SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities exchange Act of 1934
Date of Report: May 4, 1998
LG&E ENERGY CORP.
(Exact name of registrant as specified in its charter)
Kentucky 1-10568 61 - 1174555
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
220 West Main Street
P.O. Box 32030
Louisville, KY 40232
(Address of principal executive offices)
(502) 627-2000
(Registrant's telephone number)
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Item 2. Acquisition or Disposition of Assets.
On May 4, 1998, LG&E Energy Corp., a Kentucky Corporation ("LG&E Energy")
merged with KU Energy Corporation, a Kentucky Corporation ("KU Energy")
with LG&E Energy as the surviving corporation (the "Merger"). As a result
of the Merger, Kentucky Utilities Company, a Kentucky and Virginia
corporation, became a wholly-owned public utility subsidiary of LG&E
Energy. A copy of the press release regarding the Merger is filed with
this report as Exhibit 99.1 and is incorporated herein by reference.
Pursuant to the terms of the Agreement and Plan of Merger, dated as of May
20, 1997 (the "Merger Agreement") by and between LG&E Energy and KU Energy,
upon the effectiveness of the Merger, each issued and outstanding share of
common stock, no par value, of KU Energy, together with associated stock
purchase rights, was canceled and converted into 1.67 shares of common
stock, without par value, of LG&E Energy common stock, together with
associated purchase rights. Any former holder of KU Energy common stock
entitled to receive a number of shares of LG&E Energy common stock that
includes a fraction is entitled to receive, in lieu of a fractional share,
a cash payment in an amount determined by multiplying such fractional share
interest by $26.019, which is the average of the last reported sales price,
regular way, per share of LG&E Energy common stock on the NYSE Composite
Tape for the ten business days prior to and including May 1, 1998.
The Securities and Exchange Commission (the "Commission") issued its order
approving the Merger on April 30, 1998. On March 27, 1998, the Federal
Energy Regulatory Commission (the "FERC") issued its order approving the
Merger. The Commission's order and the FERC's order are filed with this
report as Exhibits 99.3 and 99.4, respectively, and are incorporated herein
by reference.
Item 5. Other Events.
On April 29, 1998, LG&E Energy announced the appointment of Frederick J.
Newton, III, as Senior Vice President - Human Resources and Administration,
effective May 15, 1998. A copy of the press release is filed with this
report as Exhibit 99.5 and is incorporated herein by reference. Subsequent
to the issuance of that news release, the effective date of Mr. Newton's
appointment was moved forward to May 1, 1998.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements.
The following documents, which include financial statements as of December
31, 1997 and for each of years in the three year period ended December 31,
1997, previously filed with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, as amended, are hereby incorporated
by reference:
1. LG&E Energy's Annual Report on Form 10-K for the year ended December
31, 1997; and
2. KU Energy's Annual Report on Form 10-K for the year ended December 31,
1997.
(b) Unaudited Pro Forma Combined Financial Statements.
The Unaudited Pro Forma Combined Condensed Consolidated Financial
Information as of and for the three years ended December 31, 1997 is filed
as part of LG&E Energy Corp.'s Annual Report on Form 10-K for the year
ended December 31, 1997, and is incorporated herein by reference. The
Unaudited Pro Forma Combined Condensed Consolidated Financial Information
includes a pro forma combined condensed balance sheet at December 31, 1997
and pro forma combined condensed statements of income for each of the three
years in the three year period ended December 31, 1997. The pro forma
combined condensed balance sheet gives effect
- 1 -
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to the Merger as if it had occurred at December 31, 1997. The pro forma
combined condensed statements of income give effect to the Merger as if it
had occurred at the beginning of the periods presented.
(c) Exhibits Filed.
Exhibit
Number Description
4.1 Copy of LG&E Energy's Amended and Restated Articles of
Incorporation as amended and restated on May 4, 1998.
4.2 Copy of LG&E Energy's By-laws as amended through May 4,
1998.
99.1 Press Release, dated as of May 4, 1998.
99.2 Unaudited Pro Forma Combined Condensed Consolidated
Financial Information (filed as part of LG&E Energy's
Annual Report on Form 10-K for the year ended December
31, 1997, and incorporated herein by reference).
99.3 Copy of the Order Authorizing Acquisition of Public
Utility Company; Granting Exemption Under Section
3(a)(1), dated April 30, 1998, and issued by the
Commission.
99.4 Copy of the FERC order, dated March 27, 1998, approving
the Merger (filed as Exhibit D-1.3 to LG&E Energy's
Application-Declaration on Form U-1 (File No. 70-09159),
as amended on March 31, 1998 by Amendment No. 3 thereto)
(incorporated herein by reference).
99.5 Press Release, dated April 20, 1998.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
LG&E ENERGY CORP.
Registrant
Date: May 4, 1998 /s/ John R. McCall
John R. McCall
Executive Vice President, General
Counsel and Corporate Secretary
- 2 -
Exhibit 99.1
LG&E Energy and KU Energy Close Merger
Merger Closing Happens In Record Time For Franchised Utilities
Under FERC's Merger Policy Statement
LOUISVILLE, Ky. - LG&E Energy Corp. (NYSE:LGE) and KU Energy Corporation
(formerly NYSE:KU) today closed their merger transaction, less than a year
after announcing their agreement to merge in May 1997. The closing comes
in record time for a significant merger involving two franchised electric
utilities reviewed under the Federal Energy Regulatory Commission's Merger
Policy Statement.
Roger W. Hale continues as chairman and chief executive officer of LG&E
Energy. Michael R. Whitley, former chairman and chief executive officer of
KU Energy, has been appointed vice chairman, president and chief operating
officer of the combined company. The LG&E Energy board of directors will
comprise 15 members, with seven directors designated by KU Energy and eight
directors designated by LG&E Energy.
"Today marks a major milestone in the history of LG&E Energy," said Hale.
"The combination of these two companies brings LG&E Energy to a new level
of capabilities, and strengthens our position in the evolving energy
market. The merger, coupled with the Big Rivers transaction we are
finalizing now, creates a new foundation for aggressively expanding the
reach of our company well into the 21st century. I am extremely proud of
all the employees at LG&E Energy and KU Energy who have worked very hard
over the past year to make this merger a reality - and in record time for
this type of merger in our industry. They have been the driving force
behind combining our two companies and building value for our customers and
shareholders."
"Today is also a major milestone in the history of KU Energy Corporation
and the 85-year history of Kentucky Utilities Company," said Whitley.
"Both LG&E and KU are leaders in the industry, and by joining forces we
will be able to grow and diversify more than either one of us could have as
individual companies. The move is good for our customers, shareholders,
employees and the communities we serve."
LG&E Energy Corp., the successor company in today's merger, is one of the
largest, low-cost energy services holding companies in the United States.
The combined company has assets exceeding $5.0 billion and a market
capitalization of more than $3.3 billion. It will serve more than 1.1
million electric and natural gas customers throughout Kentucky, Virginia
and internationally.
With the completion of the merger, Kentucky Utilities Company becomes a
wholly owned subsidiary of LG&E Energy, and will continue operations in
Lexington, Ky., and the 77 counties it serves. LG&E Energy retains its
ownership of Louisville Gas and Electric Company, its regulated utility
which operates in Louisville, Ky. and surrounding areas.
The merger closing comes just a few days after the Kentucky Public Service
Commission approved LG&E Energy's application to lease and operate the
generating assets of Big Rivers Electric Corporation in western Kentucky.
Pending closure of that transaction, LG&E Energy will directly control more
than 8,000 megawatts of low-cost generation capacity.
LG&E Energy and KU Energy signed a definitive merger agreement in May 1997.
Shareholders of both companies voted overwhelmingly in favor of the merger
last October, and the companies received swift regulatory approvals in 1997
and early this year from the Kentucky Public Service Commission, the
Virginia State Corporation Commission, the Federal Energy Regulatory
Commission and the Securities and Exchange Commission.
LG&E Energy Corp., a Fortune 500 company headquartered in Louisville, Ky.,
is a diversified energy services and marketing company with businesses in
energy marketing and trading; power generation and project development; and
retail gas and electric utility services. The company owns and operates
Louisville Gas and Electric Company, a regulated electric and gas utility
serving Louisville, Ky. and 16 surrounding counties, and Kentucky Utilities
Company, a regulated electric utility, based in Lexington, Ky., which
serves more than 470,000 customers in 77 Kentucky counties and five
counties in Virginia. LG&E Energy also owns equity in and operates power
plants in seven states as well as in Spain, and owns interests in two
natural gas distribution companies in Argentina. The company is one of the
largest utility-affiliated energy marketers in the U.S.
# # #
Exhibit 99.3
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35-26866; 70-9159)
LG&E Energy Corp.
Order Authorizing Acquisition of Public Utility Company; Granting Exemption
Under Section 3(a)(1)
April 30, 1998
LG&E Energy Corp. ("LG&E Energy"), Louisville, Kentucky, has filed with
this Commission an application for an order under sections 9(a)(2) and 10
of the Public Utility Holding Company Act of 1935, as amended ("Act"),
authorizing the proposed merger of KU Energy Corporation ("KU Energy") with
and into LG&E Energy, with LG&E Energy emerging as the surviving entity
("Transaction"). LG&E Energy also requests an order under section 3(a)(1)
exempting it from all provisions of the Act, except section 9(a)(2),
following consummation of the proposed Transaction. The Commission issued
a notice of the filing of the application on March 6, 1998 (HCAR No.
26838).
LG&E Energy is a Kentucky corporation and an electric and gas public
utility holding company currently exempt under section 3(a)(1) by rule 2 of
the Act from all provisions of the Act except section 9(a)(2). LG&E
Energy's principal subsidiary, LG&E, is a Kentucky public utility company
that owns and operates a combined electric and gas operation.
LG&E is engaged primarily in the generation, transmission, and distribution
of electricity to approximately 351,000 customers in Louisville and
adjacent areas in Kentucky.(1) LG&E also purchases, distributes, and sells
natural gas to approximately 277,000 customers within this service area and
in limited additional areas.(2) Retail sales rates, services and other
aspects of LG&E's electric and gas retail operations are subject to the
jurisdiction of the Kentucky Public Service Commission ("Kentucky
Commission"). The Kentucky Commission also has regulatory authority over
aspects of LG&E's financial activities including securities issuances,
property transfers when the asset value is in excess of $100,000, and
mergers with other utilities. Wholesale rates for electric energy sold in
interstate commerce, wheeling rates for energy transmission in interstate
commerce, and certain other activities of LG&E (including its hydro-
electric facilities) are subject to the jurisdiction of the Federal Energy
Regulatory Commission ("FERC").
LG&E owns 4.9% of the common stock of Ohio Valley Electric Corporation
("OVEC"), an electric utility company under the Act which has one wholly
owned subsidiary, Indiana-Kentucky Electric Corp. ("IKEC"). OVEC and IKEC
were organized to supply the entire power requirements of the U.S.
