EXHIBIT 10(a)
CIPSCO STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of August 11, 1995 by and between
Union Electric Company, a Missouri corporation ("Union Electric"), and CIPSCO
Incorporated, an Illinois corporation ("CIPSCO").
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) Union Electric, CIPSCO, Arch Holding Corp., a Missouri
corporation ("Holdings") and Arch Merger Inc., a Missouri corporation ("Merger
Sub"), are entering into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"), which provides, among other things, upon the
terms and subject to the conditions thereof, for the merger of Merger Sub with
and into Union Electric and the merger of CIPSCO with and into Holdings (the
"Mergers"); and
WHEREAS, as a condition to Union Electric's willingness to enter into
the Merger Agreement, Union Electric has requested that CIPSCO agree, and CIPSCO
has so agreed, to grant to Union Electric an option with respect to certain
shares of CIPSCO' common stock, on the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, to induce Union Electric to enter into the Merger
Agreement, and in consideration of the mutual covenants and agreements set forth
herein and in the Merger Agreement, the parties hereto agree as follows:
1. Grant of Option. CIPSCO hereby grants Union Electric an
irrevocable option (the "CIPSCO Option") to purchase up to 6,779,838 shares,
subject to adjustment as provided in Section 11 (such shares being referred to
herein as the "CIPSCO Shares") of common stock, no par value, of CIPSCO (the
"CIPSCO Common Stock") (being 19.9% of the number of shares of CIPSCO Common
Stock outstanding on the date hereof) in the manner set forth below at a price
(the "Exercise Price") per CIPSCO Share of $37.02 (which is equal to the product
of (x) the Fair Market Value (as defined below) of a share of Common Stock, par
value $5.00 per share, of Union Electric (such shares being referred to herein
as the "Union Electric Shares") on the date hereof and (y) the Exchange Ratio),
payable, at Union Electric's option, (a) in cash or (b) subject to the receipt
of the approvals of any Governmental Authority required for the CIPSCO to
acquire the Union Electric Shares from Union Electric, and for Union Electric to
issue the Union Electric Shares to CIPSCO, which approvals CIPSCO and Union
Electric shall use their respective best efforts to obtain, in Union Electric
Shares, in either case in accordance with Section 4 hereof. Notwithstanding the
foregoing, in no event shall the
number of CIPSCO Shares for which the CIPSCO Option is exercisable exceed 19.9%
of the number of issued and outstanding shares of CIPSCO Common Stock. As used
herein, the "Fair Market Value" of any share shall be the average of the daily
closing sales price for such share on the New York Stock Exchange (the "NYSE")
during the 10 NYSE trading days prior to the fifth NYSE trading day preceding
the date such Fair Market Value is to be determined. Capitalized terms used
herein but not defined herein shall have the meanings set forth in the Merger
Agreement.
2. Exercise of Option. The CIPSCO Option may be exercised by Union
Electric, in whole or in part, at any time or from time to time after the Merger
Agreement becomes terminable by Union Electric under circumstances which could
entitle Union Electric to termination fees under either Section 9.3(a) of the
Merger Agreement (provided that the events specified in Section 9.3(a)(ii)(x) of
the Merger Agreement shall have occurred, although the events specified in
Section 9.3(a)(ii)(y) thereof need not have occurred) or Section 9.3(b) of the
Merger Agreement (regardless of whether the Merger Agreement is actually
terminated or whether there occurs a closing of any Business Combination
involving a Target Party or a closing by which a Target Party becomes a
subsidiary), or which could entitle Union Electric to terminate the Merger
Agreement under Section 9.1(h)(iii) thereof (provided that at the time of such
action or inaction by the Board of Directors of CIPSCO or any committee thereof
there shall have been a third-party tender offer for shares of, or a third-party
offer or proposal with respect to a Business Combination involving, CIPSCO which
at the time of such action or inaction shall not have been rejected by the Board
of Directors of CIPSCO), any such event by which the Merger Agreement becomes so
terminable by Union Electric being referred to herein as a "Trigger Event."
