EXHIBIT 10.1
EXECUTION COPY
SETTLEMENT AND GOVERNANCE AGREEMENT
BETWEEN
QUANTA SERVICES, INC.
AND
AQUILA, INC.
DATED AS OF MAY 20, 2002
TABLE OF CONTENTS
Page No.
ARTICLE I DEFINITIONS......................................................1
SECTION 1.01 DEFINITIONS................................................1
ARTICLE II BOARD OF DIRECTORS..............................................4
SECTION 2.01 TERMINATION OF PROXY CONTEST; AGREEMENT ON DIRECTORS.......4
SECTION 2.02 POSTPONEMENT OF SCHEDULED MEETING..........................4
SECTION 2.03 INDEPENDENT COMMITTEE......................................4
SECTION 2.04 BOARD SUPERMAJORITY ITEMS..................................5
SECTION 2.05 REPRESENTATION ON BOARD COMMITTEES.........................6
SECTION 2.06 SIZE OF BOARD..............................................6
ARTICLE III SETTLEMENT OF DISPUTES.........................................6
SECTION 3.01 SETTLEMENT OF DISPUTES.....................................6
ARTICLE IV STANDSTILL AGREEMENT; Transfers.................................7
SECTION 4.01 STANDSTILL.................................................7
SECTION 4.02 SHARE TRANSFERS............................................7
ARTICLE V STOCKHOLDER CONTROL; MINORITY PROTECTIONS........................8
SECTION 5.01 RIGHT TO MAKE A TENDER OFFER...............................8
SECTION 5.02 STOCKHOLDER CONTROL EVENT..................................8
SECTION 5.03 CONFLICT TRANSACTIONS; ADDITIONAL ACQUISITIONS.............8
SECTION 5.04 RESTRICTIONS ON TRANSFER OF SHARES.........................9
SECTION 5.05 THIRD PARTY OFFERS........................................10
SECTION 5.06 RECONSTITUTION OF BOARD OF DIRECTORS......................12
ARTICLE VI OTHER AGREEMENTS...............................................12
SECTION 6.01 INVESTOR'S RIGHTS AGREEMENT AMENDMENTS....................12
SECTION 6.02 REPURCHASE PROGRAM........................................12
SECTION 6.03 SHAREHOLDER RIGHTS PLAN...................................12
SECTION 6.04 SECT......................................................12
SECTION 6.05 MANAGEMENT COOPERATION....................................13
SECTION 6.06 SENIOR MANAGEMENT STOCK OWNERSHIP POLICY..................13
SECTION 6.07 BOARD COMPENSATION........................................13
SECTION 6.08 CREDIT FACILITIES.........................................13
SECTION 6.09 AFTER-ACQUIRED SECURITIES.................................13
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SECTION 6.10 STOCK CERTIFICATE LEGEND..................................13
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................14
SECTION 7.01 CORPORATE EXISTENCE.......................................14
SECTION 7.02 NO BREACH.................................................14
SECTION 7.03 AUTHORITY.................................................14
SECTION 7.04 APPROVALS............................................14
ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER................14
SECTION 8.01 CORPORATE EXISTENCE.......................................14
SECTION 8.02 NO BREACH.................................................15
SECTION 8.03 AUTHORITY.................................................15
SECTION 8.04 APPROVALS.................................................15
ARTICLE IX MISCELLANEOUS..................................................15
SECTION 9.01 INTERPRETATION............................................15
SECTION 9.02 COSTS AND EXPENSES........................................15
SECTION 9.03 NO WAIVER; MODIFICATIONS IN WRITING.......................15
SECTION 9.04 ASSIGNMENT; BINDING EFFECT................................16
SECTION 9.05 COMMUNICATIONS............................................16
SECTION 9.06 GOVERNING LAW; CONSENT TO JURISDICTION; SPECIFIC
PERFORMANCE.............................................17
SECTION 9.07 ENTIRE AGREEMENT..........................................17
SECTION 9.08 PUBLIC ANNOUNCEMENTS......................................17
SECTION 9.09 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARY...........17
SECTION 9.10 EXECUTION IN COUNTERPARTS.................................17
Annexes:
Annex I - Nominees
Annex II - Releases
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SETTLEMENT AND GOVERNANCE AGREEMENT
SETTLEMENT AND GOVERNANCE AGREEMENT dated as of May 20, 2002 (this
"AGREEMENT"), by and between QUANTA SERVICES, INC., a Delaware corporation (the
"COMPANY"), and AQUILA, INC., a Delaware corporation ("STOCKHOLDER").
Capitalized terms used herein shall have their definitions set forth in ARTICLE
I hereto.
WHEREAS, Stockholder is the Company's largest shareholder, currently owning
3,444,961 shares of Series A Preferred Stock and 12,018,374 Common Shares;
WHEREAS, certain disputes have arisen between the parties, who desire to
resolve these matters effective immediately on the terms herein set forth; and
WHEREAS, the parties desire to enter into certain governance arrangements
with respect to the Company;
NOW, THEREFORE, in consideration of the mutual representations and
warranties, covenants and agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"2002 ANNUAL MEETING" means the annual meeting of stockholders of the
Company to be held in 2002 as contemplated by this Agreement.
"ACCEPTABLE SECURITIES" shall have the meaning specified in SECTION
5.05(C).
"AFFILIATE" of any Person shall mean any Person directly or indirectly
controlled by, controlling or under common control with such first Person.
"AGREEMENT" shall have the meaning specified in the introductory paragraphs
of this Agreement.
"ARBITRATION" means the arbitration proceeding commenced by Stockholder on
November 28, 2001 with the American Arbitration Association pursuant to the
terms of the Securities Purchase Agreement in respect of, among other things,
alleged violations of such agreement by the Company.
"BENEFICIAL OWNERSHIP," "BENEFICIAL OWNER" and "BENEFICIALLY OWN" shall
have the meanings ascribed to them in Rule 13d-3 under the Exchange Act in
effect on the date hereof.
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or legal holiday
for commercial banks in Houston, Texas, Kansas City, Missouri or New York, New
York.
"CAPITAL STOCK" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of, or rights, warrants
or options to purchase, stock or any other equity interest (however designated)
of or in such Person.
"COMMISSION" means the United States Securities and Exchange Commission.
"COMMON SHARES" means shares of Common Stock, par value $0.00001 per share,
of the Company.
"COMPANY" shall have the meaning specified in the introductory paragraphs
of this Agreement.
"DELAWARE RIGHTS PLAN LITIGATION" means the litigation commenced by
Stockholder against the Company in the Court of Chancery of the State of
Delaware on November 28, 2001 in respect of actions taken by the Board of
Directors with respect to, among other things, the Stockholders Rights Plan.
