EXHIBIT 1
CONFIDENTIAL
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (this "Agreement"), dated as of April 27,
2000, is entered into by Xxxxxx Xxxxx ("Xxxxx") and the parties listed on the
signature pages hereof, each of whom may be referred to severally as a
"Shareholder" and jointly as the "Shareholders."
W I T N E S S E T H:
WHEREAS, the Shareholders collectively own in excess of 30% of the Equity
Securities (herein defined) of OEC Compression Corporation, an Oklahoma
corporation (the "Company");
WHEREAS, the parties hereto desire to promote their mutual interests and
benefits by granting certain voting rights with respect to the Equity Securities
(herein defined) of the Company now owned or hereafter acquired (legally and
beneficially) by such Shareholder or by any other Shareholder Affiliate (the
"Shareholder Shares");
WHEREAS, the Other Shareholders desire to grant to Xxxxx the power to vote
any and all of their Equity Securities of the Company that they now own or
hereafter acquire (the "Other Shareholder Shares") in connection with the
election of directors (including the power to cast votes for the election of
Xxxxx to the board of directors of the Company); and
WHEREAS, each of the Shareholders understands that Xxxxx and each Other
Shareholder is relying upon the entry into and performance of his or its
agreements set forth below, agrees that they may so rely, and further agrees
that Xxxxx and such Other Shareholders would not enter into this Agreement in
the absence of the entry into and performance of such agreements by each
Shareholder:
NOW, THEREFORE, for and in consideration of the agreements below and the
consideration recited above, and in reliance upon the matters described in the
recitals above (which are incorporated in the agreements below), the parties
hereto, intending to be legally bound, agree as follows:
ARTICLE I.
SHARES COVERED BY AGREEMENT; DEFINITIONS
1.1. Certain Definitions.
(a) As used in this Agreement, the following terms have the meanings
ascribed to them below:
(i) "Affiliate" means, as to any specified Person, a person
that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the
person specified.
(ii) "Equity Securities" means securities that, as to any
given non-natural Person, have any of the following attributes: (A)
the power to vote in the election of directors or similar governing
body of such Person, (B) the power to participate in the management
or operation of such Person (whether as a general partner, member or
manager), (C) the power to receive dividends or distributions from
such Person or as a result of its activities, and/or (D) the power
to approve or disapprove of any action taken by such Person.
(iii) "Person" means any individual, corporation, trust,
partnership, limited liability company or partnership, association,
group, governmental agency, body, or any other entity or person.
(b) For the purposes of this Agreement, beneficial ownership shall
be determined by reference to Rule 13d-3, as in effect in the date hereof,
promulgated by the Securities Exchange Commission under the Securities and
Exchange Act of 1934, as amended.
1.2. ALL EQUITY SECURITIES BOUND. During the term hereof, any Equity
Securities of the Company acquired by any Shareholder or Shareholder Affiliate
shall be deemed to be additional Shareholder Shares and bound by the terms
hereof.
ARTICLE II.
VOTING POWERS RELATING TO SHAREHOLDER SHARES
2.1. VOTING BY XXXXX. During the term of this Agreement, Xxxxx shall have
the sole and exclusive power to vote and act, and is hereby irrevocably granted
a proxy to vote and exercise all voting powers in any way relating to the
Shareholder Shares in connection with the election or removal of directors, such
power not to include any other power to cast votes in matters not involving the
election or removal of directors on which the Shareholder Shares shall be
entitled to vote at any annual or special meeting of the stockholders of the
Company, pursuant to a written consent of such stockholders, or otherwise.
