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EXECUTION COPY
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement"), dated
September 27, 2001, by and among Temple-Inland Inc., a Delaware corporation
("Parent"), Temple-Inland Acquisition Corporation, a Delaware corporation and an
indirect wholly-owned subsidiary of Parent ("Merger Subsidiary"), and each of
Mid-America Group, Ltd., Xxxxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxxx X.
Xxxxx, Xxxx Xxx Xxxxxxx, Xxxxx X. Xxxxxxx, Xxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxx,
Xxxxxxx X. Xxxxxxx, Xxxxx X. Xxxx, Xxxxx X. XxxXxxxxx Xx., Xxxxxxx X. Xxxxxx,
Xxxxxxxx X. Xxxxx, and Xxxxxxx X. Park (each in his individual capacity, a
"Stockholder", and collectively, the "Stockholders").
WITNESSETH
WHEREAS, each of the Stockholders is, as of the date hereof,
the record and beneficial owner of that number of shares of Class A Common
Stock, par value $.0001 per share (the "Company Common Stock"), of Xxxxxxx
Container Corporation, a Delaware corporation (the "Company"), set forth on
Schedule 1(a) hereto;
WHEREAS, Parent, Merger Subsidiary and the Company
concurrently with the execution and delivery of this Agreement are entering into
an Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), providing for, among other things, the acquisition of the Company
by Parent by means of a cash tender offer (the "Offer") for all of the
outstanding shares of Company Common Stock and for the subsequent merger (the
"Merger") of Merger Subsidiary with and into the Company upon the terms and
subject to the conditions set forth in the Merger Agreement; and
WHEREAS, as a condition to the willingness of Parent and
Merger Subsidiary to enter into the Merger Agreement, and in order to induce
Parent and Merger Subsidiary to enter into the Merger Agreement, the
Stockholders have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the execution and delivery
by Parent and Merger Subsidiary of the Merger Agreement and the foregoing and
the
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mutual representations, warranties, covenants and agreements contained herein
and therein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Representations and Warranties of the Stockholders.
Each of the Stockholders hereby represents and warrants to Parent and Merger
Subsidiary, severally and not jointly, as follows:
(a) Such Stockholder is the record and beneficial
owner of the shares of Company Common Stock (as may be adjusted from time to
time pursuant to Section 6 hereof, the "Shares") set forth opposite his name on
Schedule 1(a) to this Agreement and such Shares represent all of the Shares
beneficially owned (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) by such Stockholder. For
purposes of this Agreement, the term "Shares" shall include any shares of
Company Common Stock issued to the Stockholder upon exercise of any stock
options that are currently exercisable or become exercisable, restricted stock
and any other shares of Company Common Stock such Stockholder may acquire or
beneficially own during the term of this Agreement. Schedule 1(a) lists all
options and shares of restricted stock issued to the Stockholders.
(b) Such Stockholder has all requisite power and
authority and, if an individual, the legal capacity, to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been validly executed and delivered by such Stockholder and, assuming that
this Agreement constitutes the legal, valid and binding obligation of the other
parties hereto, constitutes the legal, valid and binding obligation of
Stockholder, enforceable against such Stockholder in accordance with its terms.
(c) The execution and delivery of this Agreement by
such Stockholder do not, and the consummation of the transactions contemplated
by and compliance with the provisions of this Agreement will not, (i) conflict
with the Certificate of Incorporation or By-laws or similar organizational
documents of such Stockholder as presently in effect (in the case of a
Stockholder that is a legal entity), (ii) conflict with or violate any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to such
Stockholder or by which it is bound or affected, (iii) result in any breach of
or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, contract, indenture,
note or instrument to which such Stockholder is a party or by which it is
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bound or affected, except for such breaches, defaults or other occurrences that
would not prevent or materially delay the performance by Stockholder of such
Stockholder's obligations under this Agreement, or (iv) except for applicable
requirements, if any, of the Exchange Act, require any filing by such
Stockholder with, or any permit, authorization, consent or approval of, any
governmental or regulatory authority, except where the failure to make such
filing or obtain such permit, authorization, consent or approval would not
prevent or materially delay the performance by Stockholder of such Stockholder's
obligations under this Agreement.