CIPSCO shall notify Union Electric promptly in writing of the occurrence of any
Trigger Event, it being understood that the giving of such notice by CIPSCO
shall not be a condition to the right of Union Electric to exercise the CIPSCO
Option. In the event Union Electric wishes to exercise the CIPSCO Option, Union
Electric shall deliver to CIPSCO a written notice (an "Exercise Notice")
specifying the total number of CIPSCO Shares it wishes to purchase. Each closing
of a purchase of CIPSCO Shares (a "Closing") shall occur at a place, on a date
and at a time designated by Union Electric in an Exercise Notice delivered at
least two business days prior to the date of the Closing. The CIPSCO Option
shall terminate upon the earlier of: (i) the Effective Time; (ii) the
termination of the Merger Agreement pursuant to Section 9.1 thereof (other than
upon or during the continuance of a Trigger Event); or (iii) 180 days following
any termination of the Merger Agreement upon or during the continuance of a
Trigger Event (or if, at the expiration of such 180 day period the CIPSCO Option
cannot be exercised by reason of any applicable judgment, decree, order, law or
regulation, 10 business days after such impediment to exercise shall have been
removed or shall have become final and not subject to appeal, but in no event
under this clause (iii) later than the third anniversary of the date hereof).
Notwithstanding the foregoing, the CIPSCO Option may not be exercised if Union
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Electric is in material breach of any of its material representations or
warranties, or in material breach of any of its covenants or agreements,
contained in this Agreement or in the Merger Agreement. Upon the giving by
Union Electric to CIPSCO of the Exercise Notice and the tender of the applicable
aggregate Exercise Price, Union Electric shall be deemed to be the holder of
record of the CIPSCO Shares issuable upon such exercise, notwithstanding that
the stock transfer books of CIPSCO shall then be closed or that certificates
representing such CIPSCO Shares shall not then be actually delivered to Union
Electric.
3. Conditions to Closing. The obligation of CIPSCO to issue the
CIPSCO Shares to Union Electric hereunder is subject to the conditions, which
(other than the conditions described in clauses (i), (iii) and (iv) below) may
be waived by CIPSCO in its sole discretion, that (i) all waiting periods, if
any, under the HSR Act, applicable to the issuance of the CIPSCO Shares
hereunder shall have expired or have been terminated; (ii) the CIPSCO Shares,
and any Union Electric Shares which are issued in payment of the Exercise Price,
shall have been approved for listing on the NYSE upon official notice of
issuance; (iii) all consents, approvals, orders or authorizations of, or
registrations, declarations or filings with, any federal, state or local
administrative agency or commission or other federal state or local Governmental
Authority, if any, required in connection with the issuance of the CIPSCO Shares
hereunder shall have been obtained or made, as the case may be, including,
without limitation, the approval of, if applicable, the issuance of Union
Electric Shares to CIPSCO and the acquisition by CIPSCO of the Union Electric
Shares constituting the Exercise Price hereunder, and approval of the SEC under
the 1935 Act of the acquisition of the CIPSCO Shares by Union Electric; and (iv)
no preliminary or permanent injunction or other order by any court of competent
jurisdiction prohibiting or otherwise restraining such issuance shall be in
effect.
4. Closing. At any Closing, (a) CIPSCO will deliver to Union Electric
or its designee a single certificate in definitive form representing the number
of the CIPSCO Shares designated by Union Electric in its Exercise Notice, such
certificate to be registered in the name of Union Electric and to bear the
legend set forth in Section 12, and (b) Union Electric will deliver to CIPSCO
the aggregate Exercise Price for the CIPSCO Shares so designated and being
purchased by (i) wire transfer of immediately available funds or certified check
or bank check or (ii) subject to the condition in Section 1(b), a certificate or
certificates representing the number of Union Electric Shares being issued by
Union Electric in consideration thereof, as the case may be. For the purposes
of this Agreement, the
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number of Union Electric Shares to be delivered to CIPSCO shall be equal to the
quotient obtained by dividing (i) the product of (x) the number of CIPSCO Shares
with respect to which the CIPSCO Option is being exercised and (y) the Exercise
Price by (ii) the Fair Market Value of the Union Electric Shares on the date
immediately preceding the date the Exercise Notice is delivered to CIPSCO.
CIPSCO shall pay all expenses, and any and all United States federal, state and
local taxes and other charges that may be payable in connection with the
preparation, issue and delivery of stock certificates under this Section 4 in
the name of Union Electric or such of its designees as shall have obtained
appropriate regulatory approval.
