Exhibit 1.2
EXECUTION COPY
AMERICAN ELECTRIC POWER COMPANY, INC.
Underwriting Agreement
16,000,000 Shares*
Common Stock
($6.50 par value)
Dated June 5, 2002
AGREEMENT made between AMERICAN ELECTRIC POWER COMPANY, INC., a
corporation organized and existing under the laws of the State of New York (the
"Company"), and the several persons, firms and corporations (the "Underwriters")
named in Exhibit 1 hereto.
WITNESSETH:
WHEREAS, the Company proposes to sell to the Underwriters 16,000,000
shares of common stock, $6.50 par value ("Common Stock"), of the Company (the
"Underwritten Shares"); and
WHEREAS, the Company also proposes to grant to the Underwriters an
option to purchase up to an additional 2,400,000 shares of Common Stock to cover
over-allotments (the "Option Shares"; the Option Shares, together with the
Underwritten Shares, being hereinafter called the "Shares"); and
WHEREAS, the Underwriters have designated the persons signing this
Agreement (collectively, the "Representatives") to execute this Agreement on
behalf of the respective Underwriters and to act for the respective Underwriters
in the manner provided in this Agreement; and
WHEREAS, the Company has prepared and filed, in accordance with the
provisions of the Securities Act of 1933 (the "Act"), with the Securities and
Exchange Commission (the "Commission"), a registration statement (File No.
333-86050) and a prospectus relating to $3,000,000,000 principal amount of its
securities, including the Shares, and such registration statement has become
effective; and
WHEREAS, such registration statement, including the financial
statements, the documents incorporated or deemed incorporated therein by
reference, the exhibits thereto, being herein called
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* Plus an option to purchase from American Electric Power Company, Inc. up to
240,000 additional shares to cover over-allotments.
the Registration Statement, and the prospectus, including the documents
incorporated or deemed incorporated therein by reference, constituting a part of
such Registration Statement, as it may be last amended or supplemented prior to
the effectiveness of this Agreement, being herein called the Basic Prospectus,
and the Basic Prospectus, as supplemented by a preliminary prospectus supplement
(the "Preliminary Prospectus Supplement") and a final prospectus supplement (the
"Prospectus Supplement") to include information relating to the Shares,
including the names of the Underwriters, the price and terms of the offering,
the interest rate, maturity date and certain other information relating to the
Shares, which will be filed with the Commission pursuant to Rule 424(b) of the
Commission's General Rules and Regulations under the Act (the "Rules"),
including all documents then incorporated or deemed to have been incorporated
therein by reference, being herein called the "Prospectus."
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties as follows:
1. Purchase and Sale: (a) Upon the basis of the warranties and
representations and on the terms and subject to the conditions herein
set forth, the Company agrees to sell to the respective Underwriters
named in Exhibit 1 hereto, severally and not jointly, and the
respective Underwriters, severally and not jointly, agree to purchase
from the Company, the respective number of Underwritten Shares set
opposite their names in Exhibit 1 hereto, together aggregating all of
the Underwritten Shares, at a purchase price equal to $39.673 per
Security.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, not
more than 2,400,000 Option Shares at the same purchase price per share as the
Underwriters shall pay for the Underwritten Shares. Said option may be exercised
only to cover over-allotments in the sale of the Underwritten Shares by the
Underwriters. Said option may be exercised one time, in whole or in part on or
before the 30th day after the date of the Prospectus. Said option shall be
exercised upon written or telegraphic notice by the Representatives to the
Company setting forth the number of shares of the Option Shares as to which the
several Underwriters are exercising the option and the settlement date. The
number of shares of the Option Shares to be purchased by each Underwriter shall
be the same percentage of the total number of shares of the Option Shares to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Shares, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
2. Payment and Delivery: Delivery of and payment for the
Underwritten Shares and the Option Shares (if the option provided for
in Section 1(b) hereof shall have been exercised on or before the third
Business Day prior to the Closing Date) shall be made at the offices of
Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other place as shall be agreed upon by the
Representatives and the Company, at 10:00 a.m., New York City time, on
June 11, 2002, or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall
designate, which date and time may be postponed by agreement between
the Representatives and the Company or as provided in Section 8 hereof
(such date and time of delivery and payment for the Shares being herein
called the "Closing
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Date"). Delivery of the Shares shall be made to the Representatives for
the respective accounts of the several Underwriters against payment by
the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company.
Delivery of the Underwritten Shares and the Option Shares shall be made
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 1(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the Option Shares (at the expense of the Company) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. If settlement for the
Option Shares occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Shares, and the obligation
of the Underwriters to purchase the Option Shares shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 3 hereof. Any settlement date for the Option Securities
after the Closing Date shall be such date as the Company and the Representatives
may agree, but in no event shall such date be sooner than the third Business Day
following the exercise of the option provided for in Section 1(b) hereof.
3. Conditions of Underwriters' Obligations: The several
obligations of the Underwriters hereunder to purchase Underwritten
Shares and the Option Shares, as the case may be, are subject to the
accuracy of the warranties and representations on the part of the
Company on the date hereof and at the Closing Date, and if applicable,
the settlement date pursuant to Section 2 hereof, and to the following
other conditions:
(a) That all legal proceedings to be taken and all legal
opinions to be rendered in connection with the sale of the Shares shall
be satisfactory in form and substance to Xxxxx Xxxxxxxxxx LLP, counsel
to the Underwriters and the Company shall have furnished such counsel
all documents and information that it may reasonably request to enable
it to pass upon such matters.
