SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) September 29,
1994
Allegheny & Western Energy Corporation
(Exact name of registrant as specified in its charter)
West Virginia 0-10618 55-0612692
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
300 Capitol Street, Suite 1600, Charleston, WV 25301
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (303) 343-4567
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On September 29, 1994, the Registrant issued the news
release set forth as Exhibit 20(a) hereto.
On September 30, 1994, the Registrant entered into an
agreement with Energy Corporation of America ("ECA") and Eastern
Systems corporation, a wholly owned subsidiary of ECA ("ESC"),
pursuant to which the Registrant will be merged with ESC. Each
share of the Registrant's common stock, $.01 par value per share,
will be converted into the right receive $12.00 in cash. The
merger is subject to, among other things, approval by the
Registrant's stockholders as well as the obtaining of any
required regulatory approvals.
On September 30, 1994, the Registrant also issued the news
release set forth as Exhibit 20(b) hereto.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
2(a) Agreement and Plan of Merger among Energy Corporation
of America, Eastern Systems Corporation and the
Registrant dated as of September 30, 1994.
20(a) News Release, dated September 29, 1994.
20(b) News Release, dated September 30, 1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
ALLEGHENY & WESTERN ENERGY
CORPORATION
By:/s/ W. Merwyn Pittman
Name: W. Merwyn Pittman
Title: Vice President,
Chief Financial Officer and
Treasurer
Dated: October 4, 1994
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Description Numbered Page
2(a) Agreement and Plan of Merger
among Energy Corporation of
America, Eastern Systems
Corporation and Allegheny
& Western Energy Corporation
dated as of September 30, 1994
20(a) News Release, dated September
29, 1994
20(b) News Release, dated September
30, 1994
<PAGE>
AGREEMENT AND PLAN OF MERGER
among
ENERGY CORPORATION OF AMERICA, EASTERN SYSTEMS CORPORATION
and
ALLEGHENY & WESTERN ENERGY CORPORATION
Dated as of September 30, 1994
<PAGE>
INDEX TO AGREEMENT AND PLAN OF MERGER
Page No.
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article I The Merger; Closing; Effective Time . . . . . . . . 1
1.1 The Merger. . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Effective Time. . . . . . . . . . . . . . . . . . . 2
Article II Articles of Incorporation and By-Laws
of the Surviving Corporation . . . . . . . . . 2
2.1 The Articles of Incorporation . . . . . . . . . . . 2
2.2 The By-Laws . . . . . . . . . . . . . . . . . . . . 2
Article III Officers and Directors of the Surviving
Corporation. . . . . . . . . . . . . . . . . . 2
3.1 Officers and Directors. . . . . . . . . . . . . . . 2
Article IV Conversion or Cancellation of Shares
in the Merger. . . . . . . . . . . . . . . . . 3
4.1 Conversion or Cancellation of Shares. . . . . . . . .3
4.2 Payment for Shares. . . . . . . . . . . . . . . . . 3
4.3 Dissenters' Rights. . . . . . . . . . . . . . . . . 5
4.4 Transfer of Shares After the Effective
Time . . . . . . . . . . . . . . . . . . . . . 5
Article V Representations and Warranties. . . . . . . . . . . 5
5.1 Representations and Warranties of the
Company. . . . . . . . . . . . . . . . . . . . 5
(a) Corporate Organization and Quali-
fication. . . . . . . . . . . . . . . . . .6
(b) Authorized Capital . . . . . . . . . . . . . . 6
(c) Corporate Authority. . . . . . . . . . . . . . 6
(d) Governmental Filings; No Violations. . . . . . 7
(e) Company Reports; Financial Statements. . . . . 8
(f) Absence of Certain Changes . . . . . . . . . . 9
(g) Litigation and Liabilities . . . . . . . . . . 9
(h) Employee Benefits. . . . . . . . . . . . . . . 9
(i) Brokers and Finders. . . . . . . . . . . . . . 11
(j) Takeover Statutes. . . . . . . . . . . . . . . 12
(k) Environmental Matters. . . . . . . . . . . . . 12
(l) Taxes. . . . . . . . . . . . . . . . . . . . . 13
(m) Labor Matters. . . . . . . . . . . . . . . . . 13
(n) Compliance with Laws . . . . . . . . . . . . . 14
(o) Title of Assets. . . . . . . . . . . . . . . . 14
(p) Regulation as a Utility. . . . . . . . . . . . 14
5.2 Representations and Warranties of Parent and
Merger Sub . . . . . . . . . . . . . . . . . . 14
(a) Corporate Organization and Quali-
fication. . . . . . . . . . . . . . . . . 14
(b) Corporate Authority. . . . . . . . . . . . . . 15
(c) Governmental Filings; No Violations. . . . . . 15
(d) Regulation as a Utility. . . . . . . . . . . . 16
(e) Ownership of Company Stock . . . . . . . . . . 16
Article VI Covenants. . . . . . . . . . . . . . . . . . . . . 16
6.1 Interim Operations of the Company . . . . . . . . . 16
6.2 Acquisition Proposals . . . . . . . . . . . . . . . 18
6.3 Meetings of the Company's Shareholders. . . . . . . 19
6.4 Filings; Other Action . . . . . . . . . . . . . . . 20
6.5 Access. . . . . . . . . . . . . . . . . . . . . . . 21
6.6 Notification of Certain Matters . . . . . . . . . . 21
6.7 Publicity . . . . . . . . . . . . . . . . . . . . . 22
6.8 Stock Options . . . . . . . . . . . . . . . . . . . 22
6.9 Reincorporation of Parent . . . . . . . . . . . . . 22
6.10 Financing . . . . . . . . . . . . . . . . . . . . . 22
6.11 Indemnification . . . . . . . . . . . . . . . . . . 22
Article VII Conditions. . . . . . . . . . . . . . . . . . . . 24
7.1 Conditions to Obligations of Parent and
Merger Sub . . . . . . . . . . . . . . . . . . 24
(a) Shareholder Approval . . . . . . . . . . . . . 24
(b) Representations and Warranties . . . . . . . . 24
(c) Performance of Obligations . . . . . . . . . . 24
(d) Governmental and Regulatory Consents . . . . . 24
(e) Litigation . . . . . . . . . . . . . . . . . . 25
(f) Legal Opinion. . . . . . . . . . . . . . . . . 25
7.2 Conditions to Obligations of the Company. . . . . . 25
(a) Shareholder Approval . . . . . . . . . . . . . 25
(b) Representations and Warranties . . . . . . . . 25
(c) Performance of Obligations of Parent
and Merger Sub. . . . . . . . . . . . . . 26
(d) Governmental Consents. . . . . . . . . . . . . 26
(e) Order. . . . . . . . . . . . . . . . . . . . . 26
(f) Fairness Opinion . . . . . . . . . . . . . . . 26
(g) Legal Opinion. . . . . . . . . . . . . . . . . 26
Article VIII Termination. . . . . . . . . . . . . . . . . . . 27
8.1 Terminations by Mutual Consent. . . . . . . . . . . 27
8.2 Termination by either Parent or the Company . . . . 27
8.3 Termination by Parent . . . . . . . . . . . . . . . 27
8.4 Termination by the Company. . . . . . . . . . . . . 28
8.5 Effect of Termination and Abandonment . . . . . . . 28
Article IX Miscellaneous and General. . . . . . . . . . . . . 29
9.1 Payment of Expenses . . . . . . . . . . . . . . . . 29
9.2 Survival. . . . . . . . . . . . . . . . . . . . . . 29
9.3 Modification or Amendment . . . . . . . . . . . . . 29
9.4 Waiver of Conditions. . . . . . . . . . . . . . . . 30
9.5 Counterparts. . . . . . . . . . . . . . . . . . . . 30
9.6 Governing Law . . . . . . . . . . . . . . . . . . . 30
9.7 Notices . . . . . . . . . . . . . . . . . . . . . . 30
9.8 Entire Agreement, etc.. . . . . . . . . . . . . . . 30
9.9 Definition of "Subsidiary". . . . . . . . . . . . . 31
9.10 Definition of "Material Adverse Effect" and "Material
Adverse Change" . . . . . . . . . . . . . . . . . . 31
9.11 Obligation of Parent. . . . . . . . . . . . . . . . 31
9.12 Captions. . . . . . . . . . . . . . . . . . . . . . 32
Schedule 5.1(h) Benefit Plans
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this
"Agreement"), dated as of September 30, 1994, among Allegheny &
Western Energy Corporation, a West Virginia corporation (the
"Company"), Energy Corporation of America, a Colorado corporation
("Parent") and Eastern Systems Corporation, a West Virginia
corporation and a wholly-owned subsidiary of Parent ("Merger
Sub"), the Company and Merger Sub sometimes being hereinafter
collectively referred to as the "Constituent Corporations."
RECITALS
WHEREAS, the Boards of Directors of Parent and the
Company each have determined that it is in the best interests of
their respective shareholders for Parent to acquire the Company
upon the terms and subject to the conditions set forth herein;
and
WHEREAS, the Company, Parent and Merger Sub desire to
make certain representations, warranties, covenants and
agreements in connection with this Agreement.
