Exhibit 2
AGREEMENT AND PLAN OF MERGER,
By and Between
WPS RESOURCES CORPORATION
and
UPPER PENINSULA ENERGY CORPORATION
Dated as of July 10, 1997
TABLE OF CONTENTS
Page
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ARTICLE I - THE MERGER . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 The Merger . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Effects of the Merger . . . . . . . . . . . . . 2
Section 1.3 Effective Time of the Merger . . . . . . . . . . 2
ARTICLE II - TREATMENT OF SHARES . . . . . . . . . . . . . . . 2
Section 2.1 Effect of the Merger on Capital Stock . . . . . 2
(a) Cancellation of Certain Common Stock . . . . . . . . 2
(b) Conversion of Certain Common Stock . . . . . . . . . 3
Section 2.2 Issuance of New Certificates . . . . . . . . . . 3
(a) Deposit with Exchange Agent . . . . . . . . . . . . . 3
(b) Issuance Procedures . . . . . . . . . . . . . . . . . 3
(c) Distributions with Respect to Unsurrendered Shares . 4
(d) No Fractional Securities . . . . . . . . . . . . . . 5
(e) Closing of XXXX Common Stock Transfer Books . . . . . 5
(f) Termination of Duties of Exchange Agent . . . . . . . 6
ARTICLE III - THE CLOSING . . . . . . . . . . . . . . . . . . . 6
Section 3.1 The Closing . . . . . . . . . . . . . . . . . . 6
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF WPS . . . . . . 6
Section 4.1 Organization and Qualification . . . . . . . . . 6
Section 4.2 Capitalization . . . . . . . . . . . . . . . . . 7
Section 4.3 Authority; Non-contravention; Statutory
Approvals; Compliance . . . . . . . . . . . . . 8
(a) Authority . . . . . . . . . . . . . . . . . . . . . . 8
(b) Non-contravention . . . . . . . . . . . . . . . . . . 8
(c) Statutory Approvals . . . . . . . . . . . . . . . . . 9
(d) Compliance . . . . . . . . . . . . . . . . . . . . . 9
Section 4.4 Reports and Financial Statements . . . . . . . 10
Section 4.5 Absence of Certain Changes or Events . . . . . 11
Section 4.6 Litigation . . . . . . . . . . . . . . . . . . 11
Section 4.7 Registration Statement and Proxy Statement . . 12
Section 4.8 Regulation as a Utility . . . . . . . . . . . 12
Section 4.9 Vote Not Required . . . . . . . . . . . . . . 12
Section 4.10 Ownership of XXXX Common Stock . . . . . . . . 12
Section 4.11 WPS Rights Agreement . . . . . . . . . . . . . 13
Section 4.12 Accounting Matters . . . . . . . . . . . . . . 13
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF XXXX . . . . . 13
Section 5.1 Organization and Qualification . . . . . . . . 13
Section 5.2 Subsidiaries . . . . . . . . . . . . . . . . . 14
Section 5.3 Capitalization . . . . . . . . . . . . . . . . 15
Section 5.4 Authority; Non-contravention; Statutory
Approvals; Compliance . . . . . . . . . . . . 15
(a) Authority . . . . . . . . . . . . . . . . . . . . . 15
(b) Non-contravention . . . . . . . . . . . . . . . . . 16
(c) Statutory Approvals . . . . . . . . . . . . . . . . 16
(d) Compliance . . . . . . . . . . . . . . . . . . . . 17
Section 5.5 Reports and Financial Statements . . . . . . . 18
Section 5.6 Absence of Certain Changes or Events . . . . . 18
Section 5.7 Litigation . . . . . . . . . . . . . . . . . . 19
Section 5.8 Registration Statement and Proxy Statement . . 19
Section 5.9 Tax Matters . . . . . . . . . . . . . . . . . 20
(a) Filing of Timely Tax Returns . . . . . . . . . . . 20
(b) Payment of Taxes . . . . . . . . . . . . . . . . . 20
(c) Tax Reserves . . . . . . . . . . . . . . . . . . . 20
(d) Tax Liens . . . . . . . . . . . . . . . . . . . . . 20
(e) Withholding Taxes . . . . . . . . . . . . . . . . . 20
(f) Extensions of Time for Filing Tax Returns . . . . . 20
(g) Waivers of Statute of Limitations . . . . . . . . . 20
(h) No Assessments . . . . . . . . . . . . . . . . . . 20
(i) Audit, Administrative and Court Proceedings . . . . 21
(j) Powers of Attorney . . . . . . . . . . . . . . . . 21
(k) Tax Rulings . . . . . . . . . . . . . . . . . . . . 21
(l) Availability of Tax Returns . . . . . . . . . . . . 21
(m) Tax Sharing Agreements . . . . . . . . . . . . . . 21
(n) Code Section 280G . . . . . . . . . . . . . . . . . 21
(o) Liability for Others . . . . . . . . . . . . . . . 21
(p) Certain Definitions . . . . . . . . . . . . . . . . 21
Section 5.10 Employee Matters; ERISA . . . . . . . . . . . 22
(a) Benefit Plans . . . . . . . . . . . . . . . . . . . 22
(b) Contributions . . . . . . . . . . . . . . . . . . . 22
(c) Multiemployer Pension Plans . . . . . . . . . . . . 22
(d) Title IV of ERISA . . . . . . . . . . . . . . . . . 22
(e) Qualification; Compliance . . . . . . . . . . . . . 23
(f) Liabilities . . . . . . . . . . . . . . . . . . . . 24
(g) Welfare Plans . . . . . . . . . . . . . . . . . . . 24
(h) Documents made Available . . . . . . . . . . . . . 24
(i) Payments Resulting from Merger . . . . . . . . . . 25
(j) Labor Agreements . . . . . . . . . . . . . . . . . 25
Section 5.11 Environmental Protection . . . . . . . . . . . 26
(a) Compliance . . . . . . . . . . . . . . . . . . . . 26
(b) Environmental Permits . . . . . . . . . . . . . . . 26
(c) Environmental Claims . . . . . . . . . . . . . . . 27
(d) Releases . . . . . . . . . . . . . . . . . . . . . 27
(e) Predecessors . . . . . . . . . . . . . . . . . . . 27
(f) Disclosure . . . . . . . . . . . . . . . . . . . . 27
(g) Certain Definitions . . . . . . . . . . . . . . . . 27
Section 5.12 Regulation as a Utility . . . . . . . . . . . 29
Section 5.13 Vote Required . . . . . . . . . . . . . . . . 29
Section 5.14 Accounting Matters . . . . . . . . . . . . . . 29
Section 5.15 Applicability of Certain Michigan Law, Etc . . 29
Section 5.16 Opinion of Financial Advisor . . . . . . . . . 30
Section 5.17 Insurance . . . . . . . . . . . . . . . . . . 30
Section 5.18 Ownership of WPS Common Stock . . . . . . . . 30
Section 5.19 Title to Assets . . . . . . . . . . . . . . . 30
Section 5.20 No Violation of Law; Buildings and Equipment . 30
Section 5.21 Existing Contracts . . . . . . . . . . . . . . 31
Section 5.22 Performance of Contracts . . . . . . . . . . . 31
Section 5.23 Contingent and Undisclosed Liabilities . . . . 32
ARTICLE VI - CONDUCT OF BUSINESS BY XXXX PENDING THE MERGER . 32
Section 6.1 Covenants of the Parties . . . . . . . . . . . 32
Section 6.2 Ordinary Course of Business . . . . . . . . . 32
Section 6.3 Dividends . . . . . . . . . . . . . . . . . . 32
Section 6.4 Issuance of Securities . . . . . . . . . . . . 33
Section 6.5 Charter Documents . . . . . . . . . . . . . . 33
Section 6.6 No Acquisitions . . . . . . . . . . . . . . . 34
Section 6.7 Capital Expenditures and Emission Allowances . 34
Section 6.8 No Dispositions . . . . . . . . . . . . . . . 34
Section 6.9 Indebtedness . . . . . . . . . . . . . . . . . 34
Section 6.10 Compensation, Benefits . . . . . . . . . . . . 35
Section 6.11 1935 Act . . . . . . . . . . . . . . . . . . . 35
Section 6.12 Transmission, Generation, Power Purchases . . 35
Section 6.13 Accounting . . . . . . . . . . . . . . . . . . 36
Section 6.14 Affiliate Transactions . . . . . . . . . . . . 36
Section 6.15 Tax-exempt Status . . . . . . . . . . . . . . 36
Section 6.16 Tax Matters . . . . . . . . . . . . . . . . . 36
Section 6.17 Discharge of Liabilities . . . . . . . . . . . 37
Section 6.18 Contracts . . . . . . . . . . . . . . . . . . 37
Section 6.19 Insurance . . . . . . . . . . . . . . . . . . 37
Section 6.20 Permits . . . . . . . . . . . . . . . . . . . 37
ARTICLE VII - ADDITIONAL AGREEMENTS . . . . . . . . . . . . . 37
Section 7.1 Access to Information . . . . . . . . . . . . 37
Section 7.2 Proxy Statement and Registration Statement . . 38
Section 7.3 Regulatory Matters . . . . . . . . . . . . . . 39
(a) HSR Filings . . . . . . . . . . . . . . . . . . . . 39
(b) Other Regulatory Approvals . . . . . . . . . . . . 39
Section 7.4 Shareholder Approval . . . . . . . . . . . . . 39
(a) Approval of XXXX Shareholders . . . . . . . . . . . 39
(b) Meeting Date . . . . . . . . . . . . . . . . . . . 40
Section 7.5 Director and Officer Indemnification . . . . . 40
(a) Indemnification . . . . . . . . . . . . . . . . . . 40
(b) Insurance . . . . . . . . . . . . . . . . . . . . . 41
(c) Successors . . . . . . . . . . . . . . . . . . . . 41
(d) Survival of Indemnification . . . . . . . . . . . . 41
(e) Benefit . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.6 Disclosure Schedules . . . . . . . . . . . . . 42
Section 7.7 Public Announcements . . . . . . . . . . . . . 42
Section 7.8 Rule 145 Affiliates . . . . . . . . . . . . . 42
Section 7.9 Employee Agreements. . . . . . . . . . . . . . 43
Section 7.10 Employee Benefit Plans . . . . . . . . . . . . 43
Section 7.11 No Solicitations . . . . . . . . . . . . . . . 43
Section 7.12 WPS Board of Directors . . . . . . . . . . . . 44
(a) WPS Board of Directors . . . . . . . . . . . . . . 44
(b) UPPCO Advisory Board . . . . . . . . . . . . . . . 45
Section 7.13 Employment Contract . . . . . . . . . . . . . 45
Section 7.14 Operations Following the Effective Time . . . 45
(a) Relationships with Local Suppliers . . . . . . . . 45
(b) Charitable and Community Support Activities . . . . 45
Section 7.15 Workforce Matters . . . . . . . . . . . . . . 45
Section 7.16 Expenses . . . . . . . . . . . . . . . . . . . 46
Section 7.17 Further Assurances . . . . . . . . . . . . . . 46
Section 7.18 Charter and By-law Amendments . . . . . . . . 46
Section 7.19 Pooling; Long Term Stock Incentive Plan . . . 46
Section 7.20 Tax-free Status . . . . . . . . . . . . . . . 47
Section 7.21 Cooperation, Notification . . . . . . . . . . 47
Section 7.22 Third-party Consents . . . . . . . . . . . . . 47
ARTICLE VIII - CONDITIONS . . . . . . . . . . . . . . . . . . 48
Section 8.1 Conditions to each Party's Obligation to
Effect the Merger . . . . . . . . . . . . . . 48
(a) Shareholder Approval . . . . . . . . . . . . . . . 48
(b) No Injunction . . . . . . . . . . . . . . . . . . . 48
(c) Registration Statement . . . . . . . . . . . . . . 48
(d) Listing of Shares . . . . . . . . . . . . . . . . . 48
(e) Statutory Approvals . . . . . . . . . . . . . . . . 48
Section 8.2 Further Conditions to Obligation of XXXX to
Effect the Merger . . . . . . . . . . . . . . 49
(a) Performance of Obligations of WPS . . . . . . . . . 49
(b) Representations and Warranties . . . . . . . . . . 49
(c) Closing Certificates . . . . . . . . . . . . . . . 49
(d) Material Adverse Effect . . . . . . . . . . . . . . 49
(e) Tax Opinions . . . . . . . . . . . . . . . . . . . 49
(f) Required Consents . . . . . . . . . . . . . . . . . 50
(g) Trigger of WPS Rights . . . . . . . . . . . . . . . 50
Section 8.3 Further Conditions to Obligation of WPS to
Effect the Merger . . . . . . . . . . . . . . 50
(a) Performance of Obligations of XXXX . . . . . . . . 50
(b) Representations and Warranties . . . . . . . . . . 50
(c) Closing Certificates . . . . . . . . . . . . . . . 50
(d) Material Adverse Effect . . . . . . . . . . . . . . 51
(e) Tax Opinions . . . . . . . . . . . . . . . . . . . 51
(f) Required Consents . . . . . . . . . . . . . . . . . 51
(g) Affiliate Agreements . . . . . . . . . . . . . . . 51
(h) Pooling . . . . . . . . . . . . . . . . . . . . . . 51
(i) Legal Opinion . . . . . . . . . . . . . . . . . . . 51
ARTICLE IX - TERMINATION, AMENDMENT AND WAIVER . . . . . . . 52
Section 9.1 Termination . . . . . . . . . . . . . . . . . 52
Section 9.2 Effect of Termination . . . . . . . . . . . . 54
Section 9.3 Termination Fee . . . . . . . . . . . . . . . 54
(a) Termination Fee Upon Breach or Withdrawal
of Approval . . . . . . . . . . . . . . . . . . . . 54
(b) Additional Termination Fee . . . . . . . . . . . . 55
(c) Expenses . . . . . . . . . . . . . . . . . . . . . 55
Section 9.4 Amendment . . . . . . . . . . . . . . . . . . 56
Section 9.5 Waiver . . . . . . . . . . . . . . . . . . . . 56
ARTICLE X - GENERAL PROVISIONS . . . . . . . . . . . . . . . 57
Section 10.1 Non-survival; Effect of Representations and
Warranties . . . . . . . . . . . . . . . . . . 57
Section 10.2 Brokers . . . . . . . . . . . . . . . . . . . 57
Section 10.3 Notices . . . . . . . . . . . . . . . . . . . 57
Section 10.4 Miscellaneous . . . . . . . . . . . . . . . . 58
Section 10.5 Interpretation . . . . . . . . . . . . . . . . 59
Section 10.6 Counterparts; Effect . . . . . . . . . . . . . 59
Section 10.7 Binding Effect; Benefits . . . . . . . . . . . 59
Section 10.8 Enforcement . . . . . . . . . . . . . . . . . 59
THIS AGREEMENT AND PLAN OF MERGER, dated as of July 10,
1997 (this "Agreement"), by and between WPS Resources
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Corporation, a corporation incorporated under the laws of the
State of Wisconsin ("WPS") and UPPER PENINSULA ENERGY
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CORPORATION, a corporation incorporated under the laws of the
State of Michigan ("XXXX"),
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W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, WPS and XXXX have determined that it would be
in their respective best interests and in the interests of their
respective shareholders to effect the transactions contemplated
by this Agreement;
WHEREAS, in furtherance thereof, the respective Boards
of Directors of WPS and XXXX have approved this Agreement and the
Merger (as defined in Section 1.1 below) on the terms and
conditions set forth in this Agreement;
WHEREAS, for Federal income tax purposes, it is
intended that the transaction contemplated herein will be a
reorganization described in Section 368(a) of the Internal
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Revenue Code of 1986, as amended (the "Code"), and the
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regulations thereunder, and that the parties hereto and their
respective shareholders will recognize no gain or loss for
Federal income tax purposes as a result of the consummation of
the Merger;
WHEREAS, for accounting purposes, it is intended that
the Merger will be accounted for as a pooling of interests in
accordance with generally accepted accounting principles applied
on a consistent basis ("GAAP") and applicable regulations of the
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Securities and Exchange Commission (the "SEC");
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NOW, THEREFORE, in consideration of the premises and
the representations, warranties, covenants and agreements
contained herein, the parties hereto, intending to be legally
bound hereby, agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and
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subject to the conditions of this Agreement:
(a) at the Effective Time XXXX shall be merged with
and into WPS (the "Merger") in accordance with the laws of the
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States of Wisconsin and Michigan;
(b) WPS shall be the surviving corporation of the
Merger and shall continue its corporate existence under the laws
of the State of Wisconsin; and
(c) the effects and the consequences of the Merger
shall be as set forth in Section 1.2.
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Section 1.2 Effects of the Merger. At the Effective
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Time,
(a) the Restated Articles of Incorporation of WPS, as
in effect immediately prior to the Effective Time shall be the
Restated Articles of Incorporation of WPS as the surviving
corporation in the Merger until thereafter amended, and
(b) the By-laws of WPS, as in effect immediately prior
to the Effective Time, shall be the By-laws of WPS as the
surviving corporation in the Merger until thereafter amended.
Subject to the foregoing, the additional effects of the Merger
shall be as provided in the applicable provisions of the
Wisconsin Business Corporation Law (the "WBCL") and the Michigan
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Business Corporation Act (the "MBCA").
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Section 1.3 Effective Time of the Merger. On the
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Closing Date (as hereinafter defined), articles of merger and a
certificate of merger together with a Plan of Merger in
substantially the form attached hereto as Exhibit 1.3, which Plan
of Merger is incorporated by reference herein and deemed a part
hereof (the "Plan of Merger"), complying with the requirements of
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the WBCL and the MBCA, shall be executed by WPS and XXXX and
shall be filed by WPS and XXXX, as appropriate, with the
Department of Financial Institutions of the State of Wisconsin
pursuant to the WBCL and the Department of Consumer and Industry
Services of the State of Michigan pursuant to the MBCA. The
Merger shall become effective at the time (the "Effective Time")
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specified in the appropriate articles of merger and certificate
of merger filed with respect to the Merger, or absent such
specification upon such filing.
ARTICLE II
TREATMENT OF SHARES
Section 2.1 Effect of the Merger on Capital Stock.
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At the Effective Time, by virtue of the Merger and without any
action on the part of any holder of any capital stock of WPS or
XXXX:
(a) Cancellation of Certain Common Stock.
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Each share of Common Stock, without par value, of
XXXX (the "XXXX Common Stock") that is owned by XXXX or WPS
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or any of their respective Subsidiaries (as hereinafter
defined) shall be canceled and shall cease to exist.
(b) Conversion of Certain Common Stock.
