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EXHIBIT E-1
PRINCIPAL SHAREHOLDERS AGREEMENT
CONTAINING A VOTING AGREEMENT AND AN IRREVOCABLE PROXY
BY AND AMONG
DEVON ENERGY CORPORATION
XXXXXX X. XXXXXXXX
AND
XXXXXXX XXXXX XXXXXXXX
Dated as of August 13, 2001
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PRINCIPAL SHAREHOLDERS AGREEMENT
This PRINCIPAL SHAREHOLDERS AGREEMENT (this "Agreement") dated as of
August 13, 2001, by and among Devon Energy Corporation, a Delaware corporation
("Parent"), Xxxxxx X. Xxxxxxxx and Xxxxxxx Xxxxx Xxxxxxxx each being
shareholders (each, a "Shareholder") of Xxxxxxxx Energy & Development Corp., a
Texas corporation (the "Company").
W I T N E S S E T H:
WHEREAS, Parent, Devon Newco Corporation, a Delaware corporation and a
wholly owned subsidiary of Parent, and the Company propose to enter into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), pursuant to which the Company will merge with and into Sub with Sub
surviving as a wholly owned subsidiary of Parent;
WHEREAS, as of the date hereof, each Shareholder "beneficially owns"
(as such term is defined in Rule 13d-3 promulgated under the Exchange Act) and
each Shareholder is entitled to dispose of (or to direct the disposition of) and
to vote (or to direct the voting of) the number of shares of Class A Common
Stock, par value $0.10 per share of the Company (the "Common Stock") set forth
opposite the Shareholder's name on Annex A hereto, as such shares may be
adjusted by stock dividend, stock split, recapitalization, combination, merger,
consolidation, reorganization or other change in the capital structure of the
Company affecting the Common Stock (such shares of Common Stock, together with
any other shares of Common Stock the voting power over which is acquired by the
Shareholders during the period from and including the date hereof through and
including the date on which this Agreement is terminated in accordance with its
terms, are collectively referred to herein as the Shareholder's "Subject
Shares"); and
WHEREAS, prior to the execution and delivery of this Agreement by any
party hereto, Parent has purchased from Xxxxxx X. Xxxxxxxx 100 shares of Common
Stock (the "Purchased Shares"); and
WHEREAS, as a condition to the willingness of Parent to enter into the
Merger Agreement, and as an inducement and in consideration therefor, Parent has
required that each Shareholder agrees, and each Shareholder has agreed, to enter
into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. For purposes of this Agreement, capitalized
terms used and not defined herein shall have the respective meanings ascribed to
them in the Merger Agreement.
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ARTICLE II
VOTING AGREEMENT AND IRREVOCABLE PROXY
SECTION 2.1 AGREEMENT TO VOTE THE SUBJECT SHARES. Each Shareholder, in
its capacity as such, hereby agrees that during the period commencing on the
date hereof and continuing until the termination of this Agreement (such period,
the "Voting Period"), at any meeting (or any adjournment or postponement
thereof) of the holders of any class or classes of the capital stock of the
Company, however called, or in connection with any written consent of the
holders of any class or classes of the capital stock of the Company, the
Shareholders shall vote (or cause to be voted) their Subject Shares (x) in favor
of the approval of the terms of the Merger Agreement and each of the other
transactions contemplated by the Merger Agreement (and any actions required in
furtherance thereof) at every meeting of the shareholders of the Company (or in
connection with any written consent) at which such matters are considered and at
every adjournment thereof, (y) against any action, proposal, transaction or
agreement that would result in a breach in any respect of any covenant,
representation or warranty or any other obligation or agreement of the Company
or any of its subsidiaries under the Merger Agreement or of the Shareholders
under this Agreement, and (z) except as otherwise agreed to in writing in
advance by Parent, against the following actions or proposals (other than the
transactions contemplated by the Merger Agreement): (i) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving the Company or any of its subsidiaries and any Company
Acquisition Proposal; (ii) a sale, lease or transfer of a significant part of
the assets of the Company or any of its subsidiaries, or a reorganization,
recapitalization, dissolution or liquidation of the Company or any of its
subsidiaries (each of the actions in clauses (i) or (ii), a "Business
Combination"); and (iii) (A) any change in the persons who constitute the board
of directors of the Company that is not approved in advance by at least a
majority of the persons who were directors of the Company as of the date of this
Agreement (or their successors who were so approved); (B) any change in the
present capitalization of the Company or any amendment of the Company's articles
of incorporation or bylaws; (C) any other material change in the Company's
corporate structure or business; or (D) any other action or proposal involving
the Company or any of its subsidiaries that is intended, or could reasonably be
expected, to prevent, impede, interfere with, delay, postpone, or adversely
affect the transactions contemplated by the Merger Agreement. Any such vote
shall be cast or consent shall be given in accordance with such procedures
relating thereto as shall ensure that it is duly counted for purposes of
determining that a quorum is present and for purposes of recording the results
of such vote or consent. Each of the Shareholders agrees not to enter into any
agreement, letter of intent, agreement in principle or understanding with any
person that violates or conflicts with or could reasonably be expected to
violate or conflict with the provisions and agreements contained in this
Agreement or the Merger Agreement. For the avoidance of doubt, this Agreement is
intended to constitute a voting agreement entered into under Section B, Article
2.30 of the TBCA for the duration of the Voting Period.
