EXHIBIT 10.9
17TH NOVEMBER 1995
THE NATIONAL GRID COMPANY plc
EASTERN GROUP plc
EASTERN MIDLANDS ELECTRICITY plc
LONDON ELECTRICITY plc
MANWEB plc
MIDLANDS ELECTRICITY plc
NORTHERN ELECTRIC plc
NORWEB plc
SEEBOARD plc
SOUTHERN ELECTRIC plc
SOUTH WALES ELECTRICITY plc
SOUTH WESTERN ELECTRICITY plc
YORKSHIRE ELECTRICITY GROUP plc
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MEMORANDUM OF UNDERSTANDING
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Herbert Smith
Exchange House
Primrose Street
London C2A 2HS
Ref:223/C267/30438764
THIS MEMORANDUM OF UNDERSTANDING is made the 17th day of ________________, 1995
BETWEEN
A The National Grid Group plc (formerly The National Grid Holding plc)
("NGG") whose registered office is at Kirby Corner Road, Coventry CV4 8JY
AND
B Each of:
Eastern Group plc whose registered office is Wherstead Park, PO Box 40,
Wherstead, Ipswich, Suffolk IP9 2AQ
East Midlands Electricity plc whose registered office is 398 Coppice Road,
Arnold, Nottingham NG5 7HX
London Electricity plc whose registered office is Templar House, 81-87 High
Holborn, London WC1V 6NU
Manweb plc whose registered office is Sealand Road, Chester CH1 4LR
Midlands Electricity plc whose registered office is Mucklow Hill,
Halesowen, West Midlands, B62 8BP
Northern Electric plc whose registered office is Carliol House, Market
Street, Newcastle Upon Tyne NE1 6NE
NORWEB plc whose registered office is Talbot Road, Manchester, M16 OHQ
SEEBOARD plc whose registered office is Forest Gate, Brighton Road,
Crawley, West Sussex, RH11 9BH
Southern Electric plc whose registered office is Southern Electric House,
Westacott Way, Littlewick Green, Maidenhead, Berkshire SL6 3QB
South Wales Electricity plc whose registered office is Newport Road, St.
Mellons, Cardiff CF3 9XW
South Western Electricity plc whose registered office is 800 Park Avenue,
Aztec West, Almondsbury, Bristol BS12 4SE
Yorkshire Electricity Group plc whose registered office is Wetherby Road,
Scarcroft, Leeds LS14 3HS
(collectively the "RECS" and each a "REC")
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WHEREAS
Following certain changes made at the NGH EGM to the Articles of
Association of NGG and, effective upon execution of this Agreement, to the
board of directors of NGG, the parties have agreed that the relationship
between RECs (being the principal shareholders of NGG) and NGG should be
regulated in the period prior to Flotation.
NOW IT IS AGREED as follows:
1. Definitions and Interpretation
1.1. In this Agreement, unless the context otherwise requires, the following
words and expressions bear the meanings respectively set out below:
the "EGMs" means the NGH EGM and the passing of the
NGC Written Resolutions
"NGC" means The National Grid Company plc.
the "Master Agreement" means the agreement of that name dated
25th October 1995 between each of the
RECs, NGG and NGC.
the "REC Oversight Committee" means the committee established pursuant
to Clause 3.
the "Relevant Period" means the period commencing with the
execution of this Agreement and
terminating upon the earlier of the
Flotation or the Termination Date.
"Termination Date" means the date on which directors of NGC
cease to be directors of NGG and
representatives of the RECs are
appointed in their place.
1.2. Unless the context otherwise requires:
(a) any reference in this Agreement to a Clause, Sub-clause or Schedule is
to a clause, sub-clause or schedule, as the case may be, of or to this
Agreement;
(b) Capitalized terms which are not defined in Clause 1.1 shall have the
meanings ascribed to them in the Master Agreement; and
(c) the singular shall be deemed to include the plural and vice versa.
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1.3. The headings in this Agreement are for ease of reference only and shall not
affect the construction of this Agreement.