5. Representations and Warranties of CIPSCO. CIPSCO represents and
warrants to Union Electric that (a) except as set forth in Section 4.1 of the
CIPSCO Disclosure Schedule, CIPSCO is a corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois and has
the corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder, (b) the execution and delivery of this Agreement by
CIPSCO and the consummation by CIPSCO of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
CIPSCO and no other corporate proceedings on the part of CIPSCO are necessary to
authorize this Agreement or any of the transactions contemplated hereby, (c)
such corporate action (including the approval of the Board of Directors of
CIPSCO) is intended to render inapplicable to this Agreement and the Merger
Agreement and the transactions contemplated hereby and thereby, the provisions
of the IBCL referred to in Section 4.15 of the Merger Agreement (other than the
provisions described in Section 4.15 of the CIPSCO Disclosure Schedule), (d)
this Agreement has been duly executed and delivered by CIPSCO, constitutes a
valid and binding obligation of CIPSCO and, assuming this Agreement constitutes
a valid and binding obligation of Union Electric, is enforceable against CIPSCO
in accordance with its terms, (e) CIPSCO has taken all necessary corporate
action to authorize and reserve for issuance and to permit it to issue, upon
exercise of the CIPSCO Option, and at all times from the date hereof through the
expiration of the CIPSCO Option will have reserved, 6,779,838 authorized and
unissued CIPSCO Shares, such amount being subject to adjustment as provided in
Section 11, all of which, upon their issuance and delivery in accordance with
the terms of this Agreement, will be validly issued, fully paid and
nonassessable, (f) upon delivery of the CIPSCO Shares to Union Electric upon the
exercise of the CIPSCO Option in accordance with its terms, Union Electric will
acquire the CIPSCO Shares free and clear of all claims, liens, charges,
encumbrances and security interests of any nature whatsoever, (g) except as
described in Section 4.4(b) of the
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Merger Agreement, the execution and delivery of this Agreement by CIPSCO does
not, and the consummation by CIPSCO of the transactions contemplated hereby will
not, violate, conflict with, or result in a breach of any provision of, or
constitute a default (with or without notice or lapse of time, or both) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination, cancellation, or acceleration of any
obligation or the loss of a material benefit under, or the creation of a lien,
pledge, security interest or other encumbrance on assets (any such conflict,
violation, default, right of termination, cancellation or acceleration, loss or
creation, a "Violation") of CIPSCO or any of its subsidiaries, pursuant to, (A)
any provision of the Articles of Incorporation or by-laws of CIPSCO, (B) any
provisions of any loan or credit agreement, note, mortgage, indenture, lease,
CIPSCO benefit plan or other agreement, obligation, instrument, permit,
concession, franchise, license or (C) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to CIPSCO or its properties or assets,
which Violation, in the case of each of clauses (B) and (C), could reasonably be
expected to have a material adverse effect on CIPSCO and its subsidiaries taken
as a whole, (h) except as described in Section 4.4(c) of the Merger Agreement or
Section 1(b) or Section 3 hereof, the execution and delivery of this Agreement
by CIPSCO does not, and the performance of this Agreement by CIPSCO will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, (i) none of CIPSCO, any of its
affiliates or anyone acting on its or their behalf has issued, sold or offered
any security of CIPSCO to any person under circumstances that would cause the
issuance and sale of the CIPSCO Shares, as contemplated by this Agreement, to be
subject to the registration requirements of the Securities Act as in effect on
the date hereof and, assuming the representations of Union Electric contained in
Section 6(h) hereof are true and correct, the issuance, sale and delivery of the
CIPSCO Shares hereunder would be exempt from the registration and prospectus
delivery requirements of the Securities Act, as in effect on the date hereof
(and CIPSCO shall not take any action which would cause the issuance, sale and
delivery of the CIPSCO Shares hereunder not to be exempt from such
requirements), and (j) any Union Electric Shares acquired pursuant to this
Agreement will be acquired for CIPSCO' own account, for investment purposes only
and will not be acquired by CIPSCO with a view to the public distribution
thereof in violation of any applicable provision of the Securities Act.
