants or agreements set forth in
this Agreement, in which case such termination shall not relieve any
party of any liability or damages resulting from its willful and
material breach of this Agreement (including any such case in which a
Termination Fee is, or any expenses of FPL or Entergy in connection
with the transactions contemplated by this Agreement are, payable
pursuant to Section 5.09 to FPL or Entergy, as the case may be (the
"Injured Party"), to the extent any such liability or damage suffered
by the Injured Party exceeds the amount of the Termination Fee and
any expenses payable pursuant to Section 5.09 to the Injured Party).
SECTION 7.03. Amendment. This Agreement may be amended by
the parties at any time before or after the FPL Shareholder Approval
or the Entergy Shareholder Approval; provided, however, that after
any such approval, there shall not be made any amendment that by law
requires further approval by the shareholders of FPL or Entergy
without the further approval of such shareholders. This Agreement
may not be amended except by an instrument in writing signed on
behalf of each of the parties.
SECTION 7.04. Extension; Waiver. At any time prior to the
Effective Time, a party may (a) extend the time for the performance
of any of the obligations or other acts of the other parties, (b)
waive any inaccuracies in the representations and warranties of the
other parties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the proviso of
Section 7.03, waive compliance by the other parties with any of the
agreements or conditions contained in this Agreement. Any agreement
on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
SECTION 7.05. Procedure for Termination, Amendment,
Extension or Waiver. A termination of this Agreement pursuant to
Section 7.01, an amendment of this Agreement pursuant to Section 7.03
or an extension or material waiver pursuant to Section 7.04 shall, in
order to be effective, require, in the case of FPL or Entergy, action
by its Board of Directors or, with respect to any amendment to this
Agreement, the duly authorized committee of its Board of Directors to
the extent permitted by law.
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and
Warranties. None of the representations and warranties in this
Agreement or in any instrument delivered pursuant to this Agreement
shall survive the Effective Time. This Section 8.01 shall not limit
any covenant or agreement of the parties that by its terms
contemplates performance after the Effective Time.
SECTION 8.02. Notices. All notices, requests, claims,
demands and other communications under this Agreement shall be in
writing and shall be deemed given (as of the time of delivery or, in
the case of a telecopied communication, of confirmation) if delivered
personally, telecopied (which is confirmed) or sent by overnight
courier (providing proof of delivery) 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 FPL, to
FPL Group, Inc.
700 Universe Boulevard
Juno Beach, Florida 33408
Telecopy No.: (561) 691-7177
Attention: Dennis P. Coyle
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Telecopy No.: (212) 474-3700
Attention: George W. Bilicic, Jr.
(b) if to Entergy, to
Entergy Corporation
639 Loyola Avenue
New Orleans, Louisiana 70113
Telecopy No.: (504) 576-2977
Attention: Michael G. Thompson
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
Telecopy No.: (212) 735-2000
Attention: Sheldon S. Adler
SECTION 8.03. Definitions. For purposes of this
Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with,
such first person, where "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether
through the ownership of voting securities, by contract, as
trustee or executor, or otherwise;
(b) "material adverse change" or "material adverse effect"
means, when used in connection with FPL, Entergy or the Company,
any change, effect, event, occurrence or state of facts (i) that
is materially adverse to the business, assets, properties,
financial condition or results of operations of such person and
its subsidiaries taken as a whole or (ii) that prevents such
person from performing its material obligations under this
Agreement or prevents consummation of the transactions
contemplated hereby;
(c) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity; and
(d) "subsidiary" means, with respect to any person, any
other person, whether incorporated or unincorporated, of which
more than 50% of either the equity interests in, or the voting
control of, such other person is, directly or indirectly through
subsidiaries or otherwise, beneficially owned by such first
person.
SECTION 8.04. Interpretation. When a reference is made in
this Agreement to an Article, Section or Exhibit, such reference
shall be to an Article or Section of, or an Exhibit to, 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". The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms defined in this Agreement
shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such term.
Any agreement, instrument or statute defined or referred to herein or
in any agreement or instrument that is referred to herein means such
agreement, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by
succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References
to a person are also to its permitted successors and assigns.
SECTION 8.05. Counterparts. This Agreement may be
executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each party and delivered
to the other parties.
SECTION 8.06. Entire Agreement; No Third-Party
Beneficiaries. This Agreement (including the documents and
instruments referred to herein) and the Confidentiality Agreement
(except for Section 7 thereof) (i) constitute the entire agreement,
and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of
this Agreement (including Section 7 of the Confidentiality Agreement)
and (ii) except for the provisions of Section 5.08, are not intended
to confer upon any person other than the parties any rights or
remedies.
SECTION 8.07. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State
of New York, regardless of the laws that might otherwise govern under
applicable principles of conflict of laws.
SECTION 8.08. Assignment. Neither this Agreement nor any
of the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise by
any of the parties hereto without the prior written consent of the
other party. Any attempted or purported assignment in violation of
the preceding sentence shall be null and void and of no effect
whatsoever. Subject to the preceding two sentences, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.
SECTION 8.09. Enforcement. The parties agree that
irreparable damage would occur and that the parties would not have
any adequate remedy at law in the event that any of the provisions of
this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in the Federal court located in the
Borough of Manhattan in The City of New York, or if such court does
not have jurisdiction, in any New York state court, this being in
addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of the Federal court
located in the Borough of Manhattan in The City of New York, or if
such court does not have jurisdiction, in any New York state court in
the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that it will
not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court and (c) agrees that it
will not bring any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than a
Federal court sitting in the Borough of Manhattan in The City of New
York, or if such court does not have jurisdiction, in any New York
state court.
SECTION 8.10. Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other conditions
and provisions of this Agreement shall nevertheless remain in full
force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an
acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
SECTION 8.11. Waiver of Jury Trial. Each party to this
Agreement waives, to the fullest extent permitted by applicable law,
any right it may have to a trial by jury in
respect of any action, suit or proceeding arising out of or relating
to this Agreement.
IN WITNESS WHEREOF, FPL Group, Inc., Entergy Corporation,
the Company, Merger Sub A and Merger Sub B have caused this Agreement
to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
FPL GROUP, INC.,
by
/s/ James L. Broadhead
Name: James L. Broadhead
Title: Chairman and Chief
Executive Officer
ENTERGY CORPORATION,
by
/s/ J. Wayne Leonard
Name: J. Wayne Leonard
Title: Chief Executive
Officer
WCB HOLDING CORP.,
by
/s/ Dennis P. Coyle
Name: Dennis P. Coyle
Title: Vice President and
Secretary
RANGER ACQUISITION CORP.,
by
/s/ Dennis P. Coyle
Name: Dennis P. Coyle
Title: Vice President and
Secretary
RING ACQUISITION CORP.,
by
/s/ J. Wayne Leonard
Name: J. Wayne Leonard
Title: President
EXHIBIT A
TO THE MERGER AGREEMENT
FORM OF CERTIFICATE OF INCORPORATION OF THE
COMPANY AS OF THE EFFECTIVE TIME
RESTATED CERTIFICATE OF INCORPORATION
OF
[ ]
[ ], a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), DOES HEREBY
CERTIFY AS FOLLOWS:
1. The name of the corporation is [ ] and
the name under which the corporation was originally incorporated is
WCB Holding Corp. The original Certificate of Incorporation was
filed with the Secretary of State of the State of Delaware on July
25, 2000.
2. This Restated Certificate of Incorporation, having been
duly adopted in accordance with Sections 242 and 245 of the General
Corporation Law of the State of Delaware (the "DGCL") and by the
unanimous written consent of the stockholders of the Corporation in
accordance with Section 228 of the DGCL, restates and integrates and
further amends the provisions of the Certificate of Incorporation as
amended or supplemented heretofore. As so restated and integrated
and further amended, the Restated Certificate of Incorporation
(hereinafter, this "Certificate of Incorporation") reads as follows:
ARTICLE FIRST
Name
The name of the corporation is [ ].
ARTICLE SECOND
Registered Office
The address of the registered office of the Corporation in
the State of Delaware is 1209 Orange Street, City of Wilmington,
County of New Castle. The name of the registered agent of the
Corporation at such address is The Corporation Trust Company.
ARTICLE THIRD
Purpose
The purpose for which the Corporation is organized is the
transaction of any or all lawful business for which corporations may
be incorporated under the DGCL.
ARTICLE FOURTH
Capital Stock
(a) The aggregate number of shares of stock that the
Corporation shall have authority to issue is ! shares, consisting of
! shares of Common Stock, par value $.01 per share (the "Common
Stock"), and ! shares of Preferred Stock, par value $.01 per share
(the "Preferred Stock").
(b) The Board of Directors of the Corporation shall have
the full authority permitted by law, at any time and from time to
time, to divide the authorized and unissued shares of Preferred Stock
into series and, with respect to each such series, to determine by
resolution or resolutions the number of shares constituting such
series and the designation of such series, the voting powers, if any,
of the shares of such series, and the preferences and relative,
participating, optional or other special rights, if any, and any
qualifications, limitations or restrictions thereof, of the shares of
any such series of Preferred Stock to the full extent now or
hereafter permitted by the law of the State of Delaware. The powers,
preferences and relative, participating, optional and other special
rights of each series of Preferred Stock and the qualifications,
limitations or restrictions thereof, if any, may differ from those of
any and all other series at any time outstanding.
(c) Subject to applicable law and the rights, if any, of
the holders of any series of Preferred Stock or any class or series
of stock having a preference over or the right to participate with
the Common Stock with respect to the payment of dividends, dividends
may be declared and paid on the Common Stock at such times and in
such amounts as the Board of Directors of the Corporation in its
discretion shall determine. Nothing in this ARTICLE FOURTH shall
limit the power of the Board of Directors to create a series of
Preferred Stock with dividends the rate of which is calculated by
reference to, and the payment of which is concurrent with, dividends
on shares of Common Stock.