NOW, THEREFORE, in consideration of the premises, and
of the representation, warranties, covenants and agreements
contained herein the parties hereto hereby agree as follows:
ARTICLE I
The Merger; Closing; Effective Time
1.1. The Merger. Subject to the terms and conditions
of this Agreement, at the Effective Time (as defined in
Section 1.3) the Company shall be merged with and into Merger Sub
and the separate corporate existence of the Company shall
thereupon cease (the "Merger"). Merger Sub shall be the surviv-
ing corporation in the Merger (sometimes hereinafter referred to
as the "Surviving Corporation") and shall continue to be governed
by the laws of the State of West Virginia and the separate
corporate existence of Merger Sub with all its rights,
privileges, immunities, powers and franchises shall continue
unaffected by the Merger. The Merger shall have the effects
specified in the West Virginia Corporation Act (the "WVCA").
1.2. Closing. The closing of the Merger (the
"Closing") shall take place (i) at the offices of Goodwin &
Goodwin, 1500 One Valley Square, Charleston, West Virginia at
12:00 P.M. on the first business day on which the last to be
fulfilled or waived of the conditions set forth in Article VII
hereof shall be fulfilled or waived in accordance with this
Agreement or (ii) at such other place and time and/or on such
other date as the Company and Parent may agree.
1.3. Effective Time. As soon as practicable following
the Closing, and provided that this Agreement has not been
terminated or abandoned pursuant to Article VIII hereof, the
Company and Merger Sub will cause Articles of Merger to be
delivered to the Secretary of State of West Virginia as provided
in Section 31-1-36 of the WVCA. The Merger shall become
effective on the date on which the Articles of Merger has been
duly filed, and a certificate of merger has been issued, by the
Secretary of State of West Virginia, and such time is hereinafter
referred to as the "Effective Time."
ARTICLE II
Articles of Incorporation and By-Laws
of the Surviving Corporation
2.1. The Articles of Incorporation. The Articles of
Incorporation ("Articles") of Merger Sub in effect at the
Effective Time shall be the Articles of the Surviving
Corporation, until duly amended in accordance with the terms
thereof and the WVCA.
2.2. The By-Laws. The By-Laws of Merger Sub in
effect at the Effective Time shall be the By-Laws of the
Surviving Corporation, until duly amended in accordance with
the terms thereof and the WVCA.
ARTICLE III
Officers and Directors
of the Surviving Corporation
3.1. Officers and Directors. The directors and
officers of Merger Sub at the Effective Time shall, from and
after the Effective Time, be the directors and officers,
respectively, of the Surviving Corporation until their
successors have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in
accordance with the Surviving Corporation's Articles and By-
Laws.
ARTICLE IV
Conversion or Cancellation of Shares in the Merger
4.1. Conversion or Cancellation of Shares. The
manner of converting or canceling shares of the Company and
Merger Sub in the Merger shall be as follows:
(a) At the Effective Time, each share of the
Common Stock, par value $0.01 per share (a "Share"), of the
Company issued and outstanding immediately prior to the
Effective Time (other than Shares owned by Parent, Merger
Sub or any other subsidiary of Parent (collectively, the
"Parent Companies") or Shares which are held by shareholders
("Dissenting Shareholders") exercising appraisal rights
pursuant to Sections 31-1-122 and 31-1-123 of the WVCA)
shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into the right to
receive, without interest, an amount in cash (the "Merger
Consideration") equal to $12.00. All Shares (other than
Shares owned by the Parent Companies), by virtue of the
Merger and without any action on the part of the holders
thereof, shall no longer be outstanding and shall be
canceled and retired and shall cease to exist, and each
holder of a certificate representing any such Shares shall
thereafter cease to have any rights with respect to such
Shares, except the right to receive the Merger Consideration
for such Shares upon the surrender of such certificate in
accordance with Section 4.2 or the right, if any, to receive
payment from the Surviving Corporation of the "fair value"
of such Shares as determined in accordance with Section 31-
1-123 of the WVCA.
(b) At the Effective Time, each Share issued and
outstanding at the Effective Time and owned by any of the
Parent Companies, and each Share issued and held in the
Company's treasury at the Effective Time, shall, by virtue
of the Merger and without any action on the part of the
holder thereof, cease to be outstanding, shall be canceled
and retired without payment of any consideration therefor
and shall cease to exist.
(c) At the Effective Time, each share of Common
Stock, par value $1.00 per share, of Merger Sub issued and
outstanding immediately prior to the Effective Time shall
remain outstanding and each certificate therefor shall
continue to evidence one share of Common Stock of the
Surviving Corporation.
4.2. Payment for Shares. Parent shall make
available or cause to be made available to the paying agent
appointed by Parent with the Company's prior approval (the
"Paying Agent") amounts sufficient in the aggregate to
provide all funds necessary for the Paying Agent to make
payments pursuant to Section 4.1(a) hereof to holders of
Shares issued and outstanding immediately prior to the
Effective Time. Promptly after the Effective Time, the
Surviving Corporation shall cause to be mailed to each
person who was, at the Effective Time, a holder of record
(other than any of the Parent Companies) of issued and
outstanding Shares a form (mutually agreed to by Parent and
the Company) of letter of transmittal and instructions for
use in effecting the surrender of the certificates which,
immediately prior to the Effective Time, represented any of
such Shares in exchange for payment therefor. Upon surren-
der to the Paying Agent of such certificates, together with
such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, the Surviving
Corporation shall promptly cause to be paid to the persons
entitled thereto a check in the amount to which such persons
are entitled, after giving effect to any required tax with-
holdings. No interest will be paid or will accrue on the
amount payable upon the surrender of any such certificate.
If payment is to be made to a person other than the regis-
tered holder of the certificate surrendered, it shall be a
condition of such payment that the certificate so surren-
dered shall be properly endorsed or otherwise in proper form
for transfer and that the person requesting such payment
shall pay any transfer or other taxes required by reason of
the payment to a person other than the registered holder of
the certificate surrendered or establish to the satisfaction
of the Surviving Corporation or the Paying Agent that such
tax has been paid or is not applicable. One year following
the Effective Time, the Surviving Corporation shall be
entitled to cause the Paying Agent to deliver to it any
funds (including any interest received with respect thereto)
made available to the Paying Agent which have not been
disbursed to holders of certificates formerly representing
Shares outstanding on the Effective Time, and thereafter
such holders shall be entitled to look to the Surviving
Corporation only as general creditors thereof with respect
to the cash payable upon due surrender of their
certificates. Notwithstanding the foregoing, neither the
Paying Agent nor any party hereto shall be liable to any
holder of certificates formerly representing Shares for any
amount paid to a public official pursuant to any applicable
abandoned property, escheat or similar law. The Surviving
Corporation shall pay all charges and expenses, including
those of the Paying Agent, in connection with the exchange
of cash for Shares and Parent shall reimburse the Surviving
Corporation for such charges and expenses.
4.3. Dissenters' Rights. If any Dissenting
Shareholder shall be entitled to be paid the "fair value" of
his or her Shares, as provided in Section 31-1-123 of the
WVCA, the Company shall give Parent notice thereof and
Parent shall have the right to participate in all negotia-
tions and proceedings with respect to any such demands.
Neither the Company nor the Surviving Corporation shall,
except with the prior written consent of Parent, voluntarily
make any payment with respect to, or settle or offer to
settle, any such demand for payment. If any Dissenting
Shareholder shall fail to perfect or shall have effectively
withdrawn or lost the right to dissent, the Shares held by
such Dissenting Shareholder shall thereupon be treated as
though such Shares had been converted into the Merger
Consideration pursuant to Section 4.1.
4.4. Transfer of Shares After the Effective Time.
No transfers of Shares shall be made on the stock transfer
books of the Surviving Corporation at or after the Effective
Time.
ARTICLE V
Representations and Warranties
5.1. Representations and Warranties of the
Company. The Company hereby represents and warrants to
Parent and Merger Sub that:
(a) Corporate Organization and Qualification.
Each of the Company and its subsidiaries is a corporation
duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of incorporation and
is in good standing as a foreign corporation in each juris-
diction where the properties owned, leased or operated, or
the business conducted, by it require such qualification,
except for such failure to so qualify or be in such good
standing, which, when taken together with all other such
failures, is not reasonably likely to have a Material
Adverse Effect (as such term is defined in Section 9.10
hereof) on the Company and its subsidiaries taken as a
whole. Each of the Company and its subsidiaries has the
corporate requisite power and authority to carry on its
respective businesses as they are now being conducted. The
Company has made available to Parent a complete and correct
copy of the Company's Articles and By-Laws, each as amended
to date. The Company's Articles and By-Laws so delivered
are in full force and effect. Prior to the date hereof, the
Company has delivered to Parent a list of all material
corporations, partnerships, joint ventures and other
business entities in which it or any of its subsidiaries
directly or indirectly owns an interest and its and such
subsidiaries' direct or indirect share, partnership or other
ownership interest of each such entity. None of such enti-
ties (other than Mountaineer Gas Company ("Mountaineer")),
whether or not a material entity, is a "public-utility
company", and none of such entities (whether or not a
material entity) is a "holding company", a "subsidiary
company" or an "affiliate" of any public-utility company
other than Mountaineer within the meaning of
Sections 2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11) of the Public
Utility Holding Company Act of 1935, as amended (the
"Holding Company Act").
(b) Authorized Capital. The authorized capital
stock of the Company consists of 20,000,000 Shares, of which
7,479,360 Shares were outstanding on September 26, 1994 and
629,442 Shares were held in treasury, and 5,000,000 shares
of Preferred Stock, without par value (the "Preferred
Shares"), no shares of which were outstanding on the date
hereof. All of the outstanding Shares have been duly
authorized and are validly issued, fully paid and nonassess-
able. The Company has no Shares or Preferred Shares
reserved for issuance, except that, as of September 26,
1994, there were 1,084,900 Shares reserved for issuance
pursuant to the 1987 Stock Option Plan (the "Stock Plan").