6. Representations and Warranties of Union Electric. Union Electric
represents and warrants to CIPSCO that (a) Union Electric is a corporation duly
organized, validly existing and
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in good standing under the laws of the State of Missouri and has the corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder, (b) the execution and delivery of this Agreement by Union
Electric and the consummation by Union Electric of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Union Electric and no other corporate proceedings on the part of Union
Electric are necessary to authorize this Agreement or any of the transactions
contemplated hereby, (c) this Agreement has been duly executed and delivered by
Union Electric and constitutes a valid and binding obligation of Union Electric,
and, assuming this Agreement constitutes a valid and binding obligation of
CIPSCO, is enforceable against Union Electric in accordance with its terms, (d)
prior to any delivery of Union Electric Shares in consideration of the purchase
of CIPSCO Shares pursuant hereto, Union Electric will have taken all necessary
corporate action to authorize for issuance and to permit it to issue such Union
Electric Shares, all of which, upon their issuance and delivery in accordance
with the terms of this Agreement, will be validly issued, fully paid and
nonassessable, and to render inapplicable to the receipt by CIPSCO of the Union
Electric Shares the provisions of the MGBCL referred to in Section 5.15 of the
Merger Agreement (other than the provisions described in Section 5.15 of the
Union Electric Disclosure Schedule), (e) upon any delivery of such Union
Electric Shares to CIPSCO in consideration of the purchase of CIPSCO Shares
pursuant hereto, CIPSCO will acquire the Union Electric Shares free and clear of
all claims, liens, charges, encumbrances and security interests of any nature
whatsoever, (f) except as described in Section 5.4(b) of the Merger Agreement,
the execution and delivery of this Agreement by Union Electric does not, and the
consummation by Union Electric of the transactions contemplated hereby will not,
violate, conflict with, or result in the breach of any provision of, or
constitute a default (with or without notice or lapse of time, or both) under,
or result in any Violation by Union Electric or any of its subsidiaries,
pursuant to (A) any provision of the Restated Articles of Incorporation or By-
laws of Union Electric, (B) any provisions of any loan or credit agreement,
note, mortgage, indenture, lease, Union Electric benefit plan or other
agreement, obligation, instrument, permit, concession, franchise, license or (C)
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Union Electric or its properties or assets, which Violation, in
the case of each of clauses (B) and/or (C), would have a material adverse effect
on Union Electric and its subsidiaries taken as a whole, (g) except as described
in Section 5.4(c) of the Merger Agreement or Section 1(b) or Section 3 hereof,
the execution and delivery of this Agreement by Union Electric does not, and the
consummation by Union Electric of the transactions contemplated
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hereby will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Authority and (h) any CIPSCO
Shares acquired upon exercise of the CIPSCO Option will be acquired for Union
Electric's own account, for investment purposes only and will not be, and the
CIPSCO Option is not being, acquired by Union Electric with a view to the public
distribution thereof in violation of any applicable provision of the Securities
Act.
7. Certain Repurchases.
(a) Union Electric Put. At the request of Union Electric by written
notice at any time during which the CIPSCO Option is exercisable pursuant to
Section 2 (the "Repurchase Period"), CIPSCO (or any successor entity thereof)
shall repurchase from Union Electric all or any portion of the CIPSCO Option, at
the price set forth in subparagraph (i) below, or, at the request of Union
Electric by written notice at any time prior to August 11, 1997 (provided that
such date shall be extended to February 11, 1998 under the circumstances where
the date after which either party may terminate the Merger Agreement pursuant to
Section 9.1(b) of the Merger Agreement has been extended to February 11, 1998),
CIPSCO (or any successor entity thereof) shall repurchase from Union Electric
all or any portion of the CIPSCO Shares purchased by Union Electric pursuant to
the CIPSCO Option, at the price set forth in subparagraph (ii) below:
(i) the difference between (x) the "Market/Offer Price" for shares
of CIPSCO Common Stock as of the date Union Electric gives notice of its
intent to exercise its rights under this Section 7 (defined as the higher
of (A) the price per share offered as of such date pursuant to any tender
or exchange offer or other offer with respect to a Business Combination
which was made prior to such date and not terminated or withdrawn as of
such date (the "Offer Price") and (B) the Fair Market Value of CIPSCO
Common Stock as of such date (the "Market Price")) and the (y) Exercise
Price, multiplied by the number of CIPSCO Shares purchasable pursuant to
the CIPSCO Option (or portion thereof with respect to which Union Electric
is exercising its rights under this Section 7), but only if the
Market/Offer Price is greater than the Exercise Price;
(ii) the product of (x) the sum of (A) the Exercise Price paid by
Union Electric per CIPSCO Share acquired pursuant to the CIPSCO Option and
(B) the difference between the Market/Offer Price and the Exercise Price,
but only if the Market/Offer Price is greater than the Exercise Price, and
(y) the number of CIPSCO Shares so to be
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repurchased pursuant to this Section 7. For purposes of this clause (ii),
the Offer Price shall be the highest price per share offered pursuant to a
tender or exchange offer or other Business Combination offer during the
Repurchase Period prior to the delivery by Union Electric of a notice of
repurchase.
