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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ________ ) /*/
Union Electric Company
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(Name of Issuer)
Common Stock, $5.00 par value
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(Title of Class of Securities)
906548102
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(CUSIP Number)
William A. Koertner
Vice President - Finance and Secretary
CIPSCO Incorporated
607 East Adams Street
Springfield, Illinois 62739
217-523-3600
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
Copy to:
Robert A. Yolles, Esq.
Jones, Day, Reavis & Pogue
77 West Wacker
Chicago, Illinois 60601-1692
312-782-3939
August 11, 1995
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [X]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
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*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP NO. 906548102 Schedule 13D
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
CIPSCO Incorporated
I.R.S. Identification No. 37-1260920
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC/OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Illinois
7 SOLE VOTING POWER
6,983,533/+/
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 6,983,533/+/
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,983,533/+/
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.8%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
+Beneficial ownership disclaimed with respect to 6,983,233 shares.
See Item 5 below.
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ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $5.00 per share (the
"Company Common Stock"), of Union Electric Company, a Missouri corporation (the
"Company"). The principal executive offices of the Company are located at 1901
Chouteau Avenue, St. Louis, Missouri 63166.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (c) This statement is being filed by CIPSCO Incorporated, an
Illinois corporation ("CIPSCO"). The principal executive offices of CIPSCO are
located at 607 East Adams Street, Springfield, Illinois 62739.
CIPSCO is an exempt public utility holding company under the Public
Utility Holding Company Act of 1935, as amended ("PUHCA"). CIPSCO's business is
conducted primarily through two first-tier subsidiaries, Central Illinois Public
Service Company, an Illinois corporation ("CIPS"), and CIPSCO Investment
Company, an Illinois corporation ("CIC"). CIPS is a public utility operating
company engaged in the generation, transmission, distribution and sale of
electricity, and the distribution and sale of natural gas, in portions of
central and southern Illinois. CIC is a non-utility subsidiary that manages
non-utility investments. CIPSCO uses the properties and employees of CIPS to
conduct its business and reimburses CIPS for such use. Each of CIPSCO's officers
is also an officer of CIPS.
Pursuant to General Instruction "C" for Schedule 13D, set forth below is
certain information concerning the executive officers and directors of CIPSCO.
If no address is given for any officer or director, that person's business
address is CIPSCO Incorporated, 607 East Adams Street, Springfield, Illinois
62739.
Present Principal Occupation
Name or Employment and Address
---- ----------------------------
Clifford L. Greenwalt Director of CIPSCO; President and Chief Executive
Officer of CIPSCO and CIPS
William A. Koertner Vice President - Finance and Secretary of CIPSCO and
CIPS
Craig D. Nelson Treasurer, Assistant Secretary and Assistant Controller
of CIPSCO and Treasurer and Assistant Secretary of CIPS
Lynda E. Marlett Controller, Chief Accounting Officer and Assistant
Treasurer of CIPSCO and Controller and Chief Accounting
Officer of CIPS
William J. Alley Director of CIPSCO; Retired Chairman of the Board of
Directors and Chief Executive Officer of American
Brands, Inc. Six Landmark Square, Suite 400, Stamford,
Connecticut 06901
John L. Heath Director of CIPSCO; Retired Chairman of the Board of
Directors and President of L.S. Heath & Sons, Inc.
6003 N. Elizabeth Place, Paradise Valley, Arizona 85253
Robert W. Jackson Director of CIPSCO; Retired Senior Vice President and
Secretary of CIPSCO and CIPS 1305 Southern Hills Lane,
Springfield, Illinois 62704
Gordon R. Lohman Director of CIPSCO; President and Chief Executive
Officer of AMSTED Industries Incorporated 205 North
Michigan Avenue, 44th Floor, Chicago, Illinois 60601
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Richard A. Lumpkin Director of CIPSCO; Chairman of the Board of Directors
and Chief Executive Officer of Consolidated
Communications Inc. 121 South 17th Street, Mattoon,
Illinois 61938
Hanne M. Merriman Director of CIPSCO; Principal in Hanne Merriman
Associates 655 15th Street, N.W., Suite 300, Washington
D.C. 20005
Thomas L. Shade Director of CIPSCO; Retired Chairman of the Board of
Directors and Chief Executive Officer of Moorman Mfg.
Route 1, Box 105, Quincy, Illinois 62301-9739
James W. Wogsland Director of CIPSCO; Retired Vice Chairman of the Board
of Directors of Caterpillar, Inc. 9675 Easy Street,
Hayden Lake, Idaho 83835
(d) During the last five years, neither CIPSCO nor, to the best of CIPSCO's
knowledge, any of the individuals identified in this Item 2, has been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, neither CIPSCO nor, to the best of CIPSCO's
knowledge, any of the individuals identified in this Item 2, has been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) All of the individuals identified in this Item 2 are citizens of the
United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Concurrent with entering into the Merger Agreement (as defined in Item 4
below), CIPSCO was granted the Option (as defined in Item 4 below). None of the
triggering events permitting exercise of the Option have occurred as of the date
of this Schedule 13D. In the event that the Option becomes exercisable and
CIPSCO wishes to purchase for cash the Company Common Stock subject thereto,
CIPSCO will fund the exercise price from working capital or through other
sources, which could include borrowings.
