EXHIBIT 10(b)
UNION ELECTRIC COMPANY 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, Union Electric Holding Corp., a Missouri
corporation ("Holdings") and Union Electric 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 Holdings with and into CIPSCO
(the "Mergers"); and
WHEREAS, as a condition to CIPSCO' willingness to enter into the
Merger Agreement, CIPSCO has requested that Union Electric agree, and Union
Electric has so agreed, to grant to CIPSCO an option with respect to certain
shares of Union Electric's common stock, on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, to induce CIPSCO 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. Union Electric hereby grants CIPSCO an
irrevocable option (the "Union Electric Option") to purchase up to 6,983,233
shares, subject to adjustment as provided in Section 11 (such shares being
referred to herein as the "Union Electric Shares") of common stock, par value
$5.00 per share, of Union Electric (the "Union Electric Common Stock") (being
6.84% of the number of shares of Union Electric Common Stock outstanding on the
date hereof) in the manner set forth below at a price (the "Exercise Price") per
Union Electric Share of $35.94 (which is equal to the Fair Market Value (as
defined below) of a share of Union Electric Common Stock on the date hereof),
payable, at CIPSCO's option, (a) in cash or (b) subject to the receipt of
approvals of any Governmental Authority required for Union Electric to acquire
shares of common stock, no par value per share, of CIPSCO ("CIPSCO Shares") from
CIPSCO, and for CIPSCO to issue the CIPSCO Shares to Union Electric, which
approvals Union Electric and CIPSCO shall use their respective best efforts to
obtain, in CIPSCO Shares, in
either case in accordance with Section 4 hereof. Notwithstanding the foregoing,
in no event shall the number of Union Electric Shares for which the Union
Electric Option is exercisable exceed 5.48% of the number of issued and
outstanding shares of Union Electric 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 Union Electric Option may be exercised by
CIPSCO, in whole or in part, at any time or from time to time after the Merger
Agreement becomes terminable by CIPSCO under circumstances which could entitle
CIPSCO 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 CIPSCO to terminate the Merger Agreement under Section 9.1(g)(iii)
thereof (provided that at the time of such action or inaction by the Board of
Directors of Union Electric 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, Union Electric which at the time of
such action or inaction shall not have been rejected by the Board of Directors
of Union Electric), any such event by which the Merger Agreement becomes so
terminable by CIPSCO being referred to herein as a "Trigger Event." Union
Electric shall notify CIPSCO promptly in writing of the occurrence of any
Trigger Event, it being understood that the giving of such notice by Union
Electric shall not be a condition to the right of CIPSCO to exercise the Union
Electric Option. In the event CIPSCO wishes to exercise the Union Electric
Option, CIPSCO shall deliver to Union Electric a written notice (an "Exercise
Notice") specifying the total number of Union Electric Shares it wishes to
purchase. Each closing of a purchase of Union Electric Shares (a "Closing")
shall occur at a place, on a date and at a time designated by CIPSCO in an
Exercise Notice delivered at least two business days prior to the date of the
Closing. The Union Electric 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 Union Electric 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
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this clause (iii) later than the third anniversary of the date hereof).
Notwithstanding the foregoing, the Union Electric Option may not be exercised if
CIPSCO 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
CIPSCO to Union Electric of the Exercise Notice and the tender of the applicable
aggregate Exercise Price, CIPSCO shall be deemed to be the holder of record of
the Union Electric Shares issuable upon such exercise, notwithstanding that the
stock transfer books of Union Electric shall then be closed or that certificates
representing such Union Electric Shares shall not then be actually delivered to
CIPSCO.