SECTION 2.2 GRANT OF IRREVOCABLE PROXY. Each Shareholder hereby
appoints Parent and any designee of Parent, and each of them individually, such
Shareholder's proxy and attorney-in-fact, with full power of substitution and
resubstitution, to vote or act by written consent during the Voting Period with
respect to each of the Shareholders' Subject Shares in accordance with Section
2.1. This proxy is given to secure the performance of the duties of each of the
Shareholders under this Agreement. The Shareholders shall promptly cause a copy
of this
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Agreement to be deposited with the Company at its principal place of business.
Each Shareholder shall take such further action or execute such other
instruments as may be necessary to effectuate the intent of this proxy.
SECTION 2.3 NATURE OF IRREVOCABLE PROXY. The proxy and power of
attorney granted pursuant to Section 2.2 by each Shareholder shall be
irrevocable during the term of this Agreement, shall be deemed to be coupled
with an interest sufficient in law to support an irrevocable proxy and shall
revoke all prior proxies granted by the Shareholders. The power of attorney
granted herein is a durable power of attorney and shall survive the dissolution,
bankruptcy, death or incapacity of each Shareholder. For the avoidance of doubt,
the proxy and power of attorney is granted pursuant to Section C, Article 2.29
of the TBCA, is coupled with an interest and is granted to Parent as a
shareholder of the Company and a party to this voting agreement which is created
under Section B, Article 2.30 of the TBCA and is intended to be valid during the
Voting Period, which the parties understand and agree may be more than eleven
months from the date hereof.
SECTION 2.4 LEGEND. Each Shareholder shall promptly cause the
following legend to be conspicuously noted on each certificate representing its
Subject Shares:
"The shares represented by this certificate are subject to a
Principal Shareholders Agreement dated as of August 13, 2001.
The Principal Shareholders Agreement restricts the
transferability of the shares represented by this certificate
and includes a voting agreement and an irrevocable proxy to
vote the shares represented by this certificate."
ARTICLE III
COVENANTS
SECTION 3.1 GENERALLY. Except for pledges in existence as of the date
hereof, each Shareholder agrees that, except as contemplated by the terms of
this Agreement, it shall not (i) sell, transfer, tender, pledge, encumber,
assign or otherwise dispose of, or enter into any contract, option or other
agreement with respect to, or consent to, the sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of, any or all of its Subject
Shares; (ii) grant any proxies or powers of attorney in respect of the Subject
Shares, deposit any of its Subject Shares into a voting trust or enter into a
voting agreement with respect to any of its Subject Shares; and (iii) take any
action that would have the effect of preventing, impeding, interfering with or
adversely affecting its ability to perform its respective obligations under this
Agreement. Notwithstanding the foregoing, nothing herein shall prevent the
Shareholders from assigning or transferring any Subject Shares beneficially
owned by either of them to any trust, estate, family partnership, foundation or
charitable organization (a "Permitted Transferee") if such Permitted Transferee
agrees in writing to be bound by all of the provisions of this Agreement as a
Shareholder hereunder.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Each of the Shareholders hereby represents and warrants to Parent as
follows:
SECTION 4.1 DUE AUTHORITY. Each Shareholder has the capacity to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
SECTION 4.2 OWNERSHIP OF SHARES. Each Shareholder legally or
beneficially owns the number of shares of Common Stock set forth opposite their
name on Annex A hereto. The number of shares of Common Stock set forth opposite
their name on Annex A hereto are all of the shares of Common Stock legally or
beneficially owned by them. Each Shareholder has sole voting power and sole
power of disposition, in each case with respect to all of shares of Common Stock
set forth opposite his or her name on Annex A hereto, with no limitations,
qualifications or restrictions on such rights, subject only to applicable
securities laws and the terms of this Agreement and as otherwise noted on
Annex A.