ITEM 4. PURPOSE OF TRANSACTION.
CIPSCO, the Company, Arch Holding Corp., a Missouri corporation 50% owned by
each of CIPSCO and the Company ("Holdings"), and Arch Merger Inc., a Missouri
corporation and a wholly owned subsidiary of Holdings ("Merger Sub"), have
entered into an Agreement and Plan of Merger, dated as of August 11, 1995 (the
"Merger Agreement"), which provides for a strategic business combination
involving CIPSCO and the Company (the "Transaction"). The Transaction is
expected to close shortly after all of the conditions to the consummation of the
Transaction, including obtaining applicable shareholder and regulatory
approvals, are satisfied or else waived. The process of obtaining shareholder
and regulatory approvals is expected to take approximately 12 to 18 months.
In the Transaction, Holdings, a newly formed holding company that will be
registered under PUHCA, will become the parent of both CIPS and the Company.
Holdings is expected to be renamed prior to consummation of the Transaction.
The Merger Agreement is incorporated herein by reference to Exhibit 2(a) to
CIPSCO's Quarterly Report on Form 10-Q/A, Amendment No. 1, for the quarter ended
June 30, 1995, which was filed with the Securities and Exchange Commission (the
"SEC") on August 15, 1995. The description of the Merger Agreement set forth
herein does not purport to be complete and is qualified in its entirety by the
provisions of the Merger Agreement.
Under the terms of the Merger Agreement, CIPSCO will be merged with and into
Holdings, with Holdings as the surviving corporation and Merger Sub will be
merged with and into the Company, with the Company as the
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surviving corporation (such transactions being referred to as, the "Mergers").
As a result of the Mergers, (i) each share of common stock, without par value,
of CIPSCO ("CIPSCO Common Stock") (including shares with respect to which
dissenters' rights are perfected under applicable state laws, but excluding
shares owned as treasury stock or otherwise directly or indirectly owned by
CIPSCO, the Company, or any of their respective subsidiaries, which shares will
be cancelled) will be converted into the right to receive 1.03 shares of common
stock, par value $.01 per share, of Holdings ("Holdings Common Stock") (or cash
in lieu of fractional shares otherwise deliverable in respect thereof), (ii)
each outstanding share of Company Common Stock (other than shares with respect
to which dissenters' rights are perfected under applicable state laws, and other
than shares owned as treasury stock or otherwise directly or indirectly owned by
CIPSCO, the Company, or any of their respective wholly owned subsidiaries, which
shares will be cancelled) will be converted into the right to receive one share
of Holdings Common Stock, and (iii) each outstanding share of preferred stock,
without par value, of the Company (other than shares with respect to which
dissenters' rights have been perfected under applicable state laws, and other
than shares owned as treasury stock or otherwise directly or indirectly owned by
CIPSCO, the Company, or any of their respective wholly owned subsidiaries, which
shares will be cancelled) will remain outstanding and unchanged.
As of the date of the Merger Agreement, there were 34,069,542 shares of
CIPSCO Common Stock outstanding and 102,123,834 shares of Company Common Stock
outstanding. Based on such capitalization, the Transaction would result in the
common shareholders of CIPSCO owning approximately 25.6% of the common equity of
Holdings and the common shareholders of the Company owning approximately 74.4%
of the common equity of Holdings. The outstanding shares of preferred stock of
CIPS will remain outstanding and be unchanged in the Transaction and will
continue to represent preferred stock of CIPS. The outstanding shares of
preferred stock of the Company will remain outstanding and be unchanged in the
transaction and will continue to represent preferred stock of the surviving
corporation in the merger between the Company and Merger Sub.
The Transaction is subject to customary closing conditions, including,
without limitation, the receipt of required shareholder approvals of CIPSCO and
the Company; and the receipt of all necessary governmental approvals and the
making of all necessary governmental filings, including approvals of state
utility regulators in Illinois and Missouri, the approval of the Federal Energy
Regulatory Commission, the SEC, the Nuclear Regulatory Commission, and the
filing of the requisite notification with the Federal Trade Commission and the
Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the expiration of the applicable waiting period
thereunder. The Transaction is also subject to receipt of opinions of counsel
that the Transaction will qualify as a tax-free reorganization, and of
assurances from the parties' independent accountants that the Transaction will
qualify as a pooling of interests for accounting purposes. In addition, the
transaction is conditioned upon the effectiveness of a registration statement to
be filed by Holdings with the SEC with respect to the shares of Holdings Common
Stock to be issued in the Transaction and the approval for listing of such
shares on the New York Stock Exchange. Shareholder meetings to vote upon the
transaction will be convened as soon as practicable and are expected to be held
by the end of the fourth quarter of 1995.