Department of Energy's gaseous diffusion plant in Pike County, Ohio. For
each of the three years in the period ended December 31, 1996, LG&E derived
less than 0.16% of its net income from its share of the earnings of OVEC.
In addition, LG&E Energy and some of its nonutility subsidiaries have
entered into arrangements which, if requisite regulatory approvals are
obtained, will result in the operation by LG&E Energy's indirect
subsidiary, Western Kentucky Energy Corp. ("WKEC"), of certain electric
facilities owned by Big Rivers Electric Corporation ("Big Rivers"). Big
Rivers, an electric cooperative with generating facilities in Kentucky,
currently operates under Chapter 11 of the U.S. Bankruptcy Code. LG&E
Energy expects that WKEC will qualify as an exempt wholesale generator, as
defined under section 32 of the Act. Also as part of arrangements with Big
Rivers, and after receipt of relevant regulatory approvals, another
indirect wholly owned subsidiary of LG&E Energy will operate a generating
facility owned by the City of Henderson, Kentucky. LG&E Energy states that
this activity will be the subject of a no-action request under section
2(a)(3) of the Act.
LG&E Energy is engaged in a number of nonutility business activities
through two other directly owned subsidiaries, LG&E Energy Foundation, Inc.
("LG&E Energy Foundation") and LG&E Capital Corp. ("LG&E Capital"). LG&E
Energy Foundation is a tax-exempt charitable foundation that makes
charitable contributions to qualified entities. LG&E Capital, through
various subsidiaries and joint ventures, is involved in numerous energy-
related businesses.
For the year ended December 31, 1996, LG&E Energy's operating revenues on a
consolidated basis were approximately $3,589 million, of which $607 million
were attributable to the sales of electricity, $214 million were
attributable to sales of natural gas, and $2,768 million were attributable
to nonutility activities. Consolidated assets of LG&E Energy and its
subsidiaries at December 31, 1996 were approximately $3,012 million, of
which approximately $1,449 million consisted of net electric utility
property, plant and equipment, and $237 million consisted of net gas
utility property, plant, and equipment. As of September 30, 1997, LG&E
Energy had 66,525,636 issued and outstanding shares of common stock ("LG&E
Energy Common Stock"). LG&E Energy has no preferred stock outstanding.
KU Energy is a Kentucky corporation and a public utility holding company
currently exempt from registration by order under section 3(a)(1) of the
Act.(3) KU Energy's principal subsidiary, Kentucky Utilities, is a
Kentucky electric utility company and an exempt holding company(4) that
produces, transmits, and sells electric energy to about 432,900 customers
in over 600 communities and adjacent suburban and rural areas in 77
counties in central, southeastern, and western Kentucky, and to about
28,800 customers in five counties in southwestern Virginia.(5) In
Virginia, Kentucky Utilities operates under the name Old Dominion Power
Company.
Kentucky Utilities also sells electric energy at wholesale for resale in 12
municipalities in Kentucky. The territory served includes most of the
Bluegrass Region of central Kentucky and parts of the coal mining areas in
southeastern and western Kentucky and southwestern Virginia. Kentucky
Utilities is subject to the jurisdiction of the Kentucky Commission and the
Virginia State Corporation Commission ("Virginia Commission") as to retail
rates and service, accounts, issuance of securities, and in other respects.
The FERC has jurisdiction under the Federal Power Act over certain of the
electric utility facilities and operations, wholesale sales of power, and
related transactions and accounting practices of Kentucky Utilities, and in
certain other respects as provided in the Federal Power Act. By reason of
owning and operating a small amount of electric utility property in one
county in Tennessee (having a gross book value of about $226,000), Kentucky
Utilities may also be subject to the jurisdiction of the Tennessee
Regulatory Authority as to retail rates, accounts, issuance of securities,
and in other respects.
Kentucky Utilities owns 2.5% of the Common Stock of OVEC. Kentucky
Utilities also owns 20% of Electric Energy, Inc. ("EEI"), an electric
utility company under the Act. EEI was formed in the early 1950s to
provide electric energy to a uranium enrichment plant located near Paducah,
Kentucky.(6) For each of the three years in the period ended December 31,
1996, KU Energy derived less than 3.4% of its net income from its share of
the earnings of EEI and OVEC.
In addition to Kentucky Utilities, KU Energy has one other subsidiary, KU
Capital Corporation ("KU Capital"). KU Capital is KU Energy's vehicle for
investments in various nonutility energy-related ventures. These
activities have consisted of investing as an equity participant in leases
of eight combustion turbine generating units to other utilities and
investing in limited partnership interests in various independent projects
that are qualifying cogeneration facilities under the Public Utility
Regulatory Policies Act of 1978, exempt wholesale generators, as defined in
section 32 of the Act, or foreign utility companies, as defined under
section 33 of the Act.
For the year ended December 31, 1996, KU Energy's operating revenues on a
consolidated basis were approximately $716 million, of which approximately
$712 million (99%) were attributable to its electric utility operations,
and approximately $4 million (1%) were attributable to its nonutility
operations. Consolidated assets of KU Energy and its subsidiaries at
December 31, 1996 were approximately $1.7 billion of which approximately
$1.5 billion consisted of net electric utility property, and $55 million
consisted of nonutility assets. As of September 30, 1997, KU Energy had
37,817,878 outstanding shares of common stock ("KU Energy Common Stock").
KU Energy has no shares of preferred stock outstanding.
The electric utility assets of LG&E and Kentucky Utilities are physically
interconnected through transmission lines that they own, including two 138
Kilovolts transmission lines and two 69 Kilovolts transmission lines.
Kentucky Utilities' service territory surrounds the service territory of
LG&E. Kentucky Utilities serves portions of central, southern and western
Kentucky and a small portion of western Virginia. LG&E serves the portion
of central Kentucky around and including the city of Lexington. There is
substantial overlap between the gas service territory of LG&E and the
electric service territories of LG&E and Kentucky Utilities. Substantially
all of the gas customers of LG&E will be served with electricity by either
LG&E or Kentucky Utilities.
LG&E Energy and KU Energy entered into an Agreement and Plan of Merger,
dated May 20, 1997 ("Agreement"). The Agreement provides for KU Energy to
be merged with and into LG&E Energy, with LG&E Energy as the surviving
corporation. Under the Agreement, upon completion of the Transaction, each
issued and outstanding share of KU Energy Common Stock (except shares held
by KU Energy shareholders who perfect dissenters' rights), together with
associated stock purchase rights, will be canceled and converted into 1.67
shares of LG&E Energy Common Stock, together with associated stock purchase
rights. Each issued and outstanding share of LG&E Energy Common Stock
(except shares held by LG&E Energy shareholders who perfect dissenters'
rights), together with associated stock purchase rights, will remain
outstanding, unchanged, as one share of LG&E Energy Common Stock. The
Transaction is expected to qualify as a tax-free reorganization under
section 368(a) of the Internal Revenue Code of 1986, as amended, and to be
treated as a "pooling of interests" for accounting purposes.
The application states that the principal motivation for the proposed
Transaction is to respond to the changes to the electric industry which are
bringing increased competition to both the wholesale and retail markets and
putting pressure on utilities to lower their costs. Each of LG&E Energy
and KU Energy concluded that key factors contributing to success in a more
competitive environment will include maintaining low cost production and
achieving a size that will enable it to continue to provide high quality
customer service, enhance its competitive position and maintain its
financial strength. Each of LG&E Energy and KU Energy concluded that a
business combination with the other system would produce these and other
benefits because of their contiguous service territories, similar size,
financial strength, strategic initiatives and management styles, the
potential cost savings that would result from a combination, and LG&E
Energy's strengths in energy marketing and trading.
All of the LG&E Energy gas and electric utility systems and the KU Energy
electric utility system will benefit from the proposed Transaction. The
post-Transaction systems will be able to offer customers a choice of fuels
(gas and/or electricity) to meet their energy needs at competitive prices.
Further, the Transaction is expected to create significant economies and
efficiencies through: savings through reductions in corporate and
operations labor costs; the combination and elimination of existing
facilities (i.e., facilities integration); a reduction in corporate and
administration programs by consolidating overlapping or duplicative
programs and expenses (e.g., information systems, professional services,
benefits, insurance, directors' fees, advertising, and shareholder
services); purchasing economies (nonfuel) (i.e., combining procurement of
material and supplies, inventory reduction from standardization and limited
sharing of parts and components and from economies of scale from the
aggregation of related work activities and increased purchasing power over
service providers); and capacity deferral (i.e., deferral of costs
associated with the building of new generation or purchasing firm
generating capacity created by diversity of the peaks of LG&E and Kentucky
Utilities and a joint reduction in reserve margins). LG&E Energy has
identified these additional benefits, which may not be quantifiable:
maintenance of competitive rates; expanded management resources; production
dispatch savings; and community involvement. With respect to quantifiable
benefits, LG&E Energy estimates that the net present value of synergies
resulting from the Transaction will be approximately $680 million over the
first ten-year period after consummation of the Transaction.
As a result of the Transaction, LG&E Energy will be a public utility
holding company as defined in section 2(a)(7) of the Act with ownership of
two public utility companies, LG&E and Kentucky Utilities, and indirect
ownership, through Kentucky Utilities, of 20% of one other public utility
company, EEI. Neither OVEC nor IKEC will be a subsidiary of LG&E Energy
for purposes of the Act following the Transaction because LG&E Energy's
total indirect ownership of OVEC will be only 7.4%. Although EEI will be a
subsidiary of LG&E Energy for purposes of the Act following the Transaction
and is not a Kentucky corporation, LG&E Energy states that EEI will not be
a material public utility subsidiary of LG&E Energy for purposes of section
3(a)(1). KU Energy has not in the past derived a material part of its
income from EEI (less than 3.5% in each of the last three years) and, on a
pro forma basis following the Transaction, EEI will constitute an even
smaller part of LG&E Energy's income on a percentage basis. LG&E Energy
and each of its material public utility subsidiaries will be Kentucky
corporations operating primarily in Kentucky.(7)
LG&E Energy states that following consummation of the Transaction, it will
be entitled to an exemption under section 3(a)(1) of the Act from all
provisions of the Act except section 9(a)(2). LG&E Energy and each of its
public utility subsidiary companies from which it will derive a material
part of its income are and will be predominately intrastate in character
and will carry on their businesses substantially in Kentucky.
Fees and expenses in connection with the proposed Transaction are estimated
to be a total of $21,383,230. Applications for approval of the Transaction
and related transactions were filed with the Kentucky Commission and the
Virginia Commission in July 1997. The Kentucky Commission granted its
approval on September 12, 1997, and the Virginia Commission granted its
approval on January 20, 1998. A notice filing was made with the Tennessee
Regulatory Authority on October 21, 1997 and acknowledged December 8, 1997.
In addition, on October 9, 1997, an application was filed with the FERC for
approval of the Transaction. The FERC granted its Approval of the
Transaction on March 27, 1998. Further, each of LG&E Energy and KU Energy
submitted its Notification and Report Forms to the Department of Justice
and Federal Trade Commission under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, on February 25, 1998, and the
requisite waiting period expired on March 27, 1998. It is stated that no
other state or federal commission, other than this Commission. has
jurisdiction over the proposed Transaction.
