As filed with the Securities and Exchange Commission on April 30, 1996
Registration No. 33-____
======================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-3
Registration Statement
Under
The Securities Act of 1933
-------------------------
ILLINOVA CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Illinois 37-1319890
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Illinova Corporation Larry D. Haab
500 South 27th Street 500 South 27th Street
Decatur, Illinois 62525 Decatur, Illinois 62525
(217) 424-6600 (217) 424-6600
(Address, Including Zip Code, (Name, Address, Including
and Telephone Number, Including Zip Code, and Telephone Number,
Area Code, of Registrant's Including Area Code, of Agent
Principal Executive Offices) for Service)
With a Copy to:
Robert J. Regan, Esq.
Schiff Hardin & Waite
7200 Sears Tower
Chicago, Illinois 60606
(312) 876-1000
--------------------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. [ ] ________________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] _____________
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount To Be Aggregate Price Aggregate Offering Registration
Securities To Be Registered Registered Per Unit (1) Price (1) Fee
----------------------------- ------------------ ------------------ ----------------- ------------
<S> <C> <C> <C> <C>
Common Stock,
No Par Value . . . . . . . . 5,000,000 $25-5/8 $128,125,000 $44,181.03
</TABLE>
(1) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(c) under the Securities Act of 1933
based on $25-5/8, the average of the high and low prices of the
Common Stock on April 24, 1996, as reported on the New York Stock
Exchange.
-------------------------
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
======================================================================
<PAGE>
<TABLE>
<S> <C>
====================================================== ======================================================
No dealer, salesman or other person has been
authorized to give any information or to make any
representations in connection with this offering other
than those contained in this Prospectus, and, if given ILLINOVA
or made, such information or representations must not CORPORATION
be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer
to sell, or a solicitation of an offer to buy, any of
the securities offered hereby in any jurisdiction to
any person to whom it is unlawful to make such offer
or solicitation in such jurisdiction. Neither the 5,000,000 Shares
delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any
implication that there has been no change in the
affairs of the Company or of the Plan since the date
of this Prospectus or that the information set forth
herein is correct as of any time subsequent to the
date hereof or the date of filing of any documents Common Stock
incorporated by reference herein. (without par value)
------------------------------------------------------ ---------------------------
TABLE OF CONTENTS P R O S P E C T U S
---------------------------
Available Information . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . 2
ILLINOVA
The Company and its Subsidiaries . . . . . . . . . 3 INVESTMENT
PLUS
Use of Proceeds . . . . . . . . . . . . . . . . . . . 3
Illinova Investment Plus . . . . . . . . . . . . . 4
Plan of Distribution . . . . . . . . . . . . . . 16
Description of Capital Stock . . . . . . . . . . 17
Experts . . . . . . . . . . . . . . . . . . . . . 17
Legal Matters . . . . . . . . . . . . . . . . . . 17 April 30, 1996
====================================================== ======================================================
</TABLE>
<PAGE> 2
PROSPECTUS
ILLINOVA CORPORATION
5,000,000 SHARES
COMMON STOCK
ILLINOVA INVESTMENT PLUS
Illinova Investment Plus (the "Plan") of Illinova Corporation
(the "Company") is designed to provide investors with a convenient way
to purchase shares of the Company's common stock, without par value
("Common Stock"), and to reinvest all or a portion of the cash
dividends paid on certain securities (the "Eligible Securities") of
the Company and its subsidiary, Illinois Power Company ("Illinois
Power") in additional shares of Common Stock. For a listing of
Eligible Securities, see "Illinova Investment Plus Eligible
Securities."
Participants in the Plan may:
o Make an initial investment in Common Stock with a cash
payment of at least $250 ($25 in the case of employees of
the Company or its subsidiaries).
o Reinvest all or a portion of cash dividends paid on Eligible
Securities registered in their names or Common Stock
credited to their Plan accounts in additional shares of
Common Stock.
o Increase their investment in Common Stock by making optional
cash investments at any time.
o Receive, upon written request, certificates for whole shares
of Common Stock credited to their Plan accounts.
o Deposit certificates representing Common Stock into the Plan
for safekeeping.
o Sell shares of Common Stock credited to their Plan accounts
through the Plan.
Shares of Common Stock purchased under the Plan will, at the
option of the Company, be newly issued shares or treasury shares
purchased directly from the Company, or shares purchased in the open
market or in privately negotiated transactions. Any open market or
privately negotiated purchases will be effected through an Independent
Agent (as hereinafter defined) selected by the Company. The Common
Stock is listed on the New York Stock Exchange and the Chicago Stock
Exchange. The closing price of the Common Stock on April 26, 1996 on
the New York Stock Exchange was $25 3/4.
The purchase price of newly issued or treasury shares of Common
Stock purchased under the Plan for an Investment Date (as hereinafter
defined) will be the average of the high and low sales prices of the
Common Stock reported on the New York Stock Exchange Composite Tape as
published in the Midwest Edition of The Wall Street Journal on the
Investment Date. The price of shares of Common Stock purchased or sold
in the open market or in privately negotiated transactions will be the
weighted average price per share of the aggregate number of shares
purchased or sold, as the case may be, with respect to the relevant
Investment Date. The Company will pay the costs of administration of
the Plan and any brokerage commissions and service charges related to
shares purchased under the Plan; however, Participants will bear the
costs of any brokerage commissions and any applicable transfer taxes
and service charges related to shares sold under the Plan.
<PAGE> 3
To the extent required by applicable law in certain
jurisdictions, shares of Common Stock offered under the Plan to
persons not presently record holders of Common Stock are offered only
through a registered broker/dealer in such jurisdictions.
This Prospectus contains a summary of the material provisions of
the Plan and should be retained for future reference.
______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
______________________
The date of this Prospectus is April 30, 1996.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith files reports, information statements and
other information with the Securities and Exchange Commission (the
"Commission"). Reports, information statements and other information
filed by the Company may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices at Suite 1400, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661 and at the 13th Floor, Seven
World Trade Center, New York, New York 10048. Copies of such material
may be obtained from the public reference section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Such reports, information statements and other information concerning
the Company may also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005 and the Chicago
Stock Exchange, 440 South LaSalle Street, Chicago, Illinois 60605, on
which exchanges the Common Stock of the Company is listed. In
addition, such reports, information statements and other information
concerning the Company can be inspected at the principal office of the
Company, 500 South 27th Street, Decatur, Illinois 62525.
This Prospectus does not contain all the information set forth in
the Registration Statement on Form S-3 (together with all amendments
and exhibits thereto, the "Registration Statement"), which the Company
has filed with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). Statements contained or incorporated
by reference herein concerning the provisions of documents are
necessarily summaries of such documents, and each statement is
qualified in its entirety by reference to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated herein by
reference:
(1) the Company's Annual Report on Form 10-K for the
year ended December 31, 1995; and
(2) the description of the Common Stock contained in
the Company's Registration Statement on Form 8-B dated May
5, 1994 and the Prospectus dated December 20, 1993 contained
in the Company's Registration Statement on Form S-4 (Reg.
No. 33-51053).
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of the offering of the
Common Stock offered hereby shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of
<PAGE> 5
filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to whom a copy of this
Prospectus has been delivered, on the written or oral request of such
person, a copy of any or all of the documents referred to above which
have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents which are not specifically
incorporated by reference into the information that this Prospectus
incorporates. Requests for such copies should be directed to the
Shareholder Services Department, Illinova Corporation, 500 South 27th
Street, Decatur, Illinois 62525, telephone number 1-800-800-8220.
THE COMPANY AND ITS SUBSIDIARIES
The Company is a holding company organized in Illinois on May 27,
1994. It has three principal operating subsidiaries: Illinois Power, a
combination electric and gas utility; Illinova Generating Company, an
independent power company which invests in energy-related projects and
competes in the independent power market; and Illinova Power
Marketing, Inc., an entity active in the business of brokering and
marketing electric power and gas to various customers. Illinois
Power's financial position and results of operation are currently the
principal factors affecting the Company's consolidated financial
position and results of operation.
Illinois Power is engaged in the generation, transmission,
distribution and sale of electric energy and the distribution and sale
of natural gas in the State of Illinois. Its service area is a widely
diversified industrial and agricultural area comprising approximately
15,000 square miles in northern, central and southern Illinois.
Electric service is provided at retail to 310 incorporated
municipalities, adjacent suburban and rural areas and numerous
unincorporated municipalities having an estimated aggregate population
of 1,265,000. Gas service is provided to 257 incorporated
municipalities, adjacent suburban areas and numerous unincorporated
municipalities having an estimated aggregate population of 920,000.
The larger cities served include Decatur, East St. Louis (gas only),
Champaign, Danville, Belleville, Granite City, Bloomington (electric
only), Galesburg, Urbana and Normal (electric only).
The executive offices of the Company and Illinois Power are
located at 500 South 27th Street, Decatur, Illinois 62525, and their
telephone number is 1-217-424-6600.
<PAGE> 6
USE OF PROCEEDS
At present, it is expected that purchases of Common Stock under
the Plan will be made in the open market and that the Company will not
receive any proceeds from these purchases. If newly issued or
treasury shares of Common Stock are purchased under the Plan directly
from the Company, the Company will use the net proceeds from such
sales for general corporate purposes.
<PAGE> 7
ILLINOVA INVESTMENT PLUS
Purpose
- -------
The purpose of the Plan is to provide investors in the Company
with a convenient way to purchase shares of Common Stock and to
reinvest all or a portion of the cash dividends paid on Eligible
Securities in additional shares of Common Stock. Effective July 1,
1996, the Plan will replace, by amendment and restatement, the
Automatic Reinvestment and Stock Purchase Plan (the "Reinvestment
Plan") and the Employees Stock Ownership Plan (the "Employees Stock
Plan") currently offered by the Company. All accounts and all
elections, notices, instructions and authorizations under the
Reinvestment Plan and the Employees Stock Plan automatically will
continue under the Plan, and participants in the Reinvestment Plan and
the Employees Stock Plan will continue as Participants in the Plan.
No action by current participants in the Reinvestment Plan and the
Employees Stock Plan is required to continue participation in the
Plan. If, after reviewing this Prospectus, participants in the
Reinvestment Plan or the Employees Stock Plan do not wish to continue
participation in the Plan, a written withdrawal notice should be
submitted to the Shareholder Services Department, Illinova
Corporation, 500 South 27th Street, Decatur, Illinois, 62525, so that
it is received before July 10, 1996.
Summary
- -------
The following is a summary of the material terms and provisions
of the Plan and does not purport to be a complete description of all
terms and provisions of the Plan. The following summary is qualified
in its entirety by reference to all of the terms and provisions of the
Plan, which is an exhibit to the Registration Statement.
o Interested investors who are not employees of the Company or
its subsidiaries or record holders of Eligible Securities
may become Participants by making an initial investment of
at least $250 to purchase Common Stock through the Plan.
Employees of the Company or its subsidiaries who are not
record holders of Eligible Securities may become
Participants by making an initial investment of at least
$25.
o Record holders of Eligible Securities may become
Participants by electing to have dividend payments on all or
a portion of their Eligible Securities reinvested in Common
Stock, or by depositing certificates representing Common
Stock into the Plan for safekeeping.
o Participants may direct that all or a portion of their
dividend payments on Eligible Securities be reinvested in
additional shares of Common Stock. Dividend payments not
reinvested will be paid in the usual manner.
<PAGE> 8
o In addition to having their dividend payments on Eligible
Securities reinvested in Common Stock, Participants may
invest additional funds in Common Stock through optional
cash investments of at least $25 for any single investment.
