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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): NOVEMBER 9, 2001
DYNEGY HOLDINGS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-29311 94-3248415
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1000 LOUISIANA, SUITE 5800
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 507-6400
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ITEM 5. OTHER EVENTS.
MERGER AGREEMENT
On November 9, 2001, Dynegy Inc., an Illinois corporation ("Dynegy") (of
which Dynegy Holdings Inc., a Delaware corporation ("Dynegy Holdings"), is a
wholly owned subsidiary), Stanford, Inc., a Delaware corporation and wholly
owned subsidiary of Dynegy ("Newco"), Sorin, Inc., an Oregon corporation and
wholly owned subsidiary of Newco ("Enron Merger Sub"), Badin, Inc., an Illinois
corporation and wholly owned subsidiary of Newco ("Dynegy Merger Sub"), and
Enron Corp., an Oregon corporation ("Enron"), entered into an Agreement and Plan
of Merger (the "Merger Agreement"), whereby, subject to the conditions stated
therein, (i) Enron Merger Sub will merge with and into Enron, with Enron
surviving as a wholly owned subsidiary of Newco (the "Enron Merger"), and (ii)
Dynegy Merger Sub will merge with and into Dynegy, with Dynegy surviving as a
wholly owned subsidiary of Newco (collectively with the Enron Merger, the
"Mergers"). At the effective time of the Mergers, (1) each issued and
outstanding share of common stock, no par value, of Enron will be converted into
0.2685 shares (the "Enron Merger Ratio") of Class A common stock, par value
$0.01 per share, of Newco ("Newco Class A Common Stock"), and (2) each issued
and outstanding share of Class A common stock, no par value, of Dynegy and each
outstanding share of Class B common stock, no par value, of Dynegy will be
converted into one share of Newco Class A Common Stock and one share of Class B
common stock, par value $0.01 per share, of Newco, respectively.
Under the Merger Agreement, Enron is entitled to issue up to $2 billion of
additional equity securities prior to consummation of the Mergers. However, the
Enron Merger Ratio is subject to downward adjustment if Enron issues equity
securities at an equivalent Enron common stock price that is less than the
product of (1) the existing Enron Merger Ratio and (2) the last reported price
of Dynegy Class A common stock as reported on the New York Stock Exchange on the
day that a price is determined pursuant to a binding agreement for such
issuance.
The Merger Agreement provides that the parties will cooperate with each
other in analyzing and determining a structure that results in a single
corporation with substantially all the senior debt (other than that of regulated
utility subsidiaries) of Dynegy Holdings, Dynegy and Enron, and will promptly
execute an appropriate amendment to the Merger Agreement to reflect such
structure.
The closing of the Mergers will occur on the first business day
immediately following the day on which all of the conditions to the Mergers
contained in the Merger Agreement have been fulfilled or waived or on such other
date as Dynegy and Enron may agree, but in no event prior to the expiration of a
period of six months after the initial purchase of shares of Dynegy Series B
Preferred Stock by ChevronTexaco Corporation as described below. The closing of
the Mergers is conditioned upon the approval of the shareholders of both Dynegy
and Enron, the receipt of applicable regulatory approvals, including the
expiration or termination of the waiting period prescribed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other
customary conditions, including the absence of any events or series of events
that has had or is reasonably likely to have a material adverse effect on Enron
or Dynegy, excluding the effects of general economic and industry conditions,
all as further described in the Merger Agreement. Under the Merger Agreement, if
Enron's liabilities and expenses from and after November 9, 2001 associated with
all pending or threatened litigation matters, in the reasonable judgment of
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Dynegy exercised in good faith after consultation with outside counsel
experienced in such types of litigation, exceed, or are reasonably likely to
exceed, $2 billion in the aggregate (net of proceeds of insurance and litigation
reserves reflected in Enron's financial statements), the amount of such excess
over $2 billion will be taken into account in determining whether a material
adverse effect on Enron has occurred, and, in any event, if the amount of such
excess exceeds, or is reasonably likely to exceed, $1.5 billion, a material
adverse effect on Enron will be deemed to have occurred. The Merger Agreement
provides that Dynegy or Enron may be required to pay a termination fee of $350
million to the other party under certain circumstances relating to competing
transactions or a change in the recommendation of the party's board to its
shareholders.
In connection with the execution and delivery of the Merger Agreement,
each of Chevron U.S.A. Inc., the holder of approximately 27% of the outstanding
Dynegy common stock, and Charles L. Watson, the Chairman of the Board and Chief
Executive Officer of Dynegy, have entered into a Shareholder Agreement with
Enron, pursuant to which each has agreed to vote its or his shares of Dynegy
common stock in favor of the transactions contemplated by the Merger Agreement
and to refrain from soliciting a competing transaction to the Mergers.