Due notice of the filing of the application has been given in the manner
prescribed in rule 23 under the Act, and no hearing has been requested of
or ordered by the Commission. Based upon the facts in the record, it is
hereby found that the applicable standards of the Act are satisfied and
that no adverse findings are necessary.
IT IS ORDERED, under the applicable provisions of the Act and rules under
the Act, that the application, as amended, is granted, subject to the terms
and conditions prescribed in rule 24 under the Act.
For the Commission, by the Division of Investment Management, under
delegated authority.
/s/ Jonathan G. Katz
Jonathan G. Katz
Secretary
(1) LG&E's service area covers approximately 700 square miles in 17
counties in Kentucky and has an estimated population of 800,000.
(2) Included within LG&E's service area is the Fort Knox Military
Reservation, to which LG&E transports gas and provides electric service,
but which maintains its own distribution systems.
(3) See KU Energy Corporation, Holding Co. Act Release No. 25409 (Nov. 13,
1991).
(4) Kentucky Utilities is a public utility holding company exempt from all
provisions of the Act except section 9(a)(2) under section 3(a)(2) and
order the Commission. See KU Energy Corporation, Holding Co. Act Release
No. 25409 (Nov. 13, 1991).
(5) The territory served by Kentucky Utilities has an aggregate population
estimated at about one million. The largest city served is Lexington,
Kentucky. The population of the metropolitan Lexington area is estimated
at about 225,000.
(6) The enrichment plant was originally operated by the Atomic Energy
Commission and the U.S. Department of Energy and is operated today by the
United States Enrichment Corporation.
(7) In the case of the public utility system to be owned by LG&E Energy
following the Transaction, based on financial information for the year
ended December 31, 1996, less than 5% of the system's consolidated utility
revenues, none of its retail natural gas sales, and less than 6% of its
sales of electricity by revenues would be from utility operations outside
of Kentucky. Virtually all (99%) of the system's net utility plant (based
on book value) and utility customers (based on number of customers) would
be located in Kentucky. These amounts are well within the existing range
of orders issued by the Commission under Section 3(a)(1). See Sierra
Pacific Resources, Holding Co. Act Release No. 24556 (Jan. 28, 1988).
Exhibit 99.5
LG&E Energy Names Frederick J. Newton, III,
Senior Vice President - Human Resources and Administration
LOUISVILLE, Ky. - LG&E Energy Corp. (NYSE:LGE) announced today that
Frederick James Newton, III, 42, has been named senior vice president -
human resources and administration, effective May 15, 1998. Mr. Newton is
currently senior vice president, human resources, for the Woolworth
Corporation's Champs Sports Division.
At LG&E Energy, Mr. Newton will be responsible for all human resources,
administration and labor relations activities for LG&E Energy Corp. and its
subsidiaries, and will report directly to Roger W. Hale, LG&E Energy Corp.
chairman and chief executive officer.
Mr. Newton has 11 years of executive leadership experience in human
resources and labor relations with Woolworth, Unilever and Pepsico Inc.
Prior to his business career, he served as a Commissioned Officer and
Aviator in the United States Navy.
He received his bachelor of science degree in business administration/human
resources from the University of Rhode Island, and an MBA with a
concentration in labor relations and human resources from San Diego State
University.
"I am pleased to welcome Fred to LG&E Energy's management team," said
Hale. "As we rapidly expand the size and scale of our business, through
activities such as our merger with KU Energy, we will rely heavily on his
leadership to ensure that our human resources and labor relations functions
are top-notch within the industry."
LG&E Energy Corp., a Fortune 500 company headquartered in Louisville, Ky.,
is a diversified energy services and marketing company with businesses in
energy marketing and trading; power generation and project development; and
retail gas and electric utility services.
# # #
Exhibit 4.2
LG&E ENERGY CORP.
By-Laws
(as amended and restated through May 4, 1998)
Article I
Meetings of Stockholders
Section 1. The Annual Meeting of the stockholders of the Company
shall be held in or out of Kentucky at a time, date and place to be
annually designated by the Board of Directors.
Section 2. Except as otherwise mandated by Kentucky law and
except as otherwise provided in or fixed by or pursuant to the Company's
Articles of Incorporation, special meetings of the stockholders may be
called only by the President of the Company or by the Board of Directors
pursuant to a resolution approved by a majority of the entire Board of
Directors. For purposes of these By-Laws, the phrase "Company's Articles
of Incorporation" shall mean the Articles of Incorporation of LG&E Energy
Corp. as in effect on March 1, 1990, and as thereafter amended from time to
time.
Section 3. Written notice of each meeting of stockholders,
stating the time and place, and, in the case of a special meeting, the
purpose, shall be given at least ten (10) days prior to the meeting to each
stockholder entitled to attend the meeting. Notice of the time, place and
purpose of any meeting of stockholders may be waived in writing by any
stockholder and shall be waived by his attendance in person or by proxy at
such meeting.
Section 4. A stockholder may vote in person or by proxy. All
appointments of proxies shall be in accordance with Kentucky law.
Section 5. Any action required or permitted to be taken by the
stockholders of the Company at a meeting of such holders may be taken
without such a meeting only by written consent of all the stockholders
entitled to vote on the subject matter.
Section 6. At an annual meeting of the stockholders, any
business conducted must be properly brought before the meeting. To be
properly brought before the meeting, business must be (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction
of the Board of Directors, (b) otherwise properly brought before the
meeting by or at the direction of the Board of Directors, or (c) otherwise
properly be requested to be brought before the meeting by a stockholder.
For business to be properly requested to be brought by a stockholder, the
stockholder must have given timely written notice to the Secretary of the
Company. To be timely, it must be delivered to or mailed and received at
the principal executive offices of the Company, not less than 90 days prior
to the meeting. If the date of the meeting is not publicly announced by
the Company by mail, press release or otherwise more than 100 days prior to
the meeting, timely notice must be delivered to the Secretary of the
Company not later than the close of business on the tenth day following the
day on which such announcement was communicated to stockholders. This
notice shall include (a) a description of the business desired to be
brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (b) the name and address, as they appear on
the Company's books, of the stockholder proposing such business, (c) the
class and number of shares of the Company which are beneficially owned by
the stockholder, and (d) any material interest of the stockholder in such
business. No business shall be conducted at an annual meeting except in
accordance with this procedure. The Chairman of an annual meeting shall,
if the facts warrant, determine and declare to the meeting that business
was not properly brought before the meeting and in accordance with the
provisions of this Section 6, and if so determined, shall declare to the
meeting that any such business not properly brought before the meeting
shall not be transacted.
Section 7. The Chairman of the Board, if present, and in his
absence the Vice Chairman of the Board, and the Secretary of the Company,
shall serve as Chairman and Secretary, respectively, at each stockholders
meeting. The Chairman of the stockholders meeting shall determine the
order of business and shall have the authority in his discretion to
regulate the conduct of any such meeting, including, without limitation, by
imposing restrictions on the persons (other than stockholders of the
Company or their duly appointed proxies) who may attend any such
stockholders meeting, by determining whether any stockholder or his proxy
may be excluded from any stockholders meeting based upon any determination
by the Chairman of the meeting, in his sole discretion, that any such
person has unduly disrupted or is likely to disrupt the proceedings
thereof, and by regulating the circumstances in which any person may make a
statement or ask questions at any stockholders meeting.
Section 8. The Company shall be entitled to treat the holder of
record of any share or shares as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such share on the part of any other person whether or not
it shall have express or other notice thereof, except as expressly provided
by law.
Section 9. The Board of Directors may postpone and reschedule
any previously scheduled annual or special meeting of stockholders and may
adjourn any convened meeting of stockholders to another date and time as
specified by the Chairman of the meeting.
Article II
Board of Directors
Section 1. (a) The number of directors of the Company shall be
fixed from time to time by the Board of Directors, but shall be no fewer
than nine (9) and no more than fifteen (15). The Board of Directors may
elect one of its members as Chairman of the Board. Except as otherwise
provided in or fixed by or pursuant to the Company's Articles of
Incorporation, the directors shall be classified, with respect to the time
for which they each hold office, into three classes, as nearly equal in
number as possible, as determined by the Board of Directors. One class
shall be originally elected for a term expiring at the annual meeting of
stockholders to be held in 1991, another class shall be originally elected
for a term expiring at the annual meeting of stockholders to be held in
1992, and another class shall be originally elected for a term expiring at
the annual meeting of stockholders to be held in 1993, with each member of
each class to hold office until a successor is elected and qualified. At
each annual meeting of stockholders of the Company and except as otherwise
provided in or fixed by or pursuant to the Company's Articles of
Incorporation, the successors of the class of directors whose term expires
at that meeting shall be elected to hold office for a three-year term.
(b) Except as otherwise provided in or fixed by or pursuant to
the Company's Articles of Incorporation, nominations for the election of
directors may be made by the Board of Directors or any stockholder entitled
to vote in the election of directors generally. However, such stockholders
may nominate one or more persons for election as director or directors at a
stockholders' meeting only if written notice of intent to make such
nomination or nominations has been given either by personal delivery or
mail to the Secretary of the Company in the time frame set out in
Article I, Section 6. Each such notice shall state (a) the name and
address of the stockholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation that the
stockholder is a holder of record of stock of the Company entitled to vote
at such meeting and intends to appear in person or by proxy at a meeting to
nominate the person or persons specified in the notice; (c) a description
of all arrangements or understandings between the stockholder 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
stockholder; (d) such other information regarding each nominee proposed by
such stockholder 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 (e) the consent of each nominee to serve as a
director of the Company 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.
(c) Except as otherwise required by law and except as otherwise
provided in or fixed by or pursuant to the Company's Articles of
Incorporation: (i) newly created directorships resulting from any increase
in the number of directors and any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or other cause
shall be filled by the affirmative vote of a majority of the remaining
directors then in office, even though less than a quorum of the Board of
Directors; (ii) any director elected in accordance with the preceding
clause (i) shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy
occurred and until such director's successor shall have been elected and
qualified; and (iii) no decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent director.
(d) Except as otherwise provided in or fixed by or pursuant to
the Company's Articles of Incorporation, any director may be removed from
office, with or without cause, only by the affirmative vote of the holders
of at least 80% of the combined voting power of the then outstanding shares
of the Company's stock entitled to vote generally (as defined in Article
Eighth of the Company's Articles of Incorporation), voting together as a
single class. Notwithstanding the foregoing provisions of this Paragraph
(d), if at any time stockholders of the Company have cumulative voting
rights with respect to the election of directors and less than the entire
Board of Directors is to be removed, no director may be removed from office
if the votes cast against his removal would be sufficient to elect the
person as a director if cumulatively voted at an election of the class of
directors of which the person is a part.
Section 2. The business of the Company shall be managed by a
Board of Directors. Regular meetings of the Board of Directors may be held
without notice of the date, place, time or purpose at such time and place
as may be fixed by the Board of Directors.