The Merger Agreement contains certain covenants of the parties regarding the
conduct of their respective businesses pending the consummation of the
Transaction. Generally, the parties must carry on their businesses in the
ordinary course consistent with past practice, may not increase dividends on
common stock beyond specified levels, and may not issue any capital stock beyond
certain limits. The Merger Agreement also contains restrictions on, among other
things, charter and bylaw amendments, capital expenditures, acquisitions,
dispositions, incurrence of indebtedness, certain increases in employee
compensation and benefits, and affiliate transactions.
The Merger Agreement provides that, after the effectiveness of the Mergers
(the "Effective Time"), the corporate headquarters and principal executive
offices of Holdings will be located in St. Louis, Missouri. Holdings' Board of
Directors will consist of a total of 15 directors, 10 of whom will be designated
prior to the Effective Time by the Company and 5 of whom will be designated
prior to the Effective Time by CIPSCO. At the Effective Time, Mr. Charles W.
Mueller, the current President and Chief Executive Officer of the Company, will
serve as Chairman of the Board of Directors and Chief Executive Officer of
Holdings, and Mr. Clifford L. Greenwalt, the current President and Chief
Executive Officer of CIPSCO, will serve as Vice Chairman of the Board of
Directors of Holdings.
The Merger Agreement may be terminated under certain circumstances,
including (1) by mutual consent of the parties; (2) by any party if the
Transaction is not consummated by August 11, 1997 (provided, however, that
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such termination date shall be extended to February 11, 1998 if all conditions
to closing the Transaction, other than the receipt of certain consents and/or
statutory approvals by any of the parties, have been satisfied by August 11,
1997); (3) by any party if either CIPSCO's or the Company's shareholders vote
against the Transaction or if any state or federal law or court order prohibits
the Transaction; (4) by a non-breaching party if there exist breaches of any
representations or warranties contained in the Merger Agreement as of the date
thereof, which breaches, individually or in the aggregate, would result in a
material adverse effect on the breaching party and which is not cured within 20
days after notice; (5) by a non-breaching party if there occur breaches of
specified covenants or material breaches of any covenant or agreement (including
those contained in the Stock Option Agreements (as hereinafter defined)), which
are not cured within 20 days after notice; (6) by either party if the Board of
Directors of the other party shall withdraw or adversely modify its
recommendation of the Transaction or shall approve any competing transaction;
(7) by either party, under certain circumstances, as a result of a third-party
tender offer or business combination proposal which such party, pursuant to the
fiduciary duties of its Board of Directors, is, in the opinion of such party's
counsel and after the other party has first been given an opportunity to make
concessions and adjustments in the terms of the Merger Agreement, required to
accept or; (8) by either party if a third party acquires securities representing
greater than 50% of the voting power of the outstanding voting securities of the
other party or if individuals who as of the date of the Merger Agreement
constitute the Board of Directors of such other party (or replacements nominated
and/or elected by a majority of such directors) cease for any reason to
constitute a majority of the Board of Directors of such party then in office.
The Merger Agreement provides that if a breach described in clause (4) or
(5) of the previous paragraph occurs, then, if such breach is not willful, the
non-breaching party is entitled to reimbursement of its out-of-pocket expenses,
not to exceed $10 million. In the event of a willful breach, the non-breaching
party will be entitled to its out-of-pocket expenses (which shall not be limited
to $10 million) and any remedies it may have at law or in equity, provided that
if, at the time of the breaching party's willful breach, there has been a third
party tender offer or business combination proposal which has not been rejected
by the breaching party and withdrawn by the third party, and within two and one-
half years of any termination by the non-breaching party, the breaching party
accepts an offer to consummate or consummates a business combination with such
third party, then such breaching party, upon the signing of a definitive
agreement relating to such a business combination, or, if no such agreement is
signed then at the closing of such business combination, will pay to the non-
breaching party an additional fee equal to $30 million. The Merger Agreement
also requires payment of a termination fee of $30 million (and reimbursement of
out-of-pocket expenses) by one party (the "Payor") to the other in certain
circumstances, if (i) the Merger Agreement is terminated (x) as a result of the
acceptance by the Payor of a third-party tender offer or business combination
proposal, (y) following a failure of the shareholders of the Payor to grant
their approval to the Transaction or (z) as a result of the Payor's material
failure to convene a shareholder meeting, distribute proxy materials and,
subject to its Board of Directors' fiduciary duties, recommend the Transaction
to its shareholders; and (ii) at the time of such termination or prior to the
meeting of such party's shareholders there shall have been a third-party tender
offer or business combination proposal which shall not have been rejected by the
Payor and withdrawn by such third party; and (iii) within two and one-half years
of any such termination described in clause (i) above, the Payor accepts an
offer to consummate or consummates a business combination with such third party.
Such termination fee and out-of-pocket expenses referred to in the previous
sentence shall be paid upon the signing of a definitive agreement between the
Payor and the third party, or, if no such agreement is signed, then at the
closing of such third-party business combination. The termination fee and
expenses payable under these provisions and the aggregate amount which could be
payable by either CIPSCO or the Company upon a required purchase of the option
granted pursuant to the Stock Option Agreements (as defined below) may not
exceed $50 million in the aggregate.