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(i) Each issued and outstanding share of XXXX
Common Stock (but excluding shares canceled pursuant to
Section 2.1(a)) shall be converted into the right to receive
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nine-tenths (.9) of a share of duly authorized, validly
issued, fully paid and nonassessable (except as otherwise
provided in Section 180.0622(2)(b) of the WBCL) Common
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Stock, par value $1.00 per share, of WPS ("WPS Common
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Stock"), including if applicable, associated rights (the
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"WPS Rights") to purchase shares of WPS Common Stock
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pursuant to the terms of that certain Rights Agreement
between WPS and Firstar Trust Company, as Rights Agent
thereunder, dated as of December 12, 1996 (the "WPS Rights
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Agreement"). Until the Distribution Date (as defined in the
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WPS Rights Agreement) all references in this Agreement to
WPS Common Stock shall be deemed to include the associated
WPS Rights.
(ii) Upon such conversions and except as
otherwise provided in Section 2.2, all such shares of XXXX
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Common Stock shall be canceled and cease to exist, and each
holder of a certificate formerly representing any such
shares of XXXX Common Stock shall cease to have rights with
respect thereto, except the right to receive the shares of
WPS Common Stock to be issued in consideration therefor upon
the surrender of such certificate in accordance with Section
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2.3 and any cash in lieu of fractional shares of WPS Common
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Stock.
Section 2.2 Issuance of New Certificates.
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(a) Deposit with Exchange Agent. As soon as
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practicable after the Effective Time, WPS shall deposit with
Firstar Trust Company, Milwaukee, Wisconsin, or other appropriate
entity mutually agreeable to WPS and XXXX (the "Exchange Agent"),
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certificates representing shares of WPS Common Stock required to
effect the issuance referred to in Section 2.1, together with
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cash payable in respect of fractional shares pursuant to
Section 2.2(d).
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(b) Issuance Procedures.
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(i) As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each holder of record
of a certificate or certificates (the "Certificates") which
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immediately prior to the Effective Time represented
outstanding shares of XXXX Common Stock (the "Converted
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Common Shares"), that were converted into the right to
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receive shares of WPS Common Stock pursuant to Section 2.1
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and the Plan of Merger, (A) a form of letter of transmittal
(which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only
upon actual delivery of the Certificates to the Exchange
Agent), and (B) instructions for use in effecting the
surrender of the Certificates in exchange for certificates
representing WPS Common Stock.
(ii) Upon surrender of a Certificate to the
Exchange Agent for cancellation (or to such other agent or
agents as may be appointed by agreement of WPS and XXXX),
together with a duly executed letter of transmittal and such
other documents as the Exchange Agent shall require, the
holder of such Certificate shall be entitled to receive a
certificate representing that number of whole shares of WPS
Common Stock which such holder has the right to receive
pursuant to the provisions of this Article II and the Plan
of Merger. In the event of a transfer of ownership of
Converted Common Shares which is not registered in the
transfer records of XXXX, a certificate representing the
proper number of shares of WPS Common Stock may be issued to
a transferee if the Certificate representing such Converted
Common Shares is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect
such transfer and by evidence satisfactory to the Exchange
Agent that any applicable stock transfer taxes have been
paid. If any Certificate shall have been lost, stolen,
mislaid or destroyed, upon receipt of (i) an affidavit of
that fact from the holder claiming such Certificate to be
lost, mislaid, stolen or destroyed, (ii) such bond, security
or indemnity as WPS or the Exchange Agent may reasonably
require, and (iii) any other documentation necessary to
evidence and effect the bona fide exchange thereof, the
Exchange Agent shall issue to such holder a certificate
representing the number of shares of WPS Common Stock into
which the shares represented by such lost, stolen, mislaid
or destroyed Certificate shall have been converted.
(iii) Until surrendered as contemplated by this
Section 2.2, each Certificate shall be deemed at any time
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after the Effective Time to represent only the right to
receive upon such surrender the certificate representing WPS
Common Stock and cash in lieu of any fractional shares of
WPS Common Stock contemplated by this Section 2.2.
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(c) Distributions with Respect to Unsurrendered
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Shares.
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(i) No dividends or other distributions declared
or made after the Effective Time with respect to shares of
WPS Common Stock with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of WPS Common Stock to be
delivered upon surrender thereof and no cash payment in lieu
of fractional shares shall be paid to any such holder
pursuant to Section 2.2(d) until the holder of record of
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such Certificate (or a transferee as described in Section
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2.2(b)) shall surrender such Certificate.
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(ii) Subject to the effect of unclaimed property,
escheat and other applicable laws, following surrender of
any such Certificate, there shall be paid to the record
holder (or a transferee as described in Section 2.2(b))
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thereof the certificates representing whole shares of WPS
Common Stock issued in consideration therefor, without
interest,
(A) at the time of such surrender, the
amount of cash in lieu of a fractional share of WPS
Common Stock to which such holder (or transferee) is
entitled pursuant to Section 2.2(d) and the amount of
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dividends or other distributions with a record date
after the Effective Time which theretofore became
payable but which were not paid by reason of Section
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2.2(c)(i) with respect to such whole shares of WPS
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Common Stock, and
(B) at the appropriate payment date, the
amount of dividends or other distributions with a
record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender
payable with respect to such whole shares of WPS Common
Stock.
(d) No Fractional Securities.
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(i) Notwithstanding any other provision of this
Agreement, no certificates or scrip representing fractional
shares of WPS Common Stock shall be issued upon the
surrender for exchange of Certificates and such fractional
shares shall not entitle the owner thereof to vote as, or to
any other rights of, a holder of WPS Common Stock.
(ii) A holder of XXXX Common Stock who would
otherwise have been entitled to receive a fractional share
of WPS Common Stock shall be entitled to receive a cash
payment in lieu of such fractional share in an amount equal
to the product (rounded to the nearest cent) of such
fraction (rounded to the nearest thousandth) multiplied by
the average of the last reported sales price, per share of
WPS Common Stock as reported in the New York Stock Exchange
("NYSE") Composite Transactions as reported in The Wall
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Street Journal for the last ten trading days prior to and
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including the last trading day prior to the Effective Time
on which WPS Common Stock was traded on the NYSE, without
any interest thereon.
(e) Closing of XXXX Common Stock Transfer Books. From
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and after the Effective Time, the stock transfer books of XXXX
with respect to shares of XXXX Common Stock issued and
outstanding prior to the Effective Time shall be closed and no
transfer of any such shares shall thereafter be made. If, after
the Effective Time, Certificates are presented to WPS, they shall
be canceled and exchanged for certificates representing the
appropriate number of shares of WPS Common Stock as provided in
this Section 2.2.
------------
(f) Termination of Duties of Exchange Agent. Any
---------------------------------------
certificates representing WPS Common Stock deposited with the
Exchange Agent pursuant to Section 2.2(a) and not exchanged
--------------
within one year after the Effective Time pursuant to this
Section 2.2 shall be returned by the Exchange Agent to WPS, which
-----------
shall thereafter act as Exchange Agent. All funds held by the
Exchange Agent for payment to the holders of unsurrendered
Certificates and unclaimed at the end of one year from the
Effective Time shall be returned to WPS, after which time any
holder of unsurrendered Certificates shall look as a general
unsecured creditor only to WPS for payment of such funds to which
such holder may be due, subject to applicable law. WPS shall not
be liable to any person for such shares or funds delivered to a
public official pursuant to any applicable abandoned property,
escheat or similar law.
ARTICLE III
THE CLOSING
Section 3.1 The Closing. The closing of the Merger
-----------
(the "Closing") shall take place at the offices of Xxxxx &
-------
Lardner, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx, at
10:00 a.m. (Milwaukee, Wisconsin local time) on the second
business day immediately following the date on which the last of
the conditions set forth in Article VIII hereof is fulfilled or
waived, or at such other time and date and place as WPS and XXXX
shall mutually agree (the "Closing Date").
------------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WPS
WPS represents and warrants to XXXX as follows:
Section 4.1 Organization and Qualification.
------------------------------
(a) Except as set forth in Section 4.1 of the
-----------
Disclosure Schedule to this Agreement prepared and delivered by
WPS (the "WPS Disclosure Schedule"), each of WPS and the WPS
-----------------------
Subsidiaries (as hereinafter defined) is a corporation duly
organized, validly existing and in good standing (to the extent
applicable) under the laws of its respective jurisdiction of
incorporation or organization, has all requisite corporate power
and authority, and has been duly authorized by all necessary
approvals and orders to own, lease and operate its assets and
properties to the extent owned, leased and operated and to carry
on its business as it is now being conducted and is duly
qualified and in good standing (to the extent applicable) to do
business in each respective jurisdiction in which the nature of
its business or the ownership or leasing of its assets and
properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified and in good
standing would not, when taken together with all other such
failures, have a WPS Material Adverse Effect.
(b) As used in this Agreement,
(i) "Subsidiary" of a person shall mean any
----------
corporation or other entity (including partnerships and
other business associations) of which at least a majority of
the outstanding capital stock or other voting securities
having voting power under ordinary circumstances to elect
directors or similar members of the governing body of such
corporation or entity shall at the time be held, directly or
indirectly, by such person or entity;
(ii) "WPS Subsidiary" shall mean any Subsidiary
--------------
of WPS.
(iii) "WPS Material Adverse Effect" shall mean a
---------------------------
material adverse effect on the business, operations,
properties, assets, condition (financial or otherwise), or
the results of operations of WPS and the WPS Subsidiaries
taken as a whole or on the consummation of the transactions
contemplated hereby.
Section 4.2 Capitalization.
--------------
(a) The authorized capital stock of WPS consists of
100,000,000 shares of WPS Common Stock of which 23,896,962 shares
were issued and outstanding as of June 30, 1997;
(b) All of the issued and outstanding shares of WPS
Common Stock are, and any shares of WPS Common Stock issued
pursuant to the Merger will be duly authorized, validly issued,
fully paid, nonassessable (except as otherwise provided in
Section 180.0622(2)(b) of the WBCL) and free of preemptive
----------------------
rights.
(c) Except as set forth on Section 4.2(c) of the WPS
--------------
Disclosure Schedule, as of the date hereof, there are no
outstanding subscriptions, options, calls, contracts, rights or
warrants, including any right of conversion or exchange under any
outstanding security, instrument or other agreement, obligating
WPS to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of WPS Common Stock, or obligating WPS
to grant, extend or enter any such agreement or commitment, other
than the WPS Rights Agreement.
Section 4.3 Authority; Non-contravention; Statutory
---------------------------------------
Approvals; Compliance.
---------------------
(a) Authority. WPS has all requisite corporate power
---------
and authority to enter into this Agreement, and, subject to the
applicable WPS Required Statutory Approvals (as hereinafter
defined), to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation
by WPS of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of WPS.
This Agreement has been duly and validly executed and delivered
by WPS and, assuming the due authorization, execution and
delivery hereof by XXXX, constitutes the valid and binding
obligation of WPS enforceable against it in accordance with its
terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally, and except that the
availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before
which any proceeding therefor may be brought.
(b) Non-contravention. Except as set forth in
-----------------
Section 4.3(b) of the WPS Disclosure Schedule, the execution and
--------------
delivery of this Agreement by WPS do not, and the consummation of
the transactions contemplated hereby will not violate, conflict
with, or result in a breach of any provision of, or constitute a
default (with or without notice or lapse of time or both) under,
or result in the termination or modification of, or accelerate
the performance required by, or result in a right of termination,
cancellation, or acceleration of any obligation or the loss of a
benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or
assets of WPS or any of the WPS Subsidiaries or (any such
violation, conflict, breach, default, termination, modification,
cancellation, acceleration, loss or creation, a "Violation" with
---------
respect to WPS, such term when used in Article V having a
correlative meaning with respect to XXXX) pursuant to any
provisions of:
(i) the Articles of Incorporation, By-laws or
similar governing documents of WPS or any of the WPS
Subsidiaries;
(ii) subject to obtaining the WPS Required
Statutory Approvals, any statute, law, ordinance, rule,
regulation, judgment, decree, order, injunction, writ,
permit or license of any Governmental Authority (as
hereinafter defined) applicable to WPS or any of the WPS
Subsidiaries or any of their respective properties or
assets; or
(iii) subject to obtaining the third-party consents
set forth in Section 4.3(b) of the WPS Disclosure Schedule
--------------
(the "WPS Required Consents") any note, bond, mortgage,
---------------------
indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation
or agreement of any kind to which WPS or any of the WPS
Subsidiaries is a party or by which it or any of its
properties or assets may be bound or affected,
excluding from the foregoing clauses (ii) and (iii) such
Violations which, in the aggregate do not, and insofar as
reasonably can be foreseen, would not, have a WPS Material
Adverse Effect.
(c) Statutory Approvals. No declaration, filing or
-------------------
registration with, or notice to or authorization, consent or
approval of, any court, Federal, state, local or foreign
governmental or regulatory body (including a stock exchange or
other self-regulatory body) or authority (each, a "Governmental
------------
Authority") is necessary for the execution and delivery of this
---------
Agreement by WPS or the consummation by WPS of the transactions
contemplated hereby, the failure to obtain, make or give which
would have, in the aggregate, a WPS Material Adverse Effect,
except as described in Section 4.3(c) of the WPS Disclosure
--------------
Schedule (the "WPS Required Statutory Approvals," it being
--------------------------------
understood that references in this Agreement to "obtaining" such
---------
WPS Required Statutory Approvals shall mean making such
declarations, filings or registrations; giving such notices;
obtaining such authorizations, consents or approvals; and having
such waiting periods expire as are necessary to avoid a violation
of law).
(d) Compliance.
----------
(i) Except as set forth in Section 4.3(d) of the
--------------
WPS Disclosure Schedule, or as disclosed in the WPS SEC
Reports (as hereinafter defined) filed prior to the date
hereof, neither WPS nor any of the WPS Subsidiaries is in
violation of, is under investigation with respect to any
violation of, or has been given notice or been charged with
any violation of, any law, statute, order, rule, regulation,
ordinance or judgment (including, without limitation, any
applicable environmental law, ordinance or regulation) of
any Governmental Authority, except for violations which, in
the aggregate do not, and insofar as reasonably can be
foreseen, would not, have a WPS Material Adverse Effect.
(ii) Except as set forth in Section 4.3(d) of the
--------------
WPS Disclosure Schedule, WPS and the WPS Subsidiaries have
all permits, licenses, franchises and other governmental
authorizations, consents and approvals (collectively, the
"Permits") necessary to conduct their businesses as
-------
presently conducted, except those the failure of which to
obtain, in the aggregate do not, and insofar as reasonably
can be foreseen, would not, have a WPS Material Adverse
Effect.
(iii) Except as set forth in Section 4.3(d) of the
--------------
WPS Disclosure Schedule, each of WPS and the WPS
Subsidiaries is not in breach, Violation or default in the
performance or observance of any term or provision of, and
no event has occurred which, with lapse of time or action by
a third party, could result in a default under,
(A) its Articles of Incorporation or
By-laws, or
(B) any contract, commitment, agreement,
indenture, mortgage, loan agreement, note, lease, bond,
license, approval or other instrument to which it is a
party or by which it is bound or to which any of its
property is subject, except for breaches, violations or
defaults which, in the aggregate do not, and insofar as
reasonably can be foreseen, would not, have a WPS
Material Adverse Effect.
Section 4.4 Reports and Financial Statements.
--------------------------------
(a) The filings required to be made by WPS and the WPS
Subsidiaries since January 1, 1994 under the Securities Act of
1933, as amended (the "Securities Act"), the Securities Exchange
--------------
Act of 1934, as amended (the "Exchange Act"), the Public Utility
------------
Holding Company Act of 1935, as amended (the "1935 Act"), the
--------
Federal Power Act (the "Power Act"), the Atomic Energy Act of
---------
1954, as amended (the "Atomic Energy Act") and applicable state
-----------------
laws and regulations have been filed with the SEC, the Federal
Energy Regulatory Commission (the "FERC"), the Nuclear Regulatory
----
Commission (the "NRC"), the Department of Energy (the "DOE") or
--- ---
any appropriate state public utilities commission, as the case
may be, including all forms, statements, reports, agreements
(oral or written) and all documents, exhibits, amendments and
supplements appertaining thereto, and complied, as of their
respective dates, in all material respects with all applicable
requirements of the appropriate statute and the rules and
regulations thereunder.
(b) WPS has made available to XXXX a true and complete
copy of each form, report, schedule, registration statement and
definitive proxy statement filed by each of WPS and its
subsidiary, Wisconsin Public Service Corporation ("WPSC") with
----
the SEC since January 1, 1994 (as such documents have since the
time of their filing been amended or supplemented, the "WPS SEC
-------
Reports") and each other filing described in Section 4.4(a). As
------- --------------
of their respective dates, the WPS SEC Reports did not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
(c) The audited consolidated financial statements and
unaudited interim financial statements of WPS and WPSC, as the
case may be, included in the WPS SEC Reports (collectively, the
"WPS Financial Statements") have been prepared in accordance with
------------------------
GAAP (except as may be indicated therein or in the notes thereto
and except with respect to unaudited statements as permitted by
Form 10-Q under the Exchange Act) and fairly present in all
material respects the financial position of WPS or WPSC, as the
case may be, as of the dates thereof and the results of its
operations and cash flows for the periods then ended, subject, in
the case of the unaudited interim financial statements, to
normal, recurring audit adjustments.
(d) True, accurate and complete copies of the Restated
Articles of Incorporation and By-laws of WPS and the WPS Rights
Agreement, as in effect on the date hereof, have been delivered
to XXXX.
Section 4.5 Absence of Certain Changes or Events.
------------------------------------
Except as disclosed in the WPS and WPSC SEC Reports filed prior
to the date hereof or as set forth in Section 4.5 of the WPS
-----------
Disclosure Schedule, since December 31, 1996, WPS and each of the
WPS Subsidiaries have conducted their businesses only in the
ordinary course of their respective businesses consistent with
past practice and there has not been, and no facts or conditions
exist (other than facts or conditions of general applicability to
electric and gas utility companies in the region in which WPS
operates) which, in the aggregate have, or insofar as reasonably
can be foreseen, would have, a WPS Material Adverse Effect.
