SHAREHOLDERS AGREEMENT
DATED AS OF MARCH 14, 2000
TABLE OF CONTENTS
1. COVENANTS OF THE PARTIES......................................................................................1
(a) Legends...............................................................................................1
(b) Additional Management Investors.......................................................................2
(c) Additional Investors..................................................................................2
(d) Amendment No. 1 to Xxxxx X. Xxxxx'x Employment Agreement..............................................2
(e) Restated Articles of Incorporation....................................................................3
2. TRANSFER OF STOCK.............................................................................................3
(a) Resale of Management Investors' Securities............................................................3
(b) Resale of Xxxxx'x; Xxxxx Entities' and Xxxxx Family Entities' Securities..............................3
(c) Statutory Transfer Restrictions.......................................................................4
(d) Rights of First Refusal...............................................................................4
(e) Offer by Transferor...................................................................................4
(f) Acceptance of Offer...................................................................................4
(g) Purchase Price........................................................................................5
(h) Consideration Other Than Cash.........................................................................5
(i) Appraisal Procedure...................................................................................5
(j) Closing of Purchase...................................................................................6
(k) Release from Restriction; Termination of Rights.......................................................6
(l) Ownership Limitation..................................................................................6
(m) Prohibited Transfers..................................................................................7
3. TAG-ALONG RIGHT...............................................................................................7
4. PUTS AND CALLS................................................................................................7
(a) The Management Put....................................................................................7
(b) The Company Call on Management Securities.............................................................8
(c) The Xxxxx, Xxxxx Entities and Xxxxx Family Entities Put...............................................8
(d) The Purchase Price....................................................................................8
(e) Determination of the Purchase Price for the Management Put or Management Call.........................9
(f) Determination of the Purchase Price for the Xxxxx Put................................................10
(g) Closing of Purchases.................................................................................10
5. COMPANY COVENANTS............................................................................................10
(a) Appraisals...........................................................................................10
6. TERMINATION..................................................................................................10
7. INTERPRETATION OF THIS AGREEMENT.............................................................................11
(a) Terms Defined........................................................................................11
(b) Directly or Indirectly...............................................................................13
(c) Governing Law........................................................................................13
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(d) Section Headings.....................................................................................13
(e) Affiliate Action.....................................................................................13
8. MISCELLANEOUS................................................................................................13
(a) Notices..............................................................................................13
(b) Reproduction of Documents............................................................................14
(c) Successors and Assigns...............................................................................14
(d) Entire Agreement; Amendment and Waiver...............................................................14
(e) Severability.........................................................................................15
(f) Counterparts.........................................................................................15
Schedule I - Management Investors
Exhibit A - Joinder Agreement
Exhibit B - Amendment No. 1 to Xxxxx X. Xxxxx'x Employment Agreement
Exhibit C - Restated Articles of Incorporation
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SHAREHOLDERS AGREEMENT
Shareholders Agreement, dated as of this 14 day of March, 2000 (this
"Agreement"), by and among Berkshire Hathaway Inc., a Delaware corporation
("Berkshire"); Xxxxxx Xxxxx, Xx. ("Xxxxx"), Xxxxxx Xxxxx Xxxxxx, Xxx Xxxx Xxxxx
Trust #3, Xxxxx Xxx Xxxxx Trust #3, Xxxxxx Xxx Xxxxx Trust #3, Xxxxxx Xxxxx
Xxxxx Trust #3, Xxx Xxxx Xxxxx Wyoming Trust, W. Xxxxx Xxxxx Wyoming Trust,
Xxxxx Xxx Xxxxx Wyoming Trust, Double Eight Land Corporation (the "Xxxxx Family
Entities") and Xxxxx X. Xxxxx and Xxxxxxx X. Xxxx whose names and addresses
appear on Schedule I hereto (the "Management Investors," and, together with
Berkshire, Xxxxx and the Xxxxx Family Entities, the "Investors"); and Teton
Acquisition Corp., an Iowa corporation (the "Company"). Certain terms used in
this Agreement are defined in Section 7 hereof. This Agreement shall become
effective upon the consummation of the Merger.
R E C I T A L S
WHEREAS, pursuant to the terms of certain Subscription Agreements with
the Company (the "Subscription Agreements") and the Agreement and Plan of Merger
dated as of October 24, 1999, by and among MidAmerican Energy Holdings Company,
Teton Formation L.L.C. and the Company (the "Merger Agreement"), (i) Berkshire
will purchase shares of Common Stock, no par value, of the Company ("Common
Stock"), shares of Zero Coupon Convertible Preferred Stock, no par value, of the
Company ("Convertible Preferred Stock") and Trust Preferred Securities of
MidAmerican Capital Trust, a Delaware statutory business trust; (ii) Xxxxx and
the Xxxxx Family Entities will purchase shares of Common Stock; and (iii) the
Management Investors will purchase shares of Common Stock and options to
purchase Common Stock (together with any other options to purchase Common Stock
issued to the Management Investors on the date hereof, the "Options");
WHEREAS, the Investors and the Company desire to promote their mutual
interests by agreeing to certain matters relating to the disposition of the
shares of Common Stock, Convertible Preferred Stock and Options owned by the
Investors on the date hereof, together with any other shares of Common Stock or
Convertible Preferred Stock or Options subsequently acquired or otherwise owned
by them from time to time (collectively, the "Securities"), as further set forth
herein; and
WHEREAS, pursuant to the Merger Agreement, the Company will merge with
and into MidAmerican Energy Holdings Company (the "Merger"), with the surviving
corporation being referred to herein as the Company;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
1. COVENANTS OF THE PARTIES
(a) Legends. The certificates evidencing the Securities owned or
acquired by the Investors or their permitted transferees will bear the following
legends reflecting the restrictions on the transfer of such securities under the
Securities Act and those contained in this Agreement:
"The securities evidenced hereby have not been registered
under the Securities Act of 1933, as amended (the "Securities
Act"), and may not be transferred except pursuant to an
effective registration under the Securities Act or in a
transaction which, in the opinion of counsel reasonably
satisfactory to MidAmerican Energy Holdings Company (the
"Company"), qualifies as an exempt transaction under the
Securities Act and the rules and regulations promulgated
thereunder.
The securities evidenced hereby are subject to the terms of
that certain Shareholders Agreement, dated as of March 14,
2000, by and among the Company and certain holders of
securities of the Company, including, as applicable, certain
restrictions on transfer and certain rights of first refusal.
A copy of such Shareholders Agreement has been filed with the
Secretary of the Company and is available upon request."
(b) Additional Management Investors. The parties hereto acknowledge
that, subject to the terms hereof, certain Management Permitted Transferees (as
defined below in Section 2(a)) may become shareholders of the Company after the
date hereof pursuant to Section 2(a) and that each Management Permitted
Transferee will be required, as a condition to the Transfer of Securities to
them, to execute a Joinder Agreement in the form attached hereto as Exhibit A
(the "Joinder Agreement"). Upon execution of a Joinder Agreement, each such
Management Permitted Transferee shall be deemed to be a Management Investor
under this Agreement and shall be entitled to all of the rights and benefits
afforded to, and shall be subject to all the restrictions on and obligations of,
a Management Investor hereunder.
(c) Additional Investors. The parties hereto acknowledge that, subject
to the terms hereof, certain third parties may become shareholders of the
Company pursuant to the Permitted Transfers set forth in Section 2(b) after the
date hereof and that each such permitted transferee will be required, as a
condition to the Transfer of Securities to them, to execute a Joinder Agreement.
Upon execution of a Joinder Agreement, each such Person shall be deemed to be an
Investor under this Agreement and shall be subject to all the restrictions on
and obligations of, an Investor hereunder. Upon execution of a Joinder
Agreement, each such Xxxxx Entity who becomes a shareholder pursuant to Section
2(b)(i) shall be entitled to all of the rights and benefits afforded to, and
shall be subject to all the restrictions on and obligations of, a Xxxxx Entity
hereunder. Upon execution of a Joinder Agreement, each such Xxxxx Family Entity
Permitted Transferee shall be deemed to be a Xxxxx Family Entity under this
Agreement and shall be entitled to all of the rights and benefits afforded to,
and shall be subject to all the restrictions on and obligations of, a Xxxxx
Family Entity hereunder.
(d) Amendment No. 1 to Xxxxx X. Xxxxx'x Employment Agreement.
Contemporaneously with the execution of this Agreement, the Company and Xxxxx X.
Xxxxx shall enter into Amendment No. 1 to the existing Amended and Restated
Employment Agreement between MidAmerican Energy Holdings Company and Xxxxx X.
Xxxxx, which amendment shall be substantially in the form set forth on Exhibit B
hereto.
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(e) Voting Agreement Regarding Restated Articles of Incorporation.
(i) The Company shall immediately after the Merger, call and hold a
special meeting of the Company's shareholders. At such meeting, the Investors
shall vote all of their Securities in favor of the adoption of Restated Articles
of Incorporation in the form set forth in Exhibit C hereto.
(ii) EACH OF THE INVESTORS HEREBY GRANTS TO, AND APPOINTS XXXXX X.
XXXXX AND XXXX X. HAMBURG, THE INVESTOR'S IRREVOCABLE PROXY AND ATTORNEY-IN-FACT
(WITH FULL POWER OF SUBSTITUTION) TO VOTE THE SECURITIES OF THE INVESTORS AT THE
SPECIAL MEETING AND IN RESPECT OF THE MATTER IDENTIFIED IN SECTION 1(e)(i) ABOVE
AND TO WAIVE NOTICE OF THE SPECIAL MEETING. EACH OF THE INVESTORS INTEND THIS
PROXY TO BE IRREVOCABLE AND COUPLED WITH AN INTEREST AND SHALL TAKE SUCH FURTHER
ACTIONS AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE
INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY SUCH
INVESTOR WITH RESPECT TO THE SECURITIES OWNED BY SUCH INVESTOR.