It is anticipated that Holdings will adopt the Company's dividend payment
level adjusted for the exchange ratio. The Merger Agreement provides that the
Articles of Incorporation and the Bylaws of Holdings will be amended in a manner
to be agreed upon between CIPSCO and the Company.
Concurrently with entering into the Merger Agreement, CIPSCO and the Company
entered into stock option agreements pursuant to which, for no additional
consideration, (i) the Company granted to CIPSCO an irrevocable option to
purchase under certain circumstances up to 6,983,233 shares of Company Common
Stock (which equals approximately 6.8% of the number of
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shares of Company Common Stock outstanding on August 11, 1995) (the "Company
Stock Option Agreement"), and (ii) CIPSCO granted to the Company an irrevocable
option to purchase under certain circumstances up 6,779,838 shares of CIPSCO
Common Stock (which equals approximately 19.9% of the number of shares of CIPSCO
Common Stock outstanding on August 11, 1995) (the "CIPSCO Stock Option
Agreement" and, together with the Company Stock Option Agreement, the "Stock
Option Agreements"). Under the Company Stock Option Agreement, the Company
granted CIPSCO an irrevocable option to purchase (the "Option") up to 6,983,233
shares (subject to adjustment for changes in capitalization) of Company Common
Stock at an exercise price of $35.94 per share if the Merger Agreement becomes
terminable under certain circumstances by CIPSCO. The exercise price is payable,
at CIPSCO's election, in cash or shares of CIPSCO Common Stock. If the Option
becomes exercisable, CIPSCO may request the Company to repurchase from CIPSCO
all or any portion of the Option (or if the Option is exercised, to repurchase
from CIPSCO all or any portion of the acquired shares of Company Common Stock)
at the price specified in the Company Stock Option Agreement.
Each party to the Stock Option Agreements agreed to vote, prior to August
11, 2000, any shares of the capital stock of the other party acquired pursuant
to the Stock Option Agreements or otherwise beneficially owned 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 is voted for and against such matter.
The Stock Option Agreements provide that, prior to August 11, 2000, neither
party may sell, assign, pledge or otherwise dispose of or transfer the shares it
acquires pursuant to the Stock Option Agreements (collectively, the "Restricted
Shares") except as specifically provided for in the Stock Option Agreements. In
addition to the repurchase rights mentioned above, subsequent to the termination
of the Merger Agreement, the parties have the right to have such shares of the
other party registered under the Securities Act of 1933 for sale in a public
offering, unless the issuer of the shares elects to repurchase them at their
then market value. The Stock Option Agreements also provide that, following the
termination of the Merger Agreement, either party may sell any Restricted Shares
pursuant to a tender or exchange offer approved or recommended, or otherwise
determined to be fair and in the best interests of such other party's
shareholders, by a majority of the Board of Directors of such other party.
The Stock Option Agreements are incorporated herein by reference to Exhibits
10(a) and 10(b) of CIPSCO's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995. The description of the Stock Option Agreements set forth herein
does not purport to be complete and is qualified in its entirety by the
provisions of the Stock Option Agreements.
Pursuant to a Confidentiality Agreement dated as of June 21, 1995 between
CIPSCO and the Company (the "Confidentiality Agreement"), the parties thereto
have agreed, among other things, that for a period of two years from the date of
the Confidentiality Agreement (the "Restricted Period"), except as specifically
requested by the other party to the Confidentiality Agreement, neither party
will propose or enter into or agree to enter into, directly or indirectly, (i)
any form of business combination, acquisition or other transaction relating to
the other party or (ii) any form of restructuring, recapitalization or similar
transaction with respect to the other party. In addition, pursuant to the
Confidentiality Agreement, CIPSCO and the Company have agreed that, during the
Restricted Period, except as specifically requested by the other party to the
Confidentiality Agreement, neither party will, singly or with any other person
or directly or indirectly, (1) acquire, or offer, propose or agree to acquire
any voting securities of the other party, (2) make or participate in any
solicitation of proxies with respect to such voting securities, (3) become a
participant in any election contest with respect to the other party, (4) seek to
influence any person with respect to the voting or disposition of any such
voting securities, (5) demand a copy of the other party's list of stockholders
or its other books and records, (6) participate in or encourage the formation of
any partnership, syndicate or other group that owns or seeks or offers to
acquire beneficial ownership of any such voting securities or that seeks to
affect control of the other party or for the purpose of circumventing any
provision of the Confidentiality Agreement or (7) otherwise act (including by
providing financing for another person) to seek or to offer to control or
influence, in any manner, the management, Board of Directors or policies of the
other party, provided, however, that the foregoing restrictions will cease to be
binding as to a party if the other party becomes the subject of an Acquisition
Proposal (as hereinafter defined) from an entity not a party to the
Confidentiality Agreement. In addition, subject to certain exceptions, until
such time as a party has told the other party in writing that discussions with
respect to the Transaction have terminated, neither party to the Confidentiality
Agreement nor its representatives will (a) initiate, encourage or solicit,
directly or indirectly, the making of any proposal or offer to acquire all or
any material part of the business and properties or capital stock of such party,
whether by merger, purchase of assets, tender offer or otherwise (an
"Acquisition Proposal"), or initiate, directly or indirectly, any contact with
any person in an effort to or with a view towards soliciting or initiating any
Acquisition Proposal, (b) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, an
Acquisition Proposal, or (c) initiate, encourage or solicit, directly or
indirectly, the making of any proposal or offer to acquire all or any material
part of the business and properties or capital stock of
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any person or group (other than the other party) engaged in a business that is
competitive with the business of either party, whether by merger, purchase of
assets, tender offer or otherwise. The Confidentiality Agreement is filed as an
Exhibit to this Schedule 13D and is incorporated herein by reference. The
description of the Confidentiality Agreement set forth herein does not purport
to be complete and is qualified in its entirety by the provisions of the
Confidentiality Agreement.