Section 4.6 Litigation. Except as disclosed in the
----------
WPS SEC Reports filed prior to the date hereof or as set forth in
Section 4.6 of the WPS Disclosure Schedule,
-----------
(a) there are no claims, suits, actions or proceedings
pending or, to the knowledge of WPS, threatened, nor are there,
to the knowledge of WPS, any investigations or reviews pending or
threatened against, relating to or affecting WPS or any of the
WPS Subsidiaries;
(b) there have not been any developments since
December 31, 1996 with respect to such disclosed claims, suits,
actions, proceedings, investigations or reviews; and
(c) there are no judgments, decrees, injunctions,
rules or orders of any court, governmental department,
commission, agency, instrumentality or authority or any
arbitrator applicable to WPS or any of the WPS Subsidiaries,
which, when taken together with any other nondisclosures of
matters described in clauses (a), (b) and (c), have, or insofar
as reasonably can be foreseen, would have, a WPS Material Adverse
Effect.
Section 4.7 Registration Statement and Proxy
--------------------------------
Statement.
---------
(a) None of the information supplied or to be supplied
by or on behalf of WPS for inclusion or incorporation by
reference in:
(i) the registration statement on Form S-4 to be
filed with the SEC by WPS in connection with the issuance of
shares of WPS Common Stock in the Merger (the "Registration
------------
Statement") will, at the time the Registration Statement is
---------
filed with the SEC and at the time it becomes effective
under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements
therein not misleading; and
(ii) the proxy statement, in definitive form,
relating to the meeting of XXXX shareholders to be held in
connection with the Merger (the "Proxy Statement") will, at
---------------
the date mailed to such shareholders and, as the same may be
amended or supplemented, at the time of the meeting of XXXX
shareholders to be held in connection with the Merger,
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein, in light
of the circumstances under which they are made, not
misleading.
(b) The Registration Statement will comply as to form
in all material respects with the provisions of the Securities
Act and the applicable rules and regulations thereunder.
Section 4.8 Regulation as a Utility.
-----------------------
(a) WPSC is regulated as a public utility in the
States of Wisconsin and Michigan. Except as set forth in
Section 4.8 of the WPS Disclosure Schedule, neither WPS nor any
-----------
"subsidiary company" or "affiliate" of WPS is subject to
------------------ ---------
regulation as a public utility or public service company (or
similar designation) by any other state in the United States or
any foreign country. WPS is an exempt holding company under
Section 3(a)(1) of the 1935 Act.
---------------
(b) As used in this Section 4.8 and in Section 5.12,
----------- ------------
the terms "subsidiary company" and "affiliate" shall have the
------------------ ---------
respective meanings ascribed to them in the 1935 Act.
Section 4.9 Vote Not Required. The approval by the
-----------------
holders of WPS Common Stock is not required for any of the
transactions contemplated by this Agreement.
Section 4.10 Ownership of XXXX Common Stock. Except
------------------------------
as set forth in Section 4.10 of the WPS Disclosure Schedule, WPS
------------
does not "beneficially own" (as such term is defined for purposes
----------------
of Section 13(d) of the Exchange Act) any shares of XXXX Common
------------
Stock.
Section 4.11 WPS Rights Agreement. Assuming the
--------------------
accuracy of the representations contained in Section 5.18, the
------------
consummation of the transactions contemplated by this Agreement
will not result in the triggering of any right or entitlement of
WPS shareholders under the WPS Rights Agreement.
Section 4.12 Accounting Matters. Neither WPS, nor to
------------------
WPS's knowledge, WPS's Affiliates has taken or agreed to take any
action that would prevent WPS from accounting for the
transactions contemplated by this Agreement as a pooling of
interests in accordance with GAAP and applicable SEC regulations.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF XXXX
XXXX represents and warrants to WPS as follows:
Section 5.1 Organization and Qualification.
------------------------------
(a) Except as set forth in Section 5.1 of the
-----------
Disclosure Schedule to this Agreement prepared and delivered by
XXXX (the "XXXX Disclosure Schedule"), each of XXXX and the XXXX
------------------------
Subsidiaries (as hereinafter defined) is a corporation duly
organized, validly existing and in good standing (to the extent
applicable) under the laws of its respective jurisdiction of
incorporation or organization, has all requisite corporate power
and authority, and has been duly authorized by all necessary
approvals and orders to own, lease and operate its assets and
properties to the extent owned, leased and operated and to carry
on its business as it is now being conducted and is duly
qualified and in good standing (to the extent applicable) to do
business in each respective jurisdiction in which the nature of
its business or the ownership or leasing of its assets and
properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified and in good
standing would not, when taken together with all other such
failures, have an "XXXX Material Adverse Effect."
(b) As used in this Agreement, "XXXX Material Adverse
---------------------
Effect" shall mean a material adverse effect on the business,
------
operations, properties, assets, condition (financial or
otherwise), or the results of operations of XXXX and the XXXX
Subsidiaries taken as a whole or on the consummation of the
transactions contemplated hereby.
Section 5.2 Subsidiaries.
------------
(a) Section 5.2 of the XXXX Disclosure Schedule sets
-----------
forth a description as of the date hereof, of all XXXX
Subsidiaries and XXXX Joint Ventures, including (i) the name of
each such entity and UPEN's interest therein, and (ii) a brief
description of the principal line or lines of business conducted
by each such entity.
(b) Except as set forth in Section 5.2 of the XXXX
-----------
Disclosure Schedule, none of the XXXX Subsidiaries is a "public
------
utility company," a "holding company," a "subsidiary company" or
--------------- --------------- ------------------
an "affiliate" of any public utility company within the meaning
---------
of Section 2(a)(5), 2(a)(7), 2(a)(8) or 2(a)(11) of the 1935 Act,
--------------- ------- ------- --------
respectively.
(c) Except as set forth in Section 5.2 of the XXXX
-----------
Disclosure Schedule, all of the issued and outstanding shares of
capital stock of each XXXX Subsidiary are duly authorized,
validly issued, fully paid, nonassessable and free of preemptive
rights, and, except for the outstanding shares of Upper Peninsula
Power Co., a Michigan corporation ("UPPCO") preferred stock, are
owned, directly or indirectly, by XXXX free and clear of any
liens, claims, encumbrances, security interests, equities,
charges and options of any nature whatsoever, and there are no
outstanding subscriptions, options, calls, contracts, voting
trusts, proxies or other commitments, understandings,
restrictions, arrangements, rights or warrants, including any
right of conversion or exchange under any outstanding security,
instrument or other agreement, obligating any such XXXX
Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of its capital stock, or
granting to any person other than XXXX or an XXXX Subsidiary any
right to participate in its dividends or earnings or obligating
it to grant, extend or enter into any such agreement or
commitment.
(d) As used in this Agreement,
(i) "XXXX Subsidiary" shall mean any Subsidiary
---------------
of XXXX; and
(ii) "Joint Venture" of a person or entity shall
-------------
mean any corporation or other entity (including partnerships
and other business associations) that is not a Subsidiary of
such person or entity, in which such person or one or more
of its Subsidiaries owns directly or indirectly an equity
interest, other than equity interests held for passive
investment purposes which are less than 5% of each class of
the outstanding voting securities or equity interests of any
such entity; and
(iii) "XXXX Joint Venture" shall mean any Joint
------------------
Venture of XXXX or any XXXX Subsidiary.
Section 5.3 Capitalization.
--------------
(a) The authorized capital stock of XXXX consists of
5,000,000 shares of XXXX Common Stock of which 2,897,001 shares
were issued and outstanding as of the date hereof.
(b) The authorized capital stock of UPEN's Subsidiary,
UPPCO, ("UPPCO") consists of
-----
(i) 3,000,000 shares of common stock, par value
$1.00 per share of which 1,473,936 shares are issued and
outstanding as of the date hereof ("UPPCO Common Stock"),
------------------
and
(ii) 300,000 shares of Preferred Stock, $100 par
value of which 4,507 shares were issued and outstanding as
of the date hereof.
(iii)1,000,000 shares of preference stock, par
value $1.00 per share, none of which are issued or
outstanding.
(c) All of the issued and outstanding shares of XXXX
Common Stock and UPPCO Common Stock are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights.
(d) Except as set forth in Section 5.3 of the XXXX
-----------
Disclosure Schedule, as of the date hereof, there are no
outstanding subscriptions, options, calls, contracts, voting
trusts, proxies or other commitments, understandings,
restrictions, arrangements, rights or warrants, including any
right of conversion or exchange under any outstanding security,
instrument or other agreement, obligating XXXX or any of the XXXX
Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of the capital stock of
XXXX, or obligating XXXX to xxxxx, extend or enter into any such
agreement or commitment.
Section 5.4 Authority; Non-contravention; Statutory
---------------------------------------
Approvals; Compliance.
---------------------
(a) Authority. XXXX has all requisite corporate power
---------
and authority to enter into this Agreement and, subject to the
applicable XXXX Shareholders' Approval (as hereinafter defined)
and the applicable XXXX Required Statutory Approvals (as
hereinafter defined), to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation by XXXX of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the
part of XXXX, subject to obtaining the applicable XXXX
Shareholders' Approval. This Agreement has been duly and validly
executed and delivered by XXXX and, assuming the due
authorization, execution and delivery hereof and thereof by WPS,
constitutes the valid and binding obligation of XXXX enforceable
against it in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights
generally, and except that the availability of equitable
remedies, including specific performance, may be subject to the
discretion of any court before which any proceeding therefor may
be brought.
(b) Non-contravention. Except as set forth in
-----------------
Section 5.4(b) of the XXXX Disclosure Schedule, the execution and
--------------
delivery of this Agreement by XXXX do not, and the consummation
of the transactions contemplated hereby will not, result in a
Violation pursuant to any provisions of:
(i) the Articles of Incorporation, By-laws or
similar governing documents of XXXX or any of the XXXX
Subsidiaries or the XXXX Joint Ventures;
(ii) subject to obtaining the XXXX Required
Statutory Approvals and the receipt of the XXXX
Shareholders' Approval, any statute, law, ordinance, rule,
regulation, judgment, decree, order, injunction, writ,
permit or license of any Governmental Authority applicable
to XXXX or any of XXXX Subsidiaries or XXXX Joint Ventures
or any of their respective properties or assets, or
(iii) subject to obtaining the third-party
consents set forth in Section 5.4(b) of the XXXX Disclosure
--------------
Schedule (the "XXXX Required Consents"), any material note,
----------------------
bond, mortgage, indenture, deed of trust, license,
franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which
XXXX or any of the XXXX Subsidiaries or XXXX Joint Ventures
is a party or by which it or any of its properties or assets
may be bound or affected,
excluding from the foregoing clauses (ii) and (iii) such
violations which, in the aggregate do not, and insofar as
reasonably can be foreseen, would not, have an XXXX Material
Adverse Effect.
(c) Statutory Approvals. No declaration, filing or
-------------------
registration with, or notice to or authorization, consent or
approval of, any Governmental Authority is necessary for the
execution and delivery of this Agreement or the consummation by
XXXX of the transactions contemplated hereby, except as described
in this Agreement or Section 5.4(c) of the XXXX Disclosure
--------------
Schedule (the "XXXX Required Statutory Approvals", the failure to
---------------------------------
obtain, make or give which would have, in the aggregate, a XXXX
Material Adverse Effect, it being understood that references in
this Agreement to "obtaining" such XXXX Required Statutory
---------
Approvals shall mean making such declarations, filings or
registrations; giving such notices; obtaining such
authorizations, consents or approvals; and having such waiting
periods expire as are necessary to avoid a violation of law).
(d) Compliance.
----------
(i) (A) Except as set forth in Section 5.4(d),
--------------
Section 5.10 or Section 5.11 of the XXXX Disclosure
------------ ------------
Schedule, or as disclosed in the XXXX SEC Reports (as
hereinafter defined) filed prior to the date hereof, neither
XXXX nor any of the XXXX Subsidiaries nor, to the knowledge
of XXXX, any XXXX Joint Venture, is in violation of, is
under investigation with respect to any violation of, or has
been given notice or been charged with any violation of, any
law, statute, order, rule, regulation, ordinance or judgment
(including, without limitation, any applicable environmental
law, ordinance or regulation) of any Governmental Authority,
except for violations which, in the aggregate do not, and
insofar as reasonably can be foreseen, would not, have an
XXXX Material Adverse Effect.
(B) For purposes of this Agreement
"knowledge" shall mean, with respect to any party hereto,
the actual knowledge after due inquiry of principal
executive officers of such party.
(ii) Except as set forth in Section 5.4(d) or in
--------------
Section 5.11 of the XXXX Disclosure Schedule, XXXX and the
------------
XXXX Subsidiaries and XXXX Joint Ventures have all Permits
necessary to conduct their businesses as presently
conducted, except those the failure of which to obtain, in
the aggregate do not, and insofar as reasonably can be
foreseen, would not, have an XXXX Material Adverse Effect.
(iii) Except as set forth in Section 5.4(d) of
--------------
the XXXX Disclosure Schedule, each of XXXX and the XXXX
Subsidiaries and XXXX Joint Ventures is not in breach,
violation, or default in the performance or observance of
any term or provision of, and no event has occurred which,
with lapse of time or action by a third party, could result
in a default under,
(A) its Articles of Incorporation or By-laws,
or
(B) any contract, commitment, agreement,
indenture, mortgage, loan agreement, note, lease, bond,
license, approval or other instrument to which it is a
party or by which it is bound or to which any of its
property is subject, except for breaches, violations or
defaults which, in the aggregate do not, and insofar as
reasonably can be foreseen, would not, have an XXXX
Material Adverse Effect.
Section 5.5 Reports and Financial Statements.
--------------------------------
(a) The filings required to be made by XXXX and the
XXXX Subsidiaries since January 1, 1994 under the Securities Act,
the Exchange Act, the 1935 Act, the Power Act, and applicable
state laws and regulations have been filed with the SEC, the
FERC, or any appropriate state public utilities commission, as
the case may be, including all forms, statements, reports,
agreements (oral or written) and all documents, exhibits,
amendments and supplements appertaining thereto, and complied, as
of their respective dates, in all material respects with all
applicable requirements of the appropriate statute and the rules
and regulations thereunder.
(b) XXXX has made available to WPS a true and complete
copy of each form, report, schedule, registration statement and
definitive proxy statement filed by each of XXXX and UPPCO with
the SEC since January 1, 1994 (as such documents have since the
time of their filing been amended or supplemented, the "XXXX SEC
--------
Reports") and each other filing described in Section 5.5(a). As
------- --------------
of their respective dates, the XXXX SEC Reports did not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
(c) The audited consolidated financial statements and
unaudited interim financial statements of XXXX, included in the
XXXX SEC Reports (collectively, the "XXXX Financial Statements")
-------------------------
have been prepared in accordance with GAAP (except as may be
indicated therein or in the notes thereto and except with respect
to unaudited statements as permitted by Form 10-Q under the
Exchange Act) and fairly present in all material respects the
financial position of XXXX, as of the dates thereof and the
results of its operations and cash flows for the periods then
ended, subject, in the case of the unaudited interim financial
statements, to normal, recurring audit adjustments.
(d) True, accurate and complete copies of the Articles
of Incorporation and By-laws of XXXX, as in effect on the date
hereof, have been delivered to WPS.
Section 5.6 Absence of Certain Changes or Events.
------------------------------------
Except as disclosed in the XXXX SEC Reports filed prior to the
date hereof or as set forth in Section 5.6 of the XXXX Disclosure
-----------
Schedule, since December 31, 1996, XXXX and each of the XXXX
Subsidiaries and XXXX Joint Ventures have conducted their
businesses only in the ordinary course of their respective
businesses consistent with past practice and there has not been,
and no facts or conditions exist (other than facts or conditions
of general applicability to electric utility companies in the
Upper Peninsula of Michigan, including, but not limited to, "open
access" or other general utility industry restructuring orders or
legislation) which, in the aggregate have or, insofar as
reasonably can be foreseen, would have, an XXXX Material Adverse
Effect.
Section 5.7 Litigation. Except as disclosed in the
----------
XXXX SEC Reports filed prior to the date hereof or as set forth
in Section 5.7, Section 5.9 or Section 5.11 of the XXXX
----------- ----------- ------------
Disclosure Schedule,
(a) there are no claims, suits, actions or proceedings
pending or, to the knowledge of XXXX, threatened, nor are
there, to the knowledge of XXXX, any investigations or
reviews pending or threatened against, relating to or
affecting XXXX or any of the XXXX Subsidiaries and, to the
knowledge of XXXX, the XXXX Joint Ventures;
(b) there have not been any developments since
December 31, 1996 with respect to such disclosed claims,
suits, actions, proceedings, investigations or reviews; and
(c) there are no judgments, decrees, injunctions,
rules or orders of any court, governmental department,
commission, agency, instrumentality or authority or any
arbitrator applicable to XXXX or any of the XXXX
Subsidiaries and, to the knowledge of XXXX, or the XXXX
Joint Ventures,
which, when taken together with any other nondisclosures of
matters described in clauses (a), (b) and (c), have, or insofar
as reasonably can be foreseen, would have, an XXXX Material
Adverse Effect.
Section 5.8 Registration Statement and Proxy
--------------------------------
Statement.
---------
(a) None of the information supplied or to be supplied
by or on behalf of XXXX for inclusion or incorporation by
reference in:
(i) the Registration Statement will, at the time
the Registration Statement is filed with the SEC and at the
time it becomes effective under the Securities Act, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein, not misleading, and
(ii) the Proxy Statement will, at the date mailed
to shareholders and, as the same may be amended or
supplemented, at the time of the meeting of shareholders to
be held in connection with the Merger, contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances
under which they are made, not misleading.
(b) The Proxy Statement will comply as to form in all
material respects with the provisions of the Securities Act and
the Exchange Act, respectively, and the applicable rules and
regulations thereunder.
Section 5.9 Tax Matters. Except as set forth in
-----------
Section 5.9 of the XXXX Disclosure Schedule:
-----------
(a) Filing of Timely Tax Returns. XXXX and each of
----------------------------
the XXXX Subsidiaries have filed (or there has been filed on its
behalf) all Tax Returns required to be filed by each of them
under applicable law. All such Tax Returns were and are in all
material respects true, complete and correct and filed on a
timely basis.
(b) Payment of Taxes. XXXX and each of the XXXX
----------------
Subsidiaries have, within the time and in the manner prescribed
by law, paid all Taxes that are currently due and payable except
for those contested in good faith and for which adequate reserves
have been established on their books and records.
(c) Tax Reserves. XXXX and the XXXX Subsidiaries have
------------
established on their books and records reserves adequate to pay
all Taxes and reserves for deferred income taxes in accordance
with GAAP.
(d) Tax Liens. There are no Tax liens upon the assets
---------
of XXXX or any of the XXXX Subsidiaries except liens for Taxes
not yet due.