The Company reserves the right to refuse any optional cash
investment which causes an investor's total investment
(initial cash investments plus optional cash investments
plus dividends reinvested) to exceed $60,000 in any calendar
year. Optional cash investments may be made occasionally or
at regular intervals, as the Participant desires.
o Funds paid to the Plan are fully invested in Common Stock
through the purchase of whole shares and fractions of
shares, and proportionate cash dividends on fractions of
shares of Common Stock are used to purchase additional
shares of Common Stock.
o The Plan offers a "safekeeping" service whereby Participants
may deposit, free of any service charges, certificates
representing Common Stock into the Plan and have their
ownership of such Common Stock maintained on the
Administrator's records as part of their account. This
service can be selected by Participants without
participating in any other feature of the Plan.
o A Participant may direct the Administrator, at any time and
at no cost to the Participant, to transfer all or a portion
of the shares of Common Stock credited to a Participant's
account (including those shares of Common Stock deposited
into the Plan for safekeeping) to the account of another
Participant (or to set up an account for a new Participant
in connection with such transfer) or to send certificate(s)
representing such shares to the Participant or another
designated person or entity.
o Participants may sell shares of Common Stock credited to
their accounts, including those shares of Common Stock
deposited into the Plan for safekeeping, through the Plan.
o A statement will be mailed to each Participant for each
month in which a transaction takes place.
Administration
- --------------
Administration of the Plan is conducted by the individual (who
may be an employee of the Company), bank, trust company or other
entity (including the Company) appointed from time to time by the
Company to act as administrator of the Plan (the "Administrator"). The
Company will be the initial Administrator. The Administrator is
responsible for administering the Plan, receiving all cash investments
made by Participants, maintaining records of each Participant's
account activities, issuing statements of account and performing other
duties required by the Plan. The Administrator or its nominee, as
<PAGE> 9
custodian, will hold one or more certificates registered in its name
representing the aggregate number of whole shares of Common Stock
purchased under, or deposited for safekeeping into, the Plan and
credited to a Participant's account. The Administrator will forward
funds to be used to purchase shares of Common Stock in the open market
or in privately negotiated transactions to an agent selected by the
Company (an "Independent Agent") that is an "agent independent of the
issuer," as that term is defined in the rules and regulations under
the Exchange Act. Additionally, the Administrator will promptly
forward sales instructions to the Independent Agent. The Independent
Agent is responsible for purchasing and selling shares of Common Stock
in the open market for a Participant's account in accordance with the
provisions of the Plan.
Participants may contact the Administrator by writing to:
Illinova Corporation
Shareholder Services Department
500 South 27th Street
Decatur, Illinois 62525-1805
or by telephoning toll-free 1-800-800 8220 between 7 a.m. and 4:45
p.m., Monday through Friday, Central Time. Written communications may
be sent by telecopier (fax) to 1-217-424 6913.
Eligibility
- -----------
Any person or entity, whether or not a record holder of Common
Stock, is eligible to participate in the Plan, provided that (i) such
person or entity fulfills the prerequisites for participation
described below under "Enrollment Procedures" and (ii) in the case of
citizens or residents of a country other than the United States, its
territories or possessions, participation would not violate local laws
applicable to the Company, the Plan or the Participant. To the extent
required by applicable law in certain jurisdictions, shares of Common
Stock offered under the Plan to persons not presently record holders
of Common Stock are offered only through a registered broker/dealer in
such jurisdictions.
Enrollment Procedures
- ---------------------
Eligible applicants may join the Plan at any time after being
furnished with a copy of this Prospectus by completing and signing an
enrollment form ("Enrollment Form") in the manner set forth below.
Requests for copies of Enrollment Forms, as well as copies of other
Plan forms and this Prospectus, should be made in writing or by
telephone to the Administrator's address and telephone numbers listed
in " Administration" above. Record holders of Eligible Securities
should be sure to sign their name(s) on the Enrollment Form exactly as
they appear on their certificates.
<PAGE> 10
In order to become a Participant in the Plan, an eligible
applicant must complete and sign an Enrollment Form and return it to
the Administrator and (i) make an initial cash investment, (ii) elect
to have cash dividends paid on Eligible Securities of which such
applicant is the record holder invested in Common Stock, or (iii)
deposit certificates representing shares of Common Stock into the Plan
for safekeeping.
Beneficial owners of Eligible Securities registered in "street
name" (e.g., in the name of a bank, broker, or trustee) may
participate in the Plan with respect to such securities by either (i)
transferring those Eligible Securities which they wish to be subject
to the Plan into their own name and depositing shares of Common Stock
into the Plan for safekeeping and/or electing to reinvest cash
dividend payments on such Eligible Securities in Common Stock or (ii)
making arrangements with the record or registered holder (e.g., their
bank, broker or trustee who will become the Participant) of such
securities to participate in the Plan on the beneficial owner's
behalf.
Holders of Common Stock currently participating in the Company's
Reinvestment Plan or Employee Stock Plan will automatically be
Participants in the Plan without sending in a new Enrollment Form.
However, Participants who wish to change their participation in any
way (e.g., from partial to full reinvestment) must submit a new
Enrollment Form.
Enrollment Forms will be processed as promptly as practicable. A
person will become a Participant after a properly completed Enrollment
Form has been received and accepted by the Administrator.
Eligible Securities
- -------------------
The following equity securities of the Company and Illinois Power
are Eligible Securities:
o Illinova Common Stock (including shares of Common Stock
purchased through the Plan)
o Illinois Power Serial Preferred Stock, $50 par value
o 4.08% Series Preferred Stock
o 4.26% Series Preferred Stock
o 4.70% Series Preferred Stock
o 4.42% Series Preferred Stock
o 4.20% Series Preferred Stock
o 7.75% Series Preferred Stock
<PAGE> 11
o Illinois Power Serial Preferred Stock, without par value
o Adjustable Rate Series A Preferred Stock
In addition, the Company may from time to time designate, in its
sole discretion, other equity or debt securities of the Company and
its subsidiaries as Eligible Securities by notifying the Administrator
in writing of such designation.
Initial Cash Investments and Optional Cash Investments
- ------------------------------------------------------
Interested investors who are not employees of the Company or its
subsidiaries or record holders of Eligible Securities must include an
initial cash investment of at least $250 with their completed
Enrollment Form. Employees of the Company or its subsidiaries who are
not record holders of Eligible Securities must include an initial cash
investment of at least $25 with their completed Enrollment Form. Such
investments may be made (i) by personal check or money order payable
to Illinova Investment Plus, (ii) by direct debit or (iii) for
employees of the Company or its subsidiaries, by automatic payroll
deduction. DO NOT SEND CASH.
Participants may make optional cash investments by delivering to
the Administrator a completed Enrollment Form. Such investments may
be made (i) by personal check or money order payable to Illinova
Investment Plus, (ii) by direct debit or (iii) for employees of the
Company or its subsidiaries, by automatic payroll deduction. DO NOT
SEND CASH. Optional cash investments must be at least $25 for any
single investment. The Company reserves the right to refuse any
optional cash investment which causes an investor's total investment
(initial cash investments plus optional cash investments plus
dividends reinvested) to exceed $60,000 in any calendar year. There
is no obligation to make any optional cash investment and the amount
and timing of such investments may vary from time to time.
Employees participating in the Plan may arrange for initial and
optional cash investments under the Plan to be made through payroll
deductions. A payroll deduction for an initial cash investment must
be for at least $25 in a single pay period, and payroll deductions for
optional cash investments may be in even multiples of $1, but not less
than $5 per pay period. To initiate payroll deduction, an employee
must complete, sign and return to the Administrator a Payroll
Deduction Authorization Form.
After the Payroll Deduction Authorization Form has been received
by the Administrator and the authority for the payroll deduction has
been noted on the Company's payroll records, the Company will withhold
each month the amount authorized. The withholding will be made each
month from the paycheck for the pay period ending in that month. The
amount withheld will be forwarded to the Administrator, and the
Administrator will invest the funds in Common Stock beginning on the
first Investment Date following receipt thereof by the Administrator.
<PAGE> 12
The amount of payroll deduction can be revised, changed or
terminated at any time by written notice to the Administrator.
Commencement, revision or termination of payroll deductions will
become effective as soon as practicable after an employee's request is
received by the Administrator.
An Investment Date will occur twice every month. Initial and
optional cash investments will be invested in Common Stock beginning
on the first Investment Date following their receipt by the
Administrator; provided, that such investments must be received by the
Administrator no later than two business days prior to an Investment
Date to be invested beginning on that Investment Date. Otherwise, the
investment may be held by the Administrator and invested beginning on
the next Investment Date. The Administrator may temporarily invest
initial and optional cash investments and dividend payments, either
directly or indirectly, in U.S. government obligations or other
similar temporary investments approved by the Company ("Temporary
Investments"). Earnings from Temporary Investments will be used by
the Company to defray costs of administering the Plan. Any losses to
the Plan resulting from the Administrator purchasing Temporary
Investments will be reimbursed by the Company. No interest will be
paid on funds held by the Administrator pending investment.
Upon a Participant's written request, received by the
Administrator no later than two business days prior to the applicable
Investment Date, initial and optional cash investments not already
invested in Common Stock will be returned to the Participant. However,
no refund of a check or money order will be made until the funds from
such instruments have been actually collected by the Administrator.
Accordingly, such refunds may be significantly delayed. If the written
request to stop investment is received by the Administrator within two
business days prior to an Investment Date, initial and optional cash
investments then held by the Administrator will be invested in Common
Stock on such Investment Date.
All initial and optional cash investments are subject to
collection by the Administrator of full face value in U.S. funds. The
method of delivery of any initial and optional cash investment is at
the election and risk of the Participant or interested investor and
will be deemed received when actually received by the Administrator.
If the delivery is by mail, it is recommended that the Participant or
interested investor use properly insured, registered mail with return
receipt requested, and that the mailing be made sufficiently in
advance of the Investment Date.
Cash dividends paid on shares of Common Stock credited to a
Participant's account that were purchased through the Plan with
initial and optional cash investments will be reinvested in shares of
Common Stock in accordance with the Participant's reinvestment
election designated on a completed Enrollment Form.
Funds payable to a Participant or an interested investor as a
result of the redemption, tender or maturity, including accrued
interest and premium, if any, of any of the Eligible Securities of
<PAGE> 13
which such Participant or interested investor is the record holder may
be invested in Common Stock through the Plan at the request of such
holder by delivering a properly completed Enrollment Form covering
such Eligible Securities to the Administrator. Any amounts invested in
Common Stock through the Plan as described in the previous sentence
will be treated as optional cash investments in determining the
Company's right to refuse optional cash investments which cause an
investor's total investment (initial cash investments plus optional
cash investments plus dividends reinvested) to exceed $60,000 in any
calendar year.
Reinvestment of Cash Dividend Payments
- --------------------------------------
Participants may elect to reinvest all or a portion of cash
dividends paid on all or a portion of Eligible Securities registered
in their names, Common Stock purchased through the Plan and credited
to their accounts and Common Stock deposited into the Plan for
safekeeping, by designating such election on their Enrollment Form. If
a Participant does not make an election, cash dividends paid on shares
of Common Stock credited to a Participant's account that were
purchased through the Plan or deposited into the Plan for safekeeping
will be paid in cash. Participants electing partial reinvestment of
cash dividend payments on any Eligible Securities must designate the
specific security for which such partial reinvestment is desired and
the whole dollar amount or whole number of shares for which
reinvestment is desired. Once a Participant elects reinvestment, cash
dividend payments made on the designated Eligible Securities will be
reinvested in shares of Common Stock. The amount so reinvested will
be reduced by any amount which is required to be withheld under any
applicable tax or other statutes. If the Participant has specified
partial reinvestment, that portion of cash dividend payments not
designated for reinvestment will be sent to the Participant by check
in the usual manner.
Changing Plan Options
- ---------------------
A Participant may change Plan options, including (i) changing the
reinvestment level (i.e., full, partial or none) of cash dividend
payments on Eligible Securities and (ii) changing the designation of
Eligible Securities on which cash dividend payments are subject to
reinvestment, by delivering written instructions or a new Enrollment
Form to the Administrator. To be effective with respect to a
particular cash dividend payment, any such instructions must be
received by the Administrator on or before the record date relating to
such cash dividend payment. If such instructions are not received by
the Administrator on or before the record date, the instructions will
not become effective until after such dividend is paid. The shares of
Common Stock purchased with such funds will be credited to the
Participant's account.