"DELAWARE SECT LITIGATION" means the litigation commenced by Stockholder
against the Company in the Court of Chancery of the State of Delaware on March
21, 2002 in respect of actions taken by the Board of Directors with respect to,
among other things, the adoption of the Company's Stock Employee Compensation
Trust.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, and the rules and regulations of the Commission promulgated
thereunder.
"GOVERNING INSTRUMENTS" means the Company's certificate of incorporation
and bylaws, as each shall have been amended and/or restated from time to time.
"INDEPENDENT" means "independent" of the Company and of Stockholder within
the meaning established by the rules of the NYSE, provided, for avoidance of
doubt, that Terrence P. Dunn and James R. Ball shall be considered Independent
for purposes of this Agreement.
"INDEPENDENT COMMITTEE" shall have the meaning specified in SECTION
2.03(B).
"INITIAL BUYER" shall have the meaning specified in SECTION 5.05(A).
"INTERLOPER" shall have the meaning specified in SECTION 5.05(A).
"INVESTOR'S RIGHTS AGREEMENT" means the Amended and Restated Investor's
Rights Agreement, dated as of May 20, 2002, between the Company and Stockholder
including registration and pre-emptive rights relating to the Shares, as the
same may be amended from time to time (including with respect to periods after
the date hereof).
"MATCHING PROPOSAL" shall have the meaning specified in SECTION 5.05(A).
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"NEW RIGHTS PLAN" shall have the meaning specified in SECTION 6.03.
"NOMINEES" shall have the meaning specified in SECTION 2.01.
"NYSE" shall mean the New York Stock Exchange, Inc.
"OUTSIDE DIRECTORS" shall have the meaning specified in SECTION 2.03(A).
"PERMITTED TRANSFER" shall have the meaning specified in SECTION 5.04(B).
"PERSON" means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization or governmental authority, or any other form of entity.
"PROPOSAL" shall have the meaning specified in SECTION 2.02.
"SECT" shall have the meaning specified in SECTION 6.04.
"SECURITIES PURCHASE AGREEMENT" means the Securities Purchase Agreement
between Stockholder and the Company dated as of September 21, 1999.
"SERIES A PREFERRED STOCK" means the Series A convertible preferred stock,
par value $0.00001 per share, of the Company.
"SHARES" means Common Shares and/or shares of Series A Preferred Stock of
the Company.
"STOCKHOLDER" shall have the meaning set forth in the introductory
paragraphs of this Agreement.
"STOCKHOLDER CONTROL EVENT" shall have the meaning specified in SECTION
5.02.
"STOCKHOLDERS RIGHTS PLAN" means the Rights Agreement dated as of March 8,
2000 between the Company and American Stock Transfer & Trust Company, as Rights
Agent, as amended.
"SUBSIDIARY" means any corporation of which at least a majority of the
outstanding shares of stock having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by a
Person or one or more of its Subsidiaries or by a Person and one or more of its
Subsidiaries.
"SUPERIOR PROPOSAL" shall have the meaning specified in SECTION 5.05(B).
"TOPPING PERIOD" shall have the meaning specified in SECTION 5.05(A).
"TRANSFER" shall have the meaning specified in SECTION 5.04(A).
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ARTICLE II
BOARD OF DIRECTORS
Section 2.01 TERMINATION OF PROXY CONTEST; AGREEMENT ON DIRECTORS. The
Company and Stockholder agree that the pending proxy contest with respect to the
election of directors at the 2002 Annual Meeting of the Company shall be
terminated in accordance with the terms of this Agreement. The Company and
Stockholder agree that each is hereby withdrawing its proposed nominees for
election to the Board of Directors and that the persons set forth on ANNEX I
(the "NOMINEES") will be the nominees for election at the 2002 Annual Meeting to
be supported by the Company and Stockholder. The Company and Stockholder shall
take such actions as shall be necessary to ensure that the Nominees will become
the members of the Board of Directors concurrently with the execution of this
Agreement.
Section 2.02 POSTPONEMENT OF SCHEDULED MEETING. The Company will,
concurrently with the execution of this Agreement, announce the postponement of
the 2002 Annual Meeting, which is currently scheduled for May 23, 2002 until
June 28, 2002 (or as soon thereafter as possible). The only matter to be
submitted by the Board of Directors to a vote of the stockholders of the Company
at the 2002 Annual Meeting shall be the election of the Nominees as directors of
the Company (the "PROPOSAL"). The Company shall include in its amended proxy
statement relating to the 2002 Annual Meeting the recommendation of the Board of
Directors that the stockholders of the Company vote in favor of the adoption of
the Proposal, and the Company shall use its reasonable best efforts to obtain
such vote. Stockholder shall vote all of its Shares in favor of the Proposal at
the 2002 Annual Meeting.
Section 2.03 INDEPENDENT COMMITTEE.
(a) OUTSIDE DIRECTORS. Unless and until all of the outstanding Capital
Stock of the Company is owned by Stockholder, there will at all times be at
least three directors on the Board of Directors who are Independent ("OUTSIDE
DIRECTORS") of both the Company and Stockholder. Stockholder shall perform its
obligations under this Article II by voting its Shares, and directing the
directors which it is entitled to nominate by virtue of owning the Series A
Preferred Stock to act, accordingly.
(b) INDEPENDENT COMMITTEE.
(i) Three of the Outside Directors shall constitute a standing
Committee of Independent Directors (the "INDEPENDENT COMMITTEE"),
which shall act by a majority vote of its members. The members of
the Independent Committee shall consist of an Outside Director
designated by the Stockholder, an Outside Director designated by
the chief executive officer of the Company and a third Outside
Director designated by the two foregoing Outside Directors in
consultation with the chief executive officers of the Company and
Stockholder. The initial members of the Independent Committee
shall be Terrence P. Dunn, James R. Ball and a third Outside
Director mutually agreed by Messrs. Dunn and Ball, after
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consultation with the chief executive officers of the Company and
Stockholder.
(ii) Prior to a Stockholder Control Event, the roles of the
Independent Committee shall be (x) to review any tender or
exchange offer proposed by Stockholder pursuant to Section 5.01
hereof to determine whether such transaction is fair to the
stockholders of the Company other than Stockholder and (y) to
make determinations from time to time at the request of the
management of the Company or the Stockholder as to whether
pursuing the Company's stock repurchase program at such time
would jeopardize the financial integrity of the Company. After a
Stockholder Control Event, the role of the Independent Committee
shall be as specified in Article V hereof. In all matters the
Independent Committee shall act in a manner that in its business
judgment is in the best interests of the Company and the
stockholders of the Company other than the Stockholder. The
Independent Committee may engage its own counsel, investment
advisers and such other advisers as in its judgment are necessary
or appropriate, all at the expense of the Company. Any amendment
of this Agreement, or the waiver of any term or condition hereof,
at any time shall be subject to the approval of the Independent
Committee.