(e) Withholding Taxes. XXXX and each of the XXXX
-----------------
Subsidiaries have complied in all material respects with the
provisions of the Code relating to the withholding of Taxes, as
well as similar provisions under any other laws, and have, within
the time and in the manner prescribed by law, withheld from
employee wages and paid over to the proper governmental
authorities all amounts required.
(f) Extensions of Time for Filing Tax Returns.
-----------------------------------------
Neither XXXX nor any of the XXXX Subsidiaries has requested any
extension of time within which to file any Tax Return, which Tax
Return has not since been timely filed.
(g) Waivers of Statute of Limitations. Neither XXXX
---------------------------------
nor any of the XXXX Subsidiaries has executed any outstanding
waivers or comparable consents regarding the application of the
statute of limitations with respect to any Taxes or Tax Returns.
(h) No Assessments. No deficiency for any Taxes has
--------------
been proposed, asserted or assessed against XXXX or any of the
XXXX Subsidiaries that has not been resolved and paid in full.
(i) Audit, Administrative and Court Proceedings. No
-------------------------------------------
audits or other administrative proceedings or court proceedings
are presently pending with regard to any Taxes or Tax Returns of
XXXX or any of the XXXX Subsidiaries.
(j) Powers of Attorney. No power of attorney
------------------
currently in force has been granted by XXXX or any of the XXXX
Subsidiaries concerning any Tax matter.
(k) Tax Rulings. Neither XXXX nor any of the XXXX
-----------
Subsidiaries has received a Tax Ruling or entered into a Closing
Agreement with any taxing authority that would have a continuing
adverse effect after the Closing Date.
(l) Availability of Tax Returns. For the three years
---------------------------
ended December 31, 1995 XXXX has made available to WPS complete
and accurate copies of (i) all Tax Returns, and any amendments
thereto, filed by XXXX or any of the XXXX Subsidiaries, (ii) all
audit reports received from any taxing authority relating to any
Tax Return filed by XXXX or any of the XXXX Subsidiaries, and
(iii) any Closing Agreements entered into by XXXX or any of the
XXXX Subsidiaries with any taxing authority.
(m) Tax Sharing Agreements. Except for agreements
----------------------
among members of the XXXX consolidated group, neither XXXX nor
any XXXX Subsidiary is a party to any agreement relating to
allocating or sharing of Taxes.
(n) Code Section 280G. Except as set forth in Section
----------------- -------
5.9(n) of the XXXX Disclosure Schedule, neither XXXX nor any of
------
the XXXX Subsidiaries is a party to any agreement, contract, or
arrangement that could result, on account of the transactions
contemplated hereunder, separately or in the aggregate, in the
payment of any "excess parachute payments" within the meaning of
-------------------------
Section 280G of the Code.
------------
(o) Liability for Others. None of XXXX or any of the
--------------------
XXXX Subsidiaries has any liability for Taxes of any person other
than XXXX and the XXXX Subsidiaries (i) under Treasury
Regulations Section 1.1502-6 (or any similar provision of state,
----------------
local or foreign law) as a transferee or successor, (ii) by
contract, or (iii) otherwise.
(p) Certain Definitions. As used in this Agreement:
-------------------
(i) "Taxes" means any Federal, state, county,
-----
local or foreign taxes, charges, fees, levies, or other
assessments, including all net income, gross income, sales
and use, ad valorem, transfer, gains, profits, excise,
franchise, real and personal property, gross receipts,
capital stock, production, business and occupation,
disability, employment, payroll, license, estimated, stamp,
custom duties, severance or withholding taxes or charges
imposed by any governmental entity, and includes any
interest and penalties (civil or criminal) on or additions
to any such taxes;
(ii) "Tax Return" means a report, return or other
----------
information required to be supplied to a governmental entity
with respect to Taxes including, where permitted or
required, combined or consolidated returns for a group of
entities;
(iii) "Tax Ruling" means a written ruling of a
----------
taxing authority relating to Taxes; and
(iv) "Closing Agreement" means a written and
-----------------
legally binding agreement with a taxing authority relating
to Taxes.
Section 5.10 Employee Matters; ERISA.
-----------------------
(a) Benefit Plans. Section 5.10(a) of the XXXX
------------- ---------------
Disclosure Schedule contains a true and complete list of each
employee benefit plan, fund program, contract, policy or
arrangement covering employees, former employees or directors of
XXXX and each of the XXXX Subsidiaries or their beneficiaries, or
providing benefits to such persons in respect of services
provided to any such entity, including, but not limited to,
employee benefit plans within the meaning of Section 3(3) of
------------
ERISA and any severance or change in control agreement
(collectively, the "XXXX Benefit Plans"). For the purposes of
------------------
this Section 5.10 only, the term "XXXX" shall be deemed to
------------ ----
include the predecessors of such company.
(b) Contributions. Except as set forth in Section
------------- -------
5.10(b) of the XXXX Disclosure Schedule, all material
-------
contributions and other payments required to be made by XXXX or
any of the XXXX Subsidiaries to any XXXX Benefit Plan (or to any
person pursuant to the terms thereof) have been made or the
amount of such payment or contribution obligation has been
reflected in the XXXX Financial Statements.
(c) Multiemployer Pension Plans. Neither XXXX nor any
---------------------------
XXXX Subsidiary nor any member of a controlled group (as defined
in Section 401(a)(14) of ERISA, disregarding the reference to
single employer plans) that includes XXXX or any XXXX Subsidiary
contributes to or is obligated to contribute to, or has during
the past ten (10) years contributed to or been obligated to
contribute to, a multiemployer pension plan (as defined in
Section 4011(a)(3) of ERISA).
(d) Title IV of ERISA. With respect to each XXXX
-----------------
Benefit Plan and any other plan, fund or program maintained or
contributed to during the past ten (10) years by XXXX or any XXXX
Subsidiary or any member of a controlled group (as defined in
Section 401(a)(14) of ERISA) that includes XXXX or an XXXX
Subsidiary and that is subject to Title IV of ERISA:
(i) no such plan has been terminated so as to
subject, directly or indirectly, XXXX or any XXXX Subsidiary
to any liability, contingent or otherwise, or the imposition
of any lien under Title IV of ERISA on the assets of XXXX or
any XXXX Subsidiary;
(ii) no proceeding has been initiated or
threatened by any person (including the Pension Benefit
Guaranty Corporation ("PBGC")) to terminate any such plan;
(iii) to the knowledge of XXXX, no condition or
event exists or is expected to occur that could subject,
directly or indirectly, XXXX or any XXXX Subsidiary to any
liability, contingent or otherwise, or the imposition of any
lien under Title IV of ERISA on the assets of XXXX or any
XXXX Subsidiary, whether to the PBGC or to any other person
or otherwise;
(iv) if any such plan were to be terminated, no
assets of XXXX or any XXXX Subsidiary would be subject,
directly or indirectly, to any liability, contingent or
otherwise, or the imposition of any lien under Title IV of
ERISA other than for the payment of benefits in the ordinary
course of business;
(v) no "reportable event" (as defined in Section
4043 of ERISA other than a reportable event with respect to
which the 30-day notice to the PBGC has been waived) has
occurred with respect to any such plan; and
(vi) no such plan which is subject to Section 302
of ERISA or Section 412 of the Code has incurred an
"accumulated funding deficiency" (as defined in Section 302
of ERISA and Section 412 of the Code), whether or not such
deficiency has been waived.
(e) Qualification; Compliance. Except as set forth in
-------------------------
Section 5.10(e) of the XXXX Disclosure Schedule, each of the XXXX
---------------
Benefit Plans intended to be "qualified" within the meaning of
---------
Section 401(a) of the Code has been determined by the IRS to be
--------------
so qualified as to form, and, to the knowledge of XXXX, no
circumstances exist that are reasonably expected by XXXX to
result in the revocation of any such determination. To the
knowledge of XXXX, XXXX is in compliance in all respects with,
and each of the XXXX Benefit Plans is and has been operated in
accordance with the term of such plan and in all respects in
compliance with, all applicable laws, rules and regulations
governing each such plan, including, without limitation, ERISA
and the Code, except for any violations that, in the aggregate do
not, and insofar as reasonably can be foreseen, would not, give
rise to an XXXX Material Adverse Effect. To the knowledge of
XXXX, each XXXX Benefit Plan (and where applicable, its related
trust) intended to provide for the deferral of income, the
reduction of salary or other compensation, or to afford other
income tax benefits, complies in all material respects with the
requirements of the applicable provisions of the Code or other
laws, rules and regulations required to provide such income tax
benefits.
(f) Liabilities. With respect to the XXXX Benefit
-----------
Plans, individually and in the aggregate, no event has occurred,
and, to the knowledge of XXXX, there does not now exist any
condition or set of circumstances that could subject XXXX or any
of the XXXX Subsidiaries to any liability arising under the Code,
ERISA or any other applicable law (including, without limitation,
any liability of any kind whatsoever, whether direct or indirect,
contingent, inchoate or otherwise, to any such plan or the PBGC),
or under any indemnity agreement to which XXXX is subject, which
liability, excluding liability for PBGC premiums, benefit claims
and funding obligations payable in the ordinary course, has, or
insofar as reasonably can be foreseen, would have, an XXXX
Material Adverse Effect.
(g) Welfare Plans. Except as set forth in Section
------------- -------
5.10(g) of the XXXX Disclosure Schedule, (i) none of the XXXX
-------
Benefit Plans that are "welfare plans" within the meaning of
-------------
Section 3(1) of ERISA, provides for any benefits (and neither
-----------
XXXX nor any XXXX Subsidiary has any obligation to provide
benefits) payable to or on behalf of any employee or director
after termination of employment or service, as the case may be,
other than elective continuation coverage required to be provided
under Section 4980B of the Code or Part 6 of Title I of ERISA or
-------------
coverage which expires at the end of the calendar month following
such event, and (ii) with respect to each XXXX Benefit Plan (or
other plan, contract or arrangement under which XXXX or any XXXX
Subsidiary has an obligation to provide benefits) identified in
Section 5.10(g) of the XXXX Disclosure Schedule as providing
---------------
welfare benefits payable to or on behalf of any employee or
director after termination of employment or service, XXXX or the
applicable XXXX Subsidiary may at any time amend, modify or
terminate such benefits.
(h) Documents made Available. XXXX has made available
------------------------
to WPS a true and correct copy of each collective bargaining
agreement to which XXXX or any of the XXXX Subsidiaries is a
party or under which XXXX or any of the XXXX Subsidiaries has
obligations and, with respect to each XXXX Benefit Plan, where
applicable,
(i) such current plan and summary plan
description,
(ii) the most recent annual report filed with the
IRS,
(iii) each current related trust agreement,
insurance contract, service provider or investment
management agreement (including all amendments to each such
document),
(iv) the most recent determination of the IRS
with respect to the qualified status of such XXXX Benefit
Plan, and
(v) the most recent actuarial report or
valuation.
(i) Payments Resulting from Merger. Except as set
------------------------------
forth in Section 5.10(i) of the XXXX Disclosure Schedule:
---------------
(i) The consummation or announcement of any
transaction contemplated by this Agreement will not (either
alone or upon the occurrence of any additional or further
acts or events) result in any
(A) payment (whether of severance pay or
otherwise) becoming due from XXXX or any of the XXXX
Subsidiaries to any officer, employee, former employee
or director thereof or to the trustee under any "rabbi
-----
trust" or similar arrangement that would not have been
-----
paid without regard to such consummation or
announcement or
(B) benefit under any XXXX Benefit Plan
being established or becoming accelerated, vested or
payable; and
(ii) neither XXXX nor any of the XXXX Subsidiaries
is a party to
(A) any management, employment, deferred
compensation, severance (including any payment, right
or benefit resulting from a change in control), bonus
or other contract for personal services with any
officer, director or employee,
(B) any consulting contract with any person
who prior to entering into such contract was a director
or officer of XXXX, or
(C) any material plan, agreement, arrangement
or understanding similar to any of the foregoing.
(j) Labor Agreements. Except as set forth in Section
---------------- -------
5.10(j) of the XXXX Disclosure Schedule, as of the date hereof,
-------
neither XXXX nor any of the XXXX Subsidiaries is a party to any
collective bargaining agreement or other labor agreement with any
union or labor organization. To the knowledge of XXXX, as of the
date hereof, there is no current union representation question
involving employees of XXXX or any of the XXXX Subsidiaries, nor
does XXXX know of any activity or proceeding of any labor
organization (or representative thereof) or employee group to
organize any such employees. Except as disclosed in the XXXX SEC
Reports filed prior to the date hereof or in Section 5.10(j) of
---------------
the XXXX Disclosure Schedule,
(i) there is no material unfair labor practice,
employment discrimination or other complaint against XXXX or
any of the XXXX Subsidiaries pending, or to the knowledge of
XXXX, threatened,
(ii) there is no strike, lockout or material
dispute, slowdown or work stoppage pending, or to the
knowledge of XXXX, threatened, against or involving XXXX or
any of the XXXX Subsidiaries, and
(iii) there is no material proceeding, claim,
suit, action or governmental investigation pending or, to
the knowledge of XXXX, threatened, in respect of which any
director, officer, employee or agent of XXXX or any of the
XXXX Subsidiaries is or may be entitled to claim
indemnification from XXXX or such XXXX Subsidiary pursuant
to their respective Articles of Incorporation or By-laws.
Section 5.11 Environmental Protection. Except as set
------------------------
forth in Section 5.11 of the XXXX Disclosure Schedule or in the
------------
XXXX SEC Reports filed prior to the date hereof:
(a) Compliance.
----------
(i) Each of XXXX and the XXXX Subsidiaries and
XXXX Joint Ventures is in compliance with all applicable
Environmental Laws, except where the failure to be in
compliance, in the aggregate does not, and insofar as
reasonably can be foreseen, would not, have an XXXX Material
Adverse Effect; and
(ii) neither XXXX nor any of the XXXX Subsidiaries
and XXXX Joint Ventures has received any communication
(written or oral) from any person or Governmental Authority
that alleges that XXXX or any of the XXXX Subsidiaries and
XXXX Joint Ventures is not in such compliance with
applicable Environmental Laws.
(b) Environmental Permits. Each of XXXX and the XXXX
---------------------
Subsidiaries has obtained all Environmental Permits necessary for
the construction of their facilities and the conduct of their
operations, as applicable, and all such Environmental Permits are
in good standing or, where applicable, a renewal application has
been timely filed and is pending agency approval, and XXXX and
the XXXX Subsidiaries are in compliance with all terms and
conditions of the Environmental Permits, except where the failure
to be in such compliance, in the aggregate does not, and insofar
as reasonably can be foreseen, would not, have an XXXX Material
Adverse Effect.
(c) Environmental Claims. There is no material
--------------------
Environmental Claim pending
(i) against XXXX or any of the XXXX Subsidiaries
or XXXX Joint Ventures,
(ii) against any person or entity whose liability
for any Environmental Claim XXXX or any of the XXXX
Subsidiaries has or may have retained or assumed either
contractually or by operation of law, or
(iii) against any real or personal property or
operations which XXXX or any of the XXXX Subsidiaries owns,
leases or manages, in whole or in part.
(d) Releases. To the knowledge of XXXX, there have
--------
not been any material Releases of any Hazardous Material that
would be reasonably likely to form the basis of any material
Environmental Claim against XXXX or any of the XXXX Subsidiaries,
or against any person or entity whose liability for any material
Environmental Claim XXXX or any of the XXXX Subsidiaries has or
may have retained or assumed either contractually or by operation
of law.
(e) Predecessors. To the knowledge of XXXX, with
------------
respect to any predecessor of XXXX or any of the XXXX
Subsidiaries, there is no material Environmental Claim pending or
threatened, and there has been no Release of Hazardous Materials
that would be reasonably likely to form the basis of any material
Environmental Claim.
(f) Disclosure. XXXX has disclosed to WPS all
----------
material facts which XXXX reasonably believes form the basis of a
material Environmental Claim arising from
(i) the cost of XXXX pollution control equipment
currently required or known to be required in the future;
(ii) current XXXX remediation costs or XXXX
remediation costs known to be required in the future; or
(iii) any other environmental matter affecting
XXXX or the XXXX Subsidiaries or XXXX Joint Ventures.
(g) Certain Definitions. As used in this Agreement:
-------------------
(i) "Environmental Claim" means any and all
-------------------
administrative, regulatory or judicial actions, suits,
demands, demand letters, directives, claims, liens,
investigations, proceedings or notices of noncompliance,
liability or violation (written or oral) by any person or
entity (including any Governmental Authority) alleging
potential liability (including, without limitation,
potential responsibility or liability for enforcement,
investigatory costs, cleanup costs, governmental response
costs, removal costs, remedial costs, natural resources
damages, property damages, personal injuries or penalties)
arising out of, based on or resulting from
(A) the presence, or Release or threatened
Release into the environment, of any Hazardous
Materials at any location, whether or not owned,
operated, leased or managed by XXXX or any of the XXXX
Subsidiaries or XXXX Joint Ventures (as hereinafter
defined); or
(B) circumstances forming the basis of any
violation, or alleged violation, of any Environmental
Law; or
(C) any and all claims by any third party
seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting
from the presence or Release of any Hazardous
Materials;
(ii) "Environmental Laws" means all Federal, state
------------------
and local laws, rules and regulations relating to pollution,
the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface
strata) or protection of human health as it relates to the
environment including, without limitation, laws and
regulations relating to Releases or threatened Releases of
Hazardous Materials, or otherwise relating to the
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous
Materials;
(iii) "Hazardous Materials" means (a) any
-------------------
petroleum products, radioactive materials, asbestos in any
form that is or could become friable, urea formaldehyde foam
insulation, and transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls; and
(b) any chemicals, materials or substances which are now
defined as or included in the definition of "hazardous
---------
substances," "hazardous wastes," "hazardous materials,"
---------- ---------------- -------------------
"extremely hazardous wastes," "restricted hazardous wastes,"
-------------------------- ---------------------------
"toxic substances," "toxic pollutants," or words of similar
---------------- ----------------
import, under any Enviromental Law; and (c) any other
chemical, material, substance or waste, exposure to which is
now prohibited, limited or regulated under any Environmental
Law in a jurisdiction in which XXXX or any of the XXXX
Subsidiaries or XXXX Joint Ventures operates; and
(iv) "Release" means any release, spill, emission,
-------
leaking, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the atmosphere, soil, surface
water, groundwater or property.
Section 5.12 Regulation as a Utility. UPPCO is
-----------------------
regulated as a public utility in the State of Michigan and in no
other state. Except as set forth in Section 5.12 of the XXXX
------------
Disclosure Schedule, neither XXXX nor any "subsidiary company" or
------------------
"affiliate" (as such terms are defined in the 0000 Xxx) of XXXX
---------
is subject to regulation as a public utility or public service
company (or similar designation) by any other state in the United
States or any foreign country. XXXX is an exempt holding company
under Section 3(a)(1) of the 1935 Act.