(d) In the event of the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, subject to
the rights of the holders of any series of the Preferred Stock, the
net assets of the Corporation available for distribution to
stockholders of the Corporation shall be distributed pro rata to the
holders of the Common Stock in accordance with their respective
rights and interests. If the assets of the Corporation are not
sufficient to pay the amounts, if any, owing to holders of shares of
Preferred Stock in full, holders of all shares of Preferred Stock
will participate in the distribution of assets ratably in proportion
to the full amounts to which they are entitled or in such order or
priority, if any, as will have been fixed in the resolution or
resolutions providing for the issue of the series of Preferred Stock.
Neither the merger or consolidation of the Corporation into or with
any other corporation, nor a sale, transfer or lease of all or part
of its assets, will be deemed a liquidation, dissolution or winding
up of the Corporation within the meaning of this paragraph except to
the extent specifically provided for herein. Nothing in this ARTICLE
FOURTH shall limit the power of the Board of Directors to create a
series of Preferred Stock for which the amount to be distributed upon
any liquidation, dissolution or winding up of the Corporation is
calculated by reference to, and the payment of which is concurrent
with, the amount to be distributed to the holders of shares of Common
Stock.
(e) Except as otherwise required by law, as otherwise
provided herein or as otherwise determined by the Board of Directors
as to the shares of any series of Preferred Stock, the holders of
Preferred Stock shall have no voting rights and shall not be entitled
to any notice of meetings of stockholders.
(f) Except as otherwise required by law and subject to the
rights of the holders of any series of Preferred Stock, with respect
to all matters upon which stockholders are entitled to vote or to
which stockholders are entitled to give consent, the holders of any
outstanding shares of Common Stock shall vote together as a class,
and every holder of Common Stock shall be entitled to cast thereon
one vote in person or by proxy for each share of Common Stock
standing in such holder's name on the books of the Corporation;
provided, however, that, except as otherwise required by law, holders
of Common Stock, as such, shall not be entitled to vote on any
amendment to this Certificate of Incorporation (including any
certificate of designations relating to any series of Preferred
Stock) that relates solely to the terms of one or more outstanding
series of Preferred Stock if the holders of such affected series are
entitled, either separately or together with the holders of one or
more other such series, to vote thereon pursuant to this Certificate
of Incorporation (including any certificate of designations relating
to any series of Preferred Stock) or pursuant to applicable law.
Subject to the rights of the holders of any series of Preferred
Stock, stockholders of the Corporation shall not have any preemptive
rights to subscribe for additional issues of stock of the Corporation
and no stockholder will be permitted to cumulate votes at any
election of directors.
ARTICLE FIFTH
Board of Directors
(a) The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors. Except
as otherwise fixed by or pursuant to the provisions of ARTICLE FOURTH
of this Certificate of Incorporation relating to the rights of the
holders of any series of Preferred Stock, and subject to Section 2.11
of the By-laws of the Corporation, the Board of Directors shall
consist of 15 directors or such other number as may be determined
from time to time by the Board of Directors (as so adjusted, the
"entire Board of Directors"). The Board of Directors may increase or
decrease the number of directors by resolution adopted by a majority
of the entire Board of Directors; provided, however, that no decrease
in the number of directors so made by the Board of Directors shall
shorten the term of any incumbent director and provided further that
any such increase or decrease (including any change fixed by or
pursuant to the provisions of ARTICLE FOURTH of this Certificate of
Incorporation relating to the rights of the holders of any series of
Preferred Stock) prior to the earlier of (x) the occurrence of the
first vacancy on the Board of Directors with respect to a Ranger
Director (as defined in Section 2.11(c) of the By-laws) following the
12-month anniversary of the Effective Time (as such term is defined
in the Agreement and Plan of Merger dated as of July 30, 2000, by and
among Ranger, Ring, the Corporation, Ranger Acquisition Corp. and
Ring Acquisition Corp.) and (y) the third annual stockholders'
meeting of the Corporation that occurs following the end of the
calendar year in which the Effective Time occurs shall require the
affirmative vote of at least two-thirds of the entire Board of
Directors. Except as otherwise provided by or pursuant to the
provisions of ARTICLE FOURTH of this Certificate of Incorporation
with respect to any directors elected by the holders of any series of
Preferred Stock pursuant to the terms of this Certificate of
Incorporation, at each annual meeting of the stockholders of the
Corporation, the date of which shall be fixed by or pursuant to the
By-laws of the Corporation, directors shall be elected and each
director shall hold office until the next annual meeting of
stockholders and until his or her successor is duly elected and
qualified, or until his or her earlier death, incapacity, resignation
or removal from office in accordance with applicable law or pursuant
to an order of a court of competent jurisdiction. The election of
directors need not be by written ballot.
(b) Except as otherwise provided for or fixed by or
pursuant to the provisions of ARTICLE FOURTH of this Certificate of
Incorporation relating to the rights of the holders of any series of
Preferred Stock, and subject to Section 2.11 of the By-laws of the
Corporation, any vacancy on the Board of Directors of the Corporation
resulting from death, incapacity, resignation, removal or other cause
and any newly created directorship resulting from any increase in the
authorized number of directors between annual meetings of
stockholders shall be filled only by the vote of a majority of the
directors then in office, even though less than a quorum, and any
director so chosen shall hold office until the next annual meeting of
stockholders and until his or her successor is duly elected and
qualified or his or her earlier death, incapacity, resignation or
removal from office in accordance with applicable law or pursuant to
an order of a court of competent jurisdiction.
(c) A director may be removed from office with or without
cause; provided, however, that, subject to applicable law, any
director elected by the holders of any series of Preferred Stock may
be removed without cause only by the holders of a majority of the
shares of such series of Preferred Stock.
ARTICLE SIXTH
Action by Stockholders
(a) Subject to the rights of the holders of any series of
Preferred Stock, any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called
annual or special meeting of stockholders of the Corporation and may
not be effected by any consent in writing by such stockholders.
Subject to the rights of the holders of any series of Preferred
Stock, special meetings of stockholders of the Corporation may be
called only by the Chairman of the Board of Directors or by the Board
of Directors pursuant to a resolution approved by a majority of the
entire Board of Directors. Subject to paragraph (b) below, the
ability of the stockholders to call a special meeting is hereby
specifically denied.
(b) Notwithstanding the foregoing, whenever the holders of
any one or more series of Preferred Stock issued by the Corporation,
if any, shall have the right, voting separately as a class or series,
as applicable, to elect directors at an annual or special meeting of
stockholders, the calling of special meetings of the holders of such
series shall be governed by the terms of the applicable resolution or
resolutions of the Board of Directors adopted pursuant to ARTICLE
FOURTH of this Certificate of Incorporation.
ARTICLE SEVENTH
Amendment of Certificate of Incorporation
(a) The Corporation reserves the right to supplement,
amend or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by the laws
of the State of Delaware and this Certificate of Incorporation, and
all rights conferred on shareholders, directors and officers herein,
if any, are granted subject to this reservation.
(b) Prior to the date on which Section 2.11 of the By-laws
of the Corporation terminates according to its terms, any action by
the Board of Directors relating to any proposed amendment to or
modification of ARTICLE FIFTH of this Certificate of Incorporation or
this sentence shall require the affirmative vote of at least two-
thirds of the entire Board.
ARTICLE EIGHTH
Amendment of By-laws
In furtherance and not in limitation of the powers
conferred upon it by law, except as otherwise provided in Sections
2.11 and 3.03 of the By-laws of the Corporation as in effect on the
date of this Certificate of Incorporation, the Board of Directors of
the Corporation is expressly authorized to adopt, repeal, alter or
amend the By-laws of the Corporation by the affirmative vote of a
majority of the entire Board of Directors.
ARTICLE NINTH
Limitation of Liability
Except to the extent elimination or limitation of liability
is not permitted by applicable law, no director of the Corporation
shall be personally liable to the Corporation or its stockholders for
monetary damages for any breach of fiduciary duty in such capacity.
Any repeal or modification of this ARTICLE NINTH by the stockholders
of the Corporation shall not adversely affect any right or protection
of a director of the Corporation existing at the time of such repeal
or modification with respect to acts or omissions occurring prior to
such repeal or modification.
ARTICLE TENTH
Liability of Stockholders
The holders of the capital stock of the Corporation shall
not be personally liable for the payment of the Corporation's debts,
and the private property of the holders of the capital stock of the
Corporation shall not be subject to the payment of debts of the
Corporation to any extent whatsoever.
IN WITNESS WHEREOF, I, the [INSERT TITLE] of the
Corporation, have executed this Restated Certificate of Incorporation
as of the ! day of !, 2000, and DO HEREBY CERTIFY under the penalties
of perjury that the facts stated in this Restated Certificate of
Incorporation are true.
By
Name:
Title:
EXHIBIT B
TO THE MERGER AGREEMENT
FORM OF BY-LAWS OF THE COMPANY
AS OF THE EFFECTIVE TIME
AMENDED AND RESTATED
BY-LAWS
of
[ ]
Effective as of !, !