<PAGE> 14
Investment Dates
- ----------------
An "Investment Date" under the Plan will be (i) in any month in
which a cash dividend on Common Stock is paid (a "Dividend Payment
Date"), normally the 1st day of February, May, August and November of
each year, such Dividend Payment Date and the 15th day of the month
or, if either day is not a business day, the business day immediately
following that day, and (ii) in any month in which no Dividend Payment
Date occurs, the 1st and 15th day of the month or, if either day is
not a business day, the business day immediately following that day.
Purchases and Sales of Shares Generally
- ---------------------------------------
Shares of Common Stock purchased for Participants under the Plan
will be either newly issued shares or shares held in the treasury of
the Company or, at the Company's option, shares of Common Stock
purchased in the open market or in privately negotiated transactions
by an Independent Agent.
Purchases of shares of Common Stock from the Company, whether
newly issued or treasury shares, will be made on the relevant
Investment Date at the average of the high and low sales prices of the
Common Stock reported on the New York Stock Exchange Composite Tape as
published in Midwest Edition of The Wall Street Journal on the
Investment Date on which such shares are purchased. If no trading
occurs in the Common Stock on the Investment Date, the purchase price
will be the average of the high and low sales prices on the next
preceding trading day.
Purchases in the open market or in privately negotiated
transactions may begin on the relevant Investment Date and should be
completed no more than 15 days after that Investment Date. Funds not
invested in Common Stock within 30 days of receipt will be promptly
returned to Participants. The price of any shares of Common Stock
purchased or sold in the open market or in privately negotiated
transactions for Participants will be the weighted average price per
share of the aggregate number of shares purchased or sold, as the case
may be, with respect to the relevant Investment Date.
The number of shares (including any fraction of a share rounded
to three decimal places) of Common Stock credited to the account of a
Participant for a particular Investment Date will be determined by
dividing the total amount of cash dividends, optional cash investments
and/or initial cash investments to be invested for such Participant on
such Investment Date by the relevant purchase price per share.
With regard to open market purchases and sales of shares of
Common Stock by an Independent Agent, none of the Company, the
Administrator (if it is not also the Independent Agent) or any
Participant will have any authority or power to direct the time or
price at which shares may be purchased or sold, the markets on which
the shares are to be purchased or sold (including on any securities
<PAGE> 15
exchange, in the over-the-counter market or in negotiated
transactions), or the selection of the broker or dealer (other than
any Independent Agent) through or from whom purchases and sales may be
made. The Independent Agent may commingle each Participant's funds
with those of other Participants for the purpose of executing purchase
and sale transactions. Dividend and voting rights will commence upon
settlement, whether shares are purchased from the Company or any other
source.
Safekeeping Service
- -------------------
At the time of enrollment, or at any later time, Participants may
take advantage of the Plan's safekeeping services. Common Stock held
in certificate form by a Participant may be deposited into the Plan,
to be held by the Administrator or its nominee, by delivering a
completed Enrollment Form and the Common Stock certificates to the
Administrator. Such certificates should not be endorsed. The shares of
Common Stock so deposited will be transferred into the name of the
Administrator or its nominee, as custodian, and credited to the
Participant's account. Thereafter, such shares of Common Stock will be
treated in the same manner as shares of Common Stock purchased under
the Plan and credited to the Participant's account. Cash dividends
paid on shares of Common Stock credited to a Participant's account
that were deposited into the Plan for safekeeping will be reinvested
in shares of Common Stock in accordance with the Participant's
reinvestment election designated on the Enrollment Form.
Sale of Shares of Common Stock
- ------------------------------
Participants may request, at any time, that all or a portion of
the shares of Common Stock credited to their account be sold by
delivering to the Administrator a completed Sale/Transfer/Withdrawal
Request Form. Only whole shares of Common Stock credited to a
Participant's account may be sold under the Plan. The Administrator
will forward the sale instructions to an Independent Agent within five
business days of receipt (except as described in the following
paragraph). An Independent Agent will sell such shares as soon as
practicable after processing the request and will transmit to the
Participant the proceeds of the sale (less any brokerage commissions
and any applicable transfer taxes and service charges). Proceeds of
shares of Common Stock sold through the Plan will be paid to the
Participant by check.
If instructions for the sale of shares of Common Stock on which
cash dividends are not being reinvested are received by the
Administrator on or after the record date relating to a Dividend
Payment Date but before the Dividend Payment Date, the sale will be
processed and a separate check for the dividends will be mailed to the
Participant following the Dividend Payment Date. If instructions for
the sale of shares of Common Stock on which cash dividends are being
reinvested are received by the Administrator on or after the record
date relating to a Dividend Payment Date but before the Dividend
<PAGE> 16
Payment Date, the dividends paid on the Dividend Payment Date will be
invested in Common Stock through the Plan, and (i) if the
Participant's sale instructions cover less than all of the shares of
Common Stock credited to his account, the sale of such shares will be
processed and the shares purchased with the reinvested dividends will
be credited to the Participant's account or (ii) if the Participant's
sale instructions cover all of the shares of Common Stock credited to
his account, the sale instructions will not be processed until after
the dividends have been invested in Common Stock through the Plan at
which time all of the shares credited to his account, including the
shares purchased with the reinvested dividends, will be sold and the
proceeds transmitted to the Participant.
Withdrawal of Shares of Common Stock
- ------------------------------------
A Participant may withdraw some or all of the Common Stock
credited to his account from the Plan at any time by delivering to the
Administrator (i) a completed Sale/Transfer/Withdrawal Request Form,
if the Participant will be the record holder of such Common Stock
after withdrawal, or (ii) a completed Sale/Transfer/Withdrawal Request
Form and a stock assignment (stock power), if the Participant will not
be the record holder of the Common Stock after withdrawal. Upon the
Administrator's receipt of the proper documentation, certificates
representing the designated Common Stock will be sent to the
Participant, the Participant's broker or any other person that the
Participant has designated.
If a completed Sale/Transfer/Withdrawal Request Form with regard
to shares of Common Stock credited to a Participant's account on which
cash dividends are not being reinvested is received on or after the
record date relating to a Dividend Payment Date but before the
Dividend Payment Date, the withdrawal will be processed and a separate
check for the dividends will be mailed to the Participant following
the Dividend Payment Date. If a completed Sale/Transfer/Withdrawal
Request Form with regard to shares of Common Stock credited to a
Participant's account on which cash dividends are being reinvested is
received by the Administrator on or after the record date relating to
a Dividend Payment Date but before the Dividend Payment Date, the
dividends paid on the Dividend Payment Date will be invested in Common
Stock through the Plan, and (i) if the Participant's withdrawal
instructions cover less than all of the shares of Common Stock
credited to his account, the withdrawal of such shares will be
processed and the shares purchased with the reinvested dividends will
be credited to the Participant's account or (ii) if the Participant's
withdrawal instructions cover all of the shares of Common Stock
credited to his account, the withdrawal instructions will not be
processed until after the dividends have been invested in Common Stock
through the Plan, at which time certificates representing all of the
shares credited to his account, including the shares purchased with
the reinvested dividends, will be sent to the Participant or other
designated recipient.
<PAGE> 17
Certificates representing whole shares of Common Stock withdrawn
from the Plan will be sent to the Participant or designated recipient
by First Class Mail as soon as practicable following the
Administrator's receipt of the required documentation, subject to the
provisions of the preceding paragraph. Withdrawal of shares of Common
Stock does not affect reinvestment of cash dividends on the shares
withdrawn unless (i) the Participant is no longer the record holder of
such shares, (ii) such reinvestment is changed by the Participant by
delivering a completed Enrollment Form to the Administrator or (iii)
the Participant has terminated his participation in the Plan.
Transfer of Eligible Securities
- -------------------------------
Beneficial owners of Eligible Securities held in "street name"
(e.g., in the name of a bank, broker or trustee) may participate in
the Plan with respect to such securities by either (i) transferring
those Eligible Securities which they wish to be subject to the Plan
into their own name and depositing shares of Common Stock into the
Plan for safekeeping and/or electing to reinvest cash dividend
payments on such Eligible Securities in Common Stock or (ii) making
arrangements with the record holder (e.g., their bank, broker or
trustee who will become the Participant) of such securities to
participate in the Plan on the beneficial owner's behalf. In order to
transfer such securities under clause (i), a Participant must instruct
the "street name" holder to transfer the Eligible Securities to the
Participant or in the case of Common Stock to be deposited into the
Plan for safekeeping, to the Administrator for credit to the
Participant's account. If the person is already a Participant, the
Eligible Securities must be transferred to the Participant in the same
name in which the Participant's account is registered. If the person
does not have an account, participation in the Plan will commence when
the Eligible Securities are registered in his name and a properly
completed Enrollment Form is received by the Administrator.
Gift or Transfer of Shares of Common Stock Within the Plan
- ----------------------------------------------------------
If a Participant wishes to transfer, whether by gift, private
sale or otherwise, ownership of all or a part of the shares of Common
Stock credited to his account to the account of another Participant or
to establish by such transfer an account for a person or entity not
already a Participant, the Participant may do so by delivering to the
Administrator a completed Sale/Transfer/Withdrawal Request Form and a
stock assignment (stock power). The transfer will be effected as soon
as practicable following the Administrator's receipt of the required
documentation. No fraction of a share of Common Stock credited to a
Participant's account may be transferred unless the Participant's
entire account is transferred. Requests for interaccount transfers are
subject to the same requirements as for the transfer of securities
generally.
Shares of Common Stock so transferred will be credited to the
transferee's account. Unless a transferee who is already a Participant
<PAGE> 18
otherwise directs the Administrator in writing by completion of an
Enrollment Form, the reinvestment of cash dividends on the transferred
shares will be made in proportion to the reinvestment level (i.e.,
full, partial or none) of the other shares of Common Stock credited to
the transferee's account. If the transferee is not already a
Participant, an account will be opened in the transferee's name and he
may make elections with regard to reinvestment of cash dividends on
such transferred shares and other services provided by the Plan on the
Enrollment Form that is provided to him. Unless otherwise requested by
the transferor, transferees will be sent a Statement of Account
showing the transfer of such shares into their accounts. The
transferor may request that such Statement of Account be returned to
the transferor for personal delivery and/or that a gift certificate be
provided. The transferor may send the gift certificate directly or
request that it be sent by the Administrator to the transferee with
the first Statement of Account.
Reinvestment of Dividends on Remaining Shares
- ---------------------------------------------
If a Participant is reinvesting cash dividends paid on only a
portion of the shares of Common Stock credited to his account through
the Plan and the Participant elects to sell, withdraw or transfer a
portion of such shares, cash dividends on the remainder of the shares
credited to his account, up to the number of shares designated for
reinvestment prior to such sale, withdrawal or transfer, will continue
to be reinvested through the Plan, except where the Participant gives
specific instructions to the contrary in connection with such sale,
withdrawal or transfer. For example, if a Participant who had elected
to have cash dividends reinvested through the Plan on 50 shares of a
total of 100 shares of Common Stock credited to his account elected to
sell, withdraw or transfer 25 shares, cash dividends on 50 shares of
the remaining 75 shares credited to his account would be reinvested
through the Plan. If instead the Participant elected to sell, withdraw
or transfer 75 shares, cash dividends on the remaining 25 shares
credited to his account would be reinvested through the Plan.
Reports to Participants
- -----------------------
Each Participant will receive a statement of account for each
month in which an investment, reinvestment, deposit, transfer,
withdrawal, sale or any other transaction takes place. Participants
should retain these statements of account in order to establish the
cost basis, for tax purposes, for shares of Common Stock acquired
under the Plan.
Participants will receive copies of all communications sent to
holders of Common Stock. This may include quarterly reports to
shareholders, annual reports to shareholders, proxy material, and
Internal Revenue Service information, if appropriate, for reporting
dividend income. All notices, Statements of Account and other
communications from the Administrator to Participants will be
addressed to the latest address of record. Therefore, it is important
<PAGE> 19
that Participants promptly notify the Administrator of any change of
address.
