EXHIBIT 99.3
VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement"), dated March 13, 1999 by and
between El Paso Energy Corporation, a Delaware corporation ("Parent"), and Xxxxx
X. Xxxxxx, in his individual capacity and in his capacity as trustee of the
Xxxxx X. Xxxxxx Trust, and Xxxxxxx Xxxxxx (collectively, the "Stockholders").
RECITALS
A. Parent and Sonat Inc., a Delaware corporation (the "Company"), are
entering into an Agreement and Plan Merger of even date herewith (the "Merger
Agreement") providing for, among other things, a business combination between
Parent and the Company.
B. As of the date of this Agreement, the Stockholders own beneficially
and of record the shares of common stock, par value $1.00 per share, of the
Company ("Company Common Stock"), set forth opposite their respective names on
Exhibit A (the shares of Company Common Stock owned by each Stockholder are
referred to as such Stockholder's "Owned Shares").
C. As an inducement and a condition to its willingness to enter into
the Merger Agreement, Parent has required that the Stockholders enter into this
Agreement.
D. Capitalized terms not defined herein shall have the meanings set
forth in the Merger Agreement.
E. This Agreement and the Merger Agreement are being entered into
simultaneously.
NOW, THEREFORE, in consideration of the execution and delivery by
Parent of the Merger Agreement and the mutual covenants, conditions and
agreements contained herein and therein, and intending to be legally bound
hereby, the parties agree as follows:
1. Voting Agreement. Each Stockholder hereby agrees that, during the
time this Agreement is in effect, at any meeting of the stockholders of the
Company (a "Company Stockholders' Meeting"), however called, and at every
adjournment or postponement thereof, he or it shall (i) appear at the meeting or
otherwise cause his or its Owned Shares, together with any shares of Company
Common Stock acquired by such Stockholder after the date of this Agreement,
whether upon the exercise of options, conversion of convertible securities or
otherwise (such acquired shares, together with such Stockholder's Owned Shares,
are referred to herein as his or its "Shares"), to be counted as present thereat
for purposes of establishing a quorum, or (ii) vote his or its Shares, or cause
his or its Shares to be voted, in favor of the approval and adoption of the
Merger Agreement and the transactions contemplated thereby, and any action
required in furtherance thereof, if the Merger Agreement (as in effect as of the
date hereof and amendments thereto that do not effect a change to the
transactions contemplated thereby as of the date hereof that would materially
and adversely affect the Stockholders) and the transactions contemplated thereby
are presented at the Company Stockholders' Meeting.
2. Irrevocable Proxy. As security for the Stockholders' obligations
under Section 1 hereof, each of the Stockholders hereby irrevocably constitutes
and appoints Parent as his or its attorney and proxy in accordance with the
provisions of Section 212(c) of the DGCL, with full power of substitution and
resubstitution, to vote the Shares at any Company Stockholders' Meeting, however
called, as and to the extent provided in clauses (i) and (ii) of Section 1
hereof. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED WITH AN
INTEREST. Each Stockholder hereby revokes all other proxies and powers of
attorney with respect to his or its Shares that he or it may have heretofore
appointed or granted, and no subsequent proxy or power of attorney shall be
granted (and if granted, shall not be effective) by any Stockholder with respect
thereto, other than for the sole purpose of voting Shares as contemplated by
Section 1 hereof.
3. Termination. This Agreement shall terminate upon the earliest to
occur of (i) the Effective Time and (ii) the termination of the Merger Agreement
in accordance with its terms.
4. Representations and Warranties of Parent. Parent represents and
warrants to the Stockholders as follows:
(a) Organization; Due Authorization; Enforceability. Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Parent has full corporate power and authority to
execute and deliver this Agreement. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of Parent, and no other corporate
proceedings on the part of Parent are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Parent and constitutes a valid and binding
agreement of Parent, enforceable against Parent in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and to general principles of equity.
(b) No Conflicts. No authorization, consent or approval of, or filing
with, any court or any public body or authority is necessary for the
consummation by Parent of the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement by Parent will not
constitute a breach, violation or default (or any event
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which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, or result in the
creation of any lien or encumbrance upon any of the properties or assets of
Parent under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which Parent is a party or by which its
properties or assets are bound, other than breaches, violations, defaults,
terminations, accelerations or creation of liens and encumbrances which, in the
aggregate, would not materially impair the ability of Parent to perform its
obligations hereunder.
5. Representations and Warranties of the Stockholders. Each Stockholder
hereby severally and not jointly represents and warrants to Parent as follows:
(a) Organization; Due Authorization; Enforceability. Such Stockholder
has full power and authority to execute and deliver this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of such Stockholder, and no other proceedings on
the part of such Stockholder are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by such Stockholder and constitutes a valid
and binding agreement of such Stockholder, enforceable against such Stockholder
in accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and to general
principles of equity.
(b) Ownership of Shares of Company Common Stock; Voting Rights. Except
as set forth on Exhibit A, such Stockholder owns, of record and beneficially,
the shares of Company Common Stock set forth opposite such Stockholder's name on
Exhibit A. Such Stockholder has sole voting power with respect to his or its
Owned Shares. Except pursuant to this Agreement or as set forth on Exhibit A,
such Stockholder's Owned Shares are not subject to any voting trust agreement or
other contract, agreement, arrangement, commitment or understanding restricting
or otherwise relating to the voting, dividend rights or disposition of such
Owned Shares.