Except as set forth in the disclosure letter to be delivered
to Parent within five business days after the date hereof
(the "Disclosure Letter"), each of the outstanding shares of
capital stock of each of the Company's subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and
owned, either directly or indirectly, by the Company, free
and clear of all liens, pledges, security interests, claims
or other encumbrances. Except as set forth above, there are
no shares of capital stock of the Company authorized, issued
or outstanding and except as set forth above, there are no
preemptive rights nor any outstanding subscriptions,
options, warrants, rights, convertible or exchangeable
securities or other agreements or commitments of any
character relating to the issued or unissued capital stock
or other securities of the Company or any of its subsidia-
ries. After the Effective Time the Surviving Corporation
will have no obligation to issue, transfer or sell any
Shares or common stock of the Surviving Corporation pursuant
to any Benefit Plan (as defined in Section 6.1(d)).
(c) Corporate Authority. Subject only to
approval of this Agreement by the holders of a majority of
the outstanding Shares, the Company has the requisite
corporate power and authority and has taken all corporate
action necessary in order to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby. This Agreement is a valid and binding agreement of
the Company enforceable against the Company in accordance
with its terms, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance and similar
laws relating to or affecting creditors' rights generally
and court decisions with respect thereto or to general
principles of equity.
(d) Governmental Filings; No Violations.
(i) Except as set forth in the Disclosure Letter, other than
the filing required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"), the filing of a
proxy statement with the Securities and Exchange Commission
(the "SEC") under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated
thereunder, filings provided for in Section 1.3, and any
required approval under West Virginia law (the
"Governmental Filings"), no notices, reports or other
filings are required to be made by the Company with, nor are
any consents, registrations, approvals, permits or
authorizations required to be obtained by the Company from,
any governmental or regulatory authority, agency, commission
or other entity, domestic or foreign ("Governmental
Entity"), in connection with the execution and delivery of
this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby, the failure
to make or obtain any or all of which is reasonably likely
to have a Material Adverse Effect, or could prevent,
materially delay or materially burden the transactions
contemplated by this Agreement.
(ii) Except as to matters described in the
Disclosure Letter, the execution and delivery of this
Agreement by the Company do not, and the consummation by the
Company of the transactions contemplated by this Agreement
will not, constitute or result in (i) a breach or violation
of, or a default under, the Articles or By-Laws of the
Company or the comparable governing instruments of any of
its subsidiaries, (ii) except as disclosed in the Company
Reports (as hereinafter defined), a breach or violation of,
a default under or the triggering of any payment or other
material obligations pursuant to, any of the Company's
existing Benefit Plans or any grant or award made under any
of the foregoing, (iii) a breach or violation of, or a
default under, the acceleration of or the creation of a
lien, pledge, security interest or other encumbrance on
assets (with or without the giving of notice or the lapse of
time) pursuant to, any provision of any agreement, lease,
contract, note, mortgage, indenture, arrangement or other
obligation ("Contracts") of the Company or any of its sub-
sidiaries or any law, rule, ordinance or regulation or judg-
ment, decree, order, award or governmental or non-govern-
mental permit or license to which the Company or any of its
subsidiaries is subject or (iv) any change in the rights or
obligations of any party under any of the Contracts, except,
in the case of clause (iii) or (iv) above, for such
breaches, violations, defaults, accelerations or changes
that, alone or in the aggregate, are not reasonably likely
to have a Material Adverse Effect or that could not prevent,
materially delay or materially burden the transactions
contemplated by this Agreement. The Disclosure Letter sets
forth, to the best knowledge of the officers of the Company,
a list of any consents required under any Contracts to be
obtained prior to consummation of the transactions contem-
plated by this Agreement (whether or not subject to the
exception set forth with respect to clause (iii) above).
The Company will use its best reasonable efforts to obtain
the consents referred to in the Disclosure Letter.
(e) Company Reports; Financial Statements. The
Company has delivered to Parent each registration statement,
schedule, report, proxy statement or information statement
publicly filed by it since June 30, 1994 ("Audit Date"),
including, without limitation, the Company's Annual Report
on Form 10-K for the year ended June 30, 1994, each in the
form (including exhibits and any amendments thereto) filed
with the SEC (collectively, the "Company Reports"). As of
their respective dates, the Company Reports did not, and any
Company Reports filed with the SEC subsequent to the date
hereof will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in
light of the circumstances in which they were made, not mis-
leading. Each of the consolidated balance sheets included
in or incorporated by reference into the Company Reports
(including the related notes and schedules) fairly presents
the consolidated financial position of the Company and its
subsidiaries as of its date and each of the consolidated
statements of income and of changes in stockholders' equity
included in or incorporated by reference into the Company
Reports (including any related notes and schedules) fairly
presents the results of operations, and changes in
stockholders' equity, as the case may be, of the Company and
its subsidiaries for the periods set forth therein (subject,
in the case of unaudited statements, to normal year-end
audit adjustments which will not be material in amount or
effect), in each case in accordance with generally accepted
accounting principles consistently applied during the
periods involved, except as may be noted therein.
Other than the Company Reports, the Company has
<PAGE>
not filed any other definitive reports or statements with
the SEC since June 30, 1994. To the Company's best
knowledge, except as set forth in the Disclosure Letter, the
Company Reports set forth all refund obligations of the
Company and any other regulatory obligations which are
reasonably likely to have a Material Adverse Effect.
(f) Absence of Certain Changes. Except as dis-
closed in the Company Reports filed with the SEC prior to
the date hereof or in the Disclosure Letter, since June 30,
1994, the Company and its subsidiaries have conducted their
respective businesses only in, and have not engaged in any
material transaction other than according to, the ordinary
and usual course of such businesses and there has not been
(i) any Material Adverse Change (as defined in Section 9.10
hereof) in the Company and its subsidiaries taken as a whole
or any development or combination of developments of which
management of the Company has knowledge which is reasonably
likely to result in any Material Adverse Change; (ii) any
declaration, setting aside or payment of any dividend or
other distribution with respect to the capital stock of the
Company; or (iii) any change by the Company in accounting
principles, practices or methods. Since June 30, 1994,
except as disclosed in the Company Reports filed with the
SEC prior to the date hereof, except as set forth in the
Disclosure Letter and other than in the ordinary course,
there has not been any increase in the compensation payable
or which could become payable by the Company and its
subsidiaries to their officers or key employees, or any
amendment of any Benefit Plans or collective bargaining
agreements.
(g) Litigation and Liabilities. Except as dis-
closed in the Company Reports filed with the SEC prior to
the date hereof or in the Disclosure Letter, there are no
(i) civil, criminal or administrative actions, suits,
claims, hearings, investigations or proceedings pending or,
to the knowledge of the management of the Company, threat-
ened against the Company or any of its subsidiaries or
(ii) obligations or liabilities, whether or not accrued,
contingent or otherwise, including, without limitation,
those relating to matters involving any Environmental Law
(as hereinafter defined), or any other facts or
circumstances of which the management of the Company is
aware that could result in any claims against or obligations
or liabilities of the Company or any of its subsidiaries,
that, alone or in the aggregate, are reasonably likely to
have a Material Adverse Effect.
(h) Employee Benefits. (i) The descriptions in
the Company Reports of all Benefit Plans required to be
described therein are accurate in all material respects.
The Benefit Plans and all other benefit plans, contracts or
arrangements (regardless of whether they are funded or
unfunded or foreign or domestic) covering employees or
former employees of the Company and its subsidiaries (the
"Employees"), including, but not limited to, "employee
benefit plans" within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA") are listed in Schedule 5.1(h). True and complete
copies of all Benefit Plans and such other benefit plans,
contracts or arrangements, including, but not limited to,
any trust instruments and/or insurance contracts, if any,
forming a part of any such plans and agreements, and all
amendments thereto, as well as all collective bargaining
agreements and all amendments thereto, as well as any side
letters and memoranda of agreement, have been made available
to Parent.
(ii) All employee benefit plans, other than
"multiemployer plans" within the meaning of Sections 3(37)
or 4001(a)(3) of ERISA, covering Employees (the "Plans"), to
the extent subject to ERISA, are in substantial compliance
with ERISA. Except as set forth in the Disclosure Letter,
each Plan which is an "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA ("Pension Plan") and
which is intended to be qualified under Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code"),
has received a favorable determination letter from the
Internal Revenue Service, and the Company is not aware of
any circumstances likely to result in revocation of any such
favorable determination letter. There is no pending or
threatened litigation relating to the Plans which, if
adversely determined, would have a Material Adverse Effect
on the Company and its subsidiaries. Neither the Company
nor any subsidiary has engaged in a transaction with respect
to any Plan that, assuming the taxable period of such
transaction expired as of the date hereof, could subject the
Company or any of its subsidiaries to a tax or penalty
imposed by either Section 4975 of the Code or Section 502(i)
of ERISA in an amount which would have a Material Adverse
Effect.
