EXHIBIT 99.1
SECOND AMENDMENT TO LG&E ENERGY CORP. RIGHTS AGREEMENT
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SECOND AMENDMENT, dated as of May 20, 1997 (the "Amendment"), to the
Rights Agreement, dated as of December 5, 1990, as heretofore amended by the
First Amendment thereto dated as of June 7, 1995 (as so amended, the "Rights
Agreement"), between LG&E Energy Corp., a Kentucky corporation (the "Company"),
and Louisville Gas and Electric Company, a Kentucky corporation, as Rights Agent
(the "Rights Agent").
WITNESSETH
WHEREAS, on December 5, 1990, the Board of Directors of the Company
declared a dividend distribution of one Right for each share of Common Stock
outstanding at the close of business on the Record Date, each Right representing
the right to purchase one one-hundredth of a share of Preferred Stock upon the
terms and conditions set forth in the Rights Agreement; and
WHEREAS, the Rights remain issued and outstanding and the Rights
Agreement remains in effect with respect thereto; and
WHEREAS, no Distribution Date has occurred; and
WHEREAS, the Company and KU Energy Corporation, a Kentucky corporation
("KU Energy"), propose to enter into an Agreement and Plan of Merger (the
"Merger Agreement"), pursuant to which KU Energy would merge with and into the
Company; and
WHEREAS, in connection with the Merger Agreement, KU Energy and the
Company may enter into a Stock Option Agreement referred to therein pursuant to
which the Company would grant to KU Energy an option to acquire up to 19.9% of
the outstanding shares of Common Stock under certain circumstances; and
WHEREAS, in connection with the Merger Agreement, KU Energy and the
Company may enter into a Stock Option Agreement referred to therein pursuant to
which KU Energy would grant to the Company an option to acquire up to 19.9% of
the outstanding shares of KU Energy common stock under certain circumstances;
and
WHEREAS, in connection with the anticipated approval, execution, and
delivery of the Merger Agreement,
the Board of Directors of the Company has approved, in accordance with Section
26 of the Rights Agreement, this Amendment and has directed the appropriate
officers of the Company to take all appropriate steps to execute and deliver
this Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, the parties hereby agree as follows:
(1) Amendment to Subsection 1(a).
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Subsection 1(a) of the Rights Agreement is hereby amended to read in
its entirety as follows:
"(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the outstanding Common Stock
(other than as a result of a Permitted Offer) or who or which was such
a Beneficial Owner at any time after December 5, 1990, whether or not
such Person continues to be the Beneficial Owner of securities
representing 15% or more of the Common Stock, provided, however, that
the term "Acquiring Person" shall not include (i) an Exempt Person or
(ii) KU Energy or any Affiliate or Associate of KU Energy, as a result
of their acquisition of Beneficial Ownership of shares of Common Stock
by reason of the approval, execution, or delivery of the Company Stock
Option Agreement or the KU Energy Merger Agreement, or by reason of
the consummation of any transaction contemplated by the KU Energy
Stock Option Agreement, the Company Stock Option Agreement or the KU
Energy Merger Agreement, so long as KU Energy and any Affiliate or
Associate of KU Energy is not the Beneficial Owner of any shares of
Common Stock other than (w) shares of Common Stock of which KU Energy
or any Affiliate or Associate of KU Energy is or becomes the
Beneficial Owner by reason of the approval, execution, or delivery of
the KU Energy Stock Option Agreement, the Company Stock Option
Agreement or the KU Energy Merger Agreement, or by reason of the
consummation of any transaction contemplated by the KU Energy Stock
Option Agreement, the Company Stock Option Agreement or the KU Energy
Merger Agreement, (x) shares of Common Stock Beneficially Owned by KU
Energy or
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any Affiliate or Associate of KU Energy on the date hereof, (y)
shares of Common Stock of which KU Energy inadvertently becomes
the Beneficial Owner after the date hereof, provided that the
number of such shares of Common Stock does not exceed 1/2 of 1%
of the shares of Common Stock outstanding on the date hereof and
that KU Energy divests such shares of Common Stock as soon as
practicable after it becomes aware of such acquisition of
Beneficial Ownership, and (z) shares of Common Stock of which any
Affiliate or Associate of KU Energy becomes the Beneficial Owner
after the date hereof, provided that the number of such shares of
Common Stock does not exceed 1/2 of 1% of the shares of Common
Stock outstanding on the date hereof.
Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would
otherwise be an "Acquiring Person", has become such inadvertently
and without any intention of changing or influencing control of
the Company, and such Person, as promptly as practicable after
being advised of such determination, divests himself or itself of
Beneficial Ownership of a sufficient number of shares of Common
Stock so that such Person would no longer be an "Acquiring
Person", then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement."
(2) Addition of Subsection 1(mm).
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A new Subsection 1(mm) of the Rights Agreement is inserted, to
read as follows:
"(mm) "KU Energy" shall mean KU Energy Corporation, a
Kentucky corporation, and its successors."
(3) Addition of Subsection 1(nn).
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A new Subsection 1(nn) of the Rights Agreement is inserted, to
read as follows:
"(nn) "KU Energy Merger Agreement" shall mean the Agreement
and Plan of Merger, dated as of May 20, 1997, by and between the
Company and KU Energy, as the same may be amended from time to
time."
(4) Addition of Subsection 1(oo).
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A new Subsection 1(oo) of the Rights Agreement is inserted, to read as
follows:
"(oo) "KU Energy Stock Option Agreement" shall mean the Stock
Option Agreement, dated as of May 20, 1997, by and between KU Energy,
as issuer, and the Company, as grantee, as the same may be amended
from time to time."
(5) Addition of Subsection 1(pp).
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A new Subsection 1(pp) of the Rights Agreement is inserted, to
read as follows:
"(pp) "Company Stock Option Agreement" shall mean the Stock
Option Agreement, dated as of May 20, 1997, by and between the
Company, as issuer, and KU Energy, as grantee, as the same may be
amended from time to time."
(6) Amendment to Subsection 3(d). Subsection 3(d) of the Rights
Agreement is hereby amended by inserting the words "and the Second Amendment
dated as of May 20, 1997" after the words "December 5, 1990 as amended by the
First Amendment dated as of June 7, 1995" appearing in the legend contained
therein.
(7) Amendment of Exhibit B. The Form of Right Certificate attached as
Exhibit B to the Rights Agreement is hereby amended by inserting the phrase "and
the Second Amendment dated as of May 20, 1997" after the words "December 5, 1990
as amended by the First Amendment dated as of June 7, 1995" in the first
paragraph thereof.
(8) Effectiveness. This Amendment shall be deemed to be in force and
effective immediately prior to the execution and delivery of the Merger
Agreement. Except as amended hereby, the Rights Agreement shall remain in full
force and effect and shall be otherwise unaffected hereby.
(9) Defined Terms. Unless otherwise defined herein, all defined terms
used herein shall have the same meanings given to them in the Rights Agreement.
(10) Governing Law. This Amendment shall be deemed to be a contract
made under the laws of the Commonwealth of Kentucky and for all purposes shall
be governed by and construed in accordance with the laws of such Commonwealth
applicable to contracts to be made and performed entirely within such
Commonwealth.
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(11) Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall for all purposes be deemed an original and all
of which shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the day and year first above written.
LG&E ENERGY CORP.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
LOUISVILLE GAS and ELECTRIC
Company, as Rights Agent
By: /s/ Xxxx XxXxxx
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Name: Xxxx XxXxxx
Title: Executive Vice President,
General Counsel and
Corporate Secretary
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