Section 3. Special meetings of the Board of Directors may be
called by the Chairman of the Board or the Chief Executive Officer of the
Company, or, in their absence, the Vice Chairman of the Board or the Vice
President, or at the request in writing of not less than three (3)
directors on one (1) day's notice to each director.
Section 4. Unless otherwise provided by law, at each meeting of
the Board of Directors, the presence of at least one-half (1/2) of the
total number of directors shall constitute a quorum for the transaction of
business. Except as provided in Section 1(c) of this Article II, the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. At any meeting of the
Board of Directors where a quorum is not present, the members of the Board
of Directors present may by majority vote adjourn the meeting from time to
time until a quorum shall attend.
Section 5. The Chairman of the Board, if such person is present,
shall serve as Chairman at each regular or special meeting of the Board of
Directors and shall determine the order of business at such meeting. If
the Chairman of the Board is not present at a regular or special meeting of
the Board of Directors, the Vice Chairman of the Board shall serve as
Chairman of such meeting and shall determine the order of business at such
meeting.
Section 6. Directors may receive such fees, compensation or
expenses for their services as are authorized by resolution of the Board of
Directors.
Section 7. Any action required or permitted to be taken by the
Board of Directors may be taken without a meeting if the action is taken by
all members of the Board. Such action shall be evidenced by one (1) or
more written consents describing the action taken, signed by each director,
and included in the minutes with the Company's records reflecting the
action taken.
Section 8. (a) The Board of Directors may create committees and
appoint members of the Board of Directors to serve on them. Each committee
shall have two (2) or more members, who serve at the pleasure of the Board
of Directors.
(b) To the extent provided in the resolution of the Board of
Directors establishing a committee, a committee shall have and exercise all
the authority of the Board of Directors, but no such committee shall have
the authority to take any action that under Kentucky law can only be taken
by the Board of Directors.
(c) Sections 2, 3, 4, 6 and 7 of this Article II shall apply to
committees and their members as well.
Section 9. The Board of Directors may elect one of its
members as Vice Chairman of the Board.
Article III
Officers
Section 1. The officers of the Company shall be a Chief
Executive Officer, President, Chief Operating Officer, Chief Financial
Officer, one or more Vice Presidents, Secretary, Treasurer, Controller and
such other officers as the Board may from time to time elect or appoint.
Any two of the offices may be combined in one person, but no officer shall
execute, acknowledge, or verify any instrument in more than one capacity.
Officers are to be elected by the Board of Directors of the Company at the
first meeting of the Board following the annual meeting of stockholders
and, unless otherwise specified by the Board of Directors, shall be elected
to hold office for one year or until their successors are elected and
qualified. Any vacancy shall be filled by the Board of Directors, provided
that the Chief Executive Officer may fill such a vacancy until the Board of
Directors shall elect a successor. Except as provided below, officers
shall perform those duties usually incident to the office or as otherwise
required by the Board of Directors, the Chief Executive Officer, or the
officer to whom they report. An officer may be removed with or without
cause and at any time by the Board of Directors or by the Chief Executive
Officer.
Chief Executive Officer
Section 2. The Chief Executive Officer of the Company shall have
full charge of all of the affairs of the Company and shall report directly
to the Board of Directors.
President
Section 3. The President shall report to the Chief Executive
Officer and shall exercise the functions of the Chief Executive Officer
during the absence or disability of the Chief Executive Officer.
Chief Operating Officer
Section 4. The Chief Operating Officer shall report to the Chief
Executive Officer of the Company and shall have full charge of the
management and direction of the domestic and international operating
business of the Company's Utility Distribution Group and the Company's
Power Generation Division, subject to the direction and approval of the
Chief Executive Officer.
Chief Financial Officer
Section 5. The Chief Financial Officer of the Company shall
report to the Chief Executive Officer of the Company and shall have full
charge of all of the financial affairs of the Company, including
maintaining accurate books and records, meeting all reporting requirements
and controlling Company funds, in each case subject to the direction and
approval of the Chief Executive Officer.
Vice Presidents
Section 6. The Vice President or Vice Presidents may be
designated as Vice President, Senior Vice President or Executive Vice
President, as the Board of Directors or Chief Executive Officer may
determine.
Secretary
Section 7. The Secretary shall be present at and record the
proceedings of all meetings of the Board of Directors and of the
stockholders, give notices of meetings of Directors and stockholders, have
custody of the seal of the Company and affix it to any instrument requiring
the same, and shall have the power to sign certificates for shares of stock
of the Company.
Treasurer
Section 8. The Treasurer shall have charge of all receipts and
disbursements of the Company and be custodian of the Company's funds.
Controller
Section 9. The Controller shall have charge of the accounting
records of the Company.
Article IV
Capital Stock Certificates
The Board of Directors shall approve all stock certificates as to
form. The certificates for the shares of stock, issued by the Company,
shall be signed (manually or by facsimile) by the President and Secretary,
and the seal of the Company or a facsimile shall be affixed. The Board of
Directors shall appoint transfer agents to issue and transfer certificates
of stock, and registrars to register such certificates.
Article V
Finance
Section 1. The Board of Directors shall designate the bank or
banks to be used to deposit Company funds and designate the officers and
employees of the Company who may sign and countersign checks drawn against
the Company accounts. The Board of Directors may authorize the use of
facsimile signatures on checks.
Section 2. Notes shall be signed by the Chief Executive Officer
or the President and by either a Vice President or the Treasurer. In the
absence of the President, notes shall be signed by two Vice Presidents, or
a Vice President and the Treasurer.
Article VI
Seal
The seal of the Company shall be in the form of a circular disk,
bearing the following information:
( LG&E Energy Corp. )
( Kentucky )
( Corporate Seal )
Article VII
Emergency By - Laws
Section 1. The Board of Directors of the Company may adopt by-
laws to be effective only in an emergency. For purposes of Article VII of
these By-Laws, an "emergency" shall exist if a quorum of the Company's
directors cannot be readily assembled because of a catastrophic event.
Section 2. The stockholders of the Company may amend or repeal
the by-laws adopted pursuant to Section 1 of Article VII of these By-Laws.
Section 3. The by-laws adopted pursuant to Section 1 of Article
VII of these By-Laws may include all provisions necessary for managing the
Company during the emergency, including:
(a) procedures for calling a meeting of the Board of Directors;
(b) quorum requirements for meetings of the Board of Directors;
and
(c) designation of additional or substitute directors.
Article VIII
Amendments
Subject to the provisions of the Company's Articles of
Incorporation, these By-Laws may be amended or repealed at any annual
meeting of the stockholders (or at any special meeting thereof duly called
for that purpose) by the holders of at least a majority of the voting power
of the shares represented and entitled to vote at such meeting at which a
quorum is present; provided that in the notice of such special meeting the
purpose is given. Subject to the laws of the Commonwealth of Kentucky and
these By-Laws, the Board of Directors may by majority vote of those present
at any meeting at which a quorum is present amend these By-Laws, or adopt
such other By-Laws as in their judgment may be advisable to conduct the
affairs of the Company.
Exhibit 4.1
RESTATED ARTICLES OF INCORPORATION
OF
LG&E ENERGY CORP.
"FIRST. The corporate name is
LG&E Energy Corp.
SECOND. The address of the registered office of LG&E Energy Corp. (herein,
the "Company") is 220 West Main Street, P.O. Box 32030, Louisville,
Kentucky 40232 and the name of the Company's registered agent at that
office is John R. McCall.
THIRD. The mailing address of the principal office of the Company is 220
West Main Street, P.O. Box 32030, Louisville, Kentucky 40232.
FOURTH. A. AUTHORIZED CAPITAL STOCK. The total number of shares which
the Company shall have the authority to issue shall be 305,000,000 shares,
of which 300,000,000 shares shall be Common Stock, without par value, and
5,000,000 shares shall be Preferred Stock, without par value.
B. COMMON STOCK. The Board of Directors is hereby authorized to cause
shares of Common Stock, without par value, to be issued from time to time
for such consideration as may be fixed from time to time by the Board of
Directors, or by way of stock split pro rata to the holders of the Common
Stock. The Board of Directors may also determine the proportion of the
proceeds received from the sale of such stock which shall be credited upon
the books of the Company to Capital or Capital Surplus.
Each share of the Common Stock shall be equal to all respects to every
other share of the Common Stock. Subject to any special voting rights of
the holders of Preferred Stock fixed by or pursuant to the provisions of
Paragraph C of this Article Fourth, the shares of Common Stock shall
entitle the holders thereof to one vote for each share upon all matters
upon which shareholders have the right to vote and, to the extent required
by law, to cumulative voting in all elections of directors by shareholders.
No holder of shares of Common Stock shall be entitled as such as a matter
of right to subscribe for or purchase any part of any new or additional
issue of stock, or securities convertible into stock, of any class
whatsoever, whether now or hereafter authorized, and whether issued for
cash, property, services or otherwise.
After the requirements with respect to preferential dividends on Preferred
Stock (fixed by or pursuant to the provisions of Paragraph C of this
Article Fourth), if any, shall have been met and after the Company shall
have complied with all the requirements, if any, with respect to the
setting aside of sums as sinking funds or redemption or purchase accounts
(fixed by or pursuant to the provisions of Paragraph C of this Article
Fourth) and subject further to any other conditions which may be fixed by
or pursuant to the provisions of Paragraph C of this Article Fourth, then,
but not otherwise, the holders of Common Stock shall be entitled to receive
dividends, if any, as may be declared from time to time by the Board of
Directors.
After distribution in full of the preferential amount (fixed by or pursuant
to the provisions of Paragraph C of this Article Fourth), if any, to be
distributed to the holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets, dissolution or
winding up of the Company, the holders of the Common Stock shall be
entitled to receive all the remaining assets of the Company, tangible and
intangible, of whatever kind available for distribution to shareholders,
ratably in proportion to the number of shares of Common Stock held by each.
C. PREFERRED STOCK. Shares of Preferred Stock may be divided into and
issued in such series, on such terms and for such consideration as may from
time to time be determined by the Board of Directors of the Company. Each
series shall be so designated as to distinguish the shares thereof from the
shares of all other series and classes. All shares of Preferred Stock
shall be identical, except as to variations between different series in the
relative rights and preferences as permitted or contemplated by the next
succeeding sentence. Authority is hereby vested in the Board of Directors
of the Company to establish out of shares of Preferred Stock which are
authorized and unissued from time to time one or more series thereof and to
fix and determine the following relative rights and preferences of shares
of each such series:
(1) The distinctive designation of, and the number of shares which shall
constitute, the series and the "stated value" or "nominal value," if any,
thereof;
(2) The rate of dividend applicable to shares of such series;
(3) The price at and the terms and conditions on which shares of such
series may be redeemed;
(4) The amount payable upon shares of such series in the event of the
involuntary liquidation of the Company;
(5) The amount payable upon shares of such series in the event of the
voluntary liquidation of the Company;
(6) Sinking fund provisions for the redemption or purchase of shares of
such series;
(7) The terms and conditions on which shares of such series may be
converted, if such shares are issued with the privilege of conversion;
(8) The voting powers, if any, of the holders of shares of the series
which may, without limiting the generality of the foregoing, include
(i) the right to one or less than one vote per share on any or all matters
voted upon by the shareholders and (ii) the right to vote, as a series by
itself or together with other series of Preferred Stock or together with
all series of Preferred Stock as a class, upon such matters, under such
circumstances and upon such conditions as the Board of Directors may fix,
including, without limitation, the right, voting as a series by itself or
together with other series of Preferred Stock or together with all series
of Preferred Stock as a class, to elect one or more directors of this
Company in the event there shall have been a failure to pay dividends on
any one or more series of Preferred Stock or under such other circumstances
and upon such conditions as the Board of Directors may determine; provided,
however, that in no event shall a share of Preferred Stock have more than
one vote; and
(9) Any other such rights and preferences as are not inconsistent with the
Kentucky Business Corporation Act.