(iii) The Company shall file the Restated Articles of Incorporation
adopted by the Company's shareholders with the Secretary of State of Iowa.
2. TRANSFER OF STOCK
(a) Resale of Management Investors' Securities. Except as otherwise
provided in Section 3, until the third anniversary of the date hereof, no
Management Investor shall Transfer any Securities, or any beneficial interest
therein, other than to such Management Investor's estate, spouse, lineal
descendants or any Qualified Trusts for the benefit of such Management Investor
or the foregoing persons or non-corporate charitable foundations controlled by
such Management Investor (collectively, "Management Permitted Transferees"). For
the avoidance of doubt, this Section 2(a) is not intended to diminish any
transfer restrictions contained in any option agreement governing the Options.
The Transfer restrictions contained in this Section 2(a) shall terminate upon a
Berkshire Majority Transfer.
(b) Resale of Xxxxx'x, Xxxxx Entities' and Xxxxx Family Entities'
Securities. Except as otherwise provided in Section 3 and except for Permitted
Transfers (as defined below), Xxxxx, his Qualified Trusts, his estate (including
a grantor Qualified Trust created by him to receive his probate estate and
distributions by such Qualified Trust to a non-corporate foundation created by
him) and any charitable Qualified Trust or non-corporate foundation controlled
as to voting by him (collectively, the "Xxxxx Entities") and the Xxxxx Family
Entities shall not Transfer the Retained Shares or the Additional Shares other
than, as applicable, to the individual beneficiaries of those of the Xxxxx
Family Entities which are trusts (such individuals, hereinafter, the "Trust
Individuals") or the respective estates, spouses and lineal descendants of such
Trust Individuals or any Qualified Trusts for the benefit of such spouses or
lineal descendants of such Trust Individuals or non-corporate charitable
foundations controlled by such Xxxxx Family Entities (collectively, "Xxxxx
Family Entity Permitted Transferees"). "Permitted Transfers" shall mean (i) (x)
Transfers between or among the Xxxxx Entities, (y) Transfers between or among
the
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Xxxxx Family Entities or (z) Transfers by the Xxxxx Family Entities to the Xxxxx
Entities, (ii) Transfers of the Retained Shares at any time after the fifth
anniversary of the date hereof and of the Additional Shares at any time after
the third anniversary of the date hereof to Eligible Purchasers in compliance
with the provisions of Sections 2(d) through 2(j), (iii) Transfers made at any
time pursuant to the Xxxxx Put provided for in Section 4(c), and (iv) other
Transfer arrangements agreed upon by Xxxxx and Berkshire which would not cause
either Xxxxx or Berkshire or any of their affiliates to become subject to
regulation as a registered holding company under PUHCA or cause the Company or
any of its subsidiaries to become subject to regulation as a subsidiary of a
registered holding company under PUHCA. The Transfer restrictions contained in
this Section 2(b) shall terminate upon a Berkshire Majority Transfer.
(c) Statutory Transfer Restrictions. No Investor shall Transfer any
Securities (including any Securities received as a result of dividends, splits
or any other forms of recapitalization in respect of such Securities), either
voluntarily or involuntarily, directly or indirectly, except pursuant to an
effective registration under the Securities Act, or in a transaction which
qualifies as an exempt transaction under the Securities Act and the rules and
regulations promulgated thereunder. No Investor shall Transfer any Securities
(including any Securities received as a result of dividends, splits or any other
forms of recapitalization in respect of such Securities) in violation of PUHCA.
(d) Rights of First Refusal. Except as otherwise permitted by clauses
(i), (iii) and (iv) of the definition of Permitted Transfers contained in
Section 2(b) and as otherwise permitted by Xxxxxxx 0, xxxx of Xxxxx, any of the
Xxxxx Entities or any of the Xxxxx Family Entities shall Transfer any Retained
Shares or Additional Shares or any shares of Common Stock received in exchange
therefor, or any beneficial interest therein, unless such Investor desiring to
make the Transfer (hereinafter referred to as the "Transferor") shall have first
made the offer to sell to Berkshire as contemplated by Sections 2(d) through
2(k), and such offers shall not have been accepted in the manner set forth below
or shall not have been timely paid for in the manner set forth below.
(e) Offer by Transferor. Transferor shall provide written notice to
Berkshire of Transferor's intent to make a Transfer subject to Section 2(d),
which written notice shall include an offer to sell to Berkshire all of the
shares of Common Stock then proposed to be transferred by the Transferor (the
"Subject Shares") and a certification that the Proposed Transfer would be made
pursuant to a bona fide offer of a third party, identification of the name and
address of such third party transferee, the number of shares of Common Stock
involved in the proposed Transfer and the material terms of such offer.
(f) Acceptance of Offer.
(i) If Berkshire is an Eligible Purchaser at the time of receipt of
the offer described in Section 2(e), within ten (10) days after the receipt of
the offer described in Section 2(e), Berkshire may, at its option, elect to
purchase all, but not less than all, of the Subject Shares. Berkshire shall
exercise such option by giving written notice thereof to the Transferor within
such 10-day period, which notice shall specify a date for the closing of the
purchase which shall not be more than thirty (30) days after the date of the
giving of such notice, or, if applicable and required by law, two business days
after the later of (A) the expiration or
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termination of any applicable waiting period under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder, (B) the receipt of any orders or approvals required by
any federal or state regulatory authority, and (C) the receipt of any orders or
approvals or the expiration without action of any waiting period required by any
European or United Kingdom competition authority;
(ii) If Berkshire is not an Eligible Purchaser at the time of receipt
of the offer described in Section 2(e), within forty-five (45) days after the
receipt of the offer described in Section 2(e), Berkshire may, at its option,
elect to assign its rights to purchase the Subject Shares pursuant to this
Section 2 to one or more Eligible Purchasers (each, an "Assignee"); provided
that such Assignee(s) agree in writing to purchase the Subject Shares in
accordance with the terms of this Agreement. Berkshire or its Assignee(s) shall
exercise such option by giving written notice to the Transferor within such
45-day period, which notice shall specify the purchaser or purchasers of the
Subject Shares, a date for the closing of the purchase which shall not be more
than thirty (30) days after the date of the giving of such notice, or, if
applicable and required by law, two (2) business days after the later of (A) the
expiration or termination of any applicable waiting period under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder, (B) the receipt of any orders or
approvals required by any federal or state regulatory authority, and (C) the
receipt of any orders or approvals or the expiration without action of any
waiting period required by any European or United Kingdom competition authority.
(g) Purchase Price. The purchase price per share for the Subject
Shares shall be the price per share offered to be paid by the prospective
transferee described in the offer, which price shall be paid in cash or, if so
provided in the offer of the prospective transferee, cash plus deferred payments
of cash in the same proportions, and with the same terms of deferred payment as
therein set forth.
(h) Consideration Other Than Cash. If the offer of Subject Shares
under this Section 2 is for consideration other than cash or cash plus deferred
payments of cash, Berkshire (or its Assignee(s)) shall pay the cash equivalent
of such other consideration. If the Transferor and Berkshire (or its
Assignee(s)) cannot agree on the amount of such cash equivalent within the
10-day period or the 45-day period, as applicable, under Section 2(f), either of
such parties may, by written notice to the other given before the end of that
period, initiate appraisal proceedings under Section 2(i) for determination of
the cash equivalent.
(i) Appraisal Procedure. If any party shall initiate appraisal
proceedings to determine the amount of the cash equivalent of any consideration
for Subject Shares under Section 2(h), then the Transferor, on the one hand, and
Berkshire or its Assignee(s), on the other hand, shall each promptly (and in any
event within ten (10) days of the expiration of the 10-day or 45-day period, as
applicable) appoint as an appraiser an individual who shall be a member of a
reputable valuation firm or investment bank. Each appraiser shall, within thirty
(30) days of appointment, separately determine the value of the consideration
for the Subject Shares as of the proposed transfer date and shall submit a
written determination of value to each party. Each appraiser shall determine
such value without regard to income tax consequences to the Transferor as a
result of receiving cash rather than other consideration. If, upon the
completion of the initial appraisals (the "Earlier Appraisals"), the higher
appraised value of such
5
consideration is not more than one hundred ten percent (110%) of the lower
appraised value of such consideration, the average of the two appraisals on a
per share basis shall be controlling as the amount of the cash equivalent. If
the higher appraised value is more than one hundred ten percent (110%) of the
lower appraised value, the appraisers, within ten (10) days of the submission of
the last appraisal, shall appoint a third appraiser who shall be a member of a
reputable valuation firm or investment bank. The third appraiser shall, within
thirty (30) days of his appointment, appraise the value of the consideration for
the Subject Shares (without regard to the income tax consequences to the
Transferor as a result of receiving cash rather than other consideration) as of
the proposed transfer date and submit a written determination of value to each
party. The value determined by the third appraiser shall be controlling as the
amount of the cash equivalent unless the value is greater than the two Earlier
Appraisals, in which case the higher of the two Earlier Appraisals will control,
and unless that value is lower than the two Earlier Appraisals, in which case
the lower of the two Earlier Appraisals will control. If any party fails to
appoint an appraiser or if one of the two initial appraisers fails after
appointment to submit his appraisal within the required period, the appraisal
submitted by the remaining appraiser shall be controlling. The cost of the
foregoing appraisals shall be shared one-half by the Transferor and one-half by
Berkshire or its Assignee(s).