TABLE OF CONTENTS
Page
ARTICLE I
Stockholders
SECTION 1.01. Place of Stockholders' Meetings. 1
SECTION 1.02. Day and Time of Annual Meetings of
Stockholders. 1
SECTION 1.03. Purposes of Annual Meetings. 1
SECTION 1.04. Special Meetings of Stockholders. 2
SECTION 1.05. Notice of Meetings of Stockholders. 3
SECTION 1.06. Quorum of Stockholders. 3
SECTION 1.07. Chairman of the Board and Secretary
of Meeting 4
SECTION 1.08. Voting by Stockholders. 4
SECTION 1.09. Proxies. 5
SECTION 1.10. Inspectors. 5
SECTION 1.11. List of Stockholders. 5
SECTION 1.12. Fixing of Record Date for Determination
of Stockholders of Record. 5
ARTICLE II
Directors
SECTION 2.01. Method of Election. 6
SECTION 2.02. Resignations and Vacancies on
Board 8
SECTION 2.03. Meetings of the Board 8
SECTION 2.04. Quorum and Action. 9
SECTION 2.05. Presiding Officer and Secretary of
Meeting. 9
SECTION 2.06. Action by Consent without Meeting. 9
SECTION 2.07. Standing Committees 9
SECTION 2.08. Meetings of Committees. 11
SECTION 2.09. Quorum of Committee. 11
SECTION 2.10. Other Committees 11
SECTION 2.11. Representation on the Board. 12
ARTICLE III
Officers
SECTION 3.01. Officers, Titles, Elections, Terms. 13
SECTION 3.02. Powers and Duties of Officers. 14
SECTION 3.03. Employment Agreements. 14
ARTICLE IV
Indemnification
SECTION 4.01. Indemnification. 15
SECTION 4.02. Insurance, Contracts and Funding. 16
SECTION 4.03. Indemnification; Not Exclusive
Right. 16
SECTION 4.04. Advancement of Expenses 16
SECTION 4.05. Indemnification Procedures;
Presumptions and Effect of
Certain Proceedings; Remedies;
Definitions. 17
SECTION 4.06. Indemnification of Employees
and Agents 22
SECTION 4.07. Severability 22
ARTICLE V
Capital Stock
SECTION 5.01. Stock Certificates. 23
SECTION 5.02. Record Ownership. 23
SECTION 5.03. Transfer of Record Ownership. 23
SECTION 5.04. Transfer Agent; Registrar; Rules
Respecting Certificates. 24
ARTICLE VI
Securities Held by the Corporation
SECTION 6.01. Voting. 24
SECTION 6.02. General Authorization to Transfer
Securities held by the
Corporation. 24
ARTICLE VII
Amendment of By-laws
SECTION 7.01. Amendment 25
ARTICLE VIII
Other Officers
SECTION 8.01. Registered Office and Agent 25
SECTION 8.02. Other Offices 25
AMENDED AND RESTATED BY-LAWS
of
[ ]
(A CORPORATION ORGANIZED UNDER THE LAWS OF THE
STATE OF DELAWARE, THE "CORPORATION")
(EFFECTIVE AS OF !, !)
ARTICLE I
Stockholders
SECTION 1.01. Place of Stockholders' Meetings.
All meetings of the stockholders of the Corporation shall be
held at such place or places, within or outside the State of
Delaware, as may be fixed by the Corporation's Board of
Directors (the "Board", and each member thereof a
"Director") from time to time or as shall be specified in
the respective notices thereof.
SECTION 1.02. Day and Time of Annual Meetings of
Stockholders. An annual meeting of stockholders shall be
held at such date and hour as shall be determined by the
Board and designated in the notice thereof. Any previously
scheduled annual meeting of stockholders may be postponed by
action of the Board taken prior to the time previously
scheduled for such annual meeting of stockholders.
SECTION 1.03. Purposes of Annual Meetings. (a)
Subject to the rights of the holders of any series of
Preferred Stock of the Corporation, at each annual meeting,
the stockholders shall elect the Directors. At any such
annual meeting any other business properly brought before
the meeting may be transacted.
(b) To be properly brought before an annual
meeting, business must be (i) specified in the notice of the
meeting (or any supplement thereto) given by or at the
direction of the Board, (ii) otherwise properly brought
before the meeting by or at the direction of the Board or
(iii) otherwise properly brought before the meeting by a
stockholder who is a holder of record at the time of the
giving of notice provided for in this Section 1.03(b), who
is entitled to vote at the meeting and who complies with the
procedures set forth in this Section 1.03(b). For business
to be properly brought before an annual meeting by a
stockholder, such business must be a proper matter for
stockholder actions under applicable law and the stockholder
must have given written notice thereof, either by personal
delivery or by United States mail, postage prepaid, to the
Secretary of the Corporation (the "Secretary") at the
principal executive offices of the Corporation, not less
than 90 days nor more than 120 days prior to the anniversary
date of the immediately preceding annual meeting (provided,
that the first such anniversary date occurring after the
effective date of these By-laws shall be deemed to be !, !).
Any such notice shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (i)
a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting
such business at the annual meeting, and, in the event that
such business includes a proposal to amend either the
Restated Certificate of Incorporation of the Corporation
(the "Certificate") or these By-laws, the text of the
proposed amendment; (ii) the name and address, as they
appear on the Corporation's books, of the stockholder
proposing such business; (iii) the class and number of
shares of the Corporation that are beneficially owned by the
stockholder; (iv) any material interest of the stockholder
in such business; and (v) if the stockholder intends to
solicit proxies in support of such stockholder's proposal, a
representation to that effect. The foregoing notice
requirements shall be deemed satisfied by a stockholder if
the stockholder has notified the Corporation of his or her
intention to present a proposal at an annual meeting and
such stockholder's proposal has been included in a proxy
statement that has been prepared by management of the
Corporation to solicit proxies for such annual meeting;
provided, however, that if such stockholder does not appear
or send a qualified representative to present such proposal
at such annual meeting, the Corporation need not present
such proposal for a vote at such meeting, notwithstanding
that proxies in respect of such vote may have been received
by the Corporation. No business shall be conducted at an
annual meeting of stockholders except in accordance with
this Section 1.03(b), and the presiding officer of any
annual meeting of stockholders may refuse to permit any
business to be brought before an annual meeting without
compliance with the foregoing procedures or if the
stockholder solicits proxies in support of such
stockholder's proposal without such stockholder having made
the representation required by clause (v) of the second
preceding sentence.
SECTION 1.04. Special Meetings of Stockholders.
(a) Except as otherwise expressly required by the
Certificate or applicable law and subject to the rights of
the holders of any series of Preferred Stock of the
Corporation, special meetings of the stockholders or of any
class or series entitled to vote may be called for any
purpose or purposes by the Chairman of the Board or by a
majority vote of the entire Board of Directors, as defined
in the Certificate (the "entire Board"), to be held at such
place (within or without the State of Delaware), date and
hour as shall be determined by the Chairman or the Board, as
applicable, and designated in the notice thereof. At any
such special meeting any business properly brought before
the meeting may be transacted.
(b) To be properly brought before a special
meeting, business must be (i) specified in the notice of the
meeting (or any supplement thereto) given by or at the
direction of the Board or (ii) otherwise properly brought
before the meeting by or at the direction of the Board. No
business shall be conducted at a special meeting of
stockholders except in accordance with this Section 1.04(b)
or as required by applicable law.
SECTION 1.05. Notice of Meetings of Stockholders.
Except as otherwise expressly required by the Certificate or
applicable law, not less than ten days nor more than 60 days
before the date of every annual or special stockholders'
meeting the Secretary shall cause to be delivered to each
stockholder of record entitled to vote at such meeting
notice stating the place, date and hour of the meeting and,
in the case of a special meeting, the purpose or purposes
for which the meeting is called. Except as otherwise
expressly required by applicable law, notice of any
adjourned meeting of stockholders need not be given if the
time and place thereof are announced at the meeting at which
the adjournment is taken. Any notice, if mailed, shall be
deemed to be given when deposited in the United States mail,
postage prepaid, addressed to the stockholder at the address
for notices to such stockholder as it appears on the books
of the Corporation.
SECTION 1.06. Quorum of Stockholders. (a)
Unless otherwise expressly required by the Certificate or
applicable law, at any meeting of the stockholders, the
presence in person or by proxy of stockholders entitled to
cast a majority of the votes entitled to be cast thereat
shall constitute a quorum for the entire meeting,
notwithstanding the withdrawal of stockholders entitled to
cast a sufficient number of votes in person or by proxy to
reduce the number of votes represented at the meeting below
a quorum. Shares of the Corporation's stock belonging to
the Corporation or to another corporation, if a majority of
the shares entitled to vote in an election of the directors
of such other corporation is held by the Corporation, shall
neither be counted for the purpose of determining the
presence of a quorum nor be entitled to vote at any meeting
of the stockholders; provided, however, that the foregoing
shall not limit the right of the Corporation to vote stock,
including its own stock, held by it in a fiduciary capacity.
(b) At any meeting of the stockholders at which a
quorum shall be present, a majority of those present in
person or by proxy may adjourn the meeting from time to
time. Whether or not a quorum is present, the officer
presiding thereat shall have power to adjourn the meeting
from time to time. Except as otherwise expressly required
by applicable law, notice of any adjourned meeting other
than announcement at the meeting at which an adjournment is
taken shall not be required to be given.
(c) At any adjourned meeting, any business may be
transacted that might have been transacted at the meeting
originally called, but only those stockholders entitled to
vote at the meeting as originally noticed shall be entitled
to vote at any adjournment or adjournments thereof unless a
new record date is fixed by the Board.
SECTION 1.07. Chairman of the Board and Secretary
of Meeting. The Chairman of the Board or, in his or her
absence, another officer of the Corporation designated by
the Chairman of the Board, shall preside at meetings of the
stockholders. The Secretary shall act as secretary of the
meeting, or in the absence of the Secretary, an Assistant
Secretary of the Corporation shall so act, or if neither is
present, then the presiding officer may appoint a person to
act as secretary of the meeting.
SECTION 1.08. Voting by Stockholders. (a)
Except as otherwise expressly required by the Certificate or
applicable law, at every meeting of the stockholders each
stockholder of record shall be entitled to the number of
votes specified in the Certificate (or, with respect to any
series of Preferred Stock, in the applicable certificate of
designations providing for the creation of such series), in
person or by proxy, for each share of stock standing in his
or her name on the books of the Corporation on the date
fixed pursuant to the provisions of Section 1.12 of these By-
laws as the record date for the determination of the
stockholders who shall be entitled to receive notice of and
to vote at such meeting.
(b) When a quorum is present at any meeting of
the stockholders, all questions shall be decided by the vote
of a majority in voting power of the stockholders present in
person or by proxy and entitled to vote at such meeting,
unless the question is one upon which by express provision
of law, the rules or regulations of any stock exchange or
governmental or regulatory body applicable to the
Corporation, the Certificate or these By-laws, a different
vote is required, in which case such express provision shall
govern and control the decision of such question.