No holder of any share of any series of Preferred Stock shall be entitled
to vote for the election of directors or in respect of any other matter
except as may be required by the Kentucky Business Corporation Act, as
amended, or as is permitted by the resolution or resolutions adopted by the
Board of Directors authorizing the issue of such series of Preferred Stock.
D. OTHER PROVISIONS.
(1) The relative powers, preferences, and rights of each series of
Preferred Stock in relation to the powers, preferences and rights of each
other series of Preferred Stock shall, in each case, be as fixed from time
to time by the Board of Directors in the resolution or resolutions adopted
pursuant to authority granted in Paragraph C of this Article Fourth, and
the consent by class or series vote or otherwise, of the holders of the
Preferred Stock or such of the series of the Preferred Stock as are from
time to time outstanding shall not be required for the issuance by the
Board of Directors of any other series of Preferred Stock whether the
powers, preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, powers, preferences
and rights of such outstanding series, or any of them, provided, however,
that the Board of Directors may provide in such resolution or resolutions
adopted with respect to any series of Preferred Stock that the consent of
the holders of a majority (or such greater proportion as shall be therein
fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
(2) Subject to the provisions of Section 1 of this Paragraph D, shares of
any series of Preferred Stock may be issued from time to time as the Board
of Directors shall determine and on such terms and for such consideration
as shall be fixed by the Board of Directors.
(3) Common Stock may be issued from time to time as the Board of Directors
shall determine and on such terms and for such consideration as shall be
fixed by the Board of Directors.
(4) No holder of any of the shares of any class or series of shares or
securities convertible into such shares of any class or series of shares,
or of options, warrants or other rights to purchase or acquire shares of
any class or series of shares or of other securities of the Company shall
have any preemptive right to purchase, acquire, subscribe for any unissued
shares of any class or series or any additional shares of any class or
series to be issued by reason of any increase of the authorized capital
stock of the Company of any class or series, or bonds, certificates of
indebtedness, debentures or other securities convertible into or
exchangeable for shares of any class or series, or carrying any right to
purchase or acquire shares of any class or series, but any such unissued
shares, additional authorized issue of shares of any class or series of
shares or securities convertible into or exchangeable for shares, or
carrying any right to purchase or acquire shares, may be issued and
disposed of pursuant to resolution of the Board of Directors to such
persons, firms, corporations or associations, and upon such terms, as may
be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(5) The Company reserves the right to increase or decrease its authorized
capital shares, or any class or series thereof or to reclassify the same
and to amend, alter, change or repeal any provision contained in the
Articles of Incorporation or in any amendment thereto, in the manner now or
hereafter prescribed by law, but subject to such conditions and limitations
as are hereinbefore prescribed, and all rights conferred upon shareholders
in the Articles of Incorporation of this Company, or any amendment thereto,
are granted subject to this reservation.
FIFTH. The purpose of the Company is the transaction of any or all lawful
business for which corporations may be incorporated under the Kentucky
Business Corporation Act.
SIXTH. The period of the Company's duration shall be perpetual.
SEVENTH. A. CERTAIN DEFINITIONS. For purposes of this Article Seventh:
(1) "Affiliate," including the term "affiliated person," means a person
who directly, or indirectly through one (1) or more intermediaries,
controls, or is controlled by, or is under common control with, a specified
person.
(2) "Associate," when used to indicate a relationship with any person,
means:
(a) Any corporation or organization (other than the Company or a
Subsidiary), of which such person is an officer, director or partner or is,
directly or indirectly, the Beneficial Owner of ten percent (10%) or more
of any class of Equity Securities;
(b) Any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a
similar fiduciary capacity; and
(c) Any relative or spouse of such person, or any relative of such spouse,
any one (1) of whom has the same home as such person or is a director or
officer of the corporation or any of its Affiliates.
(3) "Beneficial Owner," when used with respect to any Voting Stock, means
a person:
(a) Who, individually or with any of its Affiliates or Associates,
beneficially owns Voting Stock, directly or indirectly; or
(b) Who, individually or with any of its Affiliates or Associates, has:
1. The right to acquire Voting Stock, whether such right is exercisable
immediately or only after the passage of time and whether or not such right
is exercisable only after specified conditions are met, pursuant to any
agreement, arrangement, or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise;
2. The right to vote Voting Stock pursuant to any agreement, arrangement,
or understanding; or
3. Any agreement, arrangement, or understanding for the purpose of
acquiring, holding, voting or disposing of Voting Stock with any other
person who beneficially owns, or whose Affiliates or Associates
beneficially owns, directly or indirectly, such shares of Voting Stock.
(4) "Business Combination" means:
(a) Any merger or consolidation of the Company or any Subsidiary with any
Interested Shareholder, or any other corporation, whether or not itself an
Interested Shareholder, which is, or after the merger or consolidation
would be, an Affiliate of an Interested Shareholder who was an Interested
Shareholder prior to the transaction;
(b) Any sale, lease, transfer, or other disposition, other than in the
ordinary course of business, in one (1) transaction or a series of
transactions in any twelve-month period, to any Interested Shareholder or
any Affiliate of any Interested Shareholder, other than the Company or any
Subsidiary, of any assets of the Company or any Subsidiary having, measured
at the time the transaction or transactions are approved by the Board of
Directors of the Company, an aggregate book value as of the end of the
Company's most recently ended fiscal quarter of five percent (5%) or more
of the total Market Value of the outstanding stock of the Company or of its
net worth as of the end of its most recently ended fiscal quarter;
(c) The issuance or transfer by the Company, or any Subsidiary, in one
transaction or a series of transactions in any twelve-month period, of any
Equity Securities of the Company or any Subsidiary which have an aggregate
Market Value of five percent (5%) or more of the total Market Value of the
outstanding stock of the Company, determined as of the end of the Company's
most recently ended fiscal quarter prior to the first such issuance or
transfer, to any Interested Shareholder or any Affiliate of any Interested
Shareholder, other than the Company or any of its Subsidiaries, except
pursuant to the exercise of warrants or rights to purchase securities
offered pro rata to all holders of the Company's Voting Stock or any other
method affording substantially proportionate treatment to the holders of
Voting Stock;
(d) The adoption of any plan or proposal for the liquidation or
dissolution of the Company in which anything other than cash will be
received by an Interested Shareholder or any Affiliate of any Interested
Shareholder; or
(e) Any reclassification of securities, including any reverse stock split;
or recapitalization of the Company; or any merger or consolidation of the
Company with any of its Subsidiaries; or any other transaction which has
the effect, directly or indirectly, in one transaction or a series of
transactions, of increasing by five percent (5%) or more the proportionate
amount of the outstanding shares of any class of Equity Securities of the
Company or any Subsidiary which is directly or indirectly beneficially
owned by any Interested Shareholder or any Affiliate of any Interested
Shareholder.
(5) "Common Stock" means any stock of the Company other than preferred or
preference stock of the Company.
(6) "Continuing Director" means any member of the Company's Board of
Directors who is not an Interested Shareholder or an Affiliate or Associate
of an Interested Shareholder or any of its Affiliates, other than the
Company or any of its Subsidiaries, and who was a director of the Company
prior to the time the Interested Shareholder became an Interested
Shareholder, and any successor to such Continuing Director who is not an
Interested Shareholder or an Affiliate or Associate of an Interested
Shareholder or any of its Affiliates, other than the Company or any of its
Subsidiaries, and was recommended or elected by a majority of the
Continuing Directors at a meeting at which a quorum consisting of a
majority of the Continuing Directors is present.
(7) "Control," including the term "controlling," "controlled by" and
"under common control with," means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities,
by contract, or otherwise, and the beneficial ownership of ten percent
(10%) or more of the votes entitled to be cast by a corporation's Voting
Stock creates a presumption of control.
(8) "Equity Security" means:
(a) Any stock or similar security, certificate of interest, or
participation in any profit-sharing agreement, voting trust certificate, or
certificate of deposit for the foregoing;
(b) Any security convertible, with or without consideration, into an
Equity Security, or any warrant or other security carrying any right to
subscribe to or purchase an Equity Security; or
(c) Any put, call, straddle, or other option, right or privilege of
acquiring an Equity Security from or selling an Equity Security to another
without being bound to do so.
(9) "Interested Shareholder" means any person, other than the Company or
any of its Subsidiaries, who:
(a) Is the Beneficial Owner, directly or indirectly, of ten percent (10%)
or more of the voting power of the outstanding Voting Stock of the Company;
or is an Affiliate of the Company and at any time within the two-year
period immediately prior to the date in question was the Beneficial Owner,
directly or indirectly, of ten percent (10%) or more of the voting power of
the then outstanding Voting Stock of the Company.
(b) For the purpose of determining whether a person is an Interested
Shareholder, the number of shares of Voting Stock deemed to be outstanding
shall include shares deemed owned by the person through application of
Subsection (3) of this Paragraph A of Article Seventh but shall not include
any other shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement, or understanding, or upon exercise of conversion
rights, warrants or options or otherwise.
(10) "Market Value" means:
(a) In the case of stock, the highest closing sale price during the thirty-
day period immediately preceding the date in question of a share of such
stock on the composite tape for New York Stock Exchange listed stocks, or,
if such stock is not quoted on the composite tape, on the New York Stock
Exchange, or if such stock is not listed on such exchange, on the principal
United States securities exchanges registered under the Securities Exchange
Act of 1934 on which such stock is listed, or, if such stock is not listed
on any such exchange, the highest closing bid quotation with respect to a
share of such stock during the thirty-day period preceding the date in
question on the National Association of Securities Dealers, Inc., Automated
Quotation 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
stock as determined by a majority of the Continuing Directors at a meeting
of the Board of Directors at which a quorum consisting of at least a
majority of the Continuing Directors is present; and
(b) In the case of property other than cash or stock, the fair market
value of such property on the date in question as determined by a majority
of the Continuing Directors at a meeting of the Board of Directors at which
a quorum consisting of at least a majority of the Continuing Directors is
present.
(11) "Subsidiary" means any corporation of which Voting Stock having a
majority of the votes entitled to be cast is owned, directly or indirectly,
by the Company.
