SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT ("Agreement") is made and entered into as of
the 22nd day of November, 1998, by and between [Name of Director] (the
"Shareholder"), and Xxxx'x Companies, Inc., a corporation organized and
existing under the laws of the State of North Carolina ("Lowe's").
On even date herewith, Lowe's, Mariner Merger Corporation ("Merger
Corporation") and Eagle Hardware & Garden, Inc., a corporation organized and
existing under the laws of the State of Washington ("Eagle"), have entered
into an Agreement and Plan of Merger (the "Merger Agreement"). The Merger
Agreement generally provides for the merger of Merger Corporation with and
into Eagle ("Merger"), and the conversion of the issued and outstanding
shares of common stock, without par value, of Eagle ("Eagle Common Stock")
into shares of the $0.50 par value common stock of Lowe's. The transactions
contemplated by the Merger Agreement are subject to the approval of the
shareholders of Eagle, the receipt of certain regulatory approvals and the
satisfaction of other conditions.
The Shareholder is the owner of shares of Eagle Common Stock which he
has the exclusive right to vote ("Shares"). In order to induce Lowe's to
enter into the Merger Agreement, the Shareholder is entering into this
Agreement with Lowe's to set forth certain terms and conditions governing the
actions to be taken by the Shareholder with respect to the Shares until
consummation of the Merger.
NOW, THEREFORE, to induce Lowe's to enter into, and in consideration of
its entering into, the Merger Agreement, and in consideration of the
transactions contemplated by the Merger Agreement and the mutual promises and
covenants contained herein, the parties agree as follows:
1. AGREEMENT TO VOTE SHARES. The Shareholder agrees during the
term of this Agreement to vote the Shares as to which he has voting power or
control, in person or by proxy, in favor of the approval of the Merger
Agreement at every meeting of the shareholders of Eagle at which such matters
are considered and at every adjournment thereof (each, a "Shareholder
Meeting").
2. NO OTHER GRANT OF PROXY. The Shareholder will not, directly
or indirectly, grant any proxies or powers of attorney with respect to the
Shares to any individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or
other entity (each, a "person") other than Lowe's or any person designated in
writing by Lowe's.
3. NO VOTING TRUSTS. The Shareholder agrees that the
Shareholder will not, nor will the Shareholder permit any entity under the
Shareholder's control to, deposit any of the Shareholder's Shares in a voting
trust or subject any of its Shares to any arrangement with respect to the
voting of the Shares inconsistent with this Agreement.
4. AFFILIATE AGREEMENT. If, at the time the Merger Agreement is
submitted for approval to the shareholders of Eagle, the Shareholder is an
"affiliate" of Eagle for purposes of qualifying the Merger for
pooling-of-interests accounting treatment under Opinion 16 of the Accounting
Principles Board and applicable SEC rules, regulations and interpretations
thereunder, the Shareholder shall deliver to Lowe's at least 30 days prior to
the Closing Date a written agreement substantially in the form attached as
Exhibit 3 to the Merger Agreement.
5. ENFORCEMENT. The Shareholder acknowledges and agrees that
Lowe's could not be made whole by monetary damages in the event of any
default by the Shareholder of the terms and conditions set forth in this
Agreement. It is accordingly agreed and understood that Lowe's in addition to
any other remedy which it may have at law or in equity, shall be entitled to
an injunction or injunctions to prevent breaches of this Agreement and
specifically to enforce the terms and provisions hereof in any action
instituted in any court of the United States or in any state having
appropriate jurisdiction.
6. TERM AND TERMINATION. Subject to Section 10(f), the term of
this Agreement shall commence on the date hereof, and such term and this
Agreement shall terminate upon the earlier to occur of (i) the Effective Time
and (ii) the date on which the Merger Agreement is terminated in accordance
with its terms. Upon such termination, no party shall have any further
obligations or liabilities hereunder.
7. CERTAIN EVENTS. The Shareholder agrees that this Agreement
and the obligations hereunder shall attach to the Shareholder's Shares and
shall be binding upon any person to which legal or beneficial ownership of
such Shares shall pass, whether by operation of law or otherwise, including
the Shareholder's heirs, guardians, administrators or successors. The
Shareholder agrees that any transfer by the Shareholder of beneficial
ownership of such Shares shall comply with any applicable laws. In the event
of any stock split, stock dividend, merger, reorganization, recapitalization
or other change in the capital structure of Eagle affecting the Eagle Common
Stock, or the acquisition of additional shares of Eagle Common Stock or other
voting securities of Eagle by the Shareholder (including by exercise of
options), this Agreement and the obligations hereunder shall attach to any
additional shares of Eagle Common Stock or other voting securities of Eagle
issued to or acquired by such Shareholder.
8. SHAREHOLDER CAPACITY. The Shareholder makes no agreement
herein in his or her capacity as a director or officer of Eagle. Without
limiting the generality of the foregoing, the Shareholder signs solely in his
or her capacity as the record and/or beneficial owner, as applicable, of the
Shareholder's Shares and nothing herein shall limit or affect any actions
taken by the Shareholder in his or her capacity as an officer or director of
Eagle in exercising Eagle's rights under the Merger Agreement.
9. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES; AMENDMENT;
WAIVER. This Agreement (including the documents and instruments referred to
herein) (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, written or oral, among the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon
any person other than the parties hereto any rights or remedies hereunder.
This Agreement may not be
amended, supplemented or modified, and no provisions hereof may be modified
or waived, except by an instrument in writing signed by each of the parties
hereto. No waiver of any provisions hereof by any party shall be deemed a
waiver of any other provisions hereof by any such party, nor shall any such
waiver be deemed a continuing waiver of any provision hereof by such party.
10. MISCELLANEOUS.
(a) When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. Wherever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation."
(b) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Washington regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws.
(c) If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner and to the end that the transactions contemplated hereby are fulfilled
to the extent possible.
(d) 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 of the counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that each party need not sign the same counterpart.
(e) Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by the Shareholder, on the one
hand, without the prior written consent of Lowe's, nor by Lowe's, on the
other hand, without the prior written consent of the Shareholder, except that
Lowe's may assign, in its sole discretion, any or all of its rights,
interests and obligations hereunder to any direct or indirect wholly owned
subsidiary of Lowe's. 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.
(f) The obligations of the Shareholder set forth in this
Agreement shall not be effective or binding upon the Shareholder until after
such time as the Merger Agreement is executed and delivered by Lowe's and
Eagle. Nothing contained in this Agreement shall be construed as containing
any liability on the part of the Shareholder under the Merger Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the undersigned as of the day and year first above written.
_____________________________________
Name: [Name of Director]
ATTEST: XXXX'X COMPANIES, INC.
By:__________________________________
Chief Executive Officer