(iii) STOCKHOLDER SUPPORT REQUIREMENT. At any vote of holders of the
Capital Stock of the Company at which the election or removal of
directors is in issue, Stockholder shall always vote all Shares
owned by it in favor of the election to the Board of Directors of
the members of the Independent Committee selected in accordance
with this Section 2.03, and against the removal of such persons.
Section 2.04 BOARD SUPERMAJORITY ITEMS.
(a) STOCKHOLDER VETO. As long as Stockholder is entitled under the
terms of the Series A Preferred Stock to elect one director to
the Board of Directors, except for matters contemplated by this
Agreement or the Governing Instruments (as to which no veto
rights shall be applicable), the following actions may only be
taken by the Company if they shall be approved by a majority of
the directors elected by the holders of the Series A Preferred
Stock:
(i) Any amendments to or modifications of the Company's New
Rights Plan, or adoption of a stockholder rights plan or
similar plan or arrangement that has the effects of a
stockholder rights plan;
(ii) Any amendments that modify the size of the Board of
Directors; and
(iii) Any amendments to the Governing Instruments that are
inconsistent with this Agreement.
(b) SUPERMAJORITY VOTE. As long as Stockholder Beneficially Owns not
less than 25% of the voting power of the Capital Stock of the Company, the
following actions may only be
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taken by the Company if they shall be approved by at least seven out of ten
directors (or while the Board of Directors consists of less than ten directors,
six directors):
(i) DEBT INCURRENCE. The incurrence of debt (which, for
clarification, shall not include draw-downs under existing
credit facilities) unless such debt is rated investment
grade by Moody's Investors Service, Standard and Poor's
Corporation or Fitch Ratings; PROVIDED, HOWEVER, that
incurrence by the Company or any of its Subsidiaries of debt
in the ordinary course of business in amounts up to $10
million per individual incurrence and $50 million in the
aggregate per year shall not be subject to this approval
requirement; and
(ii) ISSUANCES OF EQUITY SECURITIES. Issuances of Capital Stock
(including shares issued in acquisitions) for which the
approval of the full Board of Directors or executive
committee or similar committee (but, for clarification, not
the Acquisition Committee or Small Acquisition Committee)
would be required under applicable law or under the Board of
Directors guidelines existing on the date hereof (which have
been provided to Stockholder); PROVIDED, HOWEVER, that
ordinary-course annual stock incentive grants consistent
with past practice shall not be subject to this approval
requirement.
Section 2.05 REPRESENTATION ON BOARD COMMITTEES. On every Committee of
the Board of Directors (other than the Independent Committee and any other
committee required by law or stock exchange regulation to consist entirely of
Independent Directors), the Series A Preferred Stock is entitled to
proportionate representation by the directors elected by the Series A Preferred
Stock; PROVIDED that Terrence P. Dunn shall initially be deemed to be the
representative of Series A Preferred Stock on the Company's Audit Committee; and
provided further that the Outside Director nominated by Stockholder shall always
be on Company's Audit Committee in lieu of a representative of the Series A
Preferred Stock.
Section 2.06 SIZE OF BOARD. The Board of Directors shall consist of ten
directors, as set forth in the Governing Instruments. Any vacancy on the Board
of Directors caused by the resignation or removal of a director shall be filled
immediately upon the direction of the Person entitled under the Governing
Instruments or this Agreement to appoint the director who resigned or was
removed. If the vacancy is a member of the Independent Committee, the individual
shall be selected to fill the vacancy in accordance with Section 2.03(b)(i)
hereof.
ARTICLE III
SETTLEMENT OF DISPUTES
Section 3.01 SETTLEMENT OF DISPUTES. Immediately upon execution of this
Agreement, Stockholder and the Company shall take all necessary steps (including
the filing of stipulations of dismissal or other pleadings) to cause the
dismissal with prejudice of all judicial proceedings between the parties,
including but not limited to the Delaware Rights Plan Litigation, the
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Arbitration, and the Delaware SECT Litigation, and Stockholder and the Company
shall deliver to each other releases in the forms attached hereto as Annex II.
ARTICLE IV
STANDSTILL AGREEMENT; TRANSFERS
Section 4.01 STANDSTILL. Subject to the provisions of Article V,
Stockholder will not, and will not assist or encourage any other Person
(including by providing financing) to, directly or indirectly through its
Affiliates (other than any actions otherwise prohibited by this Section 4.01
that are taken by an officer and/or director of Stockholder serving on the Board
of Directors solely in his capacity as a member of the Board of Directors), (i)
acquire or agree to acquire ownership (including but not limited to Beneficial
Ownership) of any additional shares of the Capital Stock of the Company without
the prior approval of the Independent Committee (provided that the foregoing
shall not impede (a) Stockholder's ability to transfer its Shares as permitted
by this Agreement, exercise its pre-emptive rights as permitted by this
Agreement and the Investor's Rights Agreement, convert shares of Series A
Preferred Stock in accordance with the terms thereof or receive shares pursuant
to stock splits, dividends or any other transactions in which Stockholder
receives proportionate shares to other stockholders of the Company or (b) any
director's right to receive compensation for serving as a director of the
Company), (ii) engage in any "solicitation" of "proxies" (as such terms are used
in the proxy rules promulgated under the Exchange Act), or form, join or in any
way participate in a "group" (as defined in Regulation 13D under the Exchange
Act) with respect to the Capital Stock of the Company, (iii) grant any proxies
with respect to any Capital Stock of the Company, other than in connection with
a solicitation of proxies by the Board of Directors, (iv) make any stockholder
proposals in respect of the Company, including but not limited to proposals (A)
to nominate directors to be elected at any annual or special meeting of the
stockholders of the Company (other than nominations that Stockholder is entitled
to make under the Company's Restated Certificate of Incorporation in its
capacity as the holder of Series A Preferred Stock) or (B) to terminate (or
redeem any rights granted under) the New Rights Plan, (v) enter into any,
negotiations, agreements, arrangements or understandings with any Person with
respect to any of the foregoing, or (vi) make any public proposals with respect
to any of the foregoing or make any public request to amend or modify any
provision of this Agreement.