3. Conditions to Closing. The obligation of Union Electric to issue
the Union Electric Shares to CIPSCO hereunder is subject to the conditions,
which (other than the conditions described in clauses (i), (iii) and (iv) below)
may be waived by Union Electric in its sole discretion, that (i) all waiting
periods, if any, under the HSR Act, applicable to the issuance of the Union
Electric Shares hereunder shall have expired or have been terminated; (ii) the
Union Electric Shares, and any CIPSCO 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 Union
Electric Shares hereunder shall have been obtained or made, as the case may be,
including, without limitation, the approval of, if applicable, the issuance of
the CIPSCO Shares to Union Electric and the acquisition by Union Electric of the
CIPSCO Shares constituting the Exercise Price hereunder, and approval of the SEC
under the 1935 Act of the acquisition of the Union Electric Shares by CIPSCO;
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) Union Electric will deliver to
CIPSCO or its designee a single certificate in definitive form representing the
number of the Union Electric Shares designated by CIPSCO in its Exercise Notice,
such certificate to be registered in the name of CIPSCO and to bear the legend
set forth in Section 12, and (b) CIPSCO will deliver to Union Electric the
aggregate Exercise Price for the Union Electric 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
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certificate or certificates representing the number of CIPSCO Shares being
issued by CIPSCO in consideration thereof, as the case may be. For the purposes
of this Agreement, the number of CIPSCO Shares to be delivered to Union Electric
shall be equal to the quotient obtained by dividing (i) the product of (x) the
number of Union Electric Shares with respect to which the Union Electric Option
is being exercised and (y) the Exercise Price by (ii) the Fair Market Value of
the CIPSCO Shares on the date immediately preceding the date the Exercise Notice
is delivered to Union Electric. Union Electric 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 CIPSCO or such designees of
CIPSCO as shall have obtained appropriate regulatory approval.
5. Representations and Warranties of Union Electric. Union Electric
represents and warrants to CIPSCO that (a) except as set forth in Section 5.1 of
the Union Electric Disclosure Schedule, Union Electric 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 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) such corporate
action (including the approval of the Board of Directors of Union Electric) is
intended to render inapplicable to this Agreement and the Merger Agreement and
the transactions contemplated hereby and thereby, 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), (d) this
Agreement has been duly executed and delivered by Union Electric, 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, (e) Union Electric has taken all
necessary corporate action to authorize and reserve for issuance and to permit
it to issue, upon exercise of the Union Electric Option in accordance with its
terms, and at all times from the date hereof through the expiration of the Union
Electric Option will have reserved, 6,983,233 authorized and unissued Union
Electric 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
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of this Agreement, will be validly issued, fully paid and nonassessable, (f)
upon delivery of the Union Electric Shares to CIPSCO upon the exercise of the
Union Electric Option in accordance with its terms, CIPSCO will acquire the
Union Electric Shares free and clear of all claims, liens, charges, encumbrances
and security interests of any nature whatsoever, (g) 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 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 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 (C), could reasonably be
expected to have a material adverse effect on Union Electric and its
subsidiaries taken as a whole, (h) 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 performance of this
Agreement by Union Electric will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, (i) none of Union Electric, any of its affiliates or anyone acting on
its or their behalf has issued, sold or offered any security of Union Electric
to any person under circumstances that would cause the issuance and sale of the
Union Electric 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 CIPSCO contained in Section 6(h) hereof are
true and correct, the issuance, sale and delivery of the Union Electric Shares
hereunder would be exempt from the registration and prospectus delivery
requirements of the Securities Act, as in effect on the date hereof (and Union
Electric shall not take any action which would cause the issuance, sale and
delivery of the Union Electric Shares hereunder not to be exempt from such
requirements), and (j) any CIPSCO Shares acquired pursuant to
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this Agreement will be acquired for Union Electric's own account, for investment
purposes only and will not be acquired by Union Electric with a view to the
public distribution thereof in violation of any applicable provision of the
Securities Act.
6. Representations and Warranties of CIPSCO. CIPSCO represents and
warrants to Union Electric that (a) CIPSCO is a corporation duly organized,
validly existing and 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 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) this Agreement has been duly executed and delivered by
CIPSCO and 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, (d) prior to any
delivery of CIPSCO Shares in consideration of the purchase of Union Electric
Shares pursuant hereto, CIPSCO will have taken all necessary corporate action to
authorize for issuance and to permit it to issue such CIPSCO 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 Union Electric of the CIPSCO Shares the
provisions of the MGBCL referred to in Section 4.15 of the Merger Agreement
(other than the provisions described in Section 4.15 of the CIPSCO Disclosure
Schedule), (e) upon any delivery of such CIPSCO Shares to Union Electric in
consideration of the purchase of Union Electric Shares pursuant hereto, Union
Electric will acquire the CIPSCO Shares free and clear of all claims, liens,
charges, encumbrances and security interests of any nature whatsoever, (f)
except as described in Section 4.4(b) of the 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 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 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
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of each of clauses (B) and/or (C), would have a material adverse effect on
CIPSCO and its subsidiaries taken as a whole, (g) 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
consummation by CIPSCO of the transactions contemplated 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 Union Electric Option will be acquired for CIPSCO's own
account, for investment purposes only and will not be, and the Union Electric
Option is not being, acquired by CIPSCO with a view to the public distribution
thereof in violation of any applicable provision of the Securities Act.