(12) "Voting Stock" means shares of capital stock of a corporation
entitled to vote generally in the election of its directors.
B. MINIMUM SHARE VOTE REQUIREMENTS FOR APPROVAL OF BUSINESS COMBINATIONS.
(1) In addition to any vote otherwise required by law or these Articles of
Incorporation, a Business Combination shall be recommended by the Board of
Directors of the Company and approved by the affirmative vote of at least:
(a) Eighty percent (80%) of the votes entitled to be cast by outstanding
shares of Voting Stock of the Company, voting together as a single voting
group, and
(b) Two-thirds of the votes entitled to be cast by holders of Voting Stock
other than Voting Stock beneficially owned by the Interested Shareholder
who is, or whose Affiliate is, a party to the Business Combination or by an
Affiliate or Associate of such Interested Shareholder, voting together as a
single voting group.
(2) Unless a Business Combination is exempted from the operation of this
Paragraph B in accordance with Paragraph C of this Article Seventh, the
failure to comply with the voting requirements of Subsection (1) of this
Paragraph B shall render such Business Combination void.
C. EXEMPTIONS FROM MINIMUM SHARE VOTE REQUIREMENTS.
(1) For purposes of Section (2) of this Paragraph C
(a) "Announcement Date" means the first general public announcement of the
proposal or intention to make a proposal of the Business Combination or the
first communication generally to shareholders of the Company, whichever is
earlier.
(b) "Determination Date" means the date on which an Interested Shareholder
first became an Interested Shareholder, and
(c) "Valuation Date" means:
1. For a Business Combination voted upon by shareholders, the latter of
the day prior to the date of the shareholders' vote or the date twenty (20)
days prior to the consummation of the Business Combination; and
2. For a Business Combination not voted upon by shareholders, the date of
the consummation of the Business Combination.
(2) The vote required by Paragraph B of this Article Seventh does not
apply to a Business Combination if each of the following conditions is met:
(a) The aggregate amount of the cash and the Market Value as of the
Valuation Date of consideration other than cash to be received per share by
holders of Common Stock in such Business Combination is at least equal to
the highest of the following:
1. The highest per share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by the Interested
Shareholder for any shares of Common Stock of the same class or series
acquired by it:
a. Within the two-year period immediately prior to the Announcement Date
of the proposal of the Business Combination; or
b. In the transaction in which it became an Interested Shareholder,
whichever is higher; or
2. The Market Value per share of Common Stock of the same class or series
on the Announcement Date or on the Determination Date, whichever is higher;
or
3. The price per share equal to the Market Value per share of Common Stock
of the same class or series determined pursuant to clause 2 of this
Subsection (a), multiplied by the fraction of:
a. The highest per share price, including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the Interested
Shareholder for any shares of Common Stock of the same class or series
acquired by it within the two-year period immediately prior to the
Announcement Date ever.
b. The Market Value per share of Common Stock of the same class or series
on the first day in such two-year period on which the Interested
Shareholder acquired any shares of Common Stock.
(b) The aggregate amount of the cash and the Market Value as of the
Valuation Date of consideration other than cash to be received per share by
holders of shares of any class or series of outstanding stock other than
Common Stock is at least equal to the highest of the following, whether or
not the Interested Shareholder has previously acquired any shares of a
particular class or series of stock:
1. The highest per share price, including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the Interested
Shareholder for any shares of such class of stock acquired by it.
a. Within the two-year period immediately prior to the Announcement Date
of the proposal of the Business Combination; or
b. In the transaction in which it became an Interested Shareholder,
whichever is higher; or
2. The highest preferential amount per share to which the holders of
shares of such class of stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company; or
3. The Market Value per share of such class of stock on the Announcement
Date or on the Determination Date, whichever is higher; or
4. The price per share equal to the Market Value per share of such class
of stock determined pursuant to clause 3 of this Subsection (b), multiplied
by the fraction of:
a. The highest per share price, including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the Interested
Shareholder for any shares of any class of Voting Stock acquired by it
within the two-year period immediately prior to the Announcement Date, over
b. The Market Value per share of the same class of Voting Stock on the
first day in such two-year period on which the Interested Shareholder
acquired any shares of the same class of Voting Stock.
(c) In making any price calculation under Section (2) of this Paragraph C,
appropriate adjustments shall be made to reflect any reclassification,
including any reverse stock split; recapitalization; reorganization; or any
similar transaction which has the effect of reducing the number of
outstanding shares of the stock. The consideration to be received by
holders of any class or series of outstanding stock is to be in cash or in
the same form as the Interested Shareholder has previously paid for shares
of the same class or series of stock. If the Interested Shareholder has
paid for shares of any class of stock with varying forms of consideration,
the form of consideration for such class of stock shall be either cash or
the form used to acquire the largest number of shares of such class or
series of stock previously acquired by it.
(d) 1. After the Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business Combination.
a. There shall have been no failure to declare and pay at the regular date
therefor any full period dividends, whether or not cumulative, on any
outstanding preferred stock of the Company;
b. There shall have been no reduction in the annual rate of dividends paid
on any class or series of stock of the Company that is not preferred stock,
except as necessary to reflect any subdivision of the stock, and an
increase in such annual rate of dividends as necessary to reflect any
reclassification, including any reverse stock split, recapitalization,
reorganization, or any similar transaction which has the effect of reducing
the number of outstanding shares of the stock;
c. The Interested Shareholder shall not become the Beneficial Owner of any
additional shares of stock of the Company except as part of the transaction
which resulted in such Interested Shareholder becoming an Interested
Shareholder or by virtue of proportionate stock splits or stock dividends.
2. The provisions of subclauses a and b of clause 1 do not apply if no
Interested Shareholder or an Affiliate or Associate of the Interested
Shareholder voted as a director of the Company in a manner inconsistent
with such subclauses and the Interested shareholder, within ten (10) days
after any act or failure to act inconsistent with such subclauses, notifies
the Board of Directors of the Company in writing that the Interested
Shareholder disapproves thereof and requests in good faith that the Board
of Directors rectify such act or failure to act.
(e) After the Interested Shareholder has become an Interested Shareholder,
the Interested Shareholder may not have received the benefit, directly or
indirectly, except proportionately as a shareholder, of any loans,
advances, guarantees, pledges or other financial assistance provided by the
Company or any Subsidiary, whether in anticipation of or in connection with
such Business Combination or otherwise.
(3) (a) The vote required by Paragraph B of this Article Seventh does not
apply to any Business Combination that is approved by a majority of
Continuing Directors at a meeting of the Board of Directors at which a
quorum consisting of at least a majority of the Continuing Directors is
present.
(b) Unless by its terms a resolution adopted under the foregoing
subsection (a) of this Section (3) is made irrevocable, it may be altered
or repealed by the Board of Directors, but this shall not affect any
Business Combinations that have been consummated, or are the subject of an
existing agreement entered into, prior to the alteration or repeal.
D. POWERS OF THE BOARD OF DIRECTORS. A majority of the Continuing
Directors of the Company shall have the power and duty to determine, on the
basis of information known to them after reasonable inquiry, all facts
necessary to determine compliance with this Article Seventh, including
without limitation, (a) whether a person is an Interested Shareholder, (b)
the number of shares of Voting Stock beneficially owned by any person, (c)
whether a person is an Affiliate or Associate of another, (d) whether the
assets which are the subject of any Business Combination have, or the
consideration to be received for the issuance or transfer of securities by
the Company or any Subsidiary in any Business Combination has, an aggregate
book value or Market Value of five percent (5%) or more of the total Market
Value of the outstanding stock of the Company or of its net worth, and
(e) whether the requirements of Paragraph C of this Article Seventh have
been met.
E. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED SHAREHOLDERS. Nothing
contained in this Article Seventh shall be construed to relieve any
Interested Shareholder from any fiduciary obligation imposed by law.
F. AMENDMENT OR REPEAL. Notwithstanding any other provisions of this
Article Seventh or of any other Article hereof, or of the By-Laws of the
Company (and notwithstanding the fact that a lesser percentage may be
specified from time to time by law, this Article Seventh, any other Article
hereof, or the By-Laws of the Company), the provisions of this Article
Seventh may not be altered, amended or repealed in any respect, nor may any
provision inconsistent therewith be adopted, unless such alteration,
amendment, repeal or adoption is approved by the affirmative vote of the
holders of at least: (i) 80% of the combined voting power of the then
outstanding Voting Stock of the Company, voting together as a single class
and (ii) 66 2/3% of the combined voting power of the then outstanding
Voting Stock (which is not beneficially owned by an Interested
Shareholder), voting together as a single class.
EIGHTH. A. NUMBER, ELECTION AND TERMS OF DIRECTORS. The business of the
Company shall be managed by a Board of Directors. The number of directors
of the Company shall be fixed from time to time by or pursuant to the By-
Laws of the Company. Except as otherwise provided in or fixed by or
pursuant to the provisions of Article Fourth hereof relating to the rights
of the holders of any class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation to elect directors under
specified circumstances, the directors shall be classified, with respect to
the time for which they severally hold office, into three classes, as
nearly equal in number as possible, as shall be provided in the manner
specified in the By-Laws of the Company. One class shall be originally
elected for a term expiring at the annual meeting of shareholders to be
held in 1991, another class shall be originally elected for a term expiring
at the annual meeting of shareholders to be held in 1992, and another class
shall be originally elected for a term expiring at the annual meeting of
shareholders to be held in 1993, with each member of each class to hold
office until a successor is elected and qualified. At each annual meeting
of shareholders of the Company and except as otherwise provided in or fixed
by or pursuant to the provisions of Article Fourth hereof relating to the
rights of the holders of any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation to elect
directors under specified circumstances, the successors of the class of
directors whose term expires at that meeting shall be elected to hold
office for a term of three years.
B. SHAREHOLDER NOMINATION OF DIRECTOR CANDIDATES AND INTRODUCTION OF
BUSINESS. Advance notice of shareholder nominations for the election of
directors, and advance notice of business to be brought by shareholders
before an annual meeting of shareholders, shall be given in the manner
provided in the By-Laws of the Company.
C. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Except as otherwise
required by law and except as otherwise provided in or fixed by or pursuant
to the provisions of Article Fourth hereof relating to the rights of the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation to elect directors under
specified circumstances: (i) newly created directorships resulting from
any increase in the number of directors and any vacancies on the Board of
Directors resulting from death, resignation, disqualification, removal or
other cause shall be filled by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the
Board of Directors; (ii) any director elected in accordance with the
preceding clause (i) shall hold office for the remainder of the full term
of the class of directors in which the new directorship was created or the
vacancy occurred and until such director's successor shall have been
elected and qualified; and (iii) no decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
D. REMOVAL. Except as otherwise provided in or fixed by or pursuant to
the provisions of Article Fourth hereof relating to the rights of the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation to elect directors under
specified circumstances, any director may be removed from office, with or
without cause, only by the affirmative vote of the holders of at least 80%
of the combined voting power of the then outstanding shares of the
Company's stock entitled to vote generally, voting together as a single
class. Notwithstanding the foregoing provisions of this Paragraph D, if at
any time any shareholders of the Company have cumulative voting rights with
respect to the election of directors and less than the entire Board of
Directors is to be removed, no director may be removed from office if the
votes cast against removal would be sufficient to elect the person as a
director if cumulatively voted at an election of the class of directors of
which such person is a part. Whenever in this Article Eighth or in Article
Ninth hereof or in Article Tenth hereof, the phrase, "the then outstanding
shares of the Company's stock entitled to vote generally" is used, such
phrase shall mean each then outstanding share of any class or series of the
Company's stock that is entitled to vote generally in the election of the
Company's directors.