Section 4.02 SHARE TRANSFERS.
(a) BLOCK TRANSFERS. Stockholder may, subject to the next sentence,
transfer, in a transaction or series of related transactions, Shares
constituting 15% or more of the voting power of the Capital Stock of the Company
to any transferee (including any Affiliates of such transferee) only if such
transferee provides to the Company an agreement reasonably acceptable to the
Independent Committee pursuant to which such transferee agrees to be bound by
all provisions of this Agreement and the Investor's Rights Agreement applicable
to Stockholder. Any transfer permitted by this Section 4.02 shall be exempt from
the New Rights Plan, provided that any transferee that Beneficially Owns more
than five percent of the voting power of the Capital Stock prior to such
transfer shall not as a result of such transfer obtain Beneficial Ownership of
Capital Stock having a greater percentage of the voting power of the Capital
Stock than that Beneficially Owned by Stockholder on the date hereof. Nothing in
this Section is
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intended to limit (i) Stockholder's ability to transfer Shares in blocks smaller
than 15%, (ii) transfers of Shares in connection with transfers by all
stockholders of the Company or (iii) transfers of Shares pursuant to the
registration rights granted under the Investor's Rights Agreement.
(b) COMPLIANCE. Notwithstanding any other provision of this Agreement,
no Transfer of Shares may be made by Stockholder unless such Transfer complies
with all applicable laws in addition to all applicable provisions of this
Agreement. An opinion of Stockholder's general counsel shall be satisfactory
evidence that such Transfer complies with all applicable securities laws in
addition to all applicable provisions of this Agreement.
ARTICLE V
STOCKHOLDER CONTROL; MINORITY PROTECTIONS
Section 5.01 RIGHT TO MAKE A TENDER OFFER. Nothing contained in Section
4.01 shall prevent Stockholder from making a public tender offer to acquire
Shares such that Stockholder will Beneficially Own a majority of the voting
power of the Shares, provided that no such tender offer shall be consummated
without the prior approval of the Independent Committee. In the event such
approval is granted, the Company shall take all action as is necessary to
terminate the New Rights Plan upon the consummation of such transaction. There
shall be no "Distribution Date" under the New Rights Plan in connection with the
commencement of a tender offer permitted by this Section 5.01.
Section 5.02 STOCKHOLDER CONTROL EVENT. In the event Stockholder at any
time Beneficially Owns Shares representing a majority of the voting power of the
Capital Stock of the Company (a "STOCKHOLDER CONTROL EVENT"), Stockholder shall
be entitled immediately to elect a majority of the members of the Board of
Directors and the Company shall take such actions as shall be necessary,
including by procuring the resignation of incumbent directors (other than
members of the Independent Committee), to ensure that the persons nominated by
Stockholder will be elected to the Board of Directors as promptly as
practicable; PROVIDED, that upon the occurrence of a Stockholder Control Event,
the minority protection provisions of Sections 5.03, 5.04, 5.05 and 5.06 shall
become immediately applicable.
Section 5.03 CONFLICT TRANSACTIONS; ADDITIONAL ACQUISITIONS.
(a) CONFLICTS OF INTEREST. After a Stockholder Control Event, all
transactions between Stockholder (or any of its Affiliates other than the
Company and its Subsidiaries) and the Company (or any of its Subsidiaries),
including sales of assets between the companies outside the ordinary course of
business, must be approved in advance by the Independent Committee.
(b) ADDITIONAL ACQUISITIONS. After a Stockholder Control Event,
Stockholder shall not, except by means of a tender or exchange offer approved by
the Independent Committee, in any manner acquire or agree to acquire, directly
or indirectly, Beneficial Ownership of any additional Shares or increase its
percentage interest in the Company; PROVIDED, HOWEVER, that the restrictions set
forth in this Section 5.03(b) shall not apply to, and Independent Committee
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approval shall not be required for (a) ordinary course share repurchase programs
approved by the Board of Directors which in any event do not authorize the
Company to repurchase in excess of 3% of the voting interests of the Company's
outstanding Capital Stock in any year, (b) exercises by Stockholder of its
preemptive rights in accordance with the Investor's Rights Agreement, (c) shares
distributed pursuant to stock splits, dividends or any other transactions in
which Stockholder receives proportionate shares to other stockholders of the
Company or (d) a director to receive compensation for serving as a director of
the Company.
Section 5.04 RESTRICTIONS ON TRANSFER OF SHARES.
(a) LIMITATION ON TRANSFER. After a Stockholder Control Event, except
in accordance with the provisions of this Agreement, Stockholder shall not,
directly or indirectly through any of its Subsidiaries, sell, give, assign,
pledge, encumber or otherwise dispose of (whether by operation of law, through a
transfer of control of any of its Subsidiaries, or otherwise) (each, a
"TRANSFER") any Shares. Any attempt to Transfer any Shares in violation of this
Section 5.04 shall be null and void.
(b) PERMITTED TRANSFERS. Notwithstanding Section 5.04(a), but subject
to Section 4.02(b), nothing in this Agreement shall be deemed to restrict in any
manner the following actions by Stockholder or any of its Subsidiaries (each, a
"PERMITTED TRANSFER"):
(i) any Transfer of Shares in a public offering designed to
result in a wide distribution, which shall include any
distribution that, at a minimum, meets the terms of clauses
(iii) and (iv) below;
(ii) any Transfer of Shares into the public market in accordance
with Rule 144 under the Securities Act;
(iii) any Transfer of Shares to a Person (including a "group" as
defined for purposes of Section 13(d) of the Exchange Act)
if, after giving effect to such Transfer, such Person
(together with its Affiliates) would not Beneficially Own
greater than five percent of the voting power of the
outstanding Capital Stock of the Company;
(iv) any Transfer of Shares to an institution qualified under
Exchange Act Rule 13d-1(b)(1) to report its ownership of the
Shares on Schedule 13G if, after giving effect to such
Transfer, such institution (together with its Affiliates)
would not Beneficially Own greater than ten percent of the
voting power of the outstanding Capital Stock of the
Company; provided that such institution does not report its
ownership of the Shares on Schedule 13D;
(v) any Transfer of Shares in connection with a pro-rata
spin-off or other pro rata distribution to the shareholders
of Stockholder;
(vi) any Transfer of Shares effected in connection with a
transaction involving the Company in which the public
shareholders of the Company have the opportunity to
participate on a pro rata basis on terms and conditions no
less favorable than those accorded to Stockholder (including
any private
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sale in which the purchaser extends tag-along rights to all
of the Company's public shareholders though a tender offer);
(vii) any pledge of Shares made to secure a bona fide loan from a
third party financial lender, provided that such lender
executes or agrees to be bound by this Agreement prior to
realization of such pledge, unless Stockholder could have
sold such Shares to such lender pursuant to clauses (iii) or
(iv) above; and
(viii) any Transfer of Shares to any Subsidiary of Stockholder
(provided that such Transfer shall not relieve Stockholder
of its obligations hereunder and that such Subsidiary
becomes a party hereto).