The Merger Agreement and the two Shareholder Agreements are filed herewith
as Exhibits 2.1, 10.1 and 10.2, respectively, and are incorporated in this Item
5 by reference. The text of a joint press release issued by Dynegy and Enron is
filed herewith as Exhibit 99.1, and is incorporated in this Item 5 by reference.
The foregoing description of the Merger Agreement and the Shareholder
Agreements, and the transactions contemplated in such documents, is qualified in
its entirety by reference to such documents.
EQUITY INVESTMENT
PREFERRED STOCK PURCHASE. In connection with the Merger Agreement, Dynegy
entered into a Subscription Agreement (the "Subscription Agreement") with Enron
and Northern Natural Gas Company, a Delaware corporation and indirect subsidiary
of Enron ("Northern Natural"), pursuant to which Dynegy purchased 1,000 shares
of Northern Natural's Series A Preferred Stock, par value $.01 per share
("Series A Preferred"), for $1.5 billion on November 13, 2001.
The Series A Preferred ranks senior to all common stock of Northern
Natural and is entitled to dividends when, as and if declared by the board of
directors of Northern Natural at a rate of 6%, payable annually beginning on
January 31, 2003, or, at Northern Natural's option, quarterly. In the event of
any liquidation or winding up of Northern Natural, the holders of Series A
Preferred will be entitled to receive in preference to the holders of the common
stock, an amount equal to $1,500,000 per share plus accrued and unpaid
dividends, if any.
The Series A Preferred is redeemable in whole, but not in part, at the
option of Northern Natural:
- for a period of six months from the date the Merger Agreement has
been terminated by (a) the mutual written consent of Dynegy and
Enron ("Mutual Consent"); (b) either Dynegy or Enron if, subject to
certain extensions, the Mergers have not been consummated by
November 30, 2002 ("Time Expiration Event"); or (c) either Dynegy or
Enron if a court or governmental agency has issued a final,
nonappealable order permanently prohibiting the transactions
contemplated in the Merger Agreement ("Court Order Event");
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- for a period of six months from the third anniversary of the
termination of the Merger Agreement by (a) Dynegy or Enron if the
shareholders of Enron do not approve the Mergers at the meeting held
for that purpose ("Enron Shareholder No Vote"); (b) Enron prior to
receiving shareholder approval of the Mergers if Enron has received
an Enron Superior Proposal (as defined in the Merger Agreement) and
entered into a binding definitive written agreement providing for
the implementation of the Enron Superior Proposal ("Enron Superior
Proposal Event"); (c) Dynegy if Enron has breached its
representation, warranties or covenants in the Merger Agreement
("Enron Breach"); or (d) Dynegy if the board of directors of Enron
has withdrawn or materially modified (in a manner adverse to Dynegy)
its approval or recommendation of the Merger Agreement or recommends
to its shareholders another proposal to acquire Enron ("Enron Board
Action");
- for a period of one year from the date the Merger Agreement has been
terminated by (a) Enron or Dynegy if the shareholders of Dynegy do
not approve the Mergers at the meeting held for that purpose
("Dynegy Shareholder No Vote"); (b) Dynegy prior to receiving
shareholder approval of the Mergers if Dynegy has received a Dynegy
Superior Proposal (as defined in the Merger Agreement) and entered
into a binding definitive written agreement providing for the
implementation of the Dynegy Superior Proposal ("Dynegy Superior
Proposal Event"); or (c) Enron if the board of directors of Dynegy
has withdrawn or materially modified (in a manner adverse to Enron)
its approval or recommendation of the Merger Agreement or recommends
to its shareholders another proposal to acquire Dynegy ("Dynegy
Board Action"); and
- for a period of one year from the date that Enron notifies Dynegy
that it is terminating the Merger Agreement based on any Dynegy
breach of its representations, warranties or covenants in the Merger
Agreement ("Dynegy Breach");
in each case, at a redemption price equal to the liquidation preference amount;
PROVIDED, that on the date of the redemption the board of directors of Northern
Natural declares and pays all accrued and unpaid dividends on the Series A
Preferred.
Without the approval of the holders of at least a majority of the Series A
Preferred, Northern Natural will not, among other things, issue any capital
stock, sell any assets above a specified threshold, make a voluntary bankruptcy
filing or incur certain indebtedness.
