Ccrs clause samples

A. A CCR is a contingent consideration right attached to each ETC common share issued in connection with the merger that represents the right to receive an additional payment, in cash or ETC common shares at ETE’s election, from ETC under certain circumstances. The CCRs will not be separately listed on any securities exchange and will not have separate voting rights. The right to receive a payment under a CCR will only be transferable in connection with the transfer of the ETC common share to which it is attached. In addition, there is no assurance that any payment will be made under the CCRs. Any amounts to be received in connection with the CCRs are contingent upon the occurrence of certain events that may or may not occur.

If, however, the ETC common shares VWAP is equal to or greater than the ETE common units VWAP for the measurement period, then each outstanding CCR will be immediately and automatically cancelled and no consideration of any kind will be delivered to CCR holders in respect of the CCRs. Furthermore, ETE will cancel as an adjustment to the number of ETE Class E units issued to ETC in the WMB Contribution, a number of ETE Class E units equal to (a)(i)the number of outstanding CCRs multiplied by (ii)a fraction, the numerator of which is the excess amount and the denominator of which is the settlement calculation VWAP, multiplied by (b)the ratio of ETE Class E units held by ETC and its subsidiaries over the number of ETC common shares outstanding. See the section titled “The Merger” beginning on page 94 of this proxy statement/prospectus.

On September4, 2015, representatives of WMB, ETE, Barclays, Lazard, Cravath, Gibson Dunn, Wachtell, Goldman, Sachs& Co. (“Goldman”), one of ETE’s financial advisors, and Intrepid held in-person meetings at the offices of Cravath in New York City to discuss the terms of a potential transaction. During this meeting, the parties discussed several transaction terms, including the terms of the CCRs. At the conclusion of the meeting, representatives of ETE indicated that Mr.Warren would call Mr.MacInnis on the following day to discuss next steps.

Between September9 and September12, 2015, representatives of Barclays and Lazard revised their respective financial analyses to reflect ETE’s most recent proposal, including the most recently proposed terms of the CCRs. In addition, representatives of WMB’s advisors and ETE’s advisors continued to discuss the impact of “stapling” the CCRs to the ETC common shares so that the CCRs were not separately tradable.

The CCRs are not equity or voting securities of ETC, do not represent ownership interests in ETC, and CCR holders are not entitled to any rights of any voting or equity security or other ownership interest of ETC, ETE or any entity affiliated with ETC or ETE, either at law or in equity. No interest or dividends shall accrue on any amounts payable in respect of the CCRs. The rights of CCR holders are limited to those expressly provided for in the CCR agreement.

Set forth below are several examples illustrating the impact of varying ETC common shares VWAP and ETE common units VWAP values on the consideration delivered to CCR holders and/or resulting in the cancellation of the CCRs. The examples are purely hypothetical and only are intended to provide investors an illustrative example of: (i) how the consideration paid to CCR holders (if any) will be determined or (ii) when the CCRs will be cancelled. The ETE common units VWAP used in the examples is based on the average ETE common units VWAP for the 30 trading days immediately prior to and including March22, 2016 (rounded up from $6.9363 to $7.00) and do not represent a likely actual ETE common units VWAP. Furthermore, since the ETC common shares are not yet publicly traded, the ETC common shares VWAP values used in these examples are purely hypothetical and are not intended to provide any assurance as to the value at which the ETC common shares will publicly trade. Some numbers stated in these examples have been rounded to the nearest 2 decimal places for purposes of presentation, but exact values were used in the calculations listed below.

Prior to the payment date, ETC will appoint a bank or trust company to act as the paying agent responsible for paying CCR holders any payments owed pursuant to the terms of the CCRs. Prior to the payment date, ETC will deposit with the paying agent either (a)the number of ETC common shares sufficient to pay the aggregate number of ETE common shares issuable (including excess shares) or (b)the aggregate cash payment. The paying agent will then deliver cash or ETC common shares to CCR holders sufficient to pay all consideration then due to them.