2. The Relevant Period
2.1. Save as set out in Clause 2.2 below, during the Relevant Period:
(a) NGG will not engage in any activity outside the ordinary course of its
business;
(b) no material contracts or commitments will be entered into by NGG
unless such contracts or commitments are conditional on Flotation;
(c) NGG shall procure that no matters relating to NGC (or its
subsidiaries) which prior to the EGMs would have required either
consultation with or the approval of the NGG Board pursuant to the
Articles of Association of either NGG pr NGC which were in force prior
to the EGMs, will be carries out by NGC (or such subsidiaries);
without the prior approval of the REC Oversight Committee or, in the case
of matters falling within paragraph (c) above which would have required
consultation only with the NGG Board, consultation with the REC Oversight
Committee.
(i) The REC Oversight Committee shall not unreasonably delay in giving or
withholding its approval in any case.
(ii) In relation to any proposal or matter concerning the carrying on of
the National Grid Business (as defined in the articles of association
of NGC in the form in force prior to the EGMs) which requires the
approval of the REC Oversight Committee, such committee shall not be
entitled to withhold approval unless it has reasonable grounds for
believing that implementation is likely adversely to affect the
financial viability of NGC and/or NGG and if the REC Oversight
Committee does withhold approval it shall provide NGC and NGG with a
written statement giving details of the grounds for such belief; and
(iii) In relation to any business or proposed business of NGC or NGG or any
subsidiary undertakings, other than National Grid Business, the RED
Oversight Committee shall be entitled to give or withhold approval to
such plans in whole or in part on any grounds it shall think fit.
(iv) No consent of the REC Oversight Committee shall be required to the
planning and implementation of any Business Plan (as defined in the
articles of association of NGC in the form in force prior to the EGMs)
except as provided in this Agreement.
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2.2. The following matters may be carried out by NGG or NGC during the Relevant
Period without prior consultation with or the prior approval of the REC
Oversight Committee:
(a) matters expressly referred to in the Master Agreement or otherwise
necessary to effect Flotation;
(b) matters expressed to be, or whose effect is, conditional on Flotation;
(c) arrangements for a low cost dealing facility for shareholders of NGG
after Flotation provided that such arrangements will be conditional
upon Flotation becoming effective and shall release NGG from all
obligations in respect thereof in the event that the Flotation does
not become effective; and
(d) arrangements for the establishment of an ADR programme in respect of
NGG shares provided that such arrangements will be conditional upon
Flotation becoming effective and shall release NGG from all
obligations in respect thereof in the event that the Flotation does
not become effective.
3. The REC Oversight Committee
3.1. The REC Oversight Committee shall consist of up to 12 persons, each
appointed by a different REC and at the date hereof shall consist of the
members of the NGH Board at the date of the NGH EGM.
3.2. The Chairman of the REC Oversight Committee shall be Mr. K. Harvey or,
failing him, that person appointed to the Committee by NORWEB plc.
3.3. Any consultation with or request for the approval of the REC Oversight
Committee pursuant to Clause 2.1 or pursuant to any provisions of the
Master Agreement which expressly contemplate approval by the REC Oversight
Committee shall be made by notice in writing to all members of the REC
Oversight Committee in accordance with Clause 6.
3.4. On receipt of such consultation or request the Chairman of the REC
Oversight Committee shall call a meeting of the committee by notice to all
its members and to the Chairman of NGG in accordance with Clause 6
specifying the date, time and place of such meeting which shall be within 7
days of receipt of the consultation or request for approval provided that
if Kleinwort Benson informs the Chairman that it is necessary for a shorter
notice period to apply such meeting shall be called as soon as s
practicable thereafter.
3.5. A meeting of the REC Oversight Committee will be quorate if 2 members are
present in person, on the telephone or by other telecommunication facility
or by duly authorized representative. The Chairman of NGG or his
representative shall be entitled to be present and to speak at the meeting,
but not to vote.
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3.6. Such meeting shall, by the votes of a majority of the committee members so
present, decide whether the approval is granted and shall give notice to
NGG in accordance with Clause 6 of its decision within one business day of
the close of the meeting. The Chairman shall not have a second or casting
vote. In the event of an equality of votes approval shall not be given.
