STOCKHOLDER AGREEMENT, dated as of July 1, 1964 among the stockholders of
CONNECTICUT YANKEE ATOMIC POWER COMPANY ("Connecticut Yankee"), a Connecticut
corporation, namely:
State of
Stockholder Incorporation
----------- -------------
The Connecticut Light and Power Company Connecticut
New England Power Company Massachusetts
Boston Edison Company Massachusetts
The Hartford Electric Light Company Connecticut
The United Illuminating Company Connecticut
Western Massachusetts Electric Company Massachusetts
Central Maine Power Company Maine
Public Service Company of New Hampshire New Hampshire
Montaup Electric Company Massachusetts
New Bedford Gas and Edison Light Company Massachusetts
Cambridge Electric Light Company Massachusetts
Central Vermont Public Service Corporation Vermont
(collectively the "Stockholders" and individually the "Stockholder").
It is agreed as follows:
1. Relationship Among the Parties
------------------------------
Connecticut Yankee has been organized to provide for the supply of
power to the Stockholders. It has commenced the construction of a nuclear
electric generating unit of the pressurized water type, which is being designed
to have an initial gross capability of approximately 490 megawatts electric, at
a site adjacent to the Connecticut River at Haddam Neck, Connecticut (the unit
being herein, together with the site and all related facilities, referred to as
the "Unit"). Construction of the Unit is being carried out under contract with
Westinghouse Electric Corporation and Stone & Webster Engineering Corporation.
By separate power contracts (the "Power Contracts") and capital funds
agreements (the "Capital Funds Agreements") Connecticut Yankee is agreeing to
sell the entire output of the Unit to the Stockholders and the Stockholders are
agreeing to purchase the output and to provide Connecticut Yankee with necessary
capital funds. The respective percentages of the capacity and output of the
Unit to be purchased by the Stockholders will be the same as their respective
percentages of stock ownership. The Stockholders' respective stock and
entitlement percentages as of the date of this Agreement are as follows:
Stock
Stockholder Percentage
----------
The Connecticut Light and Power Company 25.0%
New England Power Company 15.0%
Boston Edison Company 9.5%
The Hartford Electric Light Company 9.5%
The United Illuminating Company 9.5%
Western Massachusetts Electric Company 9.5%
Central Maine Power Company 6.0%
Public Service Company of New Hampshire 5.0%
Montaup Electric Company 4.5%
New Bedford Gas and Edison Light Company 2.5%
Cambridge Electric Light Company 2.0%
Central Vermont Public Service Corporation 2.0%
New Bedford Gas and Edison Light Company proposes to transfer the Connecticut
Yankee stock owned by it to Cambridge Electric Light Company. If this transfer
is consummated, the Power Contract and Capital Funds Agreement between
Connecticut Yankee and New Bedford Gas and Edison Light Company will be
cancelled, and the Power Contract and Capital Funds Agreement between
Connecticut Yankee and Cambridge Electric Light Company will be amended to
increase Cambridge Electric Light Company's entitlement and stock percentages
from 2.0% to 4.5%. Upon such cancellation of its Power Contract and Capital
Funds Agreement New Bedford Gas and Edison Light Company shall cease to have any
rights or obligations under this Agreement.
2. Unanimous Consent to Certain Matters
------------------------------------
The Stockholders will not cause or permit Connecticut Yankee to take
any of the following actions unless the holders at the time of all of
Connecticut Yankee's outstanding common stock consent thereto, by vote or
otherwise:
(a) the amendment in any material respect of any of the Power
Contracts or Capital Funds Agreements;
(b) the construction by Connecticut Yankee of an additional
generating unit at the Haddam Neck site or elsewhere; and
(c) participation by Connecticut Yankee, to a material extent,
in any business other than the generation and sale of
electric power.
However, the amendment of particular Power Contracts and Capital Funds
Agreements to effect changes in entitlement and stock percentages shall not
constitute such a material amendment, if, after the amendment, the sum of the
entitlement percentages of all Stockholders under all Power Contracts then in
force, and the sum of the stock percentages of all Stockholders under all
Capital Funds Agreements then in force, continues to be 100%.
3. Consent to Construction of Additional Units by Others
-----------------------------------------------------
The Stockholders will not cause or permit Connecticut Yankee to make
any arrangement with respect to the construction and/or operation by one or more
persons other than Connecticut Yankee of additional generating unit(s) at the
Haddam Neck site unless the holders at the time of at least 66 2/3% of
Connecticut Yankee's outstanding common stock consent thereto by vote. However,
if the holders at the time of at least 66 2/3% of Connecticut Yankee's
outstanding common stock vote to consent to such a proposed arrangement at a
meeting of Stockholders duly held on at least 30 days' notice which shall
specify in reasonable detail the proposed arrangement to be voted on,
Connecticut Yankee may give effect to such arrangement by selling, leasing or
otherwise transferring a portion of the site and of the facilities included in
the Unit to one or more other persons proposing to construct additional
generating unit(s) at the site, and by contracting with such person or persons
with respect to operating and other matters.