Except as set forth in this Item 4, the Merger Agreement or the Company
Stock Option Agreement, neither CIPSCO nor, to the best of CIPSCO's knowledge,
any of the individuals identified in Item 2, has any plans or proposals which
relate to or which would result in any of the actions specified in clauses (a)
through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) By reason of its execution of the Company Stock Option Agreement,
pursuant to Rule 13d-3(d)(1)(i) promulgated under the Exchange Act, CIPSCO may
be deemed to have sole voting and dispositive power with respect to the Company
Common Stock subject to the Option and, accordingly, may be deemed to
beneficially own 6,983,233 shares of Company Common Stock, or approximately 6.8%
of the Company Common Stock outstanding on August 11, 1995, assuming exercise of
the Option. However, CIPSCO expressly disclaims any beneficial ownership of the
6,983,233 shares of Company Common Stock which are obtainable by CIPSCO upon
exercise of the Option, because the Option is exercisable only in the
circumstances set forth in Item 4, none of which has occurred as of the date
hereof. Furthermore, even if events did occur which rendered the Option
exercisable, CIPSCO believes it would be a practical impossibility to obtain the
regulatory approvals necessary to acquire shares of Company Common Stock
pursuant to the Option within 60 days.
In addition to the shares of Company Common Stock that CIPSCO may be deemed
to beneficially own by virtue of the Option, CIPSCO beneficially owns 300 shares
of Company Common Stock held by CIC. As a result of the Merger Agreement, such
300 shares of Company Common Stock will be cancelled if still held by CIC on the
Effective Date. Counting such additional 300 shares, CIPSCO may be deemed to
have sole voting and dispositive power and, accordingly, may be deemed to
beneficially own an aggregate of 6,983,533 shares of Company Common Stock, or
6.8% of the Company Common Stock outstanding on August 11, 1995. CIPSCO also
beneficially owns 7,000 shares of $7.44 series preferred stock of the Company
held through CIC. All of the shares of the Company's securities held through CIC
are held for general investment purposes.
Except as set forth above, neither CIPSCO nor, to the best of CIPSCO's
knowledge, any of the individuals identified in Item 2, owns any Company Common
Stock.
(c) Except as set forth above, neither CIPSCO nor, to the best of Union
Electric's knowledge, any of the individuals identified in Item 2, has effected
any transaction in the Company Common Stock during the past 60 days.
(d) Except as set forth above and so long as CIPSCO has not purchased the
Company Common Stock subject to the Option, CIPSCO does not have the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, any of the Company Common Stock.
(e) Inapplicable.
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The Merger Agreement contains certain customary restrictions on the conduct
of the business of the Company pending the Mergers, including certain customary
restrictions relating to the Company Common Stock. Except as provided in the
Merger Agreement, the Company Stock Option Agreement or the Confidentiality
Agreement, or as set forth herein, neither CIPSCO nor, to the best of CIPSCO's
knowledge, any of the individuals identified in Item 2, has any contracts,
arrangements, understandings or relationships (legal or otherwise), with any
person with respect to any securities of the Company, including, but not limited
to, transfer or voting of any securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or losses, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit Description
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1 Agreement and Plan of Merger, dated as of August 11, 1995, by and among
Union Electric Company, CIPSCO Incorporated, Arch Holding Corp. and
Arch Merger Inc. (Incorporated by reference to Exhibit 2(a) to
CIPSCO's Quarterly Report on Form 10-Q/A, Amendment No. 1, for the
quarter ended June 30, 1995 (Commission File No. 1-10628).)
2 Stock Option Agreement, dated as of August 11, 1995, by and between
CIPSCO Incorporated and Union Electric Company. (Incorporated by
reference to Exhibit 10(a) to CIPSCO's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995 (Commission File No. 1-10628).)
3 Stock Option Agreement, dated as of August 11, 1995, by and between
Union Electric Company and CIPSCO Incorporated. (Incorporated by
reference to Exhibit 10(b) to CIPSCO's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995 (Commission File No. 1-10628).)
4 Press Release, dated as of August 14, 1995, related to the transactions
between Union Electric Company and CIPSCO Incorporated. (Incorporated
by reference to Exhibit 99(a) to CIPSCO's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995 (Commission File No. 1-10628).)