OPTION AGREEMENT. In connection with the Subscription Agreement, Dynegy
Holdings entered into an Option Agreement (the "Option Agreement") with CGNN
Holding Company, Inc., a Delaware corporation and indirect subsidiary of Enron
("CGNN"), MCTJ Holding Co. LLC, a Delaware limited liability company and a
subsidiary of CGNN ("MCTJ"), Enron and Dynegy, for consideration of $1 million.
Pursuant to the Option Agreement, Dynegy Holdings has the option to purchase all
of the membership interests of MCTJ in certain circumstances. MCTJ indirectly
owns all of the common stock of Northern Natural.
The exercise price for the option is $23 million, plus the amount by which
Northern Natural's indebtedness under its bank credit facility and senior notes
is less than $950 million (or minus the amount by which such indebtedness
exceeds $950 million), subject to adjustment for
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the amount of working capital at the time of the exercise. Dynegy Holdings may
exercise the option:
- at any time after (collectively, the "Purchase Option Events")
- the Merger Agreement has been terminated pursuant to an Enron
Shareholder No Vote, an Enron Superior Proposal Event or an
Enron Board Action; or
- Dynegy has notified Enron that it is terminating the Merger
Agreement pursuant to an Enron Breach;
- at any time beginning six months plus one day after the Merger
Agreement has been terminated pursuant to Mutual Consent, a Time
Expiration Event or a Court Order Event; and
- at any time beginning one year after
- the Merger Agreement has been terminated pursuant to a Dynegy
Shareholder No Vote, a Dynegy Superior Proposal or a Dynegy Board
Action; or
- Enron has notified Dynegy that it is terminating the Merger
Agreement pursuant to a Dynegy Breach.
The option will terminate if (i) the Mergers are consummated, (ii) the
Series A Preferred is exchanged for Enron common stock pursuant to the Exchange
Agreement described below or (iii) the Series A Preferred is redeemed in
accordance with its terms.
PURCHASE OPTION AGREEMENT. In connection with the Subscription Agreement,
Dynegy Holdings also entered into a Purchase Option Agreement (the "Purchase
Option Agreement") with CGNN, MCTJ, Northern Natural, Enron and Dynegy. Pursuant
to the Purchase Option Agreement, if Dynegy Holdings has purchased all of the
membership interests of MCTJ pursuant to the Option Agreement after any of the
Purchase Option Events, CGNN will have the option for 90 days after such
purchase (up to 180 days in some circumstances) to purchase
- all of the membership interests of MCTJ for $24 million, plus the
amount by which Northern Natural's indebtedness under its bank credit
facility and senior notes is less than $950 million (or minus the
amount by which such indebtedness exceeds $950 million), plus accrued
and unpaid dividends on the Series A Preferred through the date of the
purchase by Dynegy Holdings of the membership interests of MCTJ
pursuant to the Option Agreement, subject to adjustment for changes in
working capital and other long-term debt since the purchase by Dynegy
Holdings of the membership interests of MCTJ pursuant to the Option
Agreement; and
- the Series A Preferred for $1.5 billion.
EXCHANGE AGREEMENT. In connection with the purchase of the Series A
Preferred, Dynegy entered into an Exchange Agreement (the "Exchange Agreement")
with Enron. Pursuant to the Exchange Agreement, each share of Series A Preferred
is exchangeable for a number of shares of common stock of Enron determined by
dividing the liquidation preference amount, plus all accrued and unpaid
dividends, by $8.86, subject to adjustment based on changes to the Enron Merger
Ratio (as defined in the Merger Agreement) pursuant to the Merger Agreement:
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- at the option of Dynegy during the 90-day period beginning on the date
the Merger Agreement is terminated pursuant to an Enron Shareholder No
Vote (after the public announcement of a proposal by a third party to
acquire Enron), an Enron Superior Proposal Event or an Enron Board
Action; and
- at the option of Enron during the 15-day period beginning on the date
the Merger Agreement is terminated pursuant to a Dynegy Shareholder No
Vote (after the public announcement of a proposal by a third party to
acquire Dynegy), a Dynegy Superior Proposal Event or a Dynegy Board
Action.
The Exchange Agreement will terminate if (i) the Mergers are consummated,
(ii) the option under the Option Agreement is exercised or (iii) the Series A
Preferred is redeemed in accordance with its terms.
In the event that Dynegy is prevented from receiving Enron common stock
because the conditions for the issuance have not been satisfied, Dynegy will
have the right to assign its rights under the Exchange Agreement to any third
party or Enron will issue to Dynegy shares of a new class of Enron preferred
stock convertible into an equivalent number of shares of Enron common stock. In
the event that the conditions for Dynegy to receive Enron common stock are not
satisfied after twelve months, Dynegy may instead elect to withdraw its exercise
of the exchange right and exercise its rights under the Option Agreement, or
receive equivalent consideration from Enron.