Any Stockholder who votes against such a proposed arrangement (a
"dissenting Stockholder") shall have the right to require the Stockholders who
do not vote against the arrangement (the "assenting Stockholders") to purchase
the dissenting Stockholder's shares of Connecticut Yankee stock, if the
dissenting Stockholder elects to require such purchase by written notice given
to the other Stockholders before the meeting at which the vote in question is
taken. The dissenting Stockholder shall designate in such notice the date on
which such purchase will be effected, which date shall be not less than 90 days
nor more than three years after the date on which the vote is taken.
In the case of any such purchase of a dissenting Stockholder's shares,
the assenting Stockholders shall be obligated to purchase the dissenting
Stockholder's shares pro rata, according to their respective holdings of
Connecticut Yankee's outstanding stock. However, the assenting Stockholders
shall have the right to direct the dissenting Stockholder to transfer its shares
and power entitlement to such of them and in such proportions as they may
designate.
The purchase price to be paid to a dissenting Stockholder for its
shares pursuant to this Section shall be the book value thereof as of the date
on which the vote in question is taken, as determined in accordance with the
formula specified in Section 2 of Article VIII of Connecticut Yankee's By-Laws,
as in effect on the date of this Agreement, plus interest thereon at the rate of
----
6% per annum, from such date to the date of purchase, minus the amount of any
-----
dividends or other distributions paid or payable with respect to such shares to
stockholders of record on any date subsequent to the date of the vote and prior
to the purchase date.
The rights and obligations of the dissenting Stockholder and the
assenting Stockholders with respect to a purchase of stock under this Section 3
shall be subject to the condition that all necessary regulatory approvals shall
have been obtained with respect to the action to be taken by the seller and the
action to be taken by the purchaser(s). The parties will use their best efforts
to obtain, or to assist in obtaining, the foregoing regulatory approvals. If
such regulatory approvals cannot be obtained prior to the specified purchase
date, the dissenting Stockholder may postpone the closing by not more than 90
days by written notice to the assenting Stockholders.
On the purchase date the dissenting Stockholder shall deliver the
certificates representing its share of Connecticut Yankee stock to the
designated purchaser(s) against payment of the purchase price by certified or
official bank check in New York, Hartford or Boston Clearing House funds. Such
certificates shall be duly assigned or accompanied by appropriate instruments of
transfer, and the shares transferred shall be free and clear of all liens and
encumbrances. All transfer and other similar taxes with respect to the
transaction shall be paid by the seller.
At the time of the closing the dissenting Stockholder shall assign to
the purchaser(s), in such proportions as they may direct, all of the dissenting
Stockholder's rights under its Power Contract and Capital Funds Agreement, free
and clear of all liens and encumbrances, and the purchaser(s) shall assume, in
the same proportions, all of the dissenting Stockholder's obligations under such
agreements. Thereafter the dissenting Stockholder will be released, except as
hereinafter provided, from all further obligations, and shall have no further
rights, under such agreements and this Agreement. If at the time of the closing
Connecticut Yankee has in effect a pledge and assignment for security purposes
of its Power Contract and Capital Funds Agreement with the dissenting
Stockholder, and the pledgee's consent is required for a complete release of the
dissenting Stockholder from further obligations under any of such agreements,
the parties will use their best efforts to obtain such consent. If such consent
cannot be obtained prior to the purchase date, the dissenting Stockholder may
elect not to go forward with the sale of its stock.
4. Power Entitlement Upon Failure to Provide Additional Capital
------------------------------------------------------------
If, as the result of any Stockholder's failure to provide capital to
Connecticut Yankee as requested by Connecticut Yankee pursuant to Sections 4, 5,
or 6 of such Stockholder's Capital Funds Agreement, such Stockholder's
entitlement percentage under its Power Contract is in excess of its "capital
percentage" (as hereinafter defined), then, in such event and so long as such
condition continues, such Stockholder shall, if requested to do so by
Stockholders whose respective entitlement percentages are less than their
respective capital percentages, enter into appropriate arrangements to sell to
such Stockholders at its cost some or all, as such Stockholders may from time to
time determine, of its "excess power" (as hereinafter defined).
For the purposes of this Section, (i) a Stockholder's "capital
percentage" as of any time shall be the percentage which that portion of
Connecticut Yankee's then outstanding capital theretofore provided by such
Stockholder bears to the aggregate amount of Connecticut Yankee's then
outstanding capital theretofore provided by all of the Stockholders, and (ii) a
Stockholder's "excess power" as of any time shall be that amount of Connecticut
Yankee's capacity and net electric output determined by subtracting such
Stockholder's then capital percentage of such capacity and output from such
Stockholder's entitlement percentage of such capacity and output.