Section 5.05 THIRD PARTY OFFERS.
(a) Stockholder shall have no obligation to support any third party
proposal to effect a business combination transaction with the Company or to
offer a transaction providing value to the Company's public shareholders
equivalent to that provided by any third party proposal, except in the following
circumstances after a Stockholder Control Event:
(i) If Stockholder proposes to effect a business combination
transaction with the Company or to effect a Rule 13e-3
transaction (as defined in Rule 13e-3 under the Exchange
Act) involving the Company (whether or not such proposal is
in response to a third party offer or proposal), then any
such transaction shall be subject to the approval of the
Independent Committee. In such event, if a third party (an
"INTERLOPER") proposes a bona fide alternative transaction
that the Independent Committee determines to be a Superior
Proposal to the proposal made by Stockholder, then
Stockholder shall have ten Business Days or such longer
period as the Independent Committee may determine (the
"TOPPING PERIOD") to offer an alternative transaction that
is, in the judgment of the Independent Committee (after
receipt of advice from a nationally recognized investment
banking firm as to the fairness from a financial point of
view of the price offered), at least as favorable from a
financial point of view to the public shareholders of the
Company (a "MATCHING PROPOSAL") as the best proposal
theretofore made by the Interloper. If Stockholder does not
within the Topping Period make a Matching Proposal, then
Stockholder shall be obligated to support (including by
voting for or tendering into) such Superior Proposal of the
Interloper (or, in the event of any subsequent Superior
Proposal from a third party, to support the most favorable
transaction that is available to the Company from a
financial point of view, in the good faith judgment of the
Independent Committee); PROVIDED, HOWEVER, that if the
consideration offered in the Interloper's Superior Proposal
does not consist entirely of cash, then Stockholder shall
not be obligated to support the proposed transaction with
the Interloper, and may vote its Shares against such
proposal (and will also have no obligation to make a
Matching Proposal), if the Special Committee does not
reconfirm, within five Business Days
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prior to the shareholder vote in respect of the proposed
transaction with the Interloper if there is one (or, if not,
within five days prior to the initial scheduled closing of a
tender or exchange offer) (based on market conditions
prevailing at that time, including the prices of the
Acceptable Securities and any securities included in the
best offer made by Stockholder during the Topping Period),
that the proposed transaction with the Interloper continues
to meet the standards required for a Superior Proposal in
comparison to the best offer made by Stockholder during the
Topping Period; PROVIDED, FURTHER, HOWEVER, that in the
event Stockholder does withdraw its support for the proposed
transaction with the Interloper in accordance with this
provision, Stockholder may not propose a business
combination or Share acquisition transaction to the Company
for a period of six months (unless permitted to do so by the
Independent Committee). Any agreement with Stockholder or
with an Interloper providing for a transaction of the type
described in this Section 5.05(a)(i) shall include a
"fiduciary out" provision allowing the Company to comply
with this Section 5.05(a)(i).
(ii) If Stockholder agrees to a merger, tender or exchange offer
or other business combination transaction with any party
directly involving the Company, or agrees to sell any of its
Shares to one or more parties other than the Company in a
transaction to which Section 5.04(b)(vi) applies (in either
such case, such other parties are referred to as the
"INITIAL BUYER") and a third party Interloper proposes an
alternative transaction that the Independent Committee
determines to be a Superior Proposal to the transaction with
the Initial Buyer, then the Company shall agree to such
Superior Proposal, and Stockholder shall not use its voting
power to block such Superior Proposal, but shall support
(including by voting for or tendering into) such Superior
Proposal (or, in the event of any subsequent Superior
Proposal from a third party, to support the most favorable
transaction that is available to the Company from a
financial point of view, in the good faith judgment of the
Independent Committee). Any agreement with an Initial Buyer
providing for a transaction of the type described in this
Section 5.05(a)(ii) shall include a "fiduciary out"
provision allowing the Company to comply with this Section
5.05(a)(ii).
(b) "SUPERIOR PROPOSAL" means a proposal (i) that is reasonably
capable of being consummated, (ii) in which all the consideration offered
consists entirely of any combination of at least fifty percent (50%) cash and
the remainder in Acceptable Securities and (iii) that the Independent Committee
considers, after receiving advice from a nationally recognized investment
banking firm, to be more favorable from a financial point of view to the
shareholders of the Company who will be selling shares in such transaction than
the alternative against which it is being compared; PROVIDED, that for purposes
of its advice to the Independent Committee such investment bank shall have been
instructed to view any securities to be received by Stockholder in the
transaction on a fully distributed basis (that is, assuming that the prices to
be received by Stockholder shall be measured by the value that Stockholder would
receive in connection with Stockholder selling all of its securities as part of
such distribution).
-11-
(c) "ACCEPTABLE SECURITIES" means securities of a class that is
already listed and traded on a stock exchange or quoted and traded on NASDAQ and
that will be fully registered and capable of public distribution immediately
upon receipt by Stockholder.
Section 5.06 RECONSTITUTION OF BOARD OF DIRECTORS. After a Stockholder
Control Event and the Stockholder's assumption of control over the Board of
Directors, the Board of Directors will be reconstituted to include not less than
a majority of directors Independent of Stockholder upon the earliest to occur of
(i) Stockholder ceasing to own Shares having a majority of the voting power of
the Company, if Stockholder shall have disposed of Beneficial Ownership of
securities of the Company since the Stockholder Control Event reflecting a 5% or
greater voting interest in the Company or (ii) Stockholder ceasing to own Shares
representing a 30% or greater voting interest in the Company. In any such event,
Stockholder will cooperate with the Company to cause the Board of Directors to
be so reconstituted promptly, including by procuring the resignations of
directors nominated to the Board of Directors by Stockholder.
ARTICLE VI
OTHER AGREEMENTS
Section 6.01 INVESTOR'S RIGHTS AGREEMENT AMENDMENTS. On the date hereof,
Stockholder and the Company are executing and delivering to each other the
Investor's Rights Agreement.