REGISTRATION RIGHTS AGREEMENT. Dynegy and Enron also have entered into a
Registration Rights Agreement (the "Registration Rights Agreement") that
provides for customary registration rights for the sale by Dynegy of any shares
of Enron common stock received upon exchange of Series A Preferred.
The Subscription Agreement, the Certificate of Designations of the Series
A Preferred Stock of Northern Natural Gas Company, the Option Agreement, the
Purchase Option Agreement, the Exchange Agreement and the Registration Rights
Agreement are filed herewith as Exhibits 10.3, 99.2, 10.4, 10.5, 10.6 and 10.7,
respectively, and are incorporated in this Item 5 by reference. The foregoing
description of the Subscription Agreement, the Certificate of Designations of
the Series A Preferred Stock of Northern Natural Gas Company, the Option
Agreement, the Purchase Option Agreement, the Exchange Agreement and the
Registration Rights Agreement, and the transactions contemplated in such
documents, is qualified in its entirety by reference to such documents.
CHEVRON INVESTMENTS
In connection with the Mergers, ChevronTexaco Corporation
("ChevronTexaco"), the parent corporation of Chevron U.S.A. Inc. ("Chevron"), a
shareholder of Dynegy, has agreed to invest up to an aggregate of $4.0 billion
in Dynegy and Newco. ChevronTexaco purchased $1.5 billion of Series B
Mandatorily Convertible Redeemable preferred stock, no par value ("Series B
preferred stock"), of Dynegy on November 13, 2001, the proceeds of which were
used to finance Dynegy's investment in Northern Natural. At the closing of the
Mergers, ChevronTexaco will purchase an additional $1.0 billion of Newco Class B
Common Stock, unless ChevronTexaco determines that a material adverse effect
relating to Enron has occurred in certain circumstances and opts not to fund
such purchase (the "Chevron Out"). Also at the closing, if Chevron does not
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exercise the Chevron Out, Chevron will receive warrants to purchase up to an
additional $1.0 billion of Newco Class B common stock, which can be increased to
$1.5 billion if Chevron commits, at the closing of the Mergers, to purchase at
least $500.0 million of Newco Class B common stock pursuant to such warrants.
More specifically, the following is a description of the agreements
related to ChevronTexaco and Chevron in this transaction.
AGREEMENTS WITH DYNEGY
SERIES B PREFERRED STOCK SUBSCRIPTION AGREEMENT. ChevronTexaco has
purchased 100,000 shares of Series B preferred stock for $1.5 billion. The terms
of the Series B preferred stock are governed by the Statement of Resolution
filed with the Secretary of State of the State of Illinois on November 13, 2001.
Among other things, the Statement of Resolution provides for the
conversion of the Series B preferred stock into shares of Dynegy Class B common
stock, no par value ("Dynegy Class B common stock"), upon certain circumstances.
The Series B preferred stock will automatically convert into Dynegy Class B
common stock immediately preceding the closing of the Mergers, unless Chevron
exercises the Chevron Out. If Chevron exercises the Chevron Out and the Mergers
close, Chevron can elect to convert the Series B preferred stock into Dynegy
Class B common stock immediately preceding the closing of the Mergers. In either
event, the Series B preferred stock will convert into a number of shares of
Dynegy Class B common stock determined by dividing $10,000 by the conversion
price. Initially, the conversion price will be equal to the lesser of (1)
$31.635 (a 5% discount to a specified sales price of Dynegy Class A common
stock, no par value ("Dynegy Class A common stock"), on November 7, 2001) and
(2) the average of the closing prices of Dynegy Class A common stock for the
five business days immediately preceding the business day prior to the closing
of the Mergers. If, however, the Merger Agreement is terminated, Chevron can
convert the Series B preferred stock, at a conversion price of $31.635, at any
time after the Merger Agreement is terminated until (1) two years from the
funding of its purchase of the Series B preferred stock if Chevron exercises the
Chevron Out or (2) November 9, 2003 if Chevron does not exercise the Chevron
Out.
Under certain circumstances, Dynegy is required to redeem any outstanding
shares of Series B preferred stock. If the Mergers occur, Chevron exercises the
Chevron Out and Chevron does not convert its shares, Dynegy may at any time
after, but must before the first anniversary of, the closing of the Mergers
redeem all outstanding Series B preferred stock at a redemption price of
$10,000, plus any accrued and unpaid dividends. If the Merger Agreement is
terminated, regardless of whether Chevron exercises the Chevron Out, Dynegy must
redeem all outstanding shares of Series B preferred stock at the redemption
price on the second anniversary of the issuance of the Series B preferred stock.