(d) The Shares and the certificates representing the
Shares owned by such Stockholder are now and at all times during the term hereof
will be held by such Stockholder, or by a nominee or custodian for the benefit
of such Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder.
(e) As of the date hereof, neither the Stockholder,
nor any of its respective properties or assets is subject to any order, writ,
judgment, injunction, decree, determination or award that would prevent or delay
the consummation of the transactions contemplated hereby.
(f) There are no options or rights to acquire, or any
agreements to which the Stockholder is a party relating to any of the Shares,
other than as set forth in this Agreement.
(g) Except as set forth on Schedule 1(g), no
Stockholder, directly or indirectly, owns any of the Company's 9-3/8% Senior
Notes due 2007, 9-3/4% Senior Notes due 2007 or 9-7/8% Senior Subordinated Notes
due 2008 (collectively, the "Notes").
Section 2. Representations and Warranties of Parent and Merger
Subsidiary. Each of Parent and Merger Subsidiary hereby, jointly and severally,
represents and warrants to the Stockholders as follows:
(a) Each of Parent and Merger Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each of Parent and Merger Subsidiary has all requisite
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby,
and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agree-
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ment. This Agreement has been duly executed and delivered by each of Parent and
Merger Subsidiary and constitutes the legal, valid and binding obligation of
each of Parent and Merger Subsidiary, enforceable against each of them in
accordance with its terms.
(b) The execution and delivery of this Agreement by
each of Parent and Merger Subsidiary do not, and the consummation of the
transactions contemplated by and compliance with the provisions of this
Agreement will not, (i) conflict with or violate the Certificate of
Incorporation or By-laws of either of Parent or Merger Subsidiary, in each case
as amended to the date of this Agreement, (ii) conflict with or violate any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Parent or Merger Subsidiary or by which either is bound or affected, (iii)
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, contract, indenture, note or instrument to which Parent or Merger
Subsidiary is a party or by which either is bound or affected or (iv) except for
applicable requirements, if any, of the HSR Act and the Exchange Act or any
foreign antitrust and competition laws and regulations, require any filing by
Parent or Merger Subsidiary with, or any permit, authorization, consent or
approval of, any governmental or regulatory authority.
Section 3. Purchase and Sale of the Shares. Each of the
Stockholders hereby agrees that it shall tender the Shares into the Offer
promptly, and in any event no later than the tenth business day following the
commencement of the Offer pursuant to Section 1.1 of the Merger Agreement, and
that such Stockholder shall not withdraw any Shares so tendered unless the Offer
is terminated or has expired. Merger Subsidiary hereby agrees to purchase all
the Shares so tendered at a price per Share equal to the Merger Consideration
(as defined in the Merger Agreement) or any higher price that may be paid in the
Offer; provided, however, that Merger Subsidiary's obligation to accept for
payment and pay for the Shares in the Offer is subject to all the terms and
conditions of the Offer set forth in the Merger Agreement and Annex I thereto.
Section 4. Restrictions on Dispositions. Prior to the
termination of this Agreement, except as otherwise provided herein, none of the
Stockholders shall: (i) directly or indirectly, transfer (which term shall
include, without limitation, for the purposes of this Agreement, any sale, gift,
pledge or other disposition), or consent to any transfer of, any or all of the
Shares or any interest therein; (ii) enter into any contract, option or other
agreement or understanding with respect to any transfer of
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any or all of the Shares or any interest therein; (iii) grant any proxy,
power-of-attorney or other authorization or consent in or with respect to the
Shares; (iv) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Shares or (v) take any other action
that would in any way restrict, limit or interfere with the performance of such
Stockholder's obligations hereunder or the transactions contemplated hereby.