(c) Except as otherwise expressly required by
applicable law, the vote at any meeting of stockholders on
any question need not be by ballot, unless so directed by
the presiding officer of the meeting.
SECTION 1.09. Proxies. Any stockholder entitled
to vote at any meeting of stockholders may vote either in
person or by his or her attorney-in-fact or proxy.
SECTION 1.10. Inspectors. Prior to each meeting
of stockholders, the Board shall appoint not less than two
nor more than seven inspectors of election who shall have
such duties and perform such functions in connection with
the meeting as shall be determined by the Board.
SECTION 1.11. List of Stockholders. (a) At
least ten days before every meeting of stockholders, the
officer who has charge of the stock ledger of the
Corporation shall cause to be prepared and made a complete
list of the stockholders entitled to vote at the meeting,
arranged in alphabetical order and showing the address of
each stockholder and the number of shares registered in the
name of each stockholder.
(b) Such list shall be open to examination by any
stockholder for any purpose germane to the meeting as
required by applicable law.
(c) The stock ledger shall be the only evidence
as to who are the stockholders entitled to examine the stock
ledger, the list required by this Section 1.11 or the books
of the Corporation, or to vote in person or by proxy at any
meeting of stockholders.
SECTION 1.12. Fixing of Record Date for
Determination of Stockholders of Record. (a) The Board may
fix a date as the record date for the purpose of determining
the stockholders entitled to notice of, or to vote at, any
meeting of the stockholders or any adjournment thereof,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board,
and which record date shall not be more than 60 days nor
less than ten days before the date of a meeting of the
stockholders. If no record date is fixed by the Board, the
record date for determining the stockholders entitled to
notice of or to vote at a stockholders' meeting shall be at
the close of business on the day next preceding the day on
which notice is given, or, if notice is waived, at the close
of business on the day next preceding the day on which the
meeting is held. A determination of stockholders of record
entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date
for the adjourned meeting.
(b) The Board may fix a date as the record date
for the purpose of determining the stockholders entitled to
receive payment of any dividend or other distribution or the
allotment of any rights, or entitled to exercise any rights
in respect of any change, conversion or exchange of stock,
or in order to make a determination of the stockholders for
the purpose of any other lawful action, which record date
shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which record
date shall not be more than 60 calendar days prior to such
action. If no record date is fixed by the Board, the record
date for determining the stockholders for any such purpose
shall be at the close of business on the day on which the
Board adopts the resolution relating thereto.
ARTICLE II
Directors
SECTION 2.01. Method of Election. Directors need
not be stockholders of the Corporation or citizens of the
United States of America. Persons who, on the date of the
stockholders' meeting at which they would be elected, would
be older than 71 years of age shall not be eligible to be
nominated for election as Directors. Any Director whose
seventy-first birthday occurs on or after the date of his or
her election to the Board shall be permitted to complete his
or her term in office.
Subject to the rights of the holders of any series
of Preferred Stock of the Corporation, nominations of
persons for election as Directors may be made by the Board
or by any stockholder who is a stockholder of record at the
time of giving of the notice of nomination provided for in
this Section 2.01 and who is entitled to vote for the
election of Directors. Any stockholder of record entitled
to vote for the election of Directors at a meeting may
nominate a person or persons for election as Directors only
if written notice of such stockholder's intent to make such
nomination is given, either by personal delivery or by
United States mail, postage prepaid, to the Secretary at the
principal executive offices of the Corporation, not later
than (i) with respect to an election to be held at an annual
meeting of stockholders, not less than 90 nor more than 120
days prior to the anniversary date of the immediately
preceding annual meeting (provided, that the first such
anniversary date occurring after the effective date of these
By-laws shall be deemed to be !, !) and (ii) with respect to
an election to be held at a special meeting of stockholders
for the election of Directors, not earlier than the 90th day
prior to such special meeting and not later than the close
of business on the later of the 60th day prior to such
special meeting or the tenth day following the day on which
public announcement of the date of the special meeting and
of the nominees to be elected at such meeting is first made.
Each such notice shall set forth: (a) the name and address
of the stockholder who intends to make the nomination and of
the person or persons to be nominated; (b) a representation
that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (c) a description
of all arrangements or understandings between the
stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder;
(d) such other information regarding each nominee proposed
by such stockholder as would have been required to be
included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had each
nominee been nominated, or intended to be nominated, by the
Board; (e) the consent of each nominee to serve as a
Director if so elected; and (f) if the stockholder intends
to solicit proxies in support of such stockholder's
nominee(s), a representation to that effect. The presiding
officer of any meeting of stockholders to elect Directors
and the Board may refuse to acknowledge any attempted
nomination of any person not made in compliance with the
foregoing procedure or if the stockholder solicits proxies
in support of such stockholder's nominee(s) without such
stockholder having made the representation required by
clause (f) of the preceding sentence. Only such persons who
are nominated in accordance with the procedures set forth in
this Section 2.01 shall be eligible to serve as Directors of
the Corporation.
At each meeting of the stockholders for the
election of Directors at which a quorum is present, the
persons receiving the greatest number of votes, up to the
number of Directors to be elected, shall be the Directors.
SECTION 2.02. Resignations and Vacancies on
Board. Any Director may resign from office at any time by
delivering a resignation to the Chairman of the Board or the
Secretary. The resignation will take effect at the time
specified therein, or, if no time is specified, at the time
of its receipt by the Corporation. The acceptance of a
resignation shall not be necessary to make it effective,
unless expressly so provided in the resignation. Subject to
Section 2.11 of these By-laws, any vacancy on the Board
shall be filled as specified in the Certificate.
SECTION 2.03. Meetings of the Board. (a) The
Board may hold its meetings, both regular and special,
either within or outside the State of Delaware, at such
places as from time to time may be determined by the Board
or as may be designated in the respective notices or waivers
of notice thereof.
(b) Regular meetings of the Board shall be held
at such times and at such places as from time to time shall
be determined by the Board.
(c) The first meeting of each newly elected Board
shall be held as soon as practicable after the annual
meeting of the stockholders and shall be for the election of
officers and the transaction of such other business as may
come before such meeting.
(d) Special meetings of the Board shall be held
whenever called by direction of the Chairman of the Board or
at the request of Directors constituting one-third of the
number of Directors then in office.
(e) Members of the Board or any Committee of the
Board may participate in a meeting of the Board or such
Committee, as the case may be, by means of conference
telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each
other, and by any other means of remote communication
permitted by applicable law, and such participation shall
constitute presence in person at such meeting.
(f) The Secretary shall give notice to each
Director of any meeting of the Board by mailing, faxing or
otherwise electronically delivering the same at least two
days before the meeting or by personally delivering the same
not later than the day before the meeting. Such notice need
not include a statement of the business to be transacted at,
or the purpose of, any such meeting. Any and all business
may be transacted at any meeting of the Board. No notice of
any adjourned meeting need be given. No notice to or waiver
by any Director shall be required with respect to any
meeting at which the Director is present except when such
Director attends the meeting for the express purpose of
objecting at the beginning of the meeting to the transaction
of any business because the meeting was not lawfully called
or convened.
SECTION 2.04. Quorum and Action. Except as
otherwise expressly required by the Certificate, these By-
laws or applicable law, at any meeting of the Board, the
presence of at least a majority of the entire Board shall
constitute a quorum for the transaction of business; but if
there shall be less than a quorum at any meeting of the
Board, a majority of those present may adjourn the meeting
from time to time. Unless otherwise provided by applicable
law, the Certificate or these By-laws, the vote of a
majority of the Directors present at any meeting at which a
quorum is present shall be necessary for the approval and
adoption of any resolution or the approval of any act of the
Board.
SECTION 2.05. Presiding Officer and Secretary of
Meeting. The Chairman of the Board or, in the absence of
the Chairman of the Board, a member of the Board selected by
the members present, shall preside at meetings of the Board.
The Secretary shall act as secretary of the meeting, but in
the Secretary's absence the presiding officer may appoint a
secretary of the meeting.
SECTION 2.06. Action by Consent without Meeting.
Any action required or permitted to be taken at any meeting
of the Board or of any Committee thereof may be taken
without a meeting as permitted by applicable law.
SECTION 2.07. Standing Committees. By resolution
adopted by a majority of the entire Board, the Board shall
elect, from among its members, individuals to serve on the
Standing Committees established by this Section 2.07. Each
Standing Committee shall be comprised of such even number of
Directors, not less than two, as shall be elected to such
Committee. At the Effective Time (as such term is defined
in the Agreement and Plan of Merger dated July 30, 2000, by
and among Ranger, Ring, the Corporation, Ranger Acquisition
Corp. and Ring Acquisition Corp. (the "Merger Agreement")),
each Standing Committee shall be comprised of an equal
number of Ranger Directors and Ring Directors (as such terms
are defined in Section 2.11(c)). Each Committee shall keep
a record of all its proceedings and report the same to the
Executive Committee and/or the Board. The chairmen of the
various Committees shall preside, when present, at all
meetings of such Committees, and shall have such powers and
perform such duties as the Board may from time to time
prescribe. The Standing Committees of the Board, and
functions of each, are as follows:
(a) Executive Committee. Except as otherwise
expressly required by applicable law, the Executive
Committee shall, during the intervals between the meetings
of the Board, possess and exercise all of the powers of the
Board in the management of the property, business and
affairs of the Corporation.
(b) Audit Committee. The Audit Committee shall
aid the Board in carrying out its responsibilities for
accurate and informative financial reporting, shall assist
the Board in making recommendations with respect to the
efforts of the management of the Corporation to maintain and
improve financial controls, shall review reports of
examination by the independent auditors of the Corporation
and, except as otherwise expressly required by applicable
law, shall have authority to act for the Board in any matter
delegated to the Committee by the Board. The Committee
shall recommend each year an independent certified public
accounting firm as independent auditors for the Corporation.