Table of Contents In the event that a former U.S. holder of WMB common stock receives additional ETC common shares pursuant to such holder’s CCRs, no gain or loss would be recognized by such U.S. holder and the consequences described in this paragraph would result (except to the extent that any portion of each ETC common share received pursuant to the CCRs is treated as imputed interest (as described below)). It is not entirely clear how the tax basis in each ETC common share received pursuant to the CCRs should be determined, but a possible approach is that such tax basis should be determined by dividing the aggregate tax basis in the ETC common shares received pursuant to the merger (determined as set forth above under the heading “—Exchange Solely for ETC Common Shares” or “—Exchange for Cash or Exchange for ETC Common Shares and Cash,” as applicable) and still owned by the holder by the sum of the number of ETC common shares received pursuant to the merger and still owned by the holder and the number of ETC common shares received in settlement of the CCRs. In this case, the tax basis in the ETC common shares received pursuant to the merger and still owned by the holder will be decreased by the amount of tax basis reallocated to the ETC common shares received pursuant to the CCRs. U.S. holders that receive additional ETC common shares pursuant to the CCRs and that previously sold a portion of their ETC common shares received pursuant to the merger should consult their own tax advisors regarding the tax consequences to them of the receipt of such additional ETC common shares. The holding period of each ETC common share received pursuant to the CCR will include the holding period of the WMB common stock surrendered in the merger.

Section1.12 Entire Agreement. This CCR Agreement and the Merger Agreement represent the entire understanding of Parent and TopCo with reference to the CCRs, and this CCR Agreement supersedes any and all other oral or written agreements hereto made with respect to the CCRs. This CCR Agreement represents the entire understanding of the Rights Agent with reference to the CCRs, and this CCR Agreement supersedes any and all other oral or written agreements hereto made with respect to the CCRs. If and to the extent that any provision of this CCR Agreement is inconsistent or conflicts with the Merger Agreement, this CCR Agreement shall govern and be controlling, and this CCR Agreement may be amended, modified, supplemented or altered only in accordance with the terms of Article9. No party shall be bound by, or be liable for, any alleged representation, promise, inducement or statement of intention not contained herein.

Section2.3 Transfer of CCRs. Until the earlier of the Cancelation Date and the End Date, the surrender for transfer of any certificate evidencing TopCo Common Shares shall also constitute the transfer of the CCRs associated with the TopCo Common Shares represented thereby, and the registration of transfer of ownership of any uncertificated TopCo Common Shares in respect of which CCRs have been issued shall also constitute the transfer of the CCRs associated with the TopCo Common Shares the ownership of which is so transferred.

Section4.3 Payments with Respect to CCRs. Payment of any amounts pursuant to the CCRs shall be made in either, as permitted pursuant to the terms of this CCR Agreement, (i)such coin or currency of the United States of America as at the time is legal tender for the payment of public and private debts; or (ii)TopCo Common Shares.

(b) The Rights Agent shall, once every ninety (90)calendar days, post the trailing Parent Common Units VWAP, the Settlement Calculation VWAP and the TopCo Common Shares VWAP on [its website or other means], to be made available to the Parties or the Holders of CCRs. The Rights Agent shall also post Parent Common Units VWAP, the Settlement Calculation VWAP and the TopCo Common Shares VWAP fifteen (15)consecutive Trading Days into a potential Cancellation Event.

The CCR Rule affirms that beneficial uses of CCRs remain exempt from federal waste regulation under RCRA’s “Bevill exclusion.” Beneficial use is defined by the regulation to cover uses where CCRs provide a functional benefit, substitute for the use of a virgin material, meet the product specifications, follow established specifications for use, and are environmentally equivalent to the material that they substitute for or are below all thresholds for safety and environmental impact. In February 2014, the EPA released a report determining that the use of fly ash in concrete constitutes a beneficial use, and the CCR Rule specifically notes that the incorporation of fly ash in concrete, as a replacement for Portland cement, is one of “the most widely recognized beneficial applications” of CCRs. The CCR Rule indicates that the use of CCRs in applications such as road base generally would qualify as beneficial use, so long as relevant regulations and guidelines are followed.

