SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) July 26, 1994
IOWA-ILLINOIS GAS AND ELECTRIC COMPANY
(Exact Name of Registrant as Specified in Charter)
Illinois 1-3573 42-0673189
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
206 East Second Street, Davenport, Iowa 52801
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (319) 326-7111
None
(Former name or former address, if changed since last report)
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Item 5. Other Events
On July 26, 1994, Iowa-Illinois Gas and Electric
Company, an Illinois corporation ("Iowa-Illinois"), Midwest
Resources Inc., an Iowa corporation ("Resources"), Midwest Power
Systems Inc., an Iowa corporation and a subsidiary of Resources
("Midwest Power"), and MidAmerican Energy Company, an Iowa
corporation fifty percent of whose outstanding capital stock is
owned by each of Iowa-Illinois and Resources ("MidAmerican"),
entered into an Agreement and Plan of Merger dated as of July 26,
1994 (the "Merger Agreement"), providing for the merger of Iowa-
Illinois, Resources and Midwest Power with and into MidAmerican.
The Merger Agreement and the press release issued in connection
therewith, are filed herewith as Exhibit 2.1 and 99.1,
respectively, and are incorporated by reference herein. The
description of the Merger Agreement set forth herein does not
purport to be complete and is qualified in its entirety by the
provisions of the Merger Agreement.
Item 7. Financial Statements and Exhibitors.
C. Exhibits:
Exhibit Number Exhibit
2.1 Agreement and Plan of Merger dated as of July
26, 1994, by and among Midwest Resources
Inc., Midwest Power Systems Inc., Iowa-
Illinois Gas and Electric Company and
MidAmerican Energy Company.
99.1 Joint Press Release, dated July 27, 1994 of
Iowa-Illinois Gas and Electric Company and
Midwest Resources Inc.
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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 hereunto duly authorized.
IOWA-ILLINOIS GAS AND ELECTRIC COMPANY
By: /s/ LANCE E. COOPER
L. E. Cooper, Vice President-Finance
and Chief Financial Officer
Dated: July 29, 1994
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EXHIBIT INDEX
Exhibit No. Description
2.1 Agreement and Plan of Merger dated as of July 26,
1994 by and among Midwest Resources Inc., Midwest
Power Systems Inc., Iowa-Illinois Gas and Electric
and MidAmerican Energy Company.
99.1 Joint Press Release, dated July 27, 1994 by Iowa-
Illinois Gas and Electric Company and Midwest
Resources Inc.
AGREEMENT AND PLAN OF MERGER
by and among
MIDWEST RESOURCES INC.
and
MIDWEST POWER SYSTEMS INC.
and
IOWA-ILLINOIS GAS AND ELECTRIC COMPANY
and
MIDAMERICAN ENERGY COMPANY
Dated as of July 26, 1994
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TABLE OF CONTENTS Page
ARTICLE I
THE MERGER
SECTION 1.1 The Merger . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Effects of the Merger . . . . . . . . . . . . 1
SECTION 1.3 Effective Time of the Merger . . . . . . . . . 2
ARTICLE II
CONVERSION OF SHARES
SECTION 2.1 Effect of the Merger on Capital Stock . . . . 2
SECTION 2.2 Exchange of Common Stock Certificates . . . . 5
SECTION 2.3 Exchange of Preferred Stock and Preference
Stock; Certificates Not Required . . . . . . . 8
SECTION 2.4 No Further Ownership Rights in Preferred
Stock or Preference Stock . . . . . . . . . . 8
ARTICLE III
THE CLOSING
SECTION 3.1 Closing . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF RESOURCES
AND MIDWEST POWER
SECTION 4.1 Organization and Qualification . . . . . . . . 9
SECTION 4.2 Subsidiaries . . . . . . . . . . . . . . . . . 9
SECTION 4.3 Capitalization . . . . . . . . . . . . . . . . 10
SECTION 4.4 Authority; Non-Contravention; Statutory
Approvals; Compliance . . . . . . . . . . . . 11
SECTION 4.5 Reports and Financial Statements . . . . . . . 13
SECTION 4.6 Absence of Certain Changes or Events; Absence of
Undisclosed Liabilities . . . . . . . . . . . 14
SECTION 4.7 Litigation . . . . . . . . . . . . . . . . . . 15
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SECTION 4.8 Registration Statement and Proxy Statement . . 15
SECTION 4.9 Tax Matters . . . . . . . . . . . . . . . . . 15
SECTION 4.10 Employee Matters; ERISA . . . . . . . . . . . 19
SECTION 4.11 Environmental Protection . . . . . . . . . . . 22
SECTION 4.12 Regulation as a Utility . . . . . . . . . . . 25
SECTION 4.13 Vote Required . . . . . . . . . . . . . . . . 25
SECTION 4.14 Accounting Matters . . . . . . . . . . . . . . 26
SECTION 4.15 Opinion of Financial Advisor . . . . . . . . . 26
SECTION 4.16 Insurance . . . . . . . . . . . . . . . . . . 26
SECTION 4.17 Ownership of Iowa-Illinois Capital Stock . . . 26
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF IOWA-ILLINOIS
SECTION 5.1 Organization and Qualification . . . . . . . . 27
SECTION 5.2 Subsidiaries . . . . . . . . . . . . . . . . . 27
SECTION 5.3 Capitalization . . . . . . . . . . . . . . . . 28
SECTION 5.4 Authority; Non-Contravention; Statutory Approvals;
Compliance . . . . . . . . . . . . . . . . . . 28
SECTION 5.5 Reports and Financial Statements . . . . . . . 30
SECTION 5.6 Absence of Certain Changes or Events; Absence of
Undisclosed Liabilities . . . . . . . . . . . 31
SECTION 5.7 Litigation . . . . . . . . . . . . . . . . . . 31
SECTION 5.8 Registration Statement and Proxy Statement . . 32
SECTION 5.9 Tax Matters . . . . . . . . . . . . . . . . . 32
SECTION 5.10 Employee Matters; ERISA . . . . . . . . . . . 35
SECTION 5.11 Environmental Protection . . . . . . . . . . . 39
SECTION 5.12 Regulation as a Utility . . . . . . . . . . . 40
SECTION 5.13 Vote Required . . . . . . . . . . . . . . . . 40
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SECTION 5.14 Accounting Matters . . . . . . . . . . . . . . 41
SECTION 5.15 Opinion of Financial Advisor . . . . . . . . . 41
SECTION 5.16 Insurance . . . . . . . . . . . . . . . . . . 41
SECTION 5.17 Ownership of Resources Common Stock . . . . . 41
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.1 Covenants of the Parties . . . . . . . . . . . 41
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.1 Access to Information . . . . . . . . . . . . 47
SECTION 7.2 Joint Proxy Statement and Registration
Statement . . . . . . . . . . . . . . . . . . 47
SECTION 7.3 Regulatory Approvals and Other Matters . . . . 49
SECTION 7.4 Shareholder Approval . . . . . . . . . . . . . 49
SECTION 7.5 Directors' and Officers' Indemnification . . . 50
SECTION 7.6 Disclosure Schedules . . . . . . . . . . . . . 52
SECTION 7.7 Public Announcements . . . . . . . . . . . . . 53
SECTION 7.8 Rule 145 Affiliates . . . . . . . . . . . . . 53
SECTION 7.9 No Solicitations . . . . . . . . . . . . . . . 53
SECTION 7.10 Expenses . . . . . . . . . . . . . . . . . . . 54
SECTION 7.11 Board of Directors . . . . . . . . . . . . . . 54
SECTION 7.12 Officers . . . . . . . . . . . . . . . . . . 55
SECTION 7.13 Employment Agreements and Workforce Matters . 55
SECTION 7.14 Severance Plan . . . . . . . . . . . . . . . . 56
SECTION 7.15 Post-Merger Operations . . . . . . . . . . . . 56
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Page
ARTICLE VIII
CONDITIONS
SECTION 8.1 Conditions to Each Party's Obligations to
Effect the Merger . . . . . . . . . . . . . . 56
SECTION 8.2 Conditions to Obligations of Resources and
Midwest Power to Effect the Merger . . . . . 57
SECTION 8.3 Conditions to Obligations of Iowa-Illinois to
Effect the Merger . . . . . . . . . . . . . . 59
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 Termination . . . . . . . . . . . . . . . . . 61
SECTION 9.2 Effect of Termination . . . . . . . . . . . . 64
SECTION 9.3 Termination Fee; Expenses . . . . . . . . . . 65
SECTION 9.4 Amendment . . . . . . . . . . . . . . . . . . 67
SECTION 9.5 Waiver . . . . . . . . . . . . . . . . . . . . 67
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1 Non-Survival of Representations, Warranties
and Agreements . . . . . . . . . . . . . . . 67
SECTION 10.2 Brokers . . . . . . . . . . . . . . . . . . . 67
SECTION 10.3 Notices . . . . . . . . . . . . . . . . . . . 68
SECTION 10.4 Miscellaneous . . . . . . . . . . . . . . . . 69
SECTION 10.5 Interpretation . . . . . . . . . . . . . . . . 69
SECTION 10.6 Counterparts; Effect . . . . . . . . . . . . . 69
SECTION 10.7 Specific Performance . . . . . . . . . . . . . 69
SECTION 10.8 Parties in Interest . . . . . . . . . . . . . 69
SECTION 10.9 Further Assurances . . . . . . . . . . . . . . 70
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Exhibit A - Articles of Incorporation of the Company
Exhibit B - By-laws of the Company
Exhibit C - Articles of Merger
Exhibit D - Task Forces
Exhibit E - Initial Board Committees
Exhibit F-1 - Employment Agreement With Russell Christiansen
Exhibit F-2 - Employment Agreement With Stanley Bright
Exhibit F-3 - Positions and Duties of Mr. Christiansen and
Mr. Bright
Exhibit G - Severance Plan
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<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 26, 1994,
("Agreement"), by and among Midwest Resources Inc., an Iowa
corporation ("Resources"), Iowa-Illinois Gas and Electric
Company, an Illinois corporation ("Iowa-Illinois"), Midwest Power
Systems Inc., an Iowa corporation ("Midwest Power") and a
subsidiary of Resources and MidAmerican Energy Company, an Iowa
corporation ("Company"), 50% of whose outstanding capital stock
is owned by Iowa-Illinois and 50% of whose outstanding capital
stock is owned by Resources.
WHEREAS, Resources, Midwest Power and Iowa-Illinois have
determined to engage in a business combination as peer firms in a
merger of equals whereby Iowa-Illinois, Midwest Power and
Resources will be merged with and into the Company, with the
Company as the surviving corporation in such merger ("Merger");
and
WHEREAS, in furtherance thereof, the respective Boards of
Directors of Resources, Midwest Power, Iowa-Illinois and the
Company have approved the Merger of Resources, Midwest Power and
Iowa-Illinois with and into the Company, all upon the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS, for federal income tax purposes, it is intended
that the Merger will be treated as a reorganization under Section
368 of the Internal Revenue Code of 1986, as amended (the
"Code").
NOW THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to
the conditions of this Agreement, at the Effective Time (as
defined in Section 1.3), Resources, Midwest Power and Iowa-
Illinois shall be merged with and into the Company in accordance
with the laws of the States of Illinois and Iowa. The Company
shall be the surviving corporation in the Merger and shall
continue its corporate existence under the laws of the State of
Iowa. The effects and the consequences of the Merger shall be as
set forth in Section 1.2.
SECTION 1.2 Effects of the Merger. At the Effective
Time, (i) the Articles of Incorporation of the Company, as in
effect immediately prior to the Effective Time substantially in
the form attached hereto as Exhibit A, shall be the Articles of
Incorporation of the Company as the surviving corporation in the
<PAGE>
Merger until thereafter duly amended and (ii) the by-laws of the
Company, as in effect immediately prior to the Effective Time,
substantially in the form attached hereto as Exhibit B, shall be
the by-laws of the Company as the surviving corporation in the
Merger, until thereafter duly amended. Subject to the foregoing,
the additional effects of the Merger shall be as provided in the
applicable provisions of the Iowa Business Corporation Act ("Iowa
Act") and the Illinois Business Corporation Act of 1983
("Illinois Act").
SECTION 1.3 Effective Time of the Merger. On the Closing
Date (as defined in Section 3.1), articles of merger substan-
tially in the form attached hereto as Exhibit C ("Articles of
Merger") complying with the requirements of the Illinois Act and
the Iowa Act shall be executed by Midwest Power, Resources, Iowa-
Illinois and the Company and shall be filed with the Secretary of
State of the State of Illinois and the Secretary of State of the
State of Iowa. The Merger shall become effective at the time
that the parties agree to specify in the Articles of Merger
("Effective Time").
ARTICLE II
CONVERSION OF SHARES
SECTION 2.1 Effect of the Merger on Capital Stock. At
the Effective Time, by virtue of the Merger and without any
action on the part of any holder of any capital stock of Iowa-
Illinois, Midwest Power, Resources or the Company:
(a) Cancellation of Certain Common Stock. Each share of
Iowa-Illinois common stock, par value $1.00 per share ("Iowa-
Illinois Common Stock"), and each share of Resources common
stock, no par value ("Resources Common Stock"), that is owned by
Iowa-Illinois or any of its subsidiaries (as defined in Section
4.1) or by Resources or any of its subsidiaries, and each share
of Midwest Power common stock, no par value ("Midwest Power
Common Stock"), shall be cancelled and cease to exist, and no
consideration shall be delivered in exchange therefor.
(b) Conversion of Certain Common Stock. Each share of
Iowa-Illinois Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares cancelled pursuant
to Section 2.1(a) and shares with respect to which the holder
thereof duly exercises the right to dissent under applicable law)
shall be converted into the right to receive 1.47 shares ("Iowa-
Illinois Conversion Ratio") of Company common stock, no par value
("Company Common Stock"), and each share of Resources Common
Stock issued and outstanding immediately prior to the Effective
Time (other than shares cancelled pursuant to Section 2.1(a) and
shares with respect to which the holder thereof duly exercises
the right to dissent under applicable law) shall be converted
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into the right to receive 1.0 shares ("Resources Conversion
Ratio") of Company Common Stock. Upon such conversions as
provided for herein, each holder of a certificate formerly
representing any such shares of Iowa-Illinois Common Stock or
Resources Common Stock shall cease to have any rights with
respect thereto, except the right to receive the shares of
Company Common Stock to be issued in consideration therefor (and
cash in lieu of fractional shares) upon the surrender of such
certificate in accordance with Section 2.2.
(c) Cancellation of Company Common Stock. Each share of
Company Common Stock issued and outstanding immediately prior to
the Effective Time shall be cancelled, and no consideration shall
be delivered in exchange therefor.
(d) Cancellation of Certain Preferred Stock and Preference
Stock. Each of the Iowa-Illinois Preferred Shares, par value
$100 per share ("Iowa-Illinois Preferred Stock"), each of the
Iowa-Illinois Preference Shares, without par value ("Iowa-
Illinois Preference Stock"), and each share of Midwest Power
Preferred Stock, no par value ("Midwest Power Preferred Stock"),
that is owned by Iowa-Illinois or any of its subsidiaries or by
Resources or any of its subsidiaries shall be cancelled and cease
to exist, and no consideration shall be delivered in exchange
therefor.
(e) Conversion of Iowa-Illinois Preferred Stock and Iowa-
Illinois Preference Stock. (i) Each issued and outstanding
share of each series of Iowa-Illinois Preferred Stock, other than
shares cancelled pursuant to Section 2.1(d) and shares with
respect to which the holder thereof exercises the right to
dissent, shall be converted into and become one duly authorized,
validly issued, fully paid and nonassessable share of Company
Class I Preferred Stock, par value $100 per share ("Company Class
I Preferred Stock"), of the respective series specified below:
Iowa-Illinois Company Class I
Preferred Stock Preferred Stock
$4.36 Cumulative $4.36 Cumulative
$4.22 Cumulative $4.22 Cumulative
$7.50 Cumulative $7.50 Cumulative
(ii) Each issued and outstanding share of each series of
Iowa-Illinois Preference Stock, other than shares cancelled
pursuant to Section 2.1(d) and shares with respect to which the
holder thereof exercises the right to dissent, shall be converted
into and become one duly authorized, validly issued, fully paid
and nonassessable share of Company Preference Stock, without par
value ("Company Preference Stock"), of the respective series
specified below:
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Iowa-Illinois Company
Preference Stock Preference Stock
$7.80 Series $7.80 Series
$5.25 Series $5.25 Series
(f) Conversion of Midwest Power Preferred Stock. Each
issued and outstanding share of each series of Midwest Power
Preferred Stock, other than shares cancelled pursuant to Section
2.1(d) and shares with respect to which the holder thereof
exercises the right to dissent, shall be converted into and
become one duly authorized, validly issued, fully paid and
nonassessable share of Company Class M Preferred Stock, no par
value ("Company Class M Preferred Stock"), of the respective
series specified below:
Midwest Power Company Class M
Preferred Stock Preferred Stock
$3.30 Series $3.30 Series
$3.75 Series $3.75 Series
$3.90 Series $3.90 Series
$4.20 Series $4.20 Series
$4.35 Series $4.35 Series
$4.40 Series $4.40 Series
$4.80 Series $4.80 Series
$1.7375 Series $1.7375 Series
(g) The Company Class I Preferred Stock, Company Class M
Preferred Stock and Company Preference Stock issued upon
conversion, respectively, of the Iowa-Illinois Preferred Stock,
Midwest Power Preferred Stock and Iowa-Illinois Preference Stock
shall have the preferences, limitations and relative rights which
are described in the Articles of Incorporation of the Company
substantially in the form attached hereto as Exhibit A.
(h) Shares of Dissenting Holders. Any issued and
outstanding shares of Resources Common Stock, Iowa-Illinois
Common Stock, Iowa-Illinois Preferred Stock, Iowa-Illinois
Preference Stock or Midwest Power Preferred Stock held by a
person who objects to the Merger and complies with all applicable
provisions of the Iowa Act or the Illinois Act, as applicable,
concerning the right of such person to dissent from the Merger
and demand appraisal of such shares ("Dissenting Holder") shall
not be converted as described in Section 2.1(b), (e) or (f) but
shall from and after the Effective Time represent only the right
to receive such consideration as may be determined to be due to
such Dissenting Holder with respect to such shares pursuant to
the Iowa Act or the Illinois Act, as applicable; provided,
however, that shares of Resources Common Stock, Iowa-Illinois
Common Stock, Iowa-Illinois Preferred Stock, Iowa-Illinois
Preference Stock or Midwest Power Preferred Stock outstanding
immediately prior to the Effective Time and held by a Dissenting
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Holder who shall, after the Effective Time, withdraw the demand
for appraisal or lose the right of appraisal of such shares
pursuant to the Iowa Act or the Illinois Act, as applicable,
shall be deemed to be converted, as of the Effective Time, into
the right to receive the Company Common Stock, Company Class I
Preferred Stock, Company Class M Preferred Stock or Company
Preference Stock specified in Section 2.1(b), (e), or (f) and
cash in lieu of fractional shares in accordance with Section 2.2,
without interest.
SECTION 2.2 Exchange of Common Stock Certificates.
(a) Deposit with Exchange Agent. As soon as practicable
after the Effective Time, the Company shall deposit with a bank,
trust company or other agent selected by Iowa-Illinois and
Resources ("Exchange Agent") certificates representing shares of
Company Common Stock required to effect the exchanges referred to
in Section 2.1(b).
(b) Exchange Procedures. As soon as practicable after the
Effective Time, the Exchange Agent shall mail to each holder of
record of a certificate or certificates which immediately prior
to the Effective Time represented issued and outstanding shares
of Resources Common Stock or Iowa-Illinois Common Stock
("Certificates") that were converted ("Converted Shares") into
the right to receive shares of Company Common Stock ("Company
Shares") pursuant to Section 2.1(b), (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon actual
delivery of the Certificates to the Exchange Agent) and (ii)
instructions for use in effecting the exchange of Certificates
for certificates representing Company Shares. Upon delivery of a
Certificate to the Exchange Agent for exchange, together with a
duly executed letter of transmittal and such other documents as
the Exchange Agent shall require, the holder of such Certificate
shall be entitled to receive in exchange therefor a certificate
representing that number of whole Company Shares and the amount
of cash in lieu of fractional share interests which such holder
has the right to receive pursuant to the provisions of this
Article II. In the event of a transfer of ownership of Converted
Shares which is not registered in the transfer records of Iowa-
Illinois or Resources, a certificate representing the proper
number of Company Shares may be issued to a transferee if the
Certificate representing such Converted Shares is presented to
the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence satisfactory to
the Exchange Agent that any applicable stock transfer taxes have
been paid. Until delivered as contemplated by this Section 2.2,
each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such delivery
the certificate representing Company Shares and cash in lieu of
any fractional shares of Company Common Stock as contemplated by
this Section 2.2.
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(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the
Effective Time with respect to Company Shares with a record date
after the Effective Time shall be paid to the holder of any
undelivered Certificate with respect to the Company Shares
represented thereby, and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to Section
2.2(d), until the holder of record of such Certificate (or a
transferee as described in Section 2.2(b)) shall have delivered
such Certificate as contemplated in Section 2.2(b). Subject to
the effect of unclaimed property, escheat and other applicable
laws, following delivery of any such Certificate, there shall be
paid to the record holder (or transferee) of the certificates
representing whole Company Shares issued in exchange therefor,
without interest, (i) at the time of such delivery, the amount of
any cash payable in lieu of a fractional share of Company Common
Stock to which such holder (or transferee) is entitled pursuant
to Section 2.2(d) and the amount of dividends or other
distributions with a record date after the Effective Time
theretofore paid with respect to such whole Company Shares and
(ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time
but prior to delivery and a payment date subsequent to delivery
payable with respect to such whole Company Shares, as the case
may be.
(d) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of Company Common Stock shall be
issued upon the delivery for exchange of Certificates, and such
fractional share interests will not entitle the owner thereof to
vote or to any rights of a shareholder of the Company.
(ii) As promptly as practicable following the Effective
Time, the Exchange Agent shall determine the excess of (x) the
number of full shares of Company Common Stock delivered to the
Exchange Agent by the Company pursuant to Section 2.2(a) over (y)
the aggregate number of full shares of Company Common Stock to be
distributed to holders of Resources Common Stock and Iowa-
Illinois Common Stock pursuant to Section 2.2(b) (such excess
being herein called the "Excess Shares"). As soon after the
Effective Time as practicable, the Exchange Agent, as agent for
the holders of Iowa-Illinois Common Stock and Resources Common
Stock, shall sell the Excess Shares at then prevailing prices on
the New York Stock Exchange ("NYSE"), all in the manner provided
in Section 2.2(d)(iii).
(iii) The sale of the Excess Shares by the Exchange
Agent shall be executed on the NYSE through one or more member
firms of the NYSE and shall be executed in round lots to the
extent practicable. Until the net proceeds of such sale or sales
have been distributed to the holders of Iowa-Illinois Common
Stock and Resources Common Stock, the Exchange Agent shall, until
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remitted pursuant to Section 2.2(f), hold such proceeds in trust
for the holders of Iowa-Illinois Common Stock and Resources
Common Stock ("Common Shares Trust"). The Company shall pay all
commissions, transfer taxes and other out-of-pocket transaction
costs, including the expenses and compensation, of the Exchange
Agent incurred in connection with such sale of the Excess Shares.
The Exchange Agent shall determine the portion of the net
proceeds comprising the Common Shares Trust to which each holder
of Iowa-Illinois Common Stock or Resources Common Stock shall be
entitled, if any, by multiplying the amount of the aggregate net
proceeds comprising the Common Shares Trust by a fraction the
numerator of which is the amount of the fractional share interest
to which such holder of Iowa-Illinois Common Stock or Resources
Common Stock is entitled and the denominator of which is the
aggregate amount of fractional share interests to which all
holders of Iowa-Illinois Common Stock and Resources Common Stock
are entitled.
(iv) As soon as practicable after the sale of Excess
Shares pursuant to clause (iii) above and the determination of
the amount of cash, if any, to be paid to holders of Iowa-
Illinois Common Stock and Resources Common Stock in lieu of any
fractional share interests, the Exchange Agent shall distribute
such amounts to holders of Iowa-Illinois Common Stock and
Resources Common Stock who have theretofore delivered
Certificates for Iowa-Illinois Common Stock and Resources Common
Stock for exchange pursuant to this Article II.
(e) Closing of Transfer Books. From and after the
Effective Time, the stock transfer books of Iowa-Illinois with
respect to shares of Iowa-Illinois Common Stock, and of Resources
with respect to shares of Resources Common Stock, issued and
outstanding prior to the Effective Time shall be closed and no
transfer of any such shares shall thereafter be made. If, after
the Effective Time, Certificates are presented to the Company,
they shall be cancelled and exchanged for certificates
representing the appropriate number of whole Company Shares and
cash in lieu of fractional shares of Company Common Stock as
provided in this Section 2.2.
(f) Termination of Exchange Agent. Any certificates
representing Company Shares deposited with the Exchange Agent
pursuant to Section 2.2(a) and not exchanged within one year
after the Effective Time pursuant to this Section 2.2 shall be
returned by the Exchange Agent to the Company, which shall there-
after act as Exchange Agent. All funds held by the Exchange
Agent for payment to the holders of undelivered Certificates and
unclaimed at the end of one year from the Effective Time shall be
remitted to the Company, after which time any holder of un-
delivered Certificates shall look as a general creditor only to
the Company for payment of such funds to which such holder may be
due, subject to applicable law. The Company shall not be liable
to any person for such shares or funds delivered to a public
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official pursuant to any applicable abandoned property, escheat
or similar law.
SECTION 2.3 Exchange of Preferred Stock and Preference
Stock; Certificates Not Required. Holders of Iowa-Illinois
Preferred Stock, Midwest Power Preferred Stock and Iowa-Illinois
Preference Stock (other than, in each case, Dissenting Holders
thereof) will automatically become holders of Company Class I
Preferred Stock, Company Class M Preferred Stock or Company
Preference Stock, respectively, in accordance with Section 2.1(e)
and (f), and their certificates which represent shares of Iowa-
Illinois Preferred Stock, Midwest Power Preferred Stock or Iowa-
Illinois Preference Stock, as the case may be, will automatically
represent the shares of Company Class I Preferred Stock, Company
Class M Preferred Stock or Company Preference Stock into which
such shares were converted in the Merger. After the Merger, as
presently outstanding certificates of Iowa-Illinois Preferred
Stock, Midwest Power Preferred Stock and Iowa-Illinois Preference
Stock are presented for transfer, new stock certificates bearing
the name of the Company and the appropriate number of shares of
Company Class I Preferred Stock, Company Class M Preferred Stock
or Company Preference Stock will be issued.
SECTION 2.4 No Further Ownership Rights in Preferred
Stock or Preference Stock. All shares of Company Class I
Preferred Stock, Company Class M Preferred Stock and Company
Preference Stock issued in the Merger upon conversion of shares
of Iowa-Illinois Preferred Stock, Midwest Power Preferred Stock
and Iowa-Illinois Preference Stock, respectively, in accordance
with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Iowa-
Illinois Preferred Stock, Midwest Power Preferred Stock or Iowa-
Illinois Preference Stock, as the case may be, subject, however,
to the obligation of the Company to pay any dividends or make any
other distributions with a record date prior to the Effective
Time which may have been declared or made by Iowa-Illinois on
such shares of Iowa-Illinois Preferred Stock and Iowa-Illinois
Preference Stock or by Midwest Power on such shares of Midwest
Power Preferred Stock, and which remain unpaid at the Effective
Time, and there shall be no further registration of transfers on
the stock transfer books of the Company of the shares of Iowa-
Illinois Preferred Stock, Iowa-Illinois Preference Stock or
Midwest Power Preferred Stock which were outstanding immediately
prior to the Effective Time.
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ARTICLE III
THE CLOSING
SECTION 3.1 Closing. The closing (the "Closing") of the
Merger shall take place at the offices of Sidley & Austin, One
First National Plaza, Chicago, Illinois 60603, at 10:00 A.M.,
local time, on the second business day immediately following the
date on which the last of the conditions set forth in Article
VIII hereof is fulfilled or waived, or at such other time and
date and place as Resources and Iowa-Illinois shall mutually
agree ("Closing Date").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF RESOURCES
AND MIDWEST POWER
Resources and Midwest Power represent and warrant to Iowa-
Illinois as follows:
SECTION 4.1 Organization and Qualification. Resources
and each of its subsidiaries (including Midwest Power) is a
corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation, has all requisite
power and authority, and has been duly authorized by all neces-
sary regulatory approvals and orders, to own, lease and operate
its assets and properties and to carry on its business as it is
now being conducted, and is duly qualified and in good standing
to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its assets and properties
makes such qualification necessary other than in such
jurisdictions where the failure to be so qualified and in good
standing will not, when taken together with all other such
failures, have a material adverse effect on the business,
operations, properties, assets, condition (financial or other),
prospects or the results of operations of Resources and its
subsidiaries taken as a whole or on the consummation of the
transactions contemplated by this Agreement (any such material
adverse effect being hereinafter referred to as a "Resources
Material Adverse Effect"). As used in this Agreement, the term
"subsidiary" of a person shall mean any corporation or other
entity (including partnerships and other business associations)
in which such person directly or indirectly owns at least a
majority of the outstanding voting securities or other equity
interests having the power, under ordinary circumstances, to
elect a majority of the directors, or otherwise to direct the
management and policies, of such corporation or other entity.
SECTION 4.2 Subsidiaries. Section 4.2 of the Resources
Disclosure Schedule (as defined in Section 7.6(a)(i)) sets forth
a description as of the date hereof of all subsidiaries of
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Resources and their joint ventures, including the name of each
such entity, a brief description of the principal line or lines
of business conducted by each such entity and the interest of
Resources and its subsidiaries therein. Except as set forth in
Section 4.2 of the Resources Disclosure Schedule, none of such
entities is a "holding company," a "subsidiary company" of a
holding company, or an "affiliate" of a holding company within
the meaning of Section 2(a)(7), 2(a)(8) or 2(a)(11) of the Public
Utility Holding Company Act of 1935, as amended ("1935 Act"),
respectively. Except as set forth in Section 4.2 of the
Resources Disclosure Schedule, all of the issued and outstanding
shares of capital stock of each subsidiary of Resources are
validly issued, fully paid, nonassessable and free of preemptive
rights, are owned directly or indirectly by Resources free and
clear of any liens, claims, encumbrances, security interests,
equities, charges and options of any nature whatsoever ("Liens")
and there are no outstanding subscriptions, options, calls,
contracts, voting trusts, proxies or other commitments, under-
standings, restrictions, arrangements, rights or warrants,
including any right of conversion or exchange under any
outstanding security, instrument or other agreement, obligating
Resources or any subsidiary of Resources to issue, deliver or
sell, or cause to be issued, delivered or sold, shares of the
capital stock of any subsidiary of Resources or obligating
Resources or any of its subsidiaries to grant, extend or enter
into any such agreement or commitment. As used in this Agree-
ment, the term "joint venture" of a person shall mean any
corporation or other entity (including partnerships and other
business associations and joint ventures) in which such person or
one or more of its subsidiaries owns an equity interest that is
less than a majority of any class of the outstanding voting
securities or equity of any such entity, other than equity
interests held for passive investment purposes which are less
than 5% of any class of the outstanding voting securities or
equity of any such entity.
SECTION 4.3 Capitalization.
(a) Resources. The authorized capital stock of Resources
consists of 250,000,000 shares of Resources Common Stock and
100,000,000 shares of Resources Preferred Stock, no par value,
none of which are outstanding. As of the close of business on
July 22, 1994, 55,279,734 shares of Resources Common Stock were
issued and outstanding. All of the issued and outstanding shares
of Resources Common Stock are validly issued, fully paid,
nonassessable and free of preemptive rights. Except as set forth
in Section 4.3(a) of the Resources Disclosure Schedule, there are
no outstanding subscriptions, options, calls, contracts, voting
trusts, proxies or other commitments, understandings,
restrictions, arrangements, rights or warrants, including any
right of conversion or exchange under any outstanding security,
instrument or other agreement, obligating Resources or any of its
subsidiaries to issue, deliver or sell, or cause to be issued,
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delivered or sold, shares of the capital stock of Resources or
obligating Resources or any of its subsidiaries to grant, extend
or enter into any such agreement or commitment, other than under
the Resources Dividend Reinvestment and Common Stock Purchase
Plan, Resources Employee Stock Purchase Plan, Midwest Power
401(k) Plan for Salaried Employees and Midwest Power 401(k) Plan
for Bargaining Employees.
(b) Midwest Power. The authorized capital stock of Midwest
Power consists of 100,000,000 shares of Midwest Power Common
Stock and 10,000,000 shares of Midwest Power Preferred Stock. As
of the close of business on July 22, 1994, 1,000 shares of
Midwest Power Common Stock were issued and outstanding and
2,717,794 shares of Midwest Power Preferred Stock were issued and
outstanding; Section 4.3(b) of the Resources Disclosure Schedule
lists the numbers of shares of each Series of Midwest Power
Preferred Stock outstanding on the date hereof. All of the
issued and outstanding shares of Midwest Power Common Stock and
Midwest Power Preferred Stock are validly issued, fully paid,
nonassessable and free of preemptive rights. Except as set forth
in Section 4.3(b) of the Resources Disclosure Schedule, there are
no outstanding subscriptions, options, calls, contracts, voting
trusts, proxies or other commitments, understandings,
restrictions, arrangements, rights or warrants, including any
right of conversion or exchange under any outstanding security,
instrument or other agreement, obligating Midwest Power to issue,
deliver or sell, or cause to be issued, delivered or sold, shares
of the capital stock of Midwest Power or obligating Midwest Power
or any of its subsidiaries to grant, extend or enter into any
such agreement or commitment.
(c) No Change in Capital Structure. There has been no
material change in the information set forth in Section 4.3(a) or
4.3(b) between the close of business on July 22, 1994, and the
date hereof.
SECTION 4.4 Authority; Non-Contravention; Statutory
Approvals; Compliance.
(a) Authority. Each of Resources and Midwest Power has all
requisite power and authority to enter into this Agreement and,
subject to the applicable Resources Shareholders' Approval and
the applicable Midwest Power Shareholders' Approval (as defined
in Section 4.13) and the applicable Resources Required Statutory
Approvals (as defined in clause (c) below), to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation by Resources and Midwest
Power of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of
Resources and Midwest Power, subject to obtaining the applicable
Resources Shareholders' Approval and the Midwest Power
Shareholders' Approval. This Agreement has been duly and validly
executed and delivered by Resources and Midwest Power and,
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assuming the due authorization, execution and delivery hereof by
Iowa-Illinois, constitutes a valid and binding obligation of each
of Resources and Midwest Power enforceable against each of them
in accordance with its terms.
(b) Non-Contravention. Except as set forth in Section
4.4(b) of the Resources Disclosure Schedule, the execution and
delivery of this Agreement by Resources and Midwest Power do not,
and, subject to obtaining the Resources Required Statutory
Approvals, the Resources Shareholders' Approval and the third-
party consents set forth in Section 4.4(b) of the Resources
Disclosure Schedule ("Resources Required Consents"), the
consummation of the transactions contemplated hereby will not,
violate, conflict with, or result in a breach of any provision
of, or constitute a default (with or without notice or lapse of
time or both) under, or result in the termination of, or
accelerate the performance required by, or result in a right of
termination, cancellation, or acceleration of any obligation or
the loss of a material benefit under, or result in the creation
of any Lien upon any of the properties or assets (any such
violation, conflict, breach, default, termination, acceleration,
right of termination, cancellation or acceleration, loss or
creation, a "Violation") of Resources or any of its subsidiaries
or of any of their joint ventures pursuant to, any provisions of
(i) the articles of incorporation, by-laws or similar governing
documents of Resources or any of its subsidiaries or of any of
their joint ventures, (ii) any statute, law, ordinance, rule,
regulation, judgment, decree, order, injunction, writ, permit or
license of any Governmental Authority (as hereinafter defined)
applicable to Resources or any of its subsidiaries or any of
their joint ventures or any of their respective properties or
assets or (iii) any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, concession, contract, lease or
other instrument, obligation or agreement of any kind to which
Resources or any of its subsidiaries or any of their joint
ventures is now a party or by which they or any of their
respective properties or assets may be bound or affected,
excluding from the foregoing clauses (ii) and (iii) such
Violations as would not, in the aggregate, have a Resources
Material Adverse Effect.
(c) Statutory Approvals. No declaration, filing or
registration with, or notice to or authorization, consent or
approval of, any court, governmental or regulatory body (includ-
ing a stock exchange or other self-regulatory body) or authority,
domestic or foreign (each, a "Governmental Authority"), is
necessary for the execution and delivery of this Agreement by
Resources and Midwest Power or the consummation by Resources and
Midwest Power, as the case may be, of the transactions
contemplated hereby, the failure of which to obtain, make or give
would have, in the aggregate, a Resources Material Adverse
Effect, except as described in Section 4.4(c) of the Resources
Disclosure Schedule ("Resources Required Statutory Approvals," it
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being understood that references in this Agreement to "obtaining"
such Resources Required Statutory Approvals shall mean making
such declarations, filings or registrations; giving such notice;
obtaining such authorizations, consents or approvals; and having
such waiting periods expire as are necessary to avoid a violation
of law).
(d) Compliance. Except as set forth in Sections 4.4(d) or
4.11 of the Resources Disclosure Schedule, or as disclosed in the
Resources SEC Reports (as defined in Section 4.5), neither
Resources nor any of its subsidiaries nor, to the knowledge of
Resources, any of their joint ventures, is in violation of or is
under investigation with respect to, or has been given notice or
been charged with any violation of, any law, statute, order,
rule, regulation, ordinance or judgment (including, without
limitation, any applicable environmental law, ordinance or
regulation) of any Governmental Authority, except for violations
which in the aggregate do not, and insofar as reasonably can be
foreseen will not, have a Resources Material Adverse Effect.
Except as set forth in Sections 4.4(d) or 4.11 of the Resources
Disclosure Schedule, Resources and each of its subsidiaries and
each of their joint ventures has all permits, licenses,
franchises and other governmental authorizations, consents and
approvals (collectively, "Permits") necessary to conduct their
businesses as presently conducted, except those the failure of
which to obtain, in the aggregate do not, and insofar as
reasonably can be foreseen will not, have a Resources Material
Adverse Effect. Except as set forth in Section 4.4(d) of the
Resources Disclosure Schedule, or as disclosed in the Resources
SEC Reports, neither Resources nor any of its subsidiaries nor,
to the knowledge of Resources, any of their joint ventures, is in
breach or violation of or in default in the performance or
observance of any term or provision of, and no event has occurred
which, with lapse of time or action by a third party, could
result in a default under, (i) the articles of incorporation,
by-laws or similar governing documents of Resources or such
subsidiary or joint venture or (ii) any contract, commitment,
agreement, indenture, mortgage, loan agreement, note, lease,
bond, license, approval or other instrument to which Resources or
such subsidiary or joint venture is a party or by which it is
bound or to which any of its property is subject, except in the
case of clause (ii) above, for breaches, violations and defaults
which in the aggregate do not, and insofar as reasonably can be
foreseen will not, have a Resources Material Adverse Effect.
SECTION 4.5 Reports and Financial Statements. The
filings required to be made by Resources and each of its
subsidiaries under the Securities Act of 1933, as amended
("Securities Act"), the Securities Exchange Act of 1934, as
amended ("Exchange Act"), applicable Iowa, South Dakota and
Nebraska public utility laws and regulations, the Federal Power
Act ("Power Act") and the 1935 Act have been filed with the
Securities and Exchange Commission ("SEC"), the appropriate Iowa,
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South Dakota and Nebraska public utility commissions or the
Federal Energy Regulatory Commission ("FERC"), as the case may
be, including all forms, statements, reports, agreements (oral or
written) and all documents, exhibits, amendments and supplements
appertaining thereto, and complied in all material respects with
all applicable requirements of the appropriate act and the rules
and regulations thereunder. Resources has made available to
Iowa-Illinois a true and complete copy of each report, schedule,
registration statement and definitive proxy statement and all
amendments thereto filed by Resources or any of its subsidiaries
with the SEC since January 1, 1991 (as such documents have since
the time of their filing been amended, the "Resources SEC
Reports"). As of their respective dates, the Resources SEC
Reports did not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under
which they were made, not misleading. The audited consolidated
financial statements and unaudited interim financial statements
of Resources and Midwest Power included in the Resources SEC
Reports (collectively, the "Resources Financial Statements") have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis ("GAAP") (except as may
be indicated therein or in the notes thereto and except with
respect to unaudited statements as permitted by Form 10-Q under
the Exchange Act) and fairly present the financial position of
Resources and Midwest Power, as the case may be, as of the dates
thereof and the results of their operations and cash flows for
the periods then ended, subject, in the case of the unaudited
interim financial statements, to normal, recurring audit
adjustments. True, accurate and complete copies of the Articles
of Incorporation of Resources and Midwest Power, as in effect on
the date hereof, and true, accurate and complete copies of the
by-laws of Resources and Midwest Power, as in effect on the date
hereof, are included (or incorporated by reference) in the
Resources SEC Reports.
SECTION 4.6 Absence of Certain Changes or Events; Absence
of Undisclosed Liabilities.
(a) Absence of Certain Changes or Events. Except as set
forth in the Resources SEC Reports or Section 4.6 of the
Resources Disclosure Schedule, since December 31, 1993, Resources
and each of its subsidiaries has conducted its business only in
the ordinary course of business consistent with past practice and
there has not been, and no fact or condition exists which would
have or, insofar as reasonably can be foreseen, could have, a
Resources Material Adverse Effect.
(b) Absence of Undisclosed Liabilities. Neither Resources
nor any of its subsidiaries has any liabilities or obligations
(whether absolute, accrued, contingent or otherwise) of a nature
required by GAAP to be reflected in a consolidated corporate
balance sheet, except liabilities, obligations or contingencies
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which are accrued or reserved against in the consolidated
financial statements of Resources and Midwest Power or reflected
in the notes thereto for the year ended December 31, 1993, or
which were incurred after December 31, 1993 in the ordinary
course of business and would not, in the aggregate, have a
Resources Material Adverse Effect.
SECTION 4.7 Litigation. Except as disclosed in the
Resources SEC Reports or as set forth in Sections 4.7 or 4.11 of
the Resources Disclosure Schedule, (i) there are no claims,
suits, actions or proceedings, pending or, to the knowledge of
Resources, threatened, nor are there, to the knowledge of
Resources, any investigations or reviews pending or threatened
against, relating to or affecting Resources or any of its
subsidiaries or any of their joint ventures, (ii) there have not
been any material developments since December 31, 1993 with
respect to such disclosed claims, suits, actions, proceedings,
investigations or reviews and (iii) there are no judgments,
decrees, injunctions, rules or orders of any Governmental
Authority or any arbitrator applicable to Resources or any of its
subsidiaries or any of their joint ventures, which, when taken
together with any other nondisclosures described in clauses (i),
(ii) or (iii), would, or insofar as reasonably can be foreseen
could, have a Resources Material Adverse Effect.
SECTION 4.8 Registration Statement and Proxy Statement.
None of the information supplied or to be supplied by or on
behalf of Resources or Midwest Power for inclusion or incorpora-
tion by reference in (i) the registration statement on Form S-4
to be filed with the SEC by the Company in connection with the
issuance of shares of Company Common Stock, Company Class I
Preferred Stock, Company Class M Preferred Stock and Company
Preference Stock in the Merger ("Registration Statement") will,
at the time the Registration Statement is filed with the SEC and
at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading and (ii) the joint
proxy statement in definitive form relating to the meetings of
Resources, Midwest Power and Iowa-Illinois shareholders to be
held in connection with the Merger ("Joint Proxy Statement")
will, at the dates mailed to shareholders of Resources, Midwest
Power and Iowa-Illinois and at the times of the meetings of such
shareholders to be held in connection with the Merger, include
any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein,
in light of the circumstances under which they are made, not
misleading. The Registration Statement and the Joint Proxy
Statement will comply as to form in all material respects with
the provisions of applicable federal securities law.
SECTION 4.9 Tax Matters. "Taxes," as used in this
Agreement, means any federal, state, county, local or foreign
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taxes, charges, fees, levies, or other assessments, including all
net income, gross income, sales and use, ad valorem, transfer,
gains, profits, excise, franchise, real and personal property,
gross receipts, capital stock, production, business and occupa-
tion, disability, employment, payroll, license, estimated, stamp,
custom duties, severance or withholding taxes or charges imposed
by any governmental entity, and includes any interest and
penalties (civil or criminal) on or additions to any such taxes
and any expenses incurred in connection with the determination,
settlement or litigation of any Tax liability. "Tax Return," as
used in this Agreement, means a report, return, or similar
statement or other information required to be supplied to a
governmental entity with respect to Taxes including, without
limitation, where permitted or required, combined or consolidated
returns for any group of entities.