(b) That, at the Closing Date, the Representatives shall be
furnished with the following opinions, dated the day of the Closing
Date, with conformed copies or signed counterparts thereof for the
other Underwriters, with such changes therein as may be agreed upon by
the Company and the Representatives with the approval of Xxxxx
Xxxxxxxxxx LLP, counsel to the Underwriters:
(i) Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, substantially
in the form attached hereto as Exhibit A-1, and either
of Xxxxxx X. Xxxxxxxxxx, Esq. or Xxxxxxx X. Xxxxxxx,
Esq., counsel to the Company, substantially in the
form attached hereto as Exhibit A-2;
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(ii) Opinion of Xxxxx Xxxxxxxxxx LLP, counsel to the
Underwriters, substantially in the form attached
hereto as Exhibit B;
(c) That the Representatives shall have received letters from:
(i) Xxxxxx Xxxxxxxx LLP in form and substance
satisfactory to the Representatives, dated as of May
24, 2002, (i) confirming that they are independent
certified public accountants within the meaning of
the Act and the applicable published rules and
regulations of the Commission thereunder and (ii)
stating that in their opinion the financial
statements audited by them and incorporated by
reference in the Registration Statement complied as
to form in all material respects with the then
applicable accounting requirements of the
Commission,including the applicable published rules
and regulations of the Commission; and
(ii) KPMG Audit plc in form and substance satisfactory to
the Representatives, dated as of the Closing Date,
(i) confirming that they are independent certified
public accountants within the meaning of the Act and
the applicable published rules and regulations of
the Commission thereunder and (ii) stating that in
their opinion the financial statements audited by
them and incorporated by reference in the
Registration Statement complied as to form in all
material respects with the then applicable
accounting requirements of the Commission, including
the applicable published rules and regulations of
the Commission; and
(iii) Deloitte & Touche LLP in form and substance
satisfactory to the Representatives, (A) dated as of
the date of this Agreement and substantially in the
form of Exhibit C hereto and (B) dated as of the
Closing Date, reaffirming the statements made in the
letter furnished pursuant to clause (A) above,
except that the specified date referred to shall be
a date not more than five business days prior to the
Closing Date.
(d) That no amendment to the Registration Statement and that
no prospectus or prospectus supplement of the Company (other than the prospectus
or amendments, prospectuses or prospectus supplements relating solely to
securities other than the Shares) relating to the Shares and no document which
would be deemed incorporated in the Prospectus by reference filed subsequent to
the date hereof and prior to the Closing Date shall contain material information
substantially different from that contained in the Registration Statement which
is unsatisfactory in substance to the Representatives or unsatisfactory in form
to Xxxxx Xxxxxxxxxx LLP, counsel to the Underwriters.
(e) That, at the Closing Date, an appropriate order of the
Commission under the Public Utility Holding Company Act of 1935, as amended (the
"1935 Act") necessary to permit the sale of the Shares to the Underwriters,
shall be in effect; and that, prior to the
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Closing Date, no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act by the
Commission or proceedings therefor initiated.
(f) That, at the Closing Date, there shall not have been any
material adverse change in the business, properties or financial
condition of the Company from that set forth in the Prospectus (other
than changes referred to in or contemplated by the Prospectus), and
that the Company shall, at the Closing Date, have delivered to the
Representatives a certificate of an executive officer of the Company to
the effect that, to the best of his knowledge, information and belief,
there has been no such change.
(g) That the Company shall have performed such of its
obligations under this Agreement as are to be performed at or before
the Closing Date by the terms hereof.
(h) Subsequent to the date of this Agreement, there shall not
have been decreases in the ratings of the Company's senior unsecured
debt securities by both Xxxxx'x Investors Services, Inc. ("Moody's")
and Standard & Poor's Ratings Group ("S&P") as follows: (i) a decrease
by Moody's to a rating of Baa3 or below and (ii) a decrease by S&P to a
rating of BBB- or below.
(i) That, at the Closing Date, the Shares shall have been
approved for listing on the New York Stock Exchange, subject to
official notice of issuance, and satisfactory evidence of such actions
shall have been provided to the Representatives.
(j) That, at the Closing Date, each of the executive officers
and directors of the Company listed in Exhibit D shall have entered
into an agreement substantially in the form attached hereto as Exhibit
E.
In case any of the conditions specified in this Section 3
shall not have been fulfilled, this Agreement may be terminated by the
Underwriters at any time at or prior to the Closing Date upon written notice
thereof to the Company. Any such termination shall be without liability of any
party to any other party except as otherwise provided in Section 4(f), Section
4(g) and Section 4(h) hereof and except for any liability under Section 7
hereof.
4. Certain Covenants of the Company: In further consideration
of the agreements of the Underwriters herein contained, the Company
covenants as follows:
(a) As soon as practicable, and in any event within the time
prescribed by Rule 424 under the Act, to file the Prospectus with the
Commission; as soon as the Company is advised thereof, to advise the
Representatives and confirm the advice in writing of any request made
by the Commission for amendments to the Registration Statement or
Prospectus or for additional information with respect thereto or of the
entry of a stop order suspending the effectiveness of the Registration
Statement or of the initiation or threat of any proceedings for that
purpose and, if such a stop order should be entered by the Commission,
to make every reasonable effort to obtain the prompt lifting or removal
thereof.