(c) Finance Committee. The Finance Committee
shall periodically formulate and recommend for approval to
the Board the financial policies of the Corporation,
including management of the financial affairs of the
Corporation. All capital expenditures of the Corporation
shall be reviewed by the Committee and recommended for
approval to the Board. The Committee may authorize another
committee of the Board or one or more of the officers of the
Corporation to approve borrowings, loans, capital
expenditures and guarantees up to such specified amounts or
upon such conditions as the Committee may establish, subject
to the approval of the Board.
(d) Compensation Committee. The Compensation
Committee shall exercise the power of oversight of the
compensation and benefits of the employees of the
Corporation, and shall be charged with evaluating management
performance and establishing executive compensation.
(e) Nominating Committee. Subject to Section
2.11 of these By-laws, the Nominating Committee shall
identify and evaluate potential nominees for election to the
Board and recommend candidates for all directorships to be
filled by the stockholders or the Board. Subject to Section
2.11 of these By-laws, the Committee, in consultation with
the Chairman of the Board and the Chief Executive Officer of
the Corporation, shall make recommendations to the Board
regarding the size and composition of the Board, shall
recommend to the Board criteria regarding the personal
qualifications required for Board membership, shall
establish procedures for the nomination process, shall
evaluate the performance of the Board as a whole and shall
annually evaluate Board practices and recommend appropriate
changes to the Board.
(f) Nuclear Committee. The Nuclear Committee
shall review and generally oversee, and make reports and
recommendations to the Board in connection with, the
operation of the Corporation's nuclear generating units,
shall discuss such matters with the personnel and
consultants of the Corporation, may commission, undertake,
receive and review studies and reports on such matters and
shall perform such other services as the Board shall direct
from time to time by resolution of the Board.
SECTION 2.08. Meetings of Committees. Regular
meetings of any committee may be held without notice at such
time and at such place, within or outside the State of
Delaware, as from time to time shall be determined by such
Committee. The Chairman of the Board, the Board or the
committee by vote at a meeting, or by two members of any
committee in writing without a meeting, may call a special
meeting of any such Committee at any time by giving each
such committee member at least two days notice of the date,
time and place of the meeting. Such notice may be given
orally or in writing in accordance with Section 2.03(f)
hereof. Unless otherwise provided in the Certificate, these
By-laws or by law, neither business to be transacted at, nor
the purpose of, any regular or special meeting of any such
committee need be specified in the notice or any waiver of
notice.
SECTION 2.09. Quorum of Committee. At all
meetings of any committee a majority of the total number of
its members shall constitute a quorum for the transaction of
business. Except in cases in which it is by law, by the
Certificate, by these By-laws, or by resolution of the Board
otherwise provided, a majority of such quorum shall decide
any questions that may come before the meeting. In the
absence of a quorum, the members of the Committee present by
majority vote may adjourn the meeting from time to time,
without notice other than by verbal announcement at the
meeting, until a quorum shall attend.
SECTION 2.10. Other Committees. By resolution
passed by a majority of the entire Board, the Board may also
appoint from among its members such other Committees,
Standing or otherwise, as it may from time to time deem
desirable and may delegate to such Committees such powers of
the Board as it may consider appropriate, as permitted by
the Articles, these By-laws and by law.
SECTION 2.11. Representation on the Board. (a)
Unless this provision terminates pursuant to Section 2.11(c)
below, from the Effective Time until the third annual
stockholders' meeting of the Corporation that occurs
following the end of the calendar year in which the
Effective Time occurs (the "Transition Time"), the Board
shall consist of eight Ranger Directors and seven Ring
Directors (as such terms are defined below). If, at any
time prior to the Transition Time, (A) the number of Ranger
Directors does not exceed by one the number of Ring
Directors serving, or the number of Ranger Directors that
would be serving following the next stockholders' meeting at
which Directors are to be elected would not exceed by one
the number of Ring Directors then serving, then the Board
and the Nominating Committee thereof shall nominate for
election at the next stockholders' meeting at which
Directors are to be elected such person or persons as may be
designated by the remaining Ranger Directors (if the number
of Ranger Directors is, or would otherwise become, less than
or equal to the number of Ring Directors) or by the
remaining Ring Directors (if the number of Ring Directors
is, or would otherwise become, less than one less than the
number of Ranger Directors) to ensure that, following such
election, the number of Ranger Directors serving on the
Board exceeds by one the number of Ring Directors serving on
the Board or (B) there shall occur any vacancy in any
directorship held by any Ranger Director or Ring Director,
then the Board shall appoint for the remainder of the full
term of such directorship such person or persons as may be
designated by the remaining Ranger Directors (if the number
of Ranger Directors is, or would otherwise become, less than
or equal to the number of Ring Directors) or by the
remaining Ring Directors (if the number of Ring Directors
is, or would otherwise become, less than one less than the
number of Ranger Directors).
(b) Following the 12-month anniversary of the
Effective Time, the first vacancy on the Board that occurs
with respect to a Ranger Director shall not be filled and
instead the number of directors that constitutes the entire
Board of Directors at such time shall be reduced by one.
(c) The provisions of this Section 2.11 shall be
of no further effect after the earlier of (x) the occurrence
of the first vacancy on the Board with respect to a Ranger
Director following the 12-month anniversary of the Effective
Time (and the reduction in the number of directors by one in
accordance with clause (b) above) and (y) the third annual
stockholders' meeting of the Corporation that occurs
following the end of the calendar year in which the
Effective Time occurs. The term "Ranger Director" means (i)
any person serving as a director of Ranger prior to the
Effective Time and who becomes a Director of the Corporation
and (ii) any person who becomes a Director of the
Corporation pursuant to the last sentence of subsection (a)
above and is designated by the Ranger Directors; and the
term "Ring Director" means (i) any person serving as a
director of Ring prior to the Effective Time and who becomes
a Director of the Corporation and (ii) any person who
becomes a Director of the Corporation pursuant to the last
sentence of subsection (a) above and who is designated by
the Ring Directors. Prior to the Transition Time, (i) any
action by the Board relating to any proposed amendment to or
modification of ARTICLES FIFTH or EIGHTH of the Certificate
and (ii) any amendment to or modification of this Section
2.11 or any provision of these By-laws that refers to this
Section 2.11 shall require the affirmative vote of at least
two-thirds of the entire Board.
ARTICLE III
Officers
SECTION 3.01. Officers, Titles, Elections, Terms.
(a) Subject to Section 3.03 of these By-laws, the Board may
from time to time elect a Chairman of the Board, a Chief
Executive Officer, a President, Group President(s), a Chief
Financial Officer, one or more Executive Vice Presidents,
one or more Senior Vice Presidents, one or more Vice
Presidents, a Controller, a Treasurer, a Secretary and a
General Counsel, each to serve at the pleasure of the Board
or otherwise as shall be specified by the Board at the time
of such election and until their successors are elected and
qualified or until their earlier death, incapacity,
retirement, resignation or removal from office in accordance
with these By-laws or applicable law or pursuant to an order
of a court of competent jurisdiction.
(b) The Board may elect or appoint at any time
such other officers or agents with such duties as it may
deem necessary or desirable. Such other officers or agents
shall serve at the pleasure of the Board or otherwise as
shall be specified by the Board at the time of such election
or appointment and, in the case of such other officers,
until their successors are elected and qualified or until
their earlier death, incapacity, retirement, resignation or
removal from office in accordance with these By-laws or
applicable law or pursuant to an order of a court of
competent jurisdiction. Each such officer or agent shall
have such authority and shall perform such duties as may be
provided herein or as the Board may prescribe. The Board
may from time to time authorize any officer or agent to
appoint and remove any other such officer or agent and to
prescribe such person's authority and duties.
(c) Any two or more offices may be held
simultaneously by the same person, except as otherwise
expressly required by applicable law.
(d) Subject to Section 3.03 of these By-laws, any
vacancy in any office may be filled for the unexpired
portion of the term by the Board. Each officer elected or
appointed during the year shall hold office until the next
annual meeting of the Board at which officers are regularly
elected or appointed and until his or her successor is
elected or appointed and qualified or until his or her
earlier death, incapacity, retirement, resignation or
removal from office in accordance with these By-laws or
applicable law or pursuant to an order of a court of
competent jurisdiction.
(e) Subject to Section 3.03 of these By-laws, any
officer or agent may be removed at any time by the
affirmative vote of a majority of the entire Board.
(f) Any officer may resign from office at any
time. Such resignation shall be made in writing and given
to the Chief Executive Officer or the Secretary. Any such
resignation shall take effect at the time specified therein,
or, if no time is specified, at the time of its receipt by
the Corporation. The acceptance of a resignation shall not
be necessary to make it effective, unless expressly so
provided in the resignation.
SECTION 3.02. Powers and Duties of Officers.
Subject to Section 3.03 of these By-laws, the officers of
the Corporation shall have such powers and duties as usually
pertain to their respective offices, except as otherwise
directed by the Board or any designee thereof, and shall
also have such powers and duties as may from time to time be
conferred upon them by the Board or any such designee.
SECTION 3.03. Employment Agreements. Except as
to election to the positions with the Corporation provided
for in the employment agreements between the Corporation and
James L. Broadhead and the Corporation and J. Wayne Leonard
(each an "Employment Agreement" and collectively the
"Employment Agreements"), each entered into in connection
with the Merger Agreement, and until the earlier of (x) the
occurrence of the first vacancy on the Board with respect to
a Ranger Director following the 12-month anniversary of the
Effective Time and (y) the third annual stockholders'
meeting of the Corporation that occurs following the end of
the calendar year in which the Effective Time occurs, (i)
the election of any other person to the positions with the
Corporation provided for in the Employment Agreements, (ii)
the removal or replacement of Messrs. Broadhead or Leonard
from one or more of such positions, (iii) any amendment to
or modification of this Section 3.03 or (iv) any amendment
to or modification of the Employment Agreements, shall
require the affirmative vote of at least two-thirds of the
entire Board.