(a) Filing of Timely Tax Returns. Except as set forth in
Section 4.9(a) of the Resources Disclosure Schedule, Resources
and each of its subsidiaries have filed (or will file) all Tax
Returns required to be filed by each of them under applicable
law. All Tax Returns were in all material respects (and, as to
Tax Returns not filed as of the date hereof, will be) true,
complete and correct and filed on a timely basis.
(b) Payment of Taxes. Resources and each of its
subsidiaries have, within the time and in the manner prescribed
by law, paid (and until the Closing Date will pay within the time
and in the manner prescribed by law) all Taxes that are currently
due and payable except for those contested in good faith and for
which adequate reserves have been taken.
(c) Tax Reserves. Resources and each of its subsidiaries
have established (and until the Closing Date will maintain) on
their books and records liabilities which adequately reflect its
estimate of the amounts required for federal and state income
taxes in accordance with GAAP.
(d) Tax Liens. There are no material Tax liens upon any
assets of Resources or any of its subsidiaries except liens for
Taxes not yet due.
(e) Withholding Taxes. Resources and each of its
subsidiaries have complied (and until the Closing Date will
comply) in all material respects with the provisions of the Code
relating to the payment and withholding of Taxes, including,
without limitation, the withholding and reporting requirements
under Code 1441 through 1464, 3401 thorough 3406, and 6041
through 6049, as well as similar provisions under any other laws,
and have, within the time and in the manner prescribed by law,
withheld from employee wages and paid over to the proper
governmental authorities all amounts required.
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(f) Extensions of Time for Filing Tax Returns. Except as
disclosed in Section 4.9(f) of the Resources Disclosure Schedule,
neither Resources nor any of its subsidiaries has requested or
been granted any extension of time within which to file any Tax
Return, which Tax Return has not since been timely filed.
(g) Waivers of Statute of Limitations. Except as disclosed
in Section 4.9(g) of the Resources Disclosure Schedule, neither
Resources nor any of its subsidiaries has executed any
outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any
Taxes or Tax Returns.
(h) Expiration of Statute of Limitations. Except as
disclosed in Section 4.9(h) of the Resources Disclosure Schedule,
the statute of limitations for the assessment of all Taxes has
expired for all applicable Tax Returns of Resources and each of
its subsidiaries or those Tax Returns have been examined by the
appropriate taxing authorities for all tax periods ending before
the date hereof, and no deficiency for any Taxes has been
proposed, asserted or assessed against Resources or any of its
subsidiaries that has not been resolved and paid in full.
(i) Audit, Administrative and Court Proceedings. Except as
disclosed in Section 4.9(i) of the Resources Disclosure Schedule,
no audits or other administrative proceedings or court
proceedings are presently pending with regard to any Taxes or Tax
Returns of Resources or any of its subsidiaries.
(j) Powers of Attorney. Except as disclosed in Section
4.9(j) of the Resources Disclosure Schedule, no power of attorney
currently in force has been granted by Resources or any of its
subsidiaries concerning any Tax matter.
(k) Tax Rulings. Except as disclosed in Section 4.9(k) of
the Resources Disclosure Schedule, neither Resources nor any of
its subsidiaries has received or requested a Tax Ruling (as
defined below) or entered into a Closing Agreement (as defined
below) with any taxing authority that would have a continuing
effect after the Closing Date. "Tax Ruling," as used in this
Agreement, shall mean a written ruling of a taxing authority
relating to Taxes. "Closing Agreement," as used in this
Agreement, shall mean a written and legally binding agreement
with a taxing authority relating to Taxes.
(l) Availability of Tax Returns. As soon as practicable
after the date hereof, Resources and its subsidiaries will make
available to Iowa-Illinois complete and accurate copies, covering
all years ending on or after December 31, 1989, of (i) all Tax
Returns, and any amendments thereto, filed by Resources or any of
its subsidiaries, (ii) all audit reports received from any taxing
authority relating to any Tax Return filed by Resources or any of
its subsidiaries and (iii) any Tax Ruling or request for a Tax
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Ruling applicable to Resources or any of its subsidiaries and any
Closing Agreements entered into by Resources or any of its
subsidiaries.
(m) Tax Sharing Agreements. Except as disclosed in Section
4.9(m) of the Resources Disclosure Schedule, no agreements
relating to allocating or sharing of Taxes exist between or among
Resources and any of its subsidiaries.
(n) Code Section 341(f). Neither Resources nor any of its
subsidiaries has filed (or will file prior to the Closing) a
consent pursuant to Code Section 341(f) or has agreed to have
Code Section 341(f)(2) apply to any disposition of a subsection
(f) asset (as that term is defined in Code Section 341(f)(4),
owned by Resources or any of its subsidiaries.
(o) Code Section 168. Except as set forth in Section
4.9(o) of the Resources Disclosure Schedule, no property of
Resources or any of its subsidiaries is property that Resources
or any such subsidiary or any party to this transaction is or
will be required to treat as being owned by another person
pursuant to the provisions of Code Section 168(f)(8) (as in
effect prior to its amendment by the Tax Reform Act of 1986) or
is "tax-exempt use property" within the meaning of Code Section
168(h).
(p) Code Section 481 Adjustments. Except as set forth in
Section 4.9(p) of the Resources Disclosure Schedule, neither
Resources nor any of its subsidiaries is required to include in
income for any tax period ending after the date hereof any
adjustment pursuant to Code Section 481(a) by reason of a
voluntary change in accounting method initiated by Resources or
any of its subsidiaries, and to the knowledge of Resources the
Internal Revenue Service ("IRS") has not proposed any such
adjustment or change in accounting method.
(q) Acquisition Indebtedness. Except as set forth in
Section 4.9(q) of the Resources Disclosure Schedule, no
indebtedness of Resources or any of its subsidiaries is
"corporate acquisition indebtedness" within the meaning of Code
Section 279(b).
(r) Intercompany Transactions. Except as set forth in
Section 4.9(r) of the Resources Disclosure Schedule, neither
Resources nor any of its subsidiaries has engaged in any
intercompany transactions within the meaning of Treasury
Regulations 1.1502-13 or -14 or Temporary Treasury Regulation
Section 1.1502-13T or -14T for which any income or gain remains
unrecognized as of the close of the last taxable year prior to
the Closing Date, and no excess loss account within the meaning
of Treasury Regulation Sections 1.1502-14, -19 or -32 exists with
respect to Resources or any of its subsidiaries.
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(s) Code Section 280G. Except as set forth in Section
4.9(s) of the Resources Disclosure Schedule, neither Resources
nor any of its subsidiaries is a party to any agreement,
contract, or arrangement that could result, on account of the
transactions contemplated hereunder, separately or in the
aggregate, in the payment of "excess parachute payments" within
the meaning of Code Section 280G.
(t) Consolidated Tax Returns. Neither Resources nor any of
its subsidiaries has ever been a member of an affiliated group of
corporations (within the meaning of Code Section 1504(a)) filing
consolidated returns, other than the affiliated group of which
Resources is the common parent.
(u) NOLs. As of December 31, 1992, Resources and its
subsidiaries had net operating loss carryovers available to
offset future income as set forth in Section 4.9(u) of the
Resources Disclosure Schedule. Section 4.9(u) of the Resources
Disclosure Schedule sets forth the amount of and year of
expiration of each company's net operating loss carryovers.
(v) Credit Carryovers. As of December 31, 1992, Resources
and its subsidiaries had tax credit carryovers available to
offset future tax liability as set forth in Section 4.9(v) of the
Resources Disclosure Schedule. Section 4.9(v) of the Resources
Disclosure Schedule sets forth the amount and year of expiration
of each company's tax credit carryovers.
(w) Code Section 338 Elections. Except as set forth in
Section 4.9(w) of the Resources Disclosure Schedule, no election
under Code Section 338 (or any predecessor provision) has been
made by or with respect to Resources or any of its subsidiaries
or any of their respective assets or properties.
SECTION 4.10 Employee Matters; ERISA.
(a) Benefit Plans. As used in this Section 4.10, "Plan"
shall mean any employee plan, practice, arrangement (including,
without limitation, any employee benefit plan within the meaning
of ERISA Section 3(3), employee pension benefit plan, program,
arrangement or agreement, any health, medical, welfare,
disability, life insurance, bonus, severance pay, and other
employee benefit or fringe benefit plan) maintained by or with
respect to which Resources has any fixed or contingent, direct or
indirect liability; and "Resources Benefit Plan" shall mean any
Plan that provides benefits with respect to employees or former
employees of Resources or any of its subsidiaries. Section
4.10(a) of the Resources Disclosure Schedule contains a true and
complete list of all Plans.
(b) Contributions. Except as set forth in Section 4.10(b)
of the Resources Disclosure Schedule, all material contributions
and other payments required to be made by Resources or any of its
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subsidiaries to any Resources Benefit Plan (or to any person
pursuant to the terms thereof) have been made or the amount of
such contribution or payment obligation has been reflected in the
Resources Financial Statements. Except as set forth in Section
4.10(b) of the Resources Disclosure Schedule, the current value
of all accrued benefits under any Resources Benefit Plan which is
a defined benefit plan did not, as of the date of the most recent
actuarial valuation for such plan, exceed the then current value
of the assets of such plan, based on the actuarial assumptions
set forth in such valuation for calculating the minimum funding
requirements of Code Section 412. Neither Resources nor any
entity which is or ever has been considered as a single employer
together with Resources or Midwest Power pursuant to Section 414
of the Code contributes or has ever contributed to a
multiemployer plan (as defined in Section 3(37) of ERISA) or has
any liability under ERISA Section 4203 or Section 4205 in respect
of any such plan.
(c) Qualification; Compliance. Except as set forth in
Section 4.10(c) of the Resources Disclosure Schedule, each of the
Resources Benefit Plans intended to be "qualified" within the
meaning of Code Section 401(a) has been determined by the IRS to
be so qualified, and, to the knowledge of Resources and any of
its subsidiaries, no circumstances exist that are reasonably
expected by Resources or any of its subsidiaries to result in the
revocation of any such determination. Resources and each of its
subsidiaries is in compliance in all respects with, and each of
the Resources Benefit Plans is and has been operated in all
respects in compliance with the terms thereof and all applicable
laws, rules and regulations governing such plan, including,
without limitation, ERISA and the Code, except for any violations
that would not, or insofar as reasonably can be foreseen, could
not, give rise to a Resources Material Adverse Effect. Except as
set forth in Section 4.10(c) of the Resources Disclosure
Schedule, each Resources Benefit Plan intended to provide for the
deferral of income or the reduction of salary or other compen-
sation is effective to provide such deferral or reduction.
(d) Liabilities. With respect to the Plans individually
and in the aggregate, there are no actions, suits or claims
pending or, to the knowledge of Resources, threatened (other than
routine claims for benefits) and no event has occurred, and, to
the knowledge of Resources and any of its subsidiaries, as of the
date hereof there exists no condition or set of circumstances,
that could subject Resources or any of its subsidiaries to any
liability arising under the Code, ERISA or any other applicable
law (including, without limitation, any liability of any kind
whatsoever, whether direct or indirect, contingent, inchoate or
otherwise, to any such plan or the Pension Benefit Guaranty
Corporation ("PBGC")), or under any indemnity agreement to which
Resources or any of its subsidiaries is subject, which liability,
excluding liability for benefit claims and funding obligations
payable in the ordinary course, would have, or insofar as
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reasonably can be foreseen, could have, a Resources Material
Adverse Effect.
(e) Welfare Plans. Except as set forth in Section 4.10(e)
of the Resources Disclosure Schedule, none of the Resources
Benefit Plans that are "welfare plans," within the meaning of
Section 3(1) of ERISA, provides for any benefits payable to or on
behalf of any employee or director after termination of employ-
ment or service, as the case may be, other than elective
continuation required pursuant to Code Section 4980B or coverage
which expires at the end of the calendar month following such
event, and each such plan that is a "group health plan" (as
defined in Code Section 4980B(g)) has been operated in compliance
with Code Section 4980B at all times, except for any
non-compliance that would not, or insofar as reasonably can be
determined could not, give rise to a Resources Material Adverse
Effect.
(f) Documents Made Available. Resources has made available
to Iowa-Illinois a true and correct copy of each collective
bargaining agreement to which Resources or any of its
subsidiaries is a party or under which Resources or any of its
subsidiaries has obligations and, with respect to each Resources
Benefit Plan, to the extent applicable (i) such plan and summary
plan description (including all amendments to each such
document), (ii) the most recent annual report filed with the IRS,
(iii) each related trust agreement, insurance contract, service
provider or investment management agreement (including all
amendments to each such document), (iv) the most recent
determination of the IRS with respect to the qualified status of
such plan, (v) the most recent actuarial report or valuation, and
(vi) all material employee communications.
(g) Payments Resulting from Mergers. Except as set forth
in Section 4.10(g) of the Resources Disclosure Schedule, (i) the
announcement or consummation of any transaction contemplated by
this Agreement will not (either alone or upon the occurrence of
any additional or further acts or events) result in any (A)
payment (whether of severance pay or otherwise) becoming due from
Resources or any of its subsidiaries to any officer, employee,
former employee or director thereof or to the trustee under any
"rabbi trust" or similar arrangement that would not have been
paid without regard to such announcement or consummation or (B)
benefit being established or becoming accelerated, vested or
payable under any Resources Benefit Plan and (ii) neither
Resources nor any of its subsidiaries is a party to (A) any
management, employment, deferred compensation, severance
(including any payment, right or benefit resulting from a change
in control), bonus or other contract for personal services with
any officer, director or employee, (B) any consulting contract
with any person who prior to entering into such contract was a
director or officer of Resources or any of its subsidiaries or
(C) any material plan, agreement, arrangement or understanding
similar to the foregoing.
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(h) Labor Agreements. As of the date hereof, except as set
forth in Section 4.10(h) of the Resources Disclosure Schedule,
neither Resources nor any of its subsidiaries is a party to any
collective bargaining agreement or other labor agreement with any
union or labor organization. To the knowledge of Resources and
its subsidiaries, as of the date hereof, there is no current
union representation question involving employees of Resources or
any of its subsidiaries, nor does Resources nor any of its
subsidiaries know of any activity or proceeding of any labor
organization (or representative thereof) or employee group to
organize any such employees. Except as disclosed in the
Resources SEC Reports or in Section 4.10(h) of the Resources
Disclosure Schedule, (i) there is no unfair labor practice,
employment discrimination or other complaint against Resources or
any of its subsidiaries pending, or, to the knowledge of
Resources or any of its subsidiaries, threatened, which has or
reasonably may be expected by Resources or any of its subsid-
iaries to have, a Resources Material Adverse Effect, (ii) there
is no strike, dispute, slowdown, work stoppage or lockout or
other significant labor controversy pending, or, to the knowledge
of Resources or any of its subsidiaries, threatened, against or
involving Resources or any of its subsidiaries which has or,
insofar as reasonably can be foreseen, could have, a Resources
Material Adverse Effect and (iii) there is no proceeding, claim,
suit, action or governmental investigation pending or, to the
knowledge of Resources or any of its subsidiaries, threatened, in
respect of which any director, officer, employee or agent of
Resources or any of its subsidiaries is or may be entitled to
claim indemnification from Resources or any of its subsidiaries
pursuant to their respective articles of incorporation or by-
laws. Except as set forth in Section 4.10(h) of the Resources
Disclosure Schedule, Resources and its subsidiaries have, to the
knowledge of Resources and its subsidiaries, complied in all
material respects with all laws relating to the employment of
labor, including without limitation any provisions thereof
relating to wages, hours, collective bargaining, and the payment
of social security and similar taxes, and no person has, to the
knowledge of Resources or any of its subsidiaries, asserted that
Resources or any of its subsidiaries is liable in any material
amount for any arrears of wages or any taxes or penalties for
failure to comply with any of the foregoing.
SECTION 4.11 Environmental Protection.
(a) Compliance. Except as set forth in Section 4.11(a) of
the Resources Disclosure Schedule, Resources and each of its
subsidiaries is in compliance with all applicable Environmental
Laws (as hereinafter defined), except where the failure to be in
compliance would not have a Resources Material Adverse Effect.
Except as set forth in Section 4.11(a) of the Resources
Disclosure Schedule, neither Resources nor any of its
subsidiaries has received any communication (written or oral)
from any person or Governmental Authority that alleges that
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Resources or any of its subsidiaries is not in such compliance
with applicable Environmental Laws, except where the failure to
be in compliance would not have a Resources Material Adverse
Effect.
(b) Environmental Permits. Except as set forth in Section
4.11(b) of the Resources Disclosure Schedule, Resources and each
of its subsidiaries has obtained or has applied for all permits,
registrations and governmental authorizations required under any
Environmental Law (collectively, the "Environmental Permits")
necessary for the construction of its facilities or the conduct
of its operations, and all such permits are in good standing or,
where applicable, a renewal application has been timely filed and
is pending agency approval, and Resources and its subsidiaries
are in material compliance with all terms and conditions of the
Environmental Permits, except where the failure to obtain or be
in compliance with such Environmental Permit would not have a
Resources Material Adverse Effect.
(c) Environmental Claims. Except as set forth in Section
4.11(c) of the Resources Disclosure Schedule, to the best
knowledge of Resources upon diligent review, there is no
Environmental Claim (as hereinafter defined) pending or
threatened (i) against Resources or any of its subsidiaries or
any of their joint ventures, (ii) against any person or entity
whose liability for any Environmental Claim Resources or any of
its subsidiaries or any of their joint ventures has or may have
retained or assumed either contractually or by operation of law
or (iii) against any real or personal property or operations
which Resources or any of its subsidiaries or any of their joint
ventures owns, leases or manages, in whole or in part, which, if
adversely determined, would have in the aggregate a Resources
Material Adverse Effect.
(d) Releases. Except as set forth in Section 4.11(c) of
the Resources Disclosure Schedule or Section 4.11(d) of the
Resources Disclosure Schedule, Resources and each of its
subsidiaries has no knowledge of any Releases (as hereinafter
defined) of any Hazardous Material (as hereinafter defined) that
would be reasonably likely to form the basis of any Environmental
Claim against Resources or any of its subsidiaries or any of
their joint ventures, or against any person or entity whose
liability for any Environmental Claim Resources or any of its
subsidiaries or any of their joint ventures has or may have
retained or assumed either contractually or by operation of law,
except for Releases of Hazardous Materials, the liability for
which would not have, in the aggregate, a Resources Material
Adverse Effect.
(e) Predecessors. Except as set forth in Section 4.11(e)
of the Resources Disclosure Schedule, neither Resources nor any
of its subsidiaries has knowledge, with respect to any
predecessor of Resources or any of its subsidiaries or any of
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their joint ventures, of any Environmental Claim pending or
threatened, or of any Release of Hazardous Materials that would
be reasonably likely to form the basis of any Environmental
Claim, which would have, or which Resources or any of its
subsidiaries reasonably believes would have, a Resources Material
Adverse Effect.
(f) Disclosure. Resources has disclosed to Iowa-Illinois
all material facts which Resources or any of its subsidiaries
reasonably believes form the basis of a Resources Material
Adverse Effect arising from (i) the cost to Resources or any of
its subsidiaries of pollution control equipment (including,
without limitation, upgrades and other modifications to existing
equipment) currently required or known to be required in the
future; (ii) current costs to Resources or any of its subsid-
iaries of remediation or costs to Resources or any of its
subsidiaries of remediation known to be required in the future;
or (iii) any other environmental matter affecting Resources or
any of its subsidiaries which would have, or which Resources or
any of its subsidiaries reasonably believes would have, a
Resources Material Adverse Effect.
(g) As used in this Agreement:
(i) "Environmental Claim" means any and all adminis-
trative, regulatory or judicial actions, suits, demands,
demand letters, directives, claims, liens, investigations,
proceedings or notices of noncompliance or violation
(written or oral) by any person or entity (including any
Governmental Authority) alleging potential liability
(including, without limitation, potential liability for
enforcement, investigatory costs, cleanup costs, govern-
mental response costs, removal costs, remedial costs,
natural resources damages, property damages, personal
injuries, or penalties) arising out of, based on or
resulting from: (A) the presence, or Release or threatened
Release into the environment, of any Hazardous Materials at
any location, whether or not owned, operated, leased or
managed by Resources or any of its subsidiaries or any of
their joint ventures (for purposes of this Section 4.11), or
by Iowa-Illinois or any of its subsidiaries or any of their
joint ventures (for purposes of Section 5.11); or (B)
circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law; or (C) any and all
claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive
relief resulting from the presence or Release of any
Hazardous Materials.
(ii) "Environmental Laws" means all federal, state and
local statutes, regulations, ordinances and regulatory
common law or equitable doctrine relating to pollution
control or protection of the environment, human health or
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safety (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata),
including, without limitation, laws and regulations relating
to Releases or threatened Releases of Hazardous Materials,
or otherwise relating to the manufacture, generation,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.
(iii) "Hazardous Materials" means: (A) any petroleum
or petroleum products, radioactive materials, asbestos in
any form that is or could become friable, urea formaldehyde
foam insulation, and transformers or other equipment that
contain dielectric fluid containing polychlorinated
biphenyls ("PCBs"); and (B) any chemicals, materials or
substances which are now defined as or included in the
definition of "hazardous substances", "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic
pollutants," or words of similar import, under any
Environmental Law; and (C) any other chemical, material,
substance or waste, exposure to which is now prohibited,
limited or regulated under any Environmental Law in a
jurisdiction in which Resources or any of its subsidiaries
or any of their joint ventures operates (for purposes of
this Section 4.11) or in which Iowa-Illinois or any of its
subsidiaries or any of their joint ventures operates (for
purposes of Section 5.11).
(iv) "Release" means any release, spill, emission,
leaking, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the atmosphere, soil, surface
water, groundwater or property.
SECTION 4.12 Regulation as a Utility. Midwest Power is
regulated as a public utility in the States of Iowa, South Dakota
and Nebraska. Except as set forth in the preceding sentence,
neither Resources nor any "subsidiary company" or "affiliate" of
Resources is subject to regulation as a public utility or public
service company (or similar designation) by a state in the United
States or any foreign country. As used in this Section 4.12 and
in Section 5.12, the terms "subsidiary company" and "affiliate"
shall have the respective meanings ascribed to them in the 1935
Act. Resources is an exempt holding company under Section
3(a)(1) of the 1935 Act.
SECTION 4.13 Vote Required. The approval by the holders
of a majority of the votes entitled to be cast by all holders of
outstanding shares of (i) Resources Common Stock, voting as a
single class ("Resources Shareholders' Approval"), and (ii)
Midwest Power Preferred Stock, voting as a single class, Midwest
Power Common Stock, voting as a single class, and Midwest Power
Common Stock and Midwest Power Preferred Stock, voting together
as a single class (collectively, "Midwest Power Shareholders'
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Approval") are the only votes of the holders of any class or
series of the capital stock of Resources or Midwest Power
required to approve this Agreement and the transactions
contemplated hereby.
SECTION 4.14 Accounting Matters. Neither Resources,
Midwest Power nor, to their knowledge, any of their affiliates
has taken or agreed to take any action that would prevent the
Company from accounting for the Merger as a pooling of interests
in accordance with GAAP and applicable SEC regulations. As used
in this Agreement, the term "affiliate," except where otherwise
defined herein, shall mean, as to any person, any other person
which directly or indirectly controls, or is under common control
with, or is controlled by, such person. As used in this
definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause
the direction of management or policies (whether through
ownership of securities or partnership or other ownership
interest, by contract or otherwise).
SECTION 4.15 Opinion of Financial Advisor. Resources has
received the opinion of PaineWebber Incorporated on July 26,
1994, to the effect that, as of July 26, 1994, the Resources
Conversion Ratio and the consideration to be received by the
holders of Resources Common Stock is fair from a financial point
of view to the holders of Resources Common Stock.
SECTION 4.16 Insurance. Except as set forth in Section
4.16 of the Resources Disclosure Schedule, Resources and each of
its subsidiaries is, and has been continuously since January 1,
1989, insured with financially responsible insurers in such
amounts and against such risks and losses as are customary for
companies conducting the business as conducted by Resources and
its subsidiaries during such time period. Except as set forth in
Schedule 4.16 of the Resources Disclosure Schedule, neither
Resources nor any of its subsidiaries has received any notice of
cancellation or termination with respect to any material
insurance policy of Resources or any of its subsidiaries. The
insurance policies of Resources and each of its subsidiaries are
valid and enforceable policies.
SECTION 4.17 Ownership of Iowa-Illinois Capital Stock.
Resources does not "beneficially own" (as such term is defined in
Rule 13d-3 under the Exchange Act) any shares of Iowa-Illinois
Common Stock, Iowa-Illinois Preferred Stock or Iowa-Illinois
Preference Stock.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF IOWA-ILLINOIS
Iowa-Illinois represents and warrants to Resources and
Midwest Power as follows:
SECTION 5.1 Organization and Qualification. Iowa-
Illinois and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws
of its state of incorporation, has all requisite power and
authority, and has been duly authorized by all necessary regula-
tory approvals and orders, to own, lease and operate its assets
and properties and to carry on its business as it is now being
conducted, and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business
or the ownership or leasing of its assets and properties makes
such qualification necessary other than in such jurisdictions
where the failure to be so qualified and in good standing will
not, when taken together with all other such failures, have a
material adverse effect on the business, operations, properties,
assets, condition (financial or other), prospects or the results
of operations of Iowa-Illinois and its subsidiaries taken as a
whole or on the consummation of the transactions contemplated by
this Agreement (any such material adverse effect being herein-
after referred to as an "Iowa-Illinois Material Adverse Effect").
SECTION 5.2 Subsidiaries. Section 5.2 of the Iowa-
Illinois Disclosure Schedule (as defined in Section 7.6(a)(ii))
sets forth a description as of the date hereof of all subsid-
iaries of Iowa-Illinois and their joint ventures, including the
name of each such entity, a brief description of the principal
line or lines of business conducted by each such entity and the
interest of Iowa-Illinois and its subsidiaries therein. Except
as set forth in Section 5.2 of the Iowa-Illinois Disclosure
Schedule, none of such entities is a "holding company," a
"subsidiary company" of a holding company or an "affiliate" of a
holding company within the meaning of Section 2(a)(7), 2(a)(8) or
2(a)(11) of the 1935 Act, respectively. Except as set forth in
Section 5.2 of the Iowa-Illinois Disclosure Schedule, all of the
issued and outstanding shares of capital stock of each subsidiary
of Iowa-Illinois are validly issued, fully paid, nonassessable
and free of preemptive rights, are owned directly or indirectly
by Iowa-Illinois free and clear of any Liens, and there are no
outstanding subscriptions, options, calls, contracts, voting
trusts, proxies or other commitments, understandings, restric-
tions, arrangements, rights or warrants, including any right of
conversion or exchange under any outstanding security, instrument
or other agreement, obligating Iowa-Illinois or any subsidiary of
Iowa-Illinois to issue, deliver or sell, or cause to be issued,
delivered or sold, shares of the capital stock of any subsidiary
of Iowa-Illinois or obligating Iowa-Illinois or any of its
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subsidiaries to grant, extend or enter into any such agreement or
commitment.
SECTION 5.3 Capitalization. (a) The authorized capital
stock of Iowa-Illinois consists of 80,000,000 shares of Iowa-
Illinois Common Stock, 400,000 shares of Iowa-Illinois Preferred
Stock, and 2,386,250 shares of Iowa-Illinois Preference Stock.
As of the close of business on July 22, 1994, (i) 29,491,416
shares of Iowa-Illinois Common Stock were issued and outstanding,
(ii) 198,288 shares of Iowa-Illinois Preferred Stock were issued
and outstanding and 500,000 shares of Iowa-Illinois Preference
Stock were issued and outstanding; Section 5.3 of the Iowa-
Illinois Disclosure Schedule lists the numbers of shares of each
Series of Iowa-Illinois Preferred Stock and Iowa-Illinois
Preference Stock outstanding on the date hereof. All of the
issued and outstanding shares of the capital stock of Iowa-
Illinois are validly issued, fully paid, nonassessable and free
of preemptive rights. Except as set forth in Section 5.3 of the
Iowa-Illinois Disclosure Schedule, there are no outstanding
subscriptions, options, calls, contracts, voting trusts, proxies
or other commitments, understandings, restrictions, arrangements,
rights or warrants, including any right of conversion or exchange
under any outstanding security, instrument or other agreement,
obligating Iowa-Illinois or any of its subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, shares
of the capital stock of Iowa-Illinois or obligating Iowa-Illinois
or any of its subsidiaries to grant, extend or enter into any
such agreement or commitment other than under the Iowa-Illinois
Dividend Reinvestment Plan, Iowa-Illinois Key Employee
Performance Plan or the Iowa-Illinois Shareholders Rights
Agreement dated as of February 25, 1992 ("Iowa-Illinois
Shareholders Rights Plan").
(b) No Change in Capital Structure. There has been no
material change in the information set forth in Section 5.3(a)
between the close of business on July 22, 1994, and the date
hereof.
SECTION 5.4 Authority; Non-Contravention; Statutory
Approvals; Compliance.
(a) Authority. Iowa-Illinois has all requisite power and
authority to enter into this Agreement and, subject to the
applicable Iowa-Illinois Shareholders' Approval (as defined in
Section 5.13) and the applicable Iowa-Illinois Required Statutory
Approvals (as defined in clause (c) below), to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation by Iowa-Illinois of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Iowa-Illinois, subject
to obtaining the applicable Iowa-Illinois Shareholders' Approval.
This Agreement has been duly and validly executed and delivered
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by Iowa-Illinois and, assuming the due authorization, execution
and delivery hereof by Resources and Midwest Power, constitutes a
valid and binding obligation of Iowa-Illinois enforceable against
it in accordance with its terms.
(b) Non-Contravention. Except as set forth in Section
5.4(b) of the Iowa-Illinois Disclosure Schedule, the execution
and delivery of this Agreement by Iowa-Illinois does not, and,
subject to obtaining the Iowa-Illinois Required Statutory
Approvals, the Iowa-Illinois Shareholders' Approval and the
third-party consents set forth in Section 5.4(b) of the Iowa-
Illinois Disclosure Schedule ("Iowa-Illinois Required Consents"),
the consummation of the transactions contemplated hereby will
not, violate, conflict with, or result in a breach of any
provision of, or constitute a default (with or without notice or
lapse of time or both) under, or result in any Violation by Iowa-
Illinois or any of its subsidiaries or any of their joint
ventures pursuant to, any provisions of (i) the articles of
incorporation, by-laws or similar governing documents of Iowa-
Illinois or any of its subsidiaries or of any of their joint
ventures, (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of
any Governmental Authority applicable to Iowa-Illinois or any of
its subsidiaries or any of their joint ventures, or any of their
respective properties or assets, or (iii) any note, bond,
mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or
agreement of any kind to which Iowa-Illinois or any of its
subsidiaries or any of their joint ventures is now a party or by
which they or any of their respective properties or assets may be
bound or affected, excluding from the foregoing clauses (ii) and
(iii) such Violations as would not, in the aggregate, have an
Iowa-Illinois Material Adverse Effect.
(c) Statutory Approvals. No declaration, filing or
registration with, or notice to or authorization, consent or
approval of, any Governmental Authority is necessary for the
execution and delivery of this Agreement by Iowa-Illinois or the
consummation by Iowa-Illinois of the transactions contemplated
hereby, the failure of which to obtain, make or give would have,
in the aggregate, an Iowa-Illinois Material Adverse Effect,
except as described in Section 5.4(c) of the Iowa-Illinois
Disclosure Schedule ("Iowa-Illinois Required Statutory
Approvals," it being understood that references in this Agreement
to "obtaining" such Iowa-Illinois Required Statutory Approvals
shall mean making such declarations, filings or registrations;
giving such notice; obtaining such authorizations, consents or
approvals; and having such waiting periods expire as are
necessary to avoid a violation of law).
(d) Compliance. Except as set forth in Sections 5.4(d) or
5.11 of the Iowa-Illinois Disclosure Schedule, or as disclosed in
the Iowa-Illinois SEC Reports (as defined in Section 5.5),
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neither Iowa-Illinois nor any of its subsidiaries nor, to the
knowledge of Iowa-Illinois or any of its subsidiaries, any of
their joint ventures, is in violation of, or is under
investigation with respect to or has been given notice or been
charged with any violation of, any law, statute, order, rule,
regulation, ordinance or judgment (including, without limitation,
any applicable environmental law, ordinance or regulation) of any
Governmental Authority, except for violations which in the
aggregate do not, and insofar as can reasonably be foreseen will
not, have an Iowa-Illinois Material Adverse Effect. Except as
set forth in Sections 5.4(d) or 5.11 of the Iowa-Illinois
Disclosure Schedule, Iowa-Illinois and each of its subsidiaries
and each of their joint ventures has all Permits necessary to
conduct their businesses as presently conducted except those
which the failure to obtain in the aggregate do not, and insofar
as reasonably can be foreseen will not, have an Iowa-Illinois
Material Adverse Effect. Except as set forth in Section 5.4(d)
of the Iowa-Illinois Disclosure Schedule, or as disclosed in the
Iowa-Illinois SEC Reports, neither Iowa-Illinois nor any of its
subsidiaries nor, to the knowledge of Iowa-Illinois, any of their
joint ventures, is in breach or violation of or in default in the
performance or observance of any term or provision of, and no
event has occurred which, with lapse of time or action by a third
party, could result in a default under, (i) the articles of
incorporation, by-laws or similar governing documents of Iowa-
Illinois or such subsidiary or joint venture or (ii) any
contract, commitment, agreement, indenture, mortgage, loan
agreement, note, lease, bond, license, approval or other
instrument to which Iowa-Illinois or such subsidiary or joint
venture is a party or by which it is bound or to which any of its
property is subject, except in the case of clause (ii) above, for
breaches, violations and defaults which in the aggregate do not,
and insofar as reasonably can be foreseen will not, have an Iowa-
Illinois Material Adverse Effect.
SECTION 5.5 Reports and Financial Statements. The
filings required to be made by Iowa-Illinois and each of its
subsidiaries under the Securities Act, the Exchange Act,
applicable Iowa and Illinois public utility laws and regulations,
the Power Act, the 1935 Act and the Atomic Energy Act have been
filed with the SEC, the appropriate Iowa and Illinois public
utility commissions, the FERC or the Nuclear Regulatory
Commission, as the case may be, including all forms, statements,
reports, agreements (oral or written) and all documents,
exhibits, amendments and supplements appertaining thereto, and
complied in all material respects with all applicable
requirements of the appropriate act and the rules and regulations
thereunder. Iowa-Illinois has made available to Resources a true
and complete copy of each report, schedule, registration
statement and definitive proxy statement and all amendments
thereto filed by Iowa-Illinois with the SEC since January 1, 1991
(as such documents have since the time of their filing been
amended, the "Iowa-Illinois SEC Reports"). As of their
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respective dates, the Iowa-Illinois SEC Reports did not contain
any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were
made, not misleading. The audited consolidated financial
statements and unaudited interim financial statements of Iowa-
Illinois included in the Iowa-Illinois SEC Reports ("Iowa-
Illinois Financial Statements") have been prepared in accordance
with GAAP (except as may be indicated therein or in the notes
thereto and except with respect to unaudited statements as
permitted by Form 10-Q under the Exchange Act) and fairly present
the financial position of Iowa-Illinois as of the dates thereof
and the results of its operations and cash flows for the periods
then ended, subject, in the case of the unaudited interim finan-
cial statements, to normal, recurring audit adjustments. True,
accurate and complete copies of the Articles of Incorporation and
by-laws of Iowa-Illinois, as in effect on the date hereof, are
included (or incorporated by reference) in the Iowa-Illinois SEC
Reports.
SECTION 5.6 Absence of Certain Changes or Events; Absence
of Undisclosed Liabilities.
(a) Absence of Certain Changes or Events. Except as set
forth in the Iowa-Illinois SEC Reports or Section 5.6 of the
Iowa-Illinois Disclosure Schedule, since December 31, 1993, Iowa-
Illinois and each of its subsidiaries has conducted its business
only in the ordinary course of business consistent with past
practice and there has not been any Iowa-Illinois Material
Adverse Effect, and no fact or condition exists which would have,
or, insofar as reasonably can be foreseen, could have, an Iowa-
Illinois Material Adverse Effect.
(b) Absence of Undisclosed Liabilities. Neither Iowa-
Illinois nor any of its subsidiaries has any liabilities or
obligations (whether absolute, accrued, contingent or otherwise)
of a nature required by GAAP to be reflected in a consolidated
corporate balance sheet, except liabilities, obligations or
contingencies which are accrued or reserved against in the
consolidated financial statements of Iowa-Illinois or reflected
in the notes thereto for the year ended December 31, 1993, or
which were incurred after December 31, 1993 in the ordinary
course of business and would not, in the aggregate, have an Iowa-
Illinois Material Adverse Effect.
SECTION 5.7 Litigation. Except as disclosed in the Iowa-
Illinois SEC Reports or as set forth in Sections 5.7 or 5.11 of
the Iowa-Illinois Disclosure Schedule, (i) there are no claims,
suits, actions or proceedings, pending or, to the knowledge of
Iowa-Illinois or its subsidiaries, threatened, nor are there, to
the knowledge of Iowa-Illinois, any investigations or reviews
pending or threatened against, relating to or affecting Iowa-
Illinois or any of its subsidiaries or any of their joint
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ventures, (ii) there have not been any material developments
since December 31, 1993 with respect to such disclosed claims,
suits, actions, proceedings, investigations or reviews and (iii)
there are no judgments, decrees, injunctions, rules or orders of
any Governmental Authority or any arbitrator applicable to Iowa-
Illinois or any of its subsidiaries or any of their joint
ventures, which, when taken together with any other
nondisclosures described in clause (i), (ii) or (iii), would, or
insofar as reasonably can be foreseen could, have an Iowa-
Illinois Material Adverse Effect.
SECTION 5.8 Registration Statement and Proxy Statement.
None of the information supplied or to be supplied by or on
behalf of Iowa-Illinois for inclusion or incorporation by
reference in (i) the Registration Statement will, at the time the
Registration Statement is filed with the SEC and at the time it
becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and (ii) the Joint Proxy Statement will,
at the date mailed to shareholders of Resources, Midwest Power
and Iowa-Illinois and at the times of the meetings of such
shareholders to be held in connection with the Merger, include
any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein,
in light of the circumstances under which they are made, not
misleading. The Registration Statement and the Joint Proxy
Statement will comply as to form in all material respects with
the provisions of applicable federal securities law.
SECTION 5.9 Tax Matters.
(a) Filing of Timely Tax Returns. Except as set forth in
Section 5.9(a) of the Iowa-Illinois Disclosure Schedule, Iowa-
Illinois and each of its subsidiaries have filed or will file all
Tax Returns required to be filed by each of them under applicable
law. All Tax Returns were in all material respects (and, as to
Tax Returns not filed as of the date hereof, will be) true,
complete and correct and filed on a timely basis.
(b) Payment of Taxes. Iowa-Illinois and each of its
subsidiaries have, within the time and in the matter prescribed
by law, paid (and until the Closing Date will pay within the time
and in the manner prescribed by law) all Taxes that are currently
due and payable except for those contested in good faith and for
which adequate reserves have been taken.
(c) Tax Reserves. Iowa-Illinois and each of its
subsidiaries have established (and until the Closing Date will
maintain) on their books and records liabilities which adequately
reflect its estimate of amounts required for federal and state
income taxes in accordance with GAAP.
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(d) Tax Liens. There are no material Tax liens upon any
assets of Iowa-Illinois or any of its subsidiaries except liens
for Taxes not yet due.
(e) Withholding Taxes. Iowa-Illinois and each of its
subsidiaries have complied (and until the Closing Date will
comply) in all material respects with the provisions of the Code
relating to the payment and withholding of Taxes, including,
without limitation, the withholding and reporting requirements
under Code Section 2 Section 1441 through 1464, 3401 through
3406, and 6041
through 6049, as well as similar provisions under any other laws,
and have, within the time and in the manner prescribed by law,
withheld from employee wages and paid over to the proper
governmental authorities all amounts required.
(f) Extensions of Time for Filing Tax Returns. Except as
set forth in Section 5.9(f) of the Iowa-Illinois Disclosure
Schedule, neither Iowa-Illinois nor any of its subsidiaries has
requested or been granted any extension of time within which to
file any Tax Return, which Tax Return has not since been timely
filed.
(g) Waivers of Statute of Limitations. Except as set forth
in Section 5.9(g) of the Iowa-Illinois Disclosure Schedule,
neither Iowa-Illinois nor any of its subsidiaries has executed
any outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any
Taxes or Tax Returns.
(h) Expiration of Statute of Limitations. Except as set
forth in Section 5.9(h) of the Iowa-Illinois Disclosure Schedule,
the statute of limitations for the assessment of all Taxes has
expired for all applicable Tax Returns of Iowa-Illinois and each
of its subsidiaries or those Tax Returns have been examined by
the appropriate taxing authorities for all tax periods ended
before the date hereof, and no deficiency for any Taxes has been
proposed, asserted or assessed against Iowa-Illinois or any of
its subsidiaries that has not been resolved and paid in full.
(i) Audit, Administrative and Court Proceedings. Except as
set forth in Section 5.9(i) of the Iowa-Illinois Disclosure
Schedule, no audits or other administrative proceedings or court
proceedings are presently pending with regard to any Taxes or Tax
Returns of Iowa-Illinois or any of its subsidiaries.
(j) Powers of Attorney. Except as set forth in Section
5.9(j) of the Iowa-Illinois Disclosure Schedule, no power of
attorney currently in force has been granted by Iowa-Illinois or
any of its subsidiaries concerning any Tax matter.
(k) Tax Rulings. Except as set forth in Section 5.9(k) of
the Iowa-Illinois Disclosure Schedule, neither Iowa-Illinois nor
any of its subsidiaries has received or requested a Tax Ruling or
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entered into a Closing Agreement with any taxing authority that
would have a continuing effect after the Closing Date.
(l) Availability of Tax Returns. As soon as practicable
after the date hereof, Iowa-Illinois and its subsidiaries will
make available to Resources and Midwest Power complete and
accurate copies, covering all years ending on or after December
31, 1989, of (i) all Tax Returns, and any amendments thereto,
filed by Iowa-Illinois or any of its subsidiaries, (ii) all audit
reports received from any taxing authority relating to any Tax
Return filed by Iowa-Illinois or any of its subsidiaries and
(iii) any Tax Ruling or request for a Tax Ruling applicable to
Iowa-Illinois or any of its subsidiaries and any Closing
Agreements entered into by Iowa-Illinois or any of its
subsidiaries.
(m) Tax Sharing Agreements. Except as disclosed in Section
5.9(m) of the Iowa-Illinois Disclosure Schedule, no agreements
relating to allocating or sharing of Taxes exist between or among
Iowa-Illinois and any of its subsidiaries.
(n) Code Section 341(f). Neither Iowa-Illinois nor any of
its subsidiaries has filed (or will file prior to the Closing) a
consent pursuant to Code Section 341(f) or has agreed to have
Code Section 341(f)(2) apply to any disposition of a subsection
(f) asset (as that term is defined in Code Section 341(f)(4))
owned by Iowa-Illinois or any of its subsidiaries.
(o) Code Section 168. Except as set forth in Section
5.9(o) of the Iowa-Illinois Disclosure Schedule, no property of
Iowa-Illinois or any of its subsidiaries is property that Iowa-
Illinois or any such subsidiary or any party to this transaction
is or will be required to treat as being owned by another person
pursuant to the provisions of Code Section 168(f)(8) (as in
effect prior to its amendment by the Tax Reform Act of 1986) or
is "tax-exempt use property" within the meaning of Code Section
168(h).
(p) Code Section 481 Adjustments. Except as set forth in
Section 5.9(p) of the Iowa-Illinois Disclosure Schedule, neither
Iowa-Illinois nor any of its subsidiaries is required to include
in income for any tax period ending after the date hereof any
adjustment pursuant to Code Section 481(a) by reason of a
voluntary change in accounting method initiated by Iowa-Illinois
or any of its subsidiaries, and to the knowledge of
Iowa-Illinois, the IRS has not proposed any such adjustment or
change in accounting method.
(q) Acquisition Indebtedness. Except as set forth in
Section 5.9(q) of the Iowa-Illinois Disclosure Schedule, no
indebtedness of Iowa-Illinois or any of its subsidiaries is
"corporate acquisition indebtedness" within the meaning of Code
Section 279(b).
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(r) Intercompany Transactions. Except as set forth in
Section 5.9(r) of the Iowa-Illinois Disclosure Schedule, neither
Iowa-Illinois nor any of its subsidiaries has engaged in any
intercompany transactions within the meaning of Treasury
Regulations 1.1502-13 or - 14 or Temporary Treasury Regulation
Section 1.502-13T or -14T for which any income or gain remains
unrecognized as of the close of the last taxable year prior to
the Closing Date and no excess loss account within the meaning of
Treasury Regulation Section 1.502-14, -19 or -32 exists with
respect to Iowa-Illinois or any of its subsidiaries.