---------------
Section 5.13 Vote Required. The approval by the
-------------
holders of a majority of the votes entitled to be cast by all
holders of XXXX Common Stock (the "XXXX Shareholders' Approval")
---------------------------
to approve the XXXX Merger, is the only vote of the holders of
any class or series of capital stock of XXXX required for any of
the transactions required by this Agreement.
Section 5.14 Accounting Matters.
------------------
(a) Neither XXXX nor, to UPEN's knowledge, any of its
Affiliates has taken or agreed to take any action that would
prevent WPS from accounting for the transactions to be effected
pursuant to this Agreement as a pooling of interests in
accordance with GAAP and applicable SEC regulations.
(b) As used in this Agreement (except as specifically
otherwise defined):
(i) "Affiliate" means, as to any person, any
---------
other person which directly or indirectly controls, or is
under common control with, or is controlled by, such person;
and
(ii) "control" (including, with its correlative
-------
meanings, "controlled by" and "under common control with")
------------- -------------------------
means possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether
through ownership of securities or partnership or other
ownership interests, by contract or otherwise).
Section 5.15 Applicability of Certain Michigan Law,
--------------------------------------
Etc. Assuming the representations and warranties of WPS made in
---
Sections 4.10 are correct, none of the "control share" or
------------- -------------
"business combination" provisions of the MBCA, or any other
--------------------
takeover related provisions of the MBCA (or, to the knowledge of
XXXX, similar Michigan state statute) the Articles of
Incorporation or By-laws of XXXX is applicable to the transaction
contemplated by this Agreement.
Section 5.16 Opinion of Financial Advisor. XXXX has
----------------------------
received the written opinion of Xxxxxxxxxxx Xxxxxxx & Co., Inc.
to the effect that, as of the date hereof, the consideration to
be received by the holders of shares of XXXX Common Stock in the
Merger is fair from a financial point of view to such holders.
Section 5.17 Insurance. Except as set forth in
---------
Section 5.17 of the XXXX Disclosure Schedule, each of XXXX and
------------
the XXXX Subsidiaries is, and has been continuously since
January 1, 1990, insured with financially responsible insurers in
such amounts and against such risks and losses as are customary
in all material respects for companies conducting the business
conducted by XXXX and the XXXX Subsidiaries during such time
period. Except as set forth in Section 5.17 of the XXXX
------------
Disclosure Schedule, neither XXXX nor any of the XXXX
Subsidiaries has received any notice of cancellation or
termination with respect to any material insurance policy of XXXX
or any of the XXXX Subsidiaries. The insurance policies of XXXX
and each of the XXXX Subsidiaries are valid and enforceable
policies in all material respects.
Section 5.18 Ownership of WPS Common Stock. Except
-----------------------------
as set forth in Section 5.18 of the XXXX Disclosure Schedule,
------------
XXXX does not "beneficially own" (as such term is defined for
----------------
purposes of Section 13(d) of the Exchange Act) any shares of WPS
-------------
Common Stock.
Section 5.19 Title to Assets. Except as set forth in
---------------
Section 5.19 of the XXXX Disclosure Schedule, XXXX or an XXXX
------------
Subsidiary owns good and valid title to the assets and properties
which XXXX or such XXXX Subsidiary owns or purports to own, free
and clear of any and all liens and encumbrances.
Section 5.20 No Violation of Law; Buildings and
----------------------------------
Equipment.
---------
(a) Except as set forth in Section 5.20 of the XXXX
------------
Disclosure Schedule, neither XXXX nor any XXXX Subsidiary nor any
of the assets of XXXX or any XXXX Subsidiary violates or
conflicts with any law, governance, regulation, judgment or order
or any zoning, building line restrictions, planning, use or other
similar restriction.
(b) Except as set forth in Section 5.20 of the XXXX
------------
Disclosure Schedule, (i) the buildings and equipment owned by
XXXX or any XXXX Subsidiary are in good operating condition and
repair, reasonable wear and tear excepted; (ii) such assets and
their use conform in all respects to applicable laws, ordinances
and governmental regulations and (iii) no written notice of any
violation of any building, zoning or other law or governmental
regulation relating to such assets or their use has been received
by XXXX or any XXXX Subsidiary.
Section 5.21 Existing Contracts. Set forth in
------------------
Section 5.21 of the XXXX Disclosure Schedule are all contracts to
------------
which XXXX or any XXXX Subsidiary is a party which constitute:
(a) a lease of, or agreement to purchase or sell, any
capital assets in excess of $250,000;
(b) any union labor contracts;
(c) any management, consulting, employment, personal
service, agency or other contracts providing for employment or
rendition of services and which: (i) are in writing; or (ii)
create other than an at will employment relationship; or (iii)
provide for any commission, bonus, profit sharing, incentive,
retirement, consulting or additional compensation;
(d) any agreements or notes evidencing any
indebtedness;
(e) an agreement for the storage, transportation,
treatment or disposal of any hazardous waste or hazardous
byproduct;
(f) a power of attorney (whether revocable or
irrevocable) given to any Person by XXXX or any XXXX Subsidiary
that is in force;
(g) an agreement by XXXX or an XXXX Subsidiary not to
compete in any business or in any geographical area;
(h) an agreement restricting the right of XXXX or any
XXXX Subsidiary to use or disclose any information in its
possession;
(i) a partnership, joint venture or similar
arrangement;
(j) a license;
(k) an agreement or arrangement with any Affiliate; or
(l) any other agreement which: (i) involves an amount
in excess of $50,000.00; or (ii) is not in the ordinary course of
business of XXXX or an XXXX Subsidiary.
Section 5.22 Performance of Contracts. XXXX and the
------------------------
XXXX Subsidiary have complied in all material respects with each
contract which is to be performed by it at or before the date
hereof. Each of the contracts is in full force and effect and
constitutes the legal and binding obligation of XXXX or an XXXX
Subsidiary and to the knowledge of XXXX, constitutes the legal
and binding obligation of the other parties thereto.
Section 5.23 Contingent and Undisclosed Liabilities.
--------------------------------------
Except pursuant to the deposit and collection of checks in the
ordinary course of business, neither XXXX nor any XXXX Subsidiary
has guaranteed or become a surety or is otherwise contingently
liable for the obligation of any other Person. Neither XXXX nor
any XXXX Subsidiary has any liabilities of any nature except for
those which: (a) are disclosed in the XXXX SEC Reports or in the
XXXX Disclosure Schedule or in this Agreement; or (b) arose in
the ordinary course of business since December 31, 1996 and are
not required to be disclosed pursuant to this Agreement or the
XXXX Disclosure Schedule.
ARTICLE VI
CONDUCT OF BUSINESS BY XXXX PENDING THE MERGER
Section 6.1 Covenants of the Parties. After the
------------------------
date hereof and prior to the Effective Time or earlier
termination of this Agreement, XXXX agrees as set forth in this
Article VI, as to itself and to each of the XXXX Subsidiaries,
except as expressly contemplated or permitted in this Agreement,
or to the extent WPS shall otherwise consent in writing.
Section 6.2 Ordinary Course of Business. XXXX
---------------------------
shall, and shall cause its Subsidiaries to, carry on their
respective businesses in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted and use
all commercially reasonable efforts to preserve intact their
present business organizations and goodwill, preserve the
goodwill and relationships with customers, suppliers and others
having business dealings with them and, subject to prudent
management of workforce needs and ongoing programs currently in
force, keep available the services of their present officers and
employees. Except as set forth in Section 6.2 of the XXXX
-----------
Disclosure Schedule, XXXX shall not, nor shall XXXX permit any of
its Subsidiaries to, enter into a new line of business, or make
any change in the line of business it engages in as of the date
hereof involving any material investment of assets or resources
or any material exposure to liability or loss to XXXX and its
Subsidiaries taken as a whole or take any action that would make
it materially less likely that WPS can obtain the WPS Required
Statutory Approvals or that XXXX can obtain the XXXX Required
Statutory Approvals.
Section 6.3 Dividends. XXXX shall not, nor shall
---------
XXXX permit any of its Subsidiaries to,
(a)(i) declare or pay any dividends (including
dividends payable in capital stock) on or make other
distributions in respect of any of their capital stock other
than
(A) to XXXX or its wholly-owned
Subsidiaries,
(B) regular quarterly cash dividends on XXXX
Common Stock, with usual record and payment dates,
during any fiscal year, which quarterly dividends shall
not exceed the dividend per share paid in the last
quarter preceding the execution of this Agreement, and
(ii) split, combine or reclassify any of their
capital stock or issue or authorize or propose the issuance
of any other securities in respect of, in lieu of, or in
substitution for, shares of their capital stock; or
(iii) redeem, repurchase or otherwise acquire any
shares of their capital stock, other than
(A) redemptions or repurchases in accordance
with the terms of such capital stock,
(B) in connection with intercompany purchases
of capital stock,
(C) for the purpose of funding dividend
reinvestment and employee stock purchase plans in
accordance with past practice, or
(D) as set forth on Section 6.3(a)(iii) of
-------------------
the XXXX Disclosure Schedule.
Section 6.4 Issuance of Securities. (a) XXXX shall
----------------------
not, nor shall XXXX permit any of its Subsidiaries to, issue,
agree to issue, deliver, sell, award, pledge, dispose of or
otherwise encumber or authorize or propose the issuance,
delivery, sale, award, pledge, disposal or other encumbrance of,
any shares of their capital stock of any class or any securities
convertible into or exchangeable for, or any rights, warrants or
options (including but not limited to, options granted under the
UPPCO Long Term Stock Incentive Plan) to acquire, any such shares
or convertible or exchangeable securities, other than issuances
by an XXXX Subsidiary to XXXX or to a wholly-owned Subsidiary of
XXXX.
(b) XXXX shall promptly furnish to WPS such
information as may be reasonably requested including
financial information and take such action as may be
reasonably necessary and otherwise fully cooperate with in
the preparation of any registration statement under the
Securities Act and other documents necessary in connection
with issuance of securities as contemplated by this Section
-------
6.4, subject to obtaining customary indemnities.
---
Section 6.5 Charter Documents. Except as set forth
-----------------
in Section 6.5 of the XXXX Disclosure Schedule and except as
-----------
contemplated herein, XXXX shall not amend or propose to amend its
articles of incorporation, by-laws or regulations, or similar
organic documents.
Section 6.6 No Acquisitions. Except as set forth in
---------------
Section 6.6 of the XXXX Disclosure Schedule XXXX shall not, nor
-----------
shall XXXX permit any of its Subsidiaries to, acquire, or
publicly propose to acquire, or agree to acquire, by merger or
consolidation with, or by purchase or otherwise, a substantial
equity interest in or a substantial portion of the assets of, any
business or any corporation, partnership, association or other
business organization or division thereof, nor shall XXXX acquire
or agree to acquire a material amount of assets other than in the
ordinary course of business consistent with past practice.
Section 6.7 Capital Expenditures and Emission
---------------------------------
Allowances. Except as set forth in Section 6.7 of the XXXX
---------- -----------
Disclosure Schedule, or as required by law, XXXX shall not, nor
shall XXXX permit any of its Subsidiaries to, (i) make capital
expenditures in excess of $250,000 over the amount budgeted by
XXXX for capital expenditures as set forth in Section 6.7 of the
-----------
XXXX Disclosure Schedule, or (ii) enter into written commitments
for the purchase or sale of sulfur dioxide emission allowances as
provided for by the Clean Air Act Amendments of 1990, in excess
(singularly or in the aggregate) of $250,000.
Section 6.8 No Dispositions. Except as set forth in
---------------
Section 6.8 of the XXXX Disclosure Schedule, other than
-----------
dispositions by XXXX and its Subsidiaries of assets having a fair
market value (singularly or in the aggregate) of less than
$250,000 XXXX shall not, nor shall XXXX permit any of its
Subsidiaries to, sell, lease, license, encumber or otherwise
dispose of, any of its assets, other than encumbrances or
dispositions in the ordinary course of its business consistent
with past practice.
Section 6.9 Indebtedness. Except as contemplated by
------------
this Agreement, XXXX shall not, nor shall XXXX permit any of its
Subsidiaries to, incur or guarantee any indebtedness (including
any debt borrowed or guaranteed or otherwise assumed including,
without limitation, the issuance of debt securities or warrants
or rights to acquire debt) or enter into any "keep well" or other
---------
agreement to maintain any financial condition of another person
or enter into any arrangement having the economic effect of any
of the foregoing other than (i) short-term indebtedness in the
ordinary course of business consistent with past practice (such
as the issuance of commercial paper or the use of existing credit
facilities); (ii) long-term indebtedness not aggregating more
than $250,000; (iii) arrangements between XXXX and its
Subsidiaries or among its Subsidiaries; (iv) as set forth in
Section 6.9 of the XXXX Disclosure Schedule; or (v) in connection
-----------
with the refunding of existing indebtedness at a lower cost of
funds.
Section 6.10 Compensation, Benefits. Except as set
----------------------
forth in Section 6.10 of the XXXX Disclosure Schedule, or as may
------------
be required by applicable law or as contemplated by this
Agreement, XXXX shall not, and XXXX shall use its best efforts to
prevent any of its Subsidiaries from taking any action to,
(a) enter into, adopt or amend or increase the amount
or accelerate the payment or vesting of any benefit or amount
payable under, any employee benefit plan or other contract,
agreement, commitment, arrangement, plan or policy maintained by,
contributed to or entered into by XXXX or any of its
Subsidiaries, or increase, or enter into any contract, agreement,
commitment or arrangement to increase in any manner, the
compensation or fringe benefits, or otherwise to extend, expand
or enhance the engagement, employment or any related rights, of
any director, officer or other employee of such party or any of
its Subsidiaries, except for normal increases in the ordinary
course of business consistent with past practice that, in the
aggregate, would not result in a material increase in benefits or
compensation expense to XXXX or any of its Subsidiaries, or
(b) enter into or amend any employment, severance or
special pay arrangement with respect to the termination of
employment or other similar contract, agreement or arrangement
with any director or officer or other employee, except as set
forth in Section 6.10 of the XXXX Disclosure Schedule or
------------
otherwise in the ordinary course of business consistent with past
practice that would not result in a material increase in benefits
or compensation expense to XXXX or its subsidiaries.
(c) Notwithstanding the foregoing, UPPCO shall be
permitted to enter into negotiations with respect to, and to
execute and deliver, new collective bargaining agreements in the
ordinary course of business after consultation with WPS.
Section 6.11 1935 Act. Except as set forth in
--------
Section 6.11 of the XXXX Disclosure Schedule, XXXX shall not, nor
------------
shall XXXX permit any of its Subsidiaries to, except as required
or contemplated by this Agreement, engage in any activities which
would cause a change in its status, or that of its Subsidiaries,
under the 1935 Act, or that would impair the ability of WPS to
claim an exemption pursuant to its order under Section 3(a)(1) of
---------------
the 1935 Act or that would impair the ability of XXXX to claim an
exemption under Section 3(a)(1) of the 1935 Act prior to the
---------------
Effective Time, other than (i) the application to the SEC under
the 1935 Act contemplated by this Agreement for approval to the
extent required of the transactions contemplated hereby and
(ii) the registration of WPS pursuant to the 1935 Act if required
by the provisions thereof.
Section 6.12 Transmission, Generation, Power
-------------------------------
Purchases. (a) Except as required pursuant to tariffs on file
---------
with the FERC as of the date hereof, in the ordinary course of
business consistent with past practice, or as set forth in
Section 6.12 of the XXXX Disclosure Schedule, XXXX shall not, nor
------------
shall XXXX permit any of its Subsidiaries to,
(i) commence construction of any additional
generating, transmission or delivery capacity, or
(ii) obligate itself to purchase or otherwise
acquire, or to sell or otherwise dispose of, or to share,
any additional generating, transmission or delivery
capacity,
in an amount in excess of $250,000 except as set forth in the
budgets or forecasts of XXXX prepared in October 1996 which
budgets or forecasts have been made available to WPS.
(b) XXXX will not permit UPPCO to enter into any power
purchase agreements for a term of more than one year unless
previously approved in writing by WPS.
Section 6.13 Accounting. Except as set forth in
----------
Section 6.13 of the XXXX Disclosure Schedule, XXXX shall not, nor
------------
shall XXXX permit any of its Subsidiaries to, make any changes in
their accounting methods, except as required by law, rule,
regulation or GAAP.
Section 6.14 Affiliate Transactions. Except as set
----------------------
forth in Section 6.14 of the XXXX Disclosure Schedule, XXXX shall
------------
not, nor shall XXXX permit any of its Subsidiaries or, within the
exercise of its best efforts, its Joint Ventures to, enter into
any material agreement or arrangement with any of their
respective Affiliates (other than wholly-owned Subsidiaries) on
terms materially less favorable to XXXX than could reasonably be
expected to have been obtained with an unaffiliated third party
on an arm's-length basis.
Section 6.15 Tax-exempt Status. XXXX shall not, nor
-----------------
shall XXXX permit any Subsidiary to take any action that would be
reasonably likely to jeopardize the qualification of UPPCO's
outstanding revenue bonds which qualify on the date hereof under
Section 142(a) of the Code as "exempt facility bonds" or as
------------- ---------------------
tax-exempt industrial development bonds under Section 103(b)(4)
-----------------
of the Internal Revenue Code of 1954, as amended, prior to the
enactment of the Tax Reform Act of 1986.
Section 6.16 Tax Matters. Except as set forth in
-----------
Section 6.17 of the XXXX Disclosure Schedule, XXXX shall not make
------------
or rescind any material express or deemed election relating to
Taxes, settle or compromise any material claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes, or change any of its methods of
reporting income or deductions for Federal income Tax purposes
from those historically employed.
Section 6.17 Discharge of Liabilities. XXXX shall
------------------------
not, nor shall XXXX permit its Subsidiaries to, pay, discharge or
satisfy any material claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in
the ordinary course of business consistent with past practice
(which includes the payment of final and unappealable judgments)
or in accordance with their terms, of liabilities reflected or
reserved against in, or contemplated by, the most recent
consolidated financial statements (or the notes thereto) of XXXX
included in UPEN's reports filed with the SEC, or incurred in the
ordinary course of business consistent with past practice.