Section 5. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each of the Stockholders hereby irrevocably
grants to, and appoints, Parent and any nominee thereof, its proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Stockholder, to vote the Shares, or grant a consent or
approval in respect of the Shares, in connection with any meeting of the
stockholders of the Company (i) in favor of the Merger, and (ii) against any
action or agreement which would impede, interfere with or prevent the Merger,
including any other extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company and a third party or any
other proposal of a third party to acquire the Company.
(b) Such Stockholder represents that any proxies
heretofore given in respect of the Shares, if any, are not irrevocable, and that
such proxies are hereby revoked.
(c) Such Stockholder hereby affirms that the
irrevocable proxy set forth in this Section 5 is given in connection with the
execution of the Merger Agreement, and that such irrevocable proxy is given to
secure the performance of the duties of such Stockholder under this Agreement.
Such Stockholder hereby further affirms that the irrevocable proxy is coupled
with an interest and, except as set forth in Section 8 hereof, is intended to be
irrevocable in accordance with the provisions of Section 212(e) of the Delaware
General Corporation Law.
Section 6. Adjustments Upon Share Issuances, Changes in
Capitalization, etc. In the event of any change in Company Common Stock or in
the number of outstanding shares of Company Common Stock by reason of a stock
dividend, split-up, recapitalization, combination, exchange of shares or similar
transaction or any other change in the corporate or capital structure of the
Company (including, without limitation, the declaration or payment of an
extraordinary dividend of cash, securities or other property), the number of
Shares shall be adjusted appropriately, and this Agreement and the obligations
hereunder shall attach to any additional shares of
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Company Common Stock or other securities or rights of the Company issued to or
acquired by each of the Stockholders.
Section 7. Tender of Notes. Each of the Stockholders listed on
Schedule 1(g) hereto hereby agrees that it shall tender promptly its Notes into
the separate tender offers for the Notes (the "Notes Tender Offers") being made
by Parent or its designee concurrently with the Offer pursuant to the Offer to
Purchase and Consent Solicitation Statement dated September 28, 2001 (as amended
or supplemented from time to time, the "Notes Offer to Purchase"), and in any
event no later than the tenth business day following the commencement of the
Notes Tender Offers pursuant to Section 1.2 of the Merger Agreement, and that
such Stockholder shall not withdraw any Notes so tendered unless the Notes
Tender Offers are terminated or have expired. Parent or its designee hereby
agrees to purchase all the Notes so tendered at a purchase price (per $1,000
principal amount) as set forth in the Notes Offer to Purchase or any higher
price that may be paid in the Notes Tender Offers; provided, however, that
Parent's or its designee's obligation to accept for payment and pay for the
Notes in the Notes Tender Offers is subject to all the terms and conditions of
the Notes Tender Offers set forth in the Merger Agreement and Annex I thereto.
Section 8. Further Assurances. Each of the Stockholders shall,
upon request of Parent or Merger Subsidiary, execute and deliver any additional
documents and take such further actions as may reasonably be deemed by Parent or
Merger Subsidiary to be necessary or desirable to carry out the provisions
hereof and to vest the power to vote the Shares as contemplated by Section 5
hereof in Parent.
Section 9. Termination. This Agreement, and all rights and
obligations of the parties hereunder and the proxies provided hereby, shall
terminate immediately upon the earlier of (a) the termination of the Merger
Agreement in accordance with its terms, (b) the Effective Time (as defined in
the Merger Agreement), or (c) the written mutual consent of the parties hereto;
provided, however, that Section 10 shall survive any termination of this
Agreement.
Section 10. Expenses. All costs and expenses incurred in
connection with this Agreement and the consummation of the transactions
contemplated hereby shall paid by the party incurring such costs or expenses.
Section 11. Miscellaneous.
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(a) Definitions. Capitalized terms used and not
otherwise defined in this Agreement shall have the respective meanings assigned
to such terms in the Merger Agreement.