(s) Code Section 280G. Except as set forth in Section
5.9(s) of the Iowa-Illinois Disclosure Schedule, neither
Iowa-Illinois nor any of its subsidiaries is a party to any
agreement, contract, or arrangement that could result, on account
of the transactions contemplated hereunder, separately or in the
aggregate, in the payment of any "excess parachute payments"
within the meaning of the Code Section 280G.
(t) Consolidated Tax Returns. Neither Iowa-Illinois nor
any of its subsidiaries has ever been a member of an affiliated
group of corporations (within the meaning of Code Section
1504(a)) filing consolidated returns, other than the affiliated
group of which Iowa-Illinois is the common parent.
(u) NOLs. As of December 31, 1992, Iowa-Illinois and its
subsidiaries had net operating loss carryovers available to
offset future income as set forth in Section 5.9(u) of the Iowa-
Illinois Disclosure Schedule. Section 5.9(u) of the Iowa-
Illinois Disclosure Schedule sets forth the amount of and year of
expiration of each company's net operating loss carryovers.
(v) Credit Carryovers. As of December 31, 1992, Iowa-
Illinois and its subsidiaries had tax credit carryovers available
to offset future tax liability as set forth in Section 5.9(v) of
the Iowa-Illinois Disclosure Schedule. Section 5.9(v) of the
Iowa-Illinois Disclosure Schedule sets forth the amount and year
of expiration of each company's tax credit carryovers.
(w) Code Section 338 Elections. Except as set forth in
Section 5.9(w) of the Iowa-Illinois Disclosure Schedule, no
election under Code Section 338 (or any predecessor provision)
has been made by or with respect to Iowa-Illinois or any of its
subsidiaries or any of their respective assets or properties.
SECTION 5.10 Employee Matters; ERISA.
(a) Benefit Plans. As used in this Section 5.10, "Plan"
shall mean any employee plan, practice, arrangement (including,
without limitation, any employee benefit plan within the meaning
of ERISA Section 3(3), employee pension benefit plan, program,
arrangement or agreement, any health, medical, welfare,
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disability, life insurance, bonus, severance pay, and other
employee benefit or fringe benefit plan) maintained by or with
respect to which Iowa-Illinois has any fixed or contingent,
direct or indirect liability; and "Iowa-Illinois Benefit Plan"
shall mean any Plan that provides benefits with respect to
employees or former employees of Iowa-Illinois or any of its
subsidiaries. Section 5.10(a) of the Iowa-Illinois Disclosure
Schedule contains a true and complete list of all Plans.
(b) Contributions. Except as set forth in Section 5.10(b)
of the Iowa-Illinois Disclosure Schedule, all material
contributions and other payments required to be made by Iowa-
Illinois or any of its subsidiaries to any Iowa-Illinois Benefit
Plan (or to any person pursuant to the terms thereof) have been
made or the amount of such contribution obligation has been
reflected in the Iowa-Illinois Financial Statements. Except as
set forth in Section 5.10(b) of the Iowa-Illinois Disclosure
Schedule, the current value of all accrued benefits under any
Iowa-Illinois Benefit Plan which is a defined benefit plan did
not, as of the date of the most recent actuarial valuation for
such plan, exceed the then current value of the assets of such
plan, based on the actuarial assumptions set forth in such
valuation for calculating the minimum funding requirements of
Code Section 412. Neither Iowa-Illinois nor any entity which is
or ever has been considered as a single employer together with
Iowa-Illinois pursuant to Section 414 of the Code contributes or
has ever contributed to a multiemployer plan (as defined in
Section 3(37) of ERISA)or has any liability under ERISA Section
4203 or Section 4205 in respect of any such Plan.
(c) Qualification; Compliance. Except as set forth in
Section 5.10(c) of the Iowa-Illinois Disclosure Schedule, each of
the Iowa-Illinois Benefit Plans intended to be "qualified" within
the meaning of Code Section 401(a) has been determined by the IRS
to be so qualified, and, to the knowledge of Iowa-Illinois and
any of its subsidiaries, no circumstances exist that are
reasonably expected by Iowa-Illinois or any of its subsidiaries
to result in the revocation of any such determination.
Iowa-Illinois and each of its subsidiaries is in compliance in
all respects with, and each Iowa-Illinois Benefit Plan is and has
been operated in all respects in compliance with the terms
thereof and all applicable laws, rules and regulations governing
such plan, including, without limitation, ERISA and the Code,
except for any violations that would not, or insofar as can
reasonably be foreseen, could not give rise to an Iowa-Illinois
Material Adverse Effect. Except as set forth in Section 5.10(c)
of the Iowa-Illinois Disclosure Schedule, each Iowa-Illinois
Benefit Plan intended to provide for the deferral of income or
the reduction of salary or other compensation is effective to
provide such deferral or reduction.
(d) Liabilities. Except with respect to the Iowa-Illinois
Severance Plan, the Iowa-Illinois Supplemental Retirement Plan
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for Designated Officers, the Iowa-Illinois Key Employee Sustained
Performance Plan, the Iowa-Illinois Compensation Deferral Plan
for Designated Officers and the Iowa-Illinois Compensation
Deferral Plan for Key Executives, there are no actions, suits or
claims pending or, to the knowledge of Iowa-Illinois, threatened
(other than routine claims for benefits) and no event has
occurred with respect to the Plans individually and in the
aggregate, and, to the knowledge of Iowa-Illinois and any of its
subsidiaries, as of the date hereof there exists no condition or
set of circumstances, that could subject Iowa-Illinois or any of
its subsidiaries to any liability arising under the Code, ERISA
or any other applicable law (including, without limitation, any
liability of any kind whatsoever, whether direct or indirect,
contingent, inchoate or otherwise, to any such plan or the PBGC),
or under any indemnity agreement to which Iowa-Illinois or any of
its subsidiaries is subject, which liability, excluding liability
for benefit claims and funding obligations payable in the
ordinary course, would have, or insofar as reasonably can be
foreseen, could have, an Iowa-Illinois Material Adverse Effect.
(e) Welfare Plans. Except as set forth in Section 5.10(e)
of the Iowa-Illinois Disclosure Schedule, none of the Iowa-
Illinois Benefit Plans that are "welfare plans," within the
meaning of Section 3(1) of ERISA, provides for any benefits
payable to or on behalf of any employee or director after
termination of employment or service, as the case may be, other
than elective continuation required pursuant to Code Section
4980B or coverage which expires at the end of the calendar month
following such event, and each such plan that is a "group health
plan" (as defined in Code Section 4980B(g)) has been operated in
compliance with Code Section 4980B at all times, except for any
non-compliance that would not, or insofar as reasonably can be
determined could not, give rise to an Iowa-Illinois Material
Adverse Effect.
(f) Documents Made Available. Iowa-Illinois has made
available to Resources a true and correct copy of each collective
bargaining agreement to which Iowa-Illinois or any of its
subsidiaries is a party or under which Iowa-Illinois or any of
its subsidiaries has obligations, and with respect to each Iowa-
Illinois Benefit Plan, to the extent applicable (i) such plan and
summary plan description (including all amendments to each such
document), (ii) the most recent annual report filed with the IRS,
(iii) each related trust agreement, insurance contract, service
provider or investment management agreement (including all
amendments to each such document), (iv) the most recent
determination of the IRS with respect to the qualified status of
such plan, (v) the most recent actuarial report or valuation and
(vi) all material employee communications.
(g) Payments Resulting from Mergers. Except as set forth
in Section 5.10(g) of the Iowa-Illinois Disclosure Schedule, (i)
the announcement or consummation of any transaction contemplated
by this Agreement will not (either alone or upon the occurrence
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of any additional or further acts or events) result in any (A)
payment (whether of severance pay or otherwise) becoming due from
Iowa-Illinois or any of its subsidiaries to any officer,
employee, former employee or director thereof or to the trustee
under any "rabbi trust" or similar arrangement that would not
have been paid without regard to such announcement or
consummation or (B) benefit established or becoming accelerated,
vested or payable under any Iowa-Illinois Benefit Plan and (ii)
neither Iowa-Illinois nor any of its subsidiaries is a party to
(A) any management, employment, deferred compensation, severance
(including any payment, right or benefit resulting from a change
in control), bonus or other contract for personal services with
any officer, director or employee, (B) any consulting contract
with any person who prior to entering into such contract was a
director or officer of Iowa-Illinois or any of its subsidiaries
or (C) any material plan, agreement, arrangement or understanding
similar to any of the foregoing.
(h) Labor Agreements. As of the date hereof, except as set
forth in Section 5.10(h) of the Iowa-Illinois Disclosure
Schedule, neither Iowa-Illinois nor any of its subsidiaries is a
party to any collective bargaining agreement or other labor
agreement with any union or labor organization. To the knowledge
of Iowa-Illinois and any of its subsidiaries, as of the date
hereof, except as set forth in Section 5.10(h) of the
Iowa-Illinois Disclosure Statement, there is no current union
representation question involving employees of Iowa-Illinois or
any of its subsidiaries, nor does Iowa-Illinois know of any
activity or proceeding of any labor organization (or
representative thereof) or employee group to organize any such
employees. Except as disclosed in the Iowa-Illinois SEC Reports
or in Section 5.10(h) of the Iowa-Illinois Disclosure Schedule,
(i) there is no unfair labor practice, employment discrimination
or other complaint against Iowa-Illinois or any of its
subsidiaries pending, or, to the knowledge of Iowa-Illinois or
any of its subsidiaries, threatened, which has or reasonably may
be expected by Iowa-Illinois or any of its subsidiaries to have
an Iowa-Illinois Material Adverse Effect, (ii) there is no
strike, dispute, slowdown, work stoppage or lockout or other
significant labor controversy, pending, or, to the knowledge of
Iowa-Illinois or any of its subsidiaries, threatened, against or
involving Iowa-Illinois or any of its subsidiaries which has or,
insofar as reasonably can be foreseen, could have, an
Iowa-Illinois Material Adverse Effect and (iii) there is no
proceeding, claim, suit, action or governmental investigation
pending or, to the knowledge of Iowa-Illinois or any of its
subsidiaries, threatened, in respect of which any director,
officer, employee or agent of Iowa-Illinois or any of its
subsidiaries is or may be entitled to claim indemnification from
Iowa-Illinois or any of its subsidiaries pursuant to their
respective charters or by-laws. Except as set forth in Section
5.10(h) of the Iowa-Illinois Disclosure Schedule, Iowa-Illinois
and its subsidiaries have, to the knowledge of Iowa-Illinois and
its subsidiaries, complied in all material respects with all laws
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relating to the employment of labor, including without limitation
any provisions thereof relating to wages, hours, collective
bargaining, and the payment of social security and similar taxes,
and no person has, to the knowledge of Iowa-Illinois or any of
its subsidiaries, asserted that Iowa-Illinois or any of its
subsidiaries is liable in any material amount for any arrears of
wages or any taxes or penalties for failure to comply with any of
the foregoing.
SECTION 5.11 Environmental Protection.
(a) Compliance. Except as set forth in Section 5.11(a) of
the Iowa-Illinois Disclosure Schedule, Iowa-Illinois and each of
its subsidiaries is in compliance with all applicable
Environmental Laws, except where the failure to be in compliance
would not have an Iowa-Illinois Material Adverse Effect. Except
as set forth in Section 5.11(a) of the Iowa-Illinois Disclosure
Schedule, neither Iowa-Illinois nor any of its subsidiaries has
received any communication (written or oral) from any person or
Governmental Authority, that alleges that Iowa-Illinois or any of
its subsidiaries is not in such compliance with applicable
Environmental Laws, except where the failure to be in compliance
would not have an Iowa-Illinois Material Adverse Effect.
(b) Environmental Permits. Except as set forth in Section
5.11(b) of the Iowa-Illinois Disclosure Schedule, Iowa-Illinois
and each of its subsidiaries has obtained or has applied for all
Environmental Permits necessary for the construction of its
facilities or the conduct of its operations, and all such permits
are in good standing or, where applicable, a renewal application
has been timely filed and is pending agency approval, and Iowa-
Illinois and its subsidiaries are in material compliance with all
terms and conditions of the Environmental Permits, except where
the failure to obtain or be in compliance with the Environmental
Permit would not have an Iowa-Illinois Material Adverse Effect.
(c) Environmental Claims. Except as set forth in Section
5.11(c) of the Iowa-Illinois Disclosure Schedule, to the best
knowledge of Iowa-Illinois and each of its subsidiaries upon
diligent review, there is no Environmental Claim pending or
threatened (i) against Iowa-Illinois or any of its subsidiaries
or any of their joint ventures, (ii) against any person or entity
whose liability for any Environmental Claim Iowa-Illinois or any
of its subsidiaries or any of their joint ventures has or may
have retained or assumed either contractually or by operation of
law or (iii) against any real or personal property or operations
which Iowa-Illinois or any of its subsidiaries or any of their
joint ventures owns, leases or manages, in whole or in part,
which if adversely determined, would have in the aggregate an
Iowa-Illinois Material Adverse Effect.
(d) Releases. Except as set forth in Section 5.11(c) of
the Iowa-Illinois Disclosure Schedule or Section 5.11(d) of the
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Iowa-Illinois Disclosure Schedule, Iowa-Illinois and each of its
subsidiaries has no knowledge of any Releases of any Hazardous
Material that would be reasonably likely to form the basis of any
Environmental Claim against Iowa-Illinois or any of its
subsidiaries or any of their joint ventures, or against any
person or entity whose liability for any Environmental Claim
Iowa-Illinois or any of its subsidiaries or any of their joint
ventures has or may have retained or assumed either contractually
or by operation of law, except for Releases of Hazardous
Materials, the liability for which would not have, in the
aggregate, an Iowa-Illinois Material Adverse Effect.
(e) Predecessors. Except as set forth in Section 5.11(e)
of the Iowa-Illinois Disclosure Schedule, neither Iowa-Illinois
nor any of its subsidiaries has knowledge, with respect to any
predecessor of Iowa-Illinois or any of its subsidiaries or any of
their joint ventures, of any Environmental Claim pending or
threatened, or of any Release of Hazardous Materials that would
be reasonably likely to form the basis of any Environmental
Claim, which would have, or which Iowa-Illinois or any of its
subsidiaries reasonably believes would have, an Iowa-Illinois
Material Adverse Effect.
(f) Disclosure. Iowa-Illinois has disclosed to Resources
all material facts which Iowa-Illinois reasonably believes form
the basis of an Iowa-Illinois Material Adverse Effect arising
from (i) the cost of Iowa-Illinois pollution control equipment
(including, without limitation, upgrades and other modifications
to existing equipment) currently required or known to be required
in the future; (ii) current Iowa-Illinois remediation costs or
Iowa-Illinois remediation costs known to be required in the
future; or (iii) any other environmental matter affecting Iowa-
Illinois which would have, or which Iowa-Illinois or any of its
subsidiaries reasonably believes would have, an Iowa-Illinois
Material Adverse Effect.
SECTION 5.12 Regulation as a Utility. Iowa-Illinois is
regulated as a public utility in the States of Iowa and Illinois
and in no other state. Neither Iowa-Illinois nor any "subsidiary
company" or "affiliate" of Iowa-Illinois 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. Iowa-Illinois is not a holding company under
the 1935 Act.
SECTION 5.13 Vote Required. The approval by the holders
of two-thirds of the votes entitled to be cast by all holders of
outstanding shares of (i) Iowa-Illinois Preferred Stock, voting
as a single class, (ii) Iowa-Illinois Preference Stock, voting as
a single class, (iii) Iowa-Illinois Common Stock, voting as a
single class, and (iv) Iowa-Illinois Preferred Stock, Iowa-
Illinois Preference Stock and Iowa-Illinois Common Stock, voting
together as a single class (collectively, "Iowa-Illinois
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Shareholders' Approval") are the only votes of holders of any
class or series of the capital stock of Iowa-Illinois required to
approve this Agreement and the transactions contemplated hereby.
SECTION 5.14 Accounting Matters. Neither Iowa-Illinois
nor, to its knowledge, any of its affiliates has taken or agreed
to take any action that would prevent the Company from accounting
for the Merger as a pooling of interests in accordance with GAAP
and applicable SEC regulations.
SECTION 5.15 Opinion of Financial Advisor. Iowa-Illinois
has received the opinion of Dillon, Read & Co. Inc. on July 26,
1994, to the effect that, as of July 26, 1994, the Iowa-Illinois
Conversion Ratio and consideration to be received by the holders
of the Iowa-Illinois Common Stock is fair from a financial point
of view to the holders of Iowa-Illinois Common Stock.
SECTION 5.16 Insurance. Except as set forth on Section
5.16 of the Iowa-Illinois Disclosure Schedule, Iowa-Illinois and
each of its subsidiaries is, and has been continuously since
January 1, 1989, insured with financially responsible insurers in
such amounts and against such risks and losses as are customary
for companies conducting the business as conducted by Iowa-
Illinois and its subsidiaries during such time period. Except as
set forth on Schedule 5.16 of the Iowa-Illinois Disclosure
Schedule, neither Iowa-Illinois nor any of its subsidiaries has
received any notice of cancellation or termination with respect
to any material insurance policy of Iowa-Illinois or any of its
subsidiaries. The insurance policies of Iowa-Illinois and each
of its subsidiaries are valid and enforceable policies.
SECTION 5.17 Ownership of Resources Common Stock. Iowa-
Illinois does not "beneficially own" (as such term is defined in
Rule 13d-3 under the Exchange Act) any shares of Resources Common
Stock.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.1 Covenants of the Parties. From and after the
date hereof, and prior to the Effective Time or earlier
termination of this Agreement, Resources and Iowa-Illinois each
agrees as to itself and its subsidiaries, except as expressly
contemplated or permitted in this Agreement, or to the extent the
other parties hereto shall otherwise consent in writing:
(a) Ordinary Course of Business. Each party hereto shall,
and shall cause its respective subsidiaries to, carry on their
respective businesses in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted and use
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all commercially reasonable efforts to preserve intact their
present business organizations and goodwill, preserve the
goodwill and relationships with customers, suppliers and others
having business dealings with them and, subject to prudent
management of workforce needs and ongoing or planned programs
relating to downsizing, re-engineering and similar matters, keep
available the services of their present officers and employees to
the end that their goodwill and ongoing businesses shall not be
impaired in any material respect at the Effective Time.
(b) Dividends. No party shall, nor shall any party permit
any of its subsidiaries to: (i) declare or pay any dividends on
or make other distributions in respect of any of their capital
stock other than (A) to such party or its wholly-owned subsid-
iaries, (B) dividends on Midwest Power Common Stock held by
Resources, (C) dividends required to be paid on any series of
Iowa-Illinois Preferred Stock, Iowa-Illinois Preference Stock or
Midwest Power Preferred Stock in accordance with the respective
terms thereof, (D) regular quarterly dividends on Resources
Common Stock with usual record and payment dates not in excess of
100% of the average quarterly dividend for the four quarterly
dividend payments immediately preceding the date hereof with
respect thereto and (E) regular quarterly dividends on
Iowa-Illinois Common Stock with usual record and payment dates
not in excess of 100% of the average quarterly dividend for the
four quarterly dividend payments immediately preceding the date
hereof with respect thereto; (ii) split, combine or reclassify
any of their capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of, or in
substitution for, shares of its capital stock; or (iii) redeem,
repurchase or otherwise acquire any shares of their capital stock
other than redemptions, repurchases and other acquisitions of
shares of capital stock in the ordinary course of business
including, without limitation, repurchases, redemptions and other
acquisitions in connection with employee benefit plans or in
accordance with the terms of securities issued and outstanding on
the date hereof or hereafter issued in accordance with Section
6.1(c).
(c) Issuance of Securities. Except as described on
Schedule 6.1(c) of the Resources and Iowa-Illinois Disclosure
Schedules, no party shall, nor shall any party permit any of its
subsidiaries to, issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any shares of their capital
stock of any class or any securities convertible into or
exchangeable for, or any rights, warrants or options to acquire,
any such shares or convertible or exchangeable securities, other
than (i) the issuance of common stock or stock appreciation or
similar rights, as the case may be, pursuant to (x) the
Iowa-Illinois Dividend Reinvestment and Share Purchase Plan, the
Iowa-Illinois Key Employee Sustained Performance Plan or the
Iowa-Illinois Shareholders Rights Plan, and (y) Resources
Dividend Reinvestment and Stock Purchase Plan, Resources Employee
Stock Purchase Plan, Midwest Power 401(k) Plan for Salaried
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Employees or Midwest Power 401(k) Plan for Bargaining Employees,
in each case consistent in kind and amount with past practice and
in the ordinary course of business under such plans in accordance
with their present terms, (ii) issuances by a wholly-owned
subsidiary of its capital stock to its parent, (iii) issuance and
reservation of the Iowa-Illinois Common Stock pursuant to the
Iowa-Illinois Shareholders Rights Plan, and (iv) issuance and
reservation of Resources Common Stock pursuant to any rights plan
adopted pursuant to Section 6.1(i).
(d) Charter Documents. Except as set forth in Section
6.1(d) of the Resources Disclosure Schedule or the Iowa-Illinois
Disclosure Schedule, no party shall amend or propose to amend its
respective articles of incorporation or by-laws, except as
contemplated herein, in any way adverse to the other party.
(e) Acquisitions. Except (i) as set forth in Section
6.1(e) of the Resources Disclosure Schedule or the Iowa-Illinois
Disclosure Schedule, and (ii) acquisitions not exceeding $15
million in the aggregate in the case of, on the one hand,
Resources and Midwest Power and, on the other hand,
Iowa-Illinois, no party shall, nor shall any party permit any of
its subsidiaries to, acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity
interest in or a substantial portion of the assets of, or by any
other manner, any business or any corporation, partnership,
association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets in each case
which are material, individually or in the aggregate, to such
party and its subsidiaries taken as a whole.
(f) No Dispositions. Except as disclosed on Schedule
6.1(f) to the Resources or Iowa-Illinois Disclosure Schedule and
other than (i) dispositions not exceeding $15 million in the
aggregate, in the case of, on the one hand, Resources and Midwest
Power and, on the other hand, Iowa-Illinois, which dispositions
do not, individually or in the aggregate, have a Resources
Material Adverse Effect or an Iowa-Illinois Material Adverse
Effect, as the case may be, (ii) as may be required by law to
consummate the transactions contemplated hereby or (iii) in the
ordinary course of business consistent with prior practice, no
party shall, nor shall any party permit any of its subsidiaries
to, sell, lease, license, encumber or otherwise dispose of, any
of its assets which are material, individually or in the
aggregate, to such party and its subsidiaries taken as a whole.
(g) Indebtedness. Except as disclosed in Section 6.1(g) of
the Resources Disclosure Schedule and the Iowa-Illinois
Disclosure Schedule and as otherwise contemplated by this
Agreement, no party shall, nor shall any party permit any of its
subsidiaries to, incur or guarantee any indebtedness (including
any debt borrowed or guaranteed or otherwise assumed, including,
without limitation, the issuance of debt securities or warrants
or rights to acquire debt) other than (i) short-term and
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long-term indebtedness and guarantees incurred in the ordinary
course of business consistent with past practice (such as
refinancings, the issuance of commercial paper or the use of
existing credit facilities); (ii) long-term indebtedness not
aggregating more than (x) in the case of Resources and its
subsidiaries, $60 million and (y) in the case of Iowa-Illinois
and its subsidiaries, $60 million.
(h) Rights Plans. Nothing contained herein shall be deemed
to prohibit Resources from adopting a shareholder rights plan,
provided that (i) no such plan shall prohibit the transactions
contemplated hereby, be "triggered" by the transactions
contemplated hereby, or otherwise have an Iowa-Illinois Material
Adverse Effect or a Resources Material Adverse Effect or
materially change the number of outstanding equity securities of
Resources at the Effective Time and (ii) any such rights plan
shall provide that any rights or other securities issued
thereunder or pursuant thereto shall, at the Effective Time and
without further action by any of the parties or any affiliates
thereof, be redeemed at an aggregate redemption price not in
excess of $600,000 and shall thereafter not be outstanding. If
any such rights plan is adopted, nothing herein shall be deemed
to prohibit Resources from redeeming the rights issued
thereunder.
(i) Compensation, Benefits. Except as disclosed in Section
6.1(i) of the Resources Disclosure Schedule and Iowa-Illinois
Disclosure Schedule, no party shall, nor shall any party permit
any of its subsidiaries to, (i) enter into, adopt or amend
(except as may be required by applicable law), or increase the
amount or accelerate the payment or vesting of any benefit or
amount payable under, any employee benefit plan or other
contract, agreement, commitment, arrangement, plan or policy
maintained by, contributed to or entered into by such party or
any of its subsidiaries, or increase, or enter into any contract,
agreement, commitment or arrangement to increase in any manner,
the compensation or fringe benefits, or otherwise to extend,
expand or enhance the engagement, employment or any related
rights, of any director, officer or other employee of such party
or any of its subsidiaries, except pursuant to binding legal
commitments and except for normal or promotional increases in the
ordinary course of business consistent with past practice that,
in the aggregate, do not result in a material increase in
benefits or compensation expense to such party or any of its
subsidiaries or (ii) enter into or amend any employment,
severance, special pay arrangement with respect to termination of
employment or other similar contract, agreement or arrangement
with any director or officer other than in the ordinary course of
business consistent with past practice.
(j) 1935 Act. No party shall, nor shall any party permit
any of its subsidiaries to, except as required or contemplated by
this Agreement, engage in any activities which would cause a
change in its status, or that of its subsidiaries, under the 1935
Act, or that would impair the ability of Resources or Iowa-
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Illinois, respectively, to claim an exemption as of right under
Rule 2 under the 1935 Act.
(k) Accounting. No party shall, nor shall any party permit
any of its subsidiaries to, make any changes in their accounting
methods, except as required by law, rule, regulation or GAAP.
(l) Pooling. No party shall, nor shall any party permit
any of its subsidiaries to, take any actions which would, or
would be reasonably likely to, prevent the Company from
accounting for the Merger as a pooling of interests in accordance
with GAAP and applicable SEC regulations.
(m) Tax-Free Status. No party shall, nor shall any party
permit any of its subsidiaries to, take any actions which would,
or would be reasonably likely to, adversely affect the status of
the Merger as a reorganization under Code Section 368.
(n) Cooperation, Notification. Each party shall: (i)
confer on a regular and frequent basis with one or more repre-
sentatives of each other party to discuss the general status of
its ongoing operations; (ii) promptly notify each other party of
any significant changes in its business, properties, assets,
condition (financial or other) or results of operations; (iii)
advise each other party of any change or event which has had or,
insofar as reasonably can be foreseen, is reasonably likely to
result in, a Resources Material Adverse Effect or an
Iowa-Illinois Material Adverse Effect, as the case may be; and
(iv) promptly provide each other party with copies of all filings
made by such party or any of its subsidiaries with any state or
federal court, administrative agency, commission or other
Governmental Authority in connection with this Agreement and the
transactions contemplated hereby.
(o) Rate Matters. Other than currently pending rate
filings, each party shall, and shall cause its subsidiaries to,
discuss with each other party any changes in its or its
subsidiaries' regulated rates or charges (other than pass-through
fuel and gas rates or charges), standards of service or
accounting from those in effect on the date hereof and consult
with the other parties prior to making any filing (or any
amendment thereto), or effecting any agreement, commitment,
arrangement or consent, whether written or oral, formal or
informal, with respect thereto, and no party will make any filing
to change its rates on file with the public utility commission of
any state or FERC that would have a material adverse effect on
the benefits associated with the business combination provided
herein.
(p) Third-Party Consents. Resources shall, and shall cause
its subsidiaries to, use all commercially reasonable efforts to
obtain all Resources Required Consents. Resources shall promptly
notify Iowa-Illinois of any failure or anticipated failure to
obtain any such consents and, if requested by Iowa-Illinois,
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shall provide copies of all Resources Required Consents obtained
by Resources to Iowa-Illinois. Iowa-Illinois shall, and shall
cause its subsidiaries to, use all commercially reasonable
efforts to obtain all Iowa-Illinois Required Consents.
Iowa-Illinois shall promptly notify Resources of any failure or
anticipated failure to obtain any such consents and, if requested
by Resources, shall provide copies of all Iowa-Illinois Required
Consents obtained by Iowa-Illinois to Resources.
(q) No Breach, Etc. No party shall, nor shall any party
permit any of its subsidiaries to, take any action that would or
is reasonably likely to result in a material breach of any
provision of this Agreement or in any of its representations and
warranties set forth in this Agreement being untrue on and as of
the Closing Date.
(r) Tax-Exempt Status. No party shall, nor shall any party
permit any subsidiary to, take any action that would likely
jeopardize the qualification of the outstanding revenue bonds
issued for the benefit of Iowa-Illinois or for the benefit of
Midwest Power which qualify on the date hereof under Code Section
142(a) as "exempt facility bonds" or as tax-exempt industrial
development bonds under Section 103(b)(4) of the Internal Revenue
Code of 1954, as amended prior to the Tax Reform Act of 1986.
(s) Transition Management. The parties shall create two
special transition management task forces ("Task Forces"), a
"Diversified Industries Task Force" and a "Corporate/Utility Task
Force". The composition of the Task Forces shall be as indicated
on Exhibit D attached hereto. The Task Forces shall examine
various alternatives regarding the manner in which to best
organize and manage the business of the Company after the
Effective Time. Don Heppermann will manage and be responsible
for the day-to-day activities and operations of the Diversified
Industries Task Force and Richard Engle shall manage and be
responsible for the day-to-day activities and operations of the
Corporate/Utility Task Force.
(t) Insurance. Each party shall, and shall cause its
subsidiaries to, maintain with financially responsible insurance
companies insurance in such amounts and against such risks and
losses as are customary for companies engaged in the electric and
gas utility industry and employing methods of generating electric
power and fuel sources similar to those methods employed and
fuels used by such party or such party's subsidiaries.
(u) Permits. Each party shall, and shall cause its
subsidiaries to, use reasonable efforts to maintain in effect all
existing Permits pursuant to which such party or such party's
subsidiaries operate.
(v) Certain Information Relating to Commercial and
Industrial Customers. No party shall, nor shall any party permit
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any of its subsidiaries to, use any Evaluation Material (as
defined in the Confidentiality and Standstill Agreement,
effective June 5, 1994, between Resources and Iowa-Illinois
("Confidentiality Agreement")) in connection with any
solicitation, inquiry, proposal, arrangement, understanding or
agreement with any person relating to the provision of electric
or gas utility service by Iowa-Illinois or any of its
subsidiaries, on the one hand, or Resources or any of its
subsidiaries, on the other hand, to commercial and industrial
customers in the service territory of the other party.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.1 Access to Information. Upon reasonable
notice, each party shall, and shall cause its subsidiaries to,
afford to the officers, directors, employees, accountants,
counsel, investment bankers, financial advisors and other
representatives of the other (collectively, "Representatives")
reasonable access, during normal business hours throughout the
period prior to the Effective Time, to all of its properties,
books, contracts, commitments, forecasts, plans and records
(including, but not limited to, Tax Returns) and, during such
period, each party shall, and shall cause its subsidiaries to,
furnish promptly to the other (i) a copy of each report, schedule
and other document filed or received by it or any of its
subsidiaries pursuant to the requirements of federal or state
securities laws or filed with the SEC, the FERC, the public
utility commission of any State, the Nuclear Regulatory
Commission, the Department of Justice, the Federal Trade
Commission, or any other federal or state regulatory agency or
commission, and (ii) all information concerning themselves, their
subsidiaries, directors, officers and shareholders and such other
matters as may be reasonably requested by the other party in
connection with any filings, applications or approvals required
or contemplated by this Agreement. Each party shall, and shall
cause its subsidiaries and Representatives to, hold in strict
confidence all documents and information concerning the other
furnished to it in connection with the transactions contemplated
by this Agreement in accordance with the Confidentiality
Agreement.
SECTION 7.2 Joint Proxy Statement and Registration
Statement.
(a) Preparation and Filing. The parties will prepare and
file with the SEC as soon as reasonably practicable after the
date hereof the Registration Statement and the Joint Proxy
Statement (together, the "Joint Proxy/Registration Statement").
The parties hereto shall each use reasonable efforts to cause the
Registration Statement to be declared effective under the
Securities Act as promptly as practicable after such filing. The
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Company shall also take such action as may be reasonably required
to cause the shares of the Company Class I Preferred Stock,
Company Class M Preferred Stock, Company Preference Stock and the
Company Common Stock issuable in connection with the Merger to be
registered or to obtain an exemption from registration under
applicable state "blue sky" or securities laws; provided,
however, that the Company shall not be required to register or
qualify as a foreign corporation or to take other action which
would subject it to service of process in any jurisdiction where
it will not be, following the Merger, so subject. Each of the
parties hereto shall furnish all information concerning itself
which is required or customary for inclusion in the Joint
Proxy/Registration Statement. The Company shall use its best
efforts to cause the shares of the Company Common Stock issuable
in the Merger to be approved for listing on the NYSE upon
official notice of issuance. The information provided by or on
behalf of any party hereto for use in the Joint
Proxy/Registration Statement shall be true and correct in all
material respects without omission of any material fact which is
required to make such information not false or misleading. No
representation, covenant or agreement is made by any party hereto
with respect to information supplied by any other party for
inclusion in the Joint Proxy/Registration Statement.
(b) Letter of Accountants for Iowa-Illinois. Iowa-Illinois
shall use best efforts to cause to be delivered to Resources a
letter of Deloitte & Touche, dated a date within two business
days before the date of the Joint Proxy/Registration Statement,
and addressed to Resources, in form and substance reasonably
satisfactory to Resources and customary in scope and substance
for "cold comfort" letters delivered by independent public
accountants in connection with registration statements on Form
S-4.
(c) Letter of Accountants for Resources. Resources shall
use best efforts to cause to be delivered to Iowa-Illinois a
letter of Arthur Andersen & Co., dated a date within two business
days before the date of the Joint Proxy/Registration Statement,
and addressed to Iowa-Illinois, in form and substance reasonably
satisfactory to Iowa-Illinois and customary in scope and
substance for "cold comfort" letters delivered by independent
public accountants in connection with registration statements on
Form S-4.
(d) Fairness Opinions. It shall be a condition to the
mailing of the Joint Proxy Statement to the shareholders of Iowa-
Illinois, Midwest Power and Resources that (i) Iowa-Illinois
shall have received an opinion from Dillon, Read & Co. Inc.,
dated the date of the Joint Proxy Statement, to the effect that,
as of the date thereof, the Iowa-Illinois Conversion Ratio and
the consideration to be received by the holders of Iowa-Illinois
Common Stock is fair from a financial point of view to the
holders of Iowa-Illinois Common Stock and (ii) Resources shall
have received an opinion from PaineWebber Incorporated, dated the
date of the Joint Proxy Statement, to the effect that, as of the
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date thereof, the Resources Conversion Ratio and the
consideration to be received by the holders of Resources Common
Stock is fair from a financial point of view to the holders of
Resources Common Stock.
SECTION 7.3 Regulatory Approvals and Other Matters.
(a) HSR Filings. Each party hereto shall file or cause to
be filed with the Federal Trade Commission and the Department of
Justice any notifications required to be filed under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
("HSR Act"), and the rules and regulations promulgated thereunder
with respect to the transactions contemplated hereby. Such
parties will use all commercially reasonable efforts to make such
filings promptly and to respond promptly to any requests for
additional information made by either of such Governmental
Authorities.
(b) Other Approvals. Each party hereto shall cooperate and
use its best efforts to promptly prepare and file all necessary
documentation, to effect all necessary applications, notices,
petitions, filings and other documents, and to use all
commercially reasonable efforts to obtain all necessary Permits,
consents, approvals and authorizations of all Governmental
Authorities and all other persons necessary or advisable to
consummate the transactions contemplated by this Agreement,
including, without limitation, the Iowa-Illinois Required
Statutory Approvals, the Iowa-Illinois Required Consents, the
Resources Required Statutory Approvals and the Resources Required
Consents. Iowa-Illinois shall have the right to review and
approve in advance all characterizations of the information
relating to Iowa-Illinois, on the one hand, and Resources shall
have the right to review and approve in advance all
characterizations of the information relating to Resources and
Midwest Power, on the other hand, in either case, which appear in
any filing made in connection with the transactions contemplated
by this Agreement or the Merger. Iowa-Illinois, Midwest Power
and Resources agree that they will consult with each other with
respect to the obtaining of all such necessary or advisable
permits, consents, approvals and authorizations of Governmental
Authorities.
SECTION 7.4 Shareholder Approval.
(a) Approval of Resources Shareholders. Resources shall,
as soon as reasonably practicable after the date hereof, (i) take
all steps necessary duly to call, give notice of, convene and
hold a special meeting of its shareholders ("Resources Special
Meeting") for the purpose of securing the Resources Shareholders'
Approval, (ii) distribute to its shareholders the Joint Proxy
Statement in accordance with applicable federal and state law and
with its Articles of Incorporation and by-laws, (iii) subject to
the fiduciary duties of the Board of Directors of Resources,
recommend to its shareholders the approval of this Agreement, and
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(iv) cooperate and consult with Iowa-Illinois with respect to
each of the foregoing matters.
(b) Approval of Iowa-Illinois Shareholders. Iowa-Illinois
shall, as soon as reasonably practicable after the date hereof,
(i) take all steps necessary to call, give notice of, convene and
hold a special meeting of its shareholders ("Iowa-Illinois
Special Meeting") for the purpose of securing the Iowa-Illinois
Shareholders' Approval, (ii) distribute to its shareholders the
Joint Proxy Statement in accordance with applicable federal and
state law and its Articles of Incorporation and by-laws, (iii)
subject to the fiduciary duties of the Board of Directors of
Iowa-Illinois, recommend to its shareholders the approval of this
Agreement and (iv) cooperate and consult with Resources with
respect to each of the foregoing matters.
(c) Approval of Midwest Power Shareholders. Midwest Power
shall, as soon as reasonably practicable after the date hereof,
(i) take all steps necessary to call, give notice of, convene and
hold a special meeting of its shareholders ("Midwest Power
Special Meeting") for the purpose of securing the Midwest Power
Shareholders' Approval, (ii) distribute to its shareholders the
Joint Proxy Statement in accordance with applicable federal and
state law and its Articles of Incorporation and by-laws, (iii)
subject to the fiduciary duties of the Board of Directors of
Midwest Power, recommend to its shareholders the approval of this
Agreement and (iv) cooperate and consult with Iowa-Illinois with
respect to each of the foregoing matters.
(d) Meeting Date. The Resources Special Meeting for the
purpose of securing the Resources Shareholders' approval, the
Iowa-Illinois Special Meeting for the purpose of securing the
Iowa-Illinois Shareholders' Approval, and the Midwest Power
Special Meeting for the purpose of securing the Midwest Power
Shareholders' Approval, shall be held on or before such date or
dates as Resources and Iowa-Illinois shall jointly determine.
SECTION 7.5 Directors' and Officers' Indemnification.
(a) Indemnification. From and after the Effective Time,
the Company shall, to the fullest extent not prohibited by
applicable law, indemnify, defend and hold harmless the present
and former officers and directors of Iowa-Illinois, Resources and
Midwest Power (each an "Indemnified Party" and collectively, the
"Indemnified Parties") against all losses, expenses (including
reasonable attorney's fees), claims, damages or liabilities or,
subject to the proviso of the next succeeding sentence, amounts
paid in settlement arising out of actions or omissions occurring
at or prior to the Effective Time that are in whole or in part
based on, or arising out of the fact that such person is or was a
director or officer of Iowa-Illinois, Midwest Power or Resources
arising out of or pertaining to the transactions contemplated by
this Agreement. In the event of any such loss, expense, claim,
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damage or liability (whether or not arising before the Effective
Time), (i) the Company shall pay the reasonable fees and expenses
of counsel selected by the Indemnified Parties, which counsel
shall be reasonably satisfactory to the Company (which consent
shall not be unreasonably withheld), promptly after statements
therefor are received and otherwise advance to such Indemnified
Party upon request reimbursement of documented expenses
reasonably incurred, in either case to the extent not prohibited
by the Iowa Act or the Illinois Act, (ii) the Company will
cooperate in the defense of any such matter and (iii) any
determination required to be made with respect to whether an
Indemnified Party's conduct complies with the standards set forth
under the Iowa Act or the Illinois Act and the Company's Articles
of Incorporation or by-Laws shall be made by independent counsel
mutually acceptable to the Company and the Indemnified Party;
provided, however, that the Company shall not be liable for any
settlement effected without its written consent (which consent
shall not be unreasonably withheld). The Indemnified Parties as
a group may retain only one law firm with respect to each related
matter except to the extent there is, in the sole opinion of
counsel to an Indemnified Party, under applicable standards of
professional conduct, a conflict on any significant issue between
positions of any two or more Indemnified Parties.
(b) Insurance. For a period of six (6) years after the
Effective Time, the Company shall cause to be maintained in
effect the policies of directors' and officers' liability
insurance maintained by Iowa-Illinois, Resources and Midwest
Power; provided that the Company may substitute therefor policies
of at least the same coverage containing terms that are no less
advantageous with respect to matters occurring prior to the
Effective Time to the extent such liability insurance can be
maintained annually at a cost to the Company not greater than 150
percent of the respective current annual premiums for their
directors' and officers' liability insurance; provided, further,
that if such insurance cannot be so maintained or obtained at
such cost, the Company shall maintain or obtain as much of such
insurance for each of Iowa-Illinois, Resources and Midwest Power
as can be so maintained or obtained at a cost equal to 150
percent of the respective current annual premiums of each of
Iowa-Illinois, Midwest Power and Resources for their directors'
and officers' liability insurance.
(c) Successors. In the event that the Company or any of
its successors or assigns (i) consolidates with or merges into
any other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii)
transfers all or substantially all of its properties and assets
to any person, then and in either such case, proper provision
shall be made so that the successors and assigns of the Company
shall assume the obligations set forth in this Section 7.5.
(d) Survival of Indemnification. To the fullest extent not
prohibited by law, from and after the Effective Time, all rights
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to indemnification as of the date hereof in favor of the
employees, agents, directors or officers of Iowa-Illinois and its
subsidiaries and Resources and its subsidiaries with respect to
their respective activities as such prior to the Effective Time,
as provided in their respective articles of incorporation or by-
laws, in effect on the date thereof or otherwise in effect on the
date hereof, shall survive the Merger and shall continue in full
force and effect for a period of not less than six (6) years from
the Effective Time.
SECTION 7.6 Disclosure Schedules.
(a) Within ten days following the date of execution of this
Agreement, (i) Resources shall deliver to Iowa-Illinois a
schedule ("Resources Disclosure Schedule"), which shall be
accompanied by a certificate signed by the chief financial
officer of Resources stating that the Resources Disclosure
Schedule is being delivered pursuant to this Section 7.6(a)(i)
and (ii) Iowa-Illinois shall deliver to Resources a schedule
("Iowa-Illinois Disclosure Schedule"), which shall be accompanied
by a certificate signed by the chief financial officer of
Iowa-Illinois stating that the Iowa-Illinois Disclosure Schedule
is being delivered pursuant to this Section 7.6(a)(ii). The
Resources Disclosure Schedule and the Iowa-Illinois Disclosure
Schedule are collectively referred to herein as the "Disclosure
Schedules." The Disclosure Schedules, when so delivered, shall
be deemed to constitute an integral part of this Agreement and to
modify the respective representations, warranties, covenants or
agreements of the parties hereto contained herein to the extent
that such representations, warranties, covenants or agreements
expressly refer to the Disclosure Schedules. Anything to the
contrary contained herein or in the Disclosure Schedules
notwithstanding, any and all statements, representations,
warranties or disclosures set forth in the Disclosure Schedules
shall be deemed to have been made on and as of the date hereof.
(b) For the period of 20 days (or, if extended pursuant to
the following sentence, 40 days) following the date of the execu-
tion of this Agreement (the "Due Diligence Period"), each of
Resources and Iowa-Illinois shall provide the other party and its
representatives access pursuant to Section 7.1 in order for the
other party to complete its due diligence investigation of the
party providing access pursuant to Section 7.1. Upon the
expiration of the Due Diligence Period, either Resources or Iowa-
Illinois may terminate this Agreement pursuant to and in
accordance with Section 9.1(i) (in the case of a termination by
Resources) or Section 9.1(j) (in the case of a termination by
Iowa-Illinois); provided, however, that it is expressly
understood and agreed that, if neither Resources nor
Iowa-Illinois terminates this Agreement pursuant to and in
accordance with Section 9.1(i) or 9.1(j), as the case may be,
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then neither Resources nor Iowa-Illinois may thereafter assert a
failure of the condition set forth in Section 8.2(b) or in
Section 8.3(b), as the case may be, based on any information
provided to it during the Due Diligence Period. Either
Iowa-Illinois or Resources may extend the Due Diligence Period
until 40 days after the date of execution hereof by delivering
written notice to Resources or Iowa-Illinois, as the case may be,
before 5:00 p.m. Central Time on the 20th day following the date
of execution of this Agreement if it determines in good faith
that it will be unable to complete its due diligence
investigation of the other party and its subsidiaries by the
conclusion of such 20th day.