• Comprehensive Environmental Response, Compensation and Liability Act. Certain environmental laws, including the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and similar state laws, impose strict, joint and several liability on responsible parties for investigation and remediation of regulated materials at contaminated sites, including our sites, customer sites and sites to which we sent wastes, including CCRs. CCRs may contain materials such as metals that are regulated materials under these laws. Management of CCRs can give rise to liability under CERCLA and similar laws.

Environmental Solutions revenues. Our Environmental Solutions segment revenues were $218.1 million for the year ended December31, 2016. Revenues were driven by progress completed at our environmental reclamation sites, along with sales of CCRs. Revenues were also driven by the addition of new contracts.

As part of our commitment to sustainability, Ameren prioritizes environmental stewardship along with our responsibilities to customers and communities, co-workers, and shareholders. Our environmental stewardship includes the preservation of clean water through the safe and responsible handling of CCRs. Our generation facilities are located in an area of ample water supply, and water availability within our service territory has not been a significant risk to our ability to operate these facilities. Ameren takes into consideration the impact of our operations on both water quality and use. And we assess the risk of future water availability, including risks related to climate change or regulatory conditions, as part of our comprehensive enterprise risk management process that is designed to identify, assess and monitor all risks to the achievement of our strategy and objectives.

In connection with the closures of its ash ponds, Ameren Missouri will convert to dry ash handling at its Labadie, Rush Island and Sioux energy centers, while the Meramec energy center is scheduled to be retired in 2022. Construction of these projects is approximately 33% complete based on capital expenditures. Ameren Missouri has state-of-the-art dry ash landfills at its Sioux and Labadie energy centers. The EPA CCR Rule also allows Ameren Missouri to continue to recycle CCRs. In 2017, Ameren Missouri recycled approximately 55% of its total ash production into applications such as cement production or concrete. Ameren Missouri expects to recycle approximately 65% of its total ash production in 2018, with higher targets in future years following the conversions to dry ash handling and completion of the ash pond closures.

Through our website and in our other public filings, we provide a substantial amount of information relating to our strong commitment to handling CCRs responsibly and assessing the potential legal, reputational and financial risks to the Company related to such efforts. Management and the Board believe that the information presented on our website, including in Ameren Missouri’s 2017 Integrated Resource Plan (“2017 IRP”), our responses to the 2017 Carbon Disclosure Project (“CDP”) Water Report, and our 2017 Corporate Social Responsibility report (“2017 CSR”), together with information in our filings with the SEC and other agencies provides shareholders with extensive disclosure of our actions to identify and manage the potential risks of CCRs. We have summarized below the information presented in these resources and have specifically addressed assertions in the proponents’ supporting statement that are incorrect.

The 2017 CSR, available at www.amerencsr.com, also provides substantial information regarding our environmental compliance relating to CCR handling. Contrary to the proponents’ assertion, this includes data regarding thermal impacts at each of our coal-fired energy centers, as well as water usage data. The 2017 CSR also discusses current practices for coal ash management and plans for conversion to dry ash handling and storage under the EPA CCR Rule; details regarding the reuse of ash and fly ash; and information regarding the state-of-the-art solid waste management facility at our Labadie energy center, which will provide long-term or permanent storage of CCRs. In addition, the 2017 CSR discusses our efforts to manage our water supply and to conserve water through the various design features of our facilities.