5. Cancellation of Power Contracts
-------------------------------
If at any time:
(a) Stockholders owning more than 50% of Connecticut Yankee's
outstanding common stock have cancelled their Power
Contracts, pursuant to Section 9 thereof, because either (i)
the Unit is damaged to the extent of being completely or
substantially completely destroyed, or (ii) the Unit is
taken by exercise of the right of eminent domain or a
similar right or power, and
---
(b) Connecticut Yankee has paid in full, or made adequate
provision for the payment in full of, all its outstanding
bonds and notes and other indebtedness and liabilities,
other than its indebtedness to Stockholders for loans and
advances made pursuant to Section 6 of the Capital Funds
Agreements,
then, and in such case, upon the request of any Stockholder who has theretofore
so cancelled its Power Contract, the Stockholders whose Power Contracts are
still in effect will forthwith cancel their respective Power Contracts pursuant
to Section 9 thereof.
6. Arbitration
-----------
In case any dispute shall arise as to the interpretation or
performance of this Agreement which cannot be settled by mutual agreement, such
dispute shall be submitted to arbitration. The parties shall if possible agree
upon a single arbitrator. In case of failure to agree upon an arbitrator within
15 days after the delivery by any party to the others of a written notice
requesting arbitration, any party may request the American Arbitration
Association to appoint the arbitrator. The arbitrator, after opportunity for
each of the parties to be heard, shall consider and decide the dispute and
notify the parties in writing of his decision. Such decision shall be binding
upon the parties, and the expenses of the arbitration shall be borne equally by
them.
7. Interpretation
--------------
The interpretation and performance of this Agreement shall be in
accordance with and controlled by the law of the State of Connecticut.
8. Addresses
---------
Except as the parties may otherwise agree, any notice, request or
other communication from a party to any other party, relating to this Agreement,
or the rights, obligations or performance of the parties hereunder, shall be in
writing and shall be effective upon delivery to the other party. Any such
communication shall be considered as duly delivered when mailed to the
respective post office address of the other party shown following the signature
of such other party hereto, or such other post office address as may be
designated by written notice given as provided in this Section 8.
9. Successors and Assigns
----------------------
This Agreement shall be binding upon and shall inure to the benefit of
and may be performed by the corporate successors of the parties. No assignment
of this Agreement, other than to a corporate successor to all or substantially
all the electric business and property of a party, shall operate to relieve the
assignor of its obligations under this Agreement without the written consent of
the remaining parties hereto.
10. Execution in Counterparts
-------------------------
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one and
the same instrument. This Agreement shall become effective at such time as
counterparts thereof have been executed by each of the parties and it shall not
be a condition to its effectiveness that each of the parties have executed the
same counterpart.
IN WITNESS WHEREOF, the undersigned parties have executed this
Stockholder Agreement dated as of July 1, 1964 by their respective officers
thereunto duly authorized.
(Stockholder Agreement)
-----------------------
THE CONNECTICUT LIGHT AND POWER COMPANY
P.O. BOX 2010
Hartford, Connecticut 06101
By /s/ S. R. Knapp
--------------------
Chairman
(Stockholder Agreement)
-----------------------
NEW ENGLAND POWER COMPANY
441 Stuart Street
Boston, Massachusetts 02116
By /s/ Robert F. Kramer
------------------------
President
(Stockholder Agreement)
-----------------------
BOSTON EDISON COMPANY
182 Tremont Street
Boston, Massachusetts 02112
By /s/ Charles F. Avila
-----------------------
President
(Stockholder Agreement)
-----------------------
THE HARTFORD ELECTRIC LIGHT COMPANY
P.O. BOX 2370
Hartford, Connecticut 06101
By /s/ R. A. Gibson
------------------
Chairman
(Stockholder Agreement)
-----------------------
THE UNITED ILLUMINATING COMPANY
80 Temple Street
New Haven, Connecticut 06506
By /s/ William J. Cooper
---------------------------
President
(Stockholder Agreement)
-----------------------
WESTERN MASSACHUSETTS ELECTRIC COMPANY
174 Brush Hill Avenue
West Springfield, Massachusetts 01089
By /s/ Howard J. Cadwell
------------------------
Chairman of the Board
(Stockholder Agreement)
-----------------------
CENTRAL MAINE POWER COMPANY
9 Green Street
Augusta, Maine 04332
By /s/ W. H. Dunham
----------------------
President
(Stockholder Agreement)
-----------------------
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
1087 Elm Street
Manchester, New Hampshire 03105
By /s/ D. Miller
-------------------------------
President
(Stockholder Agreement)
-----------------------
MONTAUP ELECTRIC COMPANY
49 Federal Street
Boston, Massachusetts 02107
By /s/ Bill M. Perry
-----------------------
President
(Stockholder Agreement)
-----------------------
NEW BEDFORD GAS AND EDISON LIGHT COMPANY
130 Austin Street
Cambridge, Massachusetts 02139
By /s/ John F. Rich
---------------------------
President
CAMBRIDGE ELECTRIC LIGHT COMPANY
130 Austin Street
Cambridge, Massachusetts 02139
By /s/ John F. Rich
---------------------------
President
(Stockholder Agreement)
-----------------------
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
77 Grove Street
Rutland, Vermont 05701