SECTION 4.3 NO CONFLICTS. (i) No filing with any governmental
authority, and no authorization, consent or approval of any other person is
necessary for the execution of this Agreement by the Shareholders and the
consummation by the Shareholders of the transactions contemplated hereby and
(ii) none of the execution and delivery of this Agreement by the Shareholders,
the consummation by the Shareholders of the transactions contemplated hereby or
compliance by the Shareholders with any of the provisions hereof shall (A)
result in, or give rise to, a violation or breach of or a default under any of
the terms of any material contract, understanding, agreement or other instrument
or obligation to which either Shareholder is a party or by which either
Shareholder or any of his or her Subject Shares or assets may be bound, or (B)
violate any applicable order, writ, injunction, decree, judgment, statute, rule
or regulation which could reasonably be expected to adversely affect the
Shareholder's ability to perform its obligations under this Agreement.
SECTION 4.4 TITLE TO PURCHASED SHARES. The transfer by Xxxxxx X.
Xxxxxxxx of the Purchased Shares to Parent has passed to and unconditionally
vested in Parent good and valid title to all of the Purchased Shares, free and
clear of all claims, Liens, restrictions, limitations and encumbrances
whatsoever, other than any such encumbrances created by Parent.
SECTION 4.5 RELIANCE BY PARENT. Each Shareholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance upon
the execution and delivery of this Agreement by such Shareholder.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to each Shareholder as follows:
SECTION 5.1 DUE ORGANIZATION, ETC. Parent is a company duly organized
and validly existing under the laws of the jurisdiction of its incorporation.
Parent has all necessary corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of
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the transactions contemplated hereby by Parent has been duly authorized by all
necessary action on the part of Parent and, assuming its due authorization,
execution and delivery by each Shareholder constitutes a valid and binding
obligation of Parent, enforceable against Parent in accordance with its terms,
except to the extent that its enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles.
SECTION 5.2 CONFLICTS. (i) No filing with any governmental authority,
and no authorization, consent or approval of any other person is necessary for
the execution of this Agreement by Parent and the consummation by Parent of the
transactions contemplated hereby and (ii) none of the execution and delivery of
this Agreement by Parent, the consummation by Parent of the transactions
contemplated hereby shall (A) conflict with or result in any breach of the
organizational documents of Parent, (B) result in a violation or breach of or a
default under any of the terms of any material contract, understanding,
agreement or other instrument or obligation to which Parent is a party or by
which Parent or any of its assets may be bound, or (C) violate any applicable
order, writ, injunction, decree, judgment, statute, rule or regulation which
could reasonably be expected to adversely affect Parent's ability to perform its
obligations under this Agreement.
SECTION 5.3 RELIANCE BY SHAREHOLDER. Parent understands and
acknowledges that each Shareholder is entering into this Agreement in reliance
upon the execution and delivery of the Merger Agreement by Parent.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 SHAREHOLDER CAPACITY. No Shareholder executing this
Agreement who is or becomes during the term hereof a director or officer of the
Company makes any agreement or understanding herein in his or her capacity as
such director or officer. Each Shareholder executes this Agreement solely in his
or her capacity as the record holder or beneficial owner of his or her Subject
Shares and nothing herein shall limit or affect any actions taken by a
Shareholder in his or her capacity as an officer or director of the Company.
SECTION 6.2 PUBLICATION. Each Shareholder hereby permits Parent to
publish and disclose in the Proxy Statement/Prospectus (including all documents
and schedules filed with the Securities and Exchange Commission) its identity
and ownership of shares of Common Stock and the nature of its commitments,
arrangements, and understandings pursuant to this Agreement.
SECTION 6.3 FURTHER ACTIONS. Each of the parties hereto agrees that it
will use its best efforts to do all things necessary to effectuate this
Agreement.
SECTION 6.4 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein and supersedes all prior agreements and understandings, oral and written,
with respect thereto.
SECTION 6.5 BINDING EFFECT; BENEFIT; ASSIGNMENT. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
Permitted Transferees, heirs, estates
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and successors. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, except by
will or by the laws of descent and distribution, without the prior written
consent of each of the other parties, except that each of Parent and Sub may
assign and transfer its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of Parent. Nothing in this Agreement, expressed
or implied, is intended to confer on any person, other than the parties hereto,
any rights or remedies.
SECTION 6.6 AMENDMENTS, WAIVERS, ETC. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by all of
the relevant parties hereto.
