EXHIBIT 4(b)
SUPPLEMENTAL FISCAL AGENCY AGREEMENT, dated as of
August 5, 1997, by and between ENSERCH CORPORATION, a Texas
corporation (the "Company"), and CITIBANK, N.A., a national
banking association (the "Fiscal Agent"), as Fiscal Agent under
the Fiscal Agency Agreement as hereinafter mentioned.
W I T N E S S E T H:
WHEREAS, the Company has heretofore executed and
delivered that certain Fiscal Agency Agreement, dated as of April
1, 1987 (the "Fiscal Agency Agreement"), to the Fiscal Agent to
provide for the issuance of the Company's 6 3/8% Convertible
Subordinated Debentures Due 2002 (the "Debentures");
WHEREAS, pursuant Section 14(a) of the Fiscal Agency
Agreement and Section 6 of the Terms and Conditions of the
Debentures, the Holder of any Debenture has the right at his
option at any time prior to the close of business on April 1,
2002, to convert the principal of any Debenture, or in the case
of any Registered Debenture of a denomination greater than U.S.
$5,000, any portion of such principal which is U.S. $5,000 or an
integral multiple thereof, into that number of fully paid and
nonassessable shares of the Common Stock of the Company obtained
by dividing the principal amount of the Debenture or portion
thereof to be converted by the conversion price of U.S. $27.375,
as adjusted as a result of certain events ("Conversion Price");
WHEREAS, Section 14(e)(iii) of the Fiscal Agency
Agreement provides that if the Company shall distribute assets
(other than cash dividends or distributions paid from retained
earnings of the Company) to all holders of its Common Stock, then
in each such case the Conversion Price shall be adjusted,
effective immediately after the record date for the determination
of shareholders entitled to receive the distribution, so that the
Conversion Price shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the date of
such distribution by a fraction, of which the numerator shall be
the current market price per share (as defined by Section
14(e)(iv) of the Fiscal Agency Agreement) of the Common Stock on
such record date less the then fair market value (as determined
by the Board of Directors of the Company or any duly authorized
committee of the Board, whose determination shall be conclusive,
and described in a certificate filed with the Fiscal Agent and
the conversion agents) of the portion of the assets or so
distributed applicable to one share of Common Stock, and the
denominator of which shall be the current market price per share
of the Common Stock;
WHEREAS, after the issuance of the Debentures and prior
to the Distribution and the Merger (as described below), the
Conversion Price was adjusted pursuant to Section 14(e) of the
Fiscal Agency Agreement from $27.375 to $26.88 as a result of
certain distributions to the holders of Common Stock of the
Company of interests in Enserch Exploration Partners, Ltd. and
Pool Company;
WHEREAS, on August 5, 1997, the Company distributed
(the "Distribution"), pro rata to all of the holders of Common
Stock of the Company, all of the shares of Common Stock of
Enserch Exploration, Inc., a Texas corporation, held by the
Company;
WHEREAS, on August 5, 1997, pursuant to Section 14(e)
of the Fiscal Agency Agreement, upon consummation of the
Distribution, the Conversion Price was adjusted from U.S. $26.88
to U.S. $8.67, and there have been no further adjustments to the
Conversion Price since that time;
WHEREAS, the Company, Texas Energy Industries, Inc. a
Texas Corporation (formerly Texas Utilities Company), and Texas
Utilities Company, a Texas corporation (formerly TUC Holding
Company), entered into an Amended and Restated Agreement and Plan
of Merger, dated as of April 13, 1996 (the "Plan of Merger"),
which provided for the merger of Enserch Merger Corp., a Texas
corporation and a wholly owned subsidiary of Texas Utilities
Company, with and into the Company (the "Merger");
WHEREAS, the Merger became effective on August 5, 1997
immediately following the Distribution and the related adjustment
of the Conversion Price;
WHEREAS, Section 14(f) of the Fiscal Agency Agreement
provides that in the event of a merger to which the Company is a
party and which involves a change in the outstanding shares of
Common Stock of the Company, the Company shall execute with the
Fiscal Agent a supplemental fiscal agency agreement providing
that each Debenture shall be convertible into the kind and amount
of shares of stock and other securities or property receivable
upon such merger by a holder of the number of shares of Common
Stock issuable upon conversion of such Debentures immediately
prior to such merger;
WHEREAS, under the terms of the Plan of Merger, holders
of Common Stock are entitled to receive .225 shares of common
stock, without par value, of Texas Utilities Company ("TUC Common
Stock") for each share of Common Stock of the Company; and
WHEREAS, the Company deems it advisable and appropriate
to supplement the Fiscal Agency Agreement as required by Section
14(f) of the Fiscal Agency Agreement and as provided in this
Supplemental Fiscal Agency Agreement;
NOW, THEREFORE, in consideration of the foregoing
premises, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE I
CONVERSION OF DEBENTURES
Section 1.1 Conversion. Subject to and in
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accordance with the provisions of Section 14 of the Fiscal Agency
Agreement, the principal of any Debenture, or in the case of any
Registered Debenture of a denomination greater than U.S. $5,000,
any portion of such principal which is U.S. $5,000 or an integral
multiple thereof, may be converted into that number of fully paid
and nonassessable shares of TUC Common Stock obtained by dividing
the principal amount of the Debenture or portion thereof to be
converted by the conversion price of U.S. $38.54.