E. AMENDMENT OR REPEAL. Notwithstanding any other provisions of this
Article Eighth or of any other Article hereof or of the By-Laws of the
Company (and notwithstanding the fact that a lesser percentage may be
specified from time to time by law, this Article Eighth, any other Article
hereof, or the By-Laws of the Company), the provisions of this Article
Eighth may not be altered, amended or repealed in any respect, nor may any
provision inconsistent therewith be adopted, unless such alteration,
amendment, repeal or adoption is approved by the affirmative vote of at
least 80% of the combined voting power of the then outstanding shares of
the Company's stock entitled to vote generally, voting together as a single
class.
NINTH. Any action required or permitted to be taken by the shareholders of
the Company at a meeting of such holders may be taken without such a
meeting only by written consent by all of the shareholders entitled to vote
on the subject matter thereof. Except as otherwise mandated by Kentucky
law and except as otherwise provided in or fixed by or pursuant to the
provisions of Article Fourth hereof relating to the rights of the holders
of any class or series of stock having a preference over the Common Stock
as to dividends or upon liquidation to elect directors under specified
circumstances, special meetings of shareholders of the Company may be
called only by the Board of Directors pursuant to a resolution approved by
a majority of the entire Board of Directors or by the President of the
Company. Notwithstanding any other provisions of this Article Ninth or of
any other Article hereof or of the By-Laws of the Company (and
notwithstanding the fact that a lesser percentage may be specified from
time to time by law, this Article Ninth, any other Article hereof, or the
By-Laws of the Company), the provisions of this Article Ninth may not be
altered, amended or repealed in any respect, nor may any provision
inconsistent therewith be adopted, unless such alteration, amendment,
repeal or adoption is approved by the affirmative vote of the holders of at
least 80% of the combined voting power of the then outstanding shares of
the Company's stock entitled to vote generally, voting together as a single
class.
TENTH. The Board of Directors shall have power to adopt, amend and repeal
the By-Laws of the Company to the maximum extent permitted from time to
time by Kentucky law; provided, however, that any By-Laws adopted by the
Board of Directors under the powers conferred hereby may be amended or
repealed by the Board of Directors or by the holders of at least a majority
of the combined voting power of the outstanding shares of the Company's
stock entitled to vote generally, voting together as a single class, except
that, and notwithstanding any other provisions of this Article Tenth or of
any other Article hereof or of the By-Laws of the Company (and
notwithstanding the fact that a lesser percentage may be specified from
time to time by law, this Article Tenth, any other Article hereof or the By-
Laws of the Company), no provision of Section 2, Section 5 or Section 6 of
Article I of the By-Laws or of Section 1 of Article II of the By-Laws or of
Article VIII of the By-Laws may be altered, amended or repealed in any
respect, nor may any provision inconsistent therewith be adopted, unless
such alteration, amendment, repeal or adoption is approved by the
affirmative vote of the holders of at least 80% of the combined voting
power of the then outstanding shares of the Company's stock entitled to
vote generally, voting together as a single class. Notwithstanding any
other provisions of this Article Tenth or of any other Article hereof or of
the By-Laws of the Company (and notwithstanding the fact that a lesser
percentage may be specified from time to time by law, this Article Tenth,
any other Article hereof, or the By-Laws of the Company), the provisions of
this Article Tenth may not be altered, amended or repealed in any respect,
nor may any provision inconsistent therewith be adopted, unless such
alteration, amendment, repeal or adoption is approved by the affirmative
vote of the holders of at least 80% of the combined voting power of the
then outstanding shares of the Company's stock entitled to vote generally,
voting together as a single class.
ELEVENTH. A director of the Company shall not be personally liable to the
Company or its shareholders for monetary damages for breach of his duties
as a director, except for liability (i) for any transaction in which the
director's personal financial interest is in conflict with the financial
interests of the Company or its shareholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or are known to
the director to be a violation of law, (iii) under Kentucky Revised
Statutes 271B.8-330, or (iv) for any transaction from which the director
derived any improper personal benefit. If the Kentucky Business
Corporation Act as amended after approval by the shareholders of this
Article to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Company shall be eliminated or limited to the fullest extent permitted by
the Kentucky Business Corporation Act, as so amended.
Any repeal or modification of the foregoing paragraph by the shareholders
of the Company shall not adversely affect any right or protection of a
director of the Company existing at the time of such repeal or
modification.
TWELFTH. A. RIGHT TO INDEMNIFICATION. Each person who was or is a
director of the Company and who was or is made a party or is threatened to
be made a party to or as otherwise involved (including, without limitation,
as a witness) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of
the fact that he or she is or was a director or officer of the Company or
is or was serving at the request of the Company as a director, officer,
partner, trustee, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "Indemnified
Director"), whether the basis of such proceeding is alleged action in an
official capacity as a director or officer or in any other capacity while
serving as a director or officer, shall be indemnified and held harmless by
the Company to the fullest extent permitted by the Kentucky 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 Company to provide broader indemnification rights than such law
permitted the Company to provide prior to such amendment), against all
liability, all reasonable expense and all loss (including, without
limitation, judgments, fines, reasonable attorneys' fees, ERISA excise
taxes or penalties and amounts paid in settlement) incurred or suffered by
such Indemnified Director in connection therewith and such indemnification
shall continue as to an Indemnified Director who has ceased to be a
director and shall inure to the benefit of the Indemnified Director's
heirs, executors and administrators. Each person who was or is an officer
of the Company and not a director of the Company and who was or is made a
party or is threatened to be made a party to or is otherwise involved
(including, without limitation, as a witness) in any proceeding, by reason
of the fact that he or she is or was an officer of the Company or is or was
serving at the request of the Company as a director, officer, partner,
trustee, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
an employee benefit plan (hereinafter an "Indemnified Officer"), whether
the basis of such proceeding is alleged action in an official capacity as
an officer or in any other capacity while serving as an officer, shall be
indemnified and held harmless by the Company against all liability, all
reasonable expense and all loss (including, without limitation, judgments,
fines, reasonable attorneys' fees, ERISA excise taxes or penalties and
amounts paid in settlement) incurred or suffered by such Indemnified
Officer to the same extent and under the same conditions that the Company
must indemnify an Indemnified Director pursuant to the immediately
preceding sentence and to such further extent as is not contrary to public
policy and such indemnification shall continue as to an Indemnified Officer
who has ceased to be an officer and shall inure to the benefit of the
Indemnified Officer's heirs, executors and administrators. Notwithstanding
the foregoing and except as provided in Paragraph B of this Article Twelfth
with respect to proceedings to enforce rights to indemnification, the
Company shall indemnify any Indemnified Director or Indemnified Officer in
connection with a proceeding (or part thereof) initiated by such
Indemnified Director or Indemnified Officer only if such proceeding (or
part thereof) was authorized by the Board of Directors of the Company. As
hereinafter used in this Article Twelfth, the term "indemnitee" means any
Indemnified Director or Indemnified Officer. Any person who is or was a
director or officer of a subsidiary of the Company shall be deemed to be
serving in such capacity at the request of the Company for purposes of this
Article Twelfth. The right to indemnification conferred in this Article
shall include the right to be paid by the Company the expenses incurred in
defending any such proceeding in advance of its final disposition
(hereinafter an "advancement of expenses"); provided, however, that, if the
Kentucky Business Corporation Act requires, an advancement of expenses
incurred by an indemnitee who at the time of receiving such advance is a
director of the Company shall be made only upon: (i) delivery to the
Company of an undertaking (hereinafter an "undertaking"), by or on behalf
of such indemnitee, to repay all amounts so advanced if it shall ultimately
be determined by final judicial decision from which there is no further
right to appeal (hereinafter, a "final adjudication") that such indemnitee
is not entitled to be indemnified for such expenses under this Article or
otherwise; (ii) delivery to the Company of a written affirmation of the
indemnitee's good faith belief that he or she has met the standard of
conduct that makes indemnification by the Company permissible under the
Kentucky Business Corporation Act; and (iii) a determination that the facts
then known to those making the determination would not preclude
indemnification under the Kentucky Business Corporation Act. The right to
indemnification and advancement of expenses conferred in this Paragraph A
shall be a contract right.
B. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Paragraph A of
this Article Twelfth is not paid in full by the Company within sixty days
after a written claim has been received by the Company (except in the case
of a claim for an advancement of expenses, in which case the applicable
period shall be twenty days), the indemnitee may at any time thereafter
bring suit against the Company to recover the unpaid amount of the claim.
If successful in whole or in part in any such suit or in a suit brought by
the Company to recover an advancement of expenses pursuant to the terms of
an undertaking, the indemnitee also shall be entitled to be paid the
expense of prosecuting or defending such suit. In (i) any suit brought by
the indemnitee to enforce a right to indemnification hereunder (other than
a suit to enforce a right to an advancement of expenses brought by an
indemnitee who will not be a director of the Company at the time such
advance is made) it shall be a defense that, and in (ii) any suit by the
Company to recover an advancement of expenses pursuant to the terms of an
undertaking the Company shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met the standard that makes
it permissible hereunder or under the Kentucky Business Corporation Act
(the "applicable standard") for the Company to indemnify the indemnitee for
the amount claimed. Neither the failure of the Company (including its
Board of Directors, a committee of the Board of Directors, independent
legal counsel or its shareholders) to have made a determination prior to
the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard, nor an actual determination by the Company (including its Board
of Directors, a committee of the Board of Directors, independent legal
counsel or its shareholders) that the indemnitee has not met the applicable
standard, shall create a presumption that the indemnitee has not met the
applicable standard or, in the case of such a suit brought by the
indemnitee, shall be a defense to such suit. In any suit brought by the
indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Company to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified or to such advancement of
expenses under this Article Twelfth or otherwise shall be on the Company.
C. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and to the
advancement of expenses conferred in this Article Twelfth shall not be
exclusive of any other right which any person may have or hereinafter
acquire under any statute, these Restated Articles of Incorporation, any By-
Law, any agreement, any vote of shareholders or disinterested directors or
otherwise.
D. INSURANCE. The Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Company
or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Company would have the power to indemnify such person against such expense,
liability or loss under the Kentucky Business Corporation Act.
E. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Company may, to the
extent authorized from time to time by the Board of Directors, grant rights
to indemnification and to the advancement of expenses to any employee or
agent of the Company and to any person serving at the request of the
Company as an agent or employee of another corporation or of a joint
venture, trust or other enterprise to the fullest extent of the provisions
of this Article Twelfth with respect to the indemnification and advancement
of expenses of either directors or officers of the Company.
F. REPEAL OR MODIFICATION. Any repeal or modification of any provision of
this Article Twelfth shall not adversely affect any rights to
indemnification and to advancement of expenses that any person may have at
the time of such repeal or modification with respect to any acts or
omissions occurring prior to such repeal or modification.
G. SEVERABILITY. In case any one or more of the provisions of this
Article Twelfth, or any application thereof, shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions in this Article Twelfth, and any other application
thereof, shall not in any way be affected or impaired thereby.
THIRTEENTH. The name and mailing address of the sole incorporator is:
Charles A. Markel III
LG&E Energy Corp.
220 West Main Street
P.O. Box 32030
Louisville, KY 40232
FOURTEENTH. SERIES A PREFERRED STOCK.
Designation and Amount. There shall be a series of the Preferred Stock
designated as "Series A Preferred Stock". The number of shares
constituting such series shall be 2,000,000 and such series shall have the
preferences, limitations and relative rights set forth below.
Section 1. Dividends and Distributions.
(A) Subject to the possible prior and superior rights of the holders of
any shares of any other series of Preferred Stock or any other shares of
preferred stock of the Company ranking prior and superior to the shares of
Series A Preferred Stock with respect to dividends, each holder of Series A
Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for that purpose:
(i) quarterly dividends payable in cash on the first day of January, April,
July, and October in each year (each such date being a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of such share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$5.00 or (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends declared on
shares of the Common Stock of the Company, without par value (the "Common
Stock"), since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of a share of Series A Preferred Stock, and (ii) subject to
the provision for adjustment hereinafter set forth, quarterly distributions
(payable in kind) on each Quarterly Dividend Payment Date in an amount per
share equal to 100 times the aggregate per share amount of all non-cash
dividends or other distributions (other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of Common Stock,
by reclassification or otherwise) declared on shares of Common Stock since
the immediately preceding Quarterly Dividend Payment Date, or with respect
to the first Quarterly Dividend Payment Date, since the first issuance of a
share of Series A Preferred Stock. If the Quarterly Dividend Payment Date
is a Saturday, Sunday or legal holiday, then such Quarterly Dividend
Payment Date shall be the first immediately preceding calendar day which is
not a Saturday, Sunday or legal holiday. In the event that the Company
shall at any time after December 5, 1990, (the "Rights Declaration Date")
(i) declare any dividend on outstanding shares of Common Stock payable in
shares of Common Stock (ii) subdivide outstanding shares of Common Stock,
or (iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case, the amount to which the holder of a
share of Series A Preferred Stock was entitled immediately prior to such
event pursuant to the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which shall be the number of
shares of Common Stock that are outstanding immediately after such event,
and the denominator of which shall be the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on shares of
Series A Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the shares of Common Stock
(other than a dividend payable in shares of Common Stock); provided,
however, that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $5.00 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on each
outstanding share of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such share of Series A
Preferred Stock, unless the date of issuance of such share is prior to the
record date for the first Quarterly Dividend Payment Date, in which case,
dividends on such share shall begin to accrue from the date of issuance of
such share, or unless the date of issuance is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date in either of which events
such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on shares of Series A Preferred Stock in an
amount less than the aggregate amount of all such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a share-
by-share basis among all shares of Series A Preferred Stock at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which
record date shall be no more than 60 days prior to the date fixed for the
payment thereof.
(D) Dividends payable on the Series A Preferred Stock for the initial
dividend period and for any period less than a full quarterly period, shall
be computed on the basis of a 360-day year of 30-day months.
Section 2. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the shareholders
of the Company and, to the extent required by law, to cumulative voting in
all elections of directors by shareholders.
(B) Except as otherwise provided herein or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of
shareholders of Company.
(C) If at the time of any annual meeting of shareholders for the election
of directors a "default in preference dividends" on the Series A Preferred
Stock shall exist, the holders of the Series A Preferred Stock shall have
the right at such meeting, voting together as a single class, to the
exclusion of the holders of Common Stock, to elect two (2) directors of the
Company. Such right shall continue until there are no dividends in arrears
upon the Series A Preferred Stock. Either or both of the two directors to
be elected by the holders of the Series A Preferred Stock may be to fill a
vacancy or vacancies created by an increase by the Board of Directors in
the number of directors constituting the Board of Directors. Each director
elected by the holders of Preferred Stock (a "Preferred Director") shall
continue to serve as such director for the full term for which he or she
shall have been elected, notwithstanding that prior to the end of such term
a default in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except by, the vote of
the holders of record of the outstanding Series A Preferred Stock voting
together as a single class, at a meeting of the shareholders or of the
holders of Preferred Stock called for the purpose. So long as a default in
preference dividends on the Series A Preferred Stock shall exist, (i) any
vacancy in the office of a Preferred Director may be filled (except as
provided in the following clause (ii)) by an instrument in writing signed
by the remaining Preferred Director and filed with the Company and (ii) in
the case of the removal of any Preferred Director, the vacancy may be
filled by the vote of the holders of the outstanding Series A Preferred
Stock voting together as a single class, at the same meeting at which such
removal shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes hereof, to
be a Preferred Director. For the purposes hereof, a "default in preference
dividends" on the Preferred Stock shall be deemed to have occurred whenever
the amount of accrued and unpaid dividends upon the Series A Preferred
Stock shall be equivalent to six (6) full quarterly dividends or more, and
having so occurred, such default shall be deemed to exist thereafter until,
but only until, all accrued dividends on all Series A Preferred Stock then
outstanding shall have been paid to the end of the last preceding quarterly
dividend period. The provisions of this paragraph (C) shall govern the
election of Directors by holders of Series A Preferred Stock during any
default in preference dividends notwithstanding any provisions of these
Articles of Incorporation to the contrary.
(D) Except as set forth herein, holders of shares of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
shares of Common Stock as set forth herein) for taking any corporate
action.
Section 3. Certain Restrictions.
(A) Until all accrued and unpaid dividends and distributions, whether or
not declared, on outstanding shares of Series A Preferred Stock shall have
been paid in full, the Company shall not:
(i) Declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
junior stock;
(ii) Declare or pay dividends on or make any other distributions on any
shares of parity stock, except dividends paid ratably on shares of Series A
Preferred Stock and shares of all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of such Series A Preferred Stock and all such shares are then
entitled;
(iii) Redeem or purchase or otherwise acquire for consideration shares of
any junior stock, provided, however, that the Company may at any time
redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any other junior stock;
(iv) Purchase or otherwise acquire for consideration any shares of Series
A Preferred Stock or any shares of parity stock, except in accordance with
a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of stock of the Company
unless the Company could, under paragraph (A) of this Section 3, purchase
or otherwise acquire such shares at such time and in such manner.
Section 4. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares shall, upon their cancellation, become authorized but unissued
Preferred Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set forth in
the Articles of Incorporation of the Company creating a series of Preferred
Stock or any similar shares or as otherwise required by law.
Section 5. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the Company, no distributions shall be made (i) to the holders of
shares of junior stock unless the holders of Series A Preferred Stock shall
have received, subject to adjustment as hereinafter provided in paragraph
(B), the greater of either (a) $100.00 per share plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, or (b) an amount per share equal to
100 times the aggregate per share amount to be distributed to holders of
shares of Common Stock or (ii) to the holders of shares of parity stock,
unless simultaneously therewith distributions are made ratably on shares of
Series A Preferred Stock and all other shares of such parity stock in
proportion to the total amounts to which the holders of shares of Series A
Preferred Stock are entitled under clause (i)(a) of this sentence and to
which the holders of shares of such parity stock are entitled, in each
case, upon such liquidation, dissolution or winding up.
(B) In the event the Company shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide outstanding shares
of Common Stock, or (iii) combine outstanding shares of Common Stock into a
smaller number of shares, then in each such case, the aggregate amount to
which holders of Series A Preferred Stock were entitled immediately prior
to such event pursuant to clause (i)(b) of paragraph (A) of this Section 5
shall be adjusted by multiplying such amount by a fraction, the numerator
of which shall be the number of shares of Common Stock that are outstanding
immediately after such event, and the denominator of which shall be the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 6. Consolidation, Merger, etc. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or converted into other stock
or securities, cash and/or any other property, then in any such case,
shares of Series A Preferred Stock shall at the same time be similarly
exchanged for or converted into an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to the aggregate
amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common
Stock is converted or exchanged. In the event the Company shall at any
time after the Rights Declaration Date (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock, or (iii) combine outstanding
shares of Common Stock into a smaller number of shares, then in each such
case, the amount set forth in the immediately preceding sentence with
respect to the exchange or conversion of shares of Series A Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the numerator
of which shall be the number of shares of Common Stock that are outstanding
immediately after such event, and the denominator of which shall be the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 7. Redemption. The shares of Series A Preferred Stock shall not
be redeemable.
Section 8. Ranking. The shares of Series A Preferred Stock shall rank
junior to all other series of the Preferred Stock and to any other class of
preferred stock that hereafter may be issued by the Company as to the
payment of dividends and the distribution of assets, unless the terms of
any such series or class shall provide otherwise.
Section 9. Amendment. These Restated Articles of Incorporation shall not
hereafter be amended, either directly or indirectly, or through merger or
consolidation with another corporation, in any manner that would alter or
change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least a majority of the outstanding shares of Series A
Preferred Stock, voting separately as a class.
Section 10. Fractional Shares. The Series A Preferred Stock may be issued
in fractions of a share, which fractions shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions, and to have the benefit of
all other rights of holders of Series A Preferred Stock.
Section 11. Certain Definitions. As used herein with respect to the
Series A Preferred Stock, the following terms shall have the following
meanings:
(A) The term "junior stock" (i) as used in Section 3, shall mean the
Common Stock and any other class or series of capital stock of the Company
hereafter authorized or issued over which the Series A Preferred Stock has
preference or priority as to the payment of dividends, and (ii) as used in
Section 5, shall mean the Common Stock and any other class or series of
capital stock of the Company over which the Series A Preferred Stock has
preference or priority in the distribution of assets on any liquidation,
dissolution or winding up of the Company.
(B) The term "parity stock" (i) as used in Section 3, shall mean any class
or series of stock of the Company hereafter authorized or issued ranking
pari passu with the Series A Preferred Stock as to dividends, and (ii) as
used in Section 5, shall mean any class or series of stock of the Company
ranking pari passu with the Series A Preferred Stock in the distribution of
assets on any liquidation, dissolution or winding up."
The undersigned hereby certifies that the Amended and Restated Articles of
Incorporation correctly set forth the corresponding Articles of
Incorporation as amended and that these Amended and Restated Articles of
Incorporation supersede the original Articles of Incorporation and any
amendments and corrections thereto.
LG&E Energy Corp.
By:
John R. McCall, Executive Vice President,
Secretary and General Counsel