(iii) No liability under Subtitle C or D of
Title IV of ERISA has been or, based on any prior event
known to the Company, is expected to be incurred by the
Company or any subsidiary with respect to any ongoing,
frozen or terminated "single-employer plan", within the
meaning of Section 4001(a)(15) of ERISA, currently or for-
merly maintained by any of them, or the single-employer plan
of any entity which is considered one employer with the
Company under Section 4001 of ERISA or Section 414 of the
Code (an "ERISA Affiliate"). Neither the Company nor any
ERISA Affiliate has had an obligation to contribute to a
"multi-employer plan" within the meaning of Section
4001(a)(3) of ERISA. No notice of a "reportable event",
within the meaning of Section 4043 of ERISA for which the
30-day reporting requirement has not been waived, has been
required to be filed for any Pension Plan or by any ERISA
Affiliate within the 12-month period ending on the date
hereof.
(iv) All contributions required to be made under
the terms of any Plan have been timely made. Neither any
Pension Plan nor any single-employer plan of an ERISA
Affiliate has an "accumulated funding deficiency" (whether
or not waived) within the meaning of Section 412 of the Code
or Section 302 of ERISA. Neither the Company nor its
Subsidiaries has provided, or is required to provide,
security to any Pension Plan or to any single-employer plan
of an ERISA Affiliate pursuant to Section 401(a)(29) of the
Code.
(v) Except as set forth in the Disclosure Letter,
under each Pension Plan which is a single-employer plan and
which is subject to Title IV of ERISA, as of the last day of
the most recent plan year ended prior to the date hereof,
the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001(a)(16) of
ERISA (as determined on the basis of the actuarial
assumptions contained in the Plan's most recent actuarial
valuation), did not exceed the then current value of the
assets of such Plan, and there has been no Material Adverse
Change in the financial condition of such Plan since the
last day of the most recent plan year.
(vi) Neither the Company nor the subsidiaries
have any obligations for retiree health and life benefits
under any Plan, except as set forth on Schedule 5.1(h).
Except as set forth in the Disclosure Letter, there are no
restrictions on the rights of the Company or the
subsidiaries to amend or terminate any such Plan without
incurring any liability thereunder.
(vii) There are no Benefit Plans covering foreign
Employees.
(i) Brokers and Finders. Neither the Company nor
any of its officers, directors or employees has employed any
broker or finder or incurred any liability for any brokerage
fees, commissions or finders fees in connection with the
transactions contemplated herein, except that the Company
has employed Allen & Company Incorporated as its financial
advisors, the arrangements with which have been disclosed in
writing to Parent prior to the date hereof.
(j) Takeover Statutes. Other than any regulatory
Governmental Filings, no "fair price", "moratorium",
"control share acquisition" or other similar antitakeover
statute or regulation is applicable to the Company, the
Shares, the Merger or the transactions contemplated hereby.
(k) Environmental Matters. Except as disclosed in
the Company Reports filed with the SEC prior to the date
hereof or in the Disclosure Letter and except for such
matters that, alone or in the aggregate, are not reasonably
likely to have a Material Adverse Effect on the Company and
its subsidiaries taken as a whole, (i) the Company and its
subsidiaries have complied with all applicable Environmental
Laws (as hereinafter defined); (ii) to the knowledge of the
Company the properties presently or formerly owned or
operated by the Company or its subsidiaries (including,
without limitation, soil, groundwater or surface water on,
under or adjacent to the properties, and buildings thereon)
(the "Properties") are not contaminated with any Hazardous
Substance (as hereinafter defined) and do not otherwise,
except in compliance with applicable Environmental Law,
contain any Hazardous Substance, underground storage tanks
or asbestos and have not been used as a dump, sanitary
landfill or hazardous waste disposal site (provided,
however, that with respect to Properties formerly owned or
operated by the Company, such representation is limited to
the period prior to the disposition of such Properties by
the Company or one of its subsidiaries); (iii) neither the
Company nor any of its subsidiaries has received any
notices, demand letters or request for information from any
Governmental Entity or any third party indicating that the
Company may be in violation of, or liable under, any
Environmental Law and none of the Company, its subsidiaries
or the Properties are subject to any court order, adminis-
trative order or decree arising under any Environmental Law,
(iv) no Hazardous Substance has been disposed of, trans-
ferred, released or transported from any of the Properties
during the time such Property was owned or operated by the
Company or one of its subsidiaries, other than as permitted
under applicable Environmental Law, (v) there are no
circumstances or conditions involving the Company or its
subsidiaries that are reasonably likely to result in
liability or costs under any Environmental Law and (vi) PCB-
containing oils have never been present on the Properties.
"Environmental Law" means (i) any Federal, state,
foreign or local law, statute, ordinance, rule, regulation,
code, license, permit, authorization, approval, consent,
common law, legal doctrine, order, judgment, decree,
injunction, requirement or agreement with any governmental
entity, (x) relating to the protection, preservation or
restoration of the environment (including, without
limitation, air, water vapor, surface water, groundwater,
drinking water supply, surface land, subsurface land, plant
and animal life or any other natural resource), or to human
health or safety, or (y) the exposure to, or the use,
storage, recycling, treatment, generation, transportation,
processing, handling, labeling, production, release or
disposal of Hazardous Substances, in each case as amended
and as now in effect. "Hazardous Substance" means any
substance listed, defined, designated or classified as
hazardous, toxic or radioactive, or otherwise regulated
under any Environmental Law, whether by type or by quantity,
including any petroleum and petroleum products and any
substance containing any such substance as a component.
(l) Taxes. Except as set forth in the Disclosure
Letter, all material federal, state, local and foreign tax
returns required to be filed by or on behalf of the Company
or any of its subsidiaries have been timely filed or
requests for extensions have been timely filed and any such
extension shall have been granted and not have expired, and
all such filed returns are complete and accurate in all
material respects. All taxes required to be paid as shown
on returns filed by the Company have been paid in full or
adequate provision has been made for any such taxes on its
balance sheet (in accordance with generally accepted
accounting principles). As of the date of this Agreement,
there is no audit examination, deficiency or refund
litigation with respect to any taxes of the Company that
have resulted in or might reasonably be expected to result
in a determination that would have a material adverse effect
on it. All taxes, interest, additions and penalties due
with respect to completed and settled examinations or
concluded litigation relating to the Company have been paid
in full or adequate provision has been made for any such
taxes on its balance sheet (in accordance with generally
accepted accounting principles). The Company has not exe-
cuted an extension or waiver of any statute of limitations
on the assessment or collection of any material tax due that
is currently in effect.
(m) Labor Matters. Except as set forth in its
Disclosure Letter, neither the Company nor any of its
subsidiaries is a party to, or bound by, any collective
bargaining agreement, contract or other agreement or under-
standing with a labor union or labor organization, nor is it
or any of its subsidiaries the subject of any material
proceeding asserting that it or any subsidiary has committed
an unfair labor practice or is seeking to compel it to
bargain with any labor union or labor organization, nor is
there any strike or other labor dispute involving it or any
of its subsidiaries pending or, to its knowledge,
threatened.
(n) Compliance with Laws. Each of the Company
and its subsidiaries has all permits, licenses, certificates
of authority, orders, and approvals of, and has made all
filings, applications, and registrations with, Governmental
Entities that are required in order to permit it to carry on
its business as it is presently conducted, except for such
permits, licenses, certificates, orders and approvals the
absence of which, individually or in the aggregate, have not
had and are not reasonably likely to have a Material Adverse
Effect on it; all such permits, licenses, certificates of
authority, orders and approvals are in full force and
effect, and, to the best of its knowledge, no suspension or
cancellation of any of them is threatened.
(o) Title to Assets. Each of the Company and its
subsidiaries has good and marketable title to its properties
and assets (other than property as to which it is lessee),
except for such defects in title that, individually or in
the aggregate, have not had and are not reasonably likely to
have a Material Adverse Effect.
(p) Regulation as a Utility. Mountaineer, a
direct wholly-owned subsidiary of the Company, operates and
is regulated as a public utility only in the State of West
Virginia and, except as set forth in the Disclosure Letter,
neither the Company nor any of its subsidiaries is subject
to regulation as a public utility or public service company
(or similar designation) by any other state in the United
States or any foreign country. The Company is an exempt
holding company under Section 3(a)(1) of the Holding Company
Act.
5.2. Representations and Warranties of Parent and
Merger Sub. Parent and Merger Sub represent and warrant to
the Company that:
(a) Corporate Organization and Qualification.
Each of Parent and Merger Sub is a corporation duly or-
ganized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation and is
in good standing as a foreign corporation in each juris-
diction where the properties owned, leased or operated, or
the business conducted, by it require such qualification
except for such failure to so qualify or to be in such good
standing, which, when taken together with all other such
failures, is not reasonably likely to have a material
adverse effect on the financial condition, properties,
business or results of operations of Parent and its
subsidiaries, taken as a whole.
(b) Corporate Authority. Parent and Merger Sub
each has the requisite corporate power and authority and has
taken all corporate action necessary in order to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement is a valid and binding
agreement of Parent and Merger Sub enforceable against
Parent and Merger Sub in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles.
(c) Governmental Filings; No Violations.
(i) Other than the Governmental Filings and the filing of
Form U-3A-2 by Parent, no notices, reports or other filings
are required to be made by Parent and Merger Sub with, nor
are any consents, registrations, approvals, permits or
authorizations required to be obtained by Parent and Merger
Sub from, any Governmental Entity in connection with the
execution and delivery of this Agreement by Parent and
Merger Sub and the consummation of the transactions contem-
plated hereby by Parent and Merger Sub, the failure to make
or obtain any or all of which could prevent, materially
delay or materially burden the transactions contemplated by
this Agreement.