SECTION 7.7 Public Announcements. Subject to each
party's disclosure obligations imposed by law, Midwest Power,
Resources and Iowa-Illinois will cooperate with each other in the
development and distribution of all news releases and other
public information disclosures with respect to this Agreement or
any of the transactions contemplated hereby and shall not issue
any public announcement or statement prior to consultation with
the other party.
SECTION 7.8 Rule 145 Affiliates. Iowa-Illinois and
Resources shall each identify in a letter to the Company all
persons who are, at the Closing Date, "affiliates" of Iowa-
Illinois or of Resources, as the case may be, as such term is
used in Rule 145 under the Securities Act. Iowa-Illinois and
Resources shall each use their best efforts to cause their
respective affiliates to deliver to the Company on or prior to
the Closing Date a written certificate substantially in the form
described in Section 8.2(g) and Section 8.3(g).
SECTION 7.9 No Solicitations. No party hereto shall, and
each such party shall cause its subsidiaries not to, permit any
of its Representatives to, and shall use its best efforts to
cause such persons not to, directly or indirectly: initiate,
solicit or encourage, or take any action to facilitate the making
of any offer or proposal which constitutes or is reasonably
likely to lead to any Takeover Proposal (as defined below), or,
in the event of any unsolicited Takeover Proposal, engage in
negotiations or provide any confidential information or data to
any person relating to any Takeover Proposal. Each party hereto
shall notify the other party orally and in writing of any such
inquiries, offers or proposals (including, without limitation,
the terms and conditions of any such proposal and the identity of
the person making it), within 24 hours of the receipt thereof and
shall give the other party five days' advance notice of any
agreement to be entered into with or any information to be
supplied to any person making such inquiry, offer or proposal in
accordance with the last sentence of this Section 7.9. Each
party hereto shall immediately cease and cause to be terminated
all existing discussions and negotiations, if any, with any
parties conducted heretofore with respect to any Takeover
Proposal. As used in this Section 7.9, "Takeover Proposal" shall
mean any tender or exchange offer, proposal for a merger,
consolidation or other business combination involving Midwest
Power, Resources or Iowa-Illinois, or any proposal or offer to
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acquire in any manner a substantial equity interest in, or a
substantial portion of the assets of Midwest Power, Resources or
Iowa-Illinois, other than pursuant to the transactions
contemplated by this Agreement. Notwithstanding anything in this
Section 7.9 to the contrary, unless the Resources Shareholders'
Approval, the Midwest Power Shareholders' Approval and the
Iowa-Illinois Shareholders' Approval have all been obtained, any
party hereto may, to the extent required by the fiduciary duties
of the Board of Directors of such party under applicable law (as
determined in good faith by the Board of Directors of such party
based on the advice of outside counsel), participate in
discussions or negotiations with, furnish information to, and
afford access to the properties, books and records of such party
and its subsidiaries to any person in connection with a possible
Takeover Proposal with respect to such party by such person.
SECTION 7.10 Expenses. Subject to Section 9.3, all costs
and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses, except that those expenses incurred in
connection with printing the Joint Proxy/Registration Statement,
as well as the filing fee relating thereto, shall be paid 50% by
Resources and 50% by Iowa-Illinois.
SECTION 7.11 Board of Directors.
(a) Initial Composition. The initial number of directors
comprising the Board of Directors of the Company at the Effective
Time shall be nineteen (19) persons, eleven (11) of whom shall be
designated by Resources prior to the Effective Time and eight (8)
of whom shall be designated by Iowa-Illinois prior to the
Effective Time; provided, however, that if prior to the Effective
Time any of such designees shall decline or otherwise be unable
to serve, the party which designated such person shall be
entitled to designate a replacement.
(b) Initial Board Committees. The committees of the Board
of Directors of the Company at the Effective Time shall consist
of an equal number of Resources Designees and Iowa-Illinois
Designees. The initial Board committees and their respective
chair and vice-chair designations shall be as set forth on
Exhibit E.
(c) Composition After Transition. The parties recognize
the desirability of an objective of reducing the size of the
Board of Directors of the Company in an orderly manner, while
preserving the benefits associated with the familiarity of
management, policies, and operations derived from the ratio of
Iowa-Illinois Designees (as defined in Section 10.8) to Resources
Designees (as defined in Section 10.8) established in Section
7.11(a). Toward that objective, the Board of Directors, after
the Effective Time, shall implement a plan to reduce the number
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of outside directors to no more than 14 by June 1, 1997. The
Nominating Committee of the Board shall be responsible for the
initial preparation of the plan. The plan, as implemented, shall
contain at least the following three features:
(i) until June 1, 1997 the mandatory retirement age
of seventy (70) for directors shall be waived to the
extent necessary to maintain the ratio of Iowa-Illinois
Designees to Resources Designees established in Section
7.11(a);
(ii) any nomination of persons for election to the
Board of Directors of the Company or designation of
persons for the filling of vacancies on the Board
(other than vacancies resulting from a reduction in the
size of the Board in accordance with this Section
7.11(c)) shall be effectuated by nominating or
selecting, as the case may be, Iowa-Illinois Designees
or Resources Designees so as to maintain the ratio of
Iowa-Illinois Designees to Resources Designees
established in Section 7.11(a); and
(iii) any reduction in the number of directors prior
to June 1, 1997 shall be accomplished so as to maintain
the ratio of Iowa-Illinois Designees to Resources
Designees established in Section 7.11(a) until June 1,
1997.
SECTION 7.12 Officers. On or prior to the Effective Time,
the Company shall enter into employment agreements ("Employment
Agreements") with Russell Christiansen and Stanley Bright,
respectively, substantially in the form of Exhibits F-1 and F-2,
attached hereto. From and after the Effective Time, pursuant to
the Employment Agreements and the terms hereof, Mr. Christiansen
and Mr. Bright shall hold the respective positions and perform
the duties set forth in Exhibit F-3. The terms and provisions of
the Employment Agreements, this Section 7.12 and Exhibit F-3
shall not be modified prior to December 31, 1999, unless and
until the terms of such modification are approved by (i) Mr.
Christiansen, in the case of a proposed modification to his
Employment Agreement, or Mr. Bright, in the case of a proposed
modification to his Employment Agreement, and (ii) a vote of
sixty-six and two-thirds percent (66-2/3%) of the members of the
Board of Directors of the Company.
SECTION 7.13 Employment Agreements and Workforce Matters.
Certain Employee Agreements. The Company shall after the
Effective Time honor, without modification, all contracts,
agreements, collective bargaining agreements and commitments of
the parties prior to the date hereof which apply to any current
or former employee or current or former director of any of the
parties hereto; provided, however, that this undertaking is not
intended to prevent the Company from enforcing such contracts,
agreements, collective bargaining agreements and commitments in
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accordance with their terms, including, without limitation, any
reserved right to amend, modify, suspend, revoke or terminate any
such contract, agreement, collective bargaining agreement or
commitment.
SECTION 7.14 Severance Plan. At the Effective Time the
Severance Plan attached hereto as Exhibit G shall become
effective.
SECTION 7.15 Post-Merger Operations.
(a) Following the Effective Time, the Company shall
maintain (i) its corporate headquarters, the principal office of
the Chief Executive Officer and the corporate functions (without
limitation) of finance, treasury, secretary, shareholder
services, human resources and general counsel in Des Moines,
Iowa; (ii) the headquarters of the electric division and the
office of the most senior executive of such division in
Davenport, Iowa; and (iii) the headquarters of the gas division
and the office of the most senior executive of such division in
Sioux City, Iowa. This provision shall not be modified prior to
June 1, 1997, unless and until the terms of such modification are
approved by a vote of sixty-six an two-thirds percent (66-2/3%)
of the members of the Board of Directors of the Company.
(b) During the period from the Effective Time until June 1,
1997, the Company's name, as agreed upon by the Resources board
of directors and the Iowa-Illinois board of directors prior to
the Effective Time, shall not be modified unless and until the
terms of such modification are approved by a vote of sixty-six
and two-thirds percent (66-2/3%) of the members of the Board of
Directors of the Company and any required vote of the
shareholders of the Company under applicable law.
ARTICLE VIII
CONDITIONS
SECTION 8.1 Conditions to Each Party's Obligations to Effect
the Merger. The respective obligations of each party to effect
the Merger shall be subject to the satisfaction on or prior to
the Closing Date of the following conditions, except, to the
extent permitted by applicable law, that such conditions may be
waived in writing pursuant to Section 9.5 by the joint action of
the parties hereto:
(a) Shareholder Approvals. The Resources Shareholders'
Approval, the Midwest Power Shareholders' Approval and the Iowa-
Illinois Shareholders' Approval shall have been obtained.
(b) No Injunction. No temporary restraining order or
preliminary or permanent injunction or other order by any federal
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or state court preventing consummation of the Merger shall have
been issued and continuing in effect, and the Merger and the
other transactions contemplated hereby shall not have been
prohibited under any applicable federal or state law or
regulation.
(c) Registration Statement. The Registration Statement
shall have become effective in accordance with the provisions of
the Securities Act, and no stop order suspending such
effectiveness shall have been issued and remain in effect.
(d) Listing of Shares. The shares of Company Common Stock
issuable in the Merger shall have been approved for listing on
the NYSE upon official notice of issuance.
(e) Statutory Approvals. The Iowa-Illinois Required
Statutory Approvals and the Resources Required Statutory
Approvals shall have been obtained at or prior to the Effective
Time, such approvals shall have become Final Orders (as
hereinafter defined) and such Final Orders shall not impose terms
or conditions which, in the aggregate, would have, or insofar as
reasonably can be foreseen, could have, a material adverse effect
on the business, operations, properties, assets, condition
(financial or other), prospects or the results of operations of
Iowa-Illinois as if it were organized as a separate division of
the Company or a material adverse effect on the business,
operations, properties, assets, condition (financial or other),
prospects or the results of operations of Midwest Power as if it
were organized as a separate division of the Company, or which
would be inconsistent with the agreements of the parties
contained herein. A "Final Order" means action by the relevant
regulatory authority which has not been reversed, stayed,
enjoined, set aside, annulled or suspended, with respect to which
any waiting period prescribed by law before the transactions
contemplated hereby may be consummated has expired, and as to
which all conditions to the consummation of such transactions
prescribed by law, regulation or order have been satisfied.
(f) Pooling. Each of Iowa-Illinois and Resources shall
have received a letter of its independent public accountants,
dated the Closing Date, in form and substance reasonably
satisfactory to Iowa-Illinois and Resources, as the case may be,
stating that the Merger will qualify as a pooling of interests
transaction under GAAP and applicable SEC regulations.
(g) All applicable waiting periods under the HSR Act shall
have expired or been terminated.
SECTION 8.2 Conditions to Obligations of Resources and
Midwest Power to Effect the Merger. The obligations of Resources
and Midwest Power to effect the Merger shall be further subject
to the satisfaction, on or prior to the Closing Date, of the
following conditions, except as may be waived by Resources and
Midwest Power in writing pursuant to Section 9.5:
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(a) Performance of Obligations of Iowa-Illinois. Iowa-
Illinois shall have performed in all material respects its
agreements and covenants contained in or contemplated by this
Agreement required to be performed by it at or prior to the
Effective Time.
(b) Representations and Warranties. The representations
and warranties of Iowa-Illinois set forth in this Agreement shall
be true and correct in all material respects (or where any
statement in a representation or warranty expressly includes a
standard of materiality, such statement shall be true and correct
in all respects) as of the date hereof (except to the extent such
representations and warranties speak as of an earlier or later
date) and as of the Closing Date as if made on and as of the
Closing Date, except as otherwise contemplated by this Agreement.
(c) Iowa-Illinois Material Adverse Effect. No
Iowa-Illinois Material Adverse Effect shall have occurred and
there shall exist no fact or circumstance which would, or insofar
as reasonably can be foreseen, could, have an Iowa-Illinois
Material Adverse Effect.
(d) Resources Required Consents. The material Resources
Required Consents shall have been obtained.
(e) Closing Certificate. Midwest Power and Resources shall
have received a certificate on behalf of Iowa-Illinois signed by
the chief executive officer and the chief financial officer of
Iowa-Illinois, dated the Closing Date, to the effect that, to the
best of each such officer's knowledge, the conditions set forth
in Sections 8.2(a), 8.2(b), 8.2(c) and 8.2(d) have been
satisfied.
(f) Tax Opinion. Resources shall have received an opinion
of its special tax counsel, Sidley & Austin, in form and
substance satisfactory to Resources, dated the Effective Time, or
a ruling from the IRS, in form and substance satisfactory to
Resources, to the effect that Resources and Midwest Power and
their respective shareholders (except to the extent any Resources
or Midwest Power shareholders receive cash in the Merger) will
recognize no gain or loss for federal income tax purposes as a
result of consummation of the Merger and in connection with the
delivery of its opinion pursuant to this Section 8.2(f), Sidley &
Austin may request certificates of officers of Resources and
Midwest Power.
(g) Affiliate Certificates. The Company shall have received
a certificate dated the Closing Date from each person who is an
affiliate of Iowa-Illinois to the effect that: (i) such person
has no present plan or intention to transfer, sell or otherwise
dispose of any Company Common Stock such person may receive as a
result of the Merger; (ii) until such time as financial results
covering at least thirty (30) days of post-closing combined
operations of Iowa-Illinois, Resources, Midwest Power and the
Company have been published, such person shall not sell such
Company Common Stock in any transaction, private or public, or in
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any other way reduce such person's risk relative to any Company
Common Stock that such person receives as a result of the Merger;
(iii) any future disposition by such person of any Company Common
Stock such person receives as the result of the Merger will be
accomplished in accordance with Rule 145(d) under the Securities
Act; and (iv) such person agrees that the following legend be
placed upon the certificates evidencing ownership of the Company
Common Stock that such person receives as a result of the Merger:
THESE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER APPLICABLE TO AFFILIATES OF THE ISSUER AS SET FORTH IN
RULES 144 AND 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, HYPOTHECATED, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO THE PROCEDURES DESCRIBED THEREIN.
(h) Fairness Opinion. The fairness opinion letter from
PaineWebber Incorporated to Resources referred to in Section
7.2(d)(ii) shall not, in good faith, have been withdrawn by
PaineWebber Incorporated as of the date it issued such opinion
letter based upon its having obtained information material to its
opinions set forth in such letter, which information was in
existence but unavailable to it at the time it issued such
opinion letter and which, had such existing information been in
its possession at such time, would have caused it not to have
issued such opinion letter.
(i) The Company shall have duly executed and delivered to
Russell Christiansen an employment agreement substantially in the
form of Exhibit F-1 attached hereto, and such agreement shall be
in full force and effect.
SECTION 8.3 Conditions to Obligations of Iowa-Illinois to
Effect the Merger. The obligations of Iowa-Illinois to effect
the Merger shall be further subject to the satisfaction, prior to
the Closing Date, of the following conditions, except as may be
waived by Iowa-Illinois in writing pursuant to Section 9.5:
(a) Performance of Obligations of Resources and Midwest
Power. Each of Resources and Midwest Power shall have performed
in all material respects its agreements and covenants contained
in or contemplated by this Agreement required to be performed by
each of them at or prior to the Effective Time.
(b) Representations and Warranties. The representations
and warranties of each of Resources and Midwest Power set forth
in this Agreement shall be true and correct in all material
respects (or where any statement in a representation and warranty
expressly includes a standard of materiality, such statement
shall be true and correct in all respects) as of the date hereof
(except to the extent such representations and warranties speak
as of an earlier or later date) and as of the Closing Date as if
made on and as of the Closing Date, except as otherwise
contemplated by this Agreement.
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(c) Resources Material Adverse Effect. No Resources
Material Adverse Effect shall have occurred and there shall exist
no fact or circumstance which would, or insofar as reasonably can
be foreseen, could, have a Resources Material Adverse Effect.
(d) Iowa-Illinois Required Consents. The material Iowa-
Illinois Required Consents shall have been obtained.
(e) Closing Certificate. Iowa-Illinois shall have received
a certificate on behalf of Midwest Power and Resources signed by
their respective chief executive officers and chief financial
officers, dated the Closing Date, to the effect that, to the best
of each such officer's knowledge, the conditions set forth in
Sections 8.3(a), 8.3(b), 8.3(c) and 8.3(d) have been satisfied.
(f) Tax Opinion. Iowa-Illinois shall have received an
opinion of its special tax counsel, LeBoeuf, Lamb, Greene &
MacRae, in form and substance satisfactory to Iowa-Illinois,
dated the Effective Time, or a ruling from the IRS, in form and
substance satisfactory to Iowa-Illinois, to the effect that Iowa-
Illinois and its shareholders (except to the extent any Iowa-
Illinois shareholders receive cash in the Merger) will recognize
no gain or loss for federal income tax purposes as a result of
consummation of the Merger and in connection with the delivery of
its opinion pursuant to this Section 8.3(f), LeBoeuf, Lamb,
Greene & MacRae may request certificates of officers of
Iowa-Illinois;
(g) Affiliate Certificates. The Company shall have
received a certificate dated the Closing Date from each person
who is an affiliate of Resources to the effect that: (i) such
person has no present plan or intention to transfer, sell or
otherwise dispose of any Company Common Stock such person may
receive as a result of the Merger; (ii) until such time as
financial results covering at least thirty (30) days of
post-closing combined operations of Iowa-Illinois, Resources,
Midwest Power and the Company have been published, such person
shall not sell such Company Common Stock in any transaction,
private or public, or in any other way reduce such person's risk
relative to any Company Common Stock that such person receives as
a result of the Merger; (iii) any future disposition by such
person of any Company Common Stock such person receives as the
result of the Merger will be accomplished in accordance with Rule
145(d) under the Securities Act; and (iv) such person agrees that
the following legend be placed upon the certificate evidencing
ownership of the Company Common Stock that such person receives
as a result of the Merger:
THESE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER APPLICABLE TO AFFILIATES OF THE ISSUER AS SET FORTH IN
RULES 144 AND 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, HYPOTHECATED, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO THE PROCEDURES DESCRIBED THEREIN.
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(h) Fairness Opinion. The fairness opinion letter from
Dillon, Read & Co. Inc. to Iowa-Illinois referred to in Section
7.2(d)(i) shall not, in good faith, have been withdrawn by
Dillon, Read & Co. Inc. as of the date it issued such opinion
letter based upon its having obtained information material to its
opinion set forth in such letter, which information was in
existence but unavailable to it at the time it issued such
opinion letter and which, had such existing information been in
its possession at such time, would have caused it not to have
issued such opinion letter.
(i) The Company shall have duly executed and delivered to
Stanley Bright an employment agreement substantially in the form
of Exhibit F-2 attached hereto, and such agreement shall be in
full force and effect.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 Termination. This Agreement may be terminated
at any time prior to the Closing Date, whether before or after
approval by the shareholders of the respective parties hereto
contemplated by this Agreement:
(a) by mutual written consent of the Boards of Directors of
Midwest Power, Resources and Iowa-Illinois;
(b) by any party hereto, by written notice to the other, if
the Effective Time shall not have occurred on or before December
31, 1995; provided that such date shall automatically be changed
to June 30, 1996 if on December 31, 1995 the condition set forth
in Section 8.1(e) has not been satisfied or waived and the other
conditions to the consummation of the transactions contemplated
hereby are then capable of being satisfied, and the approvals
required by Section 8.1(e) which have not yet been obtained are
being pursued with diligence; and provided, further, that the
right to terminate this Agreement under this Section 9.1(b) shall
not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or
before such date;
(c) by any party hereto, by written notice to the other
party, if the Iowa-Illinois Shareholders' Approval shall not have
been obtained at a duly held Iowa-Illinois Special Meeting,
including any adjournments thereof; the Resources Shareholders'
Approval shall not have been obtained at a duly held Resources
Special Meeting, including any adjournments thereof; or the
Midwest Power Shareholders' Approval shall not have been obtained
at a duly held Midwest Power Special Meeting, including any
adjournments thereof;
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(d) by any party hereto, if any state or federal law,
order, rule or regulation is adopted or issued, which has the
effect, as supported by the written opinion of outside counsel
for such party, of prohibiting the Merger, or by any party
hereto, if any court of competent jurisdiction in the United
States or any State shall have issued an order, judgment or
decree permanently restraining, enjoining or otherwise
prohibiting the Merger, and such order, judgement or decree shall
have become final and nonappealable;
(e) by Iowa-Illinois, upon two days' prior notice to
Resources, if, as a result of a tender offer by a party other
than Resources or any of its affiliates or any written offer or
proposal with respect to a merger, sale of a material portion of
its assets or other business combination (each, a "Business
Combination") by a party other than Resources or any of its
affiliates, the Board of Directors of Iowa-Illinois determines in
good faith that their fiduciary obligations under applicable law
require that such tender offer or other written offer or proposal
be accepted; provided, however, that (i) the Board of Directors
of Iowa-Illinois shall have been advised in writing by outside
counsel that notwithstanding a binding commitment to consummate
an agreement of the nature of this Agreement entered into in the
proper exercise of their applicable fiduciary duties, such
fiduciary duties would also require the directors to reconsider
such commitment as a result of such tender offer or other written
offer or proposal; and, (ii) prior to any such termination, Iowa-
Illinois shall, and shall cause its respective financial and
legal advisors to, negotiate with Resources to make such
adjustments in the terms and conditions of this Agreement as
would enable Iowa-Illinois to proceed with the transactions
contemplated herein; provided, further, that Iowa-Illinois and
Resources acknowledge and affirm that notwithstanding anything in
this Section 9.1(e) to the contrary, the parties hereto intend
this Agreement to be an exclusive agreement and, accordingly,
nothing in this Agreement is intended to constitute a
solicitation of an offer or proposal for a Business Combination,
it being acknowledged and agreed that any such offer or proposal
would interfere with the strategic advantages and benefits which
the parties expect to derive from the Merger.
(f) by Resources, upon two days' prior notice to Iowa-
Illinois if, as a result of a tender offer by a party other than
Iowa-Illinois or any of its affiliates or any written offer or
proposal with respect to a Business Combination by a party other
than Iowa-Illinois or any of its affiliates, the Board of
Directors of Resources determines in good faith that their
fiduciary obligations under applicable law require that such
tender offer or other written offer or proposal be accepted;
provided, however, that (i) the Board of Directors of Resources
shall have been advised in writing by outside counsel that
notwithstanding a binding commitment to consummate an agreement
of the nature of this Agreement entered into in the proper
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exercise of their applicable fiduciary duties, such fiduciary
duties would also require the directors to reconsider such
commitment as a result of such tender offer or other written
offer or proposal; and (ii) prior to any such termination,
Resources shall, and shall cause its respective financial and
legal advisors to, negotiate with Iowa-Illinois to make such
adjustments in the terms and conditions of this Agreement as
would enable Resources to proceed with the transactions
contemplated herein; provided, further, that Iowa-Illinois and
Resources acknowledge and affirm that notwithstanding anything in
this Section 9.1(f) to the contrary, the parties hereto intend
this Agreement to be an exclusive agreement and, accordingly,
nothing in this Agreement is intended to constitute a
solicitation of an offer or proposal for a Business Combination,
it being acknowledged and agreed that any such offer or proposal
would interfere with the strategic advantages and benefits which
the parties expect to derive from the Merger.
(g) by Iowa-Illinois, by written notice to Resources, if
(i) there shall have been any material breach of any
representation or warranty, or any material breach of any
covenant or agreement of Resources or Midwest Power, hereunder,
and such breach shall not have been remedied within twenty days
after receipt by Resources of notice in writing from
Iowa-Illinois, specifying the nature of such breach and
requesting that it be remedied; or (ii) the Board of Directors of
Resources (A) shall withdraw or modify in any manner adverse to
Iowa-Illinois its approval of this Agreement and the transactions
contemplated hereby or its recommendation to its shareholders
regarding the approval of this Agreement, (B) shall fail to
reaffirm such approval or recommendation upon the request of
Iowa-Illinois, (C) shall approve or recommend any acquisition
by a third party of Resources or a material portion of its assets
or any tender offer for the Resources Common Stock, or (D) shall
resolve to take any of the actions specified in clause (A), (B)
or (C); provided, however, that Iowa-Illinois and Resources
acknowledge and affirm that notwithstanding anything in this
Section 9.1(g)(ii) to the contrary, the parties hereto intend
this Agreement to be an exclusive agreement and, accordingly,
nothing in this Agreement is intended to constitute a
solicitation of an offer or proposal for a Business Combination,
it being acknowledged and agreed that any such offer or proposal
would interfere with the strategic advantages and benefits which
the parties expect to derive from the Merger.
(h) by Resources, by written notice to Iowa-Illinois, if
(i) there shall have been any material breach of any
representation or warranty, or any material breach of any
covenant or agreement of Iowa-Illinois, hereunder, and such
breach shall not have been remedied within twenty days after
receipt by Iowa-Illinois of notice in writing from Resources,
specifying the nature of such breach and requesting that it be
remedied; or (ii) the Board of Directors of Iowa-Illinois (A)
shall withdraw or modify in any manner adverse to Resources its
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approval of this Agreement and the transactions contemplated
hereby or its recommendation to its shareholders regarding the
approval of this Agreement, (B) shall fail to reaffirm such
approval or recommendation upon the request of Resources, (C)
shall approve or recommend any acquisition by a third party of
Iowa-Illinois or a material portion of its assets or any tender
offer for the Iowa-Illinois Common Stock, or (D) shall resolve to
take any of the actions specified in clause (A), (B) or (C);
provided, however, that Iowa-Illinois and Resources acknowledge
and affirm that notwithstanding anything in this Section
9.1(h)(ii) to the contrary, the parties hereto intend this
Agreement to be an exclusive agreement and, accordingly, nothing
in this Agreement is intended to constitute a solicitation of an
offer or proposal for a Business Combination, it being acknowl-
edged and agreed that any such offer or proposal would interfere
with the strategic advantages and benefits which the parties
expect to derive from the Merger.
(i) by Resources by written notice delivered to Iowa-
Illinois prior to 5:00 p.m. Central Time on September 4, 1994, if
Resources reasonably determines that its due diligence investi-
gation of Iowa-Illinois and its subsidiaries uncovered
information or matters which are (i) reasonably likely to have a
material adverse effect on the business, operations, properties,
assets, condition (financial or other), prospects or the results
of operations of Iowa-Illinois as if it were organized as a
separate division of the Company (an "Iowa-Illinois Divisional
Adverse Effect") or a material adverse effect on the business,
operations, properties, assets, condition (financial or other),
prospects or the results of operations of Resources as if it were
organized as a separate division of the Company (a "Resources
Divisional Adverse Effect") or (ii) in the event the Merger is
consummated, reasonably likely to have a material adverse effect
on the holders of Resources Common Stock.
(j) by Iowa-Illinois by written notice delivered to
Resources prior to 5:00 p.m. Central Time on September 4, 1994,
if Iowa-Illinois reasonably determines that its due diligence
investigation of Resources and its subsidiaries uncovered infor-
mation or matters which are (i) reasonably likely to have a
Iowa-Illinois Divisional Adverse Effect or a Resources Divisional
Adverse Effect or (ii) in the event the Merger is consummated,
reasonably likely to have a material adverse effect on the
holders of Iowa-Illinois Common Stock.
SECTION 9.2 Effect of Termination. In the event of
termination of this Agreement by either Resources or
Iowa-Illinois pursuant to Section 9.1, there shall be no
liability on the part of either Iowa-Illinois, Resources or
Midwest Power or their respective officers or directors
hereunder, except Section 7.10 and 9.3 and the agreement
contained in Section 6.1(v) and in the last sentence of Section
7.1 shall survive the termination.
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SECTION 9.3 Termination Fee; Expenses.
(a) Termination Fee. If this Agreement is terminated (i) at
such time that this Agreement is terminable pursuant to one of
Section 9.1(g)(i) or Section 9.1(h)(i) (other than solely
pursuant to a non-curable breach of a representation or warranty
unless such breach was willful) but not the other, or (ii) is
terminated pursuant to Section 9.1(e) or Section 9.1(f), then (A)
in the event of a termination pursuant to Section 9.1(f) or
Section 9.1(g)(i), Midwest Power shall pay to Iowa-Illinois, and
(B) in the event of a termination pursuant to Section 9.1(e) or
Section 9.1(h)(i), Iowa-Illinois shall pay to Midwest Power,
promptly (but not later than five business days after such notice
is received pursuant to Section 9.1(g)(i) or Section 9.1(h)(i) or
is given pursuant to Section 9.1(e) or Section 9.1(f)) an amount
equal to $15 million in cash if required to be paid by
Iowa-Illinois and $15 million in cash if required to be paid by
Midwest Power, plus in each case cash in an amount equal to all
documented out-of- pocket expenses and fees incurred by the other
party (including, without limitation, fees and expenses payable
to all legal, accounting, financial, public relations and other
professional advisors arising out of, in connection with or
related to the Merger or the transactions contemplated by this
Agreement) not in excess of $6 million.
(b) Additional Termination Fee and Subsequent Transaction
Fee. If (i) this Agreement (x) is terminated by any party
pursuant to Section 9.1(e) or Section 9.1(f), (y) is terminated
following a failure of the shareholders of Midwest Power or
Resources or Iowa-Illinois to grant the necessary approvals
described in Section 4.13 or Section 5.13 or (z) is terminated as
a result of such party's material breach of Section 7.4, and (ii)
at the time of such termination or prior to the meeting of such
party's shareholders there shall have been a third-party tender
offer for shares of, or a third-party offer or proposal with
respect to a Business Combination involving, such party or its
affiliates which at the time of such termination or of the
meeting of such party's shareholders shall not have been (x)
rejected by such party and its Board of Directors and (y)
withdrawn by the third-party and (iii) within 2 1/2 years of any
such termination described in clause (i) above, the party or its
affiliate which is the subject of the tender offer or offer or
proposal with respect to a Business Combination ("Target Party")
becomes a subsidiary of such offeror or a subsidiary of an
affiliate of such offeror, or merges with and into the offeror or
a subsidiary or affiliate of the offeror or enters into a
definitive agreement to consummate a Business Combination with
such offeror or affiliate thereof, then (A) in the event
Resources or one of its affiliates is the Target Party, Midwest
Power shall pay to Iowa-Illinois and (B) in the event
Iowa-Illinois or one of its affiliates is the Target Party,
Iowa-Illinois shall pay to Midwest Power, at the closing of the
transaction (and as a condition to the closing) in which such
Target Party becomes a subsidiary or such Business Combination
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occurs ("Subsequent Transaction"), (1) a termination fee equal to
$30 million in cash if required to be paid by Iowa-Illinois and
$30 million in cash if required to be paid by Midwest Power plus
(2) a Subsequent Transaction fee payable in cash equal to 20% of
the difference between (I) $815,376,077 (if Resources or any of
its affiliates is the Target Party), or $637,751,871 (if Iowa-
Illinois or any of its affiliates is the Target Party) and (II)
the number of shares of Target Party common stock outstanding at
the time of the closing of the Subsequent Transaction multiplied
by the higher of (a) the average daily closing price of Target
Party common stock on the NYSE, or if such common stock is not
admitted to trading on the NYSE, on the market on which such
common stock is traded which has the highest volume of trades, on
the ten NYSE trading days immediately preceding the date of such
closing, or (b) the amount of cash plus the fair market value on
the day prior to such closing of any non-cash consideration to be
received for each share of Target Party common stock by the
holder thereof in the Subsequent Transaction (including in such
fair market value the fair market value of any Target Party
common stock retained by such holder as a result of the
Subsequent Transaction). The fair market value of any such
non-cash consideration shall be determined by a nationally
recognized accounting firm selected jointly by Resources and
Iowa-Illinois at least 60 days prior to the date of such closing.
The Target Party shall pay all of the fees and expenses of such
accounting firm for making such determination. The Target Party
shall agree to indemnify such accounting firm against any and all
liabilities, costs and expenses of whatever nature such
accounting firm may incur in connection with its determination of
such fair market value. The Target Party shall provide to such
accounting firm such security for the fee and expense payment and
indemnification obligations of the Target Party to such
accounting firm as it may request and the other party shall have
no liability for any of such fees and expenses nor shall it have
any obligation to indemnify such accounting firm for anything.
(c) Expenses. The parties agree that the agreements
contained in this Section 9.3 are an integral part of the trans-
actions contemplated by the Agreement and constitute liquidated
damages and not a penalty. If one party fails to pay promptly
to the other any expense and/or fee due hereunder, the defaulting
party shall pay the costs and expenses (including legal fees and
expenses) in connection with any action, including the filing of
any lawsuit or other legal action, taken to collect payment,
together with interest on the amount of any unpaid fee at the
publicly announced prime rate of Citibank, N.A. from the date
such fee was required to be paid.
(d) Limitation of Fees. Notwithstanding anything herein to
the contrary, the aggregate amount payable by Resources and its
affiliates pursuant to Section 9.3(a) and Section 9.3(b) shall
not exceed $51 million and the aggregate amount payable by Iowa-
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Illinois and its affiliates pursuant to Section 9.3(a) and
Section 9.3(b) shall not exceed $51 million.
SECTION 9.4 Amendment. This Agreement may be amended by the
directors of the parties hereto, at any time before or after
approval hereof by the shareholders of Iowa-Illinois, Midwest
Power and Resources and prior to the Effective Time, but after
such approvals, no such amendment shall (i) alter or change the
amount or kind of shares, rights or any of the proceeds of the
conversion under Article II, or (ii) alter or change any of the
terms and conditions of this Agreement if any of the alterations
or changes, alone or in the aggregate, would materially adversely
affect the rights of holders of Iowa-Illinois Common Stock, Iowa-
Illinois Preferred Stock, Iowa-Illinois Preference Stock, Midwest
Power Preferred Stock or Resources Common Stock. This Agreement
may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
SECTION 9.5 Waiver. At any time prior to the Effective
Time, the parties hereto may (a) extend the time for the perform-
ance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant
hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid if
set forth in an instrument in writing signed on behalf of such
party.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1 Non-Survival of Representations, Warranties
and Agreements. No representations, warranties and agreements in
this Agreement shall survive the Merger, except as otherwise
provided in this Agreement and except for the agreements
contained in this Section 10.1 and in Article II, Section 6.1(v),
the last sentence of Section 7.1, Section 7.5, Section 7.10,
Section 7.11, Section 7.12, Section 7.13, Section 7.14, Section
7.15, Section 9.3 and Section 10.8.
SECTION 10.2 Brokers. Except as previously disclosed to
Iowa-Illinois, Resources and Midwest Power represent and warrant
that, except for PaineWebber Incorporated, their investment
banking firm, no broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in
connection with the Merger or the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of
Resources or Midwest Power. Except as previously disclosed to
Resources and Midwest Power, Iowa-Illinois represents and
warrants that, except for Dillon, Read & Co. Inc., its investment
banking firm, no broker, finder or investment banker is entitled
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to any brokerage, finder's or other fee or commission in
connection with the Merger or the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of
Iowa-Illinois.
SECTION 10.3 Notices. All notices and other
communications hereunder shall be in writing and shall be deemed
given if (i) delivered personally, or (ii) sent by reputable
overnight courier service, or (iii) telecopied (which is
confirmed), or (iv) five days after being mailed by registered or
certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to Resources and/or Midwest Power, to:
Midwest Resources Inc.
Midwest Power Systems Inc.
666 Grand Avenue
P.O. Box 657
Des Moines, Iowa 50303
Attention: Chief Executive Officer
Telephone: 515-242-4300
Telecopy: 515-281-2981
with a concurrent copy to:
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: R. Todd Vieregg, P.C.
Telephone: 312-853-7470
Telecopy: 312-853-7036
(b) If to Iowa-Illinois, to:
Iowa-Illinois Gas and Electric Company
206 E. Second Street
Davenport, Iowa 52801
Attention: Chief Executive Officer
Telephone: 319-326-7243
Telecopy: 319-326-7670
with a concurrent copy to:
LeBoeuf, Lamb, Greene & MacRae
125 West 55th Street
New York, New York 10019
Attention: Douglas W. Hawes
Telephone: 212-424-8000
Telecopy: 212-424-8500
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SECTION 10.4 Miscellaneous. This Agreement (including the
documents and instruments referred to herein) (i) constitutes the
entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof other than the
Confidentiality Agreement; (ii) shall not be assigned by
operation of law or otherwise; and (iii) shall be governed by and
construed in accordance with the Illinois Act, the Iowa Act and
otherwise in accordance with the laws of the State of Iowa
applicable to contracts executed in and to be fully performed in
such State, without giving effect to its conflicts of law, rules
or principles. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect. The parties hereto agree
that they will negotiate in good faith to replace any provision
of this Agreement so held invalid or unenforceable, with a valid
provision that is as similar as possible in substance to the
invalid or unenforceable provision.
SECTION 10.5 Interpretation. When a reference is made in
this Agreement to Sections or Exhibits, such reference shall be
to a Section or Exhibit of this Agreement, respectively, unless
otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation."
SECTION 10.6 Counterparts; Effect. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one
and the same agreement.
SECTION 10.7 Specific Performance. The parties hereto
agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties hereto will be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
SECTION 10.8 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party
hereto, and, except for rights of Indemnified Parties as set
forth in Section 7.5, nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights
or remedies of any nature whatsoever under or by reason of this
Agreement.
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Notwithstanding the foregoing and any other provision of this
Agreement, and in addition to any other required action of the
Board of Directors of the Company, (i) a majority of the Iowa-
Illinois Designees serving on the Board of Directors of the
Company shall be entitled during the five year period commencing
at the Effective Time (the "Five Year Period") to enforce the
provisions of Sections 7.11, 7.12 and 7.14 on behalf of the Iowa-
Illinois officers, directors and employees, as the case may be,
and (ii) a majority of the Resources Designees serving on the
Board of Directors of the Company shall be entitled during the
Five Year Period to enforce the provisions of Section 7.11, 7.12
and 7.14 on behalf of the Resources officers, directors and
employees, as the case may be. Such directors' rights and
remedies under the preceding sentence are cumulative and are in
addition to any other rights and remedies they may have at law or
in equity, but in no event shall this Section 10.8 be deemed to
impose any additional duties on any such directors. The Company
shall pay, at the time they are incurred, all costs, fees and
expenses of such directors incurred in connection with the
assertion of any rights on behalf of the persons set forth above
pursuant to this Section 10.8. For purposes of this Section 10.8
and Section 7.11, a "Iowa-Illinois Designee" or "Resources
Designee", as the case may be, shall at any time mean a person
who at such time is a member of the Board of Directors of the
Company who either (a) was designated a member of the Board of
Directors of the Company by Iowa-Illinois or by Resources, as the
case may be, pursuant to Section 7.11(a) or (b) was designated
(before his or her initial election as a member of the Board of
Directors of the Company as contemplated by Section 7.11(c)(ii))
as a "Iowa-Illinois Designee" or a "Resources Designee" by a
majority of the then Iowa-Illinois Designees or Resources
Designees, as the case may be.
SECTION 10.9 Further Assurances. Each party will execute
such further documents and instruments and take such further
actions as may reasonably be requested by any other party in
order to consummate the Merger in accordance with the terms
hereof. Iowa-Illinois, Resources and Midwest Power expressly
acknowledge that, although it is their current intention to
effect a business combination among themselves and the Company by
means of the Merger, it may be preferable for Iowa-Illinois,
Resources and Midwest Power to effectuate such a business
combination by means of an alternative structure in light of the
conditions set forth in Sections 8.2(d) and 8.3(d). Accordingly,
if the only conditions to the parties' obligations to consummate
the Merger which are not satisfied or waived are receipt of
Resources Required Consents, Resources Required Statutory
Approvals, Iowa-Illinois Required Consents and Iowa-Illinois
Required Statutory Approvals that, in the reasonable judgment of
Iowa-Illinois or Resources, would be rendered unnecessary by
adoption of an alternative structure that otherwise substantially
preserves for Iowa-Illinois, Resources and Midwest Power the
economic benefits of the Merger, Iowa-Illinois or Resources, as
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the case may be, shall notify the other of such judgment no later
than 5:00 p.m. Central Time on December 31, 1995 and thereafter
the parties shall use their best efforts to effect a business
combination among themselves by means of a structure other than
the Merger that so preserves such benefits; provided that all
material third party and Governmental Authority declarations,
filings, registrations, notices, authorizations, consents or
approvals necessary for the effectuation of such alternative
business combination shall have been obtained and all other
conditions to the parties' obligations to consummate the Merger,
as applied to such alternative business combination, shall have
been satisfied or waived.
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IN WITNESS WHEREOF, Midwest Resources Inc., Midwest Power
Systems Inc., Iowa-Illinois Gas and Electric Company, and
MidAmerican Energy Company have caused this Agreement to be
signed by their respective officers thereunto duly authorized as
of the date first written above.
MIDWEST RESOURCES INC.
By: /s/ Russell E. Christiansen
Name: Russell E. Christiansen
Title: Chairman, President and
Chief Executive Officer
MIDWEST POWER SYSTEMS INC.
By: /s/ Russell E. Christiansen
Name: Russell E. Christiansen
Title: Chairman, President and
Chief Executive Officer
IOWA-ILLINOIS GAS AND ELECTRIC
COMPANY
By: /s/ Stanley J. Bright
Name: Stanley J. Bright
Title: Chairman and Chief
Executive Officer
MIDAMERICAN ENERGY COMPANY
By: /s/ Stanley J. Bright
Name: Stanley J. Bright
Title: President, Office of
the Chief Executive
Officer
EXHIBIT A
RESTATED
ARTICLES OF INCORPORATION
OF
MIDAMERICAN ENERGY COMPANY
TO THE SECRETARY OF STATE
OF THE STATE OF IOWA:
Pursuant to the provisions of Sections 490.201 and 202
of the Iowa Business Corporation Act, the undersigned incorpora-
tor hereby adopts the following Restated Articles of
Incorporation ("Articles of Incorporation"):
ARTICLE I
The name of the corporation is "MidAmerican Energy"
Company (hereinafter sometimes called the "Corporation") and its
registered office shall be located at ______________________ with
the right to establish and maintain branch offices at such other
points within and without the State of Iowa as the Board of
Directors of the Corporation may, from time to time, determine.
The name of the Corporation's registered agent at such registered
office is ________________.
ARTICLE II
The nature of the business or purposes to be conducted
or promoted is to engage in any or all lawful act or activity for
which a corporation may be incorporated under the Iowa Business
Corporation Act.
ARTICLE III
The name and address of the incorporator is:
______________________
______________________
______________________
______________________, Iowa _____
ARTICLE IV
A. The aggregate number of shares which the
Corporation shall have authority to issue is ___________ shares
of Common Stock, no par value ("Common Stock"), __________ shares
of Class I Preferred Stock, par value $100 per share ("Class I
Preferred Stock"), _________ shares of Class M Preferred Stock,
no par value ("Class M Preferred Stock"), and _________ shares of
Preference Stock, no par value ("Preference Stock").
<PAGE>
B. The shares of authorized Common Stock shall be
identical in all respects and shall have equal rights and
privileges. For all purposes, each registered holder of Common
Stock shall, at each meeting of shareholders, be entitled to one
vote for each share of Common Stock held, either in person or by
proxy duly authorized in writing. Except to the extent required
by law or as permitted by these Articles of Incorporation, as
amended from time to time, the registered holders of the shares
of Common Stock shall have unlimited and exclusive voting rights.
C. The Board of Directors, at any time or from time to
time, may, and is hereby authorized to, issue and dispose of any
of the authorized and unissued shares of Common Stock and any
treasury shares for such kind and amount of consideration and to
such persons, firms or corporations, as may be determined by the
Board of Directors, subject to any provisions of law then
applicable. The holders of Common Stock shall have no preemptive
rights to acquire or subscribe to any shares, or securities
convertible into shares, of Common Stock.
D. The Board of Directors, at any time or from time to
time may, and is hereby authorized to, divide the authorized and
unissued shares of Class I Preferred Stock, Class M Preferred
Stock and Preference Stock into one or more classes or series and
in connection with the creation of any class or series to
determine, in whole or in part, to the full extent now or
hereafter permitted by law, by adopting one or more articles of
amendment to the Articles of Incorporation providing for the
creation thereof, the designation, preferences, limitations and
relative rights of such class or series, which may provide for
special, conditional or limited voting rights, or no rights to
vote at all, and to issue and dispose of any of such shares and
any treasury shares for such kind and amount of consideration and
to such persons, firms or corporations, as may be determined by
the Board of Directors, subject to any provisions of law then
applicable.
E. The Board of Directors, at any time or from time to
time may, and is hereby authorized to, create and issue, whether
or not in connection with the issue and sale of any shares of its
Common Stock, Class I Preferred Stock, Class M Preferred Stock or
Preference Stock or other securities of the Corporation. Such
warrants, rights and/or options entitling the holders thereof to
purchase from the Corporation any shares of its Common Stock,
Class I Preferred Stock, Class M Preferred Stock or Preference
Stock or other securities of the Corporation. Such warrants,
rights, or options shall be evidenced by such instrument or
instruments as shall be approved by the Board of Directors of the
Corporation. The terms upon which, the time or times (which may
be limited or unlimited in duration) at or within which, and the
price or prices (which shall be not less than the minimum amount
prescribed by law, if any) at which any such shares or other
securities may be purchased from the Corporation upon the
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exercise of any such warrant, right or option shall be fixed and
stated in the resolution or resolutions of the Board of Directors
of the Corporation providing for the creation and issue of such
warrants, rights or options. The Board of Directors of the
Corporation is hereby authorized to create and issue any such
warrants, rights or options from time to time for such
consideration, if any, and to such persons, firms or
corporations, as the Board of Directors may determine.