5 Confidentiality Agreement, dated as of June 21, 1995, between Union
Electric Company and CIPSCO Incorporated.
Page 9
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Date: August 21, 1995 CIPSCO INCORPORATED
By: /s/ W. A. Koertner
-------------------------------
Name: W. A. Koertner
Title: Vice President and Secretary
Page 10
<PAGE>
Index to Exhibits
-----------------
Exhibit Description
------- -----------
1 Agreement and Plan of Merger, dated as of August 11, 1995, by and among
Union Electric Company, CIPSCO Incorporated, Arch Holding Corp. and
Arch Merger Inc. (Incorporated by reference to Exhibit 2(a) to
CIPSCO's Quarterly Report on Form 10-Q/A, Amendment No. 1, for the
quarter ended June 30, 1995 (Commission File No. 1-10628).)
2 Stock Option Agreement, dated as of August 11, 1995, by and between
CIPSCO Incorporated and Union Electric Company. (Incorporated by
reference to Exhibit 10(a) to CIPSCO's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995 (Commission File No. 1-10628).)
3 Stock Option Agreement, dated as of August 11, 1995, by and between
Union Electric Company and CIPSCO Incorporated. (Incorporated by
reference to Exhibit 10(b) to CIPSCO's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995 (Commission File No. 1-10628).)
4 Press Release, dated as of August 14, 1995, related to the transactions
between Union Electric Company and CIPSCO Incorporated. (Incorporated
by reference to Exhibit 99(a) to CIPSCO's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995 (Commission File No. 1-10628).)
5 Confidentiality Agreement, dated as of June 21, 1995, between Union
Electric Company and CIPSCO Incorporated.
Page 11
<PAGE>
EXHIBIT 5
CONFIDENTIALITY AGREEMENT
-------------------------
THIS CONFIDENTIALITY AGREEMENT, dated as of June 21, 1995 (this
"Agreement") , is made by and between Union Electric Company, a Missouri
corporation ("Union Electric", which term shall, for purposes of this Agreement,
include its subsidiaries) and CIPSCO Incorporated, an Illinois corporation
("CIPSCO", which term shall, for purposes of this Agreement, include its
subsidiaries).
WHEREAS, each of Union Electric and CIPSCO (each a "Company" or a
"party", and collectively the "Companies" or the "parties") is prepared to
furnish the other party with certain information that is confidential,
proprietary or otherwise not publicly available to assist in an evaluation (the
"Evaluation") in connection with a possible business combination transaction
involving Union Electric and CIPSCO (a "Transaction").
NOW, THEREFORE, as a condition to, and in consideration of, Union
Electric and CIPSCO furnishing to each other Information (as defined herein),
Union Electric and CIPSCO agree as follows:
1. Nondisclosure of Information. Subject to paragraph 2 hereof, each
----------------------------
Company that receives or possesses Information provided by or on behalf of, or
relating to, the other Company will (a) keep the Information confidential, (b)
not use the Information in any manner detrimental to the other Company, and (c)
not use the Information other than in connection with the Evaluation.
Notwithstanding the preceding sentence, each Company may disclose Information to
those of its Representatives (as defined herein) as are assisting such Company
with the Evaluation. Each Company will (i) inform each of its Representatives
receiving Information of the confidential nature of the Information and of the
obligations imposed by this Agreement, (ii) direct its Representatives to treat
the Information confidentially and in accordance with the obligations imposed by
this Agreement and not to use the Information other than in connection with the
Evaluation, and (iii) be responsible for (A) any failure by such Company or any
of its Representatives (including, without limitation, Representatives who,
subsequent to the first date of disclosure of Information hereunder, cease to be
its Representatives) to treat the Information confidentially and in accordance
with this Agreement or (B) the use by such Company or by any of its
Representatives or former Representatives of the Information other than in
connection with the Evaluation. Subject to paragraph 2 hereof, without the
prior written consent of the other party, neither
<PAGE>
Company nor its Representatives will disclose to any person (1) that Information
has been made available to such Company or its Representatives, (2) that
discussions relating to a Transaction are taking place or have terminated, or
(3) any of the terms, conditions or other facts with respect to such
discussions, the Evaluation or any Transaction.
2. Notice Preceding Compelled Disclosure. If either Company or any
-------------------------------------
of its Representatives is legally compelled, pursuant to a subpoena, civil
investigative demand or similar process, to disclose any Information provided by
or on behalf of the other Company or which relates to the other Company, the
Company legally compelled to disclose Information will promptly notify the other
party to permit that Company to seek a protective order or take other
appropriate action. The Company legally compelled to disclose Information will
also cooperate in all reasonable efforts by the other Company to obtain a
protective order or other reasonable assurance that confidential treatment will
be accorded the Information. If, in the absence of a protective order, either
Company or any of its Representatives is compelled as a matter of law (including
as a matter of federal or state securities law) or pursuant to the rules and
policies of any national securities exchange on which securities of the Company
are listed for trading to disclose Information, the Company compelled to
disclose Information may disclose only that part of the Information as is
required by law to be disclosed (in which case, prior to such disclosure, the
Company compelled to disclose Information will advise and consult with the other
Company and its counsel as to such disclosure and the nature and wording of such
disclosure), and, to the extent practical in the circumstances, the Company
compelled to disclose Information will use its best efforts to obtain
confidential treatment for any Information so disclosed.