(ii) The execution and delivery of this Agreement
by Parent and Merger Sub do not, and the consummation of the
transactions contemplated hereby by Parent and Merger Sub
will not, constitute or result in (i) a breach or violation
of, or a default under, the Articles or By-Laws of Parent or
Merger Sub or (ii) a breach or violation of, a default
under, the acceleration of or the creation of a lien,
pledge, security interest or other encumbrance on assets
(with or without the giving of notice or the lapse of time)
pursuant to, any provision of any Contract of Parent or
Merger Sub or any law, ordinance, rule or regulation or
judgment, decree, order, award or governmental or non-
governmental permit or license to which Parent or Merger Sub
is subject, except, in the case of clause (ii) above, for
such breaches, violations, defaults or accelerations that,
alone or in the aggregate, could not prevent, materially
delay or materially burden the transactions contemplated by
this Agreement.
(d) Regulation as a Utility. None of Parent,
Merger Sub nor any of their respective subsidiaries is a
"public utility company" or a "holding company", "subsidiary
company" or "affiliate" of any public utility company within
the meaning of Sections 2(a)(5), 2(a)(7), 2(a)(8) or
2(a)(11) of the Holding Company Act.
(e) Ownership of Company Stock. On the date
hereof, the Parent Companies, their respective "subsidiary
companies" and "affiliates" (within the meaning of Sections
2(a)(8) and 2(a)(11) of the Holding Company Act) and all
persons with whom they might constitute a "group" (as such
term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended), collectively, own less than five
percent of the outstanding Shares.
ARTICLE VI
Covenants
6.1. Interim Operations of the Company. The
Company covenants and agrees that, from the date hereof to
the earlier of the Effective Time and the termination of
this Agreement (unless Parent shall otherwise consent in
writing, such consent to be timely given and not to be
unreasonably withheld, and except as otherwise contemplated
by this Agreement):
(a) the business of the Company and its subsidi-
aries shall be conducted only in the ordinary and usual
course and, to the extent consistent therewith, each of the
Company and its subsidiaries shall use its best efforts to
preserve its business organization intact and maintain its
existing relations with customers, suppliers, employees and
business associates; provided, however, that, without
limitation, the Company shall be entitled to file a request
for increased base rates with the Public Service Commission
of West Virginia (the "PSCVW");
(b) the Company shall not (i) sell or pledge or
agree to sell or pledge any stock owned by it in any of its
subsidiaries; (ii) amend its Articles or By-Laws;
(iii) split, combine or reclassify the outstanding Shares;
or (iv) declare, set aside or pay any dividend or
distribution payable in cash, stock or property with respect
to the capital stock of the Company;
(c) neither the Company nor any of its subsidi-
aries shall (i) issue, sell, pledge, dispose of or encumber
any additional shares of, or securities convertible or
exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any shares of its capital
stock of any class of the Company or its subsidiaries or any
other property or assets except that, in the case of the
Company, Shares may be issued pursuant to options
outstanding on the date hereof under the Stock Plan;
(ii) transfer, lease, license, guarantee, sell, mortgage,
pledge, dispose of or encumber any assets or incur or modify
any indebtedness or other liability other than in the
ordinary and usual course of business; (iii) acquire
directly or indirectly by redemption or otherwise any shares
of the capital stock of the Company; or (iv) authorize
individual capital expenditures in excess of $500,000 or, in
the aggregate, in excess of $15 million (it being agreed
that the Company shall inform Parent of any individual
capital expenditures in excess of $250,000) or make any
acquisition of, or investment in, assets or stock of any
other person or entity in excess of $50,000;
(d) neither the Company nor any of its subsidi-
aries shall grant any severance or termination pay to, or
enter into any employment or severance agreement with any
director, officer or other employee of the Company or such
subsidiaries; and neither the Company nor any of its
subsidiaries shall establish, adopt, enter into, make any
new grants or awards under or amend, any bonus, profit shar-
ing, thrift, compensation, stock option, restricted stock,
pension, retirement, employee stock ownership, deferred
compensation, employment, termination, severance, "change of
control" or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any directors, officers or
employees (the "Benefit Plans") or any collective bargaining
agreement, except for amendments required by law and except
that (i) the Company may, in the ordinary course of
business, negotiate and enter into a renewed collective
bargaining agreement with the Oil, Chemical and Atomic
Workers International Union Locals 3-372 and 3-628 in
Charleston and Huntington, West Virginia, following
expiration of their previous collective bargaining agreement
on January 5, 1995, or with any other union upon expiration
of its previous collective bargaining agreement and (ii) the
Board of Directors of the Company, in its sole discretion,
may extend the employment contracts of Richard L. Grant,
Michael S. Fletcher and W. Merwyn Pittman in accordance with
the terms thereof;
(e) neither the Company nor any of its subsidi-
aries shall, without consultation with Parent, settle or
compromise any material claims or litigation or, except in
the ordinary and usual course of business, modify, amend or
terminate any of its material Contracts or waive, release or
assign any material rights or claims;
(f) neither the Company nor any of its subsidi-
aries shall make any tax election or permit any insurance
policy naming it as a beneficiary or a loss payable payee to
be canceled or terminated without notice to Parent, except
in the ordinary and usual course of business; and
(g) neither the Company nor any of its subsidiar-
ies will authorize or enter into an agreement to do any of
the foregoing.
6.2. Acquisition Proposals. (a) The Company
agrees that neither the Company nor any of its subsidiaries
nor any of the respective officers and directors of the
Company or any of its subsidiaries shall, and the Company
shall direct and use its reasonable best efforts to cause
its employees, agents and representatives (including,
without limitation, any investment banker, attorney or
accountant retained by the Company or any of its subsidi-
aries) not to, initiate or solicit, directly or indirectly,
any inquiries or the making of any proposal or offer
(including, without limitation, any proposal or offer to
shareholders of the Company) with respect to a merger,
consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or
any equity securities of, the Company or any of its
subsidiaries (any such proposal or offer being hereinafter
referred to as an "Acquisition Proposal") or, except to the
extent legally required for the discharge by the Company's
Board of Directors of its fiduciary duties as determined in
good faith by such Board, after consultation with counsel,
engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions
with, any person relating to an Acquisition Proposal, or
otherwise act to facilitate any effort or attempt to make or
implement an Acquisition Proposal. The Company will
immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing
and will promptly request each person which has heretofore
executed a confidentiality agreement in connection with its
consideration of acquiring the Company to return to the
Company or destroy, in accordance with the terms of such
confidentiality agreement, all confidential information
heretofore furnished to such person by or on behalf of the
Company. The Company will take the necessary steps to
inform the individuals or entities referred to in the first
sentence hereof of the obligations undertaken in this
Section 6.2. The Company will notify Parent as promptly as
practicable if any such inquiries or proposals are received
by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or
continued with the Company or if the Board of Directors
determines in accordance with this Section 6.2 that its
fiduciary duties require certain actions, provided, that
Parent agrees not to contact any parties identified by the
Company.
(b) If the Company has received a bona fide
written Acquisition Proposal that the Company's Board of
Directors determines in good faith, after consultation with
its financial advisors, is more favorable, from a financial
point of view, to the shareholders of the Company than the
Merger, taking into account the financial responsibility of
the party making the proposal and such party's ability, as
then reasonably determinable by the Company, to obtain
regulatory approvals for the proposed transaction (a "Higher
Proposal"), the Company will give Parent written notice of
the Higher Proposal ten business days before entering into
any agreement with respect to the Higher Proposal or as soon
as practicable; provided, however, that if the Company fails
to give ten business days' notice to Parent, such agreement
must expressly permit the Company to consider proposals
which are more favorable from a financial point of view than
such Higher Proposal, without entitling such other party to
any fees or other compensation, including by the grant of an
option. If Parent does not make a counter proposal that
the Company's Board of Directors believes in good faith,
after consultation with its financial advisors, is more
favorable, from a financial point of view, to the
shareholders of the Company than such Higher Proposal, the
Company shall be free to enter into an agreement with
respect to, and consummate, the Higher Proposal and shall
have no obligation to continue to pursue the Merger during
the pendency of the Higher Proposal, but this Agreement
shall not terminate until the earlier of (i) such
consummation and (ii) termination of this Agreement pursuant
to Article VIII hereof. If the Higher Proposal is not
consummated for any reason, this Agreement, including all
the Company's obligations hereunder, shall again be fully in
effect. The procedure in this paragraph (b) (including the
determination of favorableness from a financial point of
view) shall apply at any time any third party shall make a
proposal while there is a pending transaction between Parent
and the Company.
6.3. Meetings of the Company's Shareholders. The
Company will take, consistent with applicable law and its
Articles and By-Laws, all action necessary to convene a
meeting of holders of Shares as promptly as practicable to
consider and vote upon the approval of this Agreement and
the Merger. Subject to fiduciary requirements of applicable
law, the Board of Directors of the Company shall recommend
such approval and the Company shall take all lawful action
to solicit such approval. At any such meeting of the
Company all of the Shares then owned by the Parent Companies
will be voted, and Parent and Merger Sub will use their best
efforts to cause any shares owned by their respective
"subsidiary companies", "affiliates" or persons with whom
they might constitute a "group" (as such terms are used in
Section 5.2(e) above) to be voted, in favor of approval of
this Agreement. The Company's proxy statement with respect
to such meeting of shareholders (the "Proxy Statement"), at
the date thereof and at the date of such meeting, will not
include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that the foregoing shall not apply to the
extent that any such untrue statement of a material fact or
omission to state a material fact was made by the Company in
reliance upon and in conformity with written information
concerning the Parent Companies furnished to the Company by
Parent specifically for use in the Proxy Statement. The
Proxy Statement shall not be filed, and no amendment or
supplement to the Proxy Statement will be made by the Com-
pany, without consultation with Parent and its counsel.