Certificates for Shares
- -----------------------
A Participant may obtain, free of charge at any time, a
certificate for all or a part of the whole shares of Common Stock
credited to his account upon written request to the Administrator.
Such certificate(s) will be mailed by First Class Mail, within two
business days of the Administrator's receipt of the written request,
to the Participant's address of record. Any remaining whole or
fractions of shares of Common Stock will continue to be credited to
the Participant's account.
Except for transfers described in "Gift or Transfer of Shares of
Common Stock Within the Plan," shares of Common Stock credited to a
Participant's account may not be pledged or assigned. A Participant
who wishes to pledge or assign shares of Common Stock must request
that they be withdrawn from the Plan.
Certificates for fractions of shares of Common Stock will not be
issued under any circumstances.
Termination of Participation by a Participant
- ---------------------------------------------
A Participant may at any time terminate his participation in the
Plan by delivering a completed Sale/Transfer/Withdrawal Request Form
to the Administrator. Upon the Administrator's receipt of such
written notification, the Participant will receive (i) a certificate
for all of the whole shares of Common Stock credited to his account,
(ii) a check for any dividends and cash investments credited to his
account and (iii) a check for the cash value of any fraction of a
share of Common Stock credited to his account. Such fraction of a
share will be valued at the average of the high and low sales prices
of the Common Stock reported on the New York Stock Exchange Composite
Tape as published in the Midwest Edition of The Wall Street Journal
for the trading day preceding the date of receipt of a completed Sale/
Transfer/Withdrawal Request Form.
Costs
- -----
The Company will pay all administrative costs and expenses
associated with the Plan. In addition, the Company will pay any
brokerage commissions and any applicable transfer taxes and service
charges related to shares purchased under the Plan. Investment income
from Temporary Investments held by the Administrator will be used to
defray costs of administering the Plan. Participants requesting that
the shares of Common Stock credited to their accounts be sold in the
open market will be required to pay any brokerage commissions and any
applicable transfer taxes and services charges with respect to any
<PAGE> 20
shares of Common Stock sold. Such costs will be included as
adjustments to sales prices.
Federal Income Tax Consequences
- -------------------------------
THE FOLLOWING IS A SUMMARY OF THE MATERIAL FEDERAL INCOME TAX
CONSEQUENCES OF PARTICIPATION IN THE PLAN. THE EFFECT OF SUCH TAX
CONSEQUENCES UPON ANY PARTICIPANT WILL DEPEND UPON SUCH PARTICIPANT'S
INDIVIDUAL CIRCUMSTANCES WHICH, TOGETHER WITH THE STATE AND LOCAL TAX
CONSEQUENCES OF PARTICIPATION, SHOULD BE DISCUSSED BY EACH PARTICIPANT
WITH HIS TAX ADVISOR.
A Participant will be required to include in income for federal
income tax purposes the amount of cash dividends paid on Eligible
Securities and shares of Common Stock credited to his account which
are reinvested in Common Stock under the Plan even though no such
amount is actually received by the Participant in cash, but instead is
applied to the purchase of shares of Common Stock for the
Participant's account. If shares are purchased in the open market a
Participant will also be required to include in income for federal
income tax purposes an allocable share of any brokerage commissions
incurred to purchase such shares.
A Participant's tax basis for shares of Common Stock purchased
under the Plan will be equal to the price at which the shares are
credited by the Administrator to the Participant's account. If shares
are purchased in the open market, the allocable shares of any
brokerage commissions incurred are added to a Participant's tax basis.
Shares of Common Stock purchased under the Plan will have a holding
period beginning on the day after the shares are allocated to the
Participant's account.
A Participant will not realize any taxable income when he
receives certificates for whole shares credited to his account under
the Plan. Gain or loss will be recognized by the Participant when he
sells such whole shares and will be recognized by a Participant when a
fractional share credited to his account is sold pursuant to the terms
of the Plan.
Miscellaneous
- -------------
Stock Splits, Stock Dividends and Rights Offerings
--------------------------------------------------
Any shares or other securities representing stock splits or
noncash distributions on shares of Common Stock credited to the
account of a Participant will be credited to the Participant's
account. Stock splits, combinations, recapitalization and similar
events affecting shares of Common Stock credited to a Participant's
account will be credited to the Participant's account on a pro rata
basis.
<PAGE> 21
In the event of a rights offering, a Participant will receive
rights based upon the total number of shares of Common Stock credited
to his account.
Voting of Proxies
-----------------
A Participant will have the exclusive right to exercise all
voting rights respecting shares of Common Stock credited to his
account. The Administrator will forward all shareholder materials
relating to shares of Common Stock credited to a Participant's account
to the Participant. A Participant may vote any whole shares of Common
Stock credited to his account in person or by proxy. A Participant's
proxy card will include whole shares of Common Stock credited to his
account and shares of Common Stock registered in his name. Shares of
Common Stock credited to a Participant's account will not be voted
unless the Participant or his proxy votes them.
Limitation of Liability
-----------------------
The Plan provides that neither the Company, the Administrator
(including the Company if it is acting as such) in administering the
Plan nor any Independent Agent will be liable for any act done in good
faith or for the good faith omission to act in connection with the
Plan, including, without limitation, any claim of liability arising
out of failure to terminate a Participant's account upon such
Participant's death prior to receipt of notice in writing of such
death, or with respect to the prices at which shares of Common Stock
are purchased or sold for the Participant's account and the times when
such purchases and sales are made, or with respect to any loss or
fluctuation in the market value after the purchase or sale of such
shares. The foregoing does not represent a waiver of any rights a
Participant may have under applicable securities laws.
Interpretation and Regulation of the Plan
-----------------------------------------
The officers of the Company are authorized to take such actions
to carry out the Plan as may be consistent with the Plan's terms and
conditions. The Company reserves the right to interpret and regulate
the Plan as the Company deems desirable or necessary in connection
with the Plan's operations.
Change or Termination of the Plan
---------------------------------
The Company may suspend, modify or terminate the Plan at any
time, in whole, in part or in respect of Participants in one or more
jurisdictions, without the approval of Participants. Notice of such
suspension, modification or termination will be sent to all affected
Participants, who will in all events have the right to withdraw from
participation. Upon any whole or partial termination of the Plan by
the Company, each affected Participant will receive (i) a certificate
<PAGE> 22
for all of the whole shares of Common Stock credited to his account,
(ii) a check for any dividends and cash investments credited to his
account and (iii) a check for the cash value of any fraction of a
share of Common Stock credited to his account. Such fraction of a
share shall be valued at the average of the high and low sales prices
of the Common Stock reported on the New York Stock Exchange Composite
Tape as published in the Midwest Edition of The Wall Street Journal
for the trading day preceding the date of termination.
Termination of Participation by the Company
-------------------------------------------
If a Participant does not have at least one whole share of Common
Stock credited to his account, or does not own any Eligible Securities
for which cash dividends are designated for reinvestment pursuant to
the Plan, the Participant's participation in the Plan may be
terminated by the Company upon written notice to the Participant.
Additionally, the Company may terminate any Participant's
participation in the Plan after written notice mailed in advance to
such Participant at the address appearing on the Administrator's
records. A Participant whose participation has been terminated will
receive (i) a certificate for all of the whole shares of Common Stock
credited to his account, (ii) a check for any dividends and cash
investments credited to his account and (iii) a check for the cash
value of any fraction of a share of Common Stock credited to his
account. Such fraction of a share shall be valued at the average of
the high and low sales prices of the Common Stock reported on the New
York Stock Exchange Composite Tape as published in the Midwest Edition
of The Wall Street Journal for the trading day preceding the date of
termination.
PLAN OF DISTRIBUTION
The Common Stock being offered hereby is offered pursuant to the
Plan, the terms of which provide for the purchase of shares of Common
Stock, either newly issued shares or shares held in the treasury of
the Company, directly from the Company, or, at the Company's option,
by an Independent Agent in the open market or in privately negotiated
transactions.
The Company will pay all administrative costs and expenses
associated with the Plan. In addition, the Company will pay any
brokerage commissions and any applicable transfer taxes and service
charges related to shares purchased under the Plan. Participants
requesting that the shares of Common Stock credited to their accounts
be sold in the open market will be required to pay any brokerage
commissions and any applicable transfer taxes and service charges with
respect to any shares of Common Stock sold. Such costs will be
included as adjustments to sales prices.
<PAGE> 23
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of
200,000,000 shares of Common Stock. The description of the Common
Stock is incorporated by reference into this Prospectus. See
"Incorporation of Certain Documents by Reference" for information on
how to obtain a copy of this description. At March 31, 1996, there
were 75,681,937 shares of Common Stock issued and outstanding.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
LEGAL MATTERS
Certain legal matters in connection with the Common Stock offered
hereby have been passed upon for the Company by Schiff Hardin & Waite,
Chicago, Illinois.
<PAGE> 24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
- -----------------------------------------------------
The following table sets forth all expenses in connection with
the distribution of the shares of Common Stock being registered. All
amounts shown below are estimates, except the registration fee:
Registration fee of Securities and
Exchange Commission . . . . . . . . . $44,181.03
New York Stock Exchange listing Fees . . . 35,000.00
Accountants' fees and expenses . . . . . . 5,000.00
Legal fees and expenses . . . . . . . . . . 20,000.00
Miscellaneous . . . . . . . . . . . . . . . 5,818.97
TOTAL . . . . . . . . . . . . . . . . $ 110,000.00
=============
Item 15. Indemnification of Directors and Officers
- ---------------------------------------------------
Under Section 8.75 of the Illinois Business Corporation Act of
1983, the Company is empowered, subject to the procedures and
limitations stated therein, to indemnify any person against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed action, suit or
proceeding to which person is made a party or threatened to be made a
party by reason of such person being or having been a director,
officer, employee or agent of the Company, or serving or having served
at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise. Section 8.75 further provides that indemnification
pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors, or
otherwise, and that such indemnification shall continue as to a
director, officer, employee or agent of the Company who has ceased to
serve in such capacity, and shall inure to the benefit of the heirs,
executors and administrators of such person.
The Company's By-Laws provide, in substance, that the Company
shall, to the fullest extent permitted under the Illinois Business
Corporation Act of 1983, indemnify any person against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative,
to which such person is made a party or threatened to be made a party
by reason of such person being or having been a director, officer,
<PAGE> 25
employee, trustee or fiduciary of the Company or of a Company-
sponsored or Company-administered trust or benefit plan, or serving or
having served at the request of the Company in one or more of the
foregoing capacities with another corporation, partnership, joint
venture, trust, benefit plan or other enterprise. The indemnification
is not exclusive of other rights and shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall
inure to the benefit of his heirs, executors and administrators.
Item 16. Exhibits
- ------------------
The Exhibits filed herewith are set forth on the Index to
Exhibits filed as a part of this Registration Statement.
Item 17. Undertakings
- ----------------------
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement;
(c) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
provided, however, that paragraphs 1(a) and 1(b) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement.
2. That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
<PAGE> 26
3. To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
4. That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act, that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions referred to in Item 15
above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification is
against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Decatur, and
State of Illinois, on this 29th day of April, 1996.
ILLINOVA CORPORATION
(Registrant)
By: /s/ Larry F. Altenbaumer
------------------------------
Larry F. Altenbaumer
Chief Financial Officer,
Treasurer and Controller
<PAGE> 28
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Illinova Corporation and
each of the undersigned officers and directors of Illinova Corporation
hereby constitute and appoint each of Larry D. Haab, Larry F.