(b) Amendment. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto and specifically
referencing this Agreement.
(c) Notices. All notices, requests and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) or by telecopy (with copies by overnight courier) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
i. if to Parent or Merger Subsidiary, to
Temple-Inland Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: M. Xxxxxxx Xxxxxx, Esq.
Fax: 000-000-0000
with a copy to (which shall not constitute notice):
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: 000-000-0000
ii. if to the Stockholders, to
Xxxxxxx Container Corporation
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Fax: 000-000-0000
with a copy to (which shall not constitute notice):
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Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Xxxx X. Xxxxxxxxxx
Fax: 000-000-0000
(d) Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
(e) Entire Agreement; No Third-Party Beneficiaries.
This Agreement and the Merger Agreement (including the documents and the
instruments referred to herein and therein): (i) constitute the entire agreement
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, and (ii) are not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
(f) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
(g) Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties; any instrument purporting to
make such assignment shall be void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
(h) Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of Delaware or in Delaware state court, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (i) consents to submit itself to
the personal jurisdiction of any Federal court located in
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the State of Delaware or any Delaware state court in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement, (ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (iii)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
Federal or state court sitting in the State of Delaware.
(i) Severability. Any term or provision of this
Agreement that is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that the
court making such determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to delete specific
words or phrases, or to replace any invalid, void or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.
[Signature pages follow]
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IN WITNESS WHEREOF, Parent, Merger Subsidiary and the
Stockholders have caused this Agreement to be duly executed and delivered as of
the date first written above.
TEMPLE-INLAND INC.
By: /s/ M. Xxxxxxx Xxxxxx
---------------------------------
Name: M. Xxxxxxx Xxxxxx
Title: Vice President and Chief
Administrative Officer
TEMPLE-INLAND ACQUISITION CORPORATION
By: /s/ M. Xxxxxxx Xxxxxx
---------------------------------
Name: M. Xxxxxxx Xxxxxx
Title: Vice President
MID-AMERICA GROUP, LTD.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman and Chief
Executive Officer
/s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
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/s/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxx Xxx Xxxxxxx
------------------------------------
Xxxx Xxx Xxxxxxx
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxx
/s/ Xxxxx X. XxxXxxxxx, Xx.
-------------------------------------
Xxxxx X. XxxXxxxxx, Xx.
12
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Park
-------------------------------------
Xxxxxxx X. Park
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SCHEDULE 1(a)
OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY
SHARES UNDER
SHARES OF CLASS A SHARES OF UNEXERCISED
SHAREHOLDER COMMON STOCK RESTRICTED STOCK OPTION GRANTS
----------- --------------- ---------------- -------------
Mid-America Group, Ltd. 4,589,942
Xxxxxx X. Xxxxxxxxx 40,000
Xxxxxx X. Xxxxxxx 883,186 28,000
Xxxxxx X. Xxxxx 77,250 270,000 180,000
Xxxx Xxx Xxxxxxx 3,008 28,000
Xxxxx X. Xxxxxxx 25,000 28,000
Xxxx X. Xxxxxxxx 21,500 28,000
Xxxxx X. Xxxxxxx 2,000 28,000
Xxxxxxx X. Xxxxxxx 28,000
Xxxxx X. Xxxx 10,000 21,000
Xxxxx X. XxxXxxxxx Xx. 40,000 28,000
Xxxxxxx X. Xxxxxx 98,570 310,000 90,000
Xxxxxxxx X. Xxxxx 44,000 135,000 90,000
Xxxxxxx X. Park 41,024 82,000 60,000
--------- ------- ---------
Totals 5,875,480 797,000 637,000
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SCHEDULE 1(g)
OWNERSHIP OF DEBT SECURITIES OF THE COMPANY
Xxxx X. Xxxxxxxx owns $30,000 principal amount of the Company's 9-3/4% Senior
Notes due 2007.