(b) Redelivery of Union Electric Shares. If Union Electric elected to
purchase CIPSCO Shares pursuant to the exercise of the CIPSCO Option by the
issuance and delivery of Union Electric Shares, then CIPSCO shall, if so
requested by Union Electric, in fulfillment of its obligation pursuant to clause
(A) of Section 7(a)(ii)(x) (that is, with respect to the Exercise Price only and
without limitation to its obligation to pay additional consideration under
clause (B) of Section 7(a)(ii)(x)), redeliver the certificate for such Union
Electric Shares to Union Electric, free and clear of all liens, claims, damages,
charges and encumbrances of any kind or nature whatsoever; provided, however,
that if less than all of the CIPSCO Shares purchased by Union Electric pursuant
to the CIPSCO Option are to be repurchased pursuant to this Section 7, then
Union Electric shall issue to CIPSCO a new certificate representing those Union
Electric Shares which are not due to be redelivered to Union Electric pursuant
to this Section 7 as they constituted payment of the Exercise Price for the
CIPSCO Shares not being repurchased.
(c) Payment and Redelivery of CIPSCO Option or Shares. In the event
Union Electric exercises its rights under this Section 7, CIPSCO shall, within
10 business days thereafter, pay the required amount to Union Electric in
immediately available funds and Union Electric shall surrender to CIPSCO the
CIPSCO Option or the certificates evidencing the CIPSCO Shares purchased by
Union Electric pursuant thereto, and Union Electric shall warrant that it owns
the CIPSCO Option or such shares and that the CIPSCO Option or such shares are
then free and clear of all liens, claims, damages, charges and encumbrances of
any kind or nature whatsoever.
(d) Union Electric Call. If Union Electric has elected to purchase
CIPSCO Shares pursuant to the exercise of the CIPSCO Option by the issuance and
delivery of Union Electric Shares, notwithstanding that Union Electric may no
longer hold any such CIPSCO Shares or that Union Electric elects not to exercise
its other rights under this Section 7, Union Electric may require, at any time
or from time to time prior to August 11, 1997 (provided that such date shall be
extended to February 11, 1998 under the circumstances where the date after which
either party may terminate the Merger Agreement pursuant to Section 9.1(b) of
the Merger Agreement has been extended to
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February 11, 1998), CIPSCO to sell to Union Electric any such Union Electric
Shares at the price attributed to such Union Electric Shares pursuant to Section
4 plus interest at the rate of 7.5% per annum on such amount from the Closing
Date relating to the exchange of such Union Electric Shares pursuant to Section
4 to the closing date under this Section 7(d) less any dividends on such Union
Electric Shares paid during such period or declared and payable to stockholders
of record on a date during such period.
8. Voting of Shares. Following the date hereof and prior to the fifth
anniversary of the date hereof (the "Expiration Date"), each party shall vote
any shares of capital stock of the other party acquired by such party pursuant
to this Agreement, including any Union Electric Shares issued pursuant to
Section 1(b) ("Restricted Shares") or otherwise beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) by such party on each matter submitted to a vote
of shareholders of such other party for and against such matter in the same
proportion as the vote of all other shareholders of such other party are voted
(whether by proxy or otherwise) for and against such matter.
9. Restrictions on Transfer.
(a) Restrictions on Transfer. Prior to the Expiration Date, neither
party shall, directly or indirectly, by operation of law or otherwise, sell,
assign, pledge, or otherwise dispose of or transfer any Restricted Shares
beneficially owned by such party, other than (i) pursuant to Section 7, or (ii)
in accordance with Section 9(b) or Section 10.