(b) To deliver to the Underwriters, without charge, as soon as
practicable (and in any event within 24 hours after the date hereof),
and from time to time thereafter during
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such period of time (not exceeding nine months) after the date hereof as
they are required by law to deliver a prospectus, as many copies of the
Prospectus (as supplemented or amended if the Company shall have made
any supplements or amendments thereto, other than supplements or
amendments relating solely to securities other than the Shares) as the
Representatives may reasonably request; and in case any Underwriter is
required to deliver a prospectus after the expiration of nine months
after the date hereof, to furnish to any Underwriter, upon request, at
the expense of such Underwriter, a reasonable quantity of a supplemental
prospectus or of supplements to the Prospectus complying with Section
10(a)(3) of the Act.
(c) To furnish to the Representatives, upon request, a copy,
certified by the Secretary or an Assistant Secretary of the Company, of
the Registration Statement as initially filed with the Commission and of
all amendments thereto (exclusive of exhibits), other than amendments
relating solely to securities other than the Shares and, upon request,
to furnish to the Representatives sufficient plain copies thereof
(exclusive of exhibits) for distribution of one to the other
Underwriters.
(d) For such period of time after the date hereof as they are
required by law to deliver a prospectus, if any event shall have
occurred as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
contain any untrue statement of a material fact or not omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading, immediately to notify the
Underwriters of such event and forthwith to prepare and furnish, at its
own expense during the period ending nine months from the date of this
Agreement, and thereafter at the Underwriters' expense, to the
Underwriters and to dealers (whose names and addresses are furnished to
the Company by the Representatives) to whom principal amounts of the
Shares may have been sold by the Representatives for the accounts of the
Underwriters and, upon request, to any other dealers making such
request, copies of such amendments to the Prospectus or supplements to
the Prospectus.
(e) As soon as practicable, the Company will make generally available
to its security holders and to the Underwriters an earnings statement or
statement of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(f) To use its best efforts to qualify the Shares for offer and sale
under the securities or "blue sky" laws of such jurisdictions as the
Representatives may designate within six months after the date hereof
and itself to pay, or to reimburse the Underwriters and their counsel
for, reasonable filing fees and expenses in connection therewith in an
amount not exceeding $3,500 in the aggregate (including filing fees and
expenses paid and incurred prior to the effective date hereof),
provided, however, that the Company shall not be required to qualify as
a foreign corporation or to file a consent to service of process or to
file annual reports or to comply with any other requirements deemed by
the Company to be unduly burdensome.
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(g) To pay all expenses, fees and taxes (other than transfer taxes on
resales of the Shares by the respective Underwriters, but including all
amounts relating to (i) the Company's costs and expenses for travel,
lodging and incidental expenses relating to investor presentations on
any "road show" undertaken in connection with the marketing of the
Shares; (ii) the listing of the Shares on the New York Stock Exchange;
(iii) the preparation of the Registration Statement, the Preliminary
Prospectus Supplement and the Prospectus Supplement (and any amendments
or supplements thereto); (iv) the sale and delivery of the Shares; (v)
the reasonable fees and disbursements of counsel and accountants for the
Company; and (vi) the printing and delivery of the Preliminary
Prospectus Supplement and the Prospectus Supplement) in connection with
the sale and delivery of the Shares, except that the Company shall be
required to pay the fees and disbursements (other than disbursements
referred to in paragraph (f) of this Section 4) of Xxxxx Xxxxxxxxxx LLP,
counsel to the Underwriters, only in the events provided in paragraph
(h) of this Section 4, the Underwriters hereby agreeing to pay such fees
and disbursements in any other event.
(h) If the Underwriters shall not take up and pay for the Shares due
to the failure of the Company to comply with any of the conditions
specified in Section 3 hereof, or, if this Agreement shall be terminated
in accordance with the provisions of Section 9(b) or 13(ii) hereof, to
pay the fees and disbursements of Xxxxx Xxxxxxxxxx LLP, counsel to the
Underwriters, and, to reimburse the Underwriters for their reasonable
out-of-pocket expenses, in an aggregate amount not exceeding a total of
$50,000, incurred in connection with the financing contemplated by this
Agreement.
(i) To use its best efforts to cause the Shares to be accepted for
clearance and settlement through the facilities of The Depositary Trust
Company.
(j) The Company will timely file any certificate required by the 1935
Act in connection with the sale of the Shares.
(k) The Company will not, without the prior written consent of the
Representatives, offer, sell, contract to sell, pledge, or otherwise
dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company
or any person in privity with the Company or any affiliate of the
Company) directly or indirectly, including the filing (or participation
in the filing) of a registration statement with the Commission in
respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of
Rule 16a-1 under the 1934 Act, any shares of Common Stock or any
securities convertible into, or exercisable, or exchangeable for, shares
of Common Stock other than as provided in this Agreement; or publicly
announce an intention to effect any such transaction, for a period of 90
days after the date of the Underwriting Agreement, provided, however,
that (i) the Company may issue and sell its 9.25% Equity Units in the
concurrent offering contemplated by the Prospectus and (ii) the Company
may issue and sell Common Stock pursuant to the terms of any employee
stock option plan, stock ownership plan, dividend reinvestment plan or
any other similar plan of the Company in effect as of the date hereof
and the Company may issue Common Stock
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issuable upon the conversion of securities or the exercise of warrants
outstanding as of the date hereof.
(l) To use its reasonable efforts to effect the listing of the Shares
on the New York Stock Exchange.