ARTICLE IV
Indemnification
SECTION 4.01. Indemnification. (a) The
Corporation, to the fullest extent permitted by applicable
law, shall indemnify any person who was or is a Director or
officer of the Corporation and who was or is involved in any
manner (including as a party or a witness) or is threatened
to be made so involved in any threatened, pending or
completed investigation, claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative
(including any action, suit or proceeding by or in the right
of the Corporation to procure a judgment in its favor)
(each, a "Proceeding"), by reason of the fact that such
person was or is a Director or officer of the Corporation
or, while a Director or officer of the Corporation, was or
is serving at the request of the Corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise
(including any employee benefit plan) (a "Covered Entity"),
against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement and actually and
reasonably incurred by such person in connection with such
Proceeding. Any such former or present Director or officer
of the Corporation finally determined to be entitled to
indemnification as provided in this Article 4 is hereinafter
called an "Indemnitee". Until such final determination is
made, such former or present Director or officer shall be a
"Potential Indemnitee" for purposes of this Article 4.
Notwithstanding the foregoing provisions of this Section
4.01(a), but subject to Section 4.05(c)(iv) hereof, the
Corporation shall not indemnify an Indemnitee with respect
to any Proceeding commenced by such Indemnitee unless the
commencement of such Proceeding by such Indemnitee has been
approved by a majority vote of the Disinterested Directors
(as defined in Section 4.05(d)); provided, however, that
such approval of a majority of the Disinterested Directors
shall not be required with respect to any Proceeding
commenced by such Indemnitee after a Change in Control (as
defined in Section 4.05(d)) has occurred.
(b) Neither the amendment or repeal of, nor the
adoption of a provision inconsistent with, any provision of
this Article 4 (including this Section 4.01(b)) shall
adversely affect the rights of any Director or officer under
this Article 4 (i) with respect to any Proceeding commenced
or threatened prior to such amendment, repeal or adoption of
an inconsistent provision or (ii) after the occurrence of a
Change in Control, with respect to any Proceeding arising
out of any action or omission occurring prior to such
amendment, repeal or adoption of an inconsistent provision,
in either case without the written consent of such Director
or officer.
SECTION 4.02. Insurance, Contracts and Funding.
The Corporation may purchase and maintain insurance to
protect itself and any Director, officer, employee or agent
of the Corporation or of any Covered Entity against any
expenses, judgments, fines and amounts paid in settlement as
specified in Section 4.01(a) or Section 4.06 of this Article
4 or incurred by any such Director, officer, employee or
agent in connection with any Proceeding referred to in such
Sections, to the fullest extent permitted by applicable law.
The Corporation may enter into contracts with any Director,
officer, employee or agent of the Corporation or of any
Covered Entity in furtherance of the provisions of this
Article 4 and may create a trust fund, grant a security
interest or use other means (including a letter of credit)
to ensure the payment of such amounts as may be necessary to
effect indemnification as provided in this Article 4.
SECTION 4.03. Indemnification; Not Exclusive
Right. The right of indemnification provided in this
Article 4 shall not be exclusive of any other rights to
which an Indemnitee or Potential Indemnitee may otherwise be
entitled, and the provisions of this Article 4 shall inure
to the benefit of the heirs and legal representatives of any
Indemnitee or Potential Indemnitee under this Article 4 and
shall be applicable to Proceedings commenced or continuing
after the adoption of this Article 4, whether arising from
acts or omissions occurring before or after such adoption.
SECTION 4.04. Advancement of Expenses. All
reasonable expenses (including attorneys' fees) incurred by
or on behalf of any Potential Indemnitee in connection with
any Proceeding shall be advanced to such Potential
Indemnitee by the Corporation within 20 days after the
receipt by the Corporation of a statement or statements from
such Potential Indemnitee requesting such advance or
advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or
statements shall reasonably evidence the expenses incurred
by such Potential Indemnitee and, if required by law at the
time of such advance, shall include or be accompanied by an
undertaking by or on behalf of such Potential Indemnitee to
repay the amounts advanced if ultimately it should be
determined that such Potential Indemnitee is not entitled to
be indemnified against such expenses pursuant to this
Article 4. Notwithstanding the foregoing provisions of this
Section 4.04, the Corporation shall not advance expenses to
a Potential Indemnitee with respect to any Proceeding
commenced by such Potential Indemnitee unless the
commencement of such Proceeding by such Potential Indemnitee
has been approved by a majority vote of the Disinterested
Directors; provided, however, that such approval of a
majority of the Disinterested Directors shall not be
required with respect to any Proceeding commenced by such
Potential Indemnitee after a Change in Control has occurred.
SECTION 4.05. Indemnification Procedures;
Presumptions and Effect of Certain Proceedings; Remedies;
Definitions. In furtherance, but not in limitation, of the
foregoing provisions of this Article 4, the following
procedures, presumptions and remedies shall apply with
respect to the right to indemnification under this Article
4:
(a) Procedures for Determination of Entitlement
to Indemnification. (i) To obtain indemnification under
this Article 4, a Potential Indemnitee shall submit to the
Secretary a written request, including such documentation
and information as is reasonably available to the Potential
Indemnitee and reasonably necessary to determine whether and
to what extent the Potential Indemnitee is entitled to
indemnification (the "Supporting Documentation"). The
determination of the Potential Indemnitee's entitlement to
indemnification shall be made not later than 60 days after
the later of (A) the receipt by the Corporation of the
written request for indemnification together with the
Supporting Documentation and (B) the receipt by the
Corporation of written notice of final disposition of the
Proceeding in respect of which indemnification is sought.
The Secretary shall, promptly upon receipt of such a request
for indemnification, advise the Board in writing that the
Potential Indemnitee has requested indemnification.
(ii) The Potential Indemnitee's entitlement to
indemnification under this Article 4 shall be determined in
one of the following ways: (A) by a majority vote of the
Disinterested Directors, whether or not they constitute a
quorum of the Board; (B) by a committee of the Disinterested
Directors designated by a majority vote of the Disinterested
Directors, whether or not they constitute a quorum of the
Board; (C) by a written opinion of Independent Counsel (as
defined in Section 4.05(d)) if (x) a Change in Control shall
have occurred and the Potential Indemnitee so requests or
(y) there are no Disinterested Directors or a majority of
such Disinterested Directors so directs; (D) by the
stockholders of the Corporation; or (E) as provided in
Section 4.05(b) of this Article 4.
(iii) In the event the determination of
entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 4.05(a)(ii), a majority of the
Disinterested Directors (or, if there are no Disinterested
Directors, the General Counsel of the Corporation or, if the
General Counsel is or was a party to the Proceeding in
respect of which indemnification is sought, the highest
ranking officer of the Corporation who is not and was not a
party to such Proceeding) shall select the Independent
Counsel, but only an Independent Counsel to which the
Potential Indemnitee does not reasonably object; provided,
however, that if a Change in Control shall have occurred,
the Potential Indemnitee shall select such Independent
Counsel, but only an Independent Counsel to which a majority
of the Disinterested Directors does not reasonably object.
(b) Presumptions and Effect of Certain
Proceedings. Except as otherwise expressly provided in this
Article 4, if a Change in Control shall have occurred, the
Potential Indemnitee shall be presumed to be entitled to
indemnification under this Article 4 (with respect to
actions or omissions occurring prior to such Change in
Control) upon submission of a request for indemnification
together with the Supporting Documentation in accordance
with Section 4.05(a)(i) of this Article 4, and thereafter
the Corporation shall have the burden of proof to overcome
that presumption in reaching a contrary determination. In
any event, if the person or persons empowered under Section
4.05(a) of this Article 4 to determine entitlement to
indemnification shall not have been appointed or shall not
have made a determination within 60 days after the later of
(x) the receipt by the Corporation of the written request
for indemnification together with the Supporting
Documentation and (y) final disposition of the Proceeding in
respect of which indemnification is sought, the Potential
Indemnitee shall be deemed to be, and shall be, entitled to
indemnification. The termination of any Proceeding, or of
any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, adversely affect
the right of the Potential Indemnitee to indemnification or
create a presumption that the Potential Indemnitee did not
act in good faith and in a manner that the Potential
Indemnitee reasonably believed to be in or not opposed to
the best interests of the Corporation or, with respect to
any criminal Proceeding, that the Potential Indemnitee had
reasonable cause to believe that his or her conduct was
unlawful.
(c) Remedies. (i) In the event that a
determination is made pursuant to Section 4.05(a) of this
Article 4 that the Potential Indemnitee is not entitled to
indemnification under this Article 4, (A) the Potential
Indemnitee shall be entitled to seek an adjudication of his
or her entitlement to such indemnification either, at the
Potential Indemnitee's sole option, in (x) an appropriate
court of the State of Delaware or any other court of
competent jurisdiction or (y) an arbitration to be conducted
by a single arbitrator pursuant to the rules of the American
Arbitration Association; (B) any such judicial proceeding or
arbitration shall be de novo and the Potential Indemnitee
shall not be prejudiced by reason of such adverse
determination; and (C) if a Change in Control shall have
occurred, in any such judicial proceeding or arbitration,
the Corporation shall have the burden of proving that the
Potential Indemnitee is not entitled to indemnification
under this Article 4 (with respect to actions or omissions
occurring prior to such Change in Control).
(ii) If a determination shall have been made or
deemed to have been made, pursuant to Section 4.05(a) or (b)
of this Article 4, that the Potential Indemnitee is entitled
to indemnification, the Corporation shall be obligated to
pay the amounts constituting such indemnification within
five days after such determination has been made or deemed
to have been made and shall be conclusively bound by such
determination unless (A) the Indemnitee misrepresented or
failed to disclose a material fact in making the request for
indemnification or in the Supporting Documentation or (B)
such indemnification is prohibited by applicable law. In
the event that payment of indemnification is not made within
five days after a determination of entitlement to
indemnification has been made or deemed to have been made
pursuant to Section 4.05(a) or (b) of this Article 4, the
Indemnitee shall be entitled to seek judicial enforcement of
the Corporation's obligation to pay to the Indemnitee such
indemnification. Notwithstanding the foregoing, the
Corporation may bring an action, in an appropriate court in
the State of Delaware or any other court of competent
jurisdiction, contesting the right of the Indemnitee to
receive indemnification hereunder due to the occurrence of
an event described in clause (A) or (B) of this subsection
(each, a "Disqualifying Event"); provided, however, that in
any such action the Corporation shall have the burden of
proving the occurrence of such Disqualifying Event.