(b) Permitted Sales. Following the termination of the Merger
Agreement, a party shall be permitted to sell any Restricted Shares beneficially
owned by it if such sale is made pursuant to a tender or exchange offer that has
been approved or recommended, or otherwise determined to be fair to and in the
best interests of the shareholders of the other party, by a majority of the
members of the Board of Directors of such other party, which majority shall
include a majority of directors who were directors prior to the announcement of
such tender or exchange offer.
10. Registration Rights. Following the termination of the Merger
Agreement, each party hereto (a "Designated Holder") may by written notice (the
"Registration Notice") to the other party (the "Registrant") request the
Registrant to register under the Securities Act all or any part of the
Restricted Shares beneficially owned by such Designated Holder
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(the "Registrable Securities") pursuant to a bona fide firm commitment
underwritten public offering in which the Designated Holder and the underwriters
shall effect as wide a distribution of such Registrable Securities as is
reasonably practicable and shall use their best efforts to prevent any person
(including any Group (as used in Rule 13d-5 under the Exchange Act)) and its
affiliates from purchasing through such offering Restricted Shares representing
more than 1% of the outstanding shares of common stock of the Registrant on a
fully diluted basis (a "Permitted Offering"). The Registration Notice shall
include a certificate executed by the Designated Holder and its proposed
managing underwriter, which underwriter shall be an investment banking firm of
nationally recognized standing (the "Manager"), stating that (i) they have a
good faith intention to commence promptly a Permitted Offering and (ii) the
Manager in good faith believes that, based on the then prevailing market
conditions, it will be able to sell the Registrable Securities at a per share
price equal to at least 80% of the then Fair Market Value of such shares. The
Registrant (and/or any person designated by the Registrant) shall thereupon have
the option exercisable by written notice delivered to the Designated Holder
within 10 business days after the receipt of the Registration Notice,
irrevocably to agree to purchase all or any part of the Registrable Securities
proposed to be so sold for cash at a price (the "Option Price") equal to the
product of (i) the number of Registrable Securities to be so purchased by the
Registrant and (ii) the then Fair Market Value of such shares. Any such purchase
of Registrable Securities by the Registrant (or its designee) hereunder shall
take place at a closing to be held at the principal executive offices of the
Registrant or at the offices of its counsel at any reasonable date and time
designated by the Registrant and/or such designee in such notice within 20
business days after delivery of such notice. Any payment for the shares to be
purchased shall be made by delivery at the time of such closing of the Option
Price in immediately available funds.
If the Registrant does not elect to exercise its option pursuant to
this Section 10 with respect to all Registrable Securities, it shall use its
best efforts to effect, as promptly as practicable, the registration under the
Securities Act of the unpurchased Registrable Securities proposed to be so sold;
provided, however, that (i) neither party shall be entitled to more than an
aggregate of two effective registration statements hereunder and (ii) the
Registrant will not be required to file any such registration statement during
any period of time (not to exceed 40 days after such request in the case of
clause (A) below or 90 days in the case of clauses (B) and (C) below) when (A)
the Registrant is in possession of material non-public information which it
reasonably believes
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would be detrimental to be disclosed at such time and, in the opinion of counsel
to the Registrant, such information would have to be disclosed if a registration
statement were filed at that time; (B) the Registrant is required under the
Securities Act to include audited financial statements for any period in such
registration statement and such financial statements are not yet available for
inclusion in such registration statement; or (C) the Registrant determines, in
its reasonable judgment, that such registration would interfere with any
financing, acquisition or other material transaction involving the Registrant or
any of its affiliates. The Registrant shall use its reasonable best efforts to
cause any Registrable Securities registered pursuant to this Section 10 to be
qualified for sale under the securities or Blue-Sky laws of such jurisdictions
as the Designated Holder may reasonably request and shall continue such
registration or qualification in effect in such jurisdiction; provided, however,
that the Registrant shall not be required to qualify to do business in, or
consent to general service of process in, any jurisdiction by reason of this
provision.