In this instance, Dynegy may not redeem the shares prior to the second
anniversary of the issuance of the Series B preferred stock.
The Series B preferred stock will not accrue any dividend unless the
Mergers close and Chevron exercises the Chevron Out. Then, Chevron will be
entitled to receive a special one-time dividend at 7% per annum for the period
starting on the date on which Dynegy issued the Series B preferred stock and
ending on the date on which Chevron exercised the Chevron Out. Dynegy
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will pay this special dividend on the applicable redemption date. In addition,
Chevron will be entitled to receive a regular quarterly dividend equal to 7%
per annum for the period starting on the closing of the Mergers and ending on
the redemption date.
FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT. In connection with
ChevronTexaco's purchase of the Series B preferred stock, Dynegy and Chevron
have amended the existing registration rights agreement to include the shares of
Dynegy Class B common stock into which the Series B preferred stock can convert.
PURCHASE RIGHTS AGREEMENT BETWEEN DYNEGY AND CHEVRONTEXACO. ChevronTexaco
is entitled to purchase shares of capital stock or other equity securities of
Newco to be issued upon consummation of the Mergers (after giving effect to the
cumulative changes to the Enron Merger Ratio) in exchange for any additional
shares of capital stock or other equity securities of Enron that Enron issued
between the date of the Merger Agreement and the date of the closing of the
Mergers pursuant to Section 7.1(f) of the Merger Agreement. ChevronTexaco is
entitled to purchase that number of shares to maintain its proportionate
ownership in Dynegy immediately prior to any issuance by Enron. ChevronTexaco
will purchase any such shares at a price equal to the product of (1) the number
of such additional shares purchased and (2) the closing price of Dynegy Class A
common stock on the date on which Enron issued the additional securities.
The Series B Preferred Stock Subscription Agreement, the First Amendment
to the Registration Rights Agreement and the Purchase Rights Agreement are filed
herewith as Exhibits 10.8, 10.9 and 10.10, respectively, and are incorporated in
this Item 5 by reference. The foregoing description of the Series B Preferred
Stock Subscription Agreement, the First Amendment to the Registration Rights
Agreement and the Purchase Rights Agreement, and the transactions contemplated
in such documents, is qualified in its entirety by reference to such documents.
AGREEMENTS WITH NEWCO
CLASS B COMMON STOCK SUBSCRIPTION AGREEMENT. ChevronTexaco has agreed to
purchase from Newco, immediately following the consummation of the Mergers, $1.0
billion of Newco Class B common stock. ChevronTexaco will purchase the shares at
a price equal to the quotient of $1.0 billion divided by the lesser of (i)
$32.83 (a 5% discount to the five-day average closing price of Dynegy Class A
common stock as of November 7, 2001) or (ii) the average of the closing prices
of Dynegy Class A common stock over the five consecutive trading days ending
immediately prior to one business day prior to the consummation of the Mergers.
A condition to funding is that Chevron has not exercised the Chevron Out. If
ChevronTexaco does not exercise the Chevron Out, it will also receive warrants
to purchase $1.0 billion of Newco Class B common stock, and if it commits at the
closing of the Mergers, an additional warrant obligating ChevronTexaco to
purchase an additional $500.0 million of Newco Class B common stock.
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SERIES A WARRANT TO PURCHASE NEWCO CLASS B COMMON STOCK. This warrant
entitles ChevronTexaco to purchase from Newco, at any time until two years
following the closing of the Mergers, up to $500.0 million of Newco Class B
common stock, at a purchase price of $34.55. This warrant will only be issued at
the closing of the Mergers if Chevron does not exercise the Chevron Out.
SERIES B WARRANT TO PURCHASE NEWCO CLASS B COMMON STOCK. This warrant
entitles ChevronTexaco to purchase from Newco up to $500.0 million of Newco
Class B common stock at the lower of (1) the average of the closing prices of
Dynegy Class A common stock for the five days immediately preceding the date on
which ChevronTexaco commits to purchase shares and (2) the average closing price
of Dynegy Class A common stock for the five days immediately preceding the date
on which ChevronTexaco notifies Newco that it will settle such commitment.
ChevronTexaco may commit to exercise this warrant at any time until one year
following the closing of the Mergers, unless ChevronTexaco commits, at the
closing of the Mergers, to purchase all of the shares subject to the Series C
warrant, in which case ChevronTexaco will have two years following the closing
of the Mergers to commit to exercise this warrant. ChevronTexaco must give Newco
notice that it will settle each commitment within one year from date on which
ChevronTexaco committed to purchase shares pursuant to this warrant. This
warrant will only be issued at the closing of the Mergers if Chevron does not
exercise the Chevron Out.