Section 6.18 Contracts. XXXX shall not, nor shall
---------
XXXX permit its Subsidiaries or, within the exercise of its best
efforts, its Joint Ventures to, except in the ordinary course of
business consistent with past practice, modify, amend, terminate,
renew or fail to use reasonable business efforts to renew any
material contract or agreement to which XXXX or any Subsidiary of
XXXX is a party or waive, release or assign any material rights
or claims.
Section 6.19 Insurance. XXXX shall, and shall cause
---------
its Subsidiaries to, maintain with financially responsible
insurance companies insurance coverage in such amounts and
against such risks and losses as are customary for companies
engaged in the electric utility industry and employing methods of
generating electric power and fuel sources similar to those
methods employed and fuels used by XXXX or its Subsidiaries.
Section 6.20 Permits. XXXX shall, and shall cause
-------
its Subsidiaries to, use reasonable efforts to maintain in effect
all existing Permits pursuant to which XXXX or its Subsidiaries
operate.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Access to Information.
---------------------
(a) Upon reasonable notice, each party shall, and
shall cause its Subsidiaries and, shall use its best efforts to
cause, its Joint Ventures to, afford to the officers, directors,
employees, accountants, counsel, investment bankers, financial
advisors and other representatives of the other party
(collectively, "Representatives") reasonable access, during
---------------
normal business hours throughout the period prior to the
Effective Time, to all of its properties, books, contracts,
commitments and records (including, but not limited to, Tax
Returns) and, during such period, each party shall, and shall
cause its Subsidiaries to, furnish promptly to the other party
(i) access to each report, schedule and other
document filed or received by it or any of its Subsidiaries
and, within the exercise of its best efforts, its Joint
Ventures pursuant to the requirements of Federal or state
securities laws or filed with or sent to the SEC, the FERC,
the NRC, the DOE, the Department of Justice, the Federal
Trade Commission, the Public Service Commission of
Wisconsin, the Michigan Public Service Commission or any
other Federal or state regulatory agency or commission, and
(ii) access to all information concerning itself,
its Subsidiaries and, within the exercise of its best
efforts, its Joint Ventures, directors, officers and
shareholders and such other matters as may be reasonably
requested by any other party in connection with any filings,
applications or approvals required or contemplated by this
Agreement or for any other reason related to the
transactions contemplated by this Agreement.
(b) Each party shall, and shall cause its Subsidiaries
and Representatives, and shall use its best efforts to cause its
Joint Ventures to, continue to hold in confidence all documents
and information concerning the others furnished to it in
connection with the transactions contemplated by this Agreement
in accordance with the Confidentiality Agreement, dated March 22,
1996, between WPS and XXXX, as it may be amended from time to
time (the "Confidentiality Agreement").
-------------------------
Section 7.2 Proxy Statement and Registration
--------------------------------
Statement. The parties will prepare and file with the SEC as
---------
soon as reasonably practicable after the date hereof the
Registration Statement and the Proxy Statement (together, the
"Proxy/Registration Statement"). The parties hereto shall each
----------------------------
use reasonable efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as
practicable after such filing. Each party hereto shall also take
such action as may reasonably be required to cause the shares of
WPS Common Stock issuable in connection with the Merger to be
registered (or to obtain an exemption from registration) under
applicable state "blue sky" or securities laws; provided,
--------
however, that no party shall be required to register or qualify
-------
as a foreign corporation or to take other action which would
subject it to service of process in any jurisdiction where it
will not be, following the Merger, so subject. Each of the
parties hereto shall furnish all information concerning itself
which is required or customary for inclusion in the
Proxy/Registration Statement. The parties shall use reasonable
efforts to cause the shares of WPS Common Stock issuable in the
Merger to be approved for listing on the NYSE subject only to
official notice of issuance. The information provided by any
party hereto for use in the Proxy/Registration Statement shall be
true and correct in all material respects without omission of any
material fact which is required to make such information not
false or misleading. No representation, covenant or agreement is
made by any party hereto with respect to information supplied by
any other party for inclusion in the Proxy/Registration
Statement.
Section 7.3 Regulatory Matters.
------------------
(a) HSR Filings. Each party hereto shall file or
-----------
cause to be filed with the Federal Trade Commission and the
Department of Justice any notifications required to be filed by
itself or its respective "ultimate parent" company under the
---------------
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), and the rules and regulations promulgated
-------
thereunder with respect to the transactions contemplated hereby.
Such parties will use all commercially reasonable efforts to make
such filings as promptly as reasonably practicable after the date
hereof, and to respond promptly to any requests for additional
information made by either of such agencies.
(b) Other Regulatory Approvals. Each party hereto
--------------------------
shall cooperate and use its best efforts to prepare and file
promptly all necessary documentation, to effect all necessary
applications, notices, petitions, filings and other documents,
and to use all commercially reasonable efforts to obtain all
necessary permits, consents, approvals and authorizations of all
Governmental Authorities necessary or advisable to consummate the
Merger, including, without limitation, the WPS Required Statutory
Approvals and the XXXX Required Statutory Approvals. Each party
shall have the right to review and approve in advance all of the
information concerning such party which appears in any filing
made in connection with the transactions contemplated by this
Agreement and the Merger. WPS shall allow XXXX and its counsel a
meaningful opportunity to consult with WPS with respect to, and
to participate with WPS in, the efforts to obtain all necessary
approvals from Governmental Authorities in connection with the
transactions contemplated by this Agreement and the Merger
(including, but not limited to, the FERC), it being understood
that all positions taken in the filings with such Governmental
Authorities shall be consistent with one another and consistent
with this Agreement.
Section 7.4 Shareholder Approval.
--------------------
(a) Approval of XXXX Shareholders. Subject to the
-----------------------------
provisions of Section 7.4(b), XXXX shall, as soon as reasonably
--------------
practicable after the date hereof
(i) take all steps necessary to duly call, give
notice of, convene and hold a special meeting of its
shareholders (the "XXXX Special Meeting") for the purpose of
--------------------
securing the XXXX Shareholders' Approval,
(ii) distribute to its shareholders the Proxy
Statement/Prospectus in accordance with applicable Federal
and state law and with its Articles of Incorporation and
By-laws,
(iii) subject to the fiduciary duties of its
Board of Directors, recommend to its shareholders the
approval of the Merger, this Agreement and the transactions
contemplated hereby, and
(iv) cooperate and consult with WPS, including
obtaining the prior approval of WPS for proxy references
discussing WPS and/or its advisors with respect to each of
the foregoing matters.
(b) Meeting Date. The XXXX Special Meeting shall be
------------
held on such date as XXXX shall determine after consultation with
WPS.
Section 7.5 Director and Officer Indemnification.
------------------------------------
(a) Indemnification. To the extent, if any, not
---------------
provided by an existing right of indemnification or other
agreement or policy, from and after the Effective Time, WPS
shall, to the fullest extent permitted by applicable law,
indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date hereof, or who becomes
prior to the Effective Time, an officer, director or employee of
XXXX or of any XXXX Subsidiary (each an "Indemnified Party" and
-----------------
collectively, the "Indemnified Parties") against
-------------------
(i) all losses, expenses (including reasonable
attorney's fees and expenses), claims, damages or
liabilities or, subject to the proviso of the next
succeeding sentence, amounts paid in settlement, arising out
of actions or omissions occurring at or prior to the
Effective Time (and whether asserted or claimed prior to, at
or after the Effective Time) that are, in whole or in part,
based on or arising out of the fact that such person is or
was a director, officer or employee of XXXX or of any XXXX
Subsidiary (the "Indemnified Liabilities"), and
-----------------------
(ii) all Indemnified Liabilities to the extent
that they are based on or arise out of or pertain to the
transactions contemplated by this Agreement.
In the event of any such loss, expense, claim, damage or
liability (whether or not arising before the Effective Time),
(A) WPS shall pay the reasonable fees and
expenses of counsel selected by the Indemnified
Parties, which counsel shall be reasonably satisfactory
to WPS, promptly after statements therefor are received
and otherwise advance to such Indemnified Party upon
request reimbursement of documented expenses reasonably
incurred,
(B) WPS will cooperate in the defense of any
such matter, and
(C) any determination required to be made
with respect to whether an Indemnified Party's conduct
complies with the standards set forth under Sections
--------
180.0850 through 180.0859 of the WBCL and the Restated
-------- --------
Articles of Incorporation or By-laws of WPS (as the
same shall be amended from time to time) shall be made
by independent counsel mutually acceptable to WPS and
the Indemnified Party; provided, however, that WPS
-------- -------
shall not be liable for any settlement effected without
its written consent (which consent shall not be
unreasonably withheld).
The Indemnified Parties as a group may retain only one
law firm with respect to each related matter except to the extent
that there is, in the sole opinion of counsel to an Indemnified
Party, under applicable standards of professional conduct, a
conflict on any significant issue between positions of such
Indemnified Party and any other Indemnified Party or Indemnified
Parties.
(b) Insurance. For a period of six years after the
---------
Effective Time, WPS shall (i) cause to be maintained in effect
policies of directors' and officers' liability insurance
maintained by XXXX for the benefit of those persons who are
currently covered by such policies on terms no less favorable
than the terms of such current insurance coverage or (ii) obtain
new policies of such insurance with respect to such obligations
at least as favorable as the most favorable coverage offered by
policies currently maintained by XXXX and WPS; provided, however,
-------- -------
that WPS shall not be required to expend in any year an amount in
excess of 250% of the annual aggregate premiums currently paid by
XXXX for such insurance; and provided, further, that if the
-------- -------
annual premiums of such insurance coverage exceed such amount,
WPS shall be obligated to obtain a policy with the best coverage
available, in the reasonable judgment of the Board of Directors
of WPS, for a cost not exceeding such amount.
(c) Successors. In the event WPS or any of its
----------
successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or
(ii) transfers all or substantially all of its properties and
assets to any person, then and in either such case, proper
provisions shall be made so that the successors and assigns of
WPS shall assume the obligations set forth in this Section 7.5.
-----------
(d) Survival of Indemnification. To the fullest
---------------------------
extent permitted by law, from and after the Effective Time, all
rights to indemnification as of the date hereof in favor of the
employees, agents, directors and officers of XXXX and the XXXX
Subsidiaries with respect to their activities as such prior to
the Effective Time, as provided in their respective articles of
incorporation and by-laws in effect on the date thereof, or
otherwise in effect on the date hereof, shall survive the Merger
and shall continue in full force and effect for a period of not
less than six years from the Effective Time.
(e) Benefit. The provisions of this Section 7.5 are
------- -----------
intended to be for the benefit of, and shall be enforceable by,
each Indemnified Party, his or her heirs and his or her
representatives.
Section 7.6 Disclosure Schedules. On the date
--------------------
hereof,
(a) XXXX has delivered to WPS a XXXX Disclosure
Schedule, accompanied by a certificate signed by the chief
financial officer of XXXX stating the XXXX Disclosure Schedule is
being delivered pursuant to this Section 7.6(a).
--------------
(b) WPS has delivered to XXXX a WPS Disclosure
Schedule, accompanied by a certificate signed by the chief
financial officer of WPS stating the WPS Disclosure Schedule is
being delivered pursuant to this Section 7.6(b).
--------------
(c) The WPS Disclosure Schedule and the XXXX
Disclosure Schedule are collectively referred to herein as the
"Disclosure Schedules."
--------------------
(d) The Disclosure Schedules constitute an integral
part of this Agreement and modify the respective representations,
warranties, covenants or agreements of the parties hereto
contained herein to the extent that such representations,
warranties, covenants or agreements expressly refer to the
Disclosure Schedules. Anything to the contrary contained herein
or in the Disclosure Schedules notwithstanding, any and all
statements, representations, warranties or disclosures set forth
in the Disclosure Schedules shall be deemed to have been made on
and as of the date hereof.
Section 7.7 Public Announcements. Subject to each
--------------------
party's disclosure obligations imposed by law, WPS and XXXX will
cooperate with each other in the development and distribution of
all news releases and other public information disclosures with
respect to this Agreement or any of the transactions contemplated
hereby and shall not issue any public announcement or statement
with respect hereto or thereto without the consent of the other
party (which consent shall not be unreasonably withheld).
Section 7.8 Rule 145 Affiliates. Within 30 days
-------------------
before the Closing Date, XXXX shall identify in a letter to WPS
all persons who are, and to such person's knowledge who will be
at the Closing Date, "affiliates" of XXXX, as such term is used
----------
in Rule 145 under the Securities Act (or otherwise under
applicable SEC accounting releases with respect to
pooling-of-interests accounting treatment). XXXX shall use all
reasonable efforts to cause its affiliates (including any person
who may be deemed to have become an affiliate after the date of
the letter referred to in the prior sentence) to deliver to WPS
on or prior to the Closing Date a written agreement substantially
in the form attached as Exhibit 7.8 (an "Affiliate Agreement").
-------------------
If any affiliate refuses to provide such a written agreement, WPS
shall, in lieu of receipt of such written agreement, be entitled
to place restrictive legends on the certificates evidencing that
WPS Common Stock to be received by such affiliate pursuant to the
terms of this Agreement, and to issue appropriate stock transfer
instructions to the transfer agent for WPS Common Stock, to the
effect that the shares of WPS Common Stock received or to be
received by such affiliate pursuant to the terms of this
Agreement may only be sold, transferred or otherwise conveyed,
and the holder thereof may only reduce such holder's interest in
or risk relating to such shares of WPS Common Stock, pursuant to
an effective registration statement under the Securities Act, in
compliance with Rule 145, as amended from time to time, or in a
transaction which, in the opinion of legal counsel satisfactory
to WPS, is exempt from the registration requirements of the
Securities Act. The restrictive legends provided for herein
shall to the extent necessary also provide that the shares of WPS
Common Stock received or to be received by the affiliate be held
for the requisite period to insure that the Merger will be
accounted for as a pooling under generally accepted accounting
principles. The foregoing restrictions on the transferability of
WPS Common Stock shall apply to all purported sales, transfers
and other conveyances of the shares of WPS Common Stock received
or to be received by such affiliate pursuant to this Agreement
and to all purported reductions in the interest in or risks
relating to such shares of WPS Common Stock, whether or not such
affiliate has exchanged the certificates previously evidencing
such affiliates' shares of XXXX Common Stock for certificates
evidencing shares of WPS Common Stock into which such shares were
converted. The Proxy Statement and the Registration Statement
shall disclose the foregoing in a reasonably prominent manner.
Section 7.9 Employee Agreements. Subject to Section
------------------- -------
7.10, WPS and its Subsidiaries shall honor, without modification,
----
all contracts, agreements, collective bargaining agreements and
commitments of XXXX and the XXXX Subsidiaries prior to the date
hereof which apply to any current or former employee or current
or former director of XXXX and the XXXX Subsidiaries; provided,
--------
however, that this undertaking is not intended to prevent WPS
-------
from enforcing such contracts, agreements, collective bargaining
agreements and commitments in accordance with their terms,
including, without limitation, any reserved right to amend,
modify, suspend, revoke or terminate any such contract,
agreement, collective bargaining agreement or commitment.
Section 7.10 Employee Benefit Plans. Subject to
----------------------
Section 6.10, each of the XXXX Benefit Plans in effect at the
------------
date hereof shall be maintained in effect with respect to the
employees or former employees of XXXX and any of its Subsidiaries
who are covered by any such Benefit Plan immediately prior to the
Closing Date (the "Affiliated Employees") until WPS otherwise
--------------------
determines after the Effective Time; provided, however, that
-------- -------
nothing herein contained shall limit any reserved right contained
in any such XXXX Benefit Plan, to amend, modify, suspend, revoke
or terminate any such plan. Without limitation of the foregoing,
each participant of any such XXXX Benefit Plan shall receive
credit for purposes of eligibility to participate and vesting,
under a benefit plan of WPS or any of its Subsidiaries or
Affiliates for service credited for the corresponding purpose
under such benefit plan; provided, however, that such crediting
-------- -------
of service shall not operate to duplicate any benefit to any such
participant or the funding for any such benefit. Any person
hired by WPS or any of its Subsidiaries after the Closing Date
who was not employed by any party hereto or its Subsidiaries
immediately prior to the Closing Date shall be eligible to
participate in such benefit plans maintained, or contributed to,
by WPS or the Subsidiary, for employees of the division or
operation in which such person is employed, provided that such
--------
person meets the eligibility requirements of the applicable plan.
Section 7.11 No Solicitations.
----------------
(a) XXXX shall not, and shall use its best efforts to
cause its Subsidiaries not to, permit any of its Representatives,
directly or indirectly initiate, solicit or encourage, or take
any action to facilitate the making of any offer or proposal
which constitutes or is reasonably likely to lead to, any
Business Combination Proposal (as hereinafter defined), or, in
the event of an unsolicited Business Combination Proposal, except
to the extent required by their fiduciary duties under applicable
law if so advised in a written opinion of outside counsel, engage
in negotiations or provide any information or data to any person
relating to any Business Combination Proposal.
(b) XXXX shall notify WPS orally and in writing of any
such inquiries, offers or proposals (including, without
limitation, the terms and conditions of any such proposal and the
identity of the person making it), within 24 hours of the receipt
thereof, shall take reasonable steps to keep WPS informed of the
status and details of any such inquiry, offer or proposal, and
shall give WPS five days' advance notice of any agreement to be
entered into with or any information to be supplied to any person
making such inquiry, offer or proposal. XXXX shall immediately
cease and cause to be terminated all existing discussions and
negotiations, if any, with any parties conducted heretofore with
respect to any Business Combination Proposal.
(c) As used in this Section 7.11, "Business
--------
Combination Proposal" shall mean any tender or exchange offer,
--------------------
proposal for a merger, consolidation or other business
combination involving XXXX or any of its material Subsidiaries,
or any proposal or offer (in each case, whether or not in writing
and whether or not delivered to the shareholders of XXXX
generally) to acquire in any manner, directly or indirectly, a
substantial equity interest in or a substantial portion of the
assets of XXXX or any of its material Subsidiaries, other than
pursuant to the transactions contemplated by this Agreement.
(d) Nothing contained herein shall prohibit XXXX from
taking and disclosing to its shareholders a position contemplated
by Rule 14e-2(a) under the Exchange Act with respect to a
Business Combination Proposal made by means of a tender offer.
Section 7.12 WPS Board of Directors; UPPCO Advisory
--------------------------------------
Board.
-----
(a) WPS Board of Directors. WPS's Board of Directors
----------------------
will take such action as may be necessary to cause the number of
directors comprising the full Board of Directors of WPS at the
Effective Time to be increased by one member, the class thereof
the then current term of which extends for the longest time
beyond the Effective Time to be increased by one member and to
fill the vacancy thereby created by electing to the WPS Board of
Directors a person previously designated by the XXXX Board of
Directors and acceptable to the WPS Board of Directors. The
directors shall continue to be divided into three classes of
approximately equal size. All of the directors of WPS in office
immediately preceding the Effective Time shall continue to be
directors of WPS thereafter until their respective successors
have been duly elected and qualified. Notwithstanding the
foregoing, if, prior to the Effective Time, such designee shall
decline or be unable to serve, the Board of Directors of XXXX
shall designate another person to serve in such person's stead.