Altenbaumer and Leah Manning Stetzner the true and lawful attorney-in-
fact and agent of the undersigned, with full power of substitution and
resubstitution for and in the name, place and stead of the
undersigned, in any and all capacities, to sign all or any amendments
(including post-effective amendments) of and supplements to this
Registration Statement on Form S-3 and to file the same, with all
exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto each such
attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as said
corporation itself and each said officer or director might or could do
in person, hereby ratifying and confirming all that each such
attorney-in-fact and agent, or his substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on behalf of Illinova
Corporation by the following persons in the capacities as officers or
directors, as indicated below, of Illinova Corporation and on the
dates indicated.
Signature Title Date
----------- ------- ------
/s/ Larry D. Haab Chairman, President, April 29, 1996
------------------------------ Chief Executive
Larry D. Haab Officer and Director
(Principal Executive Officer)
/s/ Larry F. Altenbaumer Chief Financial April 29, 1996
------------------------------ Officer, Treasurer
Larry F. Altenbaumer and Controller
(Principal Financial and
Accounting Officer)
/s/ Richard R. Berry Director April 29, 1996
------------------------------
Richard R. Berry
/s/ C. Steven McMillan Director April 29, 1996
------------------------------
C. Steven McMillan
<PAGE> 29
Signature Title Date
----------- ------- ------
/s/ Donald S. Perkins Director April 29, 1996
------------------------------
Donald S. Perkins
/s/ Robert M. Powers Director April 29, 1996
------------------------------
Robert M. Powers
/s/ Walter D. Scott Director April 29, 1996
------------------------------
Walter D. Scott
/s/ Ronald L. Thompson Director April 29, 1996
------------------------------
Ronald L. Thompson
/s/ Walter M. Vannoy Director April 29, 1996
------------------------------
Walter M. Vannoy
/s/ Marilou von Ferstel Director April 29, 1996
------------------------------
Marilou von Ferstel
/s/ John D. Zeglis Director April 29, 1996
------------------------------
John D. Zeglis
/s/ Vernon K. Zimmerman Director April 29, 1996
------------------------------
Vernon K. Zimmerman
<PAGE> 30
INDEX TO EXHIBITS
Exhibit
Index Exhibit Page No.
3.1* Articles of Incorporation of the Company,
as amended. Filed as Exhibit 3(a) to the
Quarterly Report on Form 10-Q under the
Securities Exchange Act of 1934 for the
quarter ended September 30, 1994 (File
No. 1-3004).
3.2* Statement of Correction to the Articles of
Incorporation of the Company, as amended.
Filed as Exhibit 3(b) to the Quarterly Report
on Form 10-Q under the Securities Exchange
Act of 1934 for the quarter ended September
30, 1994 (File No. 1-3004).
3.3* By-Laws of the Company. Filed as Exhibit
3(b)(2) to the Annual Report on Form 10-K
under the Securities Exchange Act of 1934 for
the year ended December 31, 1994 (File
No. 1-3004).
4 Form of Illinova Investment Plus.
5 Opinion of Schiff Hardin & Waite.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Schiff Hardin & Waite (included in
its opinion filed as Exhibit 5).
24 Powers of Attorney (as set forth in the
signature pages hereto).
- ---------------------
* Incorporated herein by reference as indicated.
EXHIBIT 5
Robert J. Regan
SCHIFF HARDIN & WAITE
- -----------------------
7300 Sears Tower
Chicago, Illinois 60606
(312) 258-5606
April 30, 1996
Securities and Exchange Commission
Filing Desk -- Stop 1-4
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Re: Illinova Corporation -- Registration of 5,000,000
Shares of Common Stock, No Par Value, on Form S-3
-------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Illinova Corporation, an Illinois
corporation (the "Company"), in connection with the Company's filing
of a Registration Statement on Form S-3 (the "Registration Statement")
covering 5,000,000 shares of Common Stock, no par value (the "Common
Stock"), to be issued pursuant to Illinova Investment Plus, a stock
purchase and dividend reinvestment plan (the "Plan").
In this connection, we have made such investigation and have
examined such documents as we have deemed necessary in order to enable
us to render the opinion contained herein.
Based upon the foregoing, it is our opinion that those shares of
Common Stock covered by the Registration Statement that are originally
issued in accordance with the terms of the Plan and as contemplated in
the Registration Statement, will, when so issued, be legally issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: /s/ Robert J. Regan
---------------------
Robert J. Regan
EXHIBIT 4
ILLINOVA INVESTMENT PLUS
(As Amended and Restated Effective July 1, 1996)
<PAGE> 33
TABLE OF CONTENTS
Page
ARTICLE I Definitions . . . . . . . . . . . . . . . . . . . . . . 1
1.1 "Account" . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 "Account Shares" . . . . . . . . . . . . . . . . . . . 2
1.3 "Administrator" . . . . . . . . . . . . . . . . . . . . 2
1.4 "Common Stock" . . . . . . . . . . . . . . . . . . . . 2
1.5 "Company" . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 "Company Purchase Price" . . . . . . . . . . . . . . . 2
1.7 "Dividend" . . . . . . . . . . . . . . . . . . . . . . 2
1.8 "Dividend Payment Date" . . . . . . . . . . . . . . . . 2
1.9 "Effective Date" . . . . . . . . . . . . . . . . . . . 3
1.10 "Eligible Securities" . . . . . . . . . . . . . . . . . 3
1.11 "Enrollment Form" . . . . . . . . . . . . . . . . . . . 3
1.12 "Fractional Account Shares" . . . . . . . . . . . . . . 3
1.13 "Fractional Share Account" . . . . . . . . . . . . . . 3
1.14 "Independent Agent" . . . . . . . . . . . . . . . . . . 3
1.15 "Investment Date" . . . . . . . . . . . . . . . . . . . 4
1.16 "Market Purchase Price" . . . . . . . . . . . . . . . . 4
1.17 "Market Sales Price" . . . . . . . . . . . . . . . . . 4
1.18 "Participant" . . . . . . . . . . . . . . . . . . . . . 4
1.19 "Person" . . . . . . . . . . . . . . . . . . . . . . . 4
1.20 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . 5
1.21 "Prior Plan" . . . . . . . . . . . . . . . . . . . . . 5
1.22 "Reinvestment Eligible Securities" . . . . . . . . . . 5
1.23 "Sale/Transfer/Withdrawal Request Form" . . . . . . . . 5
1.24 "Statement of Account" . . . . . . . . . . . . . . . . 5
ARTICLE II Participation . . . . . . . . . . . . . . . . . . 6
2.1. Participation . . . . . . . . . . . . . . . . . . . . 6
2.2. Initial Cash Investment . . . . . . . . . . . . . . . 7
2.3. Dividend Reinvestment . . . . . . . . . . . . . . . . 8
2.4. Optional Cash Investments . . . . . . . . . . . . . . 8
ARTICLE III Dividend Reinvestment and Stock Purchase . . . . . 9
3.1. Dividend Reinvestment . . . . . . . . . . . . . . . . 9
3.2. Investment of Initial Cash Payments and Optional
Cash Payments . . . . . . . . . . . . . . . . . . . . 11
3.3. Temporary Investments . . . . . . . . . . . . . . . . 13
3.4. Exhaustion of Fractional Share Account . . . . . . . . 14
ARTICLE IV Safekeeping Services for Deposited Common Stock . 14
4.1. Deposited Common Stock . . . . . . . . . . . . . . . . 14
4.2. Withdrawal of Deposited Common Stock . . . . . . . . . 14
ARTICLE V Sale of Account Shares; Gift or Transfer of Account
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1. Sale of Account Shares . . . . . . . . . . . . . . . . 15
5.2. Gift or Transfer of Account Shares . . . . . . . . . . 16
5.3. Reinvestment of Dividends on Remaining Account Shares 18
- i -
<PAGE> 34
ARTICLE VI Eligible Securities . . . . . . . . . . . . . . . 18
6.1. Eligible Securities . . . . . . . . . . . . . . . . . 18
6.2. Additional Eligible Securities . . . . . . . . . . . . 19
ARTICLE VII Treatment of Accounts . . . . . . . . . . . . . . 19
7.1. Changing Plan Options . . . . . . . . . . . . . . . . 19
7.2. Right of Withdrawal . . . . . . . . . . . . . . . . . 20
7.3. Right of Termination of Participation . . . . . . . . 21
7.4. Termination of Participation by Company . . . . . . . 22
7.5. Stock Splits, Stock Dividends and Rights Offerings . . 22
7.6. Shareholder Materials; Voting Rights . . . . . . . . . 23
7.7. Statements of Account . . . . . . . . . . . . . . . . 23
ARTICLE VIII Certificates and Fractions of Shares . . . . . . . 24
8.1. Certificates . . . . . . . . . . . . . . . . . . . . . 24
8.2. Fractional Shares . . . . . . . . . . . . . . . . . . 24
8.3. Fractional Share Account . . . . . . . . . . . . . . . 25
ARTICLE IX Amendment and Termination of the Plan . . . . . . 26
9.1. Suspension, Modification and Termination . . . . . . . 26
ARTICLE X Administration of the Plan . . . . . . . . . . . . . . 27
10.1. Rules and Regulations . . . . . . . . . . . . . . . . 27
10.2. Selection of an Administrator . . . . . . . . . . . . 27
10.3. Authority and Duties of Administrator . . . . . . . . 27
10.4. Compensation . . . . . . . . . . . . . . . . . . . . 27
10.5. Costs . . . . . . . . . . . . . . . . . . . . . . . . 28
10.6. Liability of the Company, the Administrator
and Any Independent Agent . . . . . . . . . . . . . . 28
10.7. Records and Reports . . . . . . . . . . . . . . . . . 28
10.8. Selection of Independent Agent . . . . . . . . . . . 29
10.9. Source of Shares of Common Stock . . . . . . . . . . 29
ARTICLE XI Miscellaneous Provisions . . . . . . . . . . . . . 30
11.1. Controlling Law . . . . . . . . . . . . . . . . . . . 30
11.2. Acceptance of Terms and Conditions of
Plan by Participants . . . . . . . . . . . . . . . . 30
- ii -
<PAGE> 35
ILLINOVA INVESTMENT PLUS
Illinova Corporation, an Illinois corporation (the
"Company"), hereby establishes the Illinova Investment Plus (the
"Plan"), effective as of July 1, 1996. The Plan constitutes an
amendment and restatement of (i) the Illinois Power Company Employees
Stock Ownership Plan; and (ii) the Illinois Power Company Automatic
Reinvestment and Stock Purchase Plan.
The purpose of the Plan is to provide investors and holders
of certain equity securities of the Company and its subsidiary
Illinois Power Company ("Illinois Power") with a convenient and
economical opportunity to commence or increase their investment in
Common Stock of the Company through (i) cash purchases of Common Stock
of the Company; and/or (ii) regular reinvestment of cash dividends
made with respect to such equity securities, including Common Stock.
ARTICLE I
Definitions
-----------
The terms defined in this Article I shall have the following
respective meanings:
1.1 "Account" means the account maintained by the
Administrator for a Participant evidencing (i) the shares (including
any fraction of a share) of Common Stock either purchased through the
Plan on behalf of the Participant or deposited by such Participant
into the Plan pursuant to Section 4.1; and (ii) cash held in the Plan
pending investment in Common Stock for such Participant.
- 1 -
<PAGE> 36
1.2 "Account Shares" means all shares (including any
fraction of a share) of Common Stock credited to the Account of a
Participant.
1.3 "Administrator" means the individual (who may be an
employee of the Company), bank, trust company or other entity
(including the Company) appointed from time to time by the Company to
act as Administrator hereunder.
1.4 "Common Stock" means the Company's common stock,
without par value.
1.5 "Company" means Illinova Corporation, an Illinois
corporation.
1.6 "Company Purchase Price", when used with respect to
newly issued shares of Common Stock, shares of Common Stock held in
the Company's treasury or Fractional Account Shares, means the average
of the high and low sales prices of Common Stock on a given trading
day as reported on the New York Stock Exchange Composite Tape as
published in the Midwest Edition of The Wall Street Journal. In the
event no trading is so reported for a trading day, the Company
Purchase Price for such shares shall be determined on the basis of the
average of the high and low sales prices of Common Stock on the next
preceding trading day. Any fraction of a cent of a Company Purchase
Price shall be rounded up.