(iii) The Corporation shall be precluded from
asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 4.05(c) that the
procedures and presumptions of this Article 4 are not valid,
binding and enforceable and shall stipulate in any such
court or before any such arbitrator that the Corporation is
bound by all the provisions of this Article 4.
(iv) In the event that the Indemnitee or
Potential Indemnitee, pursuant to this Section 4.05(c),
seeks a judicial adjudication of or an award in arbitration
to enforce his or her rights under, or to recover damages
for breach of, this Article 4, such person shall be entitled
to recover from the Corporation, and shall be indemnified by
the Corporation against, any expenses actually and
reasonably incurred by such person in connection with such
judicial adjudication or arbitration if such person prevails
in such judicial adjudication or arbitration. If it shall
be determined in such judicial adjudication or arbitration
that such person is entitled to receive part but not all of
the indemnification or advancement of expenses sought, the
expenses incurred by such person in connection with such
judicial adjudication or arbitration shall be prorated
accordingly.
(d) Definitions. For purposes of this Article 4:
(i) "Change in Control" means a change in control
of the Corporation of a nature that would be required
to be reported in response to Item 6(e) (or any
successor provision) of Schedule 14A of Regulation 14A
(or any amendment or successor provision thereto)
promulgated under the Securities Exchange Act of 1934,
as amended (the "Act"), whether or not the Corporation
is then subject to such reporting requirement; provided
that, without limitation, such a change in control
shall be deemed to have occurred if (A) any "person"
(as such term is used in Sections 13(d) and 14(d) of
the Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Corporation
representing 15% or more of the voting power of all
outstanding shares of stock of the Corporation entitled
to vote generally in an election of Directors without
the prior approval of at least two-thirds of the
members of the Board in office immediately prior to
such acquisition; (B) the Corporation is a party to any
merger, consolidation or share exchange (or other
comparable transaction) in which the Corporation is not
the continuing or surviving corporation or pursuant to
which shares of the Corporation's Common Stock would be
converted into cash, securities or other property,
other than a merger or share exchange in which the
holders of the Corporation's Common Stock immediately
prior to the merger have the same proportionate
ownership of common stock of the surviving corporation
immediately after the merger; (C) there is a sale,
lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or
substantially all, of the assets of the Corporation, or
liquidation or dissolution of the Corporation; (D) the
Corporation is a party to a merger, consolidation, sale
of assets or other reorganization, or a proxy contest,
as a consequence of which members of the Board in
office immediately prior to such transaction or event
constitute less than a majority of the Board
thereafter; or (E) during any year, individuals who at
the beginning of such year constituted the Board
(including for this purpose any new Director whose
election or nomination for election by the stockholders
was approved by a vote of the Directors then still in
office who were Directors at the beginning of such
year) cease for any reason to constitute at least a
majority of the Board.
(ii) "Disinterested Director" means a Director
who is not and was not a party to the Proceeding in
respect of which indemnification is sought by the
Indemnitee or Potential Indemnitee.
(iii) "Independent Counsel" means a law firm or a
member of a law firm that neither presently is, nor in
the past five years has been, retained to represent:
(a) the Corporation or the Indemnitee or Potential
Indemnitee in any matter material to either such party
or (b) any other party to the Proceeding giving rise to
a claim for indemnification under this Article 4.
Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any person who, under
applicable standards of professional conduct then
prevailing under the law of the State of Delaware,
would have a conflict of interest in representing
either the Corporation or the Indemnitee or Potential
Indemnitee in an action to determine the Indemnitee's
or Potential Indemnitee's rights under this Article 4.
SECTION 4.06. Indemnification of Employees and
Agents. Notwithstanding any other provision of this Article
4, the Corporation, to the fullest extent permitted by
applicable law, may indemnify any person other than a
Director or officer of the Corporation who is or was an
employee or agent of the Corporation and who is or was
involved in any manner (including as a party or a witness)
or is threatened to be made so involved in any threatened,
pending or completed Proceeding, by reason of the fact that
such person was or is an employee or agent of the
Corporation or was or is serving at the request of the
Corporation as a director, officer, employee or agent of a
Covered Entity, against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in
connection with such Proceeding. The Corporation may also
advance expenses incurred by such employee or agent in
connection with any such Proceeding, consistent with the
provisions of applicable law. If made or advanced, such
indemnification shall be made and such reasonable expenses
shall be advanced pursuant to procedures to be established
from time to time by the Board.
SECTION 4.07. Severability. If any provision or
provisions of this Article 4 shall be held to be invalid,
illegal or unenforceable for any reason whatsoever: (i) the
validity, legality and enforceability of the remaining
provisions of this Article 4 (including all portions of any
Section of this Article 4 containing any such provision held
to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (ii) to the
fullest extent possible, the provisions of this Article 4
(including all portions of any Section of this Article 4
containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed, to the fullest extent
possible, so as to give effect to the intent manifested by
the provision held invalid, illegal or unenforceable.
ARTICLE V
Capital Stock
SECTION 5.01. Stock Certificates. The shares of
the Corporation shall be represented by certificates,
provided that the Board may provide by resolution or
resolutions that some or all of any or all classes or series
of stock shall be uncertificated shares. Each certificate
shall be signed by, or in the name of, the Corporation by
the Chairman of the Board, the President or any Vice
President, and by the Treasurer or any Assistant Treasurer
or the Secretary or any Assistant Secretary. In addition,
such certificates may be signed by a transfer agent of a
registrar (other than the Corporation itself) and may be
sealed with the seal of the Corporation or a facsimile
thereof. Any or all of the signatures on such certificates
may be facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate
is issued, such certificate may be issued by the Corporation
with the same effect as if he or she were such officer,
transfer agent or registrar at the date of its issuance.
Each certificate representing shares shall state
upon the face thereof: the name of the Corporation; that
the Corporation is organized under the laws of Delaware; the
name of the person or persons to whom issued; the number and
class of shares and the designation of the series, if any,
which such certificate represents; and the par value of each
share represented by such certificate or a statement that
the shares are without par value.
SECTION 5.02. Record Ownership. A record of the
name of the person, firm or corporation and address of such
holder of each certificate, the number of shares represented
thereby and the date of issue thereof shall be made on the
Corporation's books. The Corporation shall be entitled to
treat the holder of record of any share of stock as the
holder in fact thereof, and accordingly shall not be bound
to recognize any equitable or other claim to or interest in
any share on the part of any person, whether or not it shall
have express or other notice thereof, except as otherwise
expressly required by applicable law.
SECTION 5.03. Transfer of Record Ownership.
Transfers of stock shall be made on the books of the
Corporation only by direction of the person named in the
certificate or such person's attorney, lawfully constituted
in writing, and only upon the surrender of the certificate
therefor and a written assignment of the shares evidenced
thereby. Whenever any transfer of stock shall be made for
collateral security, and not absolutely, it shall be so
expressed in the entry of the transfer if, when the
certificates are presented to the Corporation for transfer,
both the transferor and transferee request the Corporation
to do so.
SECTION 5.04. Transfer Agent; Registrar; Rules
Respecting Certificates. The Corporation shall maintain one
or more transfer offices or agencies (which may include the
Corporation) where stock of the Corporation shall be
transferable. The Corporation shall also maintain one or
more registry offices (which may include the Corporation)
where such stock shall be registered. The Board may make
such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of stock
certificates in accordance with applicable law.
ARTICLE VI
Securities Held by the Corporation
SECTION 6.01. Voting. Unless the Board shall
otherwise order, any officer of the Corporation shall have
full power and authority, on behalf of the Corporation, to
attend, act and vote at any meeting of the stockholders of
any corporation in which the Corporation may hold stock and
at such meeting to exercise any or all rights and powers
incident to the ownership of such stock, and to execute on
behalf of the Corporation a proxy or proxies empowering
another or others to act as aforesaid. The Board from time
to time may confer like powers upon any other person or
persons.
SECTION 6.02. General Authorization to Transfer
Securities held by the Corporation. (a) Any officer of the
Corporation is hereby authorized and empowered to transfer,
convert, endorse, sell, assign and deliver any and all
shares of stock, bonds, debentures, notes, subscription
warrants, stock purchase warrants, evidences of
indebtedness, or other securities now or hereafter standing
in the name of or owned by the Corporation, and to make,
execute and deliver any and all written instruments of
assignment and transfer necessary or proper to effectuate
the authority hereby conferred.
(b) Whenever there shall be annexed to any
instrument of assignment and transfer executed pursuant to
and in accordance with the foregoing Section 6.02(a), a
certificate of the Secretary or any Assistant Secretary in
office at the date of such certificate setting forth the
provisions hereof and stating that they are in full force
and effect and setting forth the names of persons who are
then officers of the corporation, all persons to whom such
instrument and annexed certificate shall thereafter come
shall be entitled, without further inquiry or investigation
and regardless of the date of such certificate, to assume
and to act in reliance upon the assumption that (i) the
shares of stock or other securities named in such instrument
were theretofore duly and properly transferred, endorsed,
sold, assigned, set over and delivered by the Corporation,
and (ii) with respect to such securities, the authority of
these provisions of these By-laws and of such officers is
still in full force and effect.
ARTICLE VII
Amendment of By-laws
SECTION 7.01. Amendment. Except as otherwise
expressly provided in the Certificate or in Sections 2.11
and 3.03 of these By-laws, these By-laws, or any of them,
may from time to time be supplemented, amended or repealed,
or new By-laws may be adopted, by the Board at any regular
or special meeting of the Board, if such supplement,
amendment, repeal or adoption is approved by a majority of
the entire Board.