6.4. Filings; Other Action. Each party hereto
shall cooperate with each other party and use all reasonable
efforts to promptly prepare and file all necessary
documentation, to effect all necessary applications,
notices, petitions, filings and other documents, to obtain
as promptly as practicable all necessary permits, consents,
approvals and authorizations of all third parties and
Governmental Entities necessary or advisable to consummate
the transactions contemplated by this Agreement. Each party
shall have the right to review in advance, and to the extent
practicable each will consult the other on, in each case
subject to applicable laws relating to the exchange of
information, all the information relating to the other party
and any of its subsidiaries which appear in any filing made
with, or written materials submitted to, any third party or
any Governmental Entity in connection with the transactions
contemplated by this Agreement. In exercising the foregoing
right, each of the parties hereto shall act reasonably and
as promptly as practicable. Each party hereto agrees that
it will keep the other party apprised of the status of
matters relating to completion of the transactions
contemplated herein. Each party shall, and shall cause each
of its subsidiaries to, use its best efforts (i) to take, or
cause to be taken, all actions necessary to comply promptly
with all legal requirements which may be imposed on such
party or any of its subsidiaries with respect to the Merger
and, subject to the conditions set forth in Article VII
hereof, to consummate the transactions contemplated by this
Agreement and (ii) to obtain (and to cooperate with the
other party to obtain) any permit, consent, approval or
authorization of, or any exemption by, any Governmental
Entity and any other public or private third party which is
required to be obtained by such party or any of its
subsidiaries in connection with the Merger and the trans-
actions contemplated by this Agreement, provided that
nothing herein shall be deemed to obligate Parent and Merger
Sub to take any action out of the ordinary course with
respect to the business, property or operations of Parent or
any of its subsidiaries or of the Surviving Corporation or
become subject to any law, rule or regulation to which it is
not presently subject purely in order to obtain any such
permit, consent, approval, authorization or exemption. Each
party will promptly cooperate with and furnish information
to each other party in connection with any such condition or
restriction suffered by, or requirement imposed upon, any of
them or any of their subsidiaries in connection with the
foregoing.
6.5. Access. Upon reasonable notice, the Company
shall (and shall cause each of its subsidiaries to) afford
Parent's officers, employees, counsel, accountants and other
authorized representatives ("Representatives") access,
during normal business hours throughout the period prior to
the Effective Time (or if earlier, the termination of this
Agreement), to its properties, books, Contracts and records
and, during such period, the Company shall (and shall cause
each of its subsidiaries to) furnish promptly to Parent all
information concerning its business, properties and
personnel as Parent or its Representatives may reasonably
request, provided that no investigation pursuant to this
Section 6.5 shall affect or be deemed to modify any
representation or warranty made by the Company. Any
information so obtained by Parent will be subject to the
terms of the Confidentiality Agreement between Parent and
the Company, dated May 11, 1994.
6.6. Notification of Certain Matters. The Com-
pany shall give prompt notice to Parent of: (a) any notice
of, or other communication relating to, any default or event
that, with notice or lapse of time or both, would become a
default, received by the Company or any of its subsidiaries
subsequent to the date of this Agreement and prior to the
Effective Time (or, if earlier, the termination of this
Agreement), under any Contract material to the financial
condition, properties, business, results of operations or
prospects of the Company and its subsidiaries taken as a
whole to which the Company or any of its subsidiaries is a
party or is subject; (b) any matter occurring after the date
hereof which would have been disclosed on the Disclosure
Letter if it had occurred prior to the date hereof; and
(c) any Material Adverse Change with respect to the Company
and its subsidiaries taken as a whole or the occurrence of
any event which, so far as reasonably can be foreseen at the
time of its occurrence, is reasonably likely to result in
any such Material Adverse Change. Each of the Company and
Parent shall give prompt notice to the other party of any
notice or other communication from any third party alleging
that the consent of such third party is or may be required
in connection with the transactions contemplated by this
Agreement.
6.7. Publicity. The first press release after
the signing of this Agreement shall be a joint press
release, and thereafter the Company and Parent shall, to the
extent possible given their respective disclosure
obligations, consult with each other prior to issuing any
press releases or otherwise making public statements with
respect to the transactions contemplated hereby and prior to
making any filings with any Governmental Entity or with any
national securities exchange with respect thereto.
6.8. Stock Options. Prior to the Effective Time,
the Company shall take such actions as may be necessary such
that at the Effective Time each stock option outstanding
pursuant to the Stock Plan ("Option"), whether or not then
exercisable, shall be canceled and only entitle the holder
thereof, upon surrender thereof, to receive an amount in
cash equal to the difference between the Merger
Consideration and the exercise price per Share of such
Option multiplied by the number of Shares subject to such
Option.
6.9. Reincorporation of Parent. Prior to the
Effective Time, Parent shall take all actions necessary so
that it shall be a West Virginia corporation.
6.10. Financing. Parent shall use its best
efforts to obtain on reasonable terms all financing required
to consummate the transactions contemplated by this
Agreement.
6.11. Indemnification. (a) From and after the
Effective Time, Parent agrees that it will indemnify and
hold harmless each present and former director and officer
of the Company, determined as of the Effective Time (the
"Indemnified Parties"), against any costs or expenses
(including reasonable attorneys' fees), judgments, fines,
losses, claims, damages or liabilities (collectively,
"Costs") incurred in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or
pertaining to matters existing or occurring at or prior to
the Effective Time, whether asserted or claimed prior to, at
or after the Effective Time, to the fullest extent that the
Company would have been permitted under West Virginia law
and its By-Laws in effect on the date hereof to indemnify
such person (and Parent shall also advance expenses as
incurred to the fullest extent permitted under applicable
law provided the person to whom expenses are advanced
provides an undertaking to repay such advances if it is
ultimately determined that such person is not entitled to
indemnification); provided that any determination required
to be made with respect to whether an officer's or
director's conduct complies with the standards set forth
under West Virginia law and the Company's By-Laws shall be
made by independent counsel jointly selected by the
Surviving Corporation and the Indemnified Party.
(b) Any Indemnified Party wishing to claim
indemnification under paragraph (a) of Section 6.11, upon
learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify Parent thereof. In the
event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective
Time), (i) Parent or the Surviving Corporation shall have
the right to assume the defense thereof with counsel
reasonably satisfactory to the Indemnified Party and Parent
shall not be liable to such Indemnified Parties for any
legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in
connection with the defense thereof, (ii) the Indemnified
Parties will cooperate in the defense of any such matter and
(iii) Parent shall not be liable for any settlement effected
without its prior written consent; and provided further that
Parent shall not have any obligation hereunder to any
Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such
determination shall have become final, that the indemnifica-
tion of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law.
ARTICLE VII
Conditions
7.1. Conditions to Obligations of Parent and
Merger Sub. The respective obligations of Parent and Merger
Sub to consummate the Merger are subject to the fulfillment
of each of the following conditions, any or all of which may
be waived in whole or in part by Parent or Merger Sub, as
the case may be, to the extent permitted by applicable law:
(a) Shareholder Approval. This Agreement shall
have been duly approved by the holders of a majority of the
Shares, in accordance with applicable law and the Articles
and By-Laws of the Company;
(b) Representations and Warranties. The
representations and warranties of the Company set forth in
this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date,
except as otherwise required by this Agreement (provided
that, to the extent that any executive officer of Parent had
knowledge on the date of this Agreement that any such
representation or warranty was not true and correct in all
material respects as of the date of this Agreement, such
matters as to which knowledge existed shall be waived with
respect to this condition; and provided, further, that any
changes in the operating results of the Company which are
attributable to weather conditions or the failure to
request, after consultation with Parent, or obtain increased
base rates from the PSCWV shall not be deemed material), and
Parent shall have received a certificate signed on behalf of
the Company by the Chairman, President and Chief Executive
Officer and by the Chief Financial Officer of the Company to
such effect;
(c) Performance of Obligations. The Company
shall have performed in all material respects all
obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Parent shall
have received a certificate signed on behalf of the Company
by the Chairman, President and Chief Executive Officer and
by the Chief Financial Officer of the Company to such
effect;
(d) Governmental and Regulatory Consents. The
waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated and,
other than the filings provided for in Section 1.3, all
Governmental Filings required to be made prior to the
Effective Time by the Company with, and all consents,
approvals and authorizations required to be obtained prior
to the Effective Time by the Company from, any Governmental
Entity in connection with the execution and delivery of this
Agreement by the Company and the consummation of the
transactions contemplated hereby by the Company, Parent and
Merger Sub, the failure of which to obtain is reasonably
likely to have a Material Adverse Effect, shall have been
made or obtained (as the case may be), all on terms
reasonably satisfactory to Parent and the SEC shall have
taken no action which would cause Parent to reasonably
believe that, as a result of the Merger, it will not be an
exempt holding company under Section 3(a)(1) of the Holding
Company Act;
(e) Litigation. No United States or state court
or other Governmental Entity of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or
other order (whether temporary, preliminary or permanent)
which is in effect and prohibits consummation of the
transactions contemplated by this Agreement or imposes
material restrictions on Parent or the Company in connection
with consummation of the Merger or with respect to their
business operations, either prior to or subsequent to the
Merger (collectively, an "Order"); and
(f) Legal Opinion. The Board of Directors of
Parent shall have received from Robinson & McElwee a written
opinion, dated as of the Effective Time, covering the due
incorporation and good standing of the Company and
Mountaineer and the matters set forth in Section 5.1(c)
hereof.