5. Representations and Warranties of by the Company: The Company
represents and warrants to, and agrees with each Underwriter, as set
forth below:
(a) The Registration Statement on its effective date complied, or was
deemed to comply, with the applicable provisions of the Act and the
rules and regulations of the Commission and the Registration Statement
at its effective date did not, and at the Closing Date will 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 not misleading, and the Basic Prospectus on the date of this
Agreement and the Prospectus when first filed in accordance with Rule
424(b) complies, and at the Closing Date the Prospectus will comply,
with the applicable provisions of the Act, and the rules and regulations
of the Commission, the Basic Prospectus on the date of this Agreement
and the Prospectus when first filed in accordance with Rule 424(b) under
the Act do not, and the Prospectus at the Closing Date will 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 the light of the circumstances under which they were made,
not misleading, except that the Company makes no warranty or
representation to the Underwriters with respect to any statements or
omissions made in the Registration Statement, the Basic Prospectus or
the Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by, or through the Representatives
on behalf of, any Underwriter expressly for use in the Registration
Statement, the Basic Prospectus or Prospectus.
(b) The documents incorporated by reference in the Registration
Statement or Prospectus, when they were filed with the Commission,
complied in all material respects with the applicable provisions of the
1934 Act and the rules and regulations of the Commission thereunder, and
as of such time of filing, when read together with the Prospectus, none
of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise
referred to or contemplated therein, there has been no material adverse
change in the business, properties or financial condition of the
Company.
(d) This Agreement has been duly authorized, executed and delivered
by the Company.
(e) The execution, delivery and performance of this Agreement, the
issuance of the Shares and the consummation by the Company of the
transactions contemplated herein
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is not in violation of its charter or bylaws, will not result in the
violation of any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, governmental instrumentality or
court having jurisdiction over the Company or its properties and will
not conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company under any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company is a party or by which it may be bound or to which any of its
properties may be subject (except for conflicts, breaches or defaults
which would not, individually or in the aggregate, be materially adverse
to the Company or materially adverse to the transactions contemplated by
this Agreement).
(f) The Shares have been duly authorized and, when issued and
delivered in accordance with the provisions of this Agreement, will be
duly and validly issued, fully paid and non-assessable.
(g) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the
issuance and sale by the Company of the Shares or the transactions by
the Company contemplated in this Agreement, except (A) such as may be
required under the 1933 Act or the rules and regulations thereunder; (B)
such as may be required under the 1935 Act; and (C) such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws.
(h) The Company and each "significant subsidiary" of the Company (as
such term is defined in Rule 1-02 of Regulation S-X promulgated under
the Act) has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation.
(i) The consolidated financial statements of the Company and its
consolidated subsidiaries together with the notes thereto, included or
incorporated by reference in the Prospectus present fairly the financial
position of the Company at the dates or for the periods indicated; said
consolidated financial statements have been prepared in accordance with
United States generally accepted accounting principles applied, apart
from reclassifications disclosed therein, on a consistent basis
throughout the periods involved; and the selected consolidated financial
information of the Company included in the Prospectus present fairly the
information shown therein and have been compiled, apart from
reclassifications disclosed therein, on a basis consistent with that of
the audited financial statements of the Company included or incorporated
by reference in the Prospectus.
(j) There is no pending action, suit, investigation, litigation or
proceeding, including, without limitation, any environmental action,
affecting the Company or any of its "significant subsidiaries" before
any court, governmental agency or arbitration that is reasonably likely
to have a material adverse effect on the business, properties, financial
condition or results of operations of the Company, except as disclosed
in the Prospectus.
The Company's covenants, warranties and representations contained in
this Agreement,
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shall remain in full force and effect regardless of any investigation made by or
on behalf of any person, and shall survive the delivery of and payment for the
Shares hereunder.
6. Warranties of Underwriters:
(a) Each Underwriter warrants and represents that the information
furnished in writing to the Company through the Representatives for use
in the Registration Statement, in the Basic Prospectus, in the
Prospectus, or in the Prospectus as amended or supplemented is correct
as to such Underwriter.
(b) Each of the Underwriters represents and agrees that it has not
and will not offer, sell or delivery any of the Shares directly or
indirectly, or distribute the Prospectus or any other offering material
relating to the Shares, in or from any jurisdiction except under
circumstances that will result in compliance with the applicable laws
and regulations thereof and in a manner that will not impose any
obligations on the Company except as set forth in this Agreement.
The warranties and representations of such Underwriter contained in
this Agreement, shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or other person, and shall
survive the delivery of and payment for the Shares hereunder.
