1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of June 14, 1999, by and between Illinova
Corporation, an Illinois corporation ("Illinova"), and BG Holdings, Inc., a
Delaware corporation ("Stockholder").
WHEREAS, concurrently herewith, Illinova and Dynegy Inc., a Delaware
corporation ("Dynegy"), are entering into an Agreement and Plan of Merger (as
amended or supplemented from time to time, the "Merger Agreement;" capitalized
terms used without definition herein having the meanings ascribed thereto in the
Merger Agreement);
WHEREAS, as of June 14, 1999, Stockholder owns and/or has the power to
vote, as applicable, the number and type of Shares (as defined in Section 5
below) set forth in Schedule I hereto;
WHEREAS, the Board of Directors of Dynegy has, prior to the execution
of this Agreement, approved and adopted the Merger Agreement, and such approvals
and adoption have not been withdrawn;
WHEREAS, approval of the Merger Agreement by Dynegy's stockholders is a
condition to the consummation of the Mergers; and
WHEREAS, as a condition to its entering into the Merger Agreement,
Illinova has required that Stockholder agree, and Stockholder has so agreed, to
enter into this Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
Section 1. Agreement to Vote. (a) Unless the Dynegy Board of Directors
shall have withdrawn its recommendation in favor of the Mergers, Stockholder
hereby agrees to attend the Dynegy Special Meeting (or any other meeting of
stockholders of Dynegy at which the matters contemplated by the Merger Agreement
or this Agreement are to be presented to a vote of stockholders of Dynegy), in
person or by proxy, and to vote (or cause to be voted) all Shares and any other
voting securities of Dynegy that Stockholder directly or indirectly owns or has
the right to vote or direct the voting of (including any such securities
acquired hereafter but excluding any Shares or other securities Stockholder has
the right to acquire but has not acquired) (collectively, the "Covered Shares")
for approval and adoption of: (i) the Merger Agreement, (ii) the DAC Merger,
(iii) any related action reasonably required in furtherance thereof. Unless the
Dynegy Board of Directors shall have withdrawn its recommendation in favor of
the Mergers, Stockholder hereby further agrees that until the Termination Date
(as defined below), it shall, from time to time, in connection with any consent
solicitation relating to the Merger Agreement, timely execute and deliver (or
cause to be timely executed and delivered) a written consent with respect to any
Covered Shares in favor of the approval and adoption of the Merger Agreement,
the DAC Merger and any action required in furtherance thereof.
(b) Stockholder hereby agrees to make or cause to be made a timely
Election to receive Cash Consideration with respect to all Covered Shares under
the Merger Agreement.
2
(c) From and after the date hereof until the Termination Date, unless
the Dynegy Board of Directors shall have withdrawn its recommendation of the
Mergers, Stockholder hereby agrees to vote (or cause to be voted) any Covered
Shares against any Dynegy Acquisition Proposal and any related action reasonably
required in furtherance thereof, at any meeting of stockholders of Dynegy
(including any adjournments or postponements thereof) called to consider and
vote on any Dynegy Acquisition Proposal. Stockholder further agrees that, until
the Termination Date, in connection with any consent solicitation relating to a
Dynegy Acquisition Proposal, Stockholder will timely execute and deliver (or
cause to be timely executed and delivered) a written consent with respect to any
Covered Shares against any Dynegy Acquisition Proposal as contemplated by the
immediately preceding sentence. For purposes hereof, the term "Termination Date"
shall mean the first to occur of (a) the termination of the Merger Agreement and
(b) the date of consummation of the Mergers.
(d) To the extent inconsistent with the foregoing provisions of this
Section 1 or the other provisions of this Agreement, Stockholder hereby (i)
revokes any and all previous proxies with respect to Stockholder's Covered
Shares, (ii) waives any provisions of the Stockholders Agreement dated May 22,
1996 among BG Holdings, Inc., NOVA Gas Services (U.S.) Inc., and Chevron U.S.A.,
Inc. (the "Stockholders Agreement") with respect to actions contemplated by the
Merger Agreement, (iii) agrees that the Stockholders Agreement shall terminate
as of the Effective Time of the Mergers, and (iv) agrees that it will not
convert any Dynegy preferred shares into common stock before the Termination
Date.
(e) In furtherance of the purposes, and subject to the terms, of this
Agreement, Stockholder hereby appoints Illinova its proxy to vote all of
Stockholder's Covered Shares at any meeting of stockholders of Dynegy (including
any adjournments and postponements thereof) and to execute and deliver any
written consents in order to fulfill the obligations of Stockholder under this
Agreement. This proxy is coupled with an interest and is irrevocable until the
Termination Date.