SERIES C WARRANT TO PURCHASE NEWCO CLASS B COMMON STOCK. If Chevron elects
to receive this warrant, this warrant will obligate ChevronTexaco to purchase
from Newco $500.0 million of Newco Class B common stock at the lower of (1) the
average of the closing prices of Dynegy Class A common stock for the five days
immediately preceding the date on which ChevronTexaco commits to purchase shares
and (2) the average closing price of Dynegy Class A common stock for the five
days immediately preceding the date on which ChevronTexaco notifies Newco that
it will settle such commitment. ChevronTexaco must commit to exercise all of
this warrant on or before the date that is one year following the closing of the
Mergers, or it will be deemed to have committed to purchase any remaining
shares. ChevronTexaco must give Newco notice that it will settle each commitment
within one year from date on which ChevronTexaco committed to purchase shares
pursuant to this warrant. If ChevronTexaco elects to receive this warrant, the
exercise term of the Series B warrant will be extended to two years, instead of
one, from the closing of the Mergers. This warrant will only be issued at the
closing of the Mergers if Chevron does not exercise the Chevron Out and if
Chevron commits to purchase the shares underlying this warrant as of the closing
of the Mergers.
STOCKHOLDER AGREEMENT. Newco, Dynegy, Enron and Chevron have entered into
a stockholder agreement that will govern certain aspects of their relationship
before and after the Mergers. This agreement is similar to the Shareholder
Agreement, dated as of June 14, 1999, among Dynegy, Illinova Corporation, Dynegy
Holdings and Chevron. The key differences between the Dynegy shareholder
agreement and the Newco stockholder agreement are that under the Newco
stockholder agreement (1) Chevron is entitled to elect the greater of three
directors and 20% of Newco's board of directors, if Newco's board is increased
in size, and (2) Newco is not prohibited from owning an interest in a nuclear
facility.
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This agreement will terminate upon the termination of the Merger Agreement
and Chevron's ceasing to own certain specified thresholds of Newco common stock.
NEWCO REGISTRATION RIGHTS AGREEMENT. Newco has granted Chevron
registration rights, which are similar to those contained in the registration
rights agreement, dated as of June 14, 1999, between Dynegy and Chevron, for the
Newco Class A common stock underlying the Newco Class B common stock that
Chevron will own following the Mergers. This agreement will terminate upon the
first such instance when Chevron (including its affiliates) ceases to own at
least one percent (1%) of Newco's outstanding common stock (treating the Newco
Class B common stock as if it had been converted into Newco Class A common stock
in accordance with its terms).
The Class B Common Stock Subscription Agreement (including the forms of
the Series A Warrant, the Series B Warrant and the Series C Warrant attached as
Exhibits A, B and C thereto), the Stockholder Agreement and the Newco
Registration Rights Agreement are filed herewith as Exhibits 99.4, 10.11 and
99.5, respectively, and are incorporated in this Item 5 by reference. The
foregoing description of the Class B Common Stock Subscription Agreement, the
Stockholder Amendment and the Newco Registration Rights Agreement and the forms
of the Series A Warrant, the Series B Warrant and the Series C Warrant, and the
transactions contemplated in such documents, is qualified in its entirety by
reference to such documents.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
2.1 -- Agreement and Plan of Merger among Dynegy Inc.,
Stanford, Inc., Sorin, Inc., Badin, Inc. and Enron Corp.
dated as of November 9, 2001 (including as Exhibit
2.1(a) the Restated Certificate of Incorporation of
Stanford, Inc., as Exhibit 2.1(b) the Amended and
Restated Bylaws of Stanford, Inc., as Exhibit 7.11 the
Form of Rule 145 Affiliate Letter, as Exhibit 8.2(a) the
Enron Corp. Tax Certificate, as Exhibit 8.2(b) the
Dynegy Inc. Tax Certificate, as Exhibit 8.2(c) the
Chevron U.S.A. Inc. Tax Certificate and as Exhibit
8.2(d) the ChevronTexaco Corp. Tax Certificate)
(incorporated by reference to Exhibit 2.1 to Dynegy's
Current Report on Form 8-K as filed November 14, 2001,
File No. 1-15659 (the "Form 8-K")).
2.2 -- Agreement among Dynegy Inc., Enron Corp. and
ChevronTexaco Corp. dated as of November 9, 2001
(incorporated by reference to Exhibit 2.2 to the
Form 8-K).