7. Indemnification and Contribution:
(a) To the extent permitted by law, the Company agrees to indemnify
and hold you harmless and each person, if any, who controls you within
the meaning of Section 15 of the Act, against any and all losses,
claims, damages or liabilities, joint or several, to which you, they or
any of you or them may become subject under the Act or otherwise, and to
reimburse you and such controlling person or persons, if any, for any
legal or other expenses incurred by you or them in connection with
defending any action, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any alleged untrue
statement or untrue statement of a material fact contained in the
Registration Statement, in the Basic Prospectus (if used prior to the
effective date of this Agreement), or in the Prospectus, or if the
Company shall furnish or cause to be furnished to you any amendments or
any supplements to the Prospectus, in the Prospectus as so amended or
supplemented except to the extent that such amendments or supplements
relate solely to securities other than the Shares (provided that if such
Prospectus or such Prospectus, as amended or supplemented, is used after
the period of time referred to in Section 4(b) hereof, it shall contain
such amendments or supplements as the Company deems necessary to comply
with Section 10(a) of the Act), or arise out of or are based upon any
alleged omission or omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon any such alleged untrue
statement or omission, or untrue statement or omission which was made in
the Registration Statement, in the Basic Prospectus or in the
Prospectus, or in the Prospectus as so amended or supplemented, in
reliance upon and in conformity with information furnished in writing to
the Company by or through the Representatives expressly for use therein
and except that this indemnity shall
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not inure to your benefit (or of any person controlling you) on account
of any losses, claims, damages, liabilities or actions arising from the
sale of the Shares to any person if such loss arises from the fact that
a copy of the Prospectus, as the same may then be supplemented or
amended to the extent such Prospectus was provided to you by the Company
(excluding, however, any document then incorporated or deemed
incorporated therein by reference), was not sent or given by you to such
person with or prior to the written confirmation of the sale involved
and the alleged omission or alleged untrue statement or omission or
untrue statement was corrected in the Prospectus as supplemented or
amended at the time of such confirmation, and such Prospectus, as
amended or supplemented, was timely delivered to you by the Company
prior to the written confirmation of the sale involved. You agree
promptly after the receipt by you of written notice of the commencement
of any action in respect to which indemnity from the Company on account
of its agreement contained in this Section 7(a) may be sought by you, or
by any person controlling you, to notify the Company in writing of the
commencement thereof, but your omission so to notify the Company of any
such action shall not release the Company from any liability which it
may have to you or to such controlling person otherwise than on account
of the indemnity agreement contained in this Section 7(a). In case any
such action shall be brought against you or any such person controlling
you and you shall notify the Company of the commencement thereof, as
above provided, the Company shall be entitled to participate in, and, to
the extent that it shall wish, including the selection of counsel (such
counsel to be reasonably acceptable to the indemnified party), to direct
the defense thereof at its own expense. In case the Company elects to
direct such defense and select such counsel (hereinafter, Company's
counsel), you or any controlling person shall have the right to employ
your own counsel, but, in any such case, the fees and expenses of such
counsel shall be at your expense unless (i) the Company has agreed in
writing to pay such fees and expenses or (ii) the named parties to any
such action (including any impleaded parties) include both you or any
controlling person and the Company and you or any controlling person
shall have been advised by your counsel that a conflict of interest
between the Company and you or any controlling person may arise (and the
Company's counsel shall have concurred in good faith with such advice)
and for this reason it is not desirable for the Company's counsel to
represent both the indemnifying party and the indemnified party (it
being understood, however, that the Company shall not, in connection
with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for you or any
controlling person (plus any local counsel retained by you or any
controlling person in their reasonable judgment), which firm (or firms)
shall be designated in writing by you or any controlling person).
(b) Each Underwriter agrees, to the extent permitted by law, to
indemnify, hold harmless and reimburse the Company, its directors and
such of its officers as shall have signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of
Section 15 of the Act, to the same extent and upon the same terms as the
indemnity agreement of the Company set forth in Section 7(a) hereof, but
only with respect to untrue statements or alleged untrue statements or
omissions or alleged omissions made in the Registration Statement, or in
the Basic Prospectus, or in the Prospectus, or in the Prospectus as so
amended or supplemented, in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives
on behalf of such
11
Underwriter expressly for use therein. The Company agrees promptly after
the receipt by it of written notice of the commencement of any action in
respect to which indemnity from you on account of your agreement
contained in this Section 7(b) may be sought by the Company, or by any
person controlling the Company, to notify you in writing of the
commencement thereof, but the Company's omission so to notify you of any
such action shall not release you from any liability which you may have
to the Company or to such controlling person otherwise than on account
of the indemnity agreement contained in this Section 7(b).
(c) If recovery is not available or insufficient under Section
7(a) or 7(b) hereof for any reason other than as specified therein, the
indemnified party shall be entitled to contribution for any and all
losses, claims, damages, liabilities and expenses for which such
indemnification is so unavailable or insufficient under this Section
7(c). In determining the amount of contribution to which such
indemnified party is entitled, there shall be considered the portion of
the proceeds of the offering of the Shares realized, the relative
knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent
any statement or omission, and any equitable considerations appropriate
under the circumstances. The Company and the Underwriters agree that it
would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) without
reference to the considerations called for in the previous sentence. No
Underwriter or any person controlling such Underwriter shall be
obligated to contribute any amount or amounts hereunder which in the
aggregate exceeds the total price of the Shares purchased by such
Underwriter under this Agreement, less the aggregate amount of any
damages which such Underwriter and its controlling persons have
otherwise been required to pay in respect of the same claim or any
substantially similar claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. An Underwriter's obligation
to contribute under this Section 7 is in proportion to its purchase
obligation and not joint with any other Underwriter.
(d) No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
contribution could be sought under this Section 7 (whether or not the
indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of such indemnified party.
(e) In no event shall any indemnifying party have any liability
or responsibility in respect of the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or
threatened action or claim effected without its prior written consent.
The agreements contained in Section 7 hereof shall remain in full
force and effect
12
regardless of any investigation made by or on behalf of any person, and shall
survive the delivery of and payment for the Shares hereunder.