(b) UPPCO Advisory Board. Promptly following the
--------------------
Effective Time, WPS shall cause an advisory board to be appointed
to assist the Board of Directors of UPPCO or of any successor
thereto to accomplish the transition in the management of UPPCO's
operations contemplated by this Agreement. Such advisory shall
be appointed for a term of two years, and five persons serving as
outside directors of XXXX immediately prior to the effective time
will be offered the opportunity to serve on such advisory board.
Each member of the advisory board will receive a fee of $10,000
per annum for serving on such board.
Section 7.13 Employment Contract. At the Effective
-------------------
Time, WPS shall cause UPPCO to enter into an employment agreement
with Xxxxxxxx X. Xxxxxx in the form of Exhibit 7.13 hereto.
Section 7.14 Operations Following the Effective Time.
---------------------------------------
(a) Relationships with Local Suppliers. During the
----------------------------------
period ending three years after the Effective Time, to extent
reasonably practicable and consistent with the past practices of
WPS, WPS shall cause supplies and services for UPPCO to be
purchased from vendors located in the service area of UPPCO, so
long as goods and services available and prices and fees charged
by such vendors are reasonably competitive with alternative
vendors outside such service area and the quality of such
supplies and services is reasonably comparable to that of such
alternative vendors.
(b) Charitable and Community Support Activities.
-------------------------------------------
During the period ending five years after the Effective Time, WPS
shall provide, or shall cause its Subsidiaries (including, but
not limited to, UPPCO) to provide, charitable contributions and
community support within the service area of UPPCO at aggregate
levels not less than the average annual level of total charitable
contributions and community support provided by XXXX and its
Subsidiaries during the three calendar years immediately prior to
the date of this Agreement.
Section 7.15 Workforce Matters. Subject to
-----------------
applicable collective bargaining agreements, WPS will offer
employment opportunities to employees of UPPCO on terms and
conditions consistent with the employment opportunities offered
to employees of WPS or its subsidiaries. To the extent that any
of such employees are transferred from UPPCO to any affiliate or
subsidiary of WPS, WPS will provide relocation assistance and
benefits to such employees on terms comparable to those offered
by WPS to its own employees. To the extent that any reductions
in workforce are deemed to be required, such reductions shall be
made on a fair and equitable basis, in light of the circumstances
and the objective to be achieved giving appropriate consideration
to previous work history, job experience, and qualifications, and
treating all employees equally, without regard to whether prior
employment was with WPS or any of its Subsidiaries. WPS and XXXX
will consult with each other with respect to the retention of
personnel pending the Effective Time.
Section 7.16 Expenses. Subject to Section 9.3, all
-------- -----------
costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party
incurring such expenses.
Section 7.17 Further Assurances. Each party will,
------------------
and will cause its Subsidiaries and, will use its best efforts to
cause its Joint Ventures to, execute such further documents and
instruments and take such further actions as may reasonably be
requested by the terms hereof. The parties expressly acknowledge
and agree that, although it is their current intention to effect
a business combination between themselves in the form
contemplated by this Agreement, it may be preferable to
effectuate such a business combination by means of an alternative
structure in light of the conditions set forth in Section 8.1(e),
--------------
Section 8.2(e), Section 8.2(f), Section 8.3(e) and Section
-------------- -------------- -------------- -------
8.3(f). Accordingly, if the only conditions to the parties'
------
obligations to consummate the Merger which are not satisfied or
waived are receipt of any one or more of the WPS Required
Consents, WPS Required Statutory Approvals, XXXX Required
Consents, XXXX Required Statutory Approvals or the opinions
referred to in Sections 8.2(e) and 8.3(e), and the adoption of an
--------------- ------
alternative structure (that otherwise substantially preserves for
WPS and XXXX the economic and other material benefits of the
Merger) would result in such conditions being satisfied or
waived, then the parties shall use their respective best efforts
to effect a business combination among themselves by means of a
mutually agreed upon structure other than the Merger that so
preserves such benefits; provided that, prior to closing any such
--------
restructured transaction, all material third party and
Governmental Authority declarations, filings, registrations,
notices, authorizations, consents or approvals necessary to
effect such alternative business combination shall have been
obtained and all other conditions to the parties' obligations to
consummate the Merger, as applied to such alternative business
combination, shall have been satisfied or waived.
Section 7.18 Charter and By-law Amendments. Prior to
-----------------------------
the Closing, WPS shall cause its By-laws to be amended as
contemplated in Section 7.12.
Section 7.19 Pooling; Long Term Stock Incentive Plan.
---------------------------------------
XXXX shall not, nor shall XXXX permit any of its Subsidiaries or,
within the exercise of its best efforts, its Joint Ventures to,
take any action which would, or would be reasonably likely to,
prevent WPS from accounting for the transactions to be effected
pursuant to this Agreement as a pooling of interests in
accordance with GAAP and applicable SEC regulations, and XXXX
shall use all reasonable efforts to achieve such result
(including taking such actions as may be necessary to cure any
facts or circumstances that could prevent such transactions from
qualifying for pooling-of-interests accounting treatment).
Section 7.20 Tax-free Status. Neither party shall,
---------------
nor shall either party permit any of its Subsidiaries or, within
the exercise of its best efforts, its Joint Ventures to, take any
actions which would, or would be reasonably likely to, adversely
affect the status of the Merger as a reorganization under
Section 368(a) of the Code, and each party hereto shall use all
--------------
reasonable efforts to achieve such result.
Section 7.21 Cooperation, Notification. Each party
-------------------------
shall, and shall cause its Subsidiaries and shall use its best
efforts to cause, its Joint Ventures to
(a) cause its appropriate representatives to confer on
a regular and frequent basis with one or more representatives of
the other party to discuss, subject to applicable law, material
operational matters and the general status of its ongoing
operations;
(b) promptly notify the other party of any significant
changes in its business, properties, assets, condition (financial
or other), results of operations or prospects;
(c) advise the other party of any change or event
which has, had or, insofar as reasonably can be foreseen, is
reasonably likely to result in, in the case of WPS, a WPS
Material Adverse Effect or in the case of XXXX, an XXXX Material
Adverse Effect; and
(d) promptly provide the other party with copies of
all filings made by such party or any of its Subsidiaries with
any state or Federal court, administrative agency, commission or
other Governmental Authority in connection with this Agreement
and the transactions contemplated hereby.
Section 7.22 Third-party Consents.
--------------------
(a) WPS shall, and shall cause its Subsidiaries to,
use all commercially reasonable efforts to obtain all WPS
Required Consents. WPS shall promptly notify XXXX of any failure
or prospective failure to obtain any such consents and, if
requested by XXXX, shall provide copies of all WPS Required
Consents obtained by WPS to XXXX.
(b) XXXX shall, and shall cause its Subsidiaries to,
use all commercially reasonable efforts to obtain all XXXX
Required Consents. XXXX shall promptly notify WPS of any failure
or prospective failure to obtain any such consents and, if
requested by WPS, shall provide copies of all XXXX Required
Consents obtained by XXXX to WPS.
ARTICLE VIII
CONDITIONS
Section 8.1 Conditions to each Party's Obligation to
----------------------------------------
Effect the Merger. The respective obligations of each party to
-----------------
effect the Merger shall be subject to the satisfaction on or
prior to the Closing Date of the following conditions, except, to
the extent permitted by applicable law, that such conditions may
be waived in writing pursuant to Section 9.5 by the joint action
-----------
of the parties hereto:
(a) Shareholder Approval. The XXXX Shareholders'
--------------------
Approval shall have been obtained.
(b) No Injunction. No temporary restraining order or
-------------
preliminary or permanent injunction or other order by any Federal
or state court preventing consummation of the Merger shall have
been issued and be continuing in effect, and the Merger and the
other transactions contemplated hereby shall not have been
prohibited under any applicable Federal or state law or
regulation.
(c) Registration Statement. The Registration
----------------------
Statement shall have become effective in accordance with the
provisions of the Securities Act, and no stop order suspending
such effectiveness shall have been issued and remain in effect.
(d) Listing of Shares. The shares of WPS Common Stock
-----------------
issuable in the Merger pursuant to Article II shall have been
approved for listing on the NYSE and the Chicago Stock Exchange
subject only to official notice of issuance.
(e) Statutory Approvals.
-------------------
(i) The WPS Required Statutory Approvals and the
XXXX Required Statutory Approvals, including the expiration
or termination of any applicable waiting periods under the
HSR Act and the continued effectiveness of clearance of the
Merger under the HSR Act shall have been obtained at or
prior to the Effective Time, such approvals shall have
become Final Orders (as hereinafter defined) and such Final
Orders shall not impose terms or conditions which, in the
aggregate have, or insofar as reasonably can be foreseen,
would have, a material adverse effect on the business,
assets, financial condition or results of operations of WPS
or XXXX, as the case may be, or which would be materially
inconsistent with the agreements of the parties contained
herein.
(ii) As used in this Agreement, "Final Order"
-----------
means action by the relevant regulatory authority which has
not been reversed, stayed, enjoined, set aside, annulled or
suspended, with respect to which any waiting period
prescribed by law before the transactions contemplated
hereby may be consummated has expired, and as to which all
conditions to the consummation of such transactions
prescribed by law, regulation or order have been satisfied.
Section 8.2 Further Conditions to Obligation of XXXX
----------------------------------------
to Effect the Merger. The obligation of XXXX to effect the
--------------------
Merger shall be further subject to the satisfaction, on or prior
to the Closing Date, of the following conditions, except as may
be waived by XXXX in writing pursuant to Section 9.5:
-----------
(a) Performance of Obligations of WPS. WPS (and/or
---------------------------------
its appropriate Subsidiaries) will have performed in all material
respects their agreements and covenants contained in or
contemplated by this Agreement.
(b) Representations and Warranties. The
------------------------------
representations and warranties of WPS set forth in this Agreement
shall be true and correct (i) on and as of the date hereof and
(ii) on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of
the Closing Date (except for representations and warranties that
expressly speak only as of a specific date or time other than the
date hereof or the Closing Date which need only be true and
correct as of such date or time) except in each of cases (i) and
(ii) for such failures of representations or warranties to be
true and correct (without regard to any materiality
qualifications contained therein) which, individually or in the
aggregate do not, and insofar as reasonably can be foreseen,
would not, result in a WPS Material Adverse Effect.
(c) Closing Certificates. XXXX shall have received a
--------------------
certificate signed by the chief financial officer of WPS, dated
the Closing Date, to the effect that, to such officer's
knowledge, the conditions set forth in Section 8.2(a) and Section
-------------- -------
8.2(b) with respect to WPS have been satisfied.
-----
(d) Material Adverse Effect. No WPS Material Adverse
-----------------------
Effect shall have occurred, and there shall exist no facts or
conditions (other than facts or conditions of general
applicability to electric or gas utility companies in the region
in which WPS conducts its utility operations) which have, or
insofar as reasonably can be foreseen, would have a WPS Material
Adverse Effect.
(e) Tax Opinions.
------------
(i) XXXX shall have received an opinion of Xxxx &
Priest LLP dated as of the Closing Date, to the effect that
the Merger will be treated as a tax-free reorganization
under Section 368(a) of the Code, and
--------------
(ii) XXXX and Xxxx & Priest LLP shall have had
the opportunity to review the tax opinions of WPS's counsel
received pursuant to Sections 8.3(e)(i), including the
------------------
representations, covenants or other matters in reliance on
which the opinions are being rendered, and shall be
reasonably satisfied with the completeness and accuracy of
said opinions.
(f) Required Consents. The WPS Required Consents, the
-----------------
failure of which to obtain would have a WPS Material Adverse
Effect shall have been obtained.
(g) Legal Opinion. XXXX shall have received an
-------------
opinion of Xxxxx & Xxxxxxx substantially in the form of Exhibit
8.2(g).
(h) Trigger of WPS Rights. No event has occurred that
---------------------
would result in the triggering of any right or entitlement or WPS
shareholders under the WPS Rights Agreement, including a "flip
in" or "flip over" or similar event commonly described in such
rights plans has occurred, which, in the reasonable judgment of
XXXX, would have or be reasonably likely to result in a WPS
Material Adverse Effect or materially change the number of
outstanding equity securities of WPS, and the WPS Rights shall
not have become nonredeemable by any action of the WPS Board of
Directors.
Section 8.3 Further Conditions to Obligation of WPS
---------------------------------------
to Effect the Merger. The obligation of WPS to effect the Merger
--------------------
shall be further subject to the satisfaction, on or prior to the
Closing Date, of the following conditions, except as may be
waived by WPS in writing pursuant to Section 9.5:
-----------
(a) Performance of Obligations of XXXX. XXXX (and/or
----------------------------------
its appropriate Subsidiaries) will have performed their
agreements and covenants contained in Sections 6.3 and 6.4 and
------------ ---
will have performed in all material respects their other
agreements and covenants contained in or contemplated by this
Agreement required to be performed by it at or prior to the
Effective Time.
(b) Representations and Warranties. The
------------------------------
representations and warranties of XXXX set forth in this
Agreement shall be true and correct (i) on and as of the date
hereof and (ii) on and as of the Closing Date with the same
effect as though such representations and warranties had been
made on and as of the Closing Date (except for representations
and warranties that expressly speak only as of a specific date or
time other than the date hereof or the Closing Date which need
only be true and correct as of such date or time) except in each
of cases (i) and (ii) for such failures of representations or
warranties to be true and correct (without regard to any
materiality qualifications contained therein) which, individually
or in the aggregate do not, and insofar as reasonably can be
foreseen, would not, result in an XXXX Material Adverse Effect.
(c) Closing Certificates. WPS shall have received a
--------------------
certificate signed by the chief executive officer or chief
financial officer of XXXX, dated the Closing Date, to the effect
that, to such officer's knowledge, the conditions set forth in
Section 8.3(a) and Section 8.3(b) with respect to XXXX have been
-------------- --------------
satisfied.
(d) Material Adverse Effect. No XXXX Material Adverse
-----------------------
Effect shall have occurred, and there shall exist no facts or
conditions (other than facts or conditions of general
applicability to electric utility companies in the Upper
Peninsula of Michigan including, but not limited to, "open
access" or other general restructuring orders or legislation
which have, or insofar as reasonably can be foreseen, would have
an XXXX Material Adverse Effect.
(e) Tax Opinions.
------------
(i) WPS shall have received an opinion of Xxxxx &
Lardner dated as of the Closing Date, to the effect that the
Merger will be treated as a tax-free reorganization under
Section 368(a) of the Code; and
--------------
(ii) WPS and Xxxxx & Xxxxxxx shall have had the
opportunity to review the tax opinions of tax counsel, as
set forth in Section 8.2(e)(i), including the
-----------------
representations, covenants or other matters in reliance on
which the opinions are being rendered, and shall be
reasonably satisfied with the completeness and accuracy of
said opinions.
(f) Required Consents. The XXXX Required Consents,
-----------------
the failure of which to obtain would have an XXXX Material
Adverse Effect, shall have been obtained.
(g) Affiliate Agreements. WPS shall have received
--------------------
Affiliate Agreements, duly executed by each Affiliate of XXXX,
substantially in the form of Exhibit 7.8, as provided in Section
-------
7.8, or shall be satisfied by the alternative stock legend
---
process described at Section 7.8 hereof.
(h) Pooling. WPS shall have received a letter of its
-------
independent public accountants, dated the Closing Date, in form
and substance reasonably satisfactory to WPS, stating that the
transactions effected pursuant to this Agreement will qualify as
a pooling of interests transaction pursuant to GAAP and
applicable SEC regulations.
(i) Legal Opinion. WPS shall have received an opinion
-------------
of Xxxx & Priest LLP substantially in the form of Exhibit 8.3(i)
hereto.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination. This Agreement may be
-----------
terminated at any time prior to the Closing Date, whether before
or after approval by the shareholders of XXXX contemplated by
this Agreement:
(a) by mutual written consent of WPS and XXXX;
(b) by either party hereto, by written notice to the
other party, if the Effective Time shall not have occurred on or
before December 31, 1998 (the "Initial Termination Date");
------------------------
provided, however, that the right to terminate the Agreement
-------- -------
under this Section 9.1(b) shall not be available to any party
--------------
whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of the Effective
Time to occur on or before the Initial Termination Date; and
provided, further, that if on the Initial Termination Date the
-------- -------
conditions to the Closing set forth in Sections 8.1(e), 8.2(f)
--------------- ------
and/or 8.3(f) shall not have been fulfilled but all other
------
conditions to the Closing shall be fulfilled or shall be capable
of being fulfilled, then the Initial Termination Date shall be
extended to June 30, 1999;
(c) by either party hereto, by written notice to the
other parties, if the XXXX Shareholders' Approval shall not have
been obtained at a duly held XXXX meeting thereof, including any
adjournments thereof;
(d) by either party hereto, if any state or Federal
law, order, rule or regulation is adopted or issued, which has
the effect, as supported by the written opinion of outside
counsel for such party, of prohibiting the Merger or by either
party hereto if any court of competent jurisdiction in the United
States or any State shall have issued an order, judgment or
decree permanently restraining, enjoining or otherwise
prohibiting the Merger, and such order, judgment or decree shall
have become final and nonappealable;
(e) by XXXX, upon two days' prior notice to WPS, if,
as a result of a tender offer by a party other than WPS or any
WPS Affiliate or any written offer or proposal with respect to a
merger, sale of a material portion of its assets or other
business combination (each, a "Business Combination") by a party
--------------------
other than WPS or any WPS Affiliates, the Board of Directors of
XXXX determines in good faith that its fiduciary obligations
under applicable law require that such tender offer or other
written offer or proposal be accepted; provided, however, that
-------- -------
(i) the Board of Directors of XXXX shall have
been advised in a written opinion of outside counsel that
after giving due consideration to a binding commitment to
consummate an agreement of the nature of this Agreement
entered into in the proper exercise of its applicable
fiduciary duties, and after giving due consideration to all
concessions which may be offered by WPS in negotiations
entered into pursuant to clause (ii) below, such fiduciary
-----------
duties would require the directors to reconsider such
commitment as a result of such tender offer or other written
offer or proposal; and
(ii) prior to any such termination, XXXX shall,
and shall cause its respective financial and legal advisors
to, negotiate with WPS to make such adjustments in the terms
and conditions of this Agreement as would enable XXXX to
proceed with the transactions contemplated herein on such
adjusted terms;
(f) by XXXX, by written notice to WPS, if
(i) there exists any breach or breaches of the
representations and warranties of WPS made herein as of the
date hereof which breaches, individually or in the aggregate
have or, insofar as reasonably can be foreseen, would have,
a WPS Material Adverse Effect, and such breaches shall not
have been remedied within 20 days after receipt by WPS, of
notice in writing from XXXX, specifying the nature of such
breaches and requesting that they be remedied;
(ii) WPS (and/or its appropriate Subsidiaries)
shall have failed to perform and comply with, in all
material respects, their other agreements and covenants
hereunder and such failure to perform or comply shall not
have been remedied within 20 days after receipt by WPS, of
notice in writing from XXXX, specifying the nature of such
failure and requesting that it be remedied; or
(iii) the Board of Directors of WPS or any
committee thereof:
(A) shall withdraw or modify in any manner
materially adverse to XXXX its approval or
recommendation of this Agreement, or the Merger, or
(B) shall fail to reaffirm such approval or
recommendation upon UPEN's request, or
(C) shall resolve to take any of the actions
specified in clause (A) or (B);
---------- ---
(g) by WPS, by written notice to XXXX, if
(i) there exists any breach or breaches of the
representations and warranties of XXXX made herein as of the
date hereof which breaches, individually or in the aggregate
have or, insofar as reasonably can be foreseen, would have,
an XXXX Material Adverse Effect, and such breaches shall not
have been remedied within 20 days after receipt by XXXX, of
notice in writing from WPS, specifying the nature of such
breaches and requesting that they be remedied;
(ii) XXXX (and/or its appropriate Subsidiaries
shall not have performed and complied with its agreements
and covenants contained in Sections 6.3 and 6.4 or shall
------------ ---
have failed to perform and comply with, in all material
respects, its other agreements and covenants hereunder, and
such failure to perform or comply shall not have been
remedied within 20 days after receipt by XXXX, of notice in
writing from WPS, specifying the nature of such failure and
requesting that it be remedied; or
(iii) the Board of Directors of XXXX or any
committee thereof:
(A) shall withdraw or modify in any manner
materially adverse to WPS its approval or
recommendation of this Agreement, or the Merger,
(B) shall fail to reaffirm such approval or
recommendation upon WPS's request,
(C) shall approve or recommend any Business
Combination involving XXXX other than the Merger or any
tender offer for the shares of capital stock of XXXX,
in each case by or involving a party other than WPS or
any of its Affiliates or
(D) shall resolve to take any of the actions
specified in clause (A), (B) or (C).