F. The Corporation may authorize the issue of some or
all of the shares of any or all of the classes of its capital
stock without certificates.
G. The Corporation shall not be required to issue
certificates representing any fraction or fractions of a share of
stock of any class but may issue in lieu thereof one or more
non-dividend bearing and non-voting scrip certificates in such
form or forms as shall be approved by the Board of Directors of
the Corporation, each scrip certificate representing a fractional
interest in one share of stock of any class. Such scrip
certificates upon presentation together with similar scrip
certificates representing in the aggregate an interest in one or
more full shares of stock of any class shall entitle the holders
thereof to receive one or more full shares of stock of such
class. Such scrip certificates may contain such terms and
conditions as shall be fixed by the Board of Directors of the
Corporation and may become void and of no effect after a period
to be determined by the Board of Directors and to be specified in
such scrip certificates.
H. The Corporation shall be entitled to treat the
person in whose name any share of Common Stock, Class I Preferred
Stock, Class M Preferred Stock or Preference Stock is registered
as the owner thereof for all purposes and shall not be bound to
recognize any equitable or other claim to, or interest in, such
share on the part of any person, whether or not the Corporation
shall have notice thereof except as may be expressly provided
otherwise by the laws of the State of Iowa.
ARTICLE V
The term of corporate existence of the Corporation
shall be perpetual.
ARTICLE VI
A. All corporate powers shall be exercised by or under
the authority of, and the business and affairs of the Corporation
shall be managed under the direction of, the Board of Directors.
The number of directors of the Corporation shall be fixed by the
Bylaws but shall be no less than ____ (__) and no greater than
____ (__), and such number may be increased or decreased from
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time to time by amendment to the Bylaws, but no decrease shall
have the effect of shortening the term of any incumbent director.
Directors shall be elected by the shareholders at each annual
meeting of the Corporation as specified herein and in the Bylaws.
Directors need not be shareholders.
B. Each director shall serve until his or her
successor is elected and qualified or until his or her prior
death, retirement, resignation or removal. Should a vacancy
occur or be created, whether arising through death, resignation
or removal of a director or through an increase in the number of
directors, such vacancy shall be filled solely by a majority vote
of the remaining directors though less than a quorum of the Board
of Directors. A director so elected to fill a vacancy shall
serve for the remainder of the then present term of office of the
Board of Directors.
C. Any director or the entire Board of Directors may
be removed for cause as set forth in this paragraph C. Removal
of a director for cause must be approved by the affirmative vote
of the holders of shares of capital stock of the Corporation
having at least 75% of the votes of all outstanding shares of
capital stock of the Corporation entitled to vote generally in
the election of directors, voting together as a single class,
only at a meeting called for the purpose of removing the director
and after notice stating that the purpose, or one of the
purposes, of the meeting is removal of the director. Any action
for removal of a director must be taken within one year of such
cause.
D. The Board of Directors, by a vote of a majority of
the entire Board, may appoint from the directors an executive
committee and such other committees as they may deem judicious;
and to such extent as shall be provided in the resolution of the
Board or in the Bylaws, may delegate to such committees all or
any of the powers of the Board of Directors which may be lawfully
delegated, and such committees shall have and thereupon may
exercise all or any of the powers so delegated to them. The
Board of Directors of the Corporation or the Bylaws may provide
the number of members necessary to constitute a quorum of any
committee and the number of affirmative votes necessary for
action by any committee.
E. The Board of Directors shall elect such officers of
the Corporation as specified in the Bylaws. All vacancies in the
offices of the Corporation shall be filled by the Board of
Directors. The Board of Directors shall also have authority to
appoint such other managing officers and agents as they may from
time to time determine.
ARTICLE VII
Special meetings of shareholders of the Corporation may
be called at any time by the Chairman of the Board of Directors
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or by the President on at least ten days' notice to each
shareholder entitled to vote at the special meeting, by mail at
such shareholder's last known post office address, specifying the
time, place and purpose or purposes of the special meeting.
ARTICLE VIII
The private property of the shareholders of the
Corporation shall be exempt from all corporate debts.
ARTICLE IX
A. In addition to any affirmative vote required by law
or under any other provision of these Articles of Incorporation:
(i) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with or into any
Other Entity (as hereinafter defined); or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a
series of related transactions) to or with any Other Entity
of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value (as hereinafter defined) of
$25,000,000 or more; or
(iii) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Other Entity in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate Fair Market Value of $25,000,000 or
more; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation; or
(v) any reclassification of securities (including any
reverse stock split), recapitalization, reorganization,
merger or consolidation of the Corporation with any of its
Subsidiaries or any similar transaction (whether or not with
or into or otherwise involving any Other Entity) which has
the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class
of equity or convertible securities of the Corporation or
any Subsidiary which is directly or indirectly owned by any
Other Entity; or
(vi) any direct or indirect purchase or other
acquisition by the Corporation of any equity security (as
defined in Rule 3a11-1 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on
June 30, 1994) of any class from any Interested Security-
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holder (as hereinafter defined) who has beneficially owned
such securities for less than two years prior to the date of
such purchase or any agreement in respect thereof,
shall require the affirmative vote of the holders of shares of
capital stock of the Corporation having at least 75% (excluding,
in the case of (i) through (v) above, shares beneficially owned
by a 25% Shareholder (as hereinafter defined), and, in the case
of (vi) above, shares beneficially owned by such Interested
Securityholder) of the votes of all outstanding shares of capital
stock of the Corporation entitled to vote generally in the
election of directors, considered for the purpose of this
Article IX as one class ("Voting Shares"). Such affirmative vote
shall be required notwithstanding the fact that no vote may be
required, or that some lesser percentage vote may be specified,
by law or in any agreement with any national securities exchange
or otherwise.
B. The provisions of paragraph A of this Article IX
shall not be applicable to any particular Business Combination
(as hereinafter defined), and such Business Combination shall
require only such affirmative vote as is required by law and any
other provision of these Articles of Incorporation, if all of the
conditions specified in either of the following subparagraphs 1
and 2 shall have been satisfied.
1. A majority of the Continuing Directors (as
hereinafter defined) shall have approved the Business
Combination (but only if a majority of the Board of
Directors are Continuing Directors); or
2. All of the following conditions shall have been
met:
a. The ratio of:
(i) the aggregate amount of the cash and the
Fair Market Value as of the date of consummation
of the Business Combination of other consideration
to be received per share by holders of a
particular class or series of Voting Shares in
such Business Combination
to
(ii) the Fair Market Value per share of such
class or series of Voting Shares on the date of
the first public announcement of such Business
Combination or the date on which any 25%
Shareholder became a 25% Shareholder, whichever is
higher
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is at least as great as the ratio (which ratio shall
equal the number one in the event that such 25%
Shareholder has never beneficially owned any shares of
such class or series of Voting Shares) of
(x) the highest per share price
(including brokerage commissions, transfer
taxes and soliciting dealers' fees) which
such 25% Shareholder has theretofore paid for
any share of such class or series of Voting
Shares acquired by it
to
(y) the Fair Market Value per share of
such class or series of Voting Shares on the
date of the initial acquisition by such 25%
Shareholder of any share of such class or
series of Voting Shares;
b. The aggregate amount of the cash and Fair
Market Value as of the date of consummation of the
Business Combination of other consideration to be
received per share by holders of Class I Preferred
Stock, Class M Preferred Stock and Preference Stock in
such Business Combination is not less than the highest
preferential amount per share to which holders of
shares of such class or series of Class I Preferred
Stock, Class M Preferred Stock and Preference Stock
would, respectively, be entitled in the event of any
voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, regardless of whether
the Business Combination to be consummated constitutes
such an event;
c. The consideration to be received by holders of
a particular class or series of Voting Shares in such
Business Combination shall be in cash or in the same
form and of the same kind as the consideration paid by
the 25% Shareholder in acquiring the shares of such
class or series of Voting Shares already owned by it;
d. After such 25% Shareholder has acquired
ownership of not less than 25% of the then outstanding
Voting Shares (a "25% Interest") and prior to the
consummation of such Business Combination:
(i) the 25% Shareholder shall have taken
steps to ensure that the Corporation's Board of
Directors includes at all times representation by
Continuing Director(s) proportionate to the ratio
that the Voting Shares which from time to time are
owned by persons who are not 25% Shareholders
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("Public Holders") bear to all Voting Shares
outstanding at such respective times (with a
Continuing Director to occupy any resulting
fractional board position):
(ii) there shall have been no reduction in
the rate of distributions ("Dividends") payable on
the Common Stock except as may have been approved
by a majority vote of the Continuing Directors;
(iii) such 25% Shareholder shall not have
acquired any newly issued shares of stock,
directly or indirectly, from the Corporation
(except upon conversion of convertible securities
acquired by it prior to obtaining a 25% Interest
or as a result of a pro rata stock Dividend or
stock split); and
(iv) such 25% Shareholder shall not have
acquired any additional Voting Shares or
securities convertible into or exchangeable for
Voting Shares except as a part of the transaction
which resulted in such 25% Shareholder acquiring
its 25% Interest;
e. Prior to or upon the consummation of such
Business Combination, such 25% Shareholder shall not
have (i) received the benefit, directly or indirectly
(except proportionately as a shareholder), of any
loans, advances, guarantees, pledges or other financial
assistance or tax credits provided by the Corporation,
or (ii) made any major change in the Corporation's
business or equity capital structure without the
unanimous approval of the entire Board of Directors;
and
f. A proxy statement responsive to the
requirements of the Securities Exchange Act of 1934 and
the General Rules and Regulations promulgated
thereunder shall have been mailed to all holders of
Voting Shares for the purpose of soliciting
shareholders' approval of such Business Combination.
Such proxy statement shall contain at the front thereof
in a prominent place, any recommendations as to the
advisability (or inadvisability) of the Business Combi-
nation which the Continuing Directors, or any of them,
may have furnished in writing and, if deemed advisable
by a majority of the Continuing Directors, an opinion
of a reputable investment banking firm as to the,
fairness (or lack of fairness) of the terms of such
Business Combination, from a financial point of view,
to the holders of Voting Shares other than any 25%
Shareholder (such investment banking firm to be
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selected by a majority of the Continuing Directors, to
be furnished with all information it reasonably
requests and to be paid a reasonable fee for its
services upon receipt by the Corporation of such
opinion).
C. For the purposes of this Article IX:
1. The term "Business Combination" shall mean any
transaction which is referred to in any one or more of clauses
(i) through (v) of paragraph A of this Article IX;
2. The term "Other Entity" shall include (a) any 25%
Shareholder and (b) any other person (whether or not itself a 25%
Shareholder) which after any Business Combination, would be an
Affiliate (as hereinafter defined) of any 25% Shareholder;
3. The term "person" shall mean any individual, firm,
trust, partnership, association, corporation or other entity;
4. The term "25% Shareholder" shall mean, in respect
to any Business Combination, any person (other than the
Corporation or any Subsidiary) who or which, as of the record
date for the determination of shareholders entitled to notice of
and to vote on such Business Combination, or immediately prior to
the consummation of any such transactions,
(a) is the beneficial owner, directly or indirectly,
of not less than 25% of the Voting Shares, or
(b) is an Affiliate of the Corporation and at any time
within five years prior thereto was the beneficial owner,
directly or indirectly, of not less than 25% of the then
outstanding Voting Shares, or
(c) is an assignee of or has otherwise succeeded to
any shares of capital stock of the Corporation which were at
any time within five years prior thereto beneficially owned
by any 25% Shareholder, and such assignment or succession
shall have occurred in the course of a transaction or series
of transactions not involving a public offering within the
meaning of the Securities Act of 1933;
5. A person shall be the beneficial owner of any
Voting Shares
(a) which such person or any of its Affiliates and
Associates (as hereinafter defined) beneficially own,
directly or indirectly, or
(b) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such right
is exercisable immediately or only after the passage of
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time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(c) which are beneficially owned, directly or
indirectly, by any other person with which such first
mentioned person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares of
capital stock of the Corporation;
6. The outstanding Voting Shares shall include shares
deemed owned through application of subparagraph 5 of this
paragraph C above but shall not include any other Voting Shares
which may be issuable pursuant to any agreement or upon exercise
of conversion rights, warrants or options, or otherwise;
7. The term "Continuing Director" shall mean (a) a
person who was a member of the Board of Directors of the
Corporation elected by the Public Holders prior to the date as of
which any 25% Shareholder acquired in excess of 10% of the then
outstanding Voting Shares or (b) a person designated (before his
or her initial election as a director) as a Continuing Director
by a majority of the then Continuing Directors;
8. The term "other consideration to be received" shall
include, without limitation, Voting Shares retained by Public
Holders in the event of a Business Combination in which the
Corporation is the surviving corporation;
9. The terms "Affiliate" and "Associate" shall have
the respective meanings given those terms in Rule 12b-2, of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as in effect on June 30, 1994;
10. The term "Subsidiary" shall mean any corporation
or other entity of which a majority of the outstanding voting
securities or other equity interests having the power, under
ordinary circumstances, to elect a majority of the directors, or
otherwise to direct the management and policies, of such
corporation or other entity, is owned, directly or indirectly, by
the Corporation.
11. The term "Interested Securityholder" shall mean,
with respect to any transaction which is referred to in Clause
(vi) of paragraph A of this Article IX, any person (other than
the Corporation or any Subsidiary) who or which, as of the record
date for the determination of shareholders entitled to notice of
and to vote on such transaction, or immediately prior to the
consummation of any such transaction,
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(a) is the beneficial owner, directly or indirectly,
of not less than five percent of the Voting Shares, or
(b) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than five percent of the
then outstanding Voting Shares, or
(c) is an assignee of or has otherwise succeeded to
any shares of the class of securities to be acquired which
were at any time within two years prior thereto beneficially
owned by an Interested Securityholder, and such assignment
or succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933;
and
12. The term "Fair Market Value" shall mean (i) in the
case of capital stock, the highest closing sale price during the
30-day period immediately preceding the date in question of a
share of such capital stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such capital stock is not
quoted on the Composite Tape, on the New York Stock Exchange, or,
if such capital stock is not listed on such exchange, on the
principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such capital stock is
listed, or, if such capital stock is not listed on any such
exchange, the highest closing bid quotation with respect to a
share of such capital stock during the 30-day period preceding
the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in
use, or if no such quotations are available the fair market value
on the date in question of a share of such capital stock as
determined by a majority of the Continuing Directors in good
faith; and (ii) in the case of property other than cash or
capital stock, the fair market value of such property on the date
in question as determined in good faith by a majority of the
Continuing Directors; provided that any such determination by the
Continuing Directors shall only be effective if made at a meeting
at which a majority of Continuing Directors is present.
D. A majority of the Continuing Directors shall have
the power and duty to determine for purposes of this Article IX,
on the basis of information known to them, (i) the number of
Voting Shares beneficially owned by any person, (ii) whether a
person is an Affiliate or Associate of another, (iii) whether a
person has an agreement, arrangement or understanding with
another as to the matters referred to in subparagraph 4 of
paragraph C, (iv) whether the assets subject to any Business
Combination have an aggregate Fair Market Value of $25,000,000 or
more, and (v) such other matters with respect to which a
determination is required under this Article IX.
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E. Nothing contained in this Article IX shall be
construed to relieve any 25% Shareholder from any fiduciary
obligation imposed by law.
ARTICLE X
Any amendment, alteration, change or repeal of
Article VIA, VIB and VIC, Article IX or this Article X of these
Articles of Incorporation shall require the affirmative vote of
the holders of shares of capital stock of the Corporation having
at least 75% of the votes of all outstanding Voting Shares (as
defined in Article IX), excluding from such affirmative vote
shares beneficially owned by any 25% Shareholder or by any
Interested Securityholder in the case of an amendment of the
provisions of paragraph A of Article IX that exclude from an
affirmative vote required pursuant to such paragraph A shares
beneficially owned by 25% Shareholders or shares beneficially
owned by Interested Securityholders, as the case may be.
ARTICLE XI
The Board of Directors may make Bylaws, and from time
to time may alter, amend or repeal any Bylaws; but any Bylaws
made by the Board of Directors may be altered or repealed by the
shareholders entitled to vote generally at any annual meeting, or
at any special meeting provided notice of such proposed
alteration or repeal be included in the notice of meeting.
ARTICLE XII
A. A director of the Corporation shall not be
personally liable to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director,
except for liability:
(i) for any breach of the director's duty of loyalty
to the Corporation or its shareholders; or
(ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of
law; or
(iii) for any transaction from which the director
derives an improper personal benefit; or
(iv) under Section 490.833, or a successor provision,
of the Iowa Business Corporation Act.
B. If, after the date these Articles of Incorporation
are filed with the Iowa Secretary of State, the Iowa Business
Corporation Act is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be deemed
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<PAGE>
eliminated or limited to the fullest extent permitted by the Iowa
Business Corporation Act, as so amended. Any repeal or
modification of Section A, or this Section B of this Article XII,
by the shareholders of the Corporation shall be prospective only
and shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal
or modification.
ARTICLE XIII
A. Each person who was or is a party or is threatened
to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative,
investigative or arbitration ("proceeding"), by reason of the
fact that he or she, or a person of whom he or she is the legal
representative, is or was a director, officer or professional or
supervisory employee of the Corporation or is or was serving at
the request of the Corporation as a director, officer,
professional or supervisory employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in
an official capacity while serving as a director, officer,
professional or supervisory employee or agent or in any other
capacity while serving as a director, officer, professional or
supervisory employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by
the Iowa Business Corporation Act, as the same exists or may
hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than said Act permitted
the Corporation to provide prior to such amendment), against all
expenses, liability and loss (including without limitation
attorneys' fees, all costs, judgments, fines, Employee Retirement
Income Security Act excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by such
person in connection therewith. Such right shall be a contract
right and shall include the right to be paid by the Corporation
expenses incurred in defending any such proceeding in advance of
its final disposition; provided, however, that the payment of
such expenses incurred by a director, officer or professional or
supervisory employee in his or her capacity as a director,
officer or professional or supervisory employee (and not in any
other capacity in which service was or is rendered by such person
while a director, officer or professional or supervisory employee
including, without limitation, service to an employee benefit
plan) in advance of the final disposition of such proceeding,
shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director, officer or
professional or supervisory employee, to repay all amounts so
advanced if it should be determined ultimately that such
director, officer or professional or supervisory employee is not
entitled to be indemnified under this Article XIII or otherwise.
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<PAGE>
B. If a claim under Section A is not paid in full by
the Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expenses
of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking has been
tendered to the Corporation) that the claimant has not met the
standards of conduct which make it permissible under the Iowa
Business Corporation Act for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal
counsel, or its shareholders) to have made a determination prior
to the commencement of such action that indemnification of the
claimant is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in the Iowa Business
Corporation Act, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or
its shareholders) that the claimant had not met such applicable
standard of conduct, shall be a defense to the action or create a
presumption that the claimant had not met the applicable standard
of conduct.
C. Indemnification provided hereunder shall, in the
case of the death of the person entitled to indemnification,
inure to the benefit of such person's heirs, executors or other
lawful representatives. The invalidity or unenforceability of
any provision of this Article XIII shall not affect the validity
or enforceability of any other provision of this Article XIII.
D. Any action taken or omitted to be taken by (i) any
director, officer or professional or supervisory employee in good
faith and in compliance with or pursuant to any order,
determination, approval or permission made or given by a
commission, board, official or other agency of the United States
or of any state or other governmental authority with respect to
the property or affairs of the Corporation or any such business
corporation, not-for-profit corporation, joint venture, trade
association or other entity over which such commission, board,
official or agency has jurisdiction or authority or purports to
have jurisdiction or authority or (ii) by any director of the
Corporation pursuant to Section D of Article IX shall be presumed
to be in compliance with the standard of conduct set forth in
Section 490.851 (or any successor provision) of the Iowa Business
Corporation Act whether or not, in the case of clause (i), it may
thereafter be determined that such order, determination, approval
or permission was unauthorized, erroneous, unlawful or otherwise
improper.
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E. Unless finally determined, the termination of any
litigation, whether by judgment, settlement, conviction or upon a
plea of nolo contendere, or its equivalent, shall not create a
presumption that the action taken or omitted to be taken by the
person seeking indemnification did not comply with the standard
of conduct set forth in Section 490.851 (or any successor
provision) of the Iowa Business Corporation Act.
F. The rights conferred on any person by this
Article XIII shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision
of the Articles of Incorporation, Bylaws, agreement, vote of
shareholders or disinterested directors or otherwise.
Indemnification provided hereunder shall, in the case of the
death of the person entitled to indemnification, inure to the
benefit of such person's heirs, executors or other lawful
representatives. The invalidity or unenforceability of any
provision of this Article XIII shall not affect the validity or
enforceability of any other provision of this Article XIII.
G. The Corporation may maintain insurance, at its
expense, to protect itself and any such director, officer,
professional or supervisory employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or
other enterprise against any such expense, liability or loss
under the Iowa Business Corporation Act.
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<PAGE>
ARTICLES OF AMENDMENT
TO
RESTATED
ARTICLES OF INCORPORATION
OF
MIDAMERICAN ENERGY COMPANY
To the Secretary of State
of the State of Iowa:
These Articles of Amendment are delivered to you for filing
pursuant to the provisions of Section 490.601, and in accordance
with Section 490.602(4), of the Iowa Business Corporation Act.
(a) The name of the Corporation is:
MidAmerican Energy Company
(b) As of _______, 199_, the Board of Directors of
MidAmerican Energy Company, an Iowa corporation
("Corporation"), duly adopted the following Articles of
Amendment to the Restated Articles of Incorporation
("Articles of Incorporation") of the Corporation,
determining certain terms of its class of shares
designated in Article IV of its Articles of
Incorporation as Class I Preferred Stock, par value
$100 per share ("Class I Preferred Stock"), Class M
Preferred Stock, no par value ("Class M Preferred
Stock"), and Preference Stock, no par value
("Preference Stock"), and creating and determining the
terms of the three series of Class I Preferred Stock,
eight series of Class M Preferred Stock and two series
of Preference Stock (collectively, the "Merger Series")
to be issued on the date on which the merger ("Merger")
of Midwest Resources Inc., an Iowa corporation, Midwest
Power Systems Inc., an Iowa corporation ("Midwest
Power"), and Iowa-Illinois Gas and Electric Company, an
Illinois corporation ("Iowa-Illinois"), with and into
the Corporation becomes effective ("Effective Date of
the Merger"), upon the conversion of (i) all shares of
each series of Preferred Stock, no par value, of
Midwest Power into shares of a particular series of
Class M Preferred Stock, (ii) all shares of each series
of Preferred Shares, par value $100 per share, of Iowa-
Illinois into shares of a particular series of Class I
Preferred Stock, and (iii) all shares of each series of
Preference Shares, without par value, of Iowa-Illinois
into shares of a particular series of Preference Stock,
including the certain preferences, limitations and
relative rights of holders of shares of Class I
Preferred Stock, Class M Preferred Stock and Preference
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Stock and the designation, preferences. limitations and
relative rights of each Merger Series.
(c) The text of the Amendment determining the terms of the
Class I Preferred Stock, Class M Preferred Stock and
Preference Stock and the terms of each Merger Series,
is as follows:
DIVISION I
Provisions Relating to Class I Preferred Stock
(A) Issue in Series. The shares of Class I Preferred Stock may
be divided into and issued in series, each of which series
shall be so designated as to distinguish the shares thereof
from the shares of all other series and classes. Authority
is hereby expressly vested in the Board of Directors to
divide any or all of the shares of Class I Preferred Stock
from time to time authorized into series, to fix the
designation of each such series and, subject to the
limitations stated herein or imposed by law, to fix and
determine the following relative rights and preferences of
shares of each such series:
(1) the rate of distribution ("Dividend") for shares for
such series;
(2) the price at and the terms and conditions on which such
shares may be redeemed;
(3) the amount payable upon such shares in event of
voluntary liquidation;
(4) sinking fund provisions for the redemption or purchase
of such shares, provided, however, that the Board of
Directors shall not create a sinking fund in respect of
any series of Class I Preferred Stock unless provision
for a sinking fund at least as beneficial to all issued
and outstanding shares of Class I Preferred Stock shall
either then exist or be at the same time created; and
(5) the terms and conditions on which such shares may be
converted, if the shares of such series are issued with
the privilege of conversion.
(B) Dividends. The holders of shares of Class I Preferred Stock
of each series shall be entitled to receive, when and as
declared by the Board of Directors from assets legally
available for the payment thereof, Dividends at the rate
fixed for such series, and no more, payable quarterly on the
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first day of each of the months of February, May, August and
November (the quarterly "Dividend Payment Dates"), in each
case with respect to the quarterly Dividend period ending on
the day prior to such quarterly Dividend Payment Date.
Such Dividends shall accrue and be cumulative with respect
to each share of each series from and including the date of
issue thereof.
No Dividend shall be declared on the shares of any series of
Class I Preferred Stock in respect of the accumulations for
any quarterly Dividend period or portion thereof unless
Dividends shall likewise be or have been declared with
respect to accumulations on all then outstanding shares of
Class I Preferred Stock of each other series thereof and on
all outstanding shares of Parity Stock of each series
thereof for the same period or portion thereof. Except as
provided in Section (C)(2) of Division II, the ratios of the
Dividends declared to Dividends accumulated with respect to
any quarterly Dividend period on the shares of Class I
Preferred Stock of each series thereof and on all shares of
Parity Stock of each series thereof outstanding shall be
identical. Accumulations of Dividends shall not bear
interest.
So long as any shares of Class I Preferred Stock are
outstanding, no Dividend shall be paid or declared, or other
distribution made, on Junior Shares, nor shall any Junior
Shares be purchased, redeemed, retired or otherwise acquired
for a consideration if Preferential Dividends on outstanding
shares of Class I Preferred Stock for the current and all
past quarterly Dividend periods or portions thereof shall
not have been paid, or declared and set apart for payment,
or if the Corporation shall be in default or deficient under
any requirement of a sinking fund established with respect
to outstanding shares of Class I Preferred Stock of any
series for any period then elapsed; provided, however, that
the restrictions of this paragraph shall not apply to the
declaration and payment of Dividends on Junior Shares if
payable solely in Junior Shares, nor to the acquisition of
any Junior Shares through the application of the proceeds of
any Junior Shares sold at or about the time of such
acquisition, nor shall such restrictions prevent the
transfer of any amount from surplus to stated capital.
(C) Liquidation Preferences. In the event of involuntary
dissolution, liquidation or winding up ("Liquidation") of
the Corporation, the holders of shares of Class I Preferred
Stock of each series outstanding shall be entitled to
receive out of the assets of the Corporation an amount per
share equivalent to the par value thereof, plus an amount
equivalent to Preferential Dividends at the rate fixed and
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determined for such series accrued and unpaid to the date
fixed for payment, but no more.
In the event of voluntary Liquidation of the Corporation,
the holders of shares of Class I Preferred Stock of each
series outstanding shall be entitled to receive out of the
assets of the Corporation such amount per share as shall
have been fixed and determined for such series by the Board
of Directors, plus an amount equivalent to Preferential
Dividends at the rate fixed and determined for such series
accrued and unpaid to the date fixed for payment, but no
more.
Until payment to the holders of outstanding shares of Class
I Preferred Stock as aforesaid, or until moneys or other
assets sufficient for such payment shall have been set apart
for payment by the Corporation, separate and apart from its
other funds and assets for the account of such holders so as
to be and continue to be available for payment to such
holders, no payment or distribution shall be made to holders
of Junior Shares in connection with or upon such
Liquidation.
Neither a consolidation nor merger of the Corporation with
or into any other corporation, nor a merger of any other
corporation into the Corporation, nor the purchase or
redemption of all or any part of the outstanding shares of
any class or classes of the Corporation, nor the sale or
transfer of the property and business of the Corporation as
or substantially as an entirety, shall be construed to be a
Liquidation of the Corporation within the meaning of this
Division I.
(D) Redemptions. The Corporation may at its option expressed by
vote of the Board of Directors, at any time or from time to
time, redeem the whole or any part of the shares of Class I
Preferred Stock, or of any series thereof, at the redemption
price or prices at the time in effect, any such redemption
of shares of Class I Preferred Stock to be at such time and
at such place in the City of Chicago, State of Illinois, as
shall likewise be determined by vote of the Board of
Directors. Notice of any proposed redemption of shares of
Class I Preferred Stock shall be given by the Corporation by
mailing a copy of such notice, not more than 40 nor less
than 30 days prior to the time fixed for redemption, to the
holders of record of the shares of Class I Preferred Stock
to be redeemed, at their respective addresses then appearing
on the books of the Corporation. It shall not be necessary
that the holders of record of any shares of Class I
Preferred Stock to be redeemed shall actually have received
notice of redemption thereof, provided the same shall have
been mailed as aforesaid. In case less than all of the
shares of Class I Preferred Stock of any series are to be
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redeemed, the shares so to be redeemed shall be determined
by lot in such manner as may be prescribed by the Board of
Directors, and the certificates evidencing such shares shall
be specified by number in the notice of such redemption. By
the time so fixed for redemption, the Corporation shall, and
at any time within 40 days prior to such time may, deposit
in trust, for the account of the holders of the shares of
Class I Preferred Stock to be redeemed, funds necessary for
such redemption with a bank or trust company in good
standing, organized under the laws of the United States of
America or of the State of Illinois, located in the City of
Chicago, Illinois, and having a combined capital, surplus
and undivided profits of at least $5,000,000, which shall be
designated in such notice of redemption. Notice of
redemption having been mailed and funds necessary for such
redemption having been deposited as aforesaid so that such
funds shall be forthwith available to holders of shares of
Class I Preferred Stock to be redeemed upon surrender of
certificates evidencing such shares, then, notwithstanding
that the time fixed for such redemption as aforesaid may not
yet have occurred or the certificates evidencing shares to
be redeemed may not have been surrendered for cancellation,
nevertheless all shares to be redeemed shall be deemed no
longer to be outstanding for any purpose, and all voting and
other rights with respect to such shares shall thereupon
cease and terminate, excepting only the right of the holders
of the certificates for such shares to receive, out of funds
so deposited in trust, the redemption funds, without
interest, to which they are entitled, and the right to
exercise any privilege of conversion not theretofore
expiring, the Corporation to be entitled to the return of
any funds deposited for redemption of shares converted
pursuant to such privilege. Any interest accrued on funds
so deposited shall be paid to the Corporation from time to
time. In case the holder of shares of Class I Preferred
Stock which shall have been called for redemption shall not,
within six years after the redemption date, claim the amount
deposited with respect to the redemption of such shares, the
bank or trust company in which such deposit was made shall
upon demand pay over to the Corporation such unclaimed
amount and thereupon such bank or trust company shall be
relieved of all responsibility in respect thereof to such
holder.
(E) Repurchases; Limitations on Reacquisitions. Subject to
applicable law and the provisions of this Division I, the
Corporation may from time to time purchase or otherwise
acquire outstanding shares of Class I Preferred Stock at a
price per share not exceeding the amount at the time payable
in the event of redemption thereof otherwise than through
the operation of the applicable sinking fund, if any.
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No shares of Class I Preferred Stock shall be purchased,
redeemed, retired or otherwise acquired for a valuable
consideration if all accumulations of Dividends on the
shares of Class I Preferred Stock of all series thereof, and
on the shares of Parity Stock of all series thereof, for all
past quarterly Dividend periods or portions thereof shall
not have been paid, or declared and a sum sufficient for the
payment thereof set apart, or if the Corporation shall be in
default or deficient under any requirement of a sinking fund
established with respect to outstanding shares of Class I
Preferred Stock of any series thereof and with respect to
outstanding shares of Parity Stock of any series thereof,
for any period then elapsed.
(F) Restrictions on Certain Corporation Action.
(1) The Corporation shall not, without the consent (given
by vote at an annual meeting or a special meeting
called for that purpose) of the holders of at least a
majority of the total number of shares of Class I
Preferred Stock then outstanding, issue any bonds,
notes, debentures or other securities representing
indebtedness, or assume any such indebtedness, other
than:
(a) indebtedness with a maturity not more than 12
months from date of issue (short-term
indebtedness) up to an aggregate at any time
outstanding which does not exceed 10% of the sum
of items (y) and (z) below,
(b) indebtedness issued for purposes of the refunding,
reacquisition, redemption or other retirement of
any outstanding indebtedness theretofore issued or
assumed by the Corporation with a maturity date
beyond 12 months from date of issue of the
indebtedness being refunded, reacquired, redeemed
or retired, or
(c) indebtedness issued for purposes of the
reacquisition, redemption or other retirement of
all or any part of outstanding shares of Class I
Preferred Stock, Parity Stock or Senior Shares,
if, after giving effect to such issue or assumption,
the total principal amount of all bonds, notes,
debentures or other securities representing
indebtedness issued or assumed by the Corporation to be
outstanding (but excluding short-term indebtedness, as
above defined, in an amount not exceeding 10% of the
sum of items (y) and (z) below) would exceed 65% of the
aggregate of
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(y) the total principal amount of all bonds, notes,
debentures or other securities representing
indebtedness maturing in more than 12 months from
date of issue issued or assumed by the Corporation
and then to be outstanding, and
(z) the capital and surplus of the Corporation as then
to be stated on the books of account of the
Corporation.
(2) The Corporation shall not, without the consent (given
by vote at an annual meeting or a special meeting
called for that purpose) of the holders of at least
two-thirds of the total number of shares of Class I
Preferred then outstanding, issue, sell or otherwise
dispose of any additional shares of Class I Preferred
Stock, or any shares of Parity Stock or Senior Shares,
unless the gross income of the Corporation determined
in accordance with such system of accounts as may be
prescribed by governmental authorities having
jurisdiction in the premises, or, in the absence
thereof, in accordance with sound accounting practices
(but in any event after deducting the amount charged by
the Corporation on its books for depreciation expense
and all taxes), for a period of 12 consecutive calendar
months within the 15 calendar months immediately
preceding the issuance, sale or disposition of such
shares available for the payment of interest shall have
been at least 1 1/2 times the sum of (a) the annual
interest charges on all interest-bearing indebtedness
of the Corporation and (b) the annual Dividend
requirement on all outstanding shares of Class I
Preferred Stock, Parity Stock and Senior Shares,
including the shares proposed to be issued; provided
that there shall be excluded from the foregoing
computation interest charges on all indebtedness and
Dividends on all shares which are to be retired in
connection with the issue of such additional shares of
Class I Preferred Stock, Parity Stock or Senior Shares.
In determining such gross income, the Board of
Directors shall make such adjustment, by way of
increase or decrease in such gross income, as shall, in
its opinion, be necessary to give effect, for the
entire 12 months for which such gross income is
determined, to any acquisition or disposition of
property the income from which can be separately
ascertained.
(G) Preemptive Rights. No holder of shares of Class I Preferred
Stock shall have any preemptive right to subscribe for or
acquire additional shares of the Corporation of the same or
any other class, whether such shares are now or hereafter
authorized.
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(H) Cancellation. Except as may otherwise be provided in this
Division I, or in any articles of amendment to the Articles
of Incorporation providing for the issue of any particular
series of Class I Preferred Stock, shares of Class I
Preferred Stock redeemed or otherwise retired by the
Corporation may be reissued in the same manner as authorized
but unissued shares of Class I Preferred Stock undesignated
as to series until and unless cancelled pursuant to
applicable law.
(I) Definitions. In this Division I and in any articles of
amendment to the Articles of Incorporation adopted by the
Board of Directors establishing a series of shares of Class
I Preferred Stock and fixing the designation and terms
thereof, the meanings below assigned shall control:
"Senior Shares" shall mean shares of any class ranking prior
to the Class I Preferred Stock as to Dividends or upon the
Liquidation of the Corporation. No Parity Stock shall
constitute Senior Shares.
"Parity Stock" shall mean shares of any class ranking on a
parity with, but not prior to, the Class I Preferred Stock
as to Dividends or upon the Liquidation of the Corporation
and shall include all shares of Class M Preferred Stock.
"Junior Shares" shall mean shares of any class ranking
subordinate to the Class I Preferred Stock both as to
Dividends and upon the Liquidation of the Corporation,
including all shares of Preference Stock and Common Stock.
"Preferential Dividends" accrued and unpaid on a share of
Class I Preferred Stock to any particular date shall mean an
amount per share at the annual Dividend rate applicable to
such share for the period beginning with the date from and
including which Dividends on such share are cumulative and
concluding with the day prior to such particular date, less
the aggregate of all Dividends paid with respect to such
share during such period.
(J) Voting Rights.
(1) Except to the extent required by law or as permitted by
this Division I, the holders of shares of Class I
Preferred Stock shall have no voting rights.
(2) If at any time Dividends on any shares of Class I
Preferred Stock or Class M Preferred Stock shall be
accrued and unpaid in an amount equivalent to six or
more full quarterly Dividends, the holders of all
shares of Class I Preferred Stock and Class M Preferred
Stock, voting together as a single class for such
purpose, shall be entitled until, but only until, all
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Dividends accrued and unpaid on all shares of Class I
Preferred Stock and Class M Preferred Stock shall have
been paid (or deposited in trust for payment on or
before the next succeeding Dividend Payment Date with
respect to shares of Class I Preferred Stock and Merger
Series shares of Class M Preferred Stock, and on or
before the next succeeding date or dates upon which
Dividends are payable on other series of Class M
Preferred Stock), to elect two (2) Directors of the
Corporation.
(3) While the holders of the shares of Class I Preferred
Stock and Class M Preferred Stock remain entitled to
elect two Directors of the Corporation, the payment of
Dividends on Class I Preferred Stock and Class M
Preferred Stock, including accrued and unpaid
Dividends, shall not be unreasonably withheld if the
financial condition of the Corporation permits payment
thereof.
(4) The right of the holders of the shares of Class I
Preferred Stock and Class M Preferred Stock under this
Section (J) to elect two Directors of the Corporation
may be exercised at any annual meeting of shareholders
or, within the limitations of this Section (J), at a
special meeting of shareholders held for such purpose;
whenever such right shall have become vested, upon
request signed by any holder of record of shares of
Class I Preferred Stock or Class M Preferred Stock and
delivered to the Corporation at its principal office
not less than ninety (90) days prior to the date for
the annual meeting next following the date of such
vesting, the President of the Corporation shall call a
special meeting of shareholders, to be held within
sixty (60) days after the receipt of such request, for
the purpose of electing a new Board of Directors, of
which two shall, subject to the provisions of this
Section (J), be elected by a vote of the holders of the
shares of Class I Preferred Stock and Class M Preferred
Stock, voting together as a single class, to serve
until the next annual meeting or until their successors
shall be elected and shall qualify.
(5) No such special meeting shall be required to be held
within 120 days after such a prior special meeting, and
the term of office of each Director of the Corporation
shall terminate at the time of any such special meeting
or adjournment thereof, notwithstanding that the term
for which such Director had been elected shall not then
have expired, and provided that the successor of such
Director is duly elected and qualified.
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(6) In the event that at any special meeting at which the
holders of the shares of Class I Preferred Stock and
Class M Preferred Stock shall be entitled to elect two
Directors of the Corporation, a quorum of the holders
of the shares of Class I Preferred Stock and Class M
Preferred Stock shall not be present in person or by
proxy, the holders of Common Stock, if a quorum thereof
be present in person or by proxy, shall temporarily
elect the Directors of the Corporation, which the
holders of the shares of Class I Preferred Stock and
Class M Preferred Stock were entitled but failed to
elect, such Directors to be designated as having been
so elected and their term of office to expire at such
time thereafter as their successors shall be elected by
the holders of the shares of Class I Preferred Stock
and Class M Preferred Stock as provided in this Section
(J).
(7) Whenever the holders of the shares of Class I Preferred
Stock and Class M Preferred Stock shall be entitled to
elect two Directors, any holder of record of shares of
Class I Preferred Stock or Class M Preferred Stock
shall have the right, during regular business hours, in
person or by a duly authorized representative, to
examine the Corporation stock records of the Class I
Preferred Stock and Class M Preferred Stock for the
purpose of communicating with other holders of shares
of Class I Preferred Stock and Class M Preferred Stock
with respect to the exercise of such right of election,
and to make a list of such holders.
(8) Whenever, under the terms of this Section (J), the
holders of the shares of Class I Preferred Stock and
Class M Preferred Stock shall be divested of the right
to elect two Directors, upon request signed by any
holder of record of Common Stock and delivered to the
Corporation at its principal office not less than
ninety (90) days prior to the date for the annual
meeting next following the date of such divesting, the
President of the Corporation shall call a special
meeting of the holders of Common Stock to be held
within sixty (60) days after the receipt of such
request for the purpose of electing a new Board of
Directors to serve until the next annual meeting or
until their respective successors shall be elected and
shall qualify.
(9) The term of office of each Director of the Corporation
shall terminate at the time of any such special meeting
or adjournment thereof at which a quorum of holders of
Common Stock shall be present in person or by proxy,
notwithstanding that the term for which such Director
had been elected shall not then have expired, and
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provided that the successor to such Director is duly
elected and qualified.
(10) If, during any interval between annual meetings of
shareholders for the election of Directors and while
the holders of the shares of Class I Preferred Stock
and Class M Preferred Stock shall be entitled to elect
two Directors, a Director in office who has been
elected by the holders of shares of Class I Preferred
Stock and Class M Preferred Stock, shall, by reason of
resignation, death or removal, cease to be a Director,
(i) the vacancy or vacancies shall be filled by vote of
the remaining Director then in office who was elected
by the holders of shares of Class I Preferred Stock and
Class M Preferred Stock or who succeeded to a Director
so elected, and (ii) if any vacancy which occurred more
than six months prior to the date of the next ensuing
annual meeting is not so filled within forty (40) days
after the occurrence thereof, the President of the
Corporation shall call a special meeting of the holders
of the shares of Class I Preferred Stock and Class M
Preferred Stock and such vacancy shall be filled at
such special meeting.
(11) A Director elected by the holders of the shares of
Class I Preferred Stock and Class M Preferred Stock may
be removed from office only by vote of the holders of a
majority of the votes of the outstanding shares of
Class I Preferred Stock and Class M Preferred Stock,
voting together as a single class.
(12) At any annual or special meeting of the shareholders
held for any purpose, including the purpose of electing
Directors when the holders of the shares of Class I
Preferred Stock and Class M Preferred Stock shall be
entitled to elect two Directors, the presence in person
or by proxy of holders of a majority of the votes of
the outstanding shares of Class I Preferred Stock and
Class M Preferred Stock shall be required to constitute
a quorum of the holders of the shares of Class I
Preferred Stock and Class M Preferred Stock.
(13) At any meeting of shareholders at which the holders of
the shares of Class I Preferred Stock and Class M
Preferred Stock are required to vote by law or are
permitted to vote by any articles of amendment to the
Articles of Incorporation, each holder of shares of
Class I Preferred Stock shall have one vote for each
such share and each holder of shares of each series of
Class M Preferred Stock shall have the number or
fraction of votes set forth for each such share in the
articles of amendment to the Articles of Incorporation
in which the terms of such series are determined, in
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each case standing in the name of such holder on the
books of the Corporation on the record date fixed for
such purpose, or, if no record date is fixed, on the
date on which such vote is taken.
(14) The holders of shares of Class I Preferred Stock shall
not be entitled to receive notice of any meeting at
which they are not entitled to vote.
(K) $4.36 Cumulative Class I Preferred Stock.
(1) Designation of Series and Number of Shares to be
Issuable Therein. A series of Class I Preferred Stock
is designated $4.36 Cumulative Class I Preferred Stock.
Such series is a closed series consisting of 60,000
shares of Class I Preferred Stock.
(2) Rate of Dividend. The rate per annum of Dividends on
the $4.36 Cumulative Class I Preferred Stock is $4.36
per share. The first Dividend payable on shares of
$4.36 Cumulative Class I Preferred Stock, if any,
issued between quarterly Dividend Payment Dates shall
be an amount per share equal to that proportion of
$1.09 which (a) the period, beginning with the date of
issue of such shares and ending with the last day of
the quarterly Dividend period in which such issue
occurs, bears to (b) the full quarterly Dividend
period.
(3) Redemption Prices. The redemption price of the $4.36
Cumulative Class I Preferred Stock is $102 1/8 per
share plus the amount of accrued and unpaid Dividends,
if any, thereon to the redemption date.
(4) Voluntary Liquidation Price. The amount payable on
each share of $4.36 Cumulative Class I Preferred Stock
in the event of voluntary Liquidation of the
Corporation is an amount equal to the redemption price
thereof applicable at the date fixed for payment, but
no more.
(5) No Sinking Fund. There is no sinking fund for the
purchase or redemption of shares of $4.36 Cumulative
Class I Preferred Stock.