(f) Nothing herein contained shall (i) restrict, limit or prohibit any
individuals who may represent a Stockholder on Dynegy's Board of Directors from
exercising (in his or her capacity as a director or officer) his or her
fiduciary duties to the stockholders of Dynegy under applicable law, or (ii)
require any individual, in his or her capacity as an officer of Dynegy, to take
any action in contravention of, or omit to take any action pursuant to, or
otherwise take or refrain from taking any actions which are inconsistent with,
instructions or directions of the Board of Directors of Dynegy undertaken in the
exercise of its fiduciary duties, provided that nothing in this Section 1(f)
shall relieve or be deemed to relieve Stockholder from its obligations under
Sections 1 or 2 of this Agreement.
Section 2. Disposition of Shares. From and after the date hereof until
the Termination Date, and except as provided for in the Stock Purchase Agreement
by and among Newco, British Gas Atlantic Holdings BV and Stockholder, dated June
14, 1999 (the "BG Stock Purchase Agreement"), Stockholder hereby agrees that it
will not directly or indirectly sell, pledge, encumber, grant any proxy or enter
into any voting or similar agreement with respect to, transfer or otherwise
dispose of (collectively, "Transfer"), or agree or contract to Transfer, any
Covered Shares (or any interest therein) with respect to which Stockholder
directly or indirectly controls
2
3
the right to Transfer; provided, however, that Stockholder may Transfer its
respective Covered Shares to an Affiliate of Stockholder provided that such
Affiliate agrees to be subject to the terms and conditions set forth in this
Agreement.
Section 3. Other Covenants and Agreements.
Each party shall execute and deliver such additional instruments and
other documents and shall take such further actions as may be reasonably
necessary or appropriate to effectuate, carry out and comply with all of their
obligations under this Agreement. Without limiting the generality of the
foregoing, neither party shall enter into any agreement or arrangement (or
alter, amend or terminate any existing agreement or arrangement) or take any
other action (or fail to take any other action) if such action (or failure)
would materially impair the ability of any party to effectuate, carry out or
comply with all the terms of this Agreement. Illinova hereby agrees to (a)
cooperate with Stockholder in connection with any filings required to be made by
Stockholder in connection with the Mergers and the transactions contemplated
thereby, and (b) cause Newco to file with the SEC a Proxy Statement/Prospectus
registering shares of Newco Common Stock, Class B Common Stock and Series A
Convertible Preferred Stock in accordance with Section 8.13 of the Merger
Agreement.
Section 4. Representations and Warranties of Illinova. Illinova
represents and warrants to Stockholder as follows: (a) each of this Agreement
and the Merger Agreement has been approved by the Board of Directors of
Illinova, representing all necessary corporate action on the part of Illinova,
except for the approval of Illinova's stockholders contemplated by the Merger
Agreement, (b) each of this Agreement and the Merger Agreement has been duly
executed and delivered by a duly authorized officer of Illinova, and (c) each of
this Agreement and the Merger Agreement constitutes a valid and binding
agreement of Illinova, enforceable against Illinova.
Section 5. Representations and Warranties of Stockholder. Stockholder
represents and warrants to Illinova as follows: (a) Stockholder has the
corporate power and authority to execute and deliver this Agreement, (b) this
Agreement has been duly executed and delivered by Stockholder, (c) this
Agreement constitutes the valid and binding agreement of such Stockholder, (d)
except as provided in the Stockholders Agreement, Stockholder has the full power
and authority to vote, or execute a consent, with respect to, all Covered Shares
as contemplated hereby, (e) the securities of Dynegy listed next to the name of
Stockholder on Schedule I hereto are the only securities of Dynegy owned by
Stockholder and over which Stockholder has the power to vote (or direct the
voting) (collectively, the "Shares"), (f) except as provided in the Stockholders
Agreement, Stockholder is the lawful owner of the Shares listed on Schedule I as
owned by it, free and clear of all liens, charges, encumbrances and commitments
of every kind, other than this Agreement, and has the power to vote (including
by an irrevocable power to vote or execution of a consent) such Shares without
any actions on the part of any other party, and (g) except as provided in the
Stockholders Agreement, the execution and delivery by Stockholder of this
Agreement does not violate or breach any law, contract, instrument, agreement or
arrangement to which Stockholder is a party or by which Stockholder is bound,
except to the extent such violation or breach does not prevent or delay
performance of such Stockholder's obligations hereunder.
3
4
Section 6. Effectiveness. It is a condition precedent to the
effectiveness of this Agreement that the Merger Agreement shall have been duly
executed and delivered by the parties thereto. Any amendment or change to the
Merger Agreement that (i) changes the Exchange Ratio, (ii) changes the amount
and nature of the Aggregate Merger Consideration payable per share of Dynegy
Stock, (iii) changes the termination date of the Merger Agreement, or (iv)
materially adversely affects the Stockholder, will nullify the effectiveness of
this Agreement and this Agreement shall terminate immediately.