(j) Closing of Purchase. The closing of the purchase shall take place
at the office of the Company or such other location as shall be mutually
agreeable and the purchase price, to the extent comprised of cash, shall be paid
at the closing, and cash equivalents and documents evidencing any deferred
payments of cash permitted pursuant to Section 2(g) above shall be delivered at
the closing. At the closing, the Transferor shall deliver to Berkshire or its
Assignee(s), as the case may be, the certificates evidencing the Subject Shares
to be conveyed, duly endorsed and in negotiable form with all the requisite
documentary stamps affixed thereto.
(k) Release from Restriction; Termination of Rights. If the offer
pursuant to Section 2(e) is not timely accepted by Berkshire or its Assignee(s)
pursuant to Section 2(f) hereof or is not timely paid for by Berkshire or its
Assignee(s) in accordance with Sections 2(f) and (j) hereof, then the Transferor
may make a bona fide Transfer to the prospective transferee named in the
certification included in the offer in accordance with the terms set forth
therein, provided, that such Transfer shall be made only in strict accordance
with the terms therein stated. If Berkshire or its Assignee(s) do not elect to
purchase as provided in Section 2(f) and the Transferor shall fail to make such
Transfer within sixty (60) days following the expiration of the time hereinabove
provided for the acceptance by Berkshire or its Assignee(s), such shares of
Common Stock shall again become subject to all the restrictions of this Section
2. If Berkshire elects to purchase as provided in Section 2(f), but the purchase
is not timely paid for by Berkshire (or its Assignee(s)) in accordance with
Sections 2(f) and (j) hereof, then the Subject Shares shall be released from all
restrictions under this Section 2.
(l) Ownership Limitation. No Investor shall own shares of Common Stock
equal to or in excess of the Ownership Limit. No Investor shall Transfer any
Securities which shall cause any Person (together with its Affiliates) to own
shares of Common Stock equal to or in excess of the Ownership Limit.
Notwithstanding the foregoing, if the exercise of a Put or Call would cause a
holder of Convertible Preferred Stock and its Affiliates to own shares of Common
Stock equal to or in excess of the Ownership Limit, then, pursuant to the terms
of its Restated Articles of Incorporation, the Company shall accept and such
holder or its Affiliates shall tender
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for exchange that number of shares of Common Stock and the Company shall issue
the equivalent number of shares of Convertible Preferred Stock to such holder or
its Affiliates, as the case may be, so that such holder and its Affiliates will
not own shares of Common Stock equal to or in excess of the Ownership Limit.
(m) Prohibited Transfers. Any Transfer or purported Transfer made in
violation of this Section 2 shall be null and void and of no effect.
3. TAG-ALONG RIGHT
In the event that Berkshire or any of its consolidated subsidiaries
intends to Transfer (other than to one or more of Berkshire's consolidated
subsidiaries) shares of Common Stock or Convertible Preferred Stock which,
together with any previous Transfers (other than Transfers within Berkshire's
consolidated group of companies) of shares of Common Stock or Convertible
Preferred Stock by Berkshire or its consolidated subsidiaries from and after the
date of this Agreement, represent more than fifty percent (50%) of the Common
Stock (calculated on a fully-diluted basis assuming conversion of the
Convertible Preferred Stock) held by Berkshire and its consolidated subsidiaries
on the date hereof, Berkshire shall notify the other Investors, in writing, of
such proposed Transfer and its price terms and conditions (the "Proposed Sale").
Following receipt of such a notice, any of Xxxxx, the Xxxxx Entities, the Xxxxx
Family Entities and the Management Investors ("Eligible Investors") shall have
the right to exercise the tag-along right described in this Section 3. Within
ten (10) days of the date of receipt of such notice delivered under Section
8(a), each Eligible Investor that elects to participate in the Proposed Sale
shall so notify receipt of Berkshire in writing (a "Transfer Notice," all
Eligible Investors who give such Transfer Notice being the "Tag-Along
Investors"). In the event Berkshire fails to receive a Transfer Notice from any
Eligible Investor within such 10-day period, such Eligible Investor shall have
no right to participate in the Proposed Sale. Each Tag-Along Investor delivering
a Transfer Notice shall have the right to sell, at the same price and on the
same terms as Berkshire, that number of shares of Common Stock equal to the
number of shares of Common Stock (assuming that all Convertible Preferred Stock
shall be considered on an as-converted basis as Common Stock) the third party
proposes to purchase multiplied by a fraction, the numerator of which shall be
the number of shares of Common Stock (assuming that all Options shall be
considered on an as-exercised basis as Common Stock) issued and owned by such
Tag-Along Investor and the denominator of which shall be the aggregate number of
shares of Common Stock issued and owned by Berkshire (assuming that all
Convertible Preferred Stock shall be considered on an as-converted basis as
Common Stock) and each Tag-Along Investor (including such Tag-Along Investor
exercising its rights under this Section 3). Nothing contained herein shall
obligate Berkshire to consummate the Proposed Sale or limit Berkshire's right to
amend or modify the terms of the Proposed Sale in any respect; provided that the
Tag-Along Investors are offered the opportunity to participate in the Proposed
Sale on such amended or modified terms. The tag-along rights described in this
Section 3 shall terminate upon a Berkshire Majority Transfer.
4. PUTS AND CALLS
(a) The Management Put. At any time after the earlier of (i) the third
anniversary of the date hereof, (ii) a Berkshire Majority Transfer or (iii) the
death of Xxxxx X.
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Xxxxx or Xxxxxxx X. Xxxx, each Management Investor (in the case of clauses (i)
and (ii)), and the estate of Xxxxx X. Xxxxx or Xxxxxxx X. Xxxx, as applicable,
in the case of clause (iii), shall have the right to require the Company to
purchase, and the Company at the time of any such put shall be obligated to
purchase from the Management Investors (or the estate of Xxxxx X. Xxxxx or
Xxxxxxx X. Xxxx, as applicable), upon the terms and subject to the conditions of
this Agreement, not less than twenty-five percent (25%) and up to one hundred
percent (100%) of the Securities owned at that time by such Management Investor
(the "Management Put") at the Purchase Price; provided, however, that a
Management Investor may exercise a Management Put as to his or her Securities
only once in any twelve (12) month period. If a Management Investor wishes to
exercise the Management Put, the Management Investor shall provide written
notice to such effect and specifying the number and type of Securities to be put
to the Company (the "Management Put Notice").
(b) The Company Call on Management Securities. At any time after the
earlier of the third anniversary of the date hereof or a Berkshire Majority
Transfer, the Company shall have the right to purchase from any or all of the
Management Investors, and the Management Investors designated by the Company at
the time of any such call shall be obligated to sell to the Company, upon the
terms and subject to the conditions of this Agreement, not less than twenty-five
percent (25%) and up to one hundred percent (100%) of the Securities owned at
that time by any such Management Investor so designated by the Company (the
"Management Call") at the Purchase Price; provided, however, that the Company
may exercise a Management Call as to any Management Investor-owned Securities
only once in any twelve (12) month period. If the Company wishes to exercise the
Management Call, the Company shall provide written notice to the designated
Management Investors specifying the number and type of Securities to be called
by the Company (the "Management Call Notice").
(c) The Xxxxx, Xxxxx Entities and Xxxxx Family Entities Put. At any
time following the third anniversary of the date hereof, and provided in any
such case that Berkshire is then an Eligible Purchaser, any or all of Xxxxx, the
Xxxxx Entities and the Xxxxx Family Entities shall have the right to require
Berkshire to purchase, upon the terms and subject to the conditions of this
Agreement, any or all of the shares of Common Stock owned by such persons and
entities at the Purchase Price (the "Xxxxx Put"); provided, however, that any or
all of Xxxxx, the Xxxxx Entities and the Xxxxx Family Entities may choose to
receive shares of Berkshire common stock equal in value to the Purchase Price,
which value shall be the closing price quoted on the New York Stock Exchange on
the day immediately preceding the closing (which Berkshire shall register for
resale by filing an S-3 Registration Statement with respect to such shares if
the value thereof exceeds $15 million) in exchange for shares of Common Stock so
put by them (in lieu of the cash Purchase Price). In the event that any such
persons or entities elect to exercise the Xxxxx Put, then such persons or
entities shall provide written notice to Berkshire specifying the number of
shares of Common Stock to be put by them and whether they choose to receive the
Purchase Price in cash or shares of Berkshire common stock (a "Xxxxx Put
Notice"). The Xxxxx Put shall terminate upon a Berkshire Majority Transfer.
(d) The Purchase Price. The purchase price payable pursuant to Section
4(a), (b) or (c) above shall be payable in cash except as provided in Section
4(c) above. With respect to any shares of Common Stock subject to any Management
Put, Management Call or Xxxxx Put, the purchase price shall equal the applicable
number of shares multiplied by the purchase price
8
per share, which shall be the fair market value of a share of Common Stock
assuming the Company is valued on a going-concern basis as though it were a
publicly traded company with reasonable liquidity and without a controlling
shareholder and without attributing any change of control premium to the sale of
such share, and taking into account all aspects of the Company's capital
structure including all outstanding options. With respect to any Options subject
to any such Management Put or Xxxxx Put, the purchase price shall be determined
as if the Options had been exercised, with the purchase price per share
determined as described above, and reduced by the applicable exercise price or
prices. With respect to any Options subject to any such Management Call, the
purchase price determined as described in the immediately preceding sentence
shall be increased to the extent required to reflect the loss of the remaining
time value of the Options. The applicable purchase price as determined pursuant
to this Section 4(d) is referred to as the "Purchase Price."