ARTICLE VIII
Offices and Agent
SECTION 8.01. Registered Office and Agent. The
address of the registered office of the Corporation in the
State of Delaware shall be 1209 Orange Street, Wilmington,
Delaware 19801. The name of the registered agent is The
Corporation Trust Company. Such registered agent has a
business office identical with such registered office.
SECTION 8.02. Other Offices. The Corporation may
also have offices at other places, either within or outside
the State of Delaware, as the Board of Directors may from
time to time determine or as the business of the Corporation
may require.
EXHIBIT C
TO THE MERGER AGREEMENT
Corporate Governance of the Company
Following the Effective Time
Board of Directors
Until the 12-month anniversary of the Effective Time (the
"Transition Time"), the Board of Directors of the Company shall
consist of eight directors designated by Ranger (the "Ranger
Designees") and seven directors designated by Ring (the "Ring
Designees"). This arrangement will also be as set forth in Article
Fifth of the Articles of Incorporation of the Company (attached as
Exhibit A to the Merger Agreement) and Section 2.11 of the By-laws of
the Company (attached as Exhibit B to the Merger Agreement).
Committees of the Board of Directors and Chairpersons of Committees
Following the Effective Time, the Board of Directors of the
Company shall initially have six standing committees: the Executive
Committee (Chairperson: James L. Broadhead), the Audit Committee
(Chairperson: to be a Ranger Designee), the Finance Committee
(Chairperson: Robert v.d. Luft), the Nominating Committee
(Chairperson: J. Wayne Leonard), the Compensation Committee
(Chairperson: to be a Ranger Designee) and the Nuclear Committee
(Chairperson: George W. Davis). At the Effective Time, (i) the
Chairmen of each of the Committees of the Board shall comprise the
membership of the Executive Committee and (ii) each other standing
committee shall be comprised of an equal number of Ranger Designees
and Ring Designees. At the Transition Time, Mr. Broadhead shall
become the Chairman of the Nominating Committee and Mr. Leonard shall
become the Chairman of the Executive Committee.
Chairman of the Board and Chief Executive Officer
From and after the Effective Time and until the Transition
Time, and pursuant to the terms of the employment agreements entered
into between the Company and James L. Broadhead and the Company and
J. Wayne Leonard (each an "Employment Agreement" and collectively the
"Employment Agreements") and subject to Section 3.03 of the Company's
By-laws, (i) Mr. Broadhead shall hold the position of Chairman of the
Board of the Company (in which position he shall serve in an
executive capacity and shall be responsible for implementation of the
integration of the Ranger and Ring businesses) and (ii) Mr. Leonard
shall hold the positions of Chief Executive Officer and President of
the Company. In such capacities, Mr. Broadhead shall report to the
Board of Directors of the Company and Mr. Leonard shall report to Mr.
Broadhead. As Chief Executive Officer, Mr. Leonard shall have all
normal chief executive officer rights and responsibilities, including
direct charge of and general supervision over the business affairs of
the Company, interaction with and presentation of matters to the
Board of Directors and such other duties, rights and responsibilities
as may be assigned to him by the Board of Directors. In addition,
Mr. Leonard shall have input into the implementation of the
integration of the Ranger and Ring businesses, although Mr. Broadhead
shall have sole responsibility for such implementation. Following
the Transition Time and prior to the time of the third annual
shareholders' meeting of the Corporation that occurs following the
calendar year in which the Effective Time occurs, and pursuant to the
Employment Agreements and subject to Section 3.03 of the By-laws of
the Company, (i) Mr. Broadhead shall hold the position of Chairman of
the Board of the Company (in which position he shall serve in a
nonexecutive capacity) and (ii) Mr. Leonard shall hold the positions
of Chief Executive Officer and President of the Company. In such
capacity, Mr. Leonard shall report to the Board of Directors. If, at
the Effective Time, either of such persons is unable or unwilling to
hold such offices as set forth herein, his successor shall be elected
at such time by the Board of Directors of the Company in accordance
with Section 3.03 of the By-laws of the Company. The authority,
duties and responsibilities of the Chairman of the Board and the
Chief Executive Officer, respectively, shall be set forth in the
Employment Agreements, which Employment Agreements shall also set
forth in their entirety the rights and remedies of Messrs. Broadhead
and Leonard with respect to employment with the Company.
Vice Chairmen of the Board
At the Effective Time, each of Robert v.d. Luft and a
Ranger Designee shall be appointed to the position of Vice Chairman
of the Board of the Company.
EXHIBIT D
TO THE MERGER AGREEMENT
WCB Holding Corp.
700 Universe Boulevard
Juno Beach, FL 33408
Form of Affiliate Letter
Dear Sirs:
The undersigned refers to the Agreement and Plan of Merger
(the "Merger Agreement") dated as of July 30, 2000, among FPL Group,
Inc., a Florida corporation ("FPL"), Entergy Corporation, a Delaware
corporation ("Entergy"), WCB Holding Corp., a Delaware corporation
(the "Company"), Ranger Acquisition Corp., a Florida corporation, and
Ring Acquisition Corp., a Delaware corporation. Capitalized terms
used but not defined in this letter have the meanings ascribed to
such terms in the Merger Agreement.
The undersigned, a holder of shares of [FPL/Entergy] Common
Stock, is entitled to receive in connection with the [FPL/Entergy]
Merger shares of Company Common Stock. The undersigned acknowledges
that the undersigned may be deemed an "affiliate" of [FPL/Entergy]
within the meaning of Rule 145 ("Rule 145") promulgated under the
Securities Act, although nothing contained herein should be construed
as an admission of such fact.
If in fact the undersigned were an affiliate under the
Securities Act, the undersigned's ability to sell, assign or transfer
the Company Common Stock received by the undersigned in exchange for
any shares of [FPL/Entergy] Common Stock pursuant to the
[FPL/Entergy] Merger may be restricted unless such transaction is
registered under the Securities Act or an exemption from such
registration is available. The undersigned (i) understands that such
exemptions are limited and that the Company is not under any
obligation to effect any such registration and (ii) has obtained
advice of counsel as to the nature and conditions of such exemptions,
including information with respect to the applicability to the sale
of such securities of Rules 144 and 145(d) promulgated under the
Securities Act.
The undersigned hereby represents to and covenants with the
Company that the undersigned will not sell, assign or transfer any of
the Company Common Stock received by the undersigned in exchange for
shares of [FPL/Entergy] Common Stock pursuant to the [FPL/Entergy]
Merger except (i) pursuant to an effective registration statement
under the Securities Act or (ii) in a transaction that, in the
opinion of counsel reasonably satisfactory to the Company or as
described in a "no-action" or interpretive letter from the Staff of
the SEC, is not required to be registered under the Securities Act.
In the event of a sale or other disposition by the
undersigned pursuant to Rule 145, of Company Common Stock received by
the undersigned in the [FPL/Entergy] Merger, the undersigned will
supply the Company with evidence of compliance with such Rule, in the
form of a letter in the form of Annex I hereto and the opinion of
counsel or no-action letter referred to above. The undersigned
understands that the Company may instruct its transfer agent to
withhold the transfer of any [FPL/Entergy] securities disposed of by
the undersigned, but that upon receipt of such evidence of compliance
the transfer agent shall effectuate the transfer of the Company
Common Stock sold as indicated in such letter.
The undersigned acknowledges and agrees that (i) the
Company Common Stock issued to the undersigned will all be in
certificated form and (ii) the legend set forth below will be placed
on certificates representing Company Common Stock received by the
undersigned in the [FPL/Entergy] Merger or held by a transferee
thereof, which legend will be removed by delivery of substitute
certificates upon receipt of an opinion in form and substance
reasonably satisfactory to the Company from counsel reasonably
satisfactory to the Company to the effect that such legend is no
longer required for purposes of the Securities Act.
There will be placed on the certificates for the Company
Common Stock issued to the undersigned, or any substitutions
therefor, a legend stating in substance:
"The shares represented by this certificate were
issued in a transaction to which Rule 145 promulgated under
the Securities Act of 1933 applies. The shares have been
acquired by the holder not with a view to, or for resale in
connection with, any distribution thereof within the
meaning of the Securities Act of 1933 and may not be sold,
pledged or otherwise transferred except in accordance with
an exemption from the registration requirement of the
Securities Act of 1933."
The undersigned acknowledges that (i) the undersigned has
carefully read this letter and understands the requirements hereof
and the limitations imposed upon the distribution, sale, transfer or
other disposition of the Company Common Stock and (ii) the receipt by
the Company of this letter is an inducement and a condition to
[FPL/Entergy]'s and the Company's respective obligations to
consummate the [FPL/Entergy] Merger.
Very truly yours,
Dated:
ANNEX I
TO EXHIBIT D
[Holdco]
!
On , the undersigned sold the
securities of WCB Holding Corp. (the "Company") described
below in the space provided for that purpose (the
"Securities"). The Securities were received by the
undersigned in connection with the merger of [Ranger
Acquisition Corp., a Florida corporation, with and into FPL
Group, Inc., a Florida corporation/Ring Acquisition Corp., a
Delaware corporation, with and into Entergy Corporation, a
Delaware corporation].
Based upon the most recent report or statement
filed by the Company with the Securities and Exchange
Commission, the Securities sold by the undersigned were
within the prescribed limitations set forth in Rule 144(e)
promulgated under the Securities Act of 1933 (the
"Securities Act").
The undersigned hereby represents that the
Securities were sold in "brokers' transactions" within the
meaning of Section 4(4) of the Securities Act or in
transactions directly with a "market maker" as that term is
defined in Section 3(a)(38) of the Securities Exchange Act
of 1934, as amended. The undersigned further represents
that the undersigned has not solicited or arranged for the
solicitation of orders to buy the Securities, and that the
undersigned has not made any payment in connection with the
offer or sale of the Securities to any person other than to
the broker who executed the order in respect of such sale.
Very truly yours,
Dated:
[Space to be provided for description of securities.]