7.2. Conditions to Obligations of the Company.
The obligations of the Company to consummate the Merger are
subject to the fulfillment of each of the following
conditions, any or all of which may be waived in whole or in
part by the Company to the extent permitted by applicable
law:
(a) Shareholder Approval. This Agreement shall
have been duly approved by the holders of a majority of the
Shares, in accordance with applicable law and the Articles
and By-Laws of the Company;
(b) Representations and Warranties. The
representations and warranties of Parent and Merger Sub set
forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing
Date, except as otherwise required by this Agreement, and
the Company shall have received a certificate signed on
behalf of Parent and Merger Sub by the respective chief
executive officers and chief financial officers of Parent
and Merger Sub to such effect;
(c) Performance of Obligations of Parent and
Merger Sub. Parent and Merger Sub shall each have performed
in all material respects all obligations required to be
performed by it under this Agreement at or prior to the
Closing Date, and the Company shall have received
certificates signed on behalf of Parent and Merger Sub by
the respective chief executives and by the chief financial
officers of Parent and Merger Sub to such effect;
(d) Governmental Consents. The waiting period
applicable to the consummation of the Merger under the HSR
Act shall have expired or been terminated and, other than
the filings provided for in Section 1.3, all Governmental
Filings required to be made prior to the Effective Time by
Parent and Merger Sub with, and all consents, approvals,
permits and authorizations required to be obtained prior to
the Effective Time by Parent and Merger Sub from, any
Governmental Entity in connection with the execution and
delivery of this Agreement by Parent and Merger Sub and the
consummation of the transactions contemplated hereby by
Parent, Merger Sub and the Company, the failure of which to
obtain is reasonably likely to have a Material Adverse
Effect, shall have been made or obtained (as the case may
be);
(e) Order. There shall be in effect no Order;
(f) Fairness Opinion. The Board of Directors of
the Company shall have received from Allen & Company
Incorporated its written opinion, dated as of the date the
Proxy Statement is first mailed to the Company's
stockholders and not subsequently withdrawn, and
satisfactory in form and substance to such Board in its sole
discretion, that the consideration received by the
stockholders of the Company in the Merger is fair to such
stockholders; and
(g) Legal Opinion. The Board of Directors of the
Company shall have received from Goodwin & Goodwin a written
opinion, dated as of the Effective Time, covering the due
incorporation and good standing of Parent and Merger Sub and
the matters set forth in Section 5.2(b) hereof.
ARTICLE VIII
Termination
8.1. Termination by Mutual Consent. This Agree-
ment may be terminated and the Merger may be abandoned at
any time prior to the Effective Time, before or after the
approval by holders of Shares, by the mutual consent of
Parent and the Company, by action of their respective Boards
of Directors.
8.2. Termination by either Parent or the Company.
This Agreement may be terminated and the Merger may be
abandoned by action of the Board of Directors of either
Parent or the Company if (i) the Merger shall not have been
consummated by June 30, 1995 whether or not such date is
before or after the approval by holders of Shares, provided,
that Parent may, upon written notice, in its sole discretion
extend such termination date during the pendency of any
Higher Proposal and if such Higher Proposal is not
consummated for a reasonable period thereafter in order to
consummate the Merger, or (ii) the approval of shareholders
required by Section 7.1(a) shall not have been obtained in a
vote taken at a meeting duly convened therefor.
8.3. Termination by Parent. This Agreement may
be terminated and the Merger may be abandoned at any time
prior to the Effective Time, before or after the approval by
holders of Shares, by action of the Board of Directors of
Parent, if (x) the Company shall have failed to comply with
any of the covenants or agreements contained in this
Agreement to be complied with or performed by the Company at
or prior to such date of termination or breached any of its
representations and warranties which breach cannot be cured
or is not cured within a reasonable time following demand
therefor, where such failure or breach has a Material
Adverse Effect on the Company and its subsidiaries taken as
a whole, (y) the Company shall have entered into an
agreement with respect to a Higher Proposal in accordance
with Section 6.2 hereof and such agreement shall be in
effect at the time of termination or (z) the Board of
Directors of the Company shall have withdrawn or modified in
a manner adverse to Parent or Merger Sub its recommendation
that shareholders approve this Agreement or the Merger or
the Board of Directors of the Company, upon request by
Parent, shall fail to reaffirm such recommendation, or shall
have resolved to do any of the foregoing; provided, however,
that a temporary suspension of such Board's recommendation
while it considers another bid shall not trigger this clause
(z). In addition, subject to its obligations in Section
8.5(b) hereof, Parent may terminate this Agreement (i)
within five business days after delivery of the Disclosure
Letter if the changes in such document from the draft
delivered as of the date hereof would, in the aggregate,
constitute a Material Adverse Change with respect to the
Company and its subsidiaries taken as a whole or (ii) on
November 12, 1994 if by that time it shall have failed to
obtain or arrange for financing for the transactions
contemplated hereby on terms reasonably satisfactory to it.
8.4. Termination by the Company. This Agreement
may be terminated and the Merger may be abandoned at any
time prior to the Effective Time, before or after the
approval by the holders of Shares by action of the Board of
Directors of the Company, if (x) Parent or Merger Sub shall
have failed to comply in any material respect with any of
the covenants or agreements contained in this Agreement to
be complied with or performed by Parent or Merger Sub at or
prior to such date of termination or breached in any
material respect any of its representations and warranties,
which breach cannot be cured, or is not cured within a
reasonable time following demand therefor or (y) a Higher
Proposal shall have been consummated, provided that the
Company shall have complied with the provisions of Section
6.2.
8.5. Effect of Termination and Abandonment.
(a) In the event of termination of this Agreement and
abandonment of the Merger pursuant to this Article VIII, no
party hereto (or any of its directors or officers) shall
have any liability or further obligation to any other party
to this Agreement, except as provided in Section 8.5(b)
below and Section 9.2 and except that nothing herein will
relieve any party from liability for any breach of this
Agreement.
(b) If (x) after the date hereof (i) any
corporation, partnership, person, other entity or group (as
such term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended) other than Parent or
Merger Sub or any of their respective subsidiaries or
affiliates (collectively, a "Person") shall have become the
beneficial owner of 51 percent or more of the outstanding
Shares, and (ii) the holders of Shares do not approve this
Agreement and the Merger or (y) the Parent shall have
terminated this Agreement pursuant to Section 8.3(y) hereof
and the transaction contemplated by the agreement referred
to in Section 8.3(y) shall have been consummated, then the
Company, if requested by Parent, shall promptly, but in no
event later than (A) in the case of (x) above, two days
after the later of (i) and (ii) in (x), or (B) in the case
of (y) above, two days after the later of such request and
consummation, pay Parent a fee of $3.5 million which amount
shall be payable in same day funds, provided, that no fee
shall be payable pursuant to this Section 8.5(b) if Parent
shall be in material breach of its obligations hereunder.
If Parent shall terminate this Agreement pursuant to
subsection (ii) of the last sentence of Section 8.3, Parent
shall within two days of such termination pay the Company a
fee of $3.5 million by wire transfer of same day funds. The
Company and Parent acknowledge that the agreements contained
in this Section 8.5(b) are an integral part of the
transactions contemplated in this Agreement, and that, with-
out these agreements, they would not enter into this
Agreement; accordingly, if either party fails to promptly
pay the amount due pursuant to this Section 8.5(b), and, in
order to obtain such payment, the other party commences a
suit which results in a judgment against such party for the
fee set forth in this Section 8.5 (b), such party shall pay
to the other party its costs and expenses (including
reasonable attorneys' fees) in connection with such suit,
together with interest on the amount of the fee at the prime
rate of Morgan Guaranty Trust Company of New York on the
date such payment was required to be made.
ARTICLE IX
Miscellaneous and General
9.1. Payment of Expenses. Whether or not the
Merger shall be consummated, each party hereto shall pay its
own expenses incident to preparing for, entering into and
carrying out this Agreement and the consummation of the
Merger.
9.2. Survival. The agreements of the Company,
Parent and Merger Sub contained in Sections 4.2 (but only to
the extent that such Section expressly relates to actions to
be taken after the Effective Time), 4.3, 4.4, 6.8 and 9.1
shall survive the consummation of the Merger. The agree-
ments of the Company, Parent and Merger Sub contained in
Sections 8.5 and 9.1 or in the last sentence of Section 6.5
shall survive the termination of this Agreement. All other
representations, warranties, agreements and covenants in
this Agreement shall not survive the consummation of the
Merger or the termination of this Agreement.
9.3. Modification or Amendment. Subject to the
applicable provisions of the WVCA, at any time prior to the
Effective Time, the parties hereto may modify or amend this
Agreement, by written agreement executed and delivered by
duly authorized officers of the respective parties and, if
Parent so requests, the Company agrees to amend this
Agreement so that the Company is the Surviving Corporation.