(c) No Conflicts. No authorization, consent or approval of, or filing
with, any court or any public body or authority is necessary for the
consummation by such Stockholder of the transactions contemplated by this
Agreement. The execution, delivery and performance of this Agreement by such
Stockholder will not constitute a breach, violation or default (or any event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, or result in the
creation of any lien or encumbrance upon any of the properties or assets of such
Stockholder under, any note, bond, mortgage, indenture, deed of trust, license,
lease,
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agreement or other instrument to which such Stockholder is a party or by which
his or its properties or assets are bound, other than breaches, violations,
defaults, terminations, accelerations or creation of liens and encumbrances
which, in the aggregate, would not materially impair the ability of such
Stockholder to perform his or its obligations hereunder.
6. Covenants. Each Stockholder hereby severally covenants and agrees as
follows:
(a) Such Stockholder hereby agrees that, while this Agreement is in
effect, and except as contemplated hereby, (i) not to grant any proxies, powers
of attorney or other authorization or consent, deposit any shares of capital
stock of the Company into a voting trust or enter into a voting agreement with
respect to any such Shares and (ii) not to take any action that would make any
representation or warranty of such Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling such Stockholder from
performing his or its obligations under this Agreement.
(b) Such Stockholder hereby agrees, while this Agreement is in effect,
to promptly notify Parent of the number of new shares of capital stock acquired
by such Stockholder, if any, after the date of this Agreement.
(c) Such Stockholder shall immediately cease any discussions or
negotiations with any parties other than Parent that may be ongoing with respect
to a Takeover Proposal. While this Agreement is in effect, such Stockholder
shall not (i) solicit, initiate or encourage any inquiries or the making of any
Takeover Proposal, or (ii) participate in any discussions or negotiations
regarding any Takeover Proposal, except to the extent such discussions or
negotiations are participated in by the Stockholder in his capacity as a
director of the Company in accordance with the terms of the Merger Agreement.
7. Miscellaneous.
(a) Fees and Expenses. Except as otherwise provided in the Merger
Agreement, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be borne by the party incurring such
expenses.
(b) Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
(c) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ITS
CONFLICT OF LAWS RULES OR PRINCIPLES.
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(d) Notices. All notices or other communications under this Agreement
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by cable, telegram, telex or other
standard form of telecommunications, or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
If to a Stockholder:
to the address set forth
beneath the name of such
Stockholder on Exhibit A
If to Parent:
El Paso Energy Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy No: (000) 000-0000
With a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxxxx, Esq.
Xxxxxx xx Xxxx, Esq.
Telecopy No.: (000) 000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
(e) Assignment; Binding Effect; No Third Party Beneficiaries. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other party. Subject to the
preceding sentence, this Agreement (including the obligations of each
Stockholder under Sections 1 and 2 hereof) shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns. Notwithstanding anything contained in this Agreement to the contrary,
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
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(f) ENFORCEMENT. THE PARTIES HERETO 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, SUBJECT TO THE NEXT SENTENCE,THE PARTIES SHALL BE
ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OF THIS AGREEMENT
AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS HEREOF IN ANY COURT OF THE
UNITED STATES OR ANY STATE HAVING JURISDICTION, THIS BEING IN ADDITION TO ANY
OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. EACH OF THE PARTIES
HERETO (I) CONSENTS TO SUBMIT ITSELF TO THE PERSONAL JURISDICTION OF ANY FEDERAL
COURT LOCATED IN 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 SHALL 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 SHALL NOT BRING ANY ACTION RELATING TO THIS AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN ANY COURT OTHER
THAN A FEDERAL COURT SITTING IN THE STATE OF DELAWARE OR A DELAWARE STATE COURT.
(g) Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
(h) Registration Rights Agreement. Parent agrees and acknowledges that
the rights of the Stockholders set forth in the Registration Rights Agreement,
dated as of January 30, 1998, by and among the Company and the Stockholders and
the Xxxxx X. Xxxxxx (1996) Annuity Trust shall continue in effect after the
Effective Time, and after the Effective Time, Parent shall comply with the
obligations of the Company thereunder as if it were the Company.
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IN WITNESS WHEREOF, Parent and the Stockholders have caused this
Agreement to be duly executed as of the day and year first above written.
EL PASO ENERGY CORPORATION
By: /s/ Xxxxxxx Xxxxx Xx.
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Name: Xxxxxxx Xxxxx Xx.
Title: Executive Vice President
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, as trustee of the
Xxxxx X. Xxxxxx Trust
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
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EXHIBIT A
STOCKHOLDER SHARES(1) MARGIN(2)
Xxxxx X. Xxxxxx Trust 14,116,816 319,091
Two Houston Center
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Xxxxx X. Xxxxxx 2,100(3) --
Two Houston Center
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Xxxxxxx Xxxxxx 8,814,664(3) 412,364
Two Houston Center
909 Xxxxxx, Suite 2900
Xxxxxxx, Xxxxx 00000
(1) Includes shares held in such Stockholder's margin account.
(2) Such shares are held on a margin account subject to the terms of an
Individual Account Agreement between Xxxxxxx, Xxxxx & Co. and each
Stockholder.
(3) Includes 2,000 shares of restricted stock granted to such person under a
stock plan for directors on April 1, 1998. The 2,000 shares vest in
five equal increments of 400 shares each on each anniversary of the
original grant, provided that all shares vest immediately upon a
change of control of the Company. The Stockholder has the right to
vote all 2,000 shares.
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