4.1 -- Statement of Resolution Establishing Series of Series B
Mandatorily Convertible Redeemable Preferred Stock of
Dynegy Inc. (incorporated by reference to Exhibit 4.1 to
the Form 8-K).
10.1 -- Shareholder Agreement dated as of November 9, 2001 by
and among Dynegy Inc., Enron Corp. and Chevron U.S.A.
Inc. (incorporated by reference to Exhibit 10.1 to the
Form 8-K).
10.2 -- Shareholder Agreement dated as of November 9, 2001 by
and between Enron Corp. and Charles L. Watson
(incorporated by reference to Exhibit 10.2 to the
Form 8-K).
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10.3 -- Subscription Agreement dated as of November 9, 2001 by
and among Enron Corp., Northern Natural Gas Company and
Dynegy Inc. (incorporated by reference to Exhibit 10.3 to
the Form 8-K).
10.4 -- Option Agreement dated as of November 9, 2001 by and
among CGNN Holding Company, Inc., MCTJ Holding Co. LLC,
Enron Corp. Dynegy Holdings Inc. and, solely for the
provisions of Section 5.1 thereof, Dynegy Inc.
(incorporated by reference to Exhibit 10.4 to the
Form 8-K).
10.5 -- Purchase Option Agreement dated as of November 9, 2001
by and among CGNN Holding Company, Inc., MCTJ Holding
Co. LLC, Northern Natural Gas Company, Enron Corp.,
Dynegy Inc. and Dynegy Holdings Inc. (incorporated by
reference to Exhibit 10.5 to the Form 8-K).
10.6 -- Exchange Agreement dated as of November 9, 2001 by and
between Dynegy Inc. and Enron Corp. (incorporated by
reference to Exhibit 10.6 to the Form 8-K).
10.7 -- Registration Rights Agreement dated as of November 9,
2001 by and between Enron Corp. and Dynegy Inc.
(incorporated by reference to Exhibit 10.7 to the
Form 8-K).
10.8 -- Series B Preferred Stock Subscription Agreement dated as
of November 9, 2001 by and between ChevronTexaco Corp.
and Dynegy Inc. (incorporated by reference to Exhibit 10.8
to the Form 8-K).
10.9 -- First Amendment to Registration Rights Agreement dated
as of November 9, 2001 by and between Dynegy Inc. and
Chevron U.S.A. Inc. (incorporated by reference to Exhibit
10.9 to the Form 8-K).
10.10 -- Purchase Rights Agreement dated as of November 9, 2001
by and between Stanford, Inc., Dynegy Inc. and
ChevronTexaco Corp. (incorporated by reference to Exhibit
10.10 to the Form 8-K).
10.11 -- Stockholder Agreement dated as of November 9, 2001 by
and among Stanford, Inc., Dynegy Inc., Enron Corp. and
Chevron U.S.A. Inc. (incorporated by reference to Exhibit
10.11 to the Form 8-K).
99.1 -- Press Release issued on November 9, 2001 (incorporated by
reference to Exhibit 99.1 to the Form 8-K).
99.2 -- Certificate of Designations of Series A Preferred Stock
of Northern Natural Gas Company (incorporated by reference
to Exhibit 99.2 to the Form 8-K).
99.3 -- Certificate of Correction of Certificate of Designations
of Series A Preferred Stock of Northern Natural Gas
Company (incorporated by reference to Exhibit 99.3 to the
Form 8-K).
99.4 -- Class B Common Stock Subscription Agreement dated as of
November 9, 2001 by and between ChevronTexaco Corp. and
Stanford, Inc. (incorporated by reference to Exhibit 99.4
to the Form 8-K).
99.5 -- Registration Rights Agreement dated as of November 9,
2001 by and between Stanford, Inc., and Chevron U.S.A.
Inc. (incorporated by reference to Exhibit 99.5 to the
Form 8-K).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DYNEGY HOLDINGS INC.
By: /s/ Keith R. Fullenweider
-----------------------------------------
Keith R. Fullenweider, Senior Vice
President and Deputy General Counsel
Date: November 27, 2001
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EXHIBIT INDEX
2.1 -- Agreement and Plan of Merger among Dynegy Inc., Stanford,
Inc., Sorin, Inc., Badin, Inc. and Enron Corp. dated as of
November 9, 2001 (including as Exhibit 2.1(a) the Restated
Certificate of Incorporation of Stanford, Inc., as Exhibit
2.1(b) the Amended and Restated Bylaws of Stanford, Inc., as
Exhibit 7.11 the Form of Rule 145 Affiliate Letter, as Exhibit
8.2(a) the Enron Corp. Tax Certificate, as Exhibit 8.2(b) the
Dynegy Inc. Tax Certificate, as Exhibit 8.2(c) the Chevron
U.S.A. Inc. Tax Certificate and as Exhibit 8.2(d) the
ChevronTexaco Corp. Tax Certificate) (incorporated by reference
to Exhibit 2.1 to Dynegy's Current Report on Form 8-K as filed
November 14, 2001, File No. 1-15659 (the "Form 8-K")).