1.7 "Dividend" means cash dividends paid on Reinvestment
Eligible Securities.
1.8 "Dividend Payment Date" means a date on which a cash
dividend on shares of Common Stock is paid.
- 2 -
<PAGE> 37
1.9 "Effective Date" means the date as of which this Plan
is effective, or July 1, 1996.
1.10 "Eligible Securities" means the equity and debt
securities of the Company and its subsidiaries, whether issued prior
to, or on or after, the date hereof, as described in Sections 6.1 and
6.2.
1.11 "Enrollment Form" means the documentation that the
Administrator shall require to be completed and received prior to (i)
an investor's enrollment in the Plan pursuant to Section 2.2; (ii) a
Participant's election to have Dividends reinvested in the Plan
pursuant to Section 2.3; (iii) a Participant's optional cash
investment pursuant to Section 2.4; (iv) a Participant's deposit of
shares of Common Stock into the Plan pursuant to Section 4.1; or (v) a
Participant's change to his elections under the Plan pursuant to
Section 7.1.
1.12 "Fractional Account Shares" means the shares (including
any fractions of shares) of Common Stock held in the Fractional Share
Account.
1.13 "Fractional Share Account" means the account under the
Plan consisting of Fractional Account Shares, which is owned by the
Company and administered pursuant to Section 8.3.
1.14 "Independent Agent" means an agent independent of the
Company who satisfies applicable legal requirements (including without
limitation the requirements of Rule 10b-6 and Rule 10b-8 promulgated
under the Securities Exchange At of 1934) and who has been selected by
the Company pursuant to Section 10.8 to serve as an Independent Agent
- 3 -
<PAGE> 38
for purposes of making open market purchases and sales of Common Stock
under the Plan.
1.15 "Investment Date" means (i) in any month in which a
Dividend Payment Date occurs, such Dividend Payment Date and the 15th
day of the month or, if either day is not a business day, the business
day immediately following that day; and (ii) in any month in which no
Dividend Payment Date occurs, the first and 15th day of the month or,
if either day is not a business day, the business day immediately
following that day.
1.16 "Market Purchase Price", when used with respect to
shares of Common Stock purchased in the open market, means the
weighted average purchase price per share (disregarding any brokerage
commissions and any applicable taxes and service charges) of the
aggregate number of shares purchased in the open market for an
Investment Date.
1.17 "Market Sales Price", when used with respect to shares
of Common Stock sold under the Plan, means the weighted average sales
price per share (less any brokerage commissions and any applicable
transfer taxes and service charges) of the aggregate number of shares
sold in the open market for the relevant period.
1.18 "Participant" means any Person who has satisfied the
requirements of Section 2.1.
1.19 "Person" means any individual, corporation,
partnership, limited liability company, joint venture, association,
joint-stock company, trust, estate or unincorporated organization.
- 4 -
<PAGE> 39
1.20 "Plan" means the Illinova Investment Plus, as effective
July 1, 1996.
1.21 "Prior Plan" means the Illinois Power Company Employees
Stock Ownership Plan and/or the Illinois Power Company Automatic
Reinvestment and Stock Purchase Plan.
1.22 "Reinvestment Eligible Securities" means (i) a
Participant's Account Shares with respect to which the Participant has
elected to have dividends reinvested in Common Stock; and (ii) any
other Eligible Securities of which a Participant is the record holder
and with respect to which such Participant has elected to have all or
a portion of the dividends reinvested in Common Stock.
1.23 "Sale/Transfer/Withdrawal Request Form" means the
documentation that the Administrator shall require to be completed and
received prior to a Participant's (i) sale, gift or transfer of
Account Shares pursuant to Article V; (ii) withdrawal of whole Account
Shares pursuant to Section 7.2 (unless such Participant will be the
record holder of such Account Shares after withdrawal); and (iii)
termination of participation in the Plan pursuant to Section 7.3.
1.24 "Statement of Account" means a written statement
prepared by the Administrator and sent to each Participant pursuant to
Section 7.7 which reflects (i) all transactions completed under the
Plan on behalf of such Participant during a month; (ii) the number of
shares of Common Stock credited to such Participant's Account at the
date of such statement; and (iii) any additional information that the
Administrator determines to be pertinent.
- 5 -
<PAGE> 40
A pronoun or adjective in the masculine gender includes the
feminine gender, and the singular includes the plural, unless the
context clearly indicates otherwise.
ARTICLE II
Participation
---------------
2.1. Participation. (a) Any Person, whether or not a
record holder of Common Stock, may elect to participate in the Plan.
Notwithstanding the foregoing, however, (i) if required by the laws of
the jurisdiction in which the Person resides, such Person shall be a
current record holder of Common Stock in order to participate; (ii) if
such Person is a citizen or resident of, or is organized or
incorporated under, or has its principal place of business in, a
country other than the United States, its territories or possessions,
he must provide evidence satisfactory to the Administrator that his
participation in the Plan would not violate local laws applicable to
the Company, the Plan or such Person; and (iii) participation in the
Plan is subject to approval by the Administrator, which approval shall
not be unreasonably withheld.
(b) An election by a Person to participate in the Plan
shall be made by completing and returning an Enrollment Form to the
Administrator, which shall evidence the following: (i) an initial
cash investment pursuant to Section 2.2; (ii) the election to have
Dividends on all or a specified number of shares of Eligible
Securities of which such Person is the record holder invested in
- 6 -
<PAGE> 41
Common Stock pursuant to Section 2.3; and/or (iii) the deposit into
the Plan of certificates representing Common Stock of which such
Person is the record holder, pursuant to Section 4.1.
(c) Notwithstanding the foregoing, each Person who is a
participant in a Prior Plan on the Effective Date shall continue to be
a Participant in the Plan without submitting a new Enrollment Form;
provided, however, that any such Participant who wishes to change his
current participation in any way must submit a new Enrollment Form to
the Administrator.
2.2. Initial Cash Investment. (a) A Person not already
a Participant who has met the eligibility requirements of Section
2.1(a), and who is neither a current holder of record of an Eligible
Security nor an active employee of the Company or its subsidiaries,
may become a Participant by making an initial cash investment of at
least $250 to be invested in Common Stock pursuant to Section 3.2.
(b) A Person not already a Participant who has met the
eligibility requirements of Section 2.1(a), and who is not a current
holder of record of an Eligible Security, but who is an active
employee of the Company or its subsidiaries, may become a Participant
by making an initial cash investment of at least $25 to be invested in
Common Stock pursuant to Section 3.2.
(c) Payment must be by personal check or money order made
payable to Illinova Investment Plus, or by direct debit, and must be
accompanied by a completed Enrollment Form. A Person who is an active
employee of the Company may make an initial cash investment through
- 7 -
<PAGE> 42
payroll deductions, authorized on a Payroll Deduction Authorization
Form.
2.3. Dividend Reinvestment. A Person not already a
Participant who has met the eligibility requirements of Section 2.1(a)
may become a Participant by electing to have all or a portion of any
Dividends invested in shares (including any fraction of a share) of
Common Stock to be credited to his Account in lieu of receiving such
Dividends directly by completing an Enrollment Form. A current
Participant may also elect reinvestment of Dividends in accordance
with the preceding sentence. If a Participant elects to reinvest only
a portion of the Dividends, that portion of such Dividends not
reinvested in Common Stock shall be sent to the Participant by check
in the manner otherwise associated with payment of such Dividends.
2.4. Optional Cash Investments. (a) A Participant may
elect to make optional cash investments at any time or from time to
time to the Plan for investment in Common Stock pursuant to Section
3.2. Payment must be by personal check or money order made payable to
Illinova Investment Plus, or by direct debit, and must be accompanied
by a completed Enrollment Form. A Participant who is an active
employee of the Company may make optional cash investments through
payroll deductions, authorized on a Payroll Deduction Authorization
Form and in even multiples of $1, but not less than $5 per pay period.
(b) Any optional cash investment must be at least $25 for
any single investment. The Company in its sole discretion reserves
the right to refuse or limit any optional cash investments in excess
of $60,000 per calendar year. For the purposes of determining whether
- 8 -
<PAGE> 43
such maximum annual amount has been reached, an initial cash
investment made pursuant to Section 2.2 and dividend reinvestments
made pursuant to Section 2.3 shall be counted as an optional cash
investment.
ARTICLE III
Dividend Reinvestment and Stock Purchase
------------------------------------------
3.1. Dividend Reinvestment. (a) A Participant's Dividends
shall be paid to the Administrator or its nominee on behalf of such
Participant. Such Dividends shall be reinvested, at the Company's
election, in (i) either newly issued shares of Common Stock or shares
of Common Stock held in the Company's treasury purchased from the
Company; or (ii) shares of Common Stock purchased in the open market.
(b) On an Investment Date with respect to which the Company
elects to invest Dividends in newly issued shares or shares of Common
Stock held in the Company's treasury, the Administrator shall remit to
the Company the amount of Dividends paid to the Administrator on such
Investment Date and since the preceding Investment Date. Upon receipt
of such Dividends, the Company shall issue to the Administrator for
crediting to the Account of a Participant, a number of shares
(including any fraction of a share) of Common Stock equal to the
amount of such Dividends received from the Administrator, divided by
the Company Purchase Price on such Investment Date. Such shares shall
be issued or sold to, and registered in the name of, the Administrator
or its nominee as custodian for such Participants.
- 9 -
<PAGE> 44
(c) On an Investment Date with respect to which the Company
elects to invest Dividends in shares of Common Stock purchased in the
open market, the Administrator shall cause an Independent Agent to
apply the amount of any Dividends paid to the Administrator on behalf
of a Participant on such Investment Date and since the preceding
Investment Date to the purchase of shares of Common Stock in the open
market. Such purchases in the open market pursuant to this Section
3.1(c) may begin on the applicable Investment Date and shall be
completed no later than 15 days from such date, unless completion at a
later date is necessary or advisable under applicable law, including
without limitation any federal securities laws. The number of shares
(including any fraction of a share rounded to three decimal places) of
Common Stock credited to a Participant's Account shall be equal to the
amount of such Dividends received by the Administrator divided by the
Market Purchase Price on such Investment Date. Such shares shall be
registered in the name of the Administrator or its nominee as
custodian for the Participants.
(d) Open market purchases pursuant to Section 3.1(c) may be
made on any securities exchange on which the Common Stock is traded or
by negotiated transactions, and may be upon such terms and subject to
such conditions with respect to price and delivery to which the
Independent Agent may agree. With regard to such open market
purchases of Common Stock, none of the Company, the Administrator or
any Participant shall have any authority or power to direct the time
or price at which shares of Common Stock may be purchased, the markets
in which such shares are to be purchased (including on any securities
- 10 -
<PAGE> 45
exchange or in negotiated transactions) or the selection of the broker
or dealer (other than the Independent Agent) through or from whom
purchases may be made, except that the timing of such purchases must
be made in accordance with the terms and conditions of the Plan. For
the purpose of making, or causing to be made, purchases of shares of
Common Stock pursuant to Section 3.1(c) and sales of Account Shares
pursuant to Section 5.1 hereof, the Independent Agent shall be
entitled to commingle each Participant's funds with those of all other
Participants and to offset purchases of shares of Common Stock against
sales of shares of Common Stock to be made for Participants, resulting
in a net purchase or a net sale of shares.
(e) Notwithstanding the foregoing, any Dividends to be
reinvested in shares of Common Stock purchased in the open market
pursuant to Section 3.1(c) not reinvested in shares of Common Stock
within 30 days of receipt by the Administrator shall be promptly
returned to the Participant at his address of record by first class
mail.
3.2. Investment of Initial Cash Payments and Optional Cash
Payments. (a) Any initial cash investments and optional cash
investments received by the Administrator from or with respect to a
Participant at least two business days prior to an Investment Date
shall be invested, beginning on such Investment Date, in (i) either
newly issued shares or shares of Common Stock held in the Company's
treasury or (ii) Common Stock purchased in the open market. Initial
cash investments and optional cash investments not received by the
Administrator at least two business days prior to an Investment Date
- 11 -
<PAGE> 46
shall not be invested on such Investment Date but shall be invested
beginning on the next succeeding Investment Date.