XML 42 R19.htm IDEA: XBRL DOCUMENT /* Do Not Remove This Comment */ function toggleNextSibling (e) { if (e.nextSibling.style.display=='none') { e.nextSibling.style.display='block'; } else { e.nextSibling.style.display='none'; } } v3.8.0.1 Asset Retirement Obligations 3 Months Ended Mar. 31, 2018 Asset Retirement Obligation [Abstract] Asset Retirement Obligations ASSET RETIREMENT OBLIGATIONSFirstEnergy has recognized applicable legal obligations for AROs and their associated cost, primarily for the decommissioning of the TMI-2 nuclear generating facility and environmental remediation, including reclamation of sludge disposal ponds, closure of coal ash disposal sites, underground and above-ground storage tanks and wastewater treatment lagoons. In addition, FirstEnergy has recognized conditional retirement obligations, primarily for asbestos remediation. FirstEnergy uses an expected cash flow approach to measure the fair value of the nuclear decommissioning and environmental remediation AROs, considering the expected timing of settlement of the ARO based on the expected economic useful life of the plants. Conditional retirement obligations associated with tangible long-lived assets are recognized at fair value in the period in which they are incurred if a reasonable estimate can be made, even though there may be uncertainty about timing or method of settlement. The aggregate ARO liabilities for FirstEnergy are approximately $580 million and $570 million as of March31, 2018 and December31, 2017, respectively.In April 2015, the EPA finalized regulations for the disposal of CCRs (non-hazardous), establishing national standards for landfill design, structural integrity design and assessment criteria for surface impoundments, groundwater monitoring and protection procedures and other operational and reporting procedures to assure the safe disposal of CCRs from electric generating plants. On September13, 2017, the EPA announced that it would reconsider certain provisions of the final regulations. Based on an assessment of the finalized regulations, the future cost of compliance and expected timing had no significant impact on FirstEnergy's existing AROs associated with CCRs. Although not currently expected, changes in timing and closure plan requirements in the future could materially and adversely impact FirstEnergy's AROs. X - ReferencesNo definition available.

The proposal is substantially the same as proposals received by the Company in 2011 and 2012. While neither of those proposals was approved by shareholders, in response to the 2011 proposal, the Company agreed, consistent with its commitment to protecting the health and safety of the public and its employees and generating sufficient electricity to meet demand at the lowest cost, while enhancing shareholder value, to provide substantial information going forward regarding the Company’s handling of CCRs. As such, when an almost identical proposal was submitted by the same proponent in 2012, it received the support of only 9.2% of shareholders, a significant decrease from the previous year.

The 2016 CSR also notes that one of the Company’s key environmental successes over the past year has been developing an effective plan of action in response to the EPA’s Coal Combustion Residuals Rules (“EPA CCR Rule”), reinforcing the Company’s commitment to managing CCRs in a safe and environmentally responsible manner and transitioning to dry handling of CCRs. In addition, the 2016 CSR discusses the Company’s efforts to manage its water supply and to conserve water through the various design features of its facilities.

In October 2015, the EPA finalized the EPA CCR Rule, which establishes national standards for the management of CCRs. Since then, the Company has worked to address concerns regarding the impact of the EPA CCR Rule on its long-term resource plan to transition to a cleaner and more fuel diverse portfolio, in a responsible fashion. In the Company’s 2016 update (“2016 IRP Update”) to its 2014 Integrated Resource Plan (“2014 IRP”), the Company lists the EPA CCR Rule among the set of assumptions underlying the twenty-year plan to transition, in a responsible fashion, its current generation mix to a less carbon-intensive, more fuel-diverse portfolio of energy-producing assets, and provides estimated timing for compliance with the EPA CCR Rule. The 2016 IRP Update and the 2014 IRP are publicly available at www.ameren.com/missouri/environment/renewables/ameren-missouri-irp. During the fourth quarter of 2017, the Company will file its 2017 Integrated Resource Plan, which will provide a comprehensive update to the 2014 IRP.

On April 17, 2015, the EPA published its final rule regulating CCRs. CCRs include fly ash, bottom ash and sulfur dioxide scrubber wastes. The rule became effective on October 19, 2015. It imposes extensive new requirements, including location restrictions, design and operating standards, groundwater monitoring and corrective action requirements, and closure and post-closure care requirements on CCR impoundments and landfills that are located on active power plants and not closed. Under the rule, the EPA will regulate CCRs as non-hazardous under Subtitle D of RCRA and allow beneficial use of CCRs, with some restrictions. The rule's requirements for covered CCR impoundments and landfills include implementation of groundwater monitoring and commencement or completion of closure activities generally between three and ten years from certain triggering events. This self-implementing rule requires posting of compliance documentation on a publicly accessible website and is enforceable solely through citizen suits. LG&E and KU are also subject to state rules applicable to CCR management which may potentially be modified to reflect some or all requirements of the federal rule. Industry groups, environmental groups, individual companies and others have filed legal challenges to the final rule which are pending before the D.C. Circuit Court of Appeals.