3.7. If no meeting of the REC Oversight Committee is held following a valid
request for approval within the time limit in Clause 3.4, or notice to NGG
of its decision pursuant to Clause 3.6 is served pursuant to Clause 6.2 NGC
shall be entitled to proceed as though such approval had been given.
4. Termination
This Agreement shall terminate (without prejudice to any liability for any
liability for antecedent breach) on the earlier of the Flotation or the
Termination Date.
5. Variations
Variations to this Agreement shall not be effected save by means of an
instrument executed on behalf of all the parties save that alteration to
the Timetable made pursuant to Clause 20.2 of the Master Agreement shall
have the effect of altering any relevant date specified herein to conform
to the Timetable as so altered.
6. Notices
6.1. Any notice required to be given under this Agreement may be served
personally or by prepaid registered or recorded delivery letter or by
facsimile addressed to the relevant party at its address stated on the
first page of this Agreement and marked for the attention of the person
described alongside that party below or at the relevant number set out
below or at such other address or number as it may have notified to the
other for this purpose:
Party Facsimile No.
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THE NATIONAL GRID GROUP plc
for the attention of The Company Secretary
EASTERN GROUP plc 01473 553002
for the attention of The Company Secretary
EAST MIDLANDS ELECTRICITY plc 0115 967 0459
for the attention of The Company Secretary
LONDON ELECTRICITY plc 0171 331 3424
for the attention of The Company Secretary
MANWEB plc 0141 6364578
for the attention of Ian Russell
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Party Facsimile No.
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MIDLANDS ELECTRICITY plc 0121 423 1907
for the attention of The Company Secretary
NORTHERN ELECTRIC plc 0191 210 2409
for the attention of Valerie Giles
NORWEB plc 0161 875 7211
for the attention of Peter Rothwell
SEEBOARD plc 01293 657 325
for the attention of The Company Secretary
SOUTHERN ELECTRIC plc 01628 584 408
for the attention of The Company Secretary
SOUTH WALES ELECTRICITY plc 01222 723 880
for the attention of The Company Secretary
SOUTH WESTERN ELECTRICITY plc 01454 617702
for the attention of The Company Secretary
YORKSHIRE ELECTRICITY GROUP plc 0113 289 5926
for the attention of Roger Dickinson
6.2. Save in respect of a notice calling a meeting of the REC Oversight
Committee which shall, in addition to the following provisions of this
clause, only to be deemed to have been duly served upon production of
evidence that such notice was acknowledged by its recipient any notice so
given by letter shall be deemed to have been served 48 hours after the same
shall have been posted and any notice given by facsimile shall be deemed to
have been served upon receipt of a facsimile receipt form indicating
satisfactory receipt by the receiving machine, and in proving such service
it shall be sufficient to prove, in the case of a letter, it was properly
addressed, and in the case of a facsimile, by producing the relevant
facsimile receipt form.
7. Governing Law and Jurisdiction
This Agreement shall be governed by, and construed in accordance with,
English law and the High Court of Justice in England shall have exclusive
jurisdiction in relation to any claim, dispute or difference concerning
this Agreement.
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THIS AGREEMENT has been signed by or on behalf of each of the parties the day
and year first before written.
Signed by for and on behalf of )
THE NATIONAL GRID GROUP plc )
Signed by for and on behalf of )
EASTERN GROUP plc )
Signed by for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
LONDON ELECTRICITY plc )
Signed by for and on behalf of )
MANWEB plc )
Signed by for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by for and on behalf of )
NORWEB plc )
Signed by for and on behalf of )
SEEBOARD plc )
Signed by for and on behalf of )
SOUTHERN ELECTRIC plc )
Signed by for and on behalf of )
SOUTH WALES ELECTRICITY plc )
Signed by for and on behalf of ) /s/ John Junior Seed
SOUTH WESTERN ELECTRICITY plc )
Signed by for and on behalf of )
YORKSHIRE ELECTRICITY GROUP plc )
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