The registration rights set forth in this Section 10 are subject to
the condition that the Designated Holder shall provide the Registrant with such
information with respect to such holder's Registrable Securities, the plans for
the distribution thereof, and such other information with respect to such holder
as, in the reasonable judgment of counsel for the Registrant, is necessary to
enable the Registrant to include in such registration statement all material
facts required to be disclosed with respect to a registration thereunder.
A registration effected under this Section 10 shall be effected at the
Registrant's expense, except for underwriting discounts and commissions and the
fees and the expenses of counsel to the Designated Holder, and the Registrant
shall provide to the underwriters such documentation (including certificates,
opinions of counsel and "comfort" letters from auditors) as are customary in
connection with underwritten public offerings as such underwriters may
reasonably require. In connection with any such registration, the parties agree
(i) to indemnify each other and the underwriters in the customary manner, (ii)
to enter into an underwriting agreement in form and substance customary for
transactions of such type with the Manager and the other underwriters
participating in such offering and (iii) to take all further actions which shall
be reasonably necessary to effect such registration and sale (including, if the
Manager deems it necessary, participating in road-show presentations).
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The Registrant shall be entitled to include (at its expense)
additional shares of its common stock in a registration effected pursuant to
this Section 10 only if and to the extent the Manager determines that such
inclusion will not adversely affect the prospects for success of such offering.
11. Adjustment Upon Changes in Capitalization. Without limitation to
any restriction on CIPSCO contained in this Agreement or in the Merger
Agreement, in the event of any change in CIPSCO Common Stock by reason of stock
dividends, splitups, mergers (other than the Mergers), recapitalizations,
combinations, exchange of shares or the like, the type and number of shares or
securities subject to the CIPSCO Option, and the purchase price per share
provided in Section 1, shall be adjusted appropriately to restore to Union
Electric its rights hereunder, including the right to purchase from CIPSCO (or
its successors) shares of CIPSCO Common Stock representing 19.9% of the
outstanding CIPSCO Common Stock for the aggregate Exercise Price calculated as
of the date of this Agreement as provided in Section 1.
12. Restrictive Legends. Each certificate representing shares of
CIPSCO Common Stock issued to Union Electric hereunder, and Union Electric
Shares, if any, delivered to CIPSCO at a Closing, shall include a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT, DATED
AS OF AUGUST 11, 1995, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER UPON
REQUEST.
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Union Electric or CIPSCO, as
the case may be, shall have delivered to the other party a copy of a letter from
the staff of the Securities and Exchange Commission, or an opinion of counsel,
in form and substance satisfactory to the other party, to the effect that such
legend is not required for purposes of the Securities Act; (ii) the reference to
the provisions of this Agreement in the above legend shall be removed by
delivery of substitute certificate(s) without such reference if the shares have
been sold or transferred in compliance with the provisions of this Agreement and
under circumstances that
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do not require the retention of such reference; and (iii) the legend shall be
removed in its entirety if the conditions in the preceding clauses (i) and (ii)
are both satisfied. In addition, such certificates shall bear any other legend
as may be required by law. Certificates representing shares sold in a registered
public offering pursuant to Section 10 shall not be required to bear the legend
set forth in this Section 12.
13. Binding Effect; No Assignment; No Third Party Beneficiaries. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Except as expressly
provided for in this Agreement, neither this Agreement nor the rights or the
obligations of either party hereto are assignable, except by operation of law,
or with the written consent of the other party. Nothing contained in this
Agreement, express or implied, is intended to confer upon any person other than
the parties hereto and their respective permitted assigns any rights or remedies
of any nature whatsoever by reason of this Agreement. Any Restricted Shares
sold by a party in compliance with the provisions of Section 10 shall, upon
consummation of such sale, be free of the restrictions imposed with respect to
such shares by this Agreement, unless and until such party shall repurchase or
otherwise become the beneficial owner of such shares, and any transferee of such
shares shall not be entitled to the registration rights of such party.
14. Specific Performance. The parties recognize and agree that if for
any reason any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party agrees that, in addition to other
remedies, the other party shall be entitled to an injunction restraining any
violation or threatened violation of the provisions of this Agreement. In the
event that any action should be brought in equity to enforce the provisions of
the Agreement, neither party will allege, and each party hereby waives the
defense, that there is adequate remedy at law.