2.2 -- Agreement among Dynegy Inc., Enron Corp. and ChevronTexaco
Corp. dated as of November 9, 2001 (incorporated by reference
to Exhibit 2.2 to the Form 8-K).
4.1 -- Statement of Resolution Establishing Series of Series B
Mandatorily Convertible Redeemable Preferred Stock of Dynegy
Inc. (incorporated by reference to Exhibit 4.1 to the
Form 8-K).
10.1 -- Shareholder Agreement dated as of November 9, 2001 by and
among Dynegy Inc., Enron Corp. and Chevron U.S.A. Inc.
(incorporated by reference to Exhibit 10.1 to the
Form 8-K).
10.2 -- Shareholder Agreement dated as of November 9, 2001 by and
between Enron Corp. and Charles L. Watson (incorporated by
reference to Exhibit 10.2 to the Form 8-K).
10.3 -- Subscription Agreement dated as of November 9, 2001 by and
among Enron Corp., Northern Natural Gas Company and Dynegy Inc.
(incorporated by reference to Exhibit 10.3 to the
Form 8-K).
10.4 -- Option Agreement dated as of November 9, 2001 by and among
CGNN Holding Company, Inc., MCTJ Holding Co. LLC, Enron Corp.
Dynegy Holdings Inc. and, solely for the provisions of Section
5.1 thereof, Dynegy Inc. (incorporated by reference to Exhibit
10.4 to the Form 8-K).
10.5 -- Purchase Option Agreement dated as of November 9, 2001 by and
among CGNN Holding Company, Inc., MCTJ Holding Co. LLC,
Northern Natural Gas Company, Enron Corp., Dynegy Inc. and
Dynegy Holdings Inc. (incorporated by reference to Exhibit 10.5
to the Form 8-K).
10.6 -- Exchange Agreement dated as of November 9, 2001 by and between
Dynegy Inc. and Enron Corp. (incorporated by reference to Exhibit
10.6 to the Form 8-K).
10.7 -- Registration Rights Agreement dated as of November 9, 2001 by
and between Enron Corp. and Dynegy Inc. (incorporated by reference
to Exhibit 10.7 to the Form 8-K).
10.8 -- Series B Preferred Stock Subscription Agreement dated as of
November 9, 2001 by and between ChevronTexaco Corp. and Dynegy
Inc. (incorporated by reference to Exhibit 10.8 to the Form 8-K).
10.9 -- First Amendment to Registration Rights Agreement dated as of
November 9, 2001 by and between Dynegy Inc. and Chevron U.S.A.
Inc. (incorporated by reference to Exhibit 10.9 to the Form 8-K).
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10.10 -- Purchase Rights Agreement dated as of November 9, 2001 by and
between Stanford, Inc., Dynegy Inc. and ChevronTexaco Corp.
(incorporated by reference to Exhibit 10.10 to the Form 8-K).
10.11 -- Stockholder Agreement dated as of November 9, 2001 by and
among Stanford, Inc., Dynegy Inc., Enron Corp. and Chevron
U.S.A. Inc. (incorporated by reference to Exhibit 10.11 to the
Form 8-K).
99.1 -- Press Release issued on November 9, 2001 (incorporated by
reference to Exhibit 99.1 to the Form 8-K).
99.2 -- Certificate of Designations of Series A Preferred Stock of
Northern Natural Gas Company (incorporated by reference to Exhibit
99.2 to the Form 8-K).
99.3 -- Certificate of Correction of Certificate of Designations of
Series A Preferred Stock of Northern Natural Gas Company
(incorporated by reference to Exhibit 99.3 to the Form 8-K).
99.4 -- Class B Common Stock Subscription Agreement dated as of
November 9, 2001 by and between ChevronTexaco Corp. and
Stanford, Inc. (incorporated by reference to Exhibit 99.4 to the
Form 8-K).
99.5 -- Registration Rights Agreement dated as of November 9, 2001 by
and between Stanford, Inc., and Chevron U.S.A. Inc. (incorporated
by reference to Exhibit 99.5 to the Form 8-K).
14