Section 6.02 REPURCHASE PROGRAM. Promptly after the date hereof, the
Company shall reinstate its $75 million open market stock repurchase program
(under which $15 million of Common Shares has previously been purchased) and use
reasonable commercial efforts to repurchase Shares in accordance with such
program from time to time; PROVIDED, HOWEVER, that the Company shall not be
obligated to make any stock repurchases if the Independent Committee determines
that doing so would jeopardize the financial integrity of the Company. In the
event that the full buyback authority under this repurchase program is not
utilized within the initial anticipated one-year period, the program shall be
extended for appropriate periods until the program is completed (subject to all
applicable laws).
Section 6.03 SHAREHOLDER RIGHTS PLAN. As promptly as practicable after
the date hereof, the Company shall amend and restate its existing Stockholders
Rights Plan to, or terminate such plan and adopt a new shareholder rights plan
in, a customary form as agreed by Wachtell, Lipton, Rosen & Katz and Milbank,
Tweed, Hadley & McCloy LLP, which form shall have a "triggering threshold"
applicable to Stockholder equal to the current Beneficial Ownership level of
Stockholder, a "triggering threshold" for all other shareholders of 15% of the
voting power of the Capital Stock of the Company and otherwise be consistent
with the rights and obligations of the parties under this Agreement (the "NEW
RIGHTS PLAN").
Section 6.04 SECT. The Company is contemporaneously herewith terminating
the Company's Stock Employee Compensation Trust ("SECT") in accordance with its
terms at no cost to the Company other than the cancellation of the note
previously issued by the SECT to the Company to pay for the Shares issued to it
by the Company, and without any further obligations of the Company thereunder.
-12-
Section 6.05 MANAGEMENT COOPERATION. The Company shall use commercially
reasonable efforts to cause its senior management to assist Stockholder in the
event that Stockholder requests assistance with the sale or the marketing for
sale of all or a substantial portion of its Shares, including by way of
participating in "road shows" and similar presentations. Nothing contained in
this Section 6.05 is intended to, or shall, limit Stockholder's rights under
Section 6.09 of the Securities Purchase Agreement.
Section 6.06 SENIOR MANAGEMENT STOCK OWNERSHIP POLICY. The Board of
Directors shall promptly adopt guidelines to encourage stock ownership by senior
executives of the Company at the following levels: (i) in the case of the chief
executive officer, four times the employee's annual salary; (ii) in the case of
certain other senior executive officers, three times the employee's annual
salary; and (iii) in the case of the executive chairman of the Board of
Directors, 300,000 Shares. These guidelines shall be administered by the
Compensation Committee of the Board of Directors which shall develop policies
and procedures with respect thereto and shall be authorized to grant exemptions
where, in the Compensation Committee's judgment, it is appropriate to do so.
Section 6.07 BOARD COMPENSATION. The Company agrees that the compensation
paid to each member of the Board of Directors for his or her service as a
director shall henceforth include a Common Stock component the value of which
shall be not less than 60% of the total value of such compensation. Members of
management of the Company shall not be compensated for service as directors of
the Company.
Section 6.08 CREDIT FACILITIES. The Company shall use commercially
reasonable efforts as promptly as reasonably practicable to reach agreements
with its creditors to amend the Company's debt instruments to provide that no
event of default will be caused (a) in the event of a change of control of the
Company and (b) as a result of any charge that the Company may take under FAS
142. The Company shall use reasonable commercial efforts to provide notice to
and consult with Stockholder regarding all proposals that are made to and by the
Company's creditors in this connection and the status of the negotiations.
Section 6.09 AFTER-ACQUIRED SECURITIES. All of the provisions of this
Agreement shall apply to all Shares now owned or which may be issued or
transferred hereafter to Stockholder or any of its Subsidiaries in consequence
of any additional issuance, purchase, exchange or reclassification of any of
such Shares, corporate reorganization, or any other form of recapitalization,
consolidation, merger, share split or share dividend, or which are acquired by
Stockholder or any of its Subsidiaries in any other manner.
Section 6.10 STOCK CERTIFICATE LEGEND. A copy of this Agreement shall be
filed with the Secretary of the Company and kept with the records of the
Company. Each certificate representing Shares now held or hereafter acquired by
Stockholder or any of its Subsidiaries shall bear an legend reflecting that the
Shares represented by such certificate is subject to certain restrictions
provided for in this Agreement. The Company will cooperate in providing
Stockholder certificates without legends in order to facilitate permitted
Transfers pursuant to this Agreement.
-13-
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Stockholder as follows:
Section 7.01 CORPORATE EXISTENCE. The Company is a corporation duly
organized, legally existing and in good standing under the laws of the State of
Delaware. The Company is not in default in the performance, observance or
fulfillment of any provision of any of the Governing Instruments.
Section 7.02 NO BREACH. Neither the execution, delivery or performance of
this Agreement by the Company, nor the consummation by it of the transactions
contemplated hereby, shall constitute a violation of or permit the termination
of, or create, or cause the acceleration of the maturity of any debt, obligation
or liability of the Company under: (i) any term or provision of the Governing
Instruments of the Company; (ii) except as set forth on Schedule 7.02, any loan,
note or other agreements of the Company with third parties; (iii) to the best of
the Company's knowledge, any statute or law applicable to the Company; except,
in the case of (ii) and (iii) above, where such violation, termination,
acceleration, obligation or liability would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of the Company to consummate the transactions under this Agreement and
to perform its obligations hereunder and thereunder.
Section 7.03 AUTHORITY. The Company has all necessary power and authority
to execute, deliver and perform its obligations under this Agreement; the Board
of Directors has approved the execution, delivery and performance by the Company
of this Agreement; and this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer and similar laws affecting
creditors' rights generally or by general principles of equity.
Section 7.04 APPROVALS. Other than as provided elsewhere in this Agreement
or on Schedule 7.04, no approvals or consents of, or applications or notices to,
third persons or entities are necessary for the lawful consummation by the
Company of the transactions contemplated by this Agreement, except where the
failure to receive such approvals or consents, or to make such application or
notice, would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of the Company to consummate the
transactions under this Agreement and to perform its obligations hereunder.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder represents and warrants to the Company as follows:
Section 8.01 CORPORATE EXISTENCE. Stockholder is a corporation duly
organized, legally existing and in good standing under the laws of the State of
Delaware. Stockholder is not in default in the performance, observance or
fulfillment of any provision of its certificate of incorporation or bylaws, as
each shall have been amended and/or restated from time to time.