8. Default of Underwriters: If any Underwriter under this
Agreement shall fail or refuse (otherwise than for some reason
sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to purchase
and pay for the number of Shares which it has agreed to purchase and pay
for hereunder, and the number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is
not more than one-tenth of the number of the Shares, the other
Underwriters shall be obligated severally in the proportions which the
number of Shares set forth opposite their names in Exhibit 1 hereto bear
to the number of Shares set forth opposite the names of all such
non-defaulting Underwriters, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on the terms set forth herein; provided that in no event shall
the number of Shares which any Underwriter has agreed to purchase
pursuant to Section 1 hereof be increased pursuant to this Section 8 by
an amount in excess of one-ninth of such number of Shares without the
written consent of such Underwriter. In the event of any such purchase,
(a) the non-defaulting Underwriters or the Company shall have the right
to fix as a postponed Closing Date a date not exceeding four full
business days after the date specified in Section 2 and (b) the
respective number of Shares to be purchased by the non-defaulting
Underwriters shall be taken as the basis of their respective
underwriting obligations for all purposes of this Agreement. If any
Underwriter or Underwriters shall fail or refuse to purchase Shares and
the number of Shares with respect to which such default occurs is more
than one-tenth of the number of the Shares then this Agreement shall
terminate without liability on the part of any non-defaulting
Underwriter; provided, however, that the non-defaulting Underwriters may
agree, in their sole discretion, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on the terms set forth herein. In the event of any such
termination, the Company shall not be under any liability to any
Underwriter (except to the extent, if any, provided in Section 4(h)
hereof), nor shall any Underwriter (other than an Underwriter who shall
have failed or refused to purchase the Shares without some reason
sufficient to justify, in accordance with the terms hereof, its
termination of its obligations hereunder) be under any liability to the
Company or any other Underwriter.
Nothing herein contained shall release any defaulting Underwriter
from its liability to the Company or any non-defaulting Underwriter for damages
occasioned by its default hereunder.
9. Termination of Agreement by the Underwriters: This
Agreement may be terminated at any time prior to the Closing Date by the
Representatives if, after the execution and delivery of this Agreement
and prior to the Closing Date, in the Representatives' reasonable
judgment, the Underwriters' ability to market the Shares shall have been
materially adversely affected because:
(a) trading in securities on the New York Stock Exchange shall
have been generally suspended by the Commission or by the New York Stock
Exchange, or
13
(b) trading in the securities of the Company shall have been
suspended by the New York Stock Exchange, or
(c) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or
war or other national or international calamity or crisis, or
(d) a general banking moratorium shall have been declared by
Federal or New York State authorities.
If the Representatives elect to terminate this Agreement, as
provided in this Section 9, the Representatives will promptly notify the Company
by telephone or by telex or facsimile transmission, confirmed in writing. If
this Agreement shall not be carried out by any Underwriter for any reason
permitted hereunder, or if the sale of the Shares to the Underwriters as herein
contemplated shall not be carried out because the Company is not able to comply
with the terms hereof, the Company shall not be under any obligation under this
Agreement and shall not be liable to any Underwriter or to any member of any
selling group for the loss of anticipated profits from the transactions
contemplated by this Agreement (except that the Company shall remain liable to
the extent provided in Sections 4(g), 4(h) and 7 hereof) and the Underwriters
shall be under no liability to the Company nor be under any liability under this
Agreement to one another.
10. Notices: All notices hereunder shall, unless otherwise
expressly provided, be in writing and be delivered at or mailed to the
following addresses or by telex or facsimile transmission confirmed in
writing to the following addresses: if to the Underwriters, to the
Representatives at the following firms:
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Registration Department
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Syndicate Desk
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Syndicate Department
and, if to the Company, to American Electric Power Company, Inc., c/o American
Electric Power Service Corporation, 0 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000,
Attention: X. X. Xxxx, Treasurer, (fax 614/000-0000).
11. Parties in Interest: The agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the Company
(including the directors thereof
14
and such of the officers thereof as shall have signed the Registration
Statement), the controlling persons, if any, referred to in Section 7
hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in Section 8
hereof, no other person shall acquire or have any right under or by the
virtue of this Agreement.
12. Definition of Certain Terms: If there be two or more
persons, firms or corporations named in Exhibit 1 hereto, the term
"Underwriters", as used herein, shall be deemed to mean the several
persons, firms or corporations, so named (including the Representatives
herein mentioned, if so named) and any party or parties substituted
pursuant to Section 8 hereof, and the term "Representative", as used
herein, shall be deemed to mean the representative or representatives
designated by, or in the manner authorized by, the Underwriters. All
obligations of the Underwriters hereunder are several and not joint. If
there shall be only one person, firm or corporation named in Exhibit 1
hereto, the term "Underwriters" and the term "Representative", as used
herein, shall mean such person, firm or corporation. The term
"successors" as used in this Agreement shall not include any purchaser,
as such purchaser, of any of the Shares from any of the respective
Underwriters.
13. Conditions of the Company's Obligations: The obligations of
the Company hereunder are subject to (i) the Underwriters' performance
of their obligations hereunder; and (ii) that at the Closing Date the
Commission shall have issued an appropriate order under the Act and 1935
Act, and such orders shall remain in full force and effect, authorizing
the transactions contemplated hereby. In case these conditions shall not
have been fulfilled, this Agreement may be terminated by the Company
upon notice thereof to the Underwriters. Any such termination shall be
without liability of any party to any other party except as otherwise
provided in Sections 4(g), 4(h) and 7 hereof.
14. Offering by Underwriters: It is understood that the several
Underwriters propose to offer the Shares for sale to the public as set
forth in the Prospectus.
15. Applicable Law: This Agreement will be governed and
construed in accordance with the laws of the State of New York.