(e) Determination of the Purchase Price for the Management Put or
Management Call. As soon as reasonably practicable, but in any event within
fifteen (15) days, following the delivery of a Management Put Notice or a
Management Call Notice, the Company shall prepare and deliver to each selling
Management Investor a statement setting forth the good faith calculation of the
Purchase Price as of the date of the notice, together with detail reasonably
sufficient for such Management Investor(s) to evaluate the accuracy of such
calculation (the "Purchase Price Statement"). Unless any Management Investor,
within fifteen (15) days after receipt of the Purchase Price Statement, delivers
to the Company a notice (the "Dispute Notice"): (i) objecting in good faith to
the Purchase Price Statement, (ii) setting forth in reasonable detail the items
being disputed and the reasons therefor and (iii) specifying such Management
Investor's preliminary calculation of the Purchase Price as of the date of the
Put Notice or the Call Notice, as applicable, the Purchase Price Statement shall
be deemed to be final, and the Purchase Price set forth therein shall be deemed
to be the "Final Purchase Price". If a Management Investor delivers a Dispute
Notice and if the Company and such Management Investor(s) are unable to agree
upon a Final Purchase Price within thirty (30) days of the date of the Dispute
Notice, then either the selling Management Investor or the Company may elect to
submit the calculation of the Purchase Price to an independent appraiser who
shall be a member of a reputable valuation firm or investment bank which is
designated jointly by the Company and such Management Investor(s); provided,
however, that the Company and the Management Investors (as a group) may each
only exercise this right to seek an appraisal once in any twelve (12) month
period. Such appraiser shall determine the Purchase Price at the date of the
Management Put Notice or Management Call Notice, as applicable, and such
Purchase Price shall be deemed to be the Final Purchase Price. If the appraisal
results from a Management Put Notice or a Management Call Notice, within thirty
(30) days of the determination of the Final Purchase Price by the appraiser, (i)
any Management Investor, including the Management Investor making the initial
request, may elect to exercise its Management Put to sell Securities to the
Company for the Final Purchase Price and (ii) the Company may elect to exercise
the Management Call to purchase Securities from any Management Investor for the
Final Purchase Price. If the Management Put is exercised pursuant to the
preceding sentence by any Management Investor, then the Management Investors (as
a group) shall have no further right to request an appraisal for a twelve (12)
month period in connection with a Management Put or Management Call. If the
Management Call is exercised pursuant to the preceding sentence, then the
Company shall have no further right to request an appraisal for a twelve (12)
month period in connection with a Management Put or Management Call.
9
(f) Determination of the Purchase Price for the Xxxxx Put. As soon as
reasonably practicable following the delivery of a Xxxxx Put Notice, Berkshire
shall prepare and deliver to each of Xxxxx, the Xxxxx Entities and the Xxxxx
Family Entities which delivered a Xxxxx Put Notice a Purchase Price Statement.
Unless the selling party, within ten (10) days after receipt of the Purchase
Price Statement, deliver to Berkshire a Dispute Notice: (i) objecting in good
faith to the Purchase Price Statement, (ii) setting forth in reasonable detail
the items being disputed and the reasons therefor and (iii) specifying such
party's calculation of the Purchase Price as of the date of the Xxxxx Put
Notice, the Purchase Price Statement shall be deemed to be final, and the
Purchase Price set forth therein shall be deemed to be the "Final Purchase
Price". If the selling party or parties deliver a Dispute Notice and if the
selling party or parties and Berkshire are unable to agree upon a Final Purchase
Price within thirty (30) days of the Dispute Notice, then the selling party or
parties may elect to submit the calculation of the Purchase Price to an
independent appraiser who shall be a member of a reputable valuation firm or
investment bank which is designated jointly by the selling party or parties and
Berkshire; provided, however, that Xxxxx, the Xxxxx Entities and the Xxxxx
Family Entities (as a group) may only exercise this right to seek an appraisal
once every twelve (12) months (and such appraisal shall be available only to the
party or parties selling contemporaneously with the delivery of the appraisal).
Such appraiser shall determine the Final Purchase Price at the date of the Xxxxx
Put Notice and such Purchase Price shall be deemed to be the Final Purchase
Price.
(g) Closing of Purchases. The closing of the purchases pursuant to
this Section 4 shall take place at the office of the Company or such other
location as shall be mutually agreeable on a date three (3) days after the
determination of the Final Purchase Price or, if applicable and required by law,
two (2) business days after the later of (i) the expiration or termination of
any applicable waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and (ii) the receipt of any orders or approvals
required by any federal or state regulatory authority, and (iii) the receipt of
any orders or approvals or the expiration without action of any waiting period
required by any European or United Kingdom competition authority. The purchase
price shall be paid at the closing. At the closing, the selling Investor shall
deliver to the purchasing party the certificates evidencing the Securities to be
conveyed, duly endorsed and in negotiable form with all requisite documentary
stamps affixed thereto.
5. COMPANY COVENANTS
(a) Appraisals. The Company shall engage an independent appraiser who
shall be a member of a reputable valuation firm or investment bank to appraise
the value of the Company's Common Stock as of December 31, 2002 based on
information deemed relevant by the valuation firm or investment bank, valued on
a going-concern basis as though it were a publicly traded company with
reasonable liquidity and without a controlling shareholder and without
attributing any change of control premium to the sale of shares, and taking into
account all aspects of the Company's capital structure including all outstanding
options. Such appraisal shall promptly (but in no event later than April 30,
2003) be delivered by the Company to the Investors.
6. TERMINATION Except as otherwise provided herein, the Agreement
shall terminate on the date on which (i) Berkshire, (ii) Xxxxx, (iii) Xxxxx X.
Xxxxx, and (iv)
10
Xxxxxxx X. Xxxx, or in the case of individuals their estates (for so long as
they, or their estates in the case of individuals, or its Affiliates in the case
of Berkshire, own any Securities) shall have agreed in writing to terminate this
Agreement or upon the consummation of an initial public offering of Common Stock
of the Company in which the Company receives proceeds of at least $100 million.
7. INTERPRETATION OF THIS AGREEMENT
(a) Terms Defined. As used in this Agreement, the following terms have
the respective meaning set forth below:
"Additional Shares" shall mean the 3,000,000 shares of Common Stock
owned by Xxxxx, any of the Xxxxx Entities or any of the Xxxxx Family Entities in
addition to the Retained Shares.
"Affiliate" of a person or entity, shall mean any person or entity,
directly or indirectly, controlling, controlled by or under common control with
such person or entity.
"Agreement" shall have the meaning specified in the preamble.
"Assignee" shall have the meaning specified in Section 2(f).
"Berkshire" shall have the meaning specified in the preamble.
"Berkshire Majority Transfer" shall mean the Transfer by Berkshire
and/or its consolidated subsidiaries (other than Transfers within Berkshire's
consolidated group of companies) of shares of Common Stock or Convertible
Preferred Stock representing fifty percent (50%) or more of the Common Stock
(calculated on a fully-diluted basis assuming conversion of the Convertible
Preferred Stock) held by Berkshire and its consolidated subsidiaries on the date
hereof.
"Common Stock" shall have the meaning specified in the recitals.
"Company" shall have the meaning specified in the preamble.
"Convertible Preferred Stock" shall have the meaning specified in the
recitals.
"Dispute Notice" shall have the meaning specified in Section 4(e).
"Earlier Appraisals" shall have the meaning specified in Section 2(i).
"Eligible Investors" shall have the meaning specified in Section 3.
"Eligible Purchaser" shall mean, with respect to a particular
purchase, a purchaser who may consummate such purchase without it or any of its
affiliates becoming subject to regulation as a registered holding company under
PUHCA or the Company or any of its subsidiaries becoming subject to regulation
as a subsidiary of a registered holding company under PUHCA.
11
"Investors" shall have the meaning specified in the preamble.
"Joinder Agreement" shall have the meaning specified in Section 1(b).
"Management Call" shall have the meaning specified in Section 4(b).
"Management Call Notice" shall have the meaning specified in Section
4(b).
"Management Investors" shall have the meaning specified in the
preamble.
"Management Permitted Transferees" shall have the meaning specified in
Section 2(a).
"Management Put" shall have the meaning specified in Section 4(a).
"Merger" shall have the meaning specified in the recitals.
"Merger Agreement" shall have the meaning specified in the recitals.
"Management Put Notice" shall have the meaning specified in Section
4(a).
"Options" shall have the meaning specified in the recitals.
"Ownership Limit" shall mean with respect to any Person, ownership of
10% of the issued and outstanding Common Stock if such ownership would cause
such Person to become subject to regulation as a registered holding company
under PUHCA or the Company or any of its subsidiaries to become subject to
regulation as a subsidiary of a registered holding company under PUHCA.
"Permitted Transferees" shall have the meaning specified in Section
2(b).
"Person" shall mean an individual, partnership, joint-stock company,
corporation, limited liability company, trust or unincorporated organization,
and a government or agency or political subdivision thereof.
"Proposed Sale" shall have the meaning specified in Section 3.
"PUHCA" shall mean the Public Utility Holding Company Act of 1935, as
amended from time to time and any successor legislation.
"Purchase Price" shall have the meaning specified in Section 4(d).
"Purchase Price Statement" shall have the meaning specified in Section
4(e).
"Qualified Trust" shall mean a trust other than a business trust.
"Retained Shares " shall mean 5,000,000 shares of Common Stock owned
by Xxxxx or any of the Xxxxx Entities (subject to adjustments for stock splits,
reverse stock splits, stock dividends, recapitalizations and the like).
12
"Xxxxx" shall have the meaning specified in the preamble.
"Xxxxx Entities" shall have the meaning specified in Section 2(b).
"Xxxxx Family Entities" shall have the meaning specified in the
preamble.