(b) On an Investment Date with respect to which the Company
elects to invest initial cash investments or optional cash investments
in newly issued shares or shares of Common Stock held in the Company's
treasury, the Administrator shall remit to the Company the amount of
such investments (as determined in Section 3.2(a)). Upon receipt of
such funds, the Company shall issue to the Administrator for crediting
to the Account of a Participant, a number of shares (including any
fraction of a share) of Common Stock equal to the amount received from
the Administrator, divided by the Company Purchase Price applicable to
such Investment Date. Such shares shall be issued or sold to, and
registered in the name of, the Administrator or its nominee as
custodian for the Participant.
(c) On an Investment Date with respect to which the Company
elects to invest initial cash investments or optional cash
investments in shares of Common Stock purchased in the open market,
the Administrator shall remit to the Independent Agent the amount of
such investments (as determined in Section 3.2(a)). Upon receipt of
such amounts, the Independent Agent shall purchase for crediting to
the Account of a Participant a number of shares (including any
fraction of a share) of Common Stock equal to the amount paid to the
Independent Agent, divided by the Market Purchase Price applicable to
such Investment Date. Such purchases shall be made in the manner set
forth in Section 3.1(c) and (d) and such shares shall be registered in
- 12 -
<PAGE> 47
the name of the Administrator or its nominee as custodian for the
Participants.
(d) Notwithstanding the foregoing, any initial cash
investments and optional cash investments to be invested in shares of
Common Stock purchased in the open market pursuant to Section 3.2(c)
that are not so invested within 30 days of receipt by the
Administrator shall be promptly returned to the Participant at his
address of record by first class mail.
(e) If a written request to stop investment of an initial
cash investment or optional cash investment is received by the
Administrator from or on behalf of a Participant at least two business
days before the next Investment Date, any such investment then held by
the Administrator shall not be invested in Common Stock and shall be
returned to such Participant. If such a request if not received by
the Administrator at least two business days prior to an Investment
Date, any such investment shall be invested in shares of Common Stock
for such Participant's Account.
3.3. Temporary Investments. No interest shall be paid on
Dividends, initial cash payments or optional cash payments held by the
Administrator pending investment pursuant to Section 3.1 or 3.2. The
Administrator may in its discretion temporarily deposit Dividends,
initial cash investments and optional cash investments in U.S.
government obligations or other similar investments approved by the
Company. No interest shall be paid to Participants with respect to
such amounts, but shall be used to defray costs of Plan
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<PAGE> 48
administration. Any losses to the Plan resulting from investment of
such amounts shall be reimbursed by the Company.
3.4. Exhaustion of Fractional Share Account. Prior to any
purchase of Common Stock by the Administrator or an Independent Agent
pursuant to this Article III, the Administrator shall first purchase,
at the Company Purchase Price for the applicable Investment Date, the
Fractional Account Shares from the Fractional Share Account. To the
extent made, such purchases from the Fractional Share Account shall
substitute for purchases required by this Article III.
ARTICLE IV
Safekeeping Services for Deposited Common Stock
-------------------------------------------------
4.1. Deposited Common Stock. A Participant may elect to
have certificates of shares of Common Stock of which the Participant
is the record holder deposited into the Plan by delivering such
certificates and a completed Enrollment Form to the Administrator.
Shares of Common Stock so deposited shall be transferred into the name
of the Administrator or its nominee and credited to the depositing
Participant's Account. Dividends paid on shares of Common Stock
deposited into the Plan pursuant to this Section 4.1 shall be
reinvested in Common Stock in accordance with the Participant's
Enrollment Form.
4.2. Withdrawal of Deposited Common Stock. Shares of
Common Stock deposited by a Participant pursuant to Section 4.1 may be
withdrawn from the Plan pursuant to Section 7.2.
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<PAGE> 49
ARTICLE V
Sale of Account Shares; Gift or Transfer of Account Shares
----------------------------------------------------------
5.1. Sale of Account Shares. (a) A Participant may at any
time request that all or a portion of his whole Account Shares be sold
by delivering a completed Sale/Transfer/Withdrawal Request Form to the
Administrator. The Administrator shall forward such sale instructions
to the Independent Agent within five business days after receipt
thereof (except as described in (b) and (c) below). The Independent
Agent shall make such sales as soon as practicable (in accordance with
stock transfer requirements and federal and state securities laws)
after processing such sale instructions. As soon as practicable
following the receipt of proceeds (less any brokerage commissions and
any applicable transfer taxes and service charges), the Administrator
shall mail by first class mail to such Participant at his address of
the record a check in an amount equal to the Market Sales Price
multiplied by the number of his Account Shares sold.
(b) If a Sale/Transfer/Withdrawal Request Form directing
the sale of Account Shares is received on or after the record date but
prior to the related Dividend Payment Date, the sale shall be
processed as described in (a), and as soon as practicable following
receipt of Dividends paid on such Account Shares, the Administrator
shall mail a check for such Dividends by first class mail to the
Participant at his address of record.
(c) Notwithstanding the foregoing, if a Sale/Transfer/
Withdrawal Request Form directing the sale of Account Shares which are
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<PAGE> 50
also Reinvestment Eligible Securities is not received by the
Administrator on or before the record date prior to the related
Dividend Payment Date, such sale shall not be effected until after
such Dividend Payment Date (except in the case of instructions to sell
all whole Account Shares, in which case such sale shall not be
effected until after such Dividend has been reinvested pursuant to the
Plan and the shares of Common Stock purchased therewith are credited
to the Participant's Account). The shares of Common Stock purchased
with the reinvestment of such Dividends shall be credited to the
Participant's Account. Following such Dividend Payment Date, the
Administrator shall forward the sale instructions to the Independent
Agent, who shall effectuate the sale as described in (a) above.
(d) With regard to open market sales of Account Shares
pursuant to this Section 5.1, none of the Company, the Administrator
or any Participant shall have any authority or power to direct the
time or price at which shares of Common Stock may be sold, the markets
on which such shares are to be sold (including on any securities
exchange or in negotiated transactions) or the selection of the broker
or dealer (other than the Independent Agent) through or from whom
sales may be made, except that the timing of such sales must be made
in accordance with the terms and conditions of the Plan.
5.2. Gift or Transfer of Account Shares. (a) A
Participant may elect to transfer (whether by gift, private sale or
otherwise) ownership of all or a portion of the Account Shares to the
Account of another Participant, or establish an Account for a Person
not already a Participant, by delivering to the Administrator a
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<PAGE> 51
completed Sale/Transfer/Withdrawal Request Form to that effect and a
stock assignment (stock power) acceptable to the Administrator. No
fraction of a share of Common Stock credited to the transferor's
Account shall be transferred unless the transferor's entire Account is
transferred.
(b) Account Shares transferred in accordance with (a) above
shall continue to be registered in the name of the Administrator as
custodian and shall be credited to the transferee's Account. If the
transferee is not already a Participant, an Account shall be opened in
the name of the transferee and the Administrator shall send the
transferee an Enrollment Form as soon as practicable after such
transfer. Unless otherwise requested on a completed Enrollment Form
of a transferee who is already a Participant, the reinvestment of
Dividends on such transferred Account Shares shall be made in
proportion to the reinvestment level (i.e., full, partial, or none) of
the transferee's other Account Shares. Unless otherwise requested by
the transferor, the Administrator shall deliver a Statement of Account
to such transferee showing the transfer of Account Shares into his
Account. The transferor may request that the Administrator deliver
such Statement of Account to the transferor for personal delivery to
the transferee and/or the transferor may request that the
Administrator deliver a gift certificate to such transferee. The
transferor may request that the Administrator send the gift
certificate directly to such transferee with the first Statement of
Account following such transfer or request that the Administrator
deliver such gift certificate to the transferor for personal delivery
- 17 -
<PAGE> 52
to the transferee. The Administrator shall comply with any such
request of a transferor relating to Statements of Account and/or gift
certificates as soon as practicable following receipt of such request.
(c) Transfer of Account Shares pursuant to this Section 5.2
shall be effectuated in accordance with the procedures described in
Section 5.1.
5.3. Reinvestment of Dividends on Remaining Account Shares.
If only a portion of a Participant's Account Shares are Reinvestment
Eligible Securities and the Participant elects to (i) sell a portion
of his Account Shares pursuant to Section 5.1; (ii) transfer a portion
of his Account Shares pursuant to Section 5.2; or (iii) withdraw a
portion of his Account Shares pursuant to Section 7.2, all of the
shares held in his Account which are not Reinvestment Eligible
Securities shall be sold, transferred or withdrawn, as the case may
be, before any shares in his Account which are also Reinvestment
Eligible Securities are sold, transferred or withdrawn, unless the
Participant gives specific instructions to the contrary in connection
with such sale, transfer or withdrawal.
ARTICLE VI
Eligible Securities
--------------------
6.1. Eligible Securities. The following equity securities
of the Company and its subsidiary Illinois Power shall be Eligible
Securities:
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<PAGE> 53
(a) Common Stock;
(b) Illinois Power Serial Preferred Stock, $50 par value:
(i) 4.08% Series Preferred Stock;
(ii) 4.26% Series Preferred Stock;
(iii) 4.70% Series Preferred Stock;
(iv) 4.42% Series Preferred Stock;
(v) 4.20% Series Preferred Stock;
(vi) 7.75% Series Preferred Stock;
(c) Illinois Power Serial Preferred Stock, without par
value:
(i) Adjustable Rate Series A Preferred Stock.
6.2. Additional Eligible Securities. The Company may from
time to time or at any time designate other equity or debt securities
of the Company or its subsidiaries as Eligible Securities by giving
written notification thereof to the Administrator.
ARTICLE VII
Treatment of Accounts
----------------------
7.1. Changing Plan Options. A Participant may elect to
change (i) his reinvestment levels (i.e., full, partial or none) of
Dividends on Reinvestment Eligible Securities; and (ii) the
designation of Reinvestment Eligible Securities, by delivering a new
Enrollment Form to the Administrator. To be effective with respect to
any Dividend payment, the Enrollment Form must be received by the
Administrator on or before the record date relating to such Dividend
Payment Date. If the Enrollment Form is not received by the
Administrator on or before such record date, such Enrollment Form
shall not become effective until after such Dividend Payment Date.
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<PAGE> 54
7.2. Right of Withdrawal. (a) A Participant may, at any
time or from time to time, withdraw all or any of his whole Account
Shares from the Plan by delivering to the Administrator a completed
Sale/Transfer/Withdrawal Request Form and, if the Participant will not
be the record holder of such Account Shares after withdrawal, a stock
assignment (stock power). Subject to the limitations described below,
as soon as practicable following the Administrator's receipt of the
withdraw instructions, and a stock assignment (stock power), if
applicable, the Administrator shall mail certificates representing the
withdrawn Account Shares by first class mail to the Participant at his
address of record, or to the address of any person designated by the
Participant.
(b) If a completed Sale/Transfer/Withdrawal Request Form
with regard to Account Shares is received by the Administrator on or
after the record date but prior to the related Dividend Payment Date,
the withdrawal shall be processed as described in (a) above and the
Administrator shall, as soon as practicable following the receipt of
Dividends paid on the withdrawn Account Shares, mail a check for such
Dividends by first class mail to the Participant at his address of
record. Notwithstanding the foregoing, if a completed Sale/Transfer/
Withdrawal Request Form that relates to the withdrawal of Account
Shares which are also Reinvestment Eligible Securities is received by
the Administrator on or after the record date but prior to the related
Dividend Payment Date, such withdrawal shall not become effective
until after such Dividend Payment Date (except in the case of
instructions to withdraw all of the whole Account Accounts of such
- 20 -
<PAGE> 55
Participant, in which case such withdrawal shall not be effected until
after such Dividend has been reinvested pursuant to the Plan and the
shares of Common Stock purchased therewith are credited to his
Account). As soon as practicable following such Dividend Payment
Date, the Administrator shall mail certificates representing the
withdrawn Account Shares by first class mail to the Participant at his
address of record, or to the address of any person designated by the
Participant.