(6) No Conversion Privilege. Shares of $4.36 Cumulative
Class I Preferred Stock are not convertible into other
shares or securities of the Corporation.
(7) Merger Series. The $4.36 Cumulative Class I Preferred
Stock is a Merger Series (as defined below) and on the
Effective Date (as defined below) of the Merger (as
defined below) one share of $4.36 Cumulative Class I
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Preferred Stock shall be issued upon the conversion in
the Merger of a Preferred Share, par value $100 per
share, of Iowa-Illinois of the series designated $4.36
Cumulative Preferred Shares. The three series of Class
I Preferred Stock, eight series of Class M Preferred
Stock and two series of Preference Stock created
pursuant to these Articles of Amendment are
collectively referred to herein as the "Merger Series",
which are to be issued on the date on which the merger
(the "Merger") of Midwest Resources Inc., an Iowa
corporation, Midwest Power Systems Inc., an Iowa
corporation, and Iowa-Illinois Gas and Electric
Company, an Illinois corporation, with and into the
Corporation becomes effective ("Effective Date of the
Merger").
(L) $4.22 Cumulative Class I Preferred Stock.
(1) Designation of Series and Number of Shares to Be
Issuable Therein. A series of Class I Preferred Stock
is designated $4.22 Cumulative Class I Preferred Stock.
Such series is a closed series consisting of 40,000
shares of Class I Preferred Stock.
(2) Rate of Dividend. The rate per annum of Dividends on
the $4.22 Cumulative Class I Preferred Stock is $4.22
per share. The first Dividend payable on shares of
$4.22 Cumulative Class I Preferred Stock, if any,
issued between quarterly Dividend Payment Dates shall
be an amount per share equal to that proportion of
$1.06 which (a) the period, beginning with the date of
issue of such shares and ending with the last day of
the quarterly Dividend period in which such issue
occurs, bears to (b) the full quarterly Dividend
period.
(3) Redemption Prices. The redemption price of the $4.22
Cumulative Class I Preferred Stock is $100 per share
plus the amount of accrued and unpaid Dividends, if
any, thereon to the redemption date.
(4) Voluntary Liquidation Price. The amount payable on
each share of $4.22 Cumulative Class I Preferred Stock
in the event of voluntary Liquidation of the
Corporation is an amount equal to the redemption price
thereof applicable at the date fixed for payment, but
no more.
(5) No Sinking Fund. There is no sinking fund for the
purchase or redemption of shares of $4.22 Cumulative
Class I Preferred Stock.
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(6) No Conversion Privilege. Shares of $4.22 Cumulative
Class I Preferred Stock are not convertible into other
shares or securities of the Corporation.
(7) Merger Series. The $4.22 Cumulative Class I Preferred
Stock is a Merger Series and on the Effective Date of
the Merger one share of $4.22 Cumulative Class I
Preferred Stock shall be issued upon the conversion in
the Merger of a Preferred Share, par value $100 per
share, of Iowa-Illinois of the series designated $4.22
Cumulative Preferred Shares.
(M) $7.50 Cumulative Class I Preferred Stock.
(1) Designation of Series and Number of Shares to Be
Issuable Therein. A series of Class I Preferred Stock
is designated $7.50 Cumulative Class I Preferred Stock.
Such series is a closed series consisting of 100,000
shares of the Class I Preferred Stock.
(2) Rate of Dividend. The rate per annum of Dividends on
the $7.50 Cumulative Class I Preferred Stock is $7.50
per share. The first Dividend payable on shares of
$7.50 Cumulative Class I Preferred Stock, if any,
issued between quarterly Dividend Payment Dates shall
be an amount per share which is the same proportion of
$1.875 that (a) the period beginning with the date of
issue of such shares and ending with the last day of
the quarterly Dividend period in which such issue
occurs is of (b) the full quarterly Dividend period.
(3) Redemption Prices. The redemption price of the $7.50
Cumulative Class I Preferred Stock is $101.88 per share
plus the amount of accrued and unpaid Dividends
thereon, if any, to the redemption date.
(4) Voluntary Liquidation Price. The amount payable on
each share of $7.50 Cumulative Class I Preferred Stock
in the event of voluntary Liquidation of the
Corporation is an amount equal to the redemption price
thereof applicable at the date fixed for payment, but
no more.
(5) No Sinking Fund. There is no sinking fund for the
purchase or redemption of shares of $7.50 Cumulative
Class I Preferred Stock.
(6) No Conversion Privilege. Shares of $7.50 Cumulative
Class I Preferred Stock are not convertible into other
shares or securities of the Corporation.
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(7) Merger Series. The $7.50 Cumulative Class I Preferred
Stock is a Merger Series and on the Effective Date of
the Merger one share of $7.50 Cumulative Class I
Preferred Stock shall be issued upon the conversion in
the Merger of a Preferred Share, par value $100 per
share, of Iowa-Illinois of the series designated $7.50
Cumulative Preferred Shares.
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DIVISION II
Provisions Relating to Class M Preferred Stock
(A) Designations. Each Merger Series of Class M Preferred Stock
is given one of the following distinguishing designations:
$1.7375 Series
$3.30 Series
$3.75 Series
$3.90 Series
$4.20 Series
$4.35 Series
$4.40 Series
$4.80 Series
(B) Number of Shares. Each Merger Series of Class M Preferred
Stock shall consist of the following number of shares of Class M
Preferred Stock:
Series Number of Shares
$1.7375 Series 2,400,000
$3.30 Series 49,632
$3.75 Series 38,320
$3.90 Series 32,636
$4.20 Series 47,369
$4.35 Series 49,950
$4.40 Series 50,000
$4.80 Series 49,898
(C) Distributions ("Dividends").
(1) The holders of the shares of each Merger Series of
Class M Preferred Stock in preference to the holders of
Common Stock and the holders of any other shares of the
Corporation which rank junior to the Class M Preferred
Stock and Class I Preferred Stock, shall be entitled to
receive, but only when and as declared by the Board of
Directors, out of any assets legally available
therefor, Dividends in lawful money of the United
States of America, in the amount per annum set forth in
the provisions of these Articles of Amendment creating
such Merger Series of Class M Preferred Stock, and no
more.
(2) Dividends on the Merger Series shares of Class M
Preferred Stock shall be payable quarterly on the first
day of each of the months of February, May, August and
November ("Dividend Payment Date") with respect to the
quarterly Dividend period ending on the date preceding
each such Dividend Payment Date, to shareholders of
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record as of a date to be fixed by the Board of
Directors, not exceeding thirty (30) days and not less
than ten (10) days preceding such Dividend Payment
Dates; provided, however, that the first Dividend
payable on the Merger Series shares of Class M
Preferred Stock shall be paid as follows:
(a) if a regular Dividend payment date for
the shares of Preferred Stock, no par value, of
Midwest Power which were converted into shares of
such Merger Series in the merger of Midwest
Resources Inc., Midwest Power and Iowa-Illinois
with and into the Corporation ("Midwest Power
Payment Date"), occurs after the Effective Date of
the Merger but before the first Dividend Payment
Date after the Effective Date of the Merger
("First Dividend Payment Date"), then
(i) a Dividend shall be paid on the
shares of such Merger Series on the Midwest
Power Payment Date in the regular quarterly
amount, and
(ii) a Dividend shall be paid on the
shares of such Merger Series on the First
Dividend Payment Date, but only in the amount
obtained by multiplying the regular quarterly
amount of such Dividend by a fraction (A) the
numerator of which is the number of days in
the period commencing on the Midwest Power
Payment Date and ending on and including the
day prior to the First Dividend Payment Date,
and (B) the denominator of which is the
number of days in the period commencing on
the Dividend Payment Date preceding the
Effective Date of the Merger and ending on
and including the day prior to the First
Dividend Payment Date; or
(b) if the First Dividend Payment Date
occurs before a Midwest Power Payment Date, a
Dividend shall be paid on the shares of such
Merger Series on the First Dividend Payment Date,
but only in the amount obtained by multiplying the
regular quarterly amount of such Dividend by a
fraction (i) the numerator of which is the number
of days in the period commencing on the Midwest
Power Payment Date preceding the Effective Date of
the Merger and ending on and including the day
prior to the First Dividend Payment Date, and (ii)
the denominator of which is the number of days in
the period commencing on the Dividend Payment Date
preceding the Effective Date of the Merger and
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ending on and including the day prior to the First
Dividend Payment Date.
(3) Except as provided in Section (C)(2) of this Division
II, Dividends on each Merger Series share of Class M
Preferred Stock shall be cumulative from the Dividend
Payment Date preceding the Effective Date of the
Merger. Accumulations of Dividends shall not bear
interest.
(4) Except as provided in Section (C)(2) of this Division
II, no Dividend shall be paid upon, or declared and set
apart for, any Merger Series share of Class M Preferred
Stock for any quarterly period or portion thereof
unless (i) at the same time a like proportionate
Dividend for the same quarterly period or portion
thereof shall be paid upon, or declared and set aside,
for all shares of Class I Preferred Stock and all
Merger Series shares of Class M Preferred Stock and all
other shares of Class M Preferred Stock on which
Dividends are payable on a Dividend Payment Date and
(ii) no Dividends on any other shares of Class M
Preferred Stock are accrued and unpaid.
(5) So long as any shares of Class I Preferred Stock and
Merger Series shares of Class M Preferred Stock are
outstanding, the Corporation shall not (i) pay or
declare or set aside any Dividend or other distribution
on any shares of Common Stock or on any other junior
shares of the Corporation which rank below the Class I
Preferred Stock and Class M Preferred Stock with
respect to any assets, Dividends or other distributions
or upon Liquidation or (ii) purchase, redeem or
otherwise acquire for value any shares of Common Stock
or such junior shares, in each case unless and until
full Dividends have been declared and paid upon or set
apart for payment on all shares of Class I Preferred
Stock and all shares of Class M Preferred Stock, with
respect to all Dividend periods and the Dividend period
which includes the date of such Dividend or
distribution on Common Stock or such junior shares;
provided, however, that the foregoing terms of this
Section (C)(5) shall not apply to the declaration and
payment of Dividends or other distributions on any
shares of Common Stock or such junior shares if payable
solely in shares of Common Stock or such junior shares,
nor to the acquisition of shares of Common Stock or
such junior shares in exchange for, or through the
application of the proceeds of the sale of, any shares
of Common Stock or such junior shares.
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(D) Redemption.
(1) Subject to the limitations set forth in Section (E) of
this Division II, the outstanding shares of each Merger
Series of Class M Preferred Stock may be redeemed by
the Corporation, at its option, by action of its Board
of Directors, as a whole at any time or in part from
time to time, by paying in cash on a redemption date
specified by the Board of Directors, the following
redemption prices, in each case plus an amount equal to
accrued and unpaid Dividends thereon to such redemption
date:
$1.7375 Series:
$26.7375 per share through November 30,
1994
$26.3900 per share on December 1, 1994
through November 30, 1995
$26.0425 per share on December 1, 1995
through November 30, 1996
$25.6950 per share on December 1, 1996
through November 30, 1997
$25.3475 per share on December 1, 1997
through November 30, 1998
$25.0000 per share on or after
December 1, 1998
$3.30 Series:
$101.50 per share
$3.75 Series:
$102.75 per share
$3.90 Series:
$105.00 per share
$4.20 Series:
$103.439 per share
$4.35 Series:
$102.00 per share
$4.40 Series:
$101.50 per share
$4.80 Series:
$102.70 per share
provided, however, that prior to December 1, 1998, no shares of
the $1.7375 Series of Class M Preferred Stock may be redeemed
through a refunding, directly or indirectly, by or in
anticipation of the incurring of any debt which has an interest
cost, or the issuance of stock ranking equally with or prior to
the $1.7375 Series of Class M Preferred Stock as to Dividends or
assets which has a Dividend cost to the Corporation (computed in
accordance with generally accepted financial practice), of less
than 7.15% per annum.
(2) "Accrued and unpaid Dividends" as used in this
Amendment with respect to any Merger Series share of
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Class M Preferred Stock means the amount, if any, by
which the applicable amount of Dividend per annum from
the date after which Dividends on such share become
cumulative to the date in question, exceeds the
Dividends actually paid or declared and set aside for
payment thereon.
(3) Notice of any proposed redemption of any Merger Series
shares of Class M Preferred Stock shall be given by the
Corporation by mailing a copy of such notice not more
than sixty (60) nor less than thirty (30) days prior to
the date fixed for such redemption to the holders of
record of such shares to be redeemed, at their
respective addresses then appearing on the books of the
Corporation; but no failure to mail such notice or any
defect therein, or in the mailing thereof, shall affect
the validity of the proceedings for the redemption of
any Merger Series shares of Class M Preferred Stock so
to be redeemed.
(4) In case of redemption of only a part of the shares of
any Merger Series of Class M Preferred Stock at the
time outstanding, the shares of such Merger Series of
Class M Preferred Stock to be redeemed shall be
selected by lot in such manner as the Board of
Directors may determine.
(5) On the redemption date specified in the notice of such
redemption the Corporation shall, and at any time
within sixty (60) days prior to such redemption date
may, deposit in trust, for the account of the holders
of the Merger Series shares of Class M Preferred Stock
to be redeemed, funds necessary for such redemption
with a bank or trust company in good standing,
organized under the laws of the United States of
America or of the State of Iowa, doing business in the
City of Des Moines, Iowa, having combined capital,
surplus and undivided profits of at least $2,500,000
and designated in such notice of redemption.
(6) Notice having been given and funds necessary for such
redemption having been deposited, all as provided in
this Section (D), all Merger Series shares of Class M
Preferred Stock with respect to the redemption of which
such notice shall be given and deposit made, shall
thenceforth, whether or not the date fixed for such
redemption shall have yet occurred, or the certificates
for such shares shall have been surrendered for
cancellation, be deemed no longer to be outstanding for
any purpose, and all rights with respect to such shares
shall thereupon cease and terminate except only the
right of the holders of the certificates for such
shares to receive, out of the funds so deposited in
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trust, upon or after the redemption date (unless an
earlier date is fixed by the Board of Directors of the
Corporation), the redemption funds, without interest,
to which they are entitled upon endorsement, if
required, and surrender of their certificates for such
shares.
(7) At the expiration of six (6) years after the redemption
date such trust shall terminate and any such moneys
then remaining on deposit with such bank or trust
company which are unclaimed by the holders of the
certificates for the Merger Series shares of Class M
Preferred Stock which have been so redeemed, plus
interest thereon, if any, shall be paid by such bank or
trust company to the Corporation, free of trust, and
thereafter the holders of the certificates for such
shares shall have no claim against such bank or trust
company but only claims as unsecured creditors against
the Corporation for the amount payable upon the
redemption thereof, without interest.
(8) Any interest on or other accretions to funds deposited
with such bank or trust company pursuant to this
Section (D) shall belong to the Corporation.
(E) Repurchase.
(1) The Corporation may from time to time purchase or
otherwise acquire Merger Series shares of Class M
Preferred Stock at a price not exceeding the amount at
the time payable in the event of redemption thereof
otherwise than through the operation of the applicable
sinking fund, if any.
(2) If and so long as the Corporation shall be in default
in the payment of any quarterly Dividend on any shares
of Class I Preferred Stock or Merger Series shares of
Class M Preferred Stock, or shall be in default in the
payment of funds into or the setting aside of funds for
any sinking fund created for any shares of Class I
Preferred Stock or Merger Series shares of Class M
Preferred Stock, the Corporation shall not (other than
by the use of unapplied funds, if any, paid into or set
aside for a sinking fund or funds prior to such
default):
(a) redeem any shares of Class I Preferred Stock
or any Merger Series shares of Class M Preferred Stock,
unless all shares of Class I Preferred Stock and all
Merger Series shares of Class M Preferred Stock are
redeemed, or
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(b) purchase or otherwise acquire for a valuable
consideration any shares of Class I Preferred Stock or
Merger Series shares of Class M Preferred Stock, except
pursuant to offers of sale made by the holders of
shares of Class I Preferred Stock and Merger Series
shares of Class M Preferred Stock in response to an
invitation for tenders given by mail by the Corporation
simultaneously to the holders of record of all shares
of Class I Preferred Stock and all Merger Series shares
of Class M Preferred Stock then outstanding, at their
respective addresses then appearing on the books of the
Corporation.
(F) Preference on Liquidation.
(1) Before any distribution of any assets of the
Corporation shall be made to the holders of any Common
Stock or any other junior shares of the Corporation
which rank below the Class I Preferred Stock and Class
M Preferred Stock with respect to any assets, Dividends
or other distributions:
(a) in the event of any liquidation, dissolution or
winding up ("Liquidation") of the Corporation which is
voluntary:
(i) the holders of the shares of the $1.7375
Series, $3.30 Series, $3.75 Series, $4.35 Series, $4.40
Series and $4.80 Series shall be entitled to receive an
amount per share equal to the amount which would then
be payable upon such share in the event of redemption
thereof in accordance with Section (D) of this Division
II, and no more; and
(ii) the holders of the shares of the $3.90
Series and $4.20 Series shall be entitled to receive
the amount of one hundred dollars ($100) per share plus
accrued and unpaid Dividends to the date of payment of
such amount, and no more.
(b) in the event of any Liquidation of the Corporation
which is involuntary:
(i) the holders of the shares of the $3.30
Series, $3.75 Series, $3.90 Series, $4.20 Series, $4.35
series, $4.40 Series and $4.80 Series of Class M
Preferred Stock shall be entitled to receive the amount
of one hundred dollars ($100) per share plus accrued
and unpaid Dividends to the date of payment of such
amount, and no more; and
(ii) the holders of the shares of the $1.7375
Series of Class M Preferred Stock shall be entitled to
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receive the amount of twenty-five dollars ($25.00) per
share plus accrued and unpaid Dividends to the date of
payment of such amount, and no more.
(2) If upon any Liquidation the assets distributable among
the holders of the shares of Class I Preferred Stock
and Class M Preferred Stock shall be insufficient to
permit the payment of the full preferential amounts to
which they shall be entitled, then the entire assets of
the Corporation to be distributed shall be distributed
among the holders of the shares of Class I Preferred
Stock and Class M Preferred Stock then outstanding
ratably in proportion to the amounts to which such
holders are respectively entitled.
(3) If upon any Liquidation the holders of the shares of
Class I Preferred Stock and Class M Preferred Stock
shall receive the full preferential amounts to which
they shall be entitled, the remaining assets and funds
of the Corporation shall be distributed among the
holders of the shares of Common Stock and of any other
junior shares of the Corporation which rank below the
Class I Preferred Stock and Class M Preferred Stock
with respect to any assets, or Dividends or other
distributions, according to their respective rights and
preferences and according to their respective shares.
(4) Neither a consolidation nor a merger of the
Corporation, nor a sale or transfer of substantially
all its assets as an entirety, nor a redemption or a
purchase or other acquisition by the Corporation of
less than all of its shares of any class at the time
outstanding, shall be regarded as a Liquidation within
the meaning of this Section (F).
(G) Voting Rights.
(1) Except to the extent required by law or as permitted by
this Section (G), the holders of Merger Series shares
of Class M Preferred Stock shall have no voting rights.
(2) If at any time Dividends on any Class I Preferred Stock
or Class M Preferred Stock shall be accrued and unpaid
in an amount equivalent to six or more full quarterly
Dividends, the holders of all shares of Class I
Preferred Stock and Class M Preferred Stock, voting
together as a single class for such purpose, shall be
entitled until, but only until, all Dividends accrued
and unpaid on all shares of Class I Preferred Stock and
Class M Preferred Stock shall have been paid (or
deposited in trust for payment on or before the next
succeeding Dividend Payment Date with respect to shares
of Class I Preferred Stock and Merger Series shares of
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Class M Preferred Stock, and on or before the next
succeeding date or dates upon which Dividends are
payable on other series of Class M Preferred Stock), to
elect two (2) Directors of the Corporation.
(3) While the holders of the shares of Class I Preferred
Stock and Class M Preferred Stock remain entitled to
elect two Directors of the Corporation, the payment of
Dividends on Class I Preferred Stock and Class M
Preferred Stock, including accrued and unpaid
Dividends, shall not be unreasonably withheld if the
financial condition of the Corporation permits payment
thereof.
(4) The right of the holders of the shares of Class I
Preferred Stock and Class M Preferred Stock under this
Section (G) to elect two Directors of the Corporation
may be exercised at any annual meeting of shareholders
or, within the limitations of this Section (G), at a
special meeting of shareholders held for such purpose;
whenever such right shall have become vested, upon
request signed by any holder of record of shares of
Class I Preferred Stock or Class M Preferred Stock and
delivered to the Corporation at its principal office
not less than ninety (90) days prior to the date for
the annual meeting next following the date of such
vesting, the President of the Corporation shall call a
special meeting of shareholders, to be held within
sixty (60) days after the receipt of such request, for
the purpose of electing a new Board of Directors, of
which two shall, subject to the provisions of this
Section (G), be elected by a vote of the holders of the
Class I Preferred Stock and Class M Preferred Stock,
voting together as a single class, to serve until the
next annual meeting or until their successors shall be
elected and shall qualify.
(5) No such special meeting shall be required to be held
within 120 days after such a prior special meeting, and
the term of office of each Director of the Corporation
shall terminate at the time of any such special meeting
or adjournment thereof, notwithstanding that the term
for which such Director had been elected shall not then
have expired, and provided that the successor of such
Director is duly elected and qualified.
(6) In the event that at any special meeting at which the
holders of the shares of Class I Preferred Stock and
Class M Preferred Stock shall be entitled to elect two
Directors of the Corporation, a quorum of the holders
of the shares of Class I Preferred Stock and Class M
Preferred Stock shall not be present in person or by
proxy, the holders of Common Stock, if a quorum thereof
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<PAGE>
be present in person or by proxy, shall temporarily
elect the Directors of the Corporation, which holders
of the shares of Class I Preferred Stock and Class M
Preferred Stock were entitled but failed to elect, such
Directors to be designated as having been so elected
and their term of office to expire at such time
thereafter as their successors shall be elected by
holders of the shares of Class I Preferred Stock and
Class M Preferred Stock as provided in this Section
(G).
(7) Whenever the holders of the shares of Class I Preferred
Stock and Class M Preferred Stock shall be entitled to
elect two Directors, any holder of record of a share of
Class I Preferred Stock or Class M Preferred Stock
shall have the right, during regular business hours, in
person or by a duly authorized representative, to
examine the Corporation stock records of the Class I
Preferred Stock and Class M Preferred Stock for the
purpose of communicating with other holders of Class I
Preferred Stock and Class M Preferred Stock with
respect to the exercise of such right of election, and
to make a list of such holders.
(8) Whenever, under the terms of this Section (G), the
holders of the shares of Class I Preferred Stock and
Class M Preferred Stock shall be divested of the right
to elect two Directors, upon request signed by any
holder of record of Common Stock and delivered to the
Corporation at its principal office not less than
ninety (90) days prior to the date for the annual
meeting next following the date of such divesting, the
President of the Corporation shall call a special
meeting of the holders of Common Stock to be held
within sixty (60) days after the receipt of such
request for the purpose of electing a new Board of
Directors to serve until the next annual meeting or
until their respective successors shall be elected and
shall qualify.
(9) The term of office of each Director of the Corporation
shall terminate at the time of any such special meeting
or adjournment thereof at which a quorum of holders of
Common Stock shall be present in person or by proxy,
notwithstanding that the term for which such Director
had been elected shall not then have expired, and
provided that the successor to such Director is duly
elected and qualified.
(10) If, during any interval between annual meetings of
shareholders for the election of Directors and while
the holders of the shares of Class I Preferred Stock
and Class M Preferred Stock shall be entitled to elect
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two Directors, a Director in office who has been
elected by the holders of the shares of Class I
Preferred Stock and Class M Preferred Stock, shall, by
reason of resignation, death or removal, cease to be a
Director, (a) the vacancy or vacancies shall be filled
by vote of the remaining Director then in office who
was elected by the holders of the shares of Class I
Preferred Stock and Class M Preferred Stock or who
succeeded to a Director so elected, and (b) if any
vacancy which occurred more than six months prior to
the date of the next ensuing annual meeting is not so
filled within forty (40) days after the occurrence
thereof, the President of the Corporation shall call a
special meeting of the holders of the shares of Class I
Preferred Stock and Class M Preferred Stock and such
vacancy shall be filled at such special meeting.
(11) A Director elected by holders of the shares of Class I
Preferred Stock and Class M Preferred Stock may be
removed from office only by vote of the holders of a
majority of the votes of the outstanding shares of
Class I Preferred Stock and Class M Preferred Stock.
(12) At any annual or special meeting of the shareholders
held for any purpose including the purpose of electing
Directors when the holders of the shares of Class I
Preferred Stock and Class M Preferred Stock shall be
entitled to elect two Directors, the presence in person
or by proxy of holders of a majority of the votes of
the outstanding shares of Class I Preferred Stock and
Class M Preferred Stock shall be required to constitute
a quorum of the holders of the shares of Class I
Preferred Stock and Class M Preferred Stock.
(13) At any meeting of shareholders at which the holders of
the shares of Class I Preferred Stock and Class M
Preferred Stock are required to vote by law or are
permitted to vote by any articles of amendment to the
Articles of Incorporation, each holder of Merger Series
shares of Class M Preferred Stock shall have one vote
for each such Merger Series share except the holders of
$1.7375 Series Shares of Class M Preferred Stock which
shall have 1/4 vote for each such $1.7375 Series Share,
and each holder of shares of each other series of Class
M Preferred Stock shall have the number or fraction of
votes set forth for each such share in the articles of
amendment to the Articles of Incorporation in which the
terms of such series are determined, in each case
standing in the name of such holder on the books of the
Corporation on the record date fixed for such purpose,
or, if no record date is fixed, on the date on which
such vote is taken.
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(14) The holders of shares of Class M Preferred Stock shall
not be entitled to receive notice of any meeting at
which they are not entitled to vote.
(15) No Preemptive Rights. No holder of Merger Series
shares of Class M Preferred Stock as such shall have
any preemptive or preferential right to purchase or
subscribe for any shares of stock or rights or options
to purchase stock or any other securities of the
Corporation of any kind whatsoever whether now or
hereafter authorized.
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DIVISION III
Provisions Relating to Preference Stock
(A) Issue in Series. The shares of Preference Stock may be
divided into and issued in series, each of which shall be so
designated as to distinguish the shares thereof from the
shares of all other series and classes. Authority is hereby
expressly vested in the Board of Directors to divide any or
all of the shares of Preference Stock from time to time
authorized into series, to fix the designation of each such
series and, subject to the limitations stated herein or
imposed by law, to fix and determine the following as to
each such series:
(1) the distribution ("Dividend") rate or rates for the
shares of such series, or the facts ascertainable
outside the Articles of Incorporation of the
Corporation providing the basis for determining such
Dividend rate or rates, which may vary according to a
formula based upon market rates or rating agency
ratings for such series or other designated securities
and/or be determined periodically by auctions,
remarketing or other methods, but only if the manner in
which such facts are to operate upon such Dividend rate
or rates shall be clearly and expressly set forth in
Articles of Amendment to the Articles of Incorporation
adopted by the Board of Directors of the Corporation
for such purpose; the date or dates on which such
Dividends may be payable; and the date from which
Dividends on shares of such series shall be cumulative;
(2) the price or prices at which, and the terms and
conditions on which, such shares may be redeemed;
(3) the amount payable upon each of such shares in the
event of the voluntary or involuntary liquidation,
dissolution or winding up ("Liquidation") of the
Corporation;
(4) sinking fund provisions, if any, for the redemption or
purchase of such shares; and
(5) the terms and conditions on which such shares may be
converted into Common Stock, if such shares are to be
issued with such privilege of conversion.
(B) Dividends. Subject to the preferential rights of the
holders of Class I Preferred Stock and Class M Preferred
Stock with respect to the payment of Dividends, as set forth
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<PAGE>
in Section (B) of Division I and in Section (C) of Division
II, the holders of shares of Preference Stock of each series
shall be entitled to receive, when and as declared by the
Board of Directors from assets legally available for the
payment thereof, Dividends at the rate fixed for such
series, and no more, payable quarterly on the first day of
each of the months of February, May, August and November in
each year (the "quarterly Dividend Payment Dates"), each
such quarterly Dividend payment to be in respect of the
quarterly Dividend period ending with the day next preceding
the date of such payment, except in the case of the first
Dividend payable on shares of any series issued between
quarterly Dividend Payment Dates, in which case such
Dividend shall be for the period beginning with the date of
issue of such shares or the next preceding quarterly
Dividend Payment Date for the Preference Stock, as
determined by the Board of Directors, and ending with the
day next preceding either the first or the second quarterly
Dividend Payment Date for the Preference Stock succeeding
the date of issue of such shares, as determined by the Board
of Directors. Notwithstanding the immediately preceding
sentence, if so provided in the articles of amendment to the
Articles of Incorporation establishing a particular series
of Preference Stock, as authorized by Section (A) of this
Division III, Dividends on the shares of such series may be
declared payable on such dates and with respect to such
periods as shall be set forth in such articles of amendment.
Except as may be otherwise provided in the articles of
amendment to the Articles of Incorporation establishing a
particular series of Preference Stock, such Dividends shall
accrue and be cumulative with respect to each share of each
series from and including the beginning date of the period
for which the first Dividend thereon was payable.
No Dividend shall be declared in full on the outstanding
shares of Preference Stock of any series ("Declaring
Series") in respect of any Dividend period for the Declaring
Series at the Dividend rate applicable to such Dividend
period unless prior thereto or concurrently therewith
Dividends in full shall likewise have been declared on all
then outstanding Preference Stock of each other series
("Other Series") in respect of each Dividend period for each
of the Other Series ending concurrently with, or prior to,
the last day of the Dividend period first above specified,
at the respective Dividend rates applicable from time to
time to each Other Series. Whenever less than full
Dividends shall be declared on the Declaring Series in
respect of any Dividend period for the Declaring Series at
the Dividend rate applicable to such Dividend period,
Dividends on the outstanding shares of Preference Stock of
all series shall be declared ratably in accordance with the
respective amounts which would be payable on all such
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outstanding shares of Preference Stock if all Dividends,
including accumulated Dividends, if any, were declared in
full on the declaration date. Accumulations of Dividends
shall not bear interest.
So long as any shares of Preference Stock are outstanding,
no Dividend shall be paid or declared, or other distribution
made, on Junior Shares, nor shall any Junior Shares be
purchased, redeemed, retired or otherwise acquired for a
consideration, unless Dividends on the outstanding
Preference Stock for the current and all past Dividend
periods shall have been paid in full, or declared and set
apart for payment, or if the Corporation shall be in default
or deficient under any requirement or a sinking fund
established with respect to outstanding shares of Preference
Stock of any series for any period then elapsed; provided,
however, that the restrictions of this Section (B) shall not
apply to the declaration and payment of Dividends on Junior
Shares if payable solely in Junior Shares, nor to the
acquisition of any Junior Shares through the application of
the proceeds of any Junior Shares sold at or about the time
of such acquisition, nor shall such restrictions prevent the
transfer of any amount from surplus to stated capital.
(C) Liquidation Preferences. In the event of Liquidation of the
Corporation, whether voluntary or involuntary, the holders
of Preference Stock of each series outstanding shall be
entitled to receive out of the assets of the Corporation,
before any payment or distribution shall be made to the
holders of any Junior Shares, such amount per share as shall
have been fixed by the Board of Directors as the voluntary
liquidation price or the involuntary liquidation price, as
the case may be, for the shares of such series; provided,
however, that no such payment to the holders of Preference
Stock shall be made until payment in full shall have been
made to the holders of all shares of Class I Preferred Stock
and Class M Preferred Stock, or moneys or other assets
sufficient for such payment shall have been set apart for
payment by the Corporation, separate and apart from its
other funds and assets for the account of such holders, in
accordance with the provisions of Section (C) of Division I
and Section (F) of Division II. If upon any such
Liquidation the assets of the Corporation available for
payment to shareholders are not sufficient to make payment
in full to the holders of Preference Stock as above
provided, payment shall be made to such holders ratably in
accordance with the number of shares held by them
respectively, and in case there shall then be outstanding
more than one series of Preference Stock, ratably in
accordance with the respective distributive amounts to which
such holders shall be entitled.
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Neither a consolidation nor merger of the Corporation with
or into any other corporation, nor a merger of any other
corporation into the Corporation, nor the purchase or
redemption of all or any part of the outstanding shares of
any class or classes of the Corporation, nor the sale or
transfer of the property and business of the Corporation as
or substantially as an entirety, shall be construed to be a
Liquidation of the Corporation within the meaning of the
foregoing provisions.
(D) Redemption and Repurchases. Subject to the limitations
stated in Section (B) of Division I, Section (E) of Division
II and in this Section (D), and except as may be otherwise
provided in the articles of amendment to the Articles of
Incorporation establishing a particular series, shares of
Preference Stock of any one or more series may be called for
redemption and redeemed, at the option of the Corporation,
in whole at any time or in part from time to time, by the
payment therefor in cash of the then applicable optional
redemption price or prices fixed by the Board of Directors
for the shares of such series, each redemption to be
effected upon notice the same as that provided in Section
(D) of Division I in respect of the redemption of Class I
Preferred Stock. All other provisions of said Section (D)
with respect to the method and effect of redemption of Class
I Preferred Stock shall be applicable to the redemption of
Preference Stock in the same manner and with the same force
and effect as though such provisions were set forth in full
in this Section (D).
Subject to applicable law, to the provisions of Section (B)
of Division I, Section (E) of Division II and to the
provisions of this Division III, the Corporation may from
time to time purchase or otherwise acquire outstanding
shares of Preference Stock at a price per share not
exceeding the amount at the time payable in the event of
redemption thereof otherwise than through the operations of
the applicable sinking fund, if any.
If and so long as the Corporation shall be in default in the
payment of any quarterly Dividend on shares of Preference
Stock of any series, or shall be in default in the payment
of funds into or the setting aside of funds for any sinking
fund created for any series of the Preference Stock, the
Corporation shall not (other than by the use of unapplied
funds, if any, paid into or set aside for a sinking fund or
funds prior to such default):
(1) redeem any shares of Preference Stock unless all shares
thereof are redeemed, or
(2) purchase or otherwise acquire for a valuable
consideration any shares of Preference Stock, except
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pursuant to offers of sale made by the holders of
Preference Stock in response to an invitation for
tenders given by mail by the Corporation simultaneously
to the holders of record of all shares of Preference
Stock then outstanding, at their respective addresses
then appearing on the books of the Corporation.
(E) Restrictions on Certain Corporation Action. So long as any
shares of Preference Stock shall be outstanding, the
Corporation shall not, without the affirmative vote or the
written consent of the holders of at least two-thirds of the
shares of Preference Stock at the time outstanding, or as of
a record date fixed by the Board of Directors, create or
authorize any shares of any class, other than the Class I
Preferred Stock and Class M Preferred Stock (whether now or
hereafter authorized), ranking prior to or on a parity with
the Preference Stock with respect to the payment of
Dividends or the distribution of assets upon the Liquidation
of the Corporation.
(F) Preemptive Rights. No holder of Preference Stock shall have
any preemptive right to subscribe for or acquire additional
shares of the Corporation of the same or any other class,
whether such shares are now or hereafter authorized.
(G) Cancellation. All shares of Preference Stock which shall be
redeemed or repurchased pursuant to any sinking fund created
for any series of Preference Stock, or applied in lieu of
the payment of funds into or the setting aside of funds for
any such sinking fund, and all shares of Preference Stock
issued with the privilege of conversion into shares of
Common Stock which shall be so converted, shall be retired
and cancelled and shall not be reissued. Shares of
Preference Stock otherwise redeemed, purchased or acquired
by the Corporation may be reissued in the same manner as
authorized but unissued shares of Preference Stock
undesignated as to series until and unless cancelled by the
Board of Directors pursuant to applicable law.
(H) Definitions. In this Division III and in any articles of
amendment to the Articles of Incorporation establishing a
series of Preference Stock and fixing the designation and
terms thereof, the meanings below assigned shall control:
"Junior Shares" shall mean shares of any class ranking
subordinate to the Preference Stock both as to Dividends and
upon the Liquidation of the Corporation, including Common
Stock.
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(I) Voting Rights.
(1) Except to the extent required by law or as permitted by
this Division III, the holders of shares of Preference
Stock shall have no voting rights.
(2) If at any time Dividends on any shares of Preference
Stock shall be accrued and unpaid in an amount
equivalent to six or more full quarterly Dividends, the
holders of all shares of Preference Stock shall be
entitled until, but only until, all Dividends accrued
and unpaid on all shares of Preference Stock shall have
been paid (or deposited in trust for payment on or
before the next succeeding Dividend Payment Date with
respect to shares of Preference Stock) to elect one (1)
Director of the Corporation.
(3) While the holders of the shares of Preference Stock
remain entitled to elect one Director of the
Corporation, the payment of Dividends on Preference
Stock, including accrued and unpaid Dividends, shall
not be unreasonably withheld if the financial condition
of the Corporation permits payment thereof.
(4) The right of the holders of the shares of Preference
Stock under this Section (I) to elect one Director of
the Corporation may be exercised at any annual meeting
of shareholders or, within the limitations of this
Section (I), at a special meeting of shareholders held
for such purpose; whenever such right shall have become
vested, upon request signed by any holder of record of
shares of Preference Stock and delivered to the
Corporation at its principal office not less than
ninety (90) days prior to the date for the annual
meeting next following the date of such vesting, the
President of the Corporation shall call a special
meeting of shareholders, to be held within sixty (60)
days after the receipt of such request, for the purpose
of electing a new Board of Directors, of which one
shall, subject to the provisions of this Section (I),
be elected by a vote of the holders of the shares of
Preference Stock, to serve until the next annual
meeting or until the successor of such Director shall
be elected and shall qualify.
(5) No such special meeting shall be required to be held
within 120 days after such a prior special meeting, and
the term of office of each Director of the Corporation
shall terminate at the time of any such special meeting
or adjournment thereof, notwithstanding that the term
for which such Director had been elected shall not then
have expired, and provided that the successor of such
Director is duly elected and qualified.
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(6) In the event that at any special meeting at which the
holders of the shares of Preference Stock shall be
entitled to elect one Director of the Corporation, a
quorum of the holders of the shares of Preference Stock
shall not be present in person or by proxy, the holders
of Common Stock, if a quorum thereof be present in
person or by proxy, shall temporarily elect the
Director of the Corporation, which the holders of the
shares of Preference Stock were entitled but failed to
elect, such Director to be designated as having been so
elected and his or her term of office to expire at such
time thereafter as his or her successor shall be
elected by the holders of the shares of Preference
Stock as provided in this Section (I).
(7) Whenever the holders of the shares of Preference Stock
shall be entitled to elect one Director, any holder of
record of shares of Preference Stock shall have the
right, during regular business hours, in person or by a
duly authorized representative, to examine the
Corporation stock records of the Preference Stock for
the purpose of communicating with other holders of
shares of Preference Stock with respect to the exercise
of such right of election, and to make a list of such
holders.
(8) Whenever, under the terms of this Section (I), the
holders of the shares of Preference Stock shall be
divested of the right to elect one Director, upon
request signed by any holder of record of Common Stock
and delivered to the Corporation at its principal
office not less than ninety (90) days prior to the date
for the annual meeting next following the date of such
divesting, the President of the Corporation shall call
a special meeting of the holders of Common Stock to be
held within sixty (60) days after the receipt of such
request for the purpose of electing a new Board of
Directors to serve until the next annual meeting or
until their respective successors shall be elected and
shall qualify.
(9) The term of office of each Director of the Corporation
shall terminate at the time of any such special meeting
or adjournment thereof at which a quorum of holders of
Common Stock shall be present in person or by proxy,
notwithstanding that the term for which such Director
had been elected shall not then have expired, and
provided that the successor to such Director is duly
elected and qualified.
(10) If, during any interval between annual meetings of
shareholders for the election of Directors and while
the holders of the shares of Preference Stock shall be
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entitled to elect one Director, the Director in office
who has been elected by the holders of shares of
Preference Stock, shall, by reason of resignation,
death or removal, cease to be a Director, the President
of the Corporation shall call a special meeting of the
holders of the shares of Preference Stock and such
vacancy shall be filled at such special meeting if such
vacancy occurred more than six months prior to the next
ensuing annual meeting.
(11) The Director elected by the holders of the shares of
Preference Stock may be removed from office only by
vote of the holders of a majority of the votes of the
outstanding shares of Preference Stock.
(12) At any annual or special meeting of the shareholders
held for any purpose, including the purpose of electing
Directors when the holders of the shares of Preference
Stock shall be entitled to elect one Director, the
presence in person or by proxy of holders of a majority
of the votes of the outstanding shares of Preference
Stock shall be required to constitute a quorum of the
holders of the shares of Preference Stock.
(13) At any meeting of shareholders at which the holders of
the shares of Preference Stock are required to vote by
law or are permitted to vote by any articles of
amendment to the Articles of Incorporation, each holder
of shares of each series of Preference Stock shall have
the number or fraction of votes set forth for each such
share in the articles of amendment to the Articles of
Incorporation in which the terms of such series are
determined, in each case standing in the name of such
holder on the books of the Corporation on the record
date fixed for such purpose, or, if no record date is
fixed, on the date on which such vote is taken.
(14) The holders of shares of Preference Stock shall not be
entitled to receive notice of any meeting at which they
are not entitled to vote.
(J) $7.80 Series Preference Stock.
(1) Designation of Series and Number of Shares to be
Issuable Therein. There is established a series of
Preference Stock designated "Preference Stock, $7.80
Series" ("$7.80 Series"), which is a closed series
consisting of 400,000 shares of Preference Stock.
(2) Rate of Dividend. The rate per annum of Dividends on
the $7.80 Series is $7.80 per share. The Dividend
payable on each share of the $7.80 Series for any
period less than a full quarterly Dividend period shall
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be computed on the basis of twelve 30-day months and
the actual number of days elapsed in the period for
which such Dividend is payable.
(3) Sinking Fund Provisions. Subject to the limitations
stated in Section (B) of Division I, Section (E) of
Division II and Section (D) of Division III, while any
shares of the $7.80 Series shall remain outstanding,
the Corporation shall on or before May 1, 2001, and on
or before May 1 of each year thereafter to and
including May 1, 2005 (each such May 1 being
hereinafter in this Section (I) called a "Sinking Fund
Redemption Date"), set aside, separate and apart from
its other funds, an amount equal to $6,660,000 (or such
lesser amount as may be sufficient to redeem all of the
shares of the $7.80 Series then outstanding) as a
mandatory sinking fund payment for the exclusive
benefit of shares of the $7.80 Series, plus such
further amount as shall equal the accrued and unpaid
Dividends on the shares of the $7.80 Series to be
redeemed out of such payment (as hereinafter in this
Section (I) provided) through the day preceding the
applicable Sinking Fund Redemption Date. The obliga-
tion of the Corporation to make such payments shall be
cumulative, so that if for any reason the full amount
thereof shall not be set aside for any year, the amount
of the deficiency from time to time shall be added to
the amount due from the Corporation on subsequent
Sinking Fund Redemption Dates until the deficiency
shall have been fully satisfied. The Corporation shall
be entitled to credit against any such mandatory
sinking fund payment shares of the $7.80 Series
redeemed, purchased or otherwise acquired by the
Corporation, except through application of any sinking
fund payment (whether mandatory or optional), and not
theretofore so credited, at the sinking fund redemption
price hereinafter specified in this Section (I).
In addition to the mandatory sinking fund payments
required by the immediately preceding paragraph, the
Corporation may at its option, in respect of any
Sinking Fund Redemption Date, set aside, separate and
apart from its other funds, an amount not in excess of
$6,660,000 as an optional sinking fund payment for the
exclusive benefit of shares of the $7.80 Series, plus
such further amount as shall equal the accrued and
unpaid Dividends on the shares of the $7.80 Series to
be redeemed out of such payment (as hereinafter in this
Section (I) provided) through the day preceding the
applicable Sinking Fund Redemption Date. The privilege
of making such payments shall not be cumulative, and no
such payment shall relieve the Corporation to any
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extent from its obligation to make any subsequent
mandatory sinking fund payment.
Any amounts set aside by the Corporation pursuant to
this Section (I) shall be applied on the date of such
setting aside if a Sinking Fund Redemption Date or
otherwise on the first Sinking Fund Redemption Date
occurring thereafter to the redemption of shares of the
$7.80 Series at $100.00 per share, plus accrued and
unpaid Dividends through the day preceding the
applicable Sinking Fund Redemption Date, in the manner
and upon the notice provided in Section (D) of this
Division III. If any Sinking Fund Redemption Date
shall be a Saturday, Sunday or other day on which
banking institutions in Chicago, Illinois or New York,
New York are authorized or obligated to remain closed,
such term shall be construed to refer to the next
preceding business day.
Subject to the limitations stated in Section (B) of
Division I, Section (E) of Division II and Section (D)
of this Division III, the Corporation shall on May 1,
2006 redeem any shares of the $7.80 Series then
outstanding at $100.00 per share, plus accrued and
unpaid Dividends through April 30, 2006.