7. Certain Repurchases.
(a) CIPSCO Put. At the request of CIPSCO by written notice at any
time during which the Union Electric Option is exercisable pursuant to Section 2
(the "Repurchase Period"), Union Electric (or any successor entity thereof)
shall repurchase from CIPSCO all or any portion of the Union Electric Option, at
the price set forth in subparagraph (i) below, or, at the request of CIPSCO 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), Union
Electric (or any successor entity thereof) shall repurchase from CIPSCO all or
any portion of the Union Electric Shares purchased by CIPSCO pursuant to the
Union Electric Option, at the price set forth in subparagraph (ii) below:
(i) the difference between (x) the "Market/Offer Price" for
shares of Union Electric Common Stock as of the date CIPSCO 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 Union Electric Common Stock as of such date (the
"Market Price")) and the (y) Exercise Price, multiplied by the number of
Union Electric Shares purchasable pursuant to the Union Electric Option
(or portion thereof with respect to which CIPSCO is exercising its
rights under this Section 7), but only if the Market/Offer Price is
greater than the Exercise Price;
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(ii) the product of (x) the sum of (A) the Exercise Price paid by
CIPSCO per Union Electric Share acquired pursuant to the Union Electric
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 Union Electric Shares so to be
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 CIPSCO of a
notice of repurchase.
(b) Redelivery of CIPSCO Shares. If CIPSCO elected to purchase Union
Electric Shares pursuant to the exercise of the Union Electric Option by the
issuance and delivery of CIPSCO Shares, then Union Electric shall, if so
requested by CIPSCO, 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 CIPSCO
Shares to CIPSCO, 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 Union Electric Shares purchased by CIPSCO pursuant to the Union
Electric Option are to be repurchased pursuant to this Section 7, then CIPSCO
shall issue to Union Electric a new certificate representing those CIPSCO Shares
which are not due to be redelivered to CIPSCO pursuant to this Section 7 as they
constituted payment of the Exercise Price for the Union Electric Shares not
being repurchased.
(c) Payment and Redelivery of Union Electric Option or Shares. In
the event CIPSCO exercises its rights under this Section 7, Union Electric
shall, within 10 business days thereafter, pay the required amount to CIPSCO in
immediately available funds and CIPSCO shall surrender to Union Electric the
Union Electric Option or the certificates evidencing the Union Electric Shares
purchased by CIPSCO pursuant thereto, and CIPSCO shall warrant that it owns the
Union Electric Option or such shares and that the Union Electric Option or such
shares are then free and clear of all liens, claims, damages, charges and
encumbrances of any kind or nature whatsoever.
(d) CIPSCO Call. If CIPSCO has elected to purchase CIPSCO Shares
pursuant to the exercise of the Union Electric Option by the issuance and
delivery of CIPSCO Shares, notwithstanding that CIPSCO may no longer hold any
such Union Electric Shares or that CIPSCO elects not to exercise its other
rights
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under this Section 7, CIPSCO 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 February 11, 1998), Union Electric to sell to
CIPSCO any such CIPSCO Shares at the price attributed to such CIPSCO 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 CIPSCO Shares pursuant to
Section 4 to the closing date under this Section 7(d) less any dividends on such
CIPSCO 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 CIPSCO 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.
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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 (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
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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 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
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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).
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 Union Electric contained in this Agreement or in the Merger
Agreement, in the event of any change in Union Electric 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 Union Electric Option, and the
purchase price per share provided in Section 1, shall be adjusted appropriately
to restore to CIPSCO its rights hereunder, including the right to purchase from
Union Electric (or its successors) shares of Union Electric Common Stock
representing 6.84% of the outstanding Union Electric 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
Union Electric Common Stock issued to CIPSCO hereunder, and CIPSCO Shares, if
any, delivered to Union Electric 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 CIPSCO or Union Electric, 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
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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 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
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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.
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 CIPSCO is not permitted to acquire, or Union Electric is not
permitted to repurchase pursuant to Section 7, the full number of shares of
Union Electric Common Stock provided in Section 1 hereof (as the same may be
adjusted), it is the express intention of Union Electric to allow CIPSCO to
acquire or to require Union Electric 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
-15-
state court in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (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 Union Electric Option. Upon receipt by Union
Electric of evidence reasonably satisfactory to
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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 Agreement, if mutilated, Union
Electric 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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