-14-
Section 8.02 NO BREACH. Neither the execution, delivery or performance of
this Agreement by Stockholder, nor the consummation by it of the transactions
contemplated hereby, shall constitute a violation of or permit the termination
of, or create, or cause the acceleration of the maturity of any debt, obligation
or liability of Stockholder under: (i) any term or provision of the certificate
of incorporation, as amended and restated, or the bylaws of Stockholder; (ii)
except as set forth on Schedule 8.02, any loan, note or other agreements of
Stockholder with third parties; (iii) to the best of Stockholder's knowledge,
any statute or law applicable to Stockholder; except, in the case of (ii) and
(iii) above, where such violation, termination, acceleration, obligation or
liability would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of Stockholder to consummate the
transactions under this Agreement and to perform its obligations hereunder and
thereunder.
Section 8.03 AUTHORITY. Stockholder has all necessary power and authority
to execute, deliver and perform its obligations under this Agreement; the
execution, delivery and performance by Stockholder of this Agreement have been
duly authorized by all necessary action on its part; and this Agreement
constitutes the legal, valid and binding obligations of Stockholder, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer and similar laws affecting creditors' rights generally or by general
principles of equity.
Section 8.04 APPROVALS. Other than as provided elsewhere in this Agreement
or on Schedule 8.04, no approvals or consents of, or applications or notices to,
any governmental authority are necessary for the lawful consummation by
Stockholder of the transactions contemplated by this Agreement, except where the
failure to receive such approvals or consents, or to make such application or
notice, would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of Stockholder to consummate the
transactions under this Agreement and to perform its obligations hereunder.
ARTICLE IX
MISCELLANEOUS
Section 9.01 INTERPRETATION. Article, Section, Schedule, and Exhibit
references are to this Agreement, unless otherwise specified. All references to
instruments, documents, contracts, and agreements are references to such
instruments, documents, contracts, and agreements as the same may be amended,
supplemented, and otherwise modified from time to time, unless otherwise
specified. The word "INCLUDING" shall mean "INCLUDING BUT NOT LIMITED TO."
Section 9.02 COSTS AND EXPENSES. All costs and expenses incurred in
connection with the transactions contemplated hereby, and all costs and expenses
in connection with the proxy contest being terminated pursuant to Section 2.01
hereof, shall be paid by the party incurring such cost or expense.
Section 9.03 NO WAIVER; MODIFICATIONS IN WRITING.
(a) DELAY. No failure or delay on the part of either party in
exercising any right, power, or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial
-15-
exercise of any such right, power, or remedy preclude any other or further
exercise thereof or the exercise of any right, power, or remedy. The remedies
provided for herein are cumulative and are not exclusive of any remedies that
may be available to a party at law or in equity or otherwise.
(b) SPECIFIC WAIVER. Except as otherwise provided herein, no
amendment, waiver,consent, modification, or termination of any provision of this
Agreement shall be effective unless approved by the Independent Committee and
signed by a representative of the Independent Committee or the Company and
Stockholder. Any amendment, supplement or modification of or to any provision of
this Agreement, any waiver of any provision of this Agreement, and any consent
to any departure by the Company or Stockholder from the terms of any provision
of this Agreement shall be effective only in the specific instance and for the
specific purpose for which made or given.
Section 9.04 ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of
the rights or obligations of any party hereunder shall be assignable without the
prior written consent of the other party hereto, other than as expressly
provided herein and assignments by operation of law. This Agreement shall be
binding upon the Company, Stockholder, and their respective successors and
permitted assigns. Except as expressly provided in this Agreement, this
Agreement shall not be construed so as to confer any right or benefit upon any
Person other than the parties to this Agreement, and their respective successors
and permitted assigns.
Section 9.05 COMMUNICATIONS. All notices and demands provided for hereunder
shall be in writing and shall be given by registered or certified mail, return
receipt requested, telecopy, air courier guaranteeing overnight delivery or
personal delivery to the following addresses:
IF TO STOCKHOLDER:
-----------------
Aquila, Inc.
20 West Ninth Street
Kansas City, Missouri 64105
Attention: Keith Stamm
Telecopier: (816) 467-3595
Email: kstamm@aquila.com
IF TO THE COMPANY:
-----------------
Quanta Services, Inc.
1360 Post Oak Boulevard, Suite 2100
Houston, Texas 77056
Attention: Vice President and General Counsel
Telecopier: (713) 629-7676
Email: dgordon@quantaservices.com
or to such other address as the Company or Stockholder may designate in writing.
All other communications may be by regular mail or Internet electronic mail. All
notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; upon actual receipt if sent by
certified mail, return receipt requested, or
-16-
regular mail, if mailed; when receipt acknowledged, if telecopied or sent via
Internet electronic mail; and upon actual receipt when delivered to an air
courier guaranteeing overnight delivery.
Section 9.06 GOVERNING LAW; CONSENT TO JURISDICTION; SPECIFIC PERFORMANCE.
This Agreement will be construed in accordance with and governed by the laws of
the State of Delaware without regard to principles of conflicts of laws. Any
judicial proceedings with respect to this Agreement shall be brought in a
federal or state court located in the State of Delaware, and by execution and
delivery of this Agreement, each party accepts, generally and unconditionally,
the exclusive jurisdiction of such court and any related appellate court,
irrevocably agrees to be bound by any judgment rendered thereby, and waives any
objection to the laying of venue in any such proceedings in such courts. The
parties hereto agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions, including preliminary
relief, to prevent breaches of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
they are entitled at law or in equity. If any party shall institute any action
or proceeding to enforce the provisions hereof, the party against whom such
action or proceeding is brought hereby waives any claim or defense therein that
the plaintiff party has an adequate remedy at law.
Section 9.07 ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements among the parties hereto with respect to the subject
matter hereof and thereof, and contain the sole and entire agreement among the
parties hereto with respect to the subject matter hereof and thereof. Without
limiting the foregoing, to the extent that any provision therein is inconsistent
with, or deals with the same subject matter as, any provision of this Agreement,
the Securities Purchase Agreement is hereby superseded. For the avoidance of
doubt, Sections 6.10, 6.11, and 6.12 of the Securities Purchase Agreement are
hereby deleted, and Sections 7.07 and 7.08 of the Securities Purchase Agreement
are superseded by Section 9.06 hereof. Notwithstanding the foregoing, nothing in
this Agreement shall limit or detract from Stockholder's rights as the holder of
the Series A Preferred Stock.
Section 9.08 PUBLIC ANNOUNCEMENTS. The Company and the Stockholder shall
issue a mutually acceptable joint press release announcing this Agreement.
Section 9.09 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARY. This
Agreement shall inure to the benefit of and be binding upon successors and
permitted assigns of the parties hereto. No person other than the parties
hereto, their successors and permitted assigns, and the public shareholders of
the Company is intended to be a beneficiary of this Agreement. The rights of the
Company under this Agreement may be asserted on behalf of the Company by the
Independent Committee.
