EXHIBIT 2.3
STANDSTILL AGREEMENT
This STANDSTILL AGREEMENT (the "Agreement"), made and entered into by and
between ATMOS ENERGY CORPORATION, a Texas corporation ("Atmos"), and UNITED
CITIES GAS COMPANY, an Illinois and Virginia corporation ("United Cities"), and
effective as of this 13th day of July, 1996,
WITNESSETH:
WHEREAS, the parties hereto have entered into that certain Confidentiality
Agreement, dated July 5, 1996 (the "Confidentiality Agreement");
WHEREAS, pursuant to the Confidentiality Agreement, the parties hereto are
evaluating a possible merger of United Cities and Atmos, subject to approval by
the boards of directors and shareholders of United Cities and Atmos (the
"Possible Transaction"); and
WHEREAS, this Agreement is not intended to create any obligations for
either party hereto with respect to the Possible Transaction, other than the
agreements expressly set forth herein, and no other contract or agreement
providing for the Possible Transaction shall be deemed to exist between the
parties hereto.
NOW, THEREFORE, for and in consideration of the premises and the agreements
herein contained, the sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. Standstill Provisions. For a period of two years from the date of this
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Agreement, except as may otherwise be provided pursuant to the terms of a
written definitive agreement between the parties and approved by their
respective boards of directors with respect to the Possible Transaction
negotiated pursuant to the Confidentiality Agreement, neither party shall,
directly or indirectly:
(a) acquire, or offer or agree to acquire, by purchase or otherwise,
any securities or property of the other party (or direct or indirect rights
or options to acquire any securities or property of the other party) except
by way of stock, dividends or other distributions made on a pro rata basis
with respect to securities or the other party acquired to the date of this
Agreement;
(b) solicit proxies or consents or become a participant in a
"solicitation" (as such term used in the Proxy Rules of the Securities and
Exchange Commission) of proxies or consents with respect to securities of
the other party with regard to any matter or otherwise act, alone or in
concert with others, to seek to control or influence the management, board
of directors or policies of the other parts;
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(c) induce, attempt to induce or in any manner assist any other person
in initiating any stockholder proposal or a tender or exchange offer for
securities of the other party or any change of control of the other party, or
for the purpose of convening a stockholders' meeting of the other party;
(d) make any public announcement or make any written or oral proposal
or invitation to discuss any possibility, intention, plan or arrangement,
relating to a tender or exchange offer for securities of the other party or a
merger, consolidation or other business combination (or other similar
transaction which should result in a change of control), sale of all or a
substantial portion of the assets of the other party, recapitalization,
restructuring, liquidation, dissolution or other extraordinary corporate
transaction between such party and any of its affiliates and the other party or
take any action which might require the other party to make a public
announcement regarding any of the foregoing;
(e) deposit any securities of the other party in a voting trust or
subject any securities of the other party to any arrangement or agreement with
respect to the voting of securities of the other party;
(f) form, join or in any way participate in a partnership, limited
partnership, syndicate or other group (or otherwise act in concert with any
other person) for the purpose of acquiring, holding, voting and disposing of
securities of the other party or taking any other actions restricted or
prohibited under clauses (a) through (e) of this paragraph, or announce an
intention to do, or enter into any arrangement or understanding with others to
do, any of the actions restricted or prohibited under clauses (a) through (e) of
this paragraph; or
(g) request the other party (or its directors, officers, employees or
agents), to amend or waive any provision of this paragraph (including this
subsection (g)), except as may otherwise be provided pursuant to the terms of a
written definitive agreement between the parties and approved by their
respective boards of directors with respect to the Possible Transaction
negotiated pursuant to the Confidentiality Agreement.
2. Exception to Standstill Provisions.
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(a) Notwithstanding clauses (a), (e), and (f) of Paragraph 1 above,
the employee benefit plans of either party may acquire securities of the
other party if the aggregate beneficial ownership of all such plans of such
party does not exceed one percent (1%) of the outstanding securities of the
same class of the other party.
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(b) Nothing in this Agreement shall preclude or prevent Atmos
from making a counter-offer to acquire United Cities in the event
that (A) prior to the earlier of (i) the termination of negotiations
pursuant to the Confidentiality Agreement relating to a Possible
Transaction, or (ii) the execution of a definitive agreement between
the parties and approved by the respective boards of directors
providing for the Possible Transaction, a third party makes an
unsolicited bona fide publicly announced offer to acquire control of
United Cities pursuant to a tender offer, merger, consolidation,
share exchange, purchase of a substantial portion of assets, business
combination or other similar transaction (a "Third Party Offer") and
(B) United Cities thereafter (i) issues a statement recommending the
Third Party Offer to its shareholders or (ii) United Cities either
issues a statement not recommending the Third Party Offer or takes no
position with respect to such offer but is required by a court to
furnish the party making the Third Party Offer a list of shareholders
of United Cities.
3. No Further Agreement. This Agreement constitutes the entire
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agreement between the parties hereto concerning the subject matter hereof. This
Agreement does not constitute an offer to engage in any transaction, including
without limitation, the Possible Transaction, it does not impose any obligation
to bargain in good faith in connection therewith, and no party hereto intends to
be bound by any agreement concerning a Possible Transaction unless and until it
agrees to and signs a formal written contract approved by its board of
directors. Either party may terminate discussions regarding the Possible
Transaction at any time, for any reason. Each party is free to pursue any other
possible business transactions with any other persons at any time, and without
any obligations to notify the other party that any such transaction is being
considered, including any merger or other business combination. No person may
reasonably rely on any promises inconsistent with this paragraph.
4. Binding Upon Successors. This Agreement shall be binding upon
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and inure to the benefit of (i) the successors in interest of each of the
parties hereto and (ii) any affiliate of any party hereto or any affiliate of
any such successor in interest.
5. Choice of Law. This Agreement shall be governed by and in
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accordance with the laws of the State of Illinois, without regard to the
conflict of laws principles thereof.
IN WITNESS WHEREOF, the undersigned have executed this Standstill
Agreement as of the date first written above.
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ATMOS ENERGY CORPORATION UNITED CITIES GAS COMPANY
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxxxx Xxxxx X. Xxxx
Executive Vice President and Senior Vice President and Treasurer
Chief Financial Officer
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