---------- --- ---
Section 9.2 Effect of Termination. Subject to
---------------------
Section 10.1(b), in the event of termination of this Agreement by
---------------
WPS or XXXX pursuant to Section 9.1 there shall be no liability
-----------
on the part of either WPS or XXXX or their respective officers or
directors hereunder, except that Section 7.1(b), Section 7.16,
-------------- ------------
Section 9.3, Section 10.2 and Section 10.8 shall survive the
----------- ------------ ------------
termination.
Section 9.3 Termination Fee.
---------------
(a) Termination Fee Upon Breach. If this Agreement is
---------------------------
terminated at such time that this Agreement is terminable
pursuant to one (but not both) of (x) Section 9.1(f)(i) or (ii)
----------------- ----
or (y) Section 9.1(g)(i) or (ii), then the breaching party shall
--- -------------------------
promptly (but no later than five business days after receipt of
notice from the non-breaching party) pay to the non-breaching
party in cash $3,000,000 if the termination occurs on or before
January 10, 1998; $4,500,000 if the termination occurs after
January 10, 1998 but on or before July 10, 1998; and $6,000,000
if the termination occurs at any time after July 10, 1998;
provided, however, that, if this Agreement is terminated by a
-------- -------
party as a result of a willful breach of this Agreement by the
other party, the non-breaching party may pursue any other
remedies available to it at law or in equity, and its recovery
shall not be limited to the applicable amount previously
specified and the non-breaching party shall be entitled to such
additional amounts as it may be entitled to receive at law or in
equity, provided, however, that such termination damages shall be
reduced by any amount paid pursuant to the liquidated damage
amounts defined herein.
(b) Additional Termination Fee. If
--------------------------
(i) this Agreement
(A) is terminated by XXXX pursuant to Section
-------
9.1(e),
------
(B) is terminated following a failure of the
shareholders of XXXX to xxxxx the necessary approvals
described in Section 5.13 or
------------
(C) is terminated as a result of UPEN's
material breach of Section 7.4, and
-----------
(ii) at the time of such termination or prior to
the meeting of UPEN's shareholders there shall have been a
third-party tender offer for shares of, or a third-party
offer or proposal with respect to a Business Combination
involving, XXXX or any of its Affiliates which, at the time
of such termination or of the meeting of UPEN's
shareholders, shall not have been (A) rejected by XXXX and
its board of directors or (B) withdrawn by the third party,
and
(iii) within two and one-half years of any such
termination described in clause (i) above, XXXX becomes a
Subsidiary of such offeror or a Subsidiary of an Affiliate
of such offeror or accepts a written offer to consummate or
consummates a Business Combination with such offeror or an
Affiliate thereof,
then XXXX (jointly and severally with its Affiliates), at
the closing (and as a condition to the closing) of XXXX
becoming such a Subsidiary or of such Business Combination,
will pay to WPS in cash an aggregate termination fee of
$3,000,000 if the termination shall have occurred on or
before January 10, 1998; $4,500,000 if the termination shall
have occurred after January 10, 1998, and on or before July
10, 1998; and $6,000,000 if the termination shall have
occurred at any time after July 10, 1998.
(c) Expenses. The parties agree that the agreements
--------
contained in this Section 9.3 are an integral part of the
-----------
transactions contemplated by the Agreement and the termination
fees constitute liquidated damages (subject to the proviso to
-------
Section 9.3(a)) and are not penalties. If one party fails to
promptly pay to the other party any fee due hereunder, the
defaulting party shall pay the costs and expenses (including
legal fees and expenses) in connection with any action, including
the filing of any lawsuit or other legal action, taken to collect
payment, together with interest on the amount of any unpaid fee
at the publicly announced prime rate of Firstar Bank Milwaukee
N.A. from the date such fee was required to be paid.
Section 9.4 Amendment.
---------
(a) This Agreement may be amended by the Boards of
Directors of the parties hereto, at any time before or after
approval hereof by the shareholders of XXXX and prior to the
Effective Time, but after such approval, no such amendment shall
(i) alter or change the amount or kind of shares,
rights or any of the proceedings of the treatment of shares
under Article II, or
(ii) alter or change any of the terms and
conditions of this Agreement if any of the alterations or
changes, alone or in the aggregate, would materially
adversely affect the rights of holders of WPS and XXXX
Common Stock.
(b) This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties
hereto.
Section 9.5 Waiver.
------
(a) At any time prior to the Effective Time, the
parties hereto may
(i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered
pursuant hereto and
(iii) waive compliance with any of the
agreements or conditions contained herein, to the extent
permitted by applicable law.
(b) Any agreement on the part of a party hereto to any
such extension or waiver shall be valid if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Non-survival; Effect of Representations
---------------------------------------
and Warranties.
--------------
(a) All representations, warranties and agreements in
this Agreement shall not survive the Merger, except as otherwise
provided in this Agreement and except for the agreements
contained in this Section 10.1 and in Article II, Section 7.5
------------ -----------
(Director and Officer Indemnification), Section 7.9 (Employee
-----------
Agreements), Section 7.10 (Employee Benefit Plans), Section 7.12
------------ ------------
(a) (WPS Board of Directors), Section 7.12(b) (UPPCO Advisory
---
Board), Section 7.13 (Employment Contract), Section 7.16
------------ ------------
(Expenses), Section 10.2 (Brokers) and Section 10.7 (Parties in
------------ ------------
Interest).
(b) No party may assert a claim for breach of any
representation or warranty contained in this Agreement (whether
by direct claim or counterclaim) except in connection with the
termination of this Agreement pursuant to Section 9.1(f)(i) or
-----------------
Section 9.1(g)(i) (or pursuant to any other subsection of Section
----------------- -------
9.1 if the terminating party would have been entitled to
---
terminate this Agreement pursuant to Section 9.1(f)(i) or Section
----------------- -------
9.1(g)(i)).
---------
Section 10.2 Brokers.
-------
(a) WPS represents and warrants that, except for
Xxxxxx X. Xxxxx & Co. Incorporated, no broker, finder or
investment banker is entitled to any brokerage, finder's or other
fee or commission in connection with the Merger, or the
transactions contemplated by this Agreement based upon
arrangements made by or on behalf of WPS.
(b) XXXX represents and warrants that, except for
Xxxxxxxxxxx Xxxxxxx & Co., Inc., whose fees have been disclosed
to WPS prior to the date hereof, no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger or the transactions
contemplated by this Agreement based upon arrangements made by or
on behalf of XXXX.
Section 10.3 Notices. All notices and other
-------
communications hereunder shall be in writing and shall be deemed
given if (i) delivered personally, (ii) sent by reputable
overnight courier service, (iii) telecopied (which is confirmed),
or (iv) five days after being mailed by registered or certified
mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be
specified by like notice):
(a) If to WPS, to: WPS Resources Corporation
000 Xxxxx Xxxxx Xxxxxx
X.X. Xxx 00000
Xxxxx Xxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx
President and Chief
Executive Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to: Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) If to XXXX, to: Upper Peninsula Energy
Corporation
000 Xxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx, Chairman
of the Board, President and
Chief Executive Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to: Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Section 10.4 Miscellaneous. This Agreement
-------------
(including the documents and instruments referred to herein)
(a) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the
subject matter hereof other than the Confidentiality Agreement;
(b) shall not be assigned by operation of law or
otherwise; and
(c) shall be governed by and construed in accordance
with the laws of the State of Wisconsin applicable to contracts
executed in and to be fully performed in such State, without
giving effect to its conflicts of law rules or principles except
to the extent the provisions of this Agreement (including the
documents or instruments referred to herein) are expressly
governed by or derive their authority from the MBCA.
Section 10.5 Interpretation. When a reference is
--------------
made in this Agreement to Sections or Exhibits, such reference
shall be to a Section or Exhibit of this Agreement, respectively,
unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or
------- --------
"including" are used in this Agreement, they shall be deemed to
---------
be followed by the words "without limitation."
------------------
Section 10.6 Counterparts; Effect. This Agreement
--------------------
may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which shall constitute
one and the same agreement.
Section 10.7 Binding Effect; Benefits. This
------------------------
Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns;
except as provided in Section 7.5(e) nothing in this Agreement,
--------------
express or implied, shall confer upon any person, other than the
parties hereto and their respective successors and assigns, any
rights, remedies, obligations or liabilities under or by reason
of this Agreement.
Section 10.8 Enforcement. The parties agree that
-----------
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they are entitled
at law or in equity.
IN WITNESS WHEREOF, WPS and XXXX have caused this
Agreement to be signed by their respective officers thereunto
duly authorized as of the date first written above.
WPS RESOURCES CORPORATION
Attest:
By: /s/ Xxxxx X. Xxxxxx, Treas. By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------- --------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: President & CEO
UPPER PENINSULA ENERGY CORPORATION
Attest:
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxxx X. Xxxxxx
----------------------- --------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: President & CEO
Exhibit 1.3 to Merger Agreement
-------------------------------
PLAN OF MERGER
THIS PLAN OF MERGER, dated as of July 10, 1997 (the
"Plan of Merger"), is entered into by and between WPS Resources
Corporation, a Wisconsin corporation ("WPS Resources"), and Upper
Peninsula Energy Corporation, a Michigan corporation ("XXXX").
This Plan of Merger is being entered into pursuant to an
Agreement and Plan of Merger, dated as of July 10, 1997, (the
"Merger Agreement"), between WPS Resources and XXXX. The Merger
Agreement, provides for the merger of XXXX with and into WPS
Resources (the "Merger").
NOW, THEREFORE, in consideration of the premises and
the agreements herein contained, the parties hereto, intending to
be legally bound hereby, agree to as follows:
ARTICLE I
THE MERGER
1.01. The Merger. Subject to the terms and
----------
conditions of the Merger Agreement and this Plan of Merger, XXXX
shall be merged with and into WPS Resources in accordance with
and with the effect as provided in the Wisconsin Business
Corporation Law (the "WBCL") and the Michigan Business
Corporation Act (the "MBCA"). WPS Resources shall be the
surviving corporation in the Merger (sometimes hereafter referred
to as the "Surviving Corporation") and shall continue its
corporate existence under the laws of the State of Wisconsin.
The separate corporate existence of XXXX shall cease.
1.02. Effective Time of the Merger. Subject to the
----------------------------
provisions of the Merger Agreement and this Plan of Merger,
articles of merger (the "Articles of Merger") and a certificate
of merger shall be duly prepared and executed by or on behalf of
XXXX and WPS Resources and thereafter delivered to Department of
Financial Institutions of the State of Wisconsin and the
Department of Commerce of the State of Michigan as appropriate
for filing, as provided in the WBCL and the MBCA, on the Closing
Date (as defined in the Merger Agreement). The Merger shall
become effective at the time specified in the Articles of Merger
filed with the Department of Financial Institutions of the State
of Wisconsin and the Department of Consumer and Industry Services
of the State of Michigan (the "Effective Time"), or absent such
specification upon such filing.
1.03. Restated Articles of Incorporation and By
-----------------------------------------
laws of the Surviving Corporation. At the Effective Time, the
---------------------------------
Restated Articles of Incorporation of WPS Resources and the By-
laws of WPS Resources in effect immediately prior to the
Effective Time shall be the Restated Articles of Incorporation
and the By-laws, respectively, of the Surviving Corporation.
1.04. Directors and Officers of the Surviving
---------------------------------------
Corporation. Except as otherwise provided the Merger Agreement,
-----------
the directors and officers of WPS Resources at the Effective Time
shall, from and after the Effective Time, continue as the
directors and officers, respectively, of the Surviving
Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation
or removal.
1.05. Outstanding Shares. The designation and
------------------
number of outstanding shares of WPS Resources is as set forth in
Section 4.2 of the Merger Agreement. The designation and number
of outstanding shares of XXXX is as set forth in Section 5.3 of
the Merger Agreement. The number of shares of WPS Resources, and
of XXXX, is subject to change before the Effective Time in the
manner set forth in Sections 4.2, and 5.3, respectively, of the
Merger Agreement and, additionally, shares of WPS Resources and
XXXX may be issued or retired as may be approved by their
respective Boards of Directors.
ARTICLE II
CONVERSION OF SHARES
2.01. Cancellation and Conversion of XXXX Common
------------------------------------------
Stock. At the Effective Time, in accordance with the terms and
-----
conditions set forth in the Merger Agreement, and by virtue of
the Merger and without any action on the part of any holder of
shares of Common Stock, without par value of XXXX ("XXXX Common
Stock"):
(a) Cancellation of Certain XXXX Common Stock. Each
-----------------------------------------
share of XXXX Common Stock that is owned by XXXX or WPS Resources
or any of their respective subsidiaries shall be canceled and
cease to exist, and no consideration shall be delivered in
exchange therefor.
(b) Conversion of Certain XXXX Common Stock. Each
---------------------------------------
share of XXXX Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares canceled pursuant
to Section 2.01(a) shall be converted into the right to receive
nine tenths (0.9) of a share of Common Stock, $1.00 par value, of
WPS Resources ("WPS Resources Common Stock"), including, if
applicable, the associated rights to purchase shares of WPS
Resources Common Stock (the "Rights") pursuant that certain
Rights Agreement between WPS Resources and Firstar Trust Company,
as Rights Agent thereunder, dated December 12, 1996 (the "Rights
Agreement"). Until the Distribution Date (as defined in the
Rights Agreement), all references in this Plan of Merger to the
WPS Resources Common Stock shall be deemed to include the
associated Rights.
(c) No Fractional Shares. Notwithstanding any other
--------------------
provision of this Plan of Merger to the contrary, no certificates
or scrip representing fractional shares of WPS Resources Common
Stock shall be issued in the Merger, and such fractional shares
shall not entitle the owner thereof to vote as, or to any rights
of, a holder of, WPS Resources Common Stock. In lieu of any such
fractional shares, a holder of XXXX Common Stock who would
otherwise have been entitled to a fractional share of WPS
Resources Common Stock shall receive a cash payment in an amount
equal to the product (rounded to the nearest cent) of such
fraction (rounded to the nearest thousandth) multiplied by the
average of the last reported sales price, per share of WPS
Resources Common Stock as reported in the New York Stock Exchange
("NYSE") Composite Tape transactions as reported in The Wall
--------
Street Journal for the last ten trading days prior to and
--------------
including the last trading day prior to the Effective Time on
which WPS Resources Common Stock was traded on the NYSE, without
any interest thereon.
2.02. WPS Resources Common Stock. The shares of
--------------------------
WPS Resources Common Stock issued and outstanding immediately
prior to the Effective Time shall not be affected in any manner
by virtue of the Merger.
ARTICLE III
CONDITIONS; TERMINATION
3.01. Conditions to the Merger. Consummation of
------------------------
the Merger is conditioned upon the satisfaction or waiver of the
conditions precedent set forth in Article VIII of the Merger
Agreement.
3.02. Termination. This Plan of Merger shall
-----------
terminate forthwith in the event that the Merger Agreement shall
be terminated as therein provided. In the event of the
termination of this Plan of Merger as provided above, this Plan
of Merger shall forthwith become void and there shall be no
liability on the part of any of the parties hereto, except as
otherwise provided in the Merger Agreement.
ARTICLE IV
GENERAL PROVISIONS
4.01. Counterparts. This Plan of Merger may be
------------
executed in counterparts, each of which shall constitute one and
the same instrument.
4.02. Headings. The headings in this Plan of
--------
Merger are inserted for convenience only and shall not constitute
a part hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Plan of Merger to be duly executed as of the date first above
written.
WPS RESOURCES CORPORATION
("WPS Resources")
By: /s/ Xxxxxxx X. Xxxxxxxxx, EVP
------------------------------------
Attest: /s/ Xxxxx X. Xxxxxx, Treas.
--------------------------------
UPPER PENINSULA ENERGY CORPORATION
("XXXX")
By: /s/ Xxxxxxxx X. Xxxxxx, Pres. & CEO
------------------------------------
Attest: /s/ Xxxxxx X. Xxxxx, Sec.
--------------------------------