(c) Withdrawal of Account Shares shall not affect
reinvestment of Dividends on the Account Shares not withdrawn unless
(i) the Participant is no longer the record holder of such Account
Shares; (ii) such reinvestment is changed by the Participant by
delivering a completed Enrollment Form to the Administrator; or (iii)
the Participant has terminated his participation in the Plan.
7.3. Right of Termination of Participation. If a
Participant's Sale/Transfer/Withdrawal Request Form indicates the
Participant's desire to terminate his participation in the Plan, the
Administrator shall treat such request as a withdrawal of all of such
Participant's whole Account Shares pursuant to Section 7.2. The
Administrator, in addition to mailing certificates representing all
whole Account Shares, if any, pursuant to Section 7.2, shall mail by
first class mail to the Participant at his address of record a check
for an amount equal to the sum of (i) the amount of cash credited to
such Participant's Account pending investment in Common Stock; and
(ii) the cash value of any fraction of a share of Common Stock
credited to his Account. Such fraction of a share shall be valued at
- 21 -
<PAGE> 56
the Company Purchase Price for the trading day immediately preceding
the date of receipt of the completed Sale/Transfer/Withdrawal Form.
7.4. Termination of Participation by Company. If a
Participant does not have at least one whole Account Share or own or
hold any other Reinvestment Eligible Securities, the Participant's
participation in the Plan may be terminated by the Company in its sole
discretion after written notice is mailed by first class mail to such
Participant at his address of record. Additionally, the Company in
its sole discretion may terminate any Participant's participation in
the Plan after written notice mailed in advance by first class mail to
such Participant at his address of record. Upon such termination of
participation, the Account of such Participant shall be treated as if
he had elected to terminate his participation in the Plan pursuant to
Section 7.3, except that any fraction of a share of Common Stock shall
be valued as of the Company Purchase Price for the trading date
immediately preceding the date on which such Participant's
participation is terminated.
7.5. Stock Splits, Stock Dividends and Rights Offerings.
Any shares or other securities representing stock splits or other
noncash distributions on Account Shares shall be credited to such
Participant's Account. Stock splits, combinations, recapitalizations
and similar events affecting Account Shares shall be credited to such
Participant's Accounts on a pro rata basis. In the event of a rights
offering, a Participant shall receive rights based upon the total
number of his whole Account Shares.
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<PAGE> 57
7.6. Shareholder Materials; Voting Rights. (a) The
Administrator shall send or forward to each Participant all applicable
proxy solicitation materials, other shareholder materials or consent
solicitation materials. Participants shall have the exclusive right
to exercise all voting rights respecting their Account Shares. A
Participant may vote any of his whole Account Shares in person or by
proxy. A Participant's proxy card shall include all whole shares of
Common Stock of which he is the record holder, including those held in
his Account. Account Shares shall not be voted unless a Participant
or his proxy votes them. Fractions of shares of Common Stock shall
not be voted.
(b) Solicitation of the exercise of Participants' voting
rights by the management of the Company and others under a proxy or
consent provision applicable to all holders of Common Stock shall be
permitted. Solicitation of the exercise of Participants' tender or
exchange offer rights by management of the Company and others shall
also be permitted. The Administrator shall notify the Participants of
each occasion for the exercise of their voting rights or rights with
respect to a tender offer or exchange offer within a reasonable time
before such rights are to be exercised. Such notification shall
include all information distributed to the shareholders of the Company
by the Company regarding the exercise of such rights.
7.7. Statements of Account. The Administrator shall send a
Statement of Account to each Participant for each month in which such
Participant (i) made an initial investment or optional cash
investment; (ii) deposited Common Stock into the Plan; (iii)
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<PAGE> 58
transferred or withdrew Account Shares; (iv) had Dividends reinvested
in Common Stock; or (v) entered into any other transaction under the
Plan. As soon as practicable following a sale of Account Shares by a
Participant, the Administrator shall deliver a confirmation to such
Participant.
ARTICLE VIII
Certificates and Fractions of Shares
------------------------------------
Section 8.1. Certificates. A Participant may at any time
request a certificate for all or a portion of his whole Account Shares
and upon such request the Administrator shall promptly mail such
certificate (in any event, within at least two business days of the
receipt of such written request) by first class mail to such
Participant at his address of record; provided, however, that upon the
mailing of such certificate, the shares of Common Stock represented by
such certificate shall no longer be Account Shares but shall remain
Reinvestment Eligible Securities (except to the extent such
Participant delivers to the Administrator an Enrollment Form electing
not to have Dividends on such Account Shares reinvested in Common
Stock).
Section 8.2. Fractional Shares. Fractions of shares of
Common Stock shall be credited to Participants' Accounts as provided
in Article III hereof; provided, however, that (i) no certificate for
a fraction of a share shall be distributed to any Participant at any
time; and (ii) the Company shall issue and sell only whole shares of
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<PAGE> 59
Common Stock to the Administrator in respect of Dividends reinvested
in, and purchases of, newly issued shares or shares of Common Stock
held in the Company's treasury.
Section 8.3. Fractional Share Account. If upon a
Participant's termination of participation in the Plan, the Account of
such Participant is credited with a fraction of a share of Common
Stock, such fraction of a share shall be purchased by the
Administrator for the Fractional Share Account at the Company Purchase
Price determined as of the trading date specified in Sections 7.3, 9.1
or 9.4 hereof, as the case may be, and the proceeds thereof shall be
remitted to such Participant as set forth in Sections 7.3, 9.1 or 9.4
hereof, respectively. The Company shall from time to time credit the
Fractional Share Account with such amounts of money as may be
necessary to fund such purchases for the Fractional Share Account;
provided, however, that the Company may at any time direct the
Administrator to repay to the Company such portion of the cash as the
Company may, in its discretion, deem to be in excess of the amount
needed to fund the operations of the Fractional Share Account.
As set forth in Section 3.4 hereof, on each Investment Date,
the Administrator shall first apply the aggregate amount of initial
cash investments, optional cash investments and Dividends to the
purchase of all currently existing Fractional Account Shares. If the
remaining aggregate amount is not sufficient to purchase a whole
number of shares of Common Stock, the Company shall provide the
Administrator with such additional amount of money as may be necessary
to enable the Administrator (or the Independent Agent, as the case may
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<PAGE> 60
be) to purchase an additional share of Common Stock. The fraction of
a share that has been purchased with funds provided by the Company
shall be credited to the Fractional Share Account, and the remaining
fraction of a share shall be allocated among the Participants' Account
as necessary.
ARTICLE IX
Amendment and Termination of the Plan
-------------------------------------
Section 9.1. Suspension, Modification and Termination. The
Company may at any time and in its sole discretion suspend, modify,
amend or terminate the Plan, in whole, in part or in respect of
Participants in one or more jurisdictions; provided, however, that no
such amendment shall decrease the Account of any Participant or result
in a distribution to the Company of any amount credited to the Account
of any Participant. Upon complete termination of the Plan, the
Accounts of all Participants (or in the case of partial termination of
the Plan, the Accounts of all affected Participants) shall be treated
as if each such Participant had elected to terminate his participation
in the Plan pursuant to Section 7.3 hereof, except that any fraction
of a share of Common Stock shall be valued as of the trading date
immediately preceding the date on which the Plan is terminated. The
Administrator shall promptly send each affected Participant notice of
such suspension, modification or termination.
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<PAGE> 61
ARTICLE X
Administration of the Plan
--------------------------
Section 10.1. Rules and Regulations. The Company may from
time to time adopt such administrative rules and regulations
concerning the Plan as it deems necessary or desirable for the
administration of the Plan. The Company shall have the power and
authority to interpret the terms and the provisions of the Plan and
shall interpret and construe the Plan and reconcile any inconsistency
or supply any omitted detail in a manner consistent with the general
terms of the Plan and applicable law.
Section 10.2. Selection of an Administrator. The
Administrator shall be appointed by the Company. The Administrator's
appointment to serve as such may be revoked by the Company at any
time. The Administrator may resign at any time upon reasonable notice
to the Company. In the event that no Administrator is appointed, the
Company shall be deemed to be the Administrator for purposes of the
Plan. The Company shall be the initial Administrator.
Section 10.3. Authority and Duties of Administrator. The
Administrator shall have the authority to undertake any act necessary
to fulfill its duties as set forth in the various provisions of the
Plan. The Administrator shall maintain appropriate records of the
Accounts of Participants and the Fractional Share Account.
Section 10.4. Compensation. The officers of the Company
shall make such arrangements regarding compensation, reimbursement of
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<PAGE> 62
expenses and indemnification of the Administrator and any Independent
Agent as they from time to time deem reasonable and appropriate.
Section 10.5. Costs. All costs of administration of the
Plan shall be paid by the Company; provided, however, that any
brokerage commissions and any applicable transfer taxes and service
charges incurred in connection with open market sales of shares of
Common Stock made under the Plan shall be borne by the Participants.
Section 10.6. Liability of the Company, the Administrator
and Any Independent Agent. The Company, the Administrator and any
Independent Agent shall not be liable for any act done in good faith,
or for the good faith omission to act in administering or performing
their duties with respect to the Plan, including, without limitation,
any claim of liability arising out of failure to terminate a
Participant's Account upon such Participant's death prior to receipt
of notice in writing of such death, or with respect to the prices at
which shares are purchased or sold for a Participant's Account and the
times when such purchases and sales are made, or with respect to any
loss or fluctuation in the market value after the purchase or sale of
such shares.
Section 10.7. Records and Reports. The Administrator shall
keep appropriate records concerning the Plan, Accounts of
Participants, purchases and sales of Common Stock made under the Plan
and Participants' addresses of record and shall send Statements of
Account and confirmation to each Participant in accordance with the
provisions of Section 7.5 hereof.
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<PAGE> 63
Section 10.8. Selection of Independent Agent. Any
Independent Agent serving in such capacity pursuant to the Plan shall
be selected by the Company, and the Administrator and the Company, or
either of them, shall, subject to the provisions of Section 3.3
hereof, make such arrangements and enter into such agreements with the
Independent Agent in connection with the activities contemplated by
the Plan as the Administrator and the Company, or either of them, deem
reasonable and appropriate.
Section 10.9. Source of Shares of Common Stock. The
Company shall not change the source of shares of Common Stock
purchased by Participants in the Plan (i.e., either (i) newly issued
shares of Common Stock or shares of Common Stock held in the Company's
treasury purchased from the Company or (ii) shares of Common Stock
purchases in the open market) more than once in any three-month
period. At any time that the source of shares of Common Stock
purchased in the Plan are shares purchased in the open market, the
Company shall not exercise its right to change the source of shares
absent a determination by the Company's Board of Directors or Chief
Financial Officer that the Company has a need to raise additional
capital or there is another valid reason for a change.
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<PAGE> 64
ARTICLE XI
Miscellaneous Provisions
------------------------
11.1. Controlling Law. This Plan shall be construed,
regulated and administered under the laws of the State of Illinois.
11.2. Acceptance of Terms and Conditions of Plan by
Participants. Each Participant, by completing an Enrollment Form and
as a condition of participation herein, for himself, his heirs,
executors, administrators, legal representatives, and assigns,
approves and agrees to be bound by the provisions of this Plan and any
subsequent amendments hereto, and all actions of the Company and the
Administrator hereunder.
- 30 -
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
-----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our
report dated February 2, 1996, which appears on page A-10 of the 1995
Annual Report to Shareholders of Illinova Corporation in the appendix
to the Illinova Corporation Proxy Statement, which is incorporated by
reference in Illinova Corporation's Annual Report on Form 10-K for the
year ended December 31, 1995. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
April 29, 1996