SECTION 6.7 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by facsimile
(upon confirmation of receipt), as follows:
(i) If to any Shareholder, to such Shareholder at the
address set forth immediately beneath such
Shareholder's name on Annex A:
with a copy (which shall not constitute notice) to:
Bracewell & Xxxxxxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx III
Fax: (000) 000-0000
(ii) If to Parent, to it at:
Devon Energy Corporation
00 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: J. Xxxxx Xxxxxxx
Fax: (000) 000-0000
and
Duke X. Xxxxx
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
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or to such other person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery, except for a notice of a change of address, which shall be effective
only upon receipt thereof.
SECTION 6.8 SPECIFIC 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. Accordingly, 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, this being in addition to any other
remedy to which they are entitled at law or in equity.
SECTION 6.9 REMEDIES CUMULATIVE. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
SECTION 6.10 NO WAIVER. The failure of any party hereto to exercise
any right, power or remedy provided under this Agreement or otherwise available
in respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
SECTION 6.11 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS. EACH OF THE SHAREHOLDERS AND PARENT HEREBY IRREVOCABLY AND
UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
COMPETENT COURTS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA, IN
EITHER CASE LOCATED IN DALLAS COUNTY, TEXAS (THE "TEXAS COURTS") FOR ANY
LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE ANY LITIGATION RELATING THERETO
EXCEPT IN SUCH COURTS), WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION IN THE TEXAS COURTS AND AGREES NOT TO PLEAD OR CLAIM IN ANY TEXAS
COURT THAT SUCH LITIGATION BROUGHT THEREIN HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
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SECTION 6.12 HEADINGS. The descriptive headings of this Agreement are
inserted for convenience only, do not constitute a part of this Agreement and
shall not affect in any way the meaning or interpretation of this Agreement.
SECTION 6.13 COUNTERPARTS; FACSIMILES. This Agreement may be executed
in several counterparts, each of which shall be deemed to be an original, and
all of which together shall be deemed to be one and the same instrument. A
signature transmitted by facsimile shall be treated for all purposes by the
parties hereto as an original, shall be binding upon the party transmitting such
signature without limitation.
SECTION 6.14 TERMINATION. This Agreement shall terminate, and none of
Parent, Sub or any Shareholder shall have any rights or obligations hereunder
and this Agreement shall become null and void and have no effect upon the
earliest to occur of (a) the mutual consent of Parent, Sub and the Shareholder,
(b) the second anniversary of the date of this Agreement, (c) the Effective Time
or (d) the termination of the Merger Agreement (i) by Parent for any reason or
(ii) by the Company because of the failure of the conditions contained in
Sections 7.1(a)(ii), 7.1(b), 7.1(c), 7.1(d), 7.1(e) or 7.2 to have been
satisfied; provided, further, that termination of this Agreement shall not
prevent any party hereunder from seeking any remedies (at law or in equity)
against any other party hereto for such party's breach of any of the terms of
this Agreement. Notwithstanding the foregoing, Sections 6.4, 6.5, 6.7, 6.9 and
6.11 shall survive the termination of this Agreement.
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IN WITNESS WHEREOF, Parent and each Shareholder have caused this
Agreement to be duly executed as of the day and year first above written.
DEVON ENERGY CORPORATION
By: /s/ J. Xxxxx Xxxxxxx
-----------------------------------------
Name: J. Xxxxx Xxxxxxx
Title: Chairman, President and
Chief Executive Officer
THE SHAREHOLDERS
/s/Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
/s/Xxxxxxx Xxxxx Xxxxxxxx
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Xxxxxxx Xxxxx Xxxxxxxx
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TABLE OF CONTENTS
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[Intentionally Omitted]
ANNEX A
LIST OF SHAREHOLDERS AND OWNERSHIP
OF COMMON STOCK
NUMBER OF SHARES OF COMMON STOCK
SHAREHOLDER ADDRESS AS OF AUGUST 10, 2001
----------- ------- ---------------------
Xxxxxx X. Xxxxxxxx c/o J. Xxxx Xxxxxxxx 23,380,811(1)(2)(3)(4)
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Xxxxxxx Xxxxx Xxxxxxxx c/o J. Xxxx Xxxxxxxx 1,022,506(1)
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
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(1) Subject to shared power of spouse under applicable
Texas marital
property laws.
(2) Includes 404,666 shares of Common Stock which Xxxxxx X. Xxxxxxxx has
the right to acquire within 60 days on the exercise of stock options.
(3) 1,022,506 shares of Common Stock owned of record by Xxxxxxx Xxxxx
Xxxxxxxx. Xxxxxx X. Xxxxxxxx disclaims beneficial ownership of these
shares.
(4) Includes 5,888,998 shares of Common Stock which Xxxxxx X. Xxxxxxxx has
pledged with lenders to secure existing credit facilities. The
certificates representing these shares will not be stamped with the
legend referred to in Section 2.4.
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