16. Execution of Counterparts: This Agreement may be executed
in several counterparts, each of which shall be regarded as an original
and all of which shall constitute one and the same document.
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, on the date
first above written.
AMERICAN ELECTRIC POWER COMPANY, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Assistant Treasurer
16
XXXXXXX, XXXXX & CO.
By: /s/ Xxxxxxx, Sachs & Co.
---------------------------------
Name: Xxxx Xxxxxxx
X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxxx
XXXXXXX XXXXX XXXXXX INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
as Representatives
and on behalf of the Underwriters
named in Exhibit 1 hereto
17
EXHIBIT 1
Name of Underwriter Number of Underwritten Shares to
------------------- --------------------------------
be Purchased
------------
Xxxxxxx, Sachs & Co. 3,800,000
X.X. Xxxxxx Securities Inc. 3,800,000
Xxxxxxx Xxxxx Barney Inc. 3,800,000
Banc of America Securities LLC 566,000
Credit Suisse First Boston Corporation 566,000
Xxxxxx Brothers Inc. 566,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated 566,000
UBS Warburg LLC 566,000
X.X. Xxxxxxx & Sons, Inc. 295,000
Danske Securities (US), Inc. 295,000
Xxxxxx X. Xxxxx & Co., L.P. 295,000
McDonald Investments Inc. 295,000
TD Securities (USA) Inc. 295,000
The Xxxxxxxx Capital Group, L.P. 295,000
TOTAL .......................................................... 16,000,000
==========
EXHIBIT A-1
OPINION OF XXXXXXX XXXXXXX & XXXXXXXX
(a) The Company has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of New
York and has full corporate power and authority to conduct its business
as described in the Registration Statement and Prospectus.
(b) An appropriate order of the Commission legally required for the
issuance and sale of the Shares by the Company under the Public Utility
Holding Company Act of 1935 has been obtained; such order is sufficient
for the issuance and sale of the Shares by the Company; and no other
order, consent or other authorization or approval of any United States
federal or New York State governmental body (other than in connection or
in compliance with the previsions of the securities or "blue sky" laws
of any jurisdiction, as to which we express no opinion) not already
obtained is legally required for the issuance and sale of the Shares by
the Company in accordance with the terms of the Underwriting Agreement,
the performance by the Company of its obligations with respect to the
Shares and under the Underwriting Agreement and the Indenture.
(c) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(d) The Shares have been authorized by the Company, upon payment and
delivery in accordance with the Underwriting Agreement, will be validly
issued, fully paid and nonassessable.
(e) There are no preemptive rights under federal or New York law to
subscribe for or to purchase the Shares; there are no preemptive or
other rights to subscribe for or to purchase the Shares pursuant to the
Restated Certificate of Incorporation or By-Laws of the Company.
(f) The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of the Underwriting
Agreement will not violate any Federal or New York statute or any order
known to us issued pursuant to any Federal or New York statute by any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties (except
that various consents of, and filings with governmental authorities of,
the State of New York may be required to be obtained or made, as the
case may be, in connection or compliance with the provisions of the
securities or "blue sky" laws of the State of New York).
(g) The statements made in the Prospectus under the captions
"Description of Common Stock," insofar as they purport to constitute
summaries of the terms of the Company's Common Stock (including the
Shares), constitute accurate summaries of the terms of such Common Stock
in all material respects.
A-1-1
(h) Subject to the qualifications, exceptions, assumptions and
limitations therein, the statements set forth in the Prospectus under
the caption "United States Federal Income Tax Consequences," insofar as
they purport to constitute summaries of matters of United States federal
tax laws and regulations or legal conclusions with respect thereto,
constitute accurate summaries of the matters described therein in all
material respects.
Our opinion set forth in paragraph (h) above is based upon the
Internal Revenue Code of 1986, as amended, the Treasury regulations promulgated
thereunder and other relevant authorities and law, all as in effect on the date
hereof. Consequently, future changes in the law may cause the tax treatment of
the transactions referred to herein to be materially different from that
described above.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except as and to the extent set forth in paragraphs (l) and (m) above. In the
course of the preparation by the Company of the Registration Statement and the
Prospectus (excluding the Exchange Act Documents), we participated in
conferences with certain officers and employees of the Company, with your
representatives, with Underwriters' counsel, Xxxxx Xxxxxxxxxx LLP, with
representatives of Deloitte & Touche LLP and with other counsel to the Company.
We did not prepare the Exchange Act Documents; however, we reviewed the Annual
Report on Form 10-K for the Company for the fiscal year ended December 31, 2001
prior to its filing with the Commission. Based upon our examination of the
Registration Statement, the Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement and the Prospectus (excluding the Exchange Act Documents) and our
participation in the conferences referred to above, (i) we are of the opinion
that the Registration Statement, as of its effective date, and the Prospectus,
as of June 5, 2002, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act Documents complied as to form
when filed in all material respects with the requirements of the Exchange Act
and the applicable rules and regulations of the Commission thereunder, except
that in each case we express no opinion with respect to the financial statements
or other financial or statistical data contained or incorporated by reference in
the Registration Statement, the Prospectus or the Exchange Act Documents, and
(ii) we have no reason to believe that the Registration Statement, as of its
effective date (including the Exchange Act Documents on file with the Commission
on such effective date), contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the Prospectus
(including the Exchange Act Documents) contained as of June 5, 2002 or contains
any untrue statement of a material fact or omitted as June 5, 2002 or omits to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that in each case we express no belief with respect to the financial
statements or other financial or statistical data contained or incorporated by
reference in the Registration Statement, the Prospectus or the Exchange Act
Documents.
A-1-2
EXHIBIT A-2
OPINION OF XXXXXX X. XXXXXXXXXX, ESQ.
(a) The execution, delivery and performance by the Company of the
Underwriting Agreement, the issuance of the Shares and the consummation
by the Company of the transactions contemplated therein and compliance
by the Company with their obligations thereunder do not and will not
result in any violation of the charter or bylaws of the Company will not
result in the violation of any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
governmental instrumentality or court having jurisdiction over the
Company or its properties or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
and do not and will not conflict with, or result in a breach of any of
the terms or provisions of, or constitute a default under any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company is a party or by which it may be bound
or to which any of its properties may be subject (except for conflicts,
breaches or defaults which would not, individually or in the aggregate,
be materially adverse to the Company or materially adverse to the
transactions contemplated by the Underwriting Agreement).
(b) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(c) An appropriate order of the Commission legally required for the
issuance and sale of the Shares by the Company under the Public Utility
Holding Company Act of 1935, as amended, has been obtained; such order
is sufficient for the issuance and sale of the Shares by the Company;
and the Commission has issued an appropriate order under the Securities
Act of 1933, as amended, with respect to the sale of the Shares. No
other approval or consent of any governmental body is required for the
issuance and sale of the Shares to you or the performance by the Company
of its obligations under the Underwriting Agreement, the Indenture or
the Supplemental Indenture. I have not considered whether any approval
or consent is required under the blue sky laws of any jurisdiction.
A-2-1
EXHIBIT B
OPINION OF XXXXX XXXXXXXXXX LLP
(a) The Company has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of New
York and has full corporate power and authority to conduct its business
as described in the Registration Statement and Prospectus.
(b) An appropriate order of the Commission legally required for the
issuance and sale of the Shares by the Company under the Public Utility
Holding Company Act of 1935 has been obtained; such order is sufficient
for the issuance and sale of the Shares by the Company; and no other
order, consent or other authorization or approval of any United States
federal or New York State governmental body (other than in connection or
in compliance with the previsions of the securities or "blue sky" laws
of any jurisdiction, as to which we express no opinion) not already
obtained is legally required for the issuance and sale of the Shares by
the Company in accordance with the terms of the Underwriting Agreement,
the performance by the Company of its obligations with respect to the
Shares and under the Underwriting Agreement and the Indenture.
(c) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(d) The Shares have been authorized by the Company, upon payment and
delivery in accordance with the Underwriting Agreement, will be validly
issued, fully paid and nonassessable.
(e) There are no preemptive rights under federal or New York law to
subscribe for or to purchase the Shares; there are no preemptive or
other rights to subscribe for or to purchase the Shares pursuant to the
Restated Certificate of Incorporation or By-Laws of the Company.
(f) The statements made in the Prospectus under the captions
"Description of Common Stock," insofar as they purport to constitute
summaries of the terms of the Company's Common Stock (including the
Shares), constitute accurate summaries of the terms of such Common Stock
in all material respects.
B-1
EXHIBIT C
LETTER FROM DELOITTE & TOUCHE
DATED AS OF THE DATE OF THIS AGREEMENT
C-1
EXHIBIT D
X.X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxx X. XxxXxxxxx
X. Xxxx Xxxxxx
Xxxxx X. Xxxxx
Xxxxxx X. Fri
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx, III
Xxxxxx X. Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxxx X. Xxxxxxxxx
D-1
EXHIBIT E
AMERICAN ELECTRIC POWER COMPANY, INC.
Lock-Up Agreement
June 5, 2002
Xxxxxxx, Sachs & Co.
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Barney Inc.
As Representatives of the several Underwriters
Ladies and Gentlemen:
This letter is being delivered to you in connection with (i) the
proposed Underwriting Agreement (the "Equity Units Underwriting Agreement"),
between American Electric Power Company, a New York corporation (the "Company"),
and each of you as representatives of a group of Underwriters named therein,
relating to an underwritten public offering of up to 6,900,000 9.25% Equity
Units (the "Equity Units") of the Company and (ii) the proposed Underwriting
Agreement (the "Common Stock Underwriting Agreement" and together with the
Equity Units Underwriting Agreement, the "Underwriting Agreements"), between the
Company and each of you as representatives of a group of Underwriters named
therein, relating to an underwritten public offering of up to 18,240,000 shares
of Common Stock, $6.50 par value (the "Shares") of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreements, the undersigned will not, without the prior written
consent of the Representatives, offer, sell, contract to sell, pledge or
otherwise dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Shares and Exchange Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder with respect to, any shares of
capital stock of the Company or any securities convertible into or exercisable
or exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period of 90 days after the date of this
Agreement, other than shares of Common Stock disposed of as bona fide gifts
approved by the Representatives.
E-1
If for any reason the Underwriting Agreements shall be terminated
prior to the Closing Date (as defined in the Underwriting Agreements), the
agreement set forth above shall likewise be terminated.
The undersigned understands that the Company and the Underwriters are
relying on this Lock-Up Agreement in proceeding with the offering of the Equity
Units and the offering of the shares. The undersigned understands that this
Lock-Up Agreement is irrevocable and shall be binding on the undersigned's
heirs, legal representatives, successors and assigns.
Yours very truly,
[Signature of executive officer or director]
[Name of executive officer or director]
E-2