Section 7. Miscellaneous.
(a) Notices, Etc. All notices, requests, demands or other
communications required by or otherwise with respect to this Agreement shall be
in writing and shall be deemed to have been duly given to any party when
delivered personally (by courier service or otherwise), when delivered by
telecopy and confirmed by return telecopy, or three days after being mailed by
courier service that guarantees overnight delivery, in each case to the
applicable addresses set forth below:
If to Illinova:
Illinova Corporation
500 South 27th Street,
Decatur, IL 62521
Attention: President
Telecopy: (217) 362-7458
with copies to:
Illinova Corporation
500 South 27th Street
Decatur, IL 62521
Attention: Chief Legal Officer
Telecopy: (217) 424-6978
and:
Troutman Sanders LLP
600 Peachtree Street, N.E., Suite 5200
Atlanta, GA 30308
Attention: W. Brinkley Dickerson, Jr.
Telecopy: (404) 962-6743
If to the Stockholder:
BG Holdings, Inc.
-------------------------------
-------------------------------
Attention:
-------------------------------
4
5
Telecopy:
-------------------------------
with copies to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: Alfred J. Ross, Jr.
Telecopy: (212) 848-7179
and:
Dynegy Inc.
1000 Louisiana, Ste. 5800
Houston, TX 77002
Attention: Senior Vice President and General Counsel
Telecopy: (713) 507-6808
and:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
711 Louisiana Street, 19th Floor
Houston, TX 77002
Attention: Robert Allen
Telecopy: (713) 236-0822
or to such other address as such party shall have designated by notice so given
to each other party.
(b) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by Illinova and Stockholder. In addition, Illinova
agrees not to waive or modify Section 9.1(h) of the Merger Agreement without the
prior consent of Stockholder.
(c) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the parties and their
respective successors and assigns, including without limitation any corporate
successor by merger or otherwise, or any party succeeding to the ownership of
(or power to vote) Stockholder's Covered Shares.
(d) Entire Agreement. This Agreement, the BG Stock Purchase Agreement
and the Ancillary Agreements (together with the Merger Agreement) embodies the
entire agreement and understanding between the parties relating to the subject
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter. There are no representations, warranties or covenants by
the parties hereto relating to such subject matter other than those expressly
set forth in this Agreement, the Ancillary Agreements and the Merger Agreement.
5
6
(e) Severability. If any term of this Agreement or the application
thereof to any party or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such term to
the other party or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law, provided that in
such event the parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be invalid or
unenforceable) that will be valid and enforceable and will carry out the
parties' intentions hereunder.
(f) Specific Performance. The parties acknowledge that money damages
are not an adequate remedy for violations of this Agreement and that any party
may, in its sole discretion, apply to a court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
(g) Remedies Cumulative. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise or beginning of the
exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
(h) No Waiver. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
(i) Third Party Beneficiaries. This Agreement is not intended to be for
the benefit of and shall not be enforceable by any person or entity who or which
is not a party hereto, except the parties hereto acknowledge that Dynegy is a
third party beneficiary with respect to Section 1(b) of this Agreement.
(j) Jurisdiction. Each party (a) consents to submit itself to the
personal jurisdiction of any federal court located in the State of Delaware or
any Delaware state court if any action, suit or proceeding arises in connection
with this Agreement and (b) agrees that it will not attempt to defeat or deny
such personal jurisdiction by motion or other request for leave from any such
court. Each party hereto hereby waives any right to a trial by jury in
connection with any such action.
(k) Governing Law. This Agreement and all disputes hereunder shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware to the fullest extent possible.
(l) Name, Captions, Gender. The name assigned this Agreement and the
section captions used herein are for convenience of reference only and shall not
affect the interpretation or
6
7
construction hereof. Whenever the context may require, any pronoun used herein
shall include the corresponding masculine, feminine or neuter forms.
(m) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
(n) Expenses. Illinova and Stockholder shall bear its own expenses
incurred in connection with this Agreement and the transactions contemplated
hereby.
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
7
8
IN WITNESS WHEREOF, the parties have duly executed this Voting
Agreement as of the date first above written.
ILLINOVA CORPORATION
By: /s/ Charles E. Bayless
-----------------------------
Name: Charles E. Bayless
-----------------------------
Title: Chairman, President and CEO
-----------------------------
BG HOLDINGS, INC.
By: /s/ Cynthia Masters
-----------------------------
Name: Cynthia Masters
-----------------------------
Title: Vice President
-----------------------------
9
SCHEDULE I
SHARES
Dynegy Common Stock 38,789,876
9