(4) Optional Redemption. The shares of the $7.80 Series
are not redeemable at the option of the Corporation, in
whole or in part, prior to May 1, 1996. In the manner
and upon the notice provided in Section (D) of this
Division III, the shares of the $7.80 Series may be
redeemed at the option of the Corporation, at time or
from time to time on or after May 1, 1996, at $107.80
per share if redeemed prior to May 1, 2001; at $103.90
per share if redeemed on or after May 1, 2001 and prior
to May 1, 2003; and at $101.95 per share thereafter;
plus, in each case, accrued and unpaid Dividends
through the day preceding the redemption date.
(5) Liquidation Prices. In the event of voluntary
Liquidation of the Corporation, the holder of each
share of the $7.80 Series shall be entitled to $107.80
per share prior to May 1, 2001; to $103.90 per share
thereafter and prior to May 1, 2003; and to $101.95 per
share thereafter; plus accrued and unpaid Dividends
through the day preceding the date of payment, and no
more. In the event of involuntary Liquidation of the
Corporation, the holder of each share of the $7.80
Series shall be entitled to $100.00 per share, plus
accrued and unpaid Dividends through the day preceding
the date of payment, and no more.
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(6) Conversion Privileges. Shares of the $7.80 Series
shall not be convertible into Common Stock.
(7) Votes. Each holder of shares of the $7.80 Series shall
have one vote for each such share on all matters upon
which holders of shares of the $7.80 Series are
entitled to vote.
(8) Merger Series. The $7.80 Series is a Merger Series and
on the Effective Date of the Merger one share of $7.80
Series shall be issued upon the conversion in the
Merger of a Preference Share, without par value, of
Iowa-Illinois of the series designated $7.80 Series.
(K) $5.25 Series of Preference Stock.
(1) Designation of Series and Number of Shares to be
Issuable Therein. There is established a series of
Preference Stock designated "Preference Stock, $5.25
Series" ("$5.25 Series"), which is a closed series
consisting of 100,000 shares of Preference Stock.
(2) Rate of Dividend. The rate per annum of Dividends on
the $5.25 Series is $5.25 per share.
(3) Retirement of $5.25 Series. Subject to the limitations
stated in Section (B) of Division I, Section (E) of
Division II and Section (D) of Division III, the
Corporation shall on November 1, 2003 redeem all shares
of the $5.25 Series then outstanding at $100.00 per
share, plus accrued and unpaid Dividends through
October 31, 2003.
(4) Optional Redemption. In the manner and upon the notice
provided in Section (D) of this Division III, the
shares of the $5.25 Series may be redeemed at the
option of the Corporation, at any time or from time to
time on or after November 1, 1998, at $101.97 per share
if redeemed prior to November 1, 1999; at $101.31 per
share thereafter and prior to November 1, 2000; at
$100.66 per share thereafter and prior to November 1,
2001; and at $100.00 per share thereafter; plus, in
each case, accrued and unpaid Dividends through the day
preceding the redemption date.
(5) Liquidation Prices. In the event of voluntary
Liquidation of the Corporation, the holder of each
share of the $5.25 Series shall be entitled to $105.25
per share prior to November 1, 1998; to $101.97 per
share thereafter and prior to November 1, 1999; to
$101.31 per share thereafter and prior to November 1,
2000; to $100.66 per share thereafter and prior to
November 1, 2001; and to $100.00 per share thereafter;
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plus, in each case, accrued and unpaid Dividends
through the day preceding the date of payment, and no
more. In the event of involuntary Liquidation of the
Corporation, the holder of each share of the $5.25
Series shall be entitled to $100.00 per share, plus
accrued and unpaid Dividends through the day preceding
the date of payment, and no more.
(6) Conversion Privileges. Shares of the $5.25 Series
shall not be convertible into Common Stock.
(7) Votes. Each holder of shares of the $5.25 Series shall
have one vote for each such share on all matters upon
which holders of shares of the $5.25 Series are
entitled to vote.
(8) Merger Series. The $5.25 Series is a Merger Series and
on the Effective Date of the Merger one share of $5.25
Series shall be issued upon the conversion in the
Merger of a Preference Share, without par value, of
Iowa-Illinois of the series designated $5.25 Series.
EXHIBIT B
AMENDED AND RESTATED
BYLAWS
OF
MIDAMERICAN ENERGY COMPANY
(an Iowa Corporation)
ARTICLE I.
Offices.
Section 1. Principal Office. The principal office
of the Corporation shall be in the City of Des Moines, Polk
County, Iowa. The Corporation may also have an office or offices
at such other place or places either within or without the State
of Iowa as the Board of Directors from time to time determine or
the business of the Corporation may require.
Section 2. Registered Office. The registered
office of the Corporation required by the Iowa Business
Corporation Act to be maintained in the State of Iowa may be, but
need not be, the same as the principal office of the Corporation
in the State of Iowa, and the address of the registered office
may be changed from time to time by the Board of Directors.
ARTICLE II.
Shareholders' Meetings.
Section 1. Place. All meetings of the shareholders
shall be held in such place as may be ordered by the Board of
Directors.
Section 2. Annual Meetings. The annual meeting of
shareholders shall be held on the Wednesday next preceding the
last Thursday of April in each year, at ten o'clock in the
forenoon, when they shall elect the Board of Directors and
transact such other business as may properly be brought before
the meeting. The Board of Directors may, in its discretion,
change the date or time, or both, of the annual meeting of
shareholders.
Section 3. Special Meetings. Special meetings of
the shareholders for any purpose or purposes may be called by the
President, or by a Vice President (under such conditions as are
prescribed in these bylaws), or by the Chairman of the Board of
Directors (if there be one), or by the Vice Chairman of the Board
of Directors (if there be one), or by the Board of Directors.
<PAGE>
Section 4. Notice. Notice, in accordance with the
Iowa Business Corporation Act, stating the place, day and hour of
the annual meeting and of any special meeting, and in the case of
a special meeting, the purpose or purposes for which the meeting
is called, shall be given so that it is effective not less than
ten (10) nor more than sixty (60) days before the date of the
meeting, by or at the direction of the President, or the
Secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting.
Section 5. Right to Vote. Except as provided in
Sections 8 and 9 of this Article II, only shareholders owning
shares of stock of a class entitled to vote as required by the
Iowa Business Corporation Act or as provided in the Articles of
Incorporation, of record on the books of the Corporation on the
day fixed by the Board of Directors for the closing of the stock
transfer books of the Corporation prior to any meeting of the
shareholders, or, if the stock transfer books be not closed, of
record on the books of the Corporation at the close of business
on the day fixed by the Board of Directors as the record date for
the determination of the shareholders entitled to vote at such
meeting, shall be entitled to notice of and shall have the right
to vote (either in person or by proxy) at such meeting.
Section 6. Closing of Transfer Books or Fixing of
Record Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be
closed for a stated period but not to exceed, in any case,
seventy (70) days. If the stock transfer books shall be closed
for the purpose of determining shareholders entitled to notice of
or to vote at a meeting of shareholders, such books shall be
closed for at least ten (10) days immediately preceding such
meeting. In lieu of closing the stock transfer books, the Board
of Directors may fix in advance a date as the record date for any
such determination of shareholders, such date in any case to be
not more than (70) days prior to the date on which the particular
action requiring such determination of shareholders is to be
taken. Except as provided in the articles of amendment to the
Articles of Incorporation establishing one or more classes or
series of Class I Preferred Stock, Class M Preferred Stock or
Preference Stock, if the stock transfer books are not closed and
no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the date
immediately preceding the date on which notice of the meeting is
mailed, or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any
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meeting of shareholders has been made as provided in this Section
6, such determination shall apply to any adjournment thereof,
except that the Board of Directors must fix a new record date if
the meeting is adjourned to a date more than one hundred twenty
(120) days after the date fixed for the original meeting.
Section 7. Voting Lists. The officer or agent
having charge of the stock transfer books for shares of stock of
the Corporation shall make a complete list of the shareholders
entitled to vote at a meeting of shareholders or any adjournment
thereof, arranged in alphabetical order, with the address of and
the number of shares held by each, which list shall be kept on
file at the registered office of the Corporation and shall be
subject to inspection by any shareholder at any time during usual
business hours beginning two business days after notice of such
meeting is given for which such list was prepared. Such list
shall also be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such list or transfer books or
to vote at any meeting of shareholders. Failure to comply with
the requirement of this Section 7 shall not affect the validity
of any action taken at any such meeting.
Section 8. Voting of Shares by Certain Holders.
Shares standing in the name or another corporation, domestic or
foreign, may be voted by such officer, agent or proxy as the
bylaws of such corporation may prescribe, or, in the absence of
such provision, as the Board of Directors of such corporation may
determine.
Shares held by a person who is an administrator,
executor, guardian or conservator may be voted by such person,
either in person or by proxy, without the transfer of such shares
into the name of such person. Shares standing in the name of a
trustee may be voted by such trustee, either in person or by
proxy, but no trustee shall be entitled to vote shares held by
such trustee without a transfer of such shares into the name of
such trustee.
Shares standing in the name of a receiver may be voted
by such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into the name of such receiver if authority so to do is
contained in an appropriate order of the court by which such
receiver was appointed.
A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been
transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred.
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On and after the date on which written notice of
redemption of redeemable shares has been given to the holders
thereof and a sum sufficient to redeem such shares has been
deposited with a bank or trust company with irrevocable
instruction and authority to pay the redemption price to the
holders thereof upon surrender of certificates therefor, such
shares shall not be entitled to vote on any matter and shall not
be deemed to be outstanding shares.
Shares of the Corporation are not entitled to be voted
if they are owned, directly or indirectly, by a second
corporation, and the Corporation owns, directly or indirectly, a
majority of the shares entitled to vote for the election of
directors of such second corporation, nor shall any such shares
be counted in determining the total number of outstanding shares
at any given time.
At all meetings of shareholders, a shareholder may vote
either in person or by proxy appointment form executed in writing
by the shareholder or by the duly authorized attorney-in-fact of
such shareholder. Such proxy appointment and any revocation
thereof shall be filed with the Secretary of the Corporation. No
proxy appointment shall be valid after eleven (11) months from
the date of its execution, unless otherwise provided in the
proxy.
Section 9. Proxies. When a valid proxy appointment
form is filed with the Secretary of the Corporation, the proxy
named therein (or the duly appointed substitute of such proxy, if
the proxy appointment permits the appointment of a substitute)
shall be entitled to enter and be present at the shareholders'
meeting designated in the proxy appointment, and to exercise the
power granted to such proxy under such proxy appointment,
notwithstanding that the shareholder who gave the proxy
appointment is personally present at the meeting, unless and
until such proxy appointment is revoked by a written instrument
of revocation, stating the time and date of revocation of the
proxy appointment, duly signed by the shareholder who executed
the proxy appointment, and filed with the Secretary of the
Corporation at or prior to the meeting. Subject to any express
limitation or restriction in any such proxy appointment
contained, a vote, consent or action taken by a proxy prior to
revocation thereof, as hereinbefore provided, shall be valid and
binding on the shareholder who gave the proxy appointment. Each
proxy appointment, and also each instrument of revocation
thereof, shall be retained by the Secretary of the Corporation as
required by regulatory authorities.
Section 10. Quorum. The holders of a majority of
the votes of the shares entitled to vote thereat, represented in
person or by proxy, shall constitute a quorum for the transaction
of business at all meetings of the shareholders except as
otherwise provided by the Iowa Business Corporation Act, the
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Articles of Incorporation or these bylaws. The holders of a
majority of the votes of the shares present in person or by proxy
at any meeting and entitled to vote thereat shall have power
successively to adjourn the meeting to a specified date whether
or not a quorum be present. The time and place to which any such
adjournment is taken shall be publicly announced at the meeting,
and no further notice thereof shall be necessary. At any such
adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally called.
Section 11. Manner of Voting. Upon demand of any
shareholder entitled to vote thereon, the vote on any question
before the meeting shall be by ballot. If a quorum is present,
the affirmative vote of the holders of a majority of the votes of
the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders, unless the
vote of a greater number or voting by classes is required by the
Iowa Business Corporation Act or the Articles of Incorporation.
Section 12. Officers of the Meeting-Powers. The
Chairman of the Board of Directors (if there be one), or in the
absence of the Chairman of the Board, the Vice Chairman of the
Board (if there be one), or the President of the Corporation
shall call meetings of the shareholders to order and shall act as
chairman thereof. The Board of Directors may appoint any
shareholder to act as chairman of any meeting in the absence of
the Chairman of the Board and the President, and in the case of
the failure of the Board to appoint a chairman, the shareholders
present at the meeting shall elect a chairman who shall be either
a shareholder or a proxy of a shareholder.
The Secretary of the Corporation shall act as secretary
at all meetings of shareholders. In the absence of the Secretary
at any meeting of shareholders, the chairman of the meeting may
appoint any person to act as secretary of the meeting.
Section 13. Power of Chairman. The chairman of any
shareholders' meeting shall have power to determine the
eligibility of votes, and may reject votes, whether cast in
person or by proxy, as irregular, unauthorized, or not cast in
accordance with the Articles of Incorporation or these bylaws.
The decisions of such chairman as to such matters shall be final
unless challenged from the floor, immediately after being
announced and overruled by the vote of the holders of a majority
of the votes of the shares represented at the meeting. Such
chairman may appoint tellers to count ballots, whenever voting is
by ballot. Such chairman shall have power to order any
unauthorized persons to leave the meeting and to enforce such
orders, and shall have and exercise all power and authority, and
perform all duties customarily possessed and performed by the
presiding officer of such a meeting.
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ARTICLE III
Board of Directors
Section 1. Powers. The business and affairs of the
Corporation shall be managed by the Board of Directors.
Section 2. Number and Qualification of Directors.
The Board of Directors shall consist of nineteen members who
shall be elected at the annual meeting of the shareholders. A
director may but need not be a shareholder or a resident of the
State of Iowa. Each director shall be elected to serve until the
next annual meeting of the shareholders and until the successor
of such director shall be elected or appointed as provided in
Section 4 of this Article III, and shall have qualified.
Section 3. Nominations. Nominations for the
election of directors may be made by the Board of Directors or a
committee appointed by the Board of Directors or by any
shareholder entitled to vote in the election of directors
generally. However, any shareholder entitled to vote in the
election of directors generally may nominate one or more persons
for election as directors at a meeting only if written notice of
such shareholder's intent to make such nomination or nominations
has been given, either by personal delivery or by United States
mail, postage prepaid, to the Secretary of the Corporation not
later than (a) with respect to an election to be held at an
annual meeting of shareholders, 90 days in advance of such
meeting, and (b) with respect to an election to be held at a
special meeting of shareholders for the election of directors,
the close of business on the seventh day following the date on
which notice of such meeting is first given to shareholders.
Each such notice shall set forth: (i) the name and address of
the shareholder who intends to make the nomination and of the
person or persons to be nominated; (ii) a representation that the
shareholder is a holder of record of stock of the Corporation
entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons
specified in the notice; (iii) a description of all arrangements
or understandings between the shareholder and each nominee and
any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by
the shareholder; (iv) such other information regarding each
nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had the nominee been
nominated, or intended to be nominated, by the Board of
Directors; and (v) the consent of each nominee to serve as a
director of the Corporation if so elected. The Chairman of the
meeting may refuse to acknowledge the nomination of any person
not made in compliance with the foregoing procedure.
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<PAGE>
Section 4. Vacancies. In accordance with Article
VI of the Articles of Incorporation, if a vacancy in the Board of
Directors shall occur, a majority of the remaining directors,
though less than a quorum, may appoint a director to fill such
vacancy, who shall hold office for the unexpired term of the
directorship in respect of which such vacancy occurred or for the
full term of any new directorship caused by any increase in the
number of members.
Section 5. Place of Meetings. The Board of
Directors may hold its meetings, regular or special, within or
without the State of Iowa at such place or places as it may from
time to time determine, or as may be specified in the notice of
the meeting.
Section 6. Time and Place of Meeting. Regular
meetings of the Board shall be held, without notice other than
this bylaw, quarterly on the Wednesday next preceding the last
Thursday of each January, April, July, and October at the
principal office of the Corporation in Des Moines at two o'clock
in the afternoon. The Chairman of the Board of Directors (if
there be one), the Vice Chairman of the Board of Directors (if
there be one), or the President may direct a different date, time
or place for the holding of a regular meeting and the Secretary
shall advise the directors of any such change at least three days
in advance of the meeting date in the manner provided in Section
8 of this Article III.
The Chairman of the Board of Directors (if there be
one) or the President shall have power to cancel not more than
two successive regular meetings of the Board of Directors by
causing not less than one day's notice of such cancellation to be
given to the directors.
Section 7. Special Meetings. Special meetings of
the Board of Directors for any purpose or purposes may be called
by the Chairman of the Board of Directors (if there be one), the
Vice Chairman of the Board of Directors (if there be one), by the
President or a majority of the members of the Board, and shall be
held at such place as may b fixed by the person or persons
calling such meeting and as shall be specified in the notice of
such meeting. The Secretary or an assistant secretary shall give
not less than three (3) days' notice of the date, time and place
of each such meeting to each director in the manner provided in
Section 8 of this Article III. Neither the business to be
transacted at, nor the purpose of, any special meeting of the
Board of Directors need be specified in the notice given, or
waiver of notice obtained, of such meeting as provided in Section
8 or 9, as the case may be, of Article III.
Section 8. Manner of Giving Notice of Meetings.
Notice of any special meeting of the Board of Directors may be
given to any director by telephone or by telegram addressed to
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<PAGE>
such director at such address as last appears in the records of
the Secretary of the Corporation or by mail by depositing the
same in the post office or letter box in a postpaid, sealed
wrapper addressed to such director at such address.
It shall be the duty of every director to furnish the
Secretary of the Corporation with the post office address of such
director and to notify the Secretary of any change therein.
Section 9. Waiver of Notice. Whenever any notice
is required to be given to directors under the provisions of the
Iowa Business Corporation Act or of the Articles of Incorporation
or these bylaws, a waiver thereof in writing signed by the
director entitled to such notice, whether before, at or after the
time stated therein, shall be deemed equivalent thereto.
Attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction
of any business because the meeting is not lawfully called or
convened.
Section 10. Quorum. At all meetings of the Board, a
majority of the number of directors fixed by these bylaws shall
constitute a quorum for the transaction of business. The act of
a majority of the directors present at any meeting at which a
quorum is present shall be the act of the Board of Directors,
except as may be otherwise specifically provided by the Iowa
Business Corporation Act or by the Articles of Incorporation or
by these bylaws. If a quorum shall not be present at any meeting
of directors, the director or directors present may adjourn the
meeting to a specified time, without notice other than
announcement at the meeting.
Section 11. Conduct of Meetings. The Chairman of
the Board of Directors (if there be one) or, in the absence of
the Chairman of the Board, the Vice Chairman of the Board (if
there be one), or the President of the Corporation shall act as
the presiding officer at Board meetings, and the Secretary or an
assistant secretary of the Corporation shall act as the secretary
of the meeting. In the absence of the Chairman of the Board of
Directors (if there be one), the Vice Chairman of the Board (if
there be one), and the President, the Board may appoint a
director to act as the presiding officer. The presiding officer
at Board meetings shall be entitled to vote as a director on all
questions.
Minutes of all meetings of the Board shall be
permanently kept by the Secretary, and all minutes shall be
signed by the secretary of the meeting.
The Board shall have power to formulate rules and
regulations governing the conduct of Board meetings and the
procedure thereat.
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Section 12. Executive and Other Committees. The
Board of Directors may, by resolution adopted by a majority of
the number of directors fixed by these bylaws, designate from
among its members an executive committee, and one or more other
committees each of which, to the extent provided in such
resolution and permitted by the Iowa Business Corporation Act,
shall have and may exercise all the authority of the Board of
Directors. Unless otherwise provided by resolution of the Board
of Directors, a quorum of each such committee shall consist of a
majority of its members, and if a quorum is present when a vote
is taken, the affirmative vote of a majority of the members
present shall be the act of such committee.
Section 13. Compensation of Directors. The Board of
Directors shall have the authority to fix the compensation of
directors. Any director may serve the Corporation in any other
capacity and receive compensation therefor.
Section 14. Indemnification of Directors, Officers,
Professional and Supervisory Employees.
(a) Right to Indemnification. Each person who was or
is a party or is threatened to be made a party to or is involved
in any action, suit or proceeding, whether civil, criminal,
administrative, investigative or arbitration ("proceeding"), by
reason of the fact that he or she, or a person of whom he or she
is the legal representative, is or was a director, officer or
professional or supervisory employee of the Corporation or is or
was serving at the request of the Corporation as a director,
officer, professional or supervisory employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in
an official capacity as a director, officer, professional or
supervisory employee or agent or in any other capacity while
serving as a director, officer, professional or supervisory
employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Iowa Business
Corporation Act, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader
indemnification rights than said Act permitted the Corporation to
provide prior to such amendment), against all expenses,
liability, costs, judgments, fines, Employee Retirement Income
Security Act excise taxes or penalties and amounts paid or to be
paid in settlement reasonably incurred or suffered by such person
in connection therewith. Such right shall be a contract right
and shall include the right to be paid by the Corporation
expenses incurred in defending any such proceeding in advance of
its final disposition; provided, however, that, the payment of
such expenses incurred by a director, officer or professional or
supervisory employee in his or her capacity as a director,
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officer or professional or supervisory employee (and not in any
other capacity in which service was or is rendered by such person
while a director, officer or professional or supervisory employee
including, without limitation, service to an employee benefit
plan) in advance of the final disposition of such proceeding,
shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director, officer or
professional or supervisory employee, to repay all amounts so
advanced if it should be determined ultimately that such
director, officer, or professional or supervisory employee is not
entitled to be indemnified under this Section or otherwise.
(b) Right of Claimant to Bring Suit. If a claim under
paragraph (a) is not paid in full by the Corporation within
thirty (30) days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expenses of prosecuting such claim.
It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required
undertaking has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it
permissible under the Iowa Business Corporation Act for the
Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) to
have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard
of conduct set forth in the Iowa Business Corporation Act, nor an
actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) that
the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that
claimant had not met the applicable standard of conduct.
(c) Benefit. Indemnification provided hereunder
shall, in the case of the death of the person entitled to
indemnification, inure to the benefit of such person's heirs,
executors or other lawful representatives. The invalidity or
unenforceability of any provision of this Section 14 shall not
affect the validity or enforceability of any other provision of
this Section 14.
(d) Certain Actions; Presumption of Standard of
Conduct. Any action taken or omitted to be taken by (i) any
director, officer or professional or supervisory employee in good
faith and in compliance with or pursuant to any order,
determination, approval or permission made or given by a
commission, board, official or other agency of the United States
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or of any state or other governmental authority with respect to
the property or affairs of the Corporation or any such business
corporation, not-for-profit corporation, joint venture, trade
association or other entity over which such commission, board,
official or agency has jurisdiction or authority or purports to
have jurisdiction or authority or (ii) by any director of the
Corporation pursuant to Section D of Article IX of the Restated
Articles if Incorporation shall be presumed to be in compliance
with the standard of conduct set forth in Section 490.851 (or any
successor provision) of the Iowa Business Corporation Act whether
or not, in the case of clause (i), it may thereafter be
determined that such order, determination, approval or permission
was unauthorized, erroneous, unlawful or otherwise improper.
(e) Litigation; Presumption of Standard of Conduct.
Unless finally determined, the termination of any litigation,
whether by judgment, settlement, conviction or upon a plea of
nolo contendere, or its equivalent, shall not create a
presumption that the action taken or omitted to be taken by the
person seeking indemnification did not comply with the standard
of conduct set forth in Section 490.851 (or successor provision)
of the Iowa Business Corporation Act.
(f) Non-Exclusivity of Rights. The rights conferred
on any person by this Section 14 shall not be exclusive of any
other right which any person may have or hereafter acquire under
any statute, provision of the Articles of Incorporation, bylaw,
agreement, vote of shareholders or disinterested directors or
otherwise.
(g) Insurance. The Corporation may maintain
insurance, at its expense, to protect itself and any such
director, officer, professional or supervisory employee or agent
of the Corporation or another corporation, partnership, joint
venture, trust or other enterprise against any such expense,
liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or
loss under the Iowa Business Corporation Act.
Section 15. Informal Action by Directors. Any
action required to be taken at a meeting of the Board of
Directors or a committee of directors and any other action which
may be taken at a meeting of the Board of Directors or a
committee of directors may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be
signed by all of the directors or all of the members of the
committee of directors, as the case may be, entitled to vote with
respect to the subject matters thereof.
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ARTICLE IV.
Officers
At the first regular meeting of the Board of Directors
following each annual meeting of the shareholders, the Board
shall elect a President, one or more Vice Presidents as
prescribed by these bylaws, a Secretary and a Treasurer; and the
Board may at any meeting elect or appoint a Chairman of the Board
of Directors, Vice Chairman, additional vice presidents and other
officers or assistants to officers.
The Chairman of the Board of Directors (if there be
one), the Vice Chairman of the Board of Directors (if there be
one), and the President shall be selected from among the members
of the Board. Other officers of the Corporation may be, but are
not required to be, directors. An officer may, but need not be,
a shareholder of the Corporation.
Subject to the power of the Board to remove any officer
from office at any time when in its judgment the best interests
of the Corporation will be served thereby, each officer shall
serve until the successor of such officer is elected or
appointed, unless the tenure of such officer is otherwise fixed
by the Board by resolution, contract or agreement for a different
period of time.
The Board shall have power to fix the compensation of
each officer, to prescribe the duties of such officer, to
decrease or increase such compensation, change the nature of such
duties, or remove such officer from office and elect or appoint
the successor of such officer, in each case subject to the terms
of any agreement between such officer and the Corporation.
Section 1. Chairman of the Board of Directors. The
Chairman of the Board of Directors (if there be one) shall
preside at all meetings of the shareholders and of the directors,
at which the Chairman is present. The Chairman shall perform all
duties incident to the office of Chairman of the Board of
Directors and such other duties as, from time to time, may be
assigned to the Chairman by the Board of Directors, and, if so
designated by an appropriate resolution of the Board of Directors
or an agreement between the Chairman and the Corporation, shall
be the chief executive officer of the Corporation, subject
however, to the right of the Board of Directors to delegate any
specific power to any other officer or officers of the
Corporation; and the Chairman shall see that all orders and
resolutions of the Board are carried into effect.
Section 2. Vice Chairman of the Board of Directors.
The Board of Directors may elect or appoint a Vice Chairman who
shall, in the absence or disability of the Chairman or in case of
vacancy in the office, assume all duties of the Chairman and such
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other duties as, from time to time, may be assigned to the Vice
Chairman by the Board of Directors.
Section 3. President. The President of the
Corporation shall have general and active management of and
exercise general supervision of the business and affairs of the
Corporation and, if so designated by an appropriate resolution of
the Board of Directors or an agreement between the President and
the Corporation, shall be the chief executive officer of the
Corporation, subject, however, to the right of the Board of
Directors to delegate any specific power to any other officer or
officers of the Corporation; and the President shall see that all
orders and resolutions of the Board are carried into effect. The
President shall have concurrent power with the Chairman of the
Board of Directors to sign bonds, mortgages, certificates for
shares, and other contracts and documents, except in cases where
the signing and execution thereof shall be expressly delegated by
law, by the Board of Directors, or by these bylaws to some other
officer or agent of the Corporation. In the absence of the
Chairman of the Board of Directors or in the event of the
disability or refusal of the Chairman to act, and in the absence
of the Vice Chairman of the Board of Directors or in the event of
the disability or refusal of the Vice Chairman to act, the
President shall have such other powers as are vested in the
Chairman of the Board of Directors. In general the President
shall perform the duties incident to the office of President and
such other duties as may be prescribed by the Board of Directors
from time to time.
Section 4. Executive Vice President. The Board of
Directors may designate an Executive Vice President who shall, in
the absence of disability of the President, or in case of a
vacancy in that office, assume all duties of the President.
Section 5. Vice Presidents. The Vice Presidents,
including the Executive Vice President and Vice Presidents
designated by the Board of Directors as Senior Vice Presidents,
shall perform such of the duties and exercise such of the powers
of the President as shall be assigned to them from time to time
by the Board of Directors or the President, and shall perform
such other duties as the Board of Directors or the President
shall from time to time prescribe. Any Vice President may sign
certificates for shares of the Corporation and any deeds,
mortgages, bonds, contracts or other instruments which the Board
of Directors has authorized to be executed, which authorizations
may be either specific or general. In case of the death,
disability or absence of the Chairman of the Board of Directors
(if there be one) and the President and the Executive Vice
President, the Senior Vice President (or, if there be more than
one, the Senior Vice President designated by the Board of
Directors) shall perform the duties of the President, including
interim duties, and when so acting shall have all the powers of
and be subject to all restrictions upon the President.
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Section 6. Secretary. The Secretary shall attend
all meetings of the shareholders and of the Board of Directors
and shall keep the minutes of such meetings. The Secretary shall
perform like duties of the standing committees of the Board of
Directors when required. Except as otherwise provided by these
bylaws or by the Iowa Business Corporation Act, the Secretary
shall give, or cause to be given, notice of all meetings of the
shareholders and of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors
or the Chairman of the Board of Directors (if there be one) or
the President.
The Secretary shall have custody of the minute books,
containing the minutes of shareholders' and directors' meetings,
of the stock books of the Corporation, and of all corporate
records. The Secretary shall have the duty to see that the
books, reports, statements, certificates and all other documents
and reports of the Corporation required by law are properly
prepared, kept and filed. The Secretary shall, in general,
perform all duties incident to the office of Secretary.
Section 7. Assistant Secretaries. The assistant
secretaries shall perform such of the duties and exercise such of
the powers of the Secretary as shall be assigned to them from
time to time by the Board of Directors or the Chairman of the
Board of Directors (if there be one) or the President or the
Secretary, and shall perform such other duties as the Board of
Directors or the Chairman of the Board of Directors (if there be
one) or the President shall from time to time prescribe.
Section 8. Treasurer. The Treasurer shall have the
custody of all moneys, stocks, bonds and other securities of the
Corporation, and of all other papers on which moneys are to be
received and of all papers which relate to the receipt or
delivery of the stocks, bonds, notes and other securities of the
Corporation in the possession of the Treasurer. The Treasurer is
authorized to receive and receipt for stocks, bonds, notes and
other securities belonging to the Corporation or which are
received for its account, and to place and keep the same in
safety deposit vaults rented for the purpose, or in safes or
vaults belonging to the Corporation. The Treasurer is authorized
to collect and receive all moneys due the Corporation and to
receipt therefor, and to endorse all checks, drafts, vouchers or
other instruments for the payment of money payable to the
Corporation when necessary or proper and to deposit the same to
the credit of the Corporation in such depositories as the
Treasurer may designate for the purpose, and the Treasurer may
endorse all commercial documents for or on behalf of the
Corporation. The Treasurer is authorized to pay interest on
obligations when due and dividends on stock when duly declared
and payable. The Treasurer shall, when necessary or proper,
disburse the funds of the Corporation, taking proper vouchers for
such disbursements. The Treasurer shall cause to be kept in the
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office of the Treasurer true and full accounts of all receipts
and disbursements, and shall render to the Board of Directors and
the Chairman of the Board of Directors (if there be one) or the
President, whenever they may require it, an account of all
transactions as Treasurer and of the financial condition of the
Corporation. The Treasurer shall also perform such other duties
as may be prescribed by the Board of Directors or the Chairman of
the Board of Directors (if there be one) or the President. The
Treasurer shall, in general, perform all duties usually incident
to the office of Treasurer.
Section 9. Assistant Treasurers. The assistant
treasurers shall perform such of the duties and exercise such of
the powers of the Treasurer as shall be assigned to them from
time to time by the Board of Directors or the Chairman of the
Board of Directors (if there be one) or the President or the
Treasurer, and shall perform such other duties as the Board of
Directors or the Chairman of the Board of Directors (if there be
one) or the President shall from time to time prescribe.
ARTICLE V
Stock Certificates
Section 1. Registrars and Transfer Agents. The
Board of Directors shall determine the form of and provide for
the issue, registration and transfer of any stock certificates
representing stock of the Corporation, and may appoint registrars
and transfer agents, who may be natural persons or corporations.
The office of any transfer agent or registrar may be maintained
within or without the State of Iowa.
Section 2. Signatures. Any stock certificates
issued by the Corporation shall bear the signatures of the
Chairman of the Board of Directors (if there be one), or the Vice
Chairman of the Board of Directors (if there be one), or the
President or any Vice President and of the Secretary or any
Assistant Secretary and such officers are hereby authorized and
empowered to sign such certificates when the issuance thereof has
been duly authorized by the Board of Directors; provided,
however, that if certificates representing shares of any class or
series of stock issued by the Corporation are countersigned by
manual signature by a transfer agent, other than the Corporation
or its employee, or registered by manual signature by a
registrar, other than the Corporation or its employee, any other
signature on such certificate may be a facsimile, engraved,
stamped or printed. In case any person who is an officer who has
signed or whose facsimile signature has been placed upon such
certificate representing stock of the Corporation shall cease to
be such officer of the Corporation before such certificate is
issued, such certificate may be issued by the Corporation with
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the same effect as if such person was such officer at the date of
its issue.
Section 3. Transfers. Transfers of shares shall be
made on the books of the Corporation only by the registered owner
thereof (or the legal representative of such owner, upon
satisfactory proof of authority therefor), or by the attorney of
such owner lawfully constituted in writing by documents filed
with the Secretary or transfer agent of the Corporation, and only
upon surrender of any certificate to be transferred, or delivery
of an order of such owner if such shares are not represented by a
certificate, and payment of applicable taxes with respect to such
transfer, unless otherwise ordered by the Board of Directors.
Section 4. Lost or Destroyed Certificates. New
certificates may be issued to replace lost, stolen or destroyed
certificates, upon such terms and conditions as the Board of
Directors may prescribe.
Section 5. Rights of Registered Owners. The
Corporation shall be entitled to recognize the exclusive right of
a person registered or shown on its books as the owner of shares
of its stock to receive dividends or any other distribution
thereon, or to vote such shares, and to treat such person as the
owner of such shares for all purposes and the Corporation shall
not be bound to recognize any equitable or other claim to or
interest in its shares on the part of any person other than the
registered or record owner thereof, whether or not it shall have
notice thereof.
ARTICLE VI
General Provisions
Section 1. Instruments Affecting Real Estate.
Deeds, mortgages and other instruments affecting real estate
owned by the Corporation, the execution of which has been duly
authorized by the Board of Directors, shall be signed on behalf
of the Corporation by the Chairman of the Board of Directors (if
there be one), the Vice Chairman of the Board of Directors (if
there be one), or the President or any Vice President and by the
Secretary or any Assistant Secretary. Leases, contracts to
purchase, and other instruments whereby the Corporation acquires,
in the ordinary course of business, an interest in real estate
owned by others may be executed on behalf of the Corporation by
the Chairman of the Board of Directors (if there be one), the
Vice Chairman of the Board of Directors (if there be one), or the
President or by any Vice President so authorized.
Section 2. Other Instruments. Bonds, notes and
other secured or unsecured obligations of the Corporation, when
duly authorized by the Board of Directors, may be executed on
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behalf of the Corporation by the Chairman of the Board of
Directors (if there be one), the Vice Chairman of the Board of
Directors (if there be one), or the President or any Vice
President, or by any other officer or officers thereunto duly
authorized by the Board of Directors and the signature of any
such officer may, if the Board of Directors shall so determine,
be a facsimile. Contracts and other instruments entered into
executed in the ordinary course of business may be signed on
behalf of the Corporation by the Chairman of the Board of
Directors (if there be one), the Vice Chairman of the Board of
Directors (if there be one), or the President or by any officer,
employee or agent of the Corporation thereunto authorized by the
Chairman of the Board of Directors (if there be one), the Vice
Chairman of the Board of Directors (if there be one), or the
President, without obtaining specific authorization therefor from
the Board of Directors.
Section 3. Destruction of Records. The Chairman of
the Board of Directors (if there be one), the Vice Chairman of
the Board of Directors (if there be one), or the President or any
Vice President appointed by the President to serve in place of
the President, the Secretary and the Treasurer shall constitute a
committee for the destruction of records and shall meet from time
to time at the call of the Secretary who shall be chairman of
such committee. It shall have power to order and cause the
destruction of any corporate records, the preservation of which
has been found by it to be no longer necessary or desirable.
Section 4. Fiscal Year. The fiscal year of the
Corporation shall be the calendar year.
Section 5. Annual Report. As soon as practicable
after the close of each fiscal year, the Board of Directors shall
cause an annual report of the business and affairs of the
Corporation to be made to the shareholders.
Section 6. No Corporate Seal. The Corporation
shall have no corporate seal.
Section 7. Stock in Other Corporations. Unless
otherwise ordered by the Board of Directors, the Chairman of the
Board of Directors (if there be one), the Vice Chairman of the
Board of Directors (if there be one), or the President or any
Vice President of the Corporation (1) shall have full power and
authority to act and vote, in the name and on behalf of the
Corporation, at any meeting of shareholders of any corporation in
which the Corporation may hold stock, and at any such meeting
shall possess and may exercise any and all of the rights and
powers incident to the ownership of such stock, and (2) shall
have full power and authority to execute, in the name and on
behalf of the Corporation, proxies appointing any suitable person
or persons to act and to vote at any meeting of shareholders of
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any corporation in which the Corporation may hold stock, and at
any such meeting the person or persons so designated shall
possess and may exercise any and all of the rights and powers
incident to the ownership of such stock.
ARTICLE VII
Amendments
These bylaws may be altered, amended or repealed and
new bylaws may be adopted by vote of a majority of the number of
directors fixed by these bylaws at any regular or special meeting
of the Board.
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EXHIBIT C
IOWA
ARTICLES OF MERGER
OF
MIDAMERICAN ENERGY COMPANY
To the Secretary of State
of the State of Iowa:
Pursuant to the provisions of 490.1105 and 1107 of the Iowa
Business Corporation Act, the undersigned corporation hereby
executes and adopts the following Articles of Merger for the
purpose of merging each of Midwest Resources Inc., an Iowa
corporation ("Resources"), Midwest Power Systems Inc., an Iowa
corporation ("Midwest Power"), and Iowa-Illinois Gas and Electric
Company, an Illinois corporation ("Iowa-Illinois") with and into
MidAmerican Energy Company, an Iowa corporation ("Company"),
which will be the surviving corporation. Resources, Midwest
Power, Iowa-Illinois and the Company are sometimes referred to
individually as a "Constituent Corporation" and collectively as
the "Constituent Corporations".
1. The Agreement and Plan of Merger ("Plan of Merger"),
dated as of July 26, 1994, a copy of which is attached hereto as
Annex A and is incorporated by reference herein, was approved by
the shareholders of each of the Constituent Corporations.
2. The laws of Illinois, the state under which Iowa-
Illinois is organized, permit such merger.
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3. As to each Constituent Corporation, the designation,
number of shares outstanding, and the number of votes entitled to
be cast by each voting group entitled to vote separately on the
Plan of Merger is as follows:
Entitled to
Name Class Outstanding Vote
The Company Common
Resources Common
Midwest Common
Power
Preferred
Common and
Preferred,
together as
a class
Iowa- Common
Illinois
Preference
Preferred
Common,
Preference
and Preferred,
together as
a class
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4. As to each Constituent Corporation, the total number of
shares voted for and against the Plan of Merger by each voting
group entitled to vote separately on the Plan of Merger is as
follows:
Total Total
Shares Voted
Name Class Voted For Against Abstained
The Company Common
Resources Common
Midwest Common
Power
Preferred
Common
and
Preferred
together
as a class
Iowa- Common
Illinois
Prefer-
ence
Preferred
Common,
Prefer-
ence and
Preferred
together
as a class
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5. The number of votes cast for the Plan of Merger by each
voting group was sufficient for approval by that voting group.
6. The Merger shall become effective on __________, _____.
MIDAMERICAN ENERGY COMPANY
By: __________________________
Its:
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EXHIBIT C
ILLINOIS
File #_______________
ARTICLES OF MERGER
1. The names of the corporations proposing to merge, and the
respective states of their incorporation:
State or
Name of Corporation Country of Incorporation
MidAmerican Energy Company Iowa
Midwest Resources Inc. Iowa
Midwest Power Systems Inc. Iowa
Iowa-Illinois Gas and
Electric Company Illinois
2. The laws of the state under which each corporation is
incorporated permit such merger.
3. (a) Name of the surviving corporation: MidAmerican Energy
Company
(b) It shall be governed by the laws of: the State of Iowa
4. The Plan of Merger is set forth as Exhibit A attached
hereto.
5. The Plan of Merger was approved, as to each corporation not
organized in Illinois, in compliance with the laws of the
state under which it is organized, and (b) as to each
Illinois corporation, as follows:
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Name of Illinois Corporation Approval
Iowa-Illinois Gas and Electric Company By the shareholders, a
resolution of the board of
directors having been duly
adopted and submitted to a
vote at a meeting of
shareholders. Not less than
the minimum number of votes
required by statute and by the
articles of incorporation
voting in favor of the action
taken.
6. It is agreed that, upon and after the issuance of a
certificate of merger by the Secretary of State of the State
of Illinois:
a. The surviving corporation may be served with process in
the State of Illinois in any proceeding for the
enforcement of any obligation of any corporation
organized under the laws of the State of Illinois which
is a party to the merger and in any proceeding for the
enforcement of the rights of a dissenting shareholder
of any such corporation organized under the laws of the
State of Illinois against the surviving corporation.
b. The Secretary of State of the State of Illinois shall
be and hereby is irrevocably appointed as the agent of
the surviving corporation to accept service of process
in any such proceedings, and
c. The surviving corporation will promptly pay to the
dissenting shareholders of any corporation organized
under the laws of the State of Illinois which is a
party to the merger the amount, if any, to which they
shall be entitled under the provisions of "The Business
Corporation Act of 1983" of the State of Illinois with
respect to the rights of dissenting shareholders.
C-6
<PAGE>
8. Each of the undersigned corporations has caused these
articles to be signed by its duly authorized officers, each
of whom affirms, under penalties of perjury, that the facts
stated herein are true.
Dated __________________, 19___ MIDAMERICAN ENERGY COMPANY
attested by ___________________ by ___________________________
____________________ ___________________________
Dated __________________, 19___ MIDWEST RESOURCES INC.
attested by ___________________ by ___________________________
____________________ ___________________________
Dated __________________, 19___ MIDWEST POWER SYSTEMS INC.
attested by ___________________ by ___________________________
____________________ ___________________________
Dated __________________, 19___ IOWA-ILLINOIS GAS AND ELECTRIC
COMPANY
attested by ___________________ by ___________________________
____________________ ___________________________
C-7
<PAGE>
EXHIBIT D
TRANSITION TEAMS
(Charge and mission to be prepared by Mr. Christiansen and Mr.
Bright)
DIVERSIFIED CORPORATE (UTILITY)
Don Heppermann Richard Engle
John Rasmussen Steve Shelton
Dennis Melstad Steve Hollenbeck
Dan Lonergan John Rasmussen
Brent Gale
Ron Stepien
Bev Wharton
Jack Alexander
(Luis Baez)
D-1
<PAGE>
EXHIBIT E
BOARD COMMITTEES
EXECUTIVE NOMINATING AUDIT
Christiansen - Chair Foster - Chair Aalfs - Chair
Bright - V. Chair Christensen - Fletcher -
Foster V. Chair V. Chair
Eugster Colloton Lawson
Woodruff Peterson Cottrell
Peterson Asher
Tinsman
FINANCE STRATEGY COMPENSATION
Tinsman - Chair Bright - Chair Eugster - Chair
Hoak - V. Chair Gentry - V. Chair Seifert -
Woodruff Kirk V. Chair
Putney Christensen Schneider
Bright Seifert Colloton
Christiansen Cottrell
E-1
<PAGE>
EXHIBIT F-1
July __, 1994
Mr. Russell E. Christiansen
666 Grand Avenue
Des Moines, IA 50306-9244
Dear Mr. Christiansen:
Pursuant to the Agreement and Plan of Merger ("Merger
Agreement") dated as of July __, 1994, by and among Midwest
Resources Inc., Midwest Power Systems Inc., Iowa-Illinois Gas and
Electric Company and MidAmerican Energy Company ("Company"),
Midwest Resources Inc., Midwest Power Inc. and Iowa-Illinois Gas
and Electric Company will be merged into the Company. In
recognition of the value of your past services to Midwest
Resources Inc. and its subsidiaries, and in anticipation of your
contribution to the future growth and success of the Company and
its subsidiaries, the Company wishes to provide itself and its
subsidiaries the continuing benefits of your service as a senior
executive officer of the Company and its subsidiaries on the
terms and conditions set forth below.
This letter sets forth our agreement with respect to
your employment with the Company and its subsidiaries during the
period commencing on the Effective Time (as defined in the Merger
Agreement) and ending on the date your employment with the
Company and its subsidiaries terminates (as defined herein,
"Employment Period") and beyond the Employment Period, with
respect to your acting as a consultant and advisor to the Company
during the period commencing at the end of the Employment Period
and ending on the third anniversary of the retirement date
("Consulting Period") or until such earlier date as otherwise may
be determined hereunder.