Section 9.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
-17-
IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as
of the date first above written.
QUANTA SERVICES, INC.,
a Delaware corporation
By: /s/ John R. Colson
------------------------------
Name: John R. Colson
Title: Chief Executive Officer
AQUILA, INC.,
a Delaware corporation
By: /s/ Keith G. Stamm
------------------------------
Name: Keith G. Stamm
Title: President and COO
Global Networks Group
ANNEX I
DIRECTORS OF THE COMPANY
ELECTED BY THE SERIES A PREFERRED STOCK
Robert K. Green
Keith G. Stamm
Edward K. Mills
ELECTED BY THE LIMITED VOTING STOCK
Vincent D. Foster
ELECTED BY THE COMMON STOCK
James R. Ball
John R. Colson
Terrence P. Dunn
Gary A. Tucci
John R. Wilson
[Company Independent To Be Determined][To be determined by Messrs. Dunn and
Ball]
ANNEX II
AQUILA, INC. RELEASE
Aquila, Inc., on behalf of itself, and each of its predecessors,
successors, parents, subsidiaries, affiliates, divisions, general and limited
partners, assignees and nominees, and all present and former employees,
directors, officers, agents, attorneys, representatives and shareholders of each
of them (the "Aquila Releasors"), do hereby release and forever discharge each
of James R. Ball, John R. Colson, Vincent D. Foster, Louis C. Golm, Jerry J.
Langdon, Gary A. Tucci, John R. Wilson, Quanta Services, Inc. (and each of its
parents, subsidiaries, divisions and affiliates), the Quanta Services, Inc.
Stock Employee Compensation Trust, and Wachovia Bank, N.A. (and each of its
parents, subsidiaries, divisions and affiliates), and the predecessors,
successors and assignees of each of them, and each of their present and former
employees, directors, officers, shareholders, agents, attorneys (including
Wachtell, Lipton, Rosen & Katz, Winston & Strawn, and Richards, Layton &
Finger), investment bankers (including Goldman, Sachs & Co. and Morgan Stanley,
Inc.), representatives, heirs, devisees and legatees (collectively the
"Releasees") of and from, and covenant not to sue each of the Releasees with
respect to, any and all manner of claims, rights, actions, causes of action,
suits, liens, obligations, accounts, debts, demands, agreements, promises,
liabilities, controversies, costs, expenses and attorneys' or paralegals' or
other fees whatsoever, whether arising in law or equity, whether based on any
federal, state or foreign law or right of action, mature or unmatured,
contingent or fixed, liquidated or unliquidated, known or unknown, accrued or
unaccrued which, against the Releasees or any of them, the Aquila Releasors, or
any of them, ever had or now have in connection with, arising out of or which
are in any way related to:
(1) any of the claims for relief asserted in the litigation captioned AQUILA,
INC. V. QUANTA SERVICES, INC., ET AL., C.A. No. 19287, commenced in the
Court of Chancery of the State of Delaware on or about November 28, 2001,
including, but not limited to, claims pertaining to (a) the adoption of the
Quanta Services, Inc. Rights Plan and any amendments made thereto; and (b)
the formation and operation of the Special Committee of the Quanta
Services, Inc. Board of Directors.
(2) any of the claims for relief asserted in the arbitration captioned AQUILA,
INC. V. QUANTA SERVICES, INC., A.A.A. No. 57-198-00150-01, including, but
not limited to, claims pertaining to the adoption of the Quanta Services,
Inc. Rights Plan and any amendments thereto; and
(3) any of the claims for relief asserted in the litigation captioned AQUILA,
INC. V. QUANTA SERVICES, INC., ET AL., C.A. No. 19497, in the Court of
Chancery of the State of Delaware, including, but not limited to, claims
pertaining to: (a) the adoption of the Quanta Services, Inc. Stock Employee
Compensation Trust by the Special Committee of the Quanta Services, Inc.
Board of Directors on or about March 13, 2002; (b) the approval by the
Special Committee of the Quanta Services, Inc. Board of Directors of
employment agreements with certain Quanta employees on or about March 13,
2002; and (c) any other actions taken by the Special Committee at its March
13, 2002 meeting.
AQUILA, INC.
By:__________________________
Title:_______________________
Date:________________________
QUANTA SERVICES, INC. RELEASE
Quanta Services, Inc., on behalf of itself, and each of its predecessors,
successors, parents, subsidiaries, affiliates, divisions, general and limited
partners, assignees and nominees, and all present and former employees,
directors, officers, agents, attorneys, representatives and shareholders of each
of them (the "Quanta Releasors"), do hereby release and forever discharge
Aquila, Inc. and each of its parents, subsidiaries, divisions and affiliates,
and the predecessors, successors and assignees of each of them, and each of
their present and former employees, directors, officers, shareholders, agents,
attorneys (including Milbank, Tweed, Hadley & McCloy LLP, Morris, Nichols, Arsht
& Tunnell, and Blackwell Sanders Peper Martin LLP), investment bankers
(including Salomon Smith Barney Inc.), representatives, heirs, devisees and
legatees (collectively the "Releasees") of and from, and covenant not to sue the
Releasees with respect to, any and all manner of claims, rights, actions, causes
of action, suits, liens, obligations, accounts, debts, demands, agreements,
promises, liabilities, controversies, costs, expenses and attorneys' or
paralegals' or other fees whatsoever, whether arising in law or equity, whether
based on any federal, state or foreign law or right of action, mature or
unmatured, contingent or fixed, liquidated or unliquidated, known or unknown,
accrued or unaccrued which, against the Releasees or any of them, the Quanta
Releasors, or any of them, ever had, now have or can have or shall or may
hereafter have, in connection with, arising out of or which are in any way
related to:
(1) any claim that would have been a compulsory counterclaim in the litigation
captioned AQUILA, INC. V. QUANTA SERVICES, INC., ET AL., C.A. NO. 19287,
filed in the Court of Chancery of the State of Delaware on or about
November 28, 2001;
(2) any claim that would have been a compulsory
counterclaim in the arbitration captioned AQUILA, INC. V. QUANTA SERVICES,
INC., A.A.A. NO. 57-198-00150-01; and
(3) any claim that would have been a
compulsory counterclaim in the litigation captioned AQUILA, INC. V. QUANTA
SERVICES, INC., ET AL., C.A. NO. 19497, in the Court of Chancery of the
State of Delaware.
QUANTA SERVICES, INC.
By:
------------------------------------
Title:
---------------------------------
Date:
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