"Xxxxx Family Entity Permitted Transferees" shall have the meaning
specified in Section 2(b).
"Xxxxx Put" shall have the meaning specified in Section 4(c).
"Xxxxx Put Notice" shall have the meaning specified in Section 4(c).
"Securities" shall have the meaning specified in the recitals.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subject Shares" shall have the meaning specified in Section 2(e).
"Subscription Agreements" shall have the meaning specified in the
recitals.
"Tag-Along Investors" shall have the meaning specified in Section 3.
"Transfer" shall mean any sale, assignment, pledge, hypothecation, or
other disposition or encumbrance, whether or not for consideration, including,
without limitation, any Transfer pursuant to a Management Put, Xxxxx Put or
Management Call.
"Transferor" shall have the meaning specified in Section 2(d).
(b) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(c) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Iowa applicable to contracts made
and to be performed entirely within such State.
(d) Section Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(e) Affiliate Action. To the extent this Agreement contemplates any
obligation, duty or other matter with respect to any Affiliate of any signatory
hereto, such signatory shall be obligated and responsible to cause such
Affiliate to take such action or otherwise act in a manner consistent with this
Agreement.
8. MISCELLANEOUS
(a) Notices.
13
(i) All communications under this Agreement shall be in writing and
shall be delivered by hand or mailed by overnight courier or by registered or
certified mail, postage prepaid:
(A) if to any of the Management Investors, at the address of such
Management Investor shown on Schedule I, or at such other address as the
Management Investor may have furnished the Company in writing;
(B) if to Berkshire, at 0000 Xxxxxx Xxxxx, Xxxxx, XX 00000,
Attention: Xxxx X. Hamburg, or at such other address as Berkshire may have
furnished the Company in writing;
(C) if to Xxxxx, the Xxxxx Entities or the Xxxxx Family Entities,
at 0000 Xxxxxx Xxxxx, Xxxxx, XX 00000; and
(D) if to the Company, at 000 Xxxxx Xxxxxx, Xxx Xxxxxx, Xxxx
00000, Attention: Chief Executive Officer, or at such other address as it may
have furnished in writing to each of the Investors.
(ii) Any notice so addressed shall be deemed to be given: if delivered
by hand, on the date of such delivery; if mailed by courier, on the first
business day following the date of such mailing; and if mailed by registered or
certified mail, on the third business day after the date of such mailing.
(b) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (i) consents, waivers and
modifications which may hereafter be executed, (ii) documents received by each
Investor pursuant hereto and (iii) financial statements, certificates and other
information previously or hereafter furnished to each Investor, may be
reproduced by each Investor by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and each Investor may
destroy any original document so reproduced. All parties hereto agree and
stipulate that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by each
Investor in the regular course of business) and that any enlargement, facsimile
or further reproduction of such reproduction shall likewise be admissible in
evidence.
(c) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns, estates and beneficiaries of
each of the parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement constitutes
the entire understanding of the parties hereto relating to the subject matter
hereof and supersedes all prior understandings among such parties. This
Agreement may be amended, and the observance of any term of this Agreement may
be waived, with (and only with) the written consent of (i) Berkshire, (ii) Xxxxx
and (iii) Xxxxx X. Xxxxx; provided, however, that (x) any such amendment or
waiver with respect to Sections 3, 4(a), (b), (d), (e) and (g) or that would
otherwise materially
14
adversely affect the Management Investors shall also require the written consent
of Xxxxxxx X. Xxxx (for so long as he owns any Securities) and (y) any such
amendment or waiver with respect to Sections 2 (b)-(m), 3, 4 (c)-(g) or that
would otherwise materially adversely affect the Xxxxx Family Entities shall
require the written consent of the holders of a majority in interest of the
Xxxxx Family Entities' Securities (for so long as they own any Securities).
(e) Severability. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not effect the
remaining provisions of this Agreement which shall remain in full force and
effect.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
15
IN WITNESS WHEREOF, the parties hereto have executed this Shareholders
Agreement as of the date first above written.
TETON ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name:Xxxxx X. Xxxxx
Title: Chairman, Chief Executive Officer
and President
/s/ Xxxxxx Xxxxx, Xx.
--------------------------------------------
Xxxxxx Xxxxx, Xx.
MANAGEMENT INVESTORS
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxx
--------------------------------------------
Xxxxxxx X. Xxxx
BERKSHIRE HATHAWAY INC.
By: /s/ Xxxx X. Hamburg
----------------------------------------
Name: Xxxx X. Hamburg
Title: Vice President
[SIGNATURE PAGE 1 OF SHAREHOLDERS AGREEMENT]
/s/ Xxxxxx Xxxxx Xxxxxx
----------------------------------------
Xxxxxx Xxxxx Xxxxxx
XXX XXXX XXXXX TRUST #3
By: U.S. BANK NATIONAL ASSOCIATION, as trustee
By: /s/ Xxxxxxxx Sites
------------------------------------
Name: Xxxxxxxx Sites
Title: A.V.P.
XXXXX XXX XXXXX TRUST #3
By: U.S. BANK NATIONAL ASSOCIATION, as trustee
By: /s/ Xxxxxxxx Sites
------------------------------------
Name: Xxxxxxxx Sites
Title: A.V.P.
XXXXXX XXX XXXXX TRUST #3
By: U.S. BANK NATIONAL ASSOCIATION, as trustee
By: /s/ Xxxxxxxx Sites
------------------------------------
Name: Xxxxxxxx Sites
Title: A.V.P.
[SIGNATURE PAGE 2 OF SHAREHOLDERS AGREEMENT]
XXXXXX XXXXX XXXXX TRUST #3
By: U.S. BANK NATIONAL ASSOCIATION, as trustee
By: /s/ Xxxxxxxx Sites
------------------------------------
Name: Xxxxxxxx Sites
Title: A.V.P.
XXX XXXX XXXXX WYOMING TRUST
By: WYOMING TRUST & MANAGEMENT
COMPANY OF WYOMING, as trustee
By: /s/ Xxxxxxxx Sites
------------------------------------
Name: Xxxxxxxx Sites
Title: Officer
W. XXXXX XXXXX WYOMING TRUST
By: WYOMING TRUST & MANAGEMENT
COMPANY OF WYOMING, as trustee
By: /s/ Xxxxxxxx Sites
------------------------------------
Name: Xxxxxxxx Sites
Title: Officer
[SIGNATURE PAGE 3 OF SHAREHOLDERS AGREEMENT]
XXXXX XXX XXXXX WYOMING TRUST
By: WYOMING TRUST & MANAGEMENT
COMPANY OF WYOMING, as trustee
By: /s/ Xxxxxxxx Sites
------------------------------
Name: Xxxxxxxx Sites
Title: Officer
DOUBLE EIGHT LAND CORPORATION
By: /s/ Xxxxxx Xxxxx, Xx.
------------------------------
Name: Xxxxxx Xxxxx, Xx.
Title: President
[SIGNATURE PAGE 4 OF SHAREHOLDERS AGREEMENT]
SCHEDULE I
Management Investors
Xxxxx X. Xxxxx
c/o MidAmerican Energy Holdings Company
000 Xxxxx 00xx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxx
c/o MidAmerican Energy Holdings Company
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
EXHIBIT A
JOINDER AGREEMENT
Joinder Agreement, dated as of this day of ___________ _____, by and
among MidAmerican Energy Holdings Company, an Iowa corporation (the "Company"),
and the undersigned (the "Investor").
Reference is made to that certain Shareholders Agreement (the
"Shareholders Agreement"), dated as of March __, 2000, by and among MidAmerican
Energy Holdings Company, Berkshire Hathaway Inc., Xxxxxx Xxxxx, Xx., and the
other shareholders from time to time party thereto, as the same may from time to
time be amended.
By executing this Joinder Agreement, the Investor hereby agrees to be
bound by the terms of the Shareholders Agreement as if he were an original
signatory to such Agreement and shall be deemed to be [a Management Investor]
[an Investor] thereunder.
[insert for corporations only: The Investor hereby represents and warrants that
(i) it is a corporation duly organized, validly existing and in good standing
under the laws of ____________ and has the power and authority to execute and
deliver this Agreement and perform its obligations hereunder, (ii) the
execution, delivery and performance of this Agreement has been authorized by the
board of directors of the Investor and no other approval or authorization is
necessary and (iii) the execution, delivery and performance of this Agreement
does not conflict with or violate the terms of its Certificate of Incorporation
or By-laws or any agreement to which it is a party or may be bound.]
[Insert for other entities: language comparable to the foregoing as
determined by the General Counsel or outside counsel of the Company.]
IN WITNESS WHEREOF, the parties hereto have executed this Joinder
Agreement as of the date first above written.
----------------------------------
Name:
Agreed to and Accepted by:
MIDAMERICAN ENERGY HOLDINGS COMPANY
----------------------------------
Name:
Title:
EXHIBIT B
---------
AMENDMENT NO. 1
TO THE
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
BETWEEN
MIDAMERICAN ENERGY HOLDINGS COMPANY
AND
XXXXX X. XXXXX
This Amendment No. 1 (the "Amendment") to the Amended and Restated
Employment Agreement dated as of May 10, 1999 (the "Employment Agreement") by
and between MidAmerican Energy Holdings Company, an Iowa corporation (the
"Company"), and Xxxxx X. Xxxxx (the "Executive"), is entered into as of March
__, 2000.
WHEREAS, the Company and the Executive are presently parties to the
Employment Agreement; and
WHEREAS, in consideration of the performance of future services by the
Executive, the Company and the Executive desire to amend the Employment
Agreement to increase the Executive's salary, and grant Executive additional
options;
NOW, THEREFORE, the Employment Agreement is hereby amended as follows:
By inserting immediately following Section 2(b) a new Section 2(c) to
read as follows:
"(c) For so long as the Executive continues to serve as either
Chairman or Chief Executive Officer of the Company, he shall have the
right (i) to serve as a member of the Board, and (ii) to designate two
other individuals as nominees for election to the Board."