9.4. Waiver of Conditions. The conditions to
each of the parties' obligations to consummate the Merger
are for the sole benefit of such party and may be waived by
such party in whole or in part to the extent permitted by
applicable law.
9.5. Counterparts. For the convenience of the
parties hereto, this Agreement may be executed in any number
of counterparts, each such counterpart being deemed to be an
original instrument, and all such counterparts shall
together constitute the same agreement.
9.6. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of West Virginia.
9.7. Notices. Any notice, request, instruction
or other document to be given hereunder by any party to the
others shall be in writing and delivered personally or sent
by registered or certified mail, postage prepaid, courier
service or facsimile transmission if to Parent or Merger
Sub, addressed to Parent or Merger Sub, as the case may be,
at Energy Corporation of America, 4643 South Ulster Street,
Suite 1100, Denver, Colorado, 80237, Attention: John Mork,
facsimile (303) 694-2763 (with copies to Thomas Goodwin,
Goodwin & Goodwin, 1500 One Valley Square, Charleston, W.
Va. 25301, facsimile (304) 344-9692 and Benjamin F.
Stapleton, Sullivan & Cromwell, 125 Broad Street, New York,
New York 10004, facsimile (212) 558-3342); and if to the
Company, addressed to the Company at Grand Bay Plaza, 2665
South Bayshore Drive, Coconut Grove, Florida 33133,
Attention: President, facsimile (305) 358-5468 (with a copy
to Mark A. Rosenbaum, Esq., Stroock & Stroock & Lavan, 7
Hanover Square, New York, New York 10004, facsimile (212)
806-6006), or to such other persons or addresses as may be
designated in writing by the party to receive such notice.
9.8. Entire Agreement, etc. This Agreement
(including the Disclosure Letter and any exhibits, schedules
or Annexes hereto) (a) constitutes the entire agreement, and
supersedes all other prior agreements, understandings,
representations and warranties both written and oral, among
the parties, with respect to the subject matter hereof, and
(b) shall not be assignable by operation of law or otherwise
and is not intended to create any obligations to, or rights
in respect of, any persons other than the parties hereto;
provided, however, that Parent may designate, by written
notice to the Company, another wholly-owned direct or
indirect subsidiary to be a Constituent Corporation in lieu
of Merger Sub, in the event of which, all references herein
to Merger Sub shall be deemed references to such other
subsidiary except that all representations and warranties
made herein with respect to Merger Sub as of the date of
this Agreement shall be deemed representations and
warranties made with respect to such other subsidiary as of
the date of such designation.
9.9. Definition of "Subsidiary". When a refer-
ence is made in this Agreement to a subsidiary of a party,
unless expressly otherwise provided herein the word
"subsidiary" shall mean any corporation or other organ-
ization whether incorporated or unincorporated of which at
least a majority of the securities or interests having by
the terms thereof ordinary voting power to elect at least a
majority of the board of directors or others performing
similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled
by such party or by any one or more of its subsidiaries, or
by such party and one or more of its subsidiaries.
9.10. Definition of "Material Adverse Effect" and
"Material Adverse Change". As used in this Agreement, a
"Material Adverse Effect" or a "Material Adverse Change"
shall mean, with respect to any person or persons, a
material adverse effect on, or a material adverse change in,
the financial conditions, properties, business, results of
operations or prospects of such person or persons; provided,
however, that a Material Adverse Effect or a Material
Adverse Change shall not include any general economic and
market changes including, without limitation (i) any general
suspension of trading in, or limitation on prices for, or
material change in prices of, securities generally on any
national securities exchange or in the over-the-counter
markets, (ii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United
States, (iii) the commencement or continuation of a war,
armed hostilities or other international or nation calamity
directly or indirectly involving the United States; (iv) any
limitation (whether or not mandatory) by any U.S.
governmental authority or agency on the extension of credit
by banks or other financial institutions; (v) any general
decline in economic conditions in the gas utility industry
as a whole or in general economic conditions in any
geographic region of the United States; and (vi) in the case
of any of the events described in the foregoing clauses (i)
through (v), a material acceleration or worsening thereof.
9.11. Obligation of Parent. Whenever this
Agreement requires Merger Sub to take any action, such
requirement shall be deemed to include an undertaking on the
part of Parent to cause Merger Sub to take such action.
9.12. Captions. The Article, Section and para-
graph captions herein are for convenience of reference only,
do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions
hereof.
IN WITNESS WHEREOF, this Agreement has been duly
executed and delivered by the duly authorized officers of
the parties hereto on the date first hereinabove written.
ENERGY CORPORATION OF AMERICA
By /s/ John Mork
EASTERN SYSTEMS CORPORATION
By /s/ John Mork
ALLEGHENY & WESTERN ENERGY
CORPORATION
By /s/ John G. McMillian
<PAGE>
Schedule 5.1(h) Benefit Plans, Contracts or Arrangements
Schedule
Reference Discussion
5.1(h)(i) Allegheny & Western Energy Corp./Gas Access
Systems
A. Insurance benefits provided at no
cost to employees through fully-
insured coverage contract with The
Guardian Life Insurance Company
of America.
Major medical with
prescription drug benefits
Life
Accidental death and
dismemberment
Weekly disability
Long-term disability -
administrative employees only
Dental
B. Employment Agreement - W. Merwyn
Pittman, Vice President, Chief
Financial Officer and Treasurer
C. 1987 Stock Option Plan - Options to
purchase 1,500,000 shares
authorized
D. Key Executives' Supplemental
Retirement Benefit Plan
E. Key Employee Reassurance Letters
F. Executive Fringe Benefits - Company
auto, personal financial
services, club dues, tax
reimbursements
G. Participant in Retirement Income
Plan for Mountaineer Gas Company
Mountaineer Gas Company
A. Insurance benefits provided at
various cost levels and deductibles
through combination of
self-funded/fully insured plans.
Life, major
medical, dental and vision plans
are available to early retirees who
meet certain qualifications.
Life
Accidental death and dismemberment
Voluntary personal accident
Long-term disability
Major medical
Dental
Vision
B. Employment Agreements - Richard L.
Grant, President; Michael S.
Fletcher, Senior Vice President,
Chief Financial Officer
C. Participant in 1987 Stock Option
Plan
D. Participant in A&W Key Executives'
Supplemental Retirement Benefit
Plan
E. Participant in A&W Key Employee
Reassurance Letters
F. Executive Fringe Benefits - Company
auto, personal financial
services, club dues, tax
reimbursements
G. Retirement Income Plan for
Mountaineer Gas Company
H. Employees' Thrift Plan of Mountaineer
Gas Company
I. Collective bargaining agreements (6)
Beckley, WV Local 3-628 of Oil,
Chemical and Atomic Workers
International Union
Charleston and Huntington, WV Locals
3-372, 3-628 of Oil, Chemical
and Atomic Workers International
Union
Weirton, WV Local 496 of The Utility
Workers Union of America
Elkins, WV Local 420 of The Utility
Workers Union of America
Wheeling and Elkins, WV Local 420-496
(Clerical) of The Utility
Workers Union of America
Wheeling, WV Local 420 of The Utility
Workers Union of America
<PAGE>
ALLEGHENY & WESTERN ENERGY CORPORATION REACHES
AGREEMENT IN PRINCIPLE FOR MERGER
DATELINE: Charleston, W.V.
September 27, 1994
Allegheny & Western Energy Corporation (Nasdaq: ALGH)
("A&W" or the "Company")
announced today that it had reached an agreement in principle to
merge with an undisclosed
acquiror at a cash price of $12.00 per share.
The agreement in principle would be subject to negotiation
and execution of definitive
documentation. It is anticipated that consummation of the
transaction would be contingent upon
satisfaction or waiver of a number of conditions, including
approval of the merger by shareholders
of the Company and receipt of regulatory approvals.
Allegheny & Western Energy Corporation, based in Charleston,
West Virginia, is a
diversified natural gas company, and owns Mountaineer Gas
Company, the largest gas distribution
utility in West Virginia, operating approximately 3,600 miles of
natural gas distribution pipeline.
CONTACT: W. Merwyn Pittman of Allegheny & Western Energy
Corporation, 304-343-
4567.
<PAGE>
Charleston, West Virginia
September 30, 1994
FOR IMMEDIATE RELEASE
Representatives of Allegheny & Western Energy Corporation
("A&W") and Energy
Corporation of America ("ECA") announced today that the two
companies have entered into an
agreement pursuant to which A&W will be merged with a
wholly-owned subsidiary of ECA. Each
share of A&W stock will be converted to the right to receive
$12.00 in cash. The merger is subject
to approval by A&W's stockholders and any required regulatory
approvals as well as certain other
normal closing conditions.
A&W is a diversified energy company and is also the parent
company of Mountaineer Gas
Company, the largest natural gas utility in the State of West
Virginia. ECA is the parent company
of Eastern American Energy Corporation, an independent oil and
gas company based primarily in
the Appalachian Basin, engaged in extensive oil and gas
development activities.
Mr. John McMillian, Chief Executive Officer of A&W said, "I
am very pleased that we have
taken the first step to bring together two companies in West
Virginia that will continue the emphasis
on serving the many customers of Mountaineer." John Mork, Chief
Executive Officer of the Eastern
companies (phone 925-6100) said, "I look forward to finalizing
this matter by obtaining the required
regulatory approval and shareholder concurrence. I believe that
by working together we can
continue to provide excellent service to all our customers
throughout West Virginia."