2.2. NATURE OF POWER GRANTED. The power granted pursuant to SECTION 2.1 is
expressly intended by all of the Shareholders to be sole and exclusive, and each
Shareholder acknowledges that such power is coupled with an interest and is
irrevocable. None of the Other Shareholders shall directly or indirectly attempt
to revoke or curtail the power granted by SECTION 2.1 or to frustrate or
circumvent the exercise of such power by Xxxxx. Without limiting the foregoing,
none of the Other Shareholders shall (without the prior written consent or at
the direction of Xxxxx and except for the powers granted in SECTION 2.1):
(a) attempt to deposit any Equity Securities of the Company in a
voting trust or subject any Equity Securities of the Company to any
arrangement or agreement relating to the voting of such Equity Securities;
(b) solicit proxies or initiate, propose or become a "participant"
in a "solicitation" (as such terms are defined in Regulation 14A under the
Exchange Act),
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other than except as may be deemed to do so by virtue of Xxxxx' exercise
of voting powers conferred by Section 2.1 or as may otherwise be
specifically approved by Estis;
(c) join a partnership, limited partnership, syndicate or other
group, or otherwise act in concert with any other Person (except as
specifically contemplated hereby), for the purpose of acquiring, holding,
voting or disposing of voting securities of the Company, or otherwise
become a "person" or a member of a "group" within the meaning of Section
13(d) of the Securities Exchange Act of 1934, as amended other than in the
case that the Shareholders might be deemed members of such a "group" under
the Securities Exchange Act as a result of this Agreement;
(d) otherwise act, alone or in concert with others, to seek to
affect or influence the control of the management of the Board of
Directors of the Company or its business operations or affairs except in
concert with Xxxxx and the Other Shareholders
(e) directly or indirectly, participate in, aid and abet or
otherwise induce any Person to take any of the actions enumerated in (a)
through (d) above or any other actions inconsistent with the provisions of
this Agreement.
2.3. POWER OF ATTORNEY. Each Other Shareholder hereby constitutes Xxxxx as
agent and power of attorney to execute and deliver, in the name, place and stead
of such Other Shareholder, any and all documents and instruments that Xxxxx
xxxxx to be necessary or desirable in order to exercise the power granted by
SECTION 2.1, including proxies and voting agreements. Each Other Shareholder
agrees that such power of attorney is irrevocable and coupled with an interest.
Each Other Shareholder irrevocably makes, constitutes and appoints Xxxxx, with
full power of substitution as provided herein, as the true and lawful agent and
attorney-in-fact of such Other Shareholder, with full power and authority in the
name, place and stead of such Shareholder to execute, swear to, acknowledge,
deliver, file or record in public offices and publish all certificates, filings,
and other instruments (including counterparts thereof) that Xxxxx (or such
substitute) deems necessary or appropriate to file in any state or federal
office in the United States, including the Securities and Exchange Commission
and any agency of the State of Oklahoma, in accordance with the terms of this
Agreement.
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each signatory hereto hereby represents and warrants as to all other
parties hereto that as of the date hereof, each of the following is true and
correct:
(a) The number of Shareholder Shares set forth below the signature
of such Other Shareholder below are owned of record and beneficially by
such Other Shareholder, who owns such shares free and clear of any liens,
claims, options, charges, encumbrances or rights of other Persons; and
(b) During the last five years, none of the parties to this
Agreement (i) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors), or (ii) has been a party to a
civil proceeding of a judicial or
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administrative body of competent jurisdiction and as a result of such
proceeding such person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation of such laws.
ARTICLE IV.
TERMINATION
4.1. TERMINATION. This Agreement shall terminate upon the earlier to occur
of the following:
(a) the written agreement among at least two-thirds of the parties
hereto;
(b) upon the vote by the shareholders for the election of directors
at an annual or special meeting in which Xxxxx has been given an
opportunity to nominate directors and shareholders have been given an
opportunity to vote in favor of such nominees; or
(c) April 20, 2001.
4.2. DEATH OR DISABILITY OF XXXXX. In the event of the disability or death
of Estis, at least a two-thirds majority of Shareholders shall elect a permanent
or temporary successor to Xxxxx, as the circumstances warrant. In the event
Xxxxx is unable to vote his Shares, they shall be voted by the person or entity
named as executor under his last will and testament. "Disability" shall mean any
event or condition, temporary or permanent, that prevents Estis from exercising
the powers granted to him pursuant to this Agreement.
ARTICLE V.