15. Entire Agreement. This Agreement, the Confidentiality Agreement
and the Merger Agreement (including the exhibits and schedules thereto)
constitute the entire agreement among the parties with respect to the subject
matter hereof and thereof and supersede all other prior agreements and
understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof and thereof.
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16. Further Assurances. Each party will execute and deliver all such
further documents and instruments and take all such further action as may be
necessary in order to consummate the transactions contemplated hereby.
17. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which shall remain in full force and effect. In
the event any court or other competent authority holds any provisions of this
Agreement to be null, void or unenforceable, the parties hereto shall negotiate
in good faith the execution and delivery of an amendment to this Agreement in
order, as nearly as possible, to effectuate, to the extent permitted by law, the
intent of the parties hereto with respect to such provision and the economic
effects thereof. If for any reason any such court or regulatory agency
determines that Union Electric is not permitted to acquire, or CIPSCO is not
permitted to repurchase pursuant to Section 7, the full number of shares of
CIPSCO Common Stock provided in Section 1 hereof (as the same may be adjusted),
it is the express intention of CIPSCO to allow Union Electric to acquire or to
require CIPSCO to repurchase such lesser number of shares as may be permissible,
without any amendment or modification hereof. Each party agrees that, should
any court or other competent authority hold any provision of this Agreement or
part hereof to be null, void or unenforceable, or order any party to take any
action inconsistent herewith, or not take any action required herein, the other
party shall not be entitled to specific performance of such provision or part
hereof or to any other remedy, including but not limited to money damages, for
breach hereof or of any other provision of this Agreement or part hereof as the
result of such holding or order.
18. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if (i) delivered personally, or (ii) sent
by reputable overnight courier service, or (iii) telecopied (which is
confirmed), or (iv) five days after being mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
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A. If to Union Electric, to:
Union Electric Company
1901 Chouteau Avenue
P.O. Box 149
St. Louis, MO 63166
Attention: Donald E. Brandt
Telephone: (314) 554-2473
Telecopy: (314) 554-3066
and a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Seth A. Kaplan, Esq.
Telephone: (212) 403-1000
Telecopy: (212) 403-2000
B. If to CIPSCO, to:
CIPSCO Incorporated
607 East Adams Street
Springfield, IL 62739
Attention: Craig D. Nelson
Telephone: (217) 525-5315
Telecopy: (217) 535-5067
with a copy to:
Jones, Day, Reavis & Pogue
77 West Wacker Drive
Chicago, IL 60601-1692
Attention: Robert A. Yolles
Telephone: (312) 782-3939
Telecopy: (312) 782-8585
19. Governing Law; Choice of Forum. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed entirely within such State and without
regard to its choice of law principles. Each of the parties hereto (a) consents
to submit itself to the personal jurisdiction of any federal court located in
the State of New York or any New York state court in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement,
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(b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (c)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of New York or a New York state court.
20. Interpretation. When a reference is made in this Agreement to a
Section such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The descriptive headings herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
21. Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed to be an original, but both of which, taken
together, shall constitute one and the same instrument.
22. Expenses. Except as otherwise expressly provided herein or in the
Merger Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
23. Amendments; Waiver. This Agreement may be amended by the parties
hereto and the terms and conditions hereof may be waived only by an instrument
in writing signed on behalf of each of the parties hereto, or, in the case of a
waiver, by an instrument signed on behalf of the party waiving compliance.
24. Extension of Time Periods. The time periods for exercise of
certain rights under Sections 2, 6 and 7 shall be extended: (i) to the extent
necessary to obtain all regulatory approvals for the exercise of such rights,
and for the expiration of all statutory waiting periods; and (ii) to the extent
necessary to avoid any liability under Section 16(b) of the Exchange Act by
reason of such exercise.
25. Replacement of CIPSCO Option. Upon receipt by CIPSCO of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
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Agreement, if mutilated, CIPSCO will execute and deliver a new Agreement of like
tenor and date.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers as of the date first
above written.
UNION ELECTRIC COMPANY
By: /s/ Charles W. Mueller
----------------------
Name: Charles W. Mueller
Title: President
CIPSCO INCORPORATED
By: /s/ Clifford L. Greenwalt
-------------------------
Name: Clifford L. Greenwalt
Title: President
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