By deleting the phrase "six hundred seventy-five thousand ($675,000)"
each time it appears in Section 4(a) and replacing it with "seven hundred
fifty thousand ($750,000)".
By inserting immediately following Section 5(b) a new Section 5(c) to
read as follows:
"(c) Effective as of the Closing Date (as defined in the Agreement and
Plan of Merger by and among the Company, Teton Formation L.L.C. and
Teton Acquisition Corp. (the "Merger Agreement")) and conditioned on
the occurrence of the Closing, the Executive shall be granted under
the Company's 1996 Stock Option Plan (or
any successor plan thereto), new options (the "New Options") for a
number of shares of Company common stock equal to 30% of the sum of
(i) the number of shares of Company common stock owned beneficially by
Executive as of October 23, 1999 (provided that all such shares are
rolled over into common stock of the Surviving Corporation (as such
term is defined in the Merger Agreement)), plus (ii) without
duplication, the number of shares subject to outstanding Company
common stock options held by Executive as of October 23, 1999
(provided that all such options are rolled over into equivalent
options in respect of Surviving Corporation common stock). The
exercise price applicable to the New Options shall be $35.05 per
share. The New Options shall vest in equal installments of one
thirty-sixth (1/36th) of the number of shares subject to the grant on
each of the monthly anniversary dates of the Closing Date, shall have
an exercise term of ten (10) years from the Closing Date, and shall
otherwise be subject to customary terms and conditions, including
anti-dilution protections."
By inserting immediately following Section 5(c) a new Section 5(d) to
read as follows:
"(d) The Executive acknowledges that the grant of Company options to
Executive in exchange for his surrender to Teton Acquisition Corp. of
Company stock options and his right to continue to exercise such
options is in consideration of his performance of future services."
Except as provided herein and to the extent necessary to give full
effect to the provisions of this Amendment, the terms of the Employment
Agreement shall remain in full force and effect.
-2-
IN WITNESS WHEREOF, the parties hereto have entered into this
Amendment effective as of the above date.
MIDAMERICAN ENERGY HOLDINGS COMPANY
By:
-------------------------------
Name:
Title:
EXECUTIVE
-----------------------------------
Xxxxx X. Xxxxx
-3-
EXHIBIT C
---------
RESTATED ARTICLES OF INCORPORATION
OF
MIDAMERICAN ENERGY HOLDINGS COMPANY
TO THE SECRETARY OF STATE
OF THE STATE OF IOWA:
Pursuant to the provisions of Division X of the Iowa Business
Corporation Act (the "Act"), the undersigned corporation hereby adopts the
following Restated Articles of Incorporation ("Articles of Incorporation") (All
capitalized terms used herein, but not defined shall have the respective
meanings set forth in Article X hereof.):
9.
The name of the corporation is "MidAmerican Energy Holdings Company"
(hereinafter sometimes called the "Corporation") and its registered office shall
be located at 000 Xxxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000 with the right to
establish and maintain branch offices at such other points within and without
the State of Iowa as the Board of Directors of the Corporation (the "Board of
Directors") may, from time to time, determine. The name of the Corporation's
registered agent at such registered office is Xxxx X. Xxxxxxxxx, Xx.
10.
The nature of the business or purposes to be conducted or promoted is
to engage in any or all lawful act or activity for which a corporation may be
incorporated under the Act.
11.
A. The aggregate number of shares which the Corporation shall have
authority to issue is 60,000,000 shares of Common Stock, no par value ("Common
Stock"), and 50,000,000 shares of Preferred Stock, no par value ("Preferred
Stock").
B. The shares of authorized Common Stock shall be identical in all
respects and shall have equal rights and privileges. For all purposes, each
registered holder of Common Stock shall, at each meeting of shareholders, be
entitled to one vote for each share of Common Stock held, either in person or by
proxy duly authorized in writing. Except to the extent required by law or as
permitted by these Articles of Incorporation, as amended from time to time, the
registered holders of the shares of Common Stock shall have exclusive voting
rights.
C. The Board of Directors, at any time or from time to time, may, and
is hereby authorized to, issue and dispose of any of the authorized and unissued
shares of Common Stock and any issued but not outstanding shares for such kind
and amount of consideration and to such persons, firms or corporations, as may
be determined by the Board of Directors, subject to any provisions of law then
applicable. The holders of Common Stock shall have no preemptive rights to
acquire or subscribe to any shares, or securities convertible into shares, of
Common Stock.
D. A first series of the Preferred Stock is created pursuant to Article
IV hereof. The Board of Directors, at any time or from time to time may, and is
hereby authorized to, further divide the authorized and unissued shares of
Preferred Stock into one or more classes or series and in connection with the
creation of any class or series to determine, in whole or in part, to the full
extent now or hereafter permitted by law, by adopting one or more articles of
amendment to the Articles of Incorporation providing for the creation thereof,
the designation, preferences, limitations and relative rights of such class or
series, which may provide for special, conditional or limited voting rights, or
no rights to vote at all, and to issue and dispose of any of such shares and any
issued but not outstanding shares for such kind and amount of consideration and
to such persons, firms or corporations, as may be determined by the Board of
Directors, subject to any provisions of law then applicable.
E. The Board of Directors, at any time or from time to time may, and is
hereby authorized to, create and issue, whether or not in connection with the
issue and sale of any shares of its Common Stock, Preferred Stock or other
securities of the Corporation, warrants, rights and/or options entitling the
holders thereof to purchase from the Corporation any shares of its Common Stock,
Preferred Stock or other securities of the Corporation. Such warrants, rights,
or options shall be evidenced by such instrument or instruments as shall be
approved by the Board of Directors. The terms upon which, the time or times
(which may be limited or unlimited in duration) at or within which, and the
price or prices (which shall be not less than the minimum amount prescribed by
law, if any) at which any such shares or other securities may be purchased from
the Corporation upon the exercise of any such warrant, right or option shall be
fixed and stated in the resolution or resolutions of the Board of Directors
providing for the creation and issue of such warrants, rights or options. The
Board of Directors is hereby authorized to create and issue any such warrants,
rights or options from time to time for such consideration, if any, and to such
persons, firms or corporations, as the Board of Directors may determine.
F. The Corporation may authorize the issue of some or all of the shares
of any or all of the classes of its capital stock without certificates.
G. The Corporation shall not be required to issue certificates
representing any fraction or fractions of a share of stock of any class but may
issue in lieu thereof one or more non-dividend bearing and non-voting scrip
certificates in such form or forms as shall be approved by the Board of
Directors, each scrip certificate representing a fractional interest in one
share of stock of any class. Such scrip certificates upon presentation together
with similar scrip certificates representing in the aggregate an interest in one
or more full shares of stock of any class shall entitle the holders thereof to
receive one or more full shares of stock of such class. Such scrip certificates
may contain such terms and conditions as shall be fixed by the Board of
Directors and may become void and of no effect after a period to be determined
by the Board of Directors and to be specified in such scrip certificates.
H. The Corporation shall be entitled to treat the person in whose name
any share of Common Stock or Preferred Stock is registered as the owner thereof
for all purposes and shall not be bound to recognize any equitable or other
claim to, or interest in, such share on the part of any person, whether or not
the Corporation shall have notice thereof except as may be expressly provided
otherwise by the laws of the State of Iowa.
-2-
ARTICLE IV.
A. Creation, Designation and Amount of First Series of Preferred Stock.
A first series of the Preferred Stock is hereby created as follows: The shares
of such series (the "Preferred Shares") shall be designated as "Zero Coupon
Convertible Preferred Stock", and the number of shares constituting such
Preferred Stock shall be 40,000,000.
B. Dividends and Distributions. In case the Corporation shall at any
time or from time to time declare, order, pay or make a dividend or other
distribution (including, without limitation, any distribution of stock or other
securities or property or rights or warrants to subscribe for securities of the
Corporation or any of its subsidiaries by way of a dividend, distribution or
spin-off) on its Common Stock, other than (i) a distribution made in compliance
with the provisions of Section F of this Article IV or (ii) a dividend or
distribution made in Common Stock, the holders of the Preferred Shares shall be
entitled (unless such right shall be waived by the affirmative vote or consent
of the holders of at least two-thirds of the number of the then outstanding
Preferred Shares) to receive from the Corporation with respect to each Preferred
Share held, any dividend or distribution that would be received by a holder of
the number of shares (including fractional shares) of Common Stock into which
such Preferred Share is convertible on the record date for such dividend or
distribution, with fractional shares of Common Stock deemed to be entitled to
the corresponding fraction of any dividend or distribution that would be
received by a whole share. Any such dividend or distribution shall be declared,
ordered, paid or made at the same time such dividend or distribution is
declared, ordered, paid or made on the Common Stock.
C. Conversion Rights.
Each Preferred Share is convertible at the option of the holder thereof
into one Conversion Unit at any time upon the occurrence of a Conversion Event.