MISCELLANEOUS
5.1. SEVERABILITY. The parties hereto intend that each and every provision
be given full effect. If, however, any provision of this Agreement or the
application thereof to any person or circumstance is for any reason and to any
extent invalid or unenforceable, the remainder of this Agreement and the
application of such provision to the other persons or circumstances will not be
affected thereby, but rather are to be enforced to the greatest extent permitted
by law, and there shall be deemed substituted for the provision at issue a
valid, legal and enforceable provision as similar as possible to the provision
at issue. In particular, should the proxy and powers granted herein be deemed
not coupled with an interest, the proxy and other powers shall nevertheless
continue but shall be revocable by the grantor of such proxy and powers.
5.2. NOTICES. Unless otherwise provided, any notices, consents, waivers or
other communications required or permitted hereunder shall be deemed to have
been received upon the actual receipt thereof, and shall be sufficiently given
if given in writing and delivered personally, sent by telecopy or other
facsimile or electronic transmission, or sent by certified mail, return receipt
requested, postage prepaid and addressed to the address set forth next to each
party's name on the signature page.
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5.3. PARTIES BOUND. This Agreement is for the benefit of and is binding
upon and enforceable by and against the parties hereto and all future
transferees of Shareholder Shares, together with the respective heirs, donees,
pledgees, devisees, personal representatives, legal representatives, successors
and assigns of such parties. Nothing contained in this SECTION 5.4 shall be
construed as preventing any transfer of the Shareholder Shares. Notwithstanding
the foregoing, any Shareholder Shares transferred in a bona fide sale shall not
bound by the terms of this Agreement.
5.4. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any of the provisions of this Agreement were not
performed in accordance with the terms hereof and, therefore, any party hereto,
and any successor thereof shall be entitled to specific performance of the terms
hereof. If any such action or proceeding is brought to enforce the provisions
hereof, any person against whom such action or proceeding is brought hereby
waives the claim or defense therein that such party or successor has or have an
adequate remedy at law, and such party or successor shall not urge in any such
action or proceeding the claim or defense that such remedy at law exists.
5.5. EXPENSES AND ATTORNEYS' FEES. In the event that any party hereto
shall find it necessary to resort to litigation to enforce its rights hereunder,
the parties hereto agree that the party prevailing in such litigation shall also
be entitled to recover its reasonable expenses actually incurred in connection
therewith, including reasonable attorneys' fees.
5.6. AMENDMENT. The Agreement may be modified or amended by written
instrument executed by at least a two-thirds majority of the signatories hereto.
5.7. GOVERNING LAW. All provisions of this Agreement shall be construed
according to the laws of the State of Oklahoma without regard to its conflict of
laws principles.
5.8. REMEDIES CUMULATIVE. The remedies provided in this Agreement shall be
cumulative and shall preclude the assertion or exercise of any other rights or
remedies available by law, in equity or otherwise.
5.9. FURTHER ASSURANCES. Upon the reasonable request of any party hereto,
the other parties will execute and deliver such other documents, and take such
actions, as may be required to effectuate completely the purposes of this
Agreement.
5.10. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement.
5.11. EFFECTIVE DATE. This Agreement shall become effective on the date
when there are two signatory Persons to this Agreement. Thereafter additional
Persons may join this Agreement by signing below, dating their signature and
stating the number of Equity Securities owned, and thereupon such additional
Persons shall be party to this Agreement as if they had been original
signatories.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
_________________________________________
Xxxxxx X. Xxxxx
Address: ________________________________
________________________________
________ Shares of Common Stock
Date: ___________________________________
XXXXXXX & XXXX, Inc.
Address: ________________________________
________________________________
________ Shares of Common Stock
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Date: ___________________________________
_________________________________________
Xxx X. Xxxxx
Address: ________________________________
________________________________
________ Shares of Common Stock
Date: ___________________________________
_________________________________________
Xxxxxxx X. Xxxxxx, III
Address: ________________________________
________________________________
________ Shares of Common Stock
Date: ___________________________________
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