Section 1.2 Conversion Period. The right of Holders
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of Debentures to convert their Debentures as provided in Section
1 hereof shall commence on August 5, 1997.
ARTICLE II
MISCELLANEOUS PROVISIONS
Section 2.1 Terms Used Herein. For all purposes of
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this Supplemental Fiscal Agency Agreement, except as otherwise
stated herein, capitalized terms used but not defined herein and
defined in the Fiscal Agency Agreement shall have the meanings
specified in the Fiscal Agency Agreement.
Section 2.2 Fiscal Agent's Rights, Duties, etc. All
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of the provisions of the Fiscal Agency Agreement in respect of
the rights, duties and immunities of the Fiscal Agency Agreement
shall be applicable in respect of this Supplemental Fiscal Agency
Agreement as fully and with like effect as if set forth herein in
full.
Section 2.3 Governing Law. This Supplemental Fiscal
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Agency Agreement shall be construed in accordance with and
governed by the laws of the State of New York.
Section 2.4 Counterparts. This Supplemental Fiscal
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Agency Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
Such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date and year first above
written.
ENSERCH CORPORATION
By: /s/ X.X. Xxxxxxxx
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Title: Vice President and
Treasurer
CITIBANK, N.A.,
as Fiscal Agent
By: /s/ Xxxx Xxx
----------------------
Title: Vice President
[Second notice -- after the
Merger and the Distribution]
Notice to Holders of
6 3/8 Convertible Subordinated Debentures Due 2002
(the "Debentures")
of
ENSERCH Corporation
Section 14(e)(iii) of the Fiscal Agency Agreement,
dated as of April 1, 1987 (the "Fiscal Agency Agreement") by and
between ENSERCH Corporation (the "Company") and Citibank, N.A.
("Citibank") provides that if the Company shall distribute assets
(other than cash dividends or distributions paid from retained
earnings of the Company) to all holders of its Common Stock, then
in each such case the conversion price shall be adjusted,
effective immediately after the record date for the determination
of shareholders entitled to receive the distribution. Section
14(f) of the Fiscal Agency Agreement provides that in the event
of a merger to which the Company is a party and which involves a
change in the outstanding shares of Common Stock of the Company,
the Company shall execute with the Fiscal Agent a supplemental
fiscal agency agreement providing that each Debenture shall be
convertible into the kind and amount of shares of stock and other
securities or property receivable upon such merger by a holder of
the number of shares of Common Stock issuable upon conversion of
such Debentures immediately prior to such merger. Accordingly,
you are hereby notified as follows:
The Amended and Restated Agreement and Plan of Merger
by and among the Company, Texas Energy Industries, Inc., a Texas
Corporation (formerly Texas Utilities Company), and Texas
Utilities Company, a Texas corporation (formerly TUC Holding
Company), dated as of April 13, 1996, was approved by the
stockholders of the Company on November 16, 1996. The merger of
Enserch Merger Corp., a Texas corporation, with and into the
Company (the "Merger") became effective on August 5, 1997.
Immediately prior to the Merger, the Board of Directors declared
the distribution (the "Distribution"), pro rata to all of the
holders of Company Common Stock, of all of the shares of common
stock of Enserch Exploration, Inc., a Texas corporation, held by
the Company. Pursuant to Section 14(f) of the Fiscal Agency
Agreement, the Company and Citibank have entered into a
supplemental fiscal agency agreement dated as of August 5, 1997.
Taking into account the prior adjustment of the conversion price
of the Debentures immediately following the Distribution, the
Supplemental Fiscal Agency Agreement provides that the principal
of any Debenture, or in the case of any Registered Debenture of a
denomination greater than U.S. $5,000, any portion of such
principal which is U.S. $5,000 or an integral multiple thereof,
may be converted into that number of fully paid and nonassessable
shares of common stock of Texas Utilities Company obtained by
dividing the principal amount of the Debenture or portion thereof
to be converted by the conversion price of U.S. $38.54.
Dated: August 15, 1997 ENSERCH Corporation