A Conversion Unit will initially be one share of Common Stock of the Corporation
adjusted as follows:
(i) Stock splits, combinations, reclassifications etc. In case
the Corporation shall at any time or from time to time declare a
dividend or make a distribution on the outstanding shares of Common
Stock payable in Common Stock or subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares or
combine or reclassify the outstanding shares of Common Stock into a
smaller number of shares of Common Stock, then, and in each such event,
the number of shares of Common Stock into which each Preferred Share is
convertible shall be adjusted so that the holder thereof shall be
entitled to receive, upon conversion thereof, the number of shares of
Common Stock which such holder would have been entitled to receive
after the happening of any of the events described above had such share
been converted immediately prior to the happening of such event or the
record date therefor, whichever is the earlier. Any adjustment made
pursuant to this clause (i) shall become effective (I) in the case of
any such dividend or distribution on the record date for the
determination of holders of shares of Common Stock entitled to receive
such dividend or distribution, or
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(II) in the case of any such subdivision, reclassification or
combination, on the day upon which such corporate action becomes
effective.
(ii) Issuances of Additional Shares below Fair Value Price. In
case the Corporation shall issue shares of Common Stock (or rights or
warrants or other securities exercisable or convertible into or
exchangeable (collectively, a "conversion") for shares of Common Stock)
(collectively, "convertible securities") (other than in Permitted
Transactions) at a price per share (or having a conversion price per
share) less than the Fair Value Price as of the date of issuance of
such shares (or of such convertible securities), then, and in each such
event, the number of shares of Common Stock into which each Preferred
Share is convertible shall be adjusted so that the holder thereof shall
be entitled to receive, upon conversion thereof, the number of shares
of Common Stock determined by multiplying the number of shares of
Common Stock into which such share was convertible immediately prior to
such date of issuance by a fraction, (I) the numerator of which is the
sum of (1) the number of shares of Common Stock outstanding on such
date and (2) the number of additional shares of Common Stock issued (or
into which the convertible securities may convert), and (II) the
denominator of which is the sum of (1) the number of shares of Common
Stock outstanding on such date and (2) the number of shares of Common
Stock which the aggregate consideration receivable (including any
amounts payable upon conversion of convertible securities) by the
Corporation for the total number of additional shares of Common Stock
so issued (or into which the convertible securities may convert) would
purchase at the Fair Value Price on such date. For purposes of the
foregoing, "Permitted Transactions" shall include issuances (i) as
consideration for the acquisition of businesses and/or related assets,
and (ii) in connection with employee benefit plans and any other
transaction approved by the Board of Directors (including the approval
of the directors elected by the holders of the Preferred Shares), and
"Fair Value Price" shall mean the average of the closing prices on the
principal stock exchange or over-the-counter quotation system on which
the Common Stock is then listed or quoted, or if not then listed or
quoted, the fair value of the Corporation's Common Stock as determined
in good faith by the Board of Directors. Although Permitted
Transactions do not require adjustment of a Conversion Unit, the
issuance of equity and equity-linked securities in a Permitted
Transaction remains subject to the vote of the Preferred Shares as
provided in Section D of this Article IV. Any adjustment made pursuant
to this clause (ii) shall become effective immediately upon the date of
such issuance.
(iii) Mergers, Consolidations, Sales of Assets etc. In case
the Corporation shall be a party to any transaction (including a
merger, consolidation, sale of all or substantially all of the
Corporation's assets, liquidation or recapitalization of the
Corporation, but excluding any transaction described in clause (i) or
(ii) above) in which the previously outstanding Common Stock shall be
changed into or, pursuant to the operation of law or the terms of the
transaction to which the Corporation is a party, exchanged for
different securities of the Corporation or common stock or other
securities or interests in another Person or other property (including
cash) or any combination of the foregoing, then, as a condition of the
consummation of such transaction, lawful and
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adequate provision shall be made so that each holder of Preferred
Shares shall be entitled, upon conversion, to an amount per share
equal to (A) the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged times
(B) the number of shares of Common Stock into which such share was
convertible immediately prior to the consummation of such transaction.
Any adjustment made pursuant to this clause (iii) shall become
effective immediately upon the consummation of such transaction.
In calculating the adjustments provided in clauses (i), (ii) and (iii)
above, a Conversion Unit shall include any fractional share resulting from the
calculation.
A "Conversion Event" includes (i) any conversion of Preferred Shares
that would not cause the holder of the shares of Common Stock issued upon
conversion (or any affiliate of such holder) or the Corporation to become
subject to regulation as a registered holding company, or as a subsidiary of a
registered holding company, under the Public Utility Holding Company Act of
1935, as amended from time to time and any successor legislation ("PUHCA")
either as a result of the repeal or amendment of PUHCA, the number of shares
involved or the identity of the holder of such shares and (ii) a Company Sale. A
"Company Sale" includes any involuntary or voluntary liquidation, dissolution,
recapitalization, winding-up or termination of the Corporation and any merger,
consolidation or sale of all or substantially all of the assets of the
Corporation.
The holder of any Preferred Shares may exercise such holder's right to
convert each such share into a Conversion Unit by surrendering for such purpose
to the Corporation, at its principal office or at such other office or agency
maintained by the Corporation for that purpose, a certificate or certificates
representing the Preferred Shares to be converted accompanied by a written
notice stating that such holder elects to convert all or a specified whole
number of such shares in accordance with the provisions of this Section C of
this Article IV and specifying the name or names in which such holder wishes the
certificate or certificates for securities included in the Conversion Unit or
Units to be issued. In case such notice shall specify a name or names other than
that of such holder, such notice shall be accompanied by payment of all transfer
taxes payable upon the issuance of securities included in the Conversion Unit or
Units in such name or names. Other than such taxes, the Corporation will pay any
and all issue and other taxes (other than taxes based on income) that may be
payable in respect of any issue or delivery of the securities and other property
then included in a Conversion Unit or Units upon conversion of Preferred Shares
pursuant hereto. As promptly as practicable, and in any event within three
Business Days after the surrender of such certificate or certificates and the
receipt of such notice relating thereto and, if applicable, payment of all
transfer taxes (or the demonstration to the satisfaction of the Corporation that
such taxes have been paid), the Corporation shall deliver or cause to be
delivered (i) certificates representing the number of validly issued, fully paid
and nonassessable shares of Common Stock (or other securities included in the
Conversion Unit or Units) to which the holder of Preferred Shares so converted
shall be entitled and (ii) if less than the full number of Preferred Shares
evidenced by the surrendered certificate or certificates are being converted, a
new certificate or certificates, of like tenor, for the number of shares
evidenced by such surrendered certificate or certificates less the number of
shares converted. Such conversion shall be deemed to have been made at the close
of business on the date of giving of such notice and such surrender of the
certificate or certificates representing the
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Preferred Shares to be converted so that the rights of the holder thereof as to
the shares being converted shall cease except for the right to receive the
securities and other property included in the Conversion Unit or Units in
accordance herewith, and the Person entitled to receive the securities and other
property included in the Conversion Unit or Units shall be treated for all
purposes as having become the record holder of such securities and other
property included in the Conversion Unit or Units at such time. No holder of
Preferred Shares shall be prevented from converting Preferred Shares, and any
conversion of Preferred Shares in accordance with the terms of this Section C of
this Article IV shall be effective upon surrender, whether or not the transfer
books of the Corporation for the Common Stock are closed for any purpose.
The Corporation shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Preferred Shares, such number of shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all then
outstanding Preferred Shares. The Corporation shall from time to time, subject
to and in accordance with the Act, increase the authorized amount of Common
Stock if at any time the number of authorized shares of Common Stock remaining
unissued shall not be sufficient to permit the conversion at such time of all
then outstanding Preferred Shares.
Whenever the number of shares of Common Stock and other property
comprising a Conversion Unit into which each Preferred Share is convertible is
adjusted as provided in this Section C of this Article IV, the Corporation shall
promptly mail to the holders of record of the outstanding Preferred Shares at
their respective addresses as the same shall appear in the Corporation's stock
records a notice stating that the number of shares of Common Stock and other
property comprising a Conversion Unit into which each Preferred Share is
convertible has been adjusted and setting forth the new number of shares of
Common Stock (or describing the new stock, securities, cash or other property)
into which each Preferred Share is convertible, as a result of such adjustment,
a brief statement of the facts requiring such adjustment and the computation
thereof, and when such adjustment became effective.
D. Voting Rights.
The holders of the Preferred Shares shall have the following voting
rights:
(A) The holders of the then-outstanding Preferred Shares shall be
entitled to elect, as a class, two (out of a total of ten) directors to the
Board of Directors and to elect the replacement for any director elected by them
who for any reason ceases to serve as a director. In addition, without first
obtaining the consent or approval of the holders of a majority of the
then-outstanding Preferred Shares, voting as a separate class, the Corporation
will not (a) effect any Fundamental Transaction or (b) amend the provisions of
the Articles of Incorporation of the Corporation in any manner which would alter
or change the powers, preferences or special rights of the Preferred Shares or
that would otherwise adversely affect the rights of the holders of the Preferred
Shares. A "Fundamental Transaction" includes the following (in each case
referring to a single transaction or series of related transactions): (i) the
sale, lease, exchange, mortgage or other disposition (including any spin-off or
split-up) of any business or assets having a fair
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market value of 25% or more of the fair market value of the business or assets
of the Corporation and its subsidiaries taken as a whole, the merger or
consolidation of the Corporation with any other Person, a liquidation,
dissolution or winding-up of the Corporation or any recapitalization or
reclassification of the securities of the Corporation; (ii) the acquisition of
any business or assets (by way of merger, acquisition of stock or assets or
otherwise) or the making of capital expenditures not included in the applicable
annual budget approved by the Board of Directors, in each case for a
consideration or involving expenditures in excess of $50,000,000; (iii) the
issuance, grant or sale, or the repurchase, of any equity securities (or any
equity-linked securities or obligations) of the Corporation (or securities
convertible into or exchangeable or exercisable for any such equity securities);
(iv) transactions with officers, directors, stockholders and affiliates of the
Corporation except (x) to the extent effectuated on terms no less favorable to
the Corporation than those obtainable in an arms' length transaction with an
unaffiliated Person or (y) in the case of cash compensation arrangements, which
are approved by the Board of Directors (without regard to the directors elected
by the holders of the Preferred Shares); (v) the removal as chief executive
officer of the Corporation of the person occupying that position on the date of
original issuance of the Preferred Shares (the "Initial CEO") and (vi) the
appointment or removal of any person as chief executive officer of the
Corporation after the removal, resignation, death or disability of the Initial
CEO (the consent of the holders of the Preferred Stock as to the matters set
forth in this clause (vi) not to be unreasonably withheld).
