Execution Copy
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this "Agreement") is made and entered into on
March 12, 2007, by and between Pogo Producing Company, a Delaware corporation
(the "Company"), and Third Point LLC, a Delaware limited liability company
("Third Point"), Xx. Xxxxxx X. Xxxx, Xx. Xxxxxxx X. Xxxxxx, Third Point Offshore
Fund, Ltd., a Cayman Islands limited liability exempted company, Third Point
Ultra Ltd., a British Virgin Islands limited liability company, Third Point
Partners LP, a Delaware limited partnership, Third Point Partners Qualified LP,
a Delaware limited partnership and Lyxor/Third Point Fund Limited, a Jersey
public company with limited liability (each, including Third Point, a "Holder"
and, collectively, the "Holders").
RECITALS
WHEREAS, certain Holders have filed with the Commission a Schedule 13D and
amendments thereto reporting, among other things, their beneficial ownership of
common stock and other securities of the Company (as amended as of February 23,
2007, the "Third Point Schedule 13D");
WHEREAS, in the Third Point Schedule 13D, the Holders stated that they
intend, at the Company's 2007 annual meeting of stockholders (the "2007 Annual
Meeting"), to propose nominees to be elected to seats on the Company's board of
directors (the "Board") and certain amendments to the Bylaws (collectively, the
"Proposed Solicitation");
WHEREAS, the Company and the Holders have each determined that it is in
their respective best interests and in the best interests of their stockholders
and/or investors to enter into this Agreement whereby (i) the Company will
expand the Board to add new members and (ii) the Holders will abandon the
Proposed Solicitation, in each case as more fully provided herein;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
a) Except as otherwise specifically indicated, the following terms have the
following meanings for all purposes of this Agreement:
"2008 Annual Meeting" means the Company's 2008 annual meeting of
stockholders.
"Affiliate" has the meaning assigned thereto in Rule 12b-2 promulgated
under the Exchange Act.
"beneficially owns" (or comparable variations thereof) has the meaning set
forth in Rule 13d-3 promulgated under the Exchange Act.
"Board Designees" means the Third Point Designees and the TRT Designee.
"Bylaws" means the Amended and Restated Bylaws of the Company.
"Certificate of Incorporation" means the Restated Certificate of
Incorporation of the Company.
"Confidential Information" means all information, data, knowledge,
documents, reports, interpretations, forecasts, records, know-how (in whatever
form and however communicated) and other written or oral information and
documents that are furnished to or otherwise disclosed to or received by any of
the Holders, any member of the Third Point Group or their representatives,
directly or indirectly from or on behalf of the Company, whether furnished or
otherwise disclosed or received before or after the date of this Agreement,
together with all analyses, compilations, studies, memoranda, notes, evaluations
or other documents, records or data (in whatever form maintained) prepared or
formed by any of the Holders, any member of the Third Point Group or their
representatives that contain or otherwise reflect or are generated from, whether
in whole or in part, such information or documents; provided, however, that the
term "Confidential Information" does not include any information that, as