3. Treatment of Information. Each Company will keep a record in
------------------------
reasonable detail of the Information furnished to it by or on behalf of the
other Company or its Representatives and of the location of such Information.
As soon as possible upon the written request of the other Company or upon the
termination by either Company of the Evaluation or the discussions relating to a
Transaction, each Company and its Representatives will destroy (or, at their
option, return to the other Company) all Information which has been provided in
tangible form by or on behalf of the other Company, together with all copies
thereof, as well as all Information that incorporates information provided by or
on behalf of the other Company. Such destruction (or return) will be confirmed
in writing to the other Company. Any Information not so destroyed (or returned)
will remain subject to this Agreement. Each Company acknowledges that it is
aware and that its Representatives have
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<PAGE>
been or will be advised by it that the United States securities laws prohibit
any person who has material, non-public information from purchasing or, selling
securities based on such information or from communicating such information to
any other person.
4. Public Information. This Agreement will not apply to such
------------------
portions of the Information that (a) are or become generally available to the
public through no action by the Company receiving such portions or by that
Company's Representatives or (b) are or become available to the Company
receiving such portions or that Company's Representatives on a nonconfidential
basis from a source, other than the other Company or its Representatives, which
source the recipient Company believes, based upon reasonable inquiry, not to be
prohibited from disclosing such portions by a contractual, legal or fiduciary
obligation.
5. No Warranty of Accuracy. Each Company understands that the other
-----------------------
party will endeavor to include in the Information materials it believes to be
relevant for the Evaluation, but each Company acknowledges that neither the
other Company nor any of its Representatives makes any representation or
warranty as to the accuracy or completeness of any Information. Neither Company
nor any of its Representatives will have any liability to the other Company or
its Representatives resulting from the use of the Information, except for use of
the Information in breach of this Agreement.
6. Certain Actions. (a) During the course of the Evaluation,
---------------
neither Company nor its Representatives will initiate contact with any director,
officer or employee of the other Company (other than persons specifically
authorized by the other Company) regarding any matter relating to a Transaction.
If the Evaluation or the discussions relating to a Transaction are terminated
for any reason, each Company and its Representatives will permanently cease all
such contacts, whether or not previously authorized.
(b) As of the date hereof, except as previously disclosed in writing
to the other party, neither Company is the beneficial owner of any securities of
the other Company entitled to be voted generally in the election of directors or
any direct or indirect options or other rights to acquire any such securities
("Voting Securities"). For a period of two years from the date of this
Agreement (the "Restricted Period"), except as specifically requested in writing
by the other Company, neither Company nor any of its Representatives as a
principal, will propose or enter into or agree to enter
-3-
<PAGE>
into, singly or with any other person or directly or indirectly, (i) any form of
business combination, acquisition or other transaction relating to the other
Company, (ii) any form of restructuring, recapitalization or similar transaction
with respect to the other Company, or (iii) any demand, request or proposal to
amend, waive or terminate any provision of this paragraph of this Agreement.
Furthermore, during the Restricted Period, except as specifically requested in
writing by the other Company, neither Company will, singly or with any other
person or directly or indirectly, (1) acquire, or offer, propose or agree to
acquire, by tender offer, purchase or otherwise, any Voting Securities, (2)
make, or in any way participate in, any solicitation of proxies with respect to
Voting Securities (including by the execution of action by written consent), (3)
become a participant in any election contest with respect to the other Company,
(4) seek to influence any person with respect to the voting or disposition of
any Voting Securities, (5) demand a copy of the other Company's list of
stockholders or its other books and records, (6) participate in or encourage the
formation of any partnership, syndicate or other group that owns or seeks or
offers to acquire beneficial ownership of any Voting Securities or that seeks to
affect control of the other Company or for the purpose of circumventing any
provision of this Agreement or (7) otherwise act (including by providing
financing for another person) to seek or to offer to control or influence, in
any manner, the management, Board of Directors or policies of the other Company.
(c) During the Restricted Period, neither Company nor its
Representatives will directly or indirectly solicit for employment any of the
current directors, officers or managers of the other Company with whom initial
contact was made, or who were specifically identified by the other Company,
during the course of the Evaluation.
(d) The provisions of this paragraph 6 will survive for two years
from the date of this Agreement notwithstanding that some or all of the
Information has become publicly disclosed or that any portion of this Agreement
has become inoperative as to any portion of the Information.
(e) Nothing contained in this Agreement shall be deemed to restrict
in any respect activities of the parties in the ordinary course of business with
respect to Electric Energy, Inc. or any other business relationships between
Union Electric and CIPSCO predating this Agreement.
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<PAGE>
(f) The provisions of this paragraph 6 shall cease to be binding as
to a party if the other party becomes the subject of an Acquisition Proposal (as
defined in paragraph 7) from an entity not a party.