1. (a) If the Effective Time occurs (i) on or before
May 31, 1995, then during the periods commencing on (x) the
Effective Time and ending on May 31, 1996, you shall serve as
Chairman of the Board of the Directors of the Company,
("Chairman") and Chairman, Office of the Chief Executive Officer
of the Company, performing those responsibilities set forth on
Exhibit A attached hereto and (y) June 1, 1996 and ending on May
31, 1997, you shall serve as Chairman, (ii) between June 1, 1995
and May 31, 1996, then during the period commencing on (x) the
Effective Time and ending on the first anniversary of the
Effective Time, you shall serve as Chairman and Chairman, Office
of the Chief Executive Officer of the Company and (y) the first
anniversary of the Effective Time and ending on May 31, 1997, you
shall serve as Chairman or (iii) after May 31, 1996, then
commencing on the Effective Time and ending on the first
anniversary of the Effective Time, you shall serve as Chairman
and Chairman, Office of the Chief Executive Officer of the
Company, all of the foregoing shall constitute the "Employment
Period". During the Employment Period your duties and services
generally shall be performed by you on regular business days
during normal business hours, and you agree to be present as
F-1-1
<PAGE>
required and for as much time as is necessary to perform your
duties and services for the business of the Company and its
subsidiaries. You shall be entitled to vacation in accordance
with the policy from time to time in effect for senior executive
officers of the Company and its subsidiaries with credit for past
service with Midwest Resources Inc. and its subsidiaries and
predecessors of each. During the Employment Period you shall be
reimbursed by the Company in accordance with the Company's policy
from time to time in effect for any expenses commensurate with
your position which you may reasonably incur in the performance
of your duties and services hereunder and which are properly
substantiated.
(b) In consideration of and as compensation for your
services hereunder and your agreement not to compete with the
Company as set forth herein, during the Employment Period the
Company will pay to you, in equal installments with the same
frequency as for other executives of the Company, but at least
monthly, a base salary at the annual rate of not less than
$400,000, such base salary to be subject to adjustment during the
Employment Period in accordance with the Company's policy for
executives, and shall never be less than the base salary of the
Chief Executive Officer or President of the Company. In addition
to such salary, you shall be eligible to receive, as additional
compensation, appropriate management bonuses, long-term incentive
awards and such other compensation elements as are applicable, in
amounts not less than those paid or accrued for the Chief
Executive Officer or President of the Company, in relation to the
achievement by the Company and its subsidiaries of corporate
goals and objectives and the Company will provide to you all
other benefits accorded to full-time senior executive employees
of the Company from time to time, provided that such benefits
shall be not less in the aggregate than those in effect at
Midwest Resources Inc., Midwest Power Systems, Inc. and Iowa-
Illinois Gas and Electric Company as of the Effective Time. The
Company's obligations to make the salary payments and to provide
the other benefits provided for by this paragraph 1(b) shall be
expressly contingent upon, and subject to, your observance of,
and substantial compliance with, all of the terms and provisions
hereof.
2. (a) During the Consulting Period, you shall serve
as consultant and advisor to the Company. You agree, in your
capacity as consultant and advisor, to hold yourself ready to and
to render such advice and counsel to the Company and any of its
subsidiaries and affiliates as may be requested from time to time
with reasonable advance notice by the Board of Directors or Chief
Executive Officer of the Company; provided, that you shall not be
required to devote in excess of sixty (60) days in any twelve-
month period to your duties as a consultant hereunder, and
provided further that telephonic consultation shall not require
advance notice. It is understood and agreed that such requests
for consultation shall not unreasonably interfere with your
employment with any other employer. You shall report during the
Consulting Period directly to the Chief Executive Officer of the
Company, who shall represent the Company in all matters relating
to the performance of this Agreement. During the Consulting
Period, you shall be reimbursed for any expenses which you may
reasonably incur in the performance of your duties hereunder and
which are properly substantiated.
F-1-2
<PAGE>
(b) In consideration of and as compensation for your
services as a consultant and advisor to the Company hereunder,
and your agreement not to compete with the Company as set forth
herein, during the Consulting Period the Company will pay to you
in equal monthly installments a consulting fee at a rate of
$50,000 per annum. The Company shall not be obligated to make
such payments in respect of any period following the Employment
Period if you continue to be actively employed by the Company or
any subsidiary or affiliate after the Employment Period. During
the Consulting Period the Company shall provide to you the
benefits described in paragraph 1 (other than the base salary,
bonus, long-term incentive and other cash compensation elements
referred to therein), including office space, equipment and
furnishings and a full-time secretary, selected by you, at the
expense of the Company in quarters agreed upon by you and the
Company. The Company's obligations to pay the consulting fee and
benefits provided for by this paragraph 2(b) shall be expressly
contingent upon, and subject to, your observance of, and
substantial compliance with, all of the terms and provisions
hereof.
3. You agree that during the Employment Period and
the Consulting Period, and any additional period during which you
are employed by or act as a consultant to the Company or any
subsidiary or affiliate, except with the prior written consent of
the Company, you will not in any way, directly or indirectly,
own, manage, operate, control, accept employment or a consulting
position with, or otherwise advise or assist or be actively
connected with or have any financial interest in, directly or
indirectly, any enterprise which engages in, or otherwise carries
on, any business activity in competition with the business of the
Company in any geographic area in which it engages in such
business. You further agree that during the Employment Period,
the Consulting Period, and any additional period during which you
are employed by the Company or any subsidiary or an affiliate
and, in any event, until the sixth anniversary of the Effective
Time, subject to the foregoing, you will not take any action
which might divert from the Company or any of its subsidiaries or
affiliates, successors or assigns any opportunity which would be
within the scope of its or their respective present or future
operations or business. It is understood that ownership of not
more than one percent (1%) of the equity securities of a public
company shall in no way be prohibited pursuant to the foregoing
provisions.
4. Notwithstanding any of the foregoing provisions of
this Agreement, the Company may terminate your duties and
services hereunder during the term hereof and discharge you (i)
in the event of a breach of this Agreement by you in any material
respect as determined by the affirmative vote of two-thirds of
the membership of the Company's Board of Directors ("Board"),
provided that the Board shall have given you written notice of
such breach, and you shall have failed to remedy such breach
within thirty (30) days of receipt of such notice, (ii) for
cause, upon the affirmative vote of two-thirds of the membership
of the Board (cause, for purposes of this Agreement, shall mean
persistent incompetence, willful misconduct, dishonesty or
conviction of a felony), or (iii) upon the affirmative vote of
two-thirds of the membership of the Board, provided, in the case
of (iii), the Company shall be obligated to make the salary
payments to and provide the other benefits provided for by
F-1-3
<PAGE>
paragraph 1(b) through the remainder of the Employment Period and
the salary payments and other benefits provided for by paragraph
2(b) through the remainder of the Consulting Period
notwithstanding such termination. Your duties and services
hereunder shall terminate in the event of your death or your
physical inability to perform the services required to be
performed by you hereunder, provided such inability shall have
persisted for a continuous period of 270 days. Should your
services be terminated by reason of your breach of this
Agreement, or for cause, the Company shall pay to you your salary
or consulting fee, as the case may be, only through the end of
the calendar month in which such termination occurs, and if your
services are terminated by reason of your death prior to the
Retirement Date or your physical inability to preform the
services required to be performed by you hereunder, your salary
hereunder shall terminate on the date benefits in respect of your
death or physical disability are made available to your estate or
personal representative under the Company's benefit plans.
In the event of a breach of the Agreement by the
Company in any material respect, such breach shall be deemed to
constitute a constructive termination of your employment in
contravention of this Agreement, qualifying you for payment
pursuant to paragraph 4(iii) above and such other remedies as are
available in law or in equity; provided, however, that you shall
have given the Board of the Company written notice of such
breach, and the Board shall have failed to cause the Company to
remedy such breach within thirty (30) days of receipt of such
notice.
5. It is understood and agreed that the services to
be rendered under this Agreement by you are special, unique and
of an extraordinary character, and, more particularly, that in
the event of any breach or threatened breach by you of the
provisions of paragraph 3 hereof, the Company shall have no
adequate remedy in law. Consequently, in the event of a breach
or threatened breach by you of the provisions of paragraph 3
hereof, in addition to the Company's right to terminate this
Agreement pursuant to paragraph 4 hereof, the Company shall be
entitled to an injunction restraining you from any such breach or
threatened breach.
6. Any paragraph, sentence, phrase or other provision
of this Agreement which is in conflict with any applicable
statute, rule or other law shall be deemed, if possible, to be
modified or altered to conform thereto or, if not possible, to be
omitted herefrom. The invalidity of any portion hereof shall not
affect the force and effect of the remaining valid portions
hereof.
7. This Agreement is governed by and is to be
construed in accordance with the substantive law (and not the
choice of law rules) of the State of Iowa. This Agreement (and
the Merger Agreement at Section 7.12 and Exhibit F-3) constitutes
the entire understanding between you and the Company with respect
to the subject matter contained herein and, except as otherwise
set forth in this paragraph 7, supersedes and cancels any and all
prior written or oral understandings and agreements with respect
to such matters, including the employment agreement dated March
15, 1990. It is understood and agreed that the Merger of Midwest
Resources Inc., Midwest Power Systems Inc. and Iowa-Illinois Gas
and Electric Company into the Company ("Merger") as contemplated
F-1-4
<PAGE>
in the Merger Agreement shall not constitute a Change in Control
for purposes of the Agreement between you and Midwest Resources
Inc., as successor to Midwest Energy Company, dated April 19,
1989 ("MWE Agreement") only, and that notwithstanding the
foregoing, the MWE Agreement shall remain in full force and
effect in accordance with the terms thereof with respect to any
event, transaction or circumstance other than the Merger.
8. Any notice or other communication required or
permitted under this Agreement shall be effective only if it is
in writing and delivered personally or sent by registered or
certified mail, postage prepaid, or sent by an overnight delivery
service, addressed as follows:
If to the Company:
MidAmerican Energy Company
666 Grand Avenue
Des Moines, IA 50306-9244
If to you:
Mr. Russell E. Christiansen
666 Grand Avenue
Des Moines, IA 50306-9244
or to such other address as either party may designate by notice
to the other, and shall be deemed to have been given upon
receipt.
9. This Agreement may be amended only by an
instrument in writing signed by the parties hereto, and any
provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement
of such waiver is sought. The failure of either party hereto at
any time to require the performance by the other party hereto of
any provision hereof shall in no way affect the full right to
require such performance at any time thereafter, nor shall the
waiver by either party hereto of a breach of any provision hereof
be taken or held to be a waiver of any succeeding breach of such
provision or a waiver of the provision itself or a waiver of any
other provision of this Agreement.
10. This Agreement is binding on and is for the
benefit of the parties hereto and their respective successors,
heirs, executors, administrators and other legal representatives.
Neither this Agreement nor any right or obligation hereunder may
be assigned by the Company or by you.
11. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
F-1-5
<PAGE>
12. This Agreement shall have no force and effect
unless and until the Effective Time.
Very truly yours,
MIDAMERICAN ENERGY COMPANY
By /s/ STANLEY J. BRIGHT
Stanley J. Bright
President, Office of the
Chief Executive Officer
Accepted and agreed to as
of the date first written
above.
/s/ RUSSELL E. CHRISTIANSEN
Russell E. Christiansen
F-1-6
<PAGE>
EXHIBIT A
RESPONSIBILITIES OF CHAIRMAN, OFFICE OF THE CEO
Shareholder Meetings
Meetings of the Board of Directors and Committees of
the Board. (The Chairman would preside and the
President would have a principal presentation role.)
Agenda setting for board and board committee
meetings to be done by the Chairman, Office of the
CEO, with concurrence of the President, Office of
the CEO.
Committees of the Board
Executive (Chairman, Office of the CEO, to
serve as chairman; President, Office of the
CEO, to serve as vice chairman.)
Nominating
Finance (Chairman, Office of the CEO, and
President, Office of the CEO, to be members.)
Audit
Management Development and Compensation
Strategic Planning (President, Office of the
CEO, to serve as chairman)
Corporate Charter and By Law Revisions
Major Economic Development Initiatives
Major Governmental or Regulatory Initiatives and
programs undertaken by the Company at the federal,
state or local level.
Major Industry Initiatives
F-1-7
<PAGE>
July __, 1994 EXHIBIT F-2
Mr. Stanley J. Bright
206 East Second Street
Davenport, IA 52801
Dear Mr. Bright:
Pursuant to the Agreement and Plan of Merger ("Merger
Agreement") dated as of July 26, 1994, by and among Midwest
Resources Inc., Midwest Power Systems Inc., Iowa-Illinois Gas and
Electric Company and MidAmerican Energy Company ("Company"),
Midwest Resources Inc., Midwest Power Systems Inc. and Iowa-
Illinois Gas and Electric Company will be merged into the
Company. In recognition of the value of your past services to
Iowa-Illinois Gas and Electric Company and its subsidiaries, and
in anticipation of your contribution to the future growth and
success of the Company and its subsidiaries, the Company wishes
to provide itself and its subsidiaries the continuing benefits of
your services as a senior executive officer of the Company and
its subsidiaries on the terms and conditions set forth below.
This letter sets forth our agreement with respect to
your employment with the Company and its subsidiaries during the
period commencing on the Effective Time (as defined in the Merger
Agreement) and ending on the fifth anniversary of the Effective
Time (such period herein referred to as the "Employment Period").
1. (a) If the Effective Time occurs (i) on or before
May 31, 1995, then during the periods commencing on (x) the
Effective Time and ending on May 31, 1996, you shall serve as
President of the Company ("President") and President, Office of
the Chief Executive Officer of the Company performing those
responsibilities set forth on Exhibit A attached hereto, (y)
June 1, 1996 and ending on May 31, 1997, you shall serve as
President and Chief Executive Officer of the Company and (z) June
1, 1997 and ending on the fifth anniversary of the Effective
Time, you shall service as Chairman of the Board of Directors of
the Company ("Chairman") and Chief Executive Officer of the
Company, (ii) between June 1, 1995 and May 31, 1996, then during
the periods commencing on (x) the Effective Time and ending on
the first anniversary of the Effective Time, you shall serve as
President and President, Office of the Chief Executive Officer of
the Company and (y) the first anniversary of the Effective Time
and ending on May 31, 1997, you shall serve as President and
Chief Executive Officer of the Company and (z) June 1, 1997 and
ending on the fifth anniversary of the Effective Time, you shall
serve as Chairman and Chief Executive Officer of the Company, or
(iii) after May 31, 1996, then commencing on (x) the Effective
Time and ending on the first anniversary of the Effective Time,
you shall serve as President and President, Office of the Chief
Executive Officer of the Company and (y) the first anniversary of
the Effective Time and ending on the fifth anniversary of the
Effective Time, you shall serve as Chairman and Chief Executive
Officer of the Company. Any service required to be performed by
you hereunder shall be of the type usually performed by the
officer holding such title at a major public company. Your
F-2-1
<PAGE>
duties and services generally shall be performed by you on
regular business days during normal business hours, and you agree
to be present in Des Moines, Iowa, as required and for as much
time as is necessary to perform your duties and services for the
business of the Company and its subsidiaries. You shall be
entitled to vacation in accordance with the policy from time to
time in effect for senior executive officers of the Company and
its subsidiaries with credit for past service with Iowa-Illinois
Gas and Electric Company and its subsidiaries. During the
Employment Period you shall be reimbursed by the Company in
accordance with the Company's policy from time to time in effect
for any expenses commensurate with your position which you may
reasonably incur in the performance of your duties and services
hereunder and which are properly substantiated.
(b) In consideration of and as compensation for your
services hereunder and your agreement not to compete with the
Company as set forth herein, during the Employment Period the
Company will pay to you, while serving as President and
President, Office of the Chief Executive Officer, in equal
installments with the same frequency as for other executives of
the Company, but at least monthly, a base salary at the annual
rate of not less than $350,000, such base salary to be subject to
adjustment during the Employment Period in accordance with the
Company's policy for executives. At such time as you shall serve
as President and Chief Executive Officer of the Company in
accordance with paragraph 1(a), you will be paid a base salary
not less than the base salary paid the Chairman. In addition to
such salary, you shall be eligible to receive, as additional
compensation, appropriate management bonuses, long-term incentive
awards and such other compensation elements as are applicable, in
amounts not less than those paid or accrued for the Chairman of
the Company, in relation to the achievement by the Company and
its subsidiaries of corporate goals and objectives and the
Company will provide to you all other benefits accorded to full-
time senior executive employees of the Company from time to time,
provided that such benefits shall be not less in the aggregate
than those in effect at Midwest Resources Inc., Midwest Power
Systems Inc. and Iowa-Illinois Gas and Electric Company as of the
Effective Time. The Company's obligations to make the salary
payments and to provide the other benefits provided for by this
paragraph 1(b) shall be expressly contingent upon, and subject
to, your observance of, and substantial compliance with, all of
the terms and provisions thereof.
2. You agree that during the Employment Period, and
any additional period during which you are employed by or act as
a consultant to the Company or any subsidiary or affiliate,
except with the prior written consent of the Company, you will
not in any way, directly or indirectly, own, manage, operate,
control, accept employment or a consulting position with or
otherwise advise or assist or be actively connected with, or have
any financial interest in , directly or indirectly, any
enterprise which engages in, or otherwise carries on, any
business activity in competition with the business of the Company
in any geographic area in which it engages in such business. You
further agree that during the Employment Period, and any
additional period during which you are employed by the Company or
any subsidiary or an affiliate and, in any event, until the sixth
anniversary of the Effective Time, subject to the foregoing, you
F-2-2
<PAGE>
will not take any action which might divert from the Company or
any of its subsidiaries or affiliates, successors or assigns any
opportunity which would be within the scope of its or their
respective present or future operations or business. It is
understood that ownership of not more than one percent (1%) of
the equity securities of a public company shall in no way be
prohibited pursuant to the foregoing provisions.
3. Notwithstanding any of the foregoing provisions of
this Agreement, the Company may terminate your duties and
services hereunder during the term hereof and discharge you (i)
in the event of a breach of this Agreement by you in any material
respect as determined by the affirmative vote of two-thirds of
the membership of the Company's Board of Directors ("Board"),
provided that the Board shall have given you written notice of
such breach, and you shall have failed to remedy such breach
within thirty (30) days of receipt of such notice, (ii) for
cause, upon the affirmative vote of two-thirds of the membership
of the Board (cause, for purposes of this Agreement, shall mean
persistent incompetence, willful misconduct, dishonesty or
conviction of a felony), or (iii) upon the affirmative vote of
two-thirds of the membership of the Board, provided, in the case
of (iii), the Company shall be obligated to make the salary
payments to and provide the other benefits provided for by
paragraph 1(b) through the remainder of the Employment Period
notwithstanding such termination. Your duties and services
hereunder shall terminate in the event of your death or your
physical inability to perform the services required to be
performed by you hereunder, provided such inability shall have
persisted for a continuous period of 270 days. Should your
services be terminated by reason of your breach of this
Agreement, or for cause, the Company shall pay to you your salary
only through the end of the calendar month in which such
termination occurs, and if your services are terminated by reason
of your death or your physical inability to perform the services
required to be performed by you hereunder prior to the Retirement
Date, your salary hereunder shall terminate on the date benefits
in respect of your death or physical disability are made
available to your estate or personal representative under the
Company's benefit plans.
In the event of a breach of this Agreement by the
Company in any material respect, such breach shall be deemed to
constitute a constructive termination of your employment in
contravention of this Agreement, qualifying you for payment
pursuant to paragraph 3(iii) above and such other remedies as are
available in law or in equity; provided, however, that you shall
have given the Board of the Company written notice of such
breach, and the Board shall have failed to cause the Company to
remedy such breach within thirty (30) days of receipt of such
notice.
4. It is understood and agreed that the services to
be rendered under this Agreement by you are special, unique and
of an extraordinary character, and, more particularly, that in
the event of any breach or threatened breach by you of the
provisions of paragraph 2 hereof, the Company shall have no
adequate remedy in law. Consequently, in the event of a breach
or threatened breach by you of the provisions of paragraph 2
hereof, in addition to the Company's right to terminate this
Agreement pursuant to paragraph 3 hereof, the Company shall be
entitled to an injunction restraining you from any such breach or
threatened breach.
F-2-3
<PAGE>
5. Any paragraph, sentence, phrase or other provision
of this Agreement which is in conflict with any applicable
statute, rule or other law shall be deemed, if possible, to be
modified or altered to conform thereto or, if not possible, to be
omitted herefrom. The invalidity of any portion hereof shall not
affect the force and effect of the remaining valid portions
hereof.
6. This Agreement is governed by and is to be
construed in accordance with the substantive law (and not the
choice of law rules) of the State of Iowa. This Agreement (and
the Merger Agreement at Section 7.12 and Exhibit F-3) constitutes
the entire understanding between you and the Company with respect
to the subject matter contained herein and, except as otherwise
set forth in this paragraph 6, supersedes and cancels any and all
prior written or oral understandings and agreements with respect
to such matters.
7. Any notice or other communication required or
permitted under this Agreement shall be effective only if it is
in writing and delivered personally or sent by registered or
certified mail, postage prepaid, or sent by an overnight delivery
service, addressed as follows:
If to the Company:
MidAmerican Energy Company
666 Grand Avenue
Des Moines, Iowa 50306-9244
If to you:
Mr. Stanley J. Bright
206 East Second Street
Davenport, IA 52808
or to such other address as either party may designate by notice
to the other, and shall be deemed to have been given upon
receipt.
8. This Agreement may be amended only by an
instrument in writing signed by the parties hereto, and any
provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement
of such waiver is sought. The failure of either party hereto at
any time to require the performance by the other party hereto of
any provision hereof shall in no way affect the full right to
require such performance at any time thereafter, nor shall the
waiver by either party hereto of a breach of any provision hereof
be taken or held to be a waiver of any succeeding breach of such
provision or a waiver of the provision itself or a waiver of any
other provision of this Agreement.
9. This Agreement is binding on and is for the
benefit of the parties hereto and their respective successors,
heirs, executors, administrators and other legal representatives.
Neither this Agreement nor any right or obligation hereunder may
be assigned by the Company or by you.
F-2-4
<PAGE>
10. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
11. This Agreement shall have no force and effect
unless and until the Effective Time.
Very truly yours,
MIDAMERICAN ENERGY COMPANY
By: /s/ RUSSELL E. CHRISTIANSEN
Russell E. Christiansen
Chairman, Office of the
Chief Executive Officer
Accepted and agreed to as
of the date first written
above:
/s/ STANLEY J. BRIGHT
Stanley J. Bright
F-2-5
<PAGE>
EXHIBIT A
RESPONSIBILITIES OF PRESIDENT, OFFICE OF THE CEO:
Development of Strategic Alternatives and Merger
Implementation
All Operating Functions
Financial Management
Budgeting, Financial Planning and Financial
Analysis
Treasury Functions
Finance, including relationships with
Institutional Investors, Analysts and other
shareholders; Investment Banking Relationships and
Dealing with Credit Rating Agencies
Dealings with External Auditors
Accounting, Financial Reporting, and Taxation
Legal Affairs
Corporate Development
Rates and Regulatory Matters
Governmental Affairs
Marketing and Economic Development
Human Resources
Other Administrative Functions (e.g., Purchasing and
Management Information Services)
F-2-6
<PAGE>
EXHIBIT F-3
OFFICE OF THE CEO
_________________________________
| |
| CHAIRMAN |
| |
| PRESIDENT |
|_______________________________|
|
|
________________________|_________________________
| |
| SENIOR OPERATING AND STAFF OFFICERS |
|________________________________________________|
Office of the Chief Executive Officer:
Upon approval of the merger of Midwest Resources Inc., Midwest
Power Systems Inc. and Iowa-Illinois Gas and Electric Company
into the Company, the Office of the Chief Executive Officer would
be formed, composed of the CEO of Midwest Resources Inc. and the
CEO of Iowa-Illinois Gas and Electric Company. If the Effective
Time occurs (i) on or before May 31, 1995, then during the
periods commencing on (x) the Effective Time and ending on May
31, 1996, Russell E. Christiansen shall serve as Chairman of the
Board of Directors of the Company ("Chairman") and Chairman,
Office of the Chief Executive Officer of the Company and Stanley
J. Bright shall serve as President of the Company ("President")
and President, Office of the Chief Executive Officer of the
Company and (y) June 1, 1996 and ending on May 31, 1997, Russell
E. Christiansen shall serve as Chairman and Stanley J. Bright
shall serve as President and Chief Executive Officer, (ii)
between June 1, 1995 and May 31, 1996, then during the period
commencing on (x) the Effective Time and ending on the first
anniversary of the Effective Time, Russell E. Christiansen shall
serve as Chairman and Chairman, Office of the Chief Executive
Officer of the Company and Stanley J. Bright shall serve as
President and President, Office of the Chief Executive Officer of
the Company and (y) the first anniversary of the Effective Time
and ending on May 31, 1997, Russell E. Christiansen shall serve
as Chairman and Stanley J. Bright shall serve as President and
Chief Executive Officer or (iii) after May 31, 1996, then
commencing on the Effective Time and ending on the first
anniversary of the Effective Time, Russell E. Christiansen shall
serve as Chairman and Chairman, Office of the Chief Executive
Officer of the Company and Stanley J. Bright shall serve as
President and President, Office of the Chief Executive Officer of
the Company. At such time as Russell E. Christiansen retires as
Chairman (which shall be the later of May 31, 1997 or one year
after the Effective Time), then Stanley J. Bright shall become
Chairman.
F-3-1
<PAGE>
General Policy:
During the period the Office of the CEO exists, the Chairman
and the President would confer on all matters of importance. In
general, the Chairman would have the primary responsibility for
matters relating to Corporate Governance and the President would
have the primary responsibility for Strategic Direction and
Executive Management. However, the Chairman would participate
fully in the development of alternatives leading to major
decisions having strategic importance. As a general guideline,
the following chart sets forth the primary respective
responsibilities of the Chairman and the President. The term
"primary," as used in this context, refers to the officer having
the principal decision-making role with respect to issues
relating to such responsibility, it being understood that the
Chairman and the President would confer on major decisions.
Senior operating and staff officer appointments or other officer
appointments would be approved by the Board of Directors upon the
recommendation of the President with the concurrence of the
Chairman. Other executive appointments would be made by the
President.
F-3-2
<PAGE>
EXHIBIT F-3
Corporate Governance:
(Responsibilities of Chairman, Office of the CEO)
Shareholder Meetings
Meetings of the Board of Directors and Committees of
the Board. (The Chairman would preside and the
President would have a principal presentation role.)
Agenda setting for board and board committee
meetings to be done by the Chairman, Office of the
CEO, with concurrence of the President, Office of
the CEO.
Committees of the Board
Executive (Chairman, Office of the CEO, to
serve as chairman; President, Office of the
CEO, to serve as vice chairman.)
Nominating
Finance (Chairman, Office of the CEO, and
President, Office of the CEO, to be members.)
Audit
Management Development and Compensation
Strategic Planning (President, Office of the
CEO, to serve as chairman)
Corporate Charter and By Law Revisions
Major Economic Development Initiatives
Major Governmental or Regulatory Initiatives and
programs undertaken by the Company at the federal,
state or local level.
Major Industry Initiatives
F-3-3
<PAGE>
EXHIBIT F-3
Executive Management of Electric and Gas Utility Operations and
non-regulated businesses.
(Responsibilities of President, Office of the CEO):
Development of Strategic Alternatives and Merger
Implementation
All Operating Functions
Financial Management
Budgeting, Financial Planning and Financial
Analysis
Treasury Functions
Finance, including relationships with
Institutional Investors, Analysts and other
shareholders; Investment Banking Relationships and
Dealing with Credit Rating Agencies
Dealings with External Auditors
Accounting, Financial Reporting, and Taxation
Legal Affairs
Corporate Development
Rates and Regulatory Matters
Governmental Affairs
Marketing and Economic Development
Human Resources
Other Administrative Functions (e.g., Purchasing and
Management Information Services)
F-3-4
<PAGE>
EXHIBIT G
SEVERANCE PLAN FOR SPECIFIED OFFICERS
1. Purpose
The purpose of this Severance Plan is to encourage the
continued attention and dedication of the Specified Officers to
their assigned duties, without distraction, in the face of the
potentially disruptive circumstances that accompany a merger of
companies.
2. Qualification for Severance Benefits
A Specified Officer shall be entitled to receive
Severance Benefits if, during the Term of the Severance Plan,
such Specified Officer incurs a Qualifying Termination. No
Severance Benefits shall become due or payable unless and until
the occurrence of such Qualifying Termination. At the time of a
Qualifying Termination, a Specified Officer eligible for
severance benefits under both this Plan and the Severance Plan In
The Event Of A Change In control of Iowa-Illinois shall elect
coverage under one of the two Plans, but not both.
3. Specified Officers
The position titles of the persons who are potentially
eligible to receive benefits under this Severance Plan are set
forth in Appendix I, attached hereto and incorporated herein.
Persons occupying these positions are herein referred as
"Specified Officers."
4. Qualifying Termination
For the purpose of this Severance Plan, a "Qualifying
Termination" shall mean a termination of employment of a
Specified Officer occurring within the Term of this Severance
Plan either (a) involuntarily for any reason (except in the
instance of a felony as provide in this Section) or (b)
voluntarily if the Specified Officer has furnished the President
of the Company with six (6) months prior written notice of the
intent to voluntarily terminate employment.
Termination of employment due, in whole or in part, to
the commission of a felony by a Specified Officer shall not
constitute a Qualifying Termination under this Severance Plan.
All Severance Benefits for a Specified Officer charged with a
felony shall be suspended until such time as the felony charge is
finally disposed. Conviction of a felony or a plea of no contest
to a felony charge shall be sufficient to disqualify the
Specified Officer for Severance Benefits.
G-1
<PAGE>
5. Severance Benefits
For the purpose of this Severance Plan, "Severance
Benefits" shall mean:
a. an amount equal to two (2) times the Specified
Officer's highest Total Cash Compensation, said
amount to be paid in a lump sum on the effective
date of his/her Qualifying Termination (except in
the circumstance of a felony charge as provided
above); and
b. the Specified Officer's accrued vacation pay
through the effective date of his/her Qualifying
Termination, said amount to be paid in a lump sum
on the effective date of such Qualifying
Termination (except in the circumstance of a
felony charge as provided above); and
c. a continuation of the welfare benefits of health
insurance, disability insurance, and group term
life insurance for twenty-four (24) full calendar
months after the effective date of the Specified
Officer's Qualifying Termination, at the same
premium cost and at the same coverage level as in
effect on such effective date; provided, however,
in the event the premium cost and/or coverage
level shall change at any time during the twenty-
four (24) month period for all welfare benefit
participants, then the premium cost and/or
coverage level likewise shall change for such
Specified Officer in a corresponding manner; and
d. standard outplacement services from a nationally
recognized firm of the Specified Officer's
selection for a period up to twenty-four (24) full
calendar months after the effective date of the
Qualifying Termination or until such Specified
Officer obtains employment, whichever is less.
The cost of such services shall not exceed twenty
percent (20%) of the Specified Officer's Total
Cash Compensation.
6. Term
This Severance Plan shall be effective for a term
commencing at the Effective Time (as defined in the Agreement and
Plan of Merger by and among Midwest Resources Inc., Midwest Power
Systems Inc., Iowa-Illinois Gas and Electric Company and
MidAmerican Energy Company ("Company")) and terminating two (2)
years thereafter. The Plan shall not be amended during its term
except with the written consent of all Specified Officers.
7. Total Cash Compensation
The term "Total Cash Compensation" shall mean the
amount payable to a Specified Officer by the Company or its
predecessors as annual salary and Bonus, without regard to
deferrals. For the purpose of this Plan, "Bonus" shall mean the
larger of (i) the three-year average of bonuses actually paid to
the Specified Officer or (ii) the three-year average of accruals
G-2
<PAGE>
to the account of the Specified Officer under any incentive
compensation plan. In the event that less than three years of
payments or accruals have occurred, then the average of any
payments or accruals, respective, shall be used.
8. Taxes
A. The corporation paying the Severance Benefits
shall be entitled to withhold all Federal, state,
city, or other taxes legally required, subject to
subparagraphs B, C and D hereof.
B. In the event any of the Severance Benefits payable
to a Specified Officer are subject to the tax
("Excise Tax") imposed by Section 4999 of the
Internal Revenue Code of 1986 (or any similar tax
that may hereafter be imposed) ("Code"), the
corporation paying such Severance Benefits shall
pay to the Specified Officer in cash an additional
amount ("Gross-Up Payment") such that the net
amount retained by the Specified Officer after
deduction of any Excise Tax payable on the
Severance Benefits and any Federal, state, and
local income tax and Excise Tax payable upon the
Gross-Up Payment shall be equal to the Severance
Benefits. Such Gross-Up Payment shall be made by
the corporation to the Specified Officer on the
effective date of his/her Qualifying Termination.
C. For the purpose of determining whether any of the
Severance Benefits will be subject to the Excise
Tax and the amount of such Excise Tax:
(a) any other payments of benefits received or to
be received by a Specified Officer in
connection with his/her termination of
employment (whether pursuant to the terms of
this Plan or any other plan, arrangement, or
agreement) shall be treated as "parachute
payments" within the meaning of
Section 280G(b)(2) of the Code, and all
"excess parachute payments" within the
meaning of Section 280(G)(b)(1) shall be
treated as subject to the Excise Tax, unless
in the opinion of tax counsel, selected by
such Specified Officer, such other payments
or benefits (in whole or in part) do not
constitute parachute payments, or that such
excess parachute payments (in whole or in
part) represent reasonable compensation for
services actually rendered within the meaning
of Section 280G(b)(4) in excess of the base
amount within the meaning of Section
280G(b)(3), or are otherwise not subject to
the Excise Tax; and
(b) the amount of Severance Benefits which shall
be treated as subject to the Excise Tax shall
be equal to the lesser of: (i) the total
amount of Severance Benefits; or (ii) the
amount of excess parachute payments within
G-3
<PAGE>
the meaning of Section 280G(b)(1) of the Code
(after applying clause (a) above; and
(c) the value of any noncash benefits or any
deferred payment or benefit shall be
determined by the independent auditors of the
corporation paying such Severance Benefits in
accordance with the principles of Sections
280G(d) of the Code and applicable
regulations.
For the purpose of determining the amount of
the Gross-Up Payment, the Specified Officer shall
be deemed to pay Federal income taxes at the
highest marginal rate of Federal income taxation
in the calendar year in which such Gross-Up
Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in
the state and locality of the Specified Officer's
residence on the effective date of his/her
Qualifying Termination, net of the maximum
reduction in Federal income taxes which could be
obtained from deduction of such state and local
taxes.
D. In the event the Internal Revenue Service adjusts
the computations under paragraph C hereof such
that the Specified Officer does not receive the
maximum Severance Benefits (including Gross-Up
Payment) permitted by this Plan, the corporation
paying such Severance Benefits shall reimburse the
Specified Officer for the full amount necessary to
make him/her whole, plus interest from the date
such additional Severance Benefits became due to
the date of such payment at the prime rate as may
be established by The First National Bank of
Chicago from time-to-time.
9. Employment Status
In no event shall any Specified Officer be obligated to
seek other employment or to take other action by way of
mitigation of the amounts payable to such Officer under the
provisions of this Severance Plan, nor shall the amount of any
payment hereunder be reduced by any compensation earned by such
Specified Officer as a result of employment by another employer.
Nothing herein contained shall be deemed to create an
employment agreement with the Specified Officer providing for the
employment of such Specified Officer for any fixed period of
time.
10. Other Benefits
Neither the provisions of this Severance Plan nor the
right to receive Severance Benefits shall reduce any amounts
otherwise payable to any Specified Officer or in any way diminish
his/her rights under any benefit, bonus, incentive, stock option,
G-4
<PAGE>
stock bonus or other stock purchase plan, or any employee
agreement, or any other plan, program, policy or practice for
which the Specified Officer may qualify. Vested benefits and
other amounts which the Specified Officer is otherwise entitled
to receive under any plan, program, policy or practice at or
subsequent to the effective date of such Specified Officer's
Qualifying Termination shall be payable in accordance with such
plan, program, policy or practice.
11. Contractual Rights
This Plan establishes in each Specified Officer a right
to the benefits to which he or she is entitled hereunder. This
Plan shall inure to the benefit of, and be enforceable by, each
Specified Officer's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If a Specified Officer dies while any Severance
Benefits would still be payable to him/her under this Severance
Plan, all such unpaid amounts shall be paid to such Specified
Officer's designated beneficiaries or, in the absence thereof, to
such Specified Officer's estate.
12. No Separate Fund Required
Nothing herein contained shall require or be deemed to
require, or prohibit or be deemed to prohibit, that the Company
segregate or otherwise set aside any funds or other assets, in
trust or otherwise, to provide for the payment of Severance
Benefits.
13. Legal Remedies
A. To the extent permitted by law, the corporation
obligated to pay any Severance Benefits shall pay
all legal fees, cost of litigation, prejudgment
interest, and other expenses incurred in good
faith by each Specified Officer as a result of
such corporation's refusal to provide the
Severance Benefits to which the Specified Officer
becomes entitled under this Plan, or as a result
of such corporation's contesting the validity,
enforceability, or interpretation of this Plan, or
as a result of any conflict pertaining of this
Plan.
B. Each Specified Officer shall have the right and
option to elect (in lieu of litigation) to have
any dispute or controversy arising under or in
connection with this Plan settled by arbitration
conducted by an arbitrator in accordance with the
rules of the American Arbitration Association then
in effect. A Specified Officer's election to
arbitrate and the decision of the arbitrator in
that proceeding shall be binding on the parties to
such arbitration.
G-5
<PAGE>
Judgement may be entered on the award of the
arbitrator in any court having jurisdiction. All
expenses of such arbitration, including the fees
and expenses of the counsel for the Specified
Officer, shall be borne by the corporation which
is the party to the arbitration.
14. Severability
In the event any provision of this Severance Plan shall
be held illegal or invalid for any reason, such illegality or
invalidity shall not effect the remaining parts of this Plan, and
this Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.
15. Captions
The captions of this Severance Plan are not a part of
the provisions hereof and shall have no force and effect.
16. Applicable Law
This Severance Plan shall be interpreted in accordance
with the laws of the State of Iowa.
G-6
<PAGE>
APPENDIX I
Specified Officers
A. Specified Officers of Midwest Resources Inc. and Midwest
Power Systems Inc.
1. Richard C. Engle
2. Lynn K. Vorbrich
3. Beverly A. Wharton
4. Philip G. Lindner
5. John A. Rasmussen
B. Specified Officers of Iowa-Illinois Gas and Electric
Company.
1. Stephen E. Shelton
2. Ronald W. Stepien
3. Lance E. Cooper
4. Donald C. Heppermann
5. Brent E. Gale
G-7
Media contact: Sam Wilson (319) 326-7278
Investor relations contact: Lance Cooper (319) 326-7313
July 27, 1994
DAVENPORT, Iowa, July 27 - In a joint statement, Stanley J.
Bright, Chairman, President and Chief Executive Officer (CEO) of
IOWA-ILLINOIS GAS AND ELECTRIC COMPANY (NYSE: IWG) and Russell E.
Christiansen, Chairman, President and CEO of MIDWEST RESOURCES,
INC. (NYSE:MWR) today announced their respective boards of
directors have unanimously approved a strategic "merger of
equals" of Midwest Resources and Iowa-Illinois to form
MIDAMERICAN ENERGY COMPANY.
Under the proposed merger, MidAmerican Energy Company will
be structured as a utility with Midwest Resources and Iowa-
Illinois being merged into the new company. MidAmerican will
continue the former electric operations of Midwest Power and
Iowa-Illinois as a single electric business unit and will also
continue the gas operations of Midwest Gas and those of Iowa-
Illinois as a single gas business unit. Nonregulated operations
of both companies will also be continued as subsidiaries of
MidAmerican.
Midwest Resources provides electric service to 420,000
customers in central and western Iowa and southeastern South
Dakota, and gas service to more than 340,000 customers in Iowa,
South Dakota and Nebraska. Iowa-Illinois provides electric
service to nearly 200,000 customers in central and eastern Iowa
and northwestern Illinois and gas service to more than 240,000
customers in the region. Both companies also have substantial
non-regulated businesses (Midwest Resources' Midwest Capital
Group and Iowa-Illinois' InterCoast Energy Company).
Merger Specifics
Under the merger agreement, Midwest's common shareholders
will receive one share of MidAmerican for each Midwest share and
Iowa-Illinois' common shareholders will receive 1.47 shares of
MidAmerican Energy for each Iowa-Illinois share. The boards of
directors anticipate that MidAmerican will initially have an
indicated annual common stock dividend of $1.20 per share.
Upon the formation of the new company, Christiansen and
Bright will occupy an "Office of the CEO" with Christiansen as
Chairman and Bright as President. Bright will be named CEO at
the end of the initial year of operation of the new company.
Christiansen will continue to serve as Chairman until his
retirement on May 31, 1997.
In the announcement, Christiansen noted that the two
companies "... consider the merger to be an essential strategic
step in order to achieve the higher efficiencies, improved
productivity, and cost reductions required to ensure a continued
strong competitive position. The results should benefit both
customers and shareholders through reduced or avoided costs." He
noted that the average electric and gas rates of the two
companies are similar and well below national averages.
Merger Is Good for Regional Economy
"The merger is also in the best interests of the states and
communities we serve," Bright added. "It helps to assure that
the states will be able to offer competitive energy costs as
compared to other areas of the country."
MidAmerican Energy Company will be the largest electric and
gas utility operating in Iowa with combined revenues of
approximately $1.8 billion, combined assets of approximately $4.4
billion and total capitalization of approximately $2.7 billion.
The company will serve 620,000 electric customers and more than
580,000 gas customers. The combined electric generating capacity
of Midwest Resources and Iowa-Illinois is more than 4,200
megawatts. The combined 1993 gas throughput was in excess of 147
billion cubic feet. The new company's service territory will
span the state of Iowa and include most of Iowa's major cities.
Christiansen emphasized that major factors driving the
merger are the substantial changes which are occurring in the
electric and gas industries, including the advent of deregulation
and increasing competition. He noted that "the two companies
have many complementary strengths, including contiguous electric
and gas distribution territories and joint ownership interests in
four low-cost, environmentally clean coal-fired electric
generating plants with common transmission assets."
Bright noted that "the new company will be able to achieve
substantial savings by eliminating duplicate functions, avoiding
new electric generating capacity and reducing fuel and natural
gas costs through greater purchasing power." Bright pointed out
that "preliminary studies show that the merger will result in
savings of more than $400 million over 10 years."
"While the elimination of duplicate positions will require
reductions in the total work force of about 250 positions, we
believe they can be achieved through attrition, strictly
controlled hiring and other programs. Reassignment and
retraining will also be part of the process," he added.
Both executives emphasized that the historically strong
commitments of the two companies to the support of state and
community economic development programs will continue, as
evidenced by MidAmerican's organizational structure. The new
company will have its corporate headquarters in Des Moines.
Electric and gas business units will be headquartered in
Davenport and Sioux City, respectively.
The board of directors of the new company will initially
include eleven members of the current Midwest Resources board and
eight members of the current Iowa-Illinois board. Christiansen
and Bright will be the sole inside directors.
Five Key Reasons for the Merger
Christiansen and Bright presented the following strong reasons
for the merger:
It creates a larger, stronger company well positioned to
grow and prosper in an increasingly competitive environment;
It creates added shareholder value through increased
efficiency and reduced or avoided costs, resulting in a
financially stronger, more competitive company;
Customers will benefit from reduced costs of the combined
company which will keep rates low into the future.
The new company will have a diverse and growing base of
industrial, commercial, agricultural and residential
customers; and
The new company will be well positioned to take advantage of
future strategic opportunities as the demands of a
competitive market intensify.
Required Approvals
The merger agreement is subject to approval by the
shareholders of both companies and the following regulatory
agencies: the Federal Energy Regulatory Commission, and the
state regulators in Iowa, Illinois and South Dakota. A filing
also will be made with the Federal Trade Commission under the
Hart-Scott-Rodino Act. Completion of the merger is expected in
the second half of 1995.
Both companies also announced second quarter earnings today
in separate announcements. Midwest Resources announced second
quarter earnings of 16 cents per share and year-to-date earnings
of 67 cents. Iowa-Illinois announced second quarter earnings of
44 cents per share and year-to-date earnings of 98 cents per
share.
Midwest Resources is a utility holding company headquartered
in Des Moines. The utility subsidiary, Midwest Power Systems
Inc., has two operating divisions: Midwest Power, which provides
electric service in Iowa and South Dakota, and Midwest Gas, which
provides natural gas service in Iowa, Nebraska and South Dakota.
Non-regulated investments are operated through a second
subsidiary, Midwest Capital Group, Inc.