(B) Except as set forth herein, or as otherwise provided by law, holders
of the Preferred Shares shall have no voting rights.
E. Reacquired Shares.
Any Preferred Shares converted, purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Articles of Incorporation, or
in any Articles of Amendment creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
F. Liquidation, Dissolution or Winding Up.
Upon any involuntary or voluntary liquidation, dissolution,
recapitalization, winding-up or termination of the Corporation, the assets of
the Corporation available for distribution to the holders of the Corporation's
capital stock shall be distributed in the following priority, with no
distribution pursuant to the second priority until the first priority has been
fully satisfied and no distribution pursuant to the third priority until the
first and second priorities have both been fully satisfied, First, to the
holders of the Preferred Shares for each Preferred Share, a liquidation
preference of $1.00 per share, Second, to the holders of Common Stock, ratably,
an amount equal to (i) $1.00 divided by the number of shares of Common Stock
then comprising a Conversion
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Unit, multiplied by (ii) the number of shares of Common Stock then outstanding,
and Third, to the holders of the Preferred Shares and the Common Stock (ratably,
on the basis of the number of shares of Common Stock then outstanding and, in
the case of the Preferred Shares, the number of shares of Common Stock then
comprising a Conversion Unit multiplied by the total number of Preferred Shares
outstanding), all remaining assets of the Corporation available for distribution
to the holders of the Corporation's capital stock.
Neither the consolidation, merger or other business combination of the
Corporation with or into any other Person or Persons nor the sale, lease,
exchange or conveyance of all or any part of the property, assets or business of
the Corporation to a Person or Persons, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section F of
this Article IV.
G. Redemption. The Preferred Shares are not subject to redemption at
the option of the Corporation nor subject to any sinking fund or other mandatory
right of redemption accruing to the holders thereof.
ARTICLE V.
The term of corporate existence of the Corporation shall be perpetual.
ARTICLE VI.
A. No Person shall own shares of Common Stock equal to or in excess of
the Ownership Limit. If there is a purported Transfer or other event caused by
any Person or the Corporation such that a Preferred Eligible Shareholder would
own shares of Common Stock equal to or in excess of the Ownership Limit, then,
that number of shares of Common Stock owned by such Preferred Eligible
Shareholder by which the shares of Common Stock owned by such Preferred Eligible
Shareholder would be equal to or in excess of the Ownership Limit as a result of
the Transfer shall automatically be converted into that same number of shares of
Zero Coupon Convertible Preferred Stock. Such conversion shall be effective on
the books of the Corporation as of the close of business on the business day
prior to the date of the Transfer or other event.
B. If the Board of Directors shall at any time determine in good faith
that a Transfer or other event has taken place in violation of this Article VI,
the Board of Directors may take such action as it deems advisable to refuse to
give effect to or to prevent such Transfer or other event, including, but not
limited to, refusing to give effect to such Transfer or other event on the books
of the Corporation or instituting proceedings to enjoin such Transfer or other
event or transaction; provided, however, that any Transfers or attempted
Transfers (or, in the case of events other than a Transfer, ownership) in
violation of this Article VI shall be void ab initio in the case of Transfers
that would cause ownership of shares of Common Stock equal to or in excess of
the Ownership Limit by any Person other than a Preferred Eligible Shareholder,
and in the case of ownership or Transfers that would cause ownership of shares
of Common Stock equal to or in excess of the Ownership Limit by a Preferred
Eligible Shareholder shall automatically result in the conversion described in
Section A of this Article VI, irrespective of any action (or non-action) by the
Board of Directors.
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ARTICLE VII
The private property of the shareholders of the Corporation shall be
exempt from all corporate debts.
ARTICLE VIII
A. A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability:
(i) for any breach of the director's duty of loyalty to the
Corporation or its shareholders; or
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; or
(iii) for any transaction from which the director derives an improper
personal benefit; or
(iv) under Section 490.833, or a successor provision, of the Act.
B. If, after the date these Articles of Incorporation are filed with
the Iowa Secretary of State, the Act is amended to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be deemed eliminated or limited
to the fullest extent permitted by the Act, as so amended. Any repeal or
modification of Section A or this Section B of this Article VIII, by the
shareholders of the Corporation shall be prospective only and shall not
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
ARTICLE IX
A. Each person who was or is a party or is threatened to be made a party to or
is involved in any action, suit or proceeding, whether civil, criminal,
administrative, investigative or arbitration and whether formal or informal
("proceeding"), by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was a director, officer or employee, of
the Corporation or is or was serving at the request of the Corporation as a
director, officer or employee of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity while serving as a director, officer or employee or in any
other capacity while serving as a director, officer or employee, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Act, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification
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rights than the Act permitted the Corporation to provide prior to such
amendment), against all reasonable expenses, liability and loss (including
without limitation attorneys' fees, all costs, judgments, fines, Employee
Retirement Income Security Act excise taxes or penalties and amounts paid or to
be paid in settlement) reasonably incurred or suffered by such person in
connection therewith. Such right shall be a contract right and shall include the
right to be paid by the Corporation expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however, that the
payment of such expenses incurred by a director, officer or employee in his or
her capacity as a director, officer or employee (and not in any other capacity
in which service was or is rendered by such person while a director, officer or
employee including, without limitation, service to an employee benefit plan) in
advance of the final disposition of such proceeding, shall be made only upon
delivery to the Corporation of (i) a written undertaking, by or on behalf of
such director, officer or employee, to repay all amounts so advanced if it
should be determined ultimately that such director, officer or employee is not
entitled to be indemnified under this Article IX or otherwise, or (ii) a written
affirmation by or on behalf of such director, officer or employee that, in such
person's good faith belief, such person has met the standards of conduct set
forth in the Act.
B. If a claim under Section A is not paid in full by the Corporation
within 30 days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the expenses of prosecuting such
claim. It shall be a defense to any such action that the claimant has not met
the standards of conduct which make it permissible under the Act for the
Corporation to indemnify the claimant for the amount claimed, but the burden of
proving such defense shall be on the Corporation. The failure of the Corporation
(including its Board of Directors, independent legal counsel or its
shareholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Act, shall not be a defense to the action or create a presumption that the
claimant had not met the applicable standard of conduct.
C. Indemnification provided hereunder shall, in the case of the death
of the person entitled to indemnification, inure to the benefit of such person's
heirs, executors or other lawful representatives. The invalidity or
unenforceability of any provision of this Article IX shall not affect the
validity or enforceability of any other provision of this Article IX.
D. Any action taken or omitted to be taken by any director, officer or
employee in good faith and in compliance with or pursuant to any order,
determination, approval or permission made or given by a commission, board,
official or other agency of the United States or of any state or other
governmental authority with respect to the property or affairs of the
Corporation or any such business corporation, not-for-profit corporation, joint
venture, trade association or other entity over which such commission, board,
official or agency has jurisdiction or authority or purports to have
jurisdiction or authority shall be presumed to be in compliance with the
standard of conduct set forth in Section 490.851 (or any successor provision) of
the Act whether or not it may thereafter be determined that such order,
determination, approval or permission was unauthorized, erroneous, unlawful or
otherwise improper.
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E. Unless finally determined, the termination of any litigation,
whether by judgment, settlement, conviction or upon a plea of nolo contendere,
or its equivalent, shall not create a presumption that the action taken or
omitted to be taken by the person seeking indemnification did not comply with
the standard of conduct set forth in Section 490.851 (or any successor
provision) of the Act.
F. The rights conferred on any person by this Article IX shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of the Articles of Incorporation, Bylaws,
agreement, vote of shareholders or disinterested directors or otherwise.
G. The Corporation may maintain insurance, at its expense, to protect
itself and any such director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the Act.
ARTICLE X
A. As used in these Articles of Incorporation, the following terms
shall have the following meanings:
(i) "Affiliate" shall mean any Person or entity, directly or
indirectly, controlling, controlled by or under common control
with such Person or entity;
(ii) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of
New York or the State of Iowa are authorized or obligated by
law or executive order to close;
(iii) "Ownership Limit" shall mean with respect to any Person,
ownership of 10% of the issued and outstanding Common Stock if
such ownership would cause such Person to become subject to
regulation as a registered holding company under PUHCA or the
Corporation or any of its subsidiaries to become subject to
regulation as a subsidiary of a registered holding company
under PUHCA;
(iv) "Person" shall mean any person or entity of any nature
whatsoever, specifically including an individual, a firm, a
company, a corporation, a partnership, a trust or other
entity;
(v) "Preferred Eligible Shareholder" shall mean a holder of
Preferred Shares or its Affiliates; and
(vi) "Transfer" shall mean any sale, assignment, pledge,
hypothecation, other disposition or encumbrance, whether or
not for consideration.
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ARTICLE XI
These Articles of Incorporation may be amended, repealed,
changed or modified at any annual meeting of shareholders of the Corporation or
at a special meeting being called for that purpose or by written consent, in
compliance with the applicable statutes of the State of Iowa.
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