7. Acquisition Proposals. Until such time as a party has told the
---------------------
other party in writing that discussions with respect to a Transaction have
terminated, neither Company nor its Representatives will (a) initiate, encourage
or solicit, directly or indirectly, the making of any proposal or offer to
acquire all or any material part of the business and properties or capital stock
of such Company, whether by merger, purchase of assets, tender offer or
otherwise (an "Acquisition Proposal"), or initiate, directly or indirectly, any
contact with any person in an effort to or with a view towards soliciting or
initiating any Acquisition Proposal, (b) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, an Acquisition Proposal, or (c) initiate, encourage or solicit, directly or
indirectly, the making of any proposal or offer to acquire all or any material
part of the business and properties or capital stock of any person or group
(other than the other Company) engaged in a business that is competitive with
the business of either Company, whether by merger, purchase of assets, tender
offer or otherwise. Notwithstanding the foregoing, either Company may (i)
furnish Information to the other Company and its Representatives pursuant to
this Agreement, (ii) issue a joint announcement regarding the possibility of a
Transaction after obtaining the other Company's prior consent to the content and
timing of such announcement, (iii) issue any statement required by the federal
securities laws or by rule or policy of any national securities exchange on
which securities of such Company are listed for trading, and (iv) participate in
discussions and negotiations directly and through its Representatives with
persons, other than the other Company, who have sought the same if its Board of
Directors determines, based as to legal matters on the written advice of outside
legal counsel, that the failure to furnish such information or to negotiate with
such persons would be inconsistent with the proper exercise of applicable
fiduciary duties. If either Company or its Representatives receives an
Acquisition Proposal or if discussions relating to an Acquisition Proposal are
sought to be initiated or continued, such Company will promptly inform the other
Company as to the material terms thereof.
8. Certain obligations Only on Definitive Agreement. The parties
------------------------------------------------
agree that unless and until a Definitive Agreement regarding a Transaction has
been executed, neither party will be under any legal obligation of any kind with
respect to any
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<PAGE>
Transaction by virtue of this Agreement or any other written or oral expression
with respect to any Transaction.
9. General Provisions. This Agreement will be deemed to be effective
------------------
as of the earlier to occur of (i) the date Information is first disclosed by or
on behalf of either Company in connection with the Evaluation or (ii) the date
first written above. No failure or delay in exercising any right hereunder will
operate as a waiver thereof, nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right. This Agreement, any amendment to this Agreement, waiver of rights or any
notice or consent hereunder signed in the name of either Company will not be
operative for purposes of this Agreement unless it is in writing and is signed
by the Chairman, the President, a Vice President or the Treasurer of that
Company while such person was still in office. This Agreement may be executed
in multiple counterparts, each of which will be deemed an original for all
purposes and all of which will constitute a single instrument. This Agreement
will be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Each Company acknowledges that the other
party may be irreparably injured by any violation of the terms of this
Agreement; accordingly, the Company alleging a violation will be entitled to
seek specific performance and injunctive relief as remedies for any violation,
in addition to all other remedies available at law or equity. Each Company
consents to personal jurisdiction in any action brought in any federal or state
court within the states of Illinois or Missouri having subject matter
jurisdiction in the matter for purposes of any action arising out of this
Agreement. This Agreement will be governed by and construed in accordance with
the laws of the state of Illinois, without giving effect to the principles of
conflict of laws thereof.
10. Certain Definitions. As used in this Agreement, (a) the terms or
-------------------
phrases "beneficial owner," "election contest," "group," "participant,"
"person," "proxy," "security," and "solicitation" (and the plurals thereof) will
be ascribed a meaning no less broad than the broadest definition or meaning of
such terms under the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder, (b) all information furnished to either
Union Electric or CIPSCO as contemplated by this Agreement, whether in oral,
written or electronic form and whether furnished by the other party or the other
party's Representatives, together with all written or electronic documentation
prepared by Union Electric or CIPSCO or its Representatives based upon,
reflecting or incorporating, in whole or in part, such information or the
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<PAGE>
Evaluation, as well as the fact that the Companies are considering a Transaction
and performing the Evaluation, is herein referred to as the "Information," (c)
any director, officer, employee, agent, lender, partner or representative,
including, without limitation, any accountant, consultant, attorney or financial
advisor engaged by either Company, is herein referred to as a "Representative,"
and (d) a definitive, written agreement providing for a Transaction that is
executed by or on behalf of Union Electric and CIPSCO and that states it is
intended to be binding is herein referred to as a "Definitive Agreement;"
provided, however, that a Definitive Agreement does not include a letter of
-------- -------
intent or any other preliminary agreement, whether or not executed, and it does
not include any actual or purported written or oral acceptance of any offer or
bid.
Accepted and agreed to as of the date first shown:
UNION ELECTRIC COMPANY
By: /s/ Donald E. Brandt
---------------------
Name: Donald E. Brandt
Title: Senior Vice President
CIPSCO INCORPORATED
By: /s/ C.L. Greenwalt
-------------------
Name: C. L. Greenwalt
Title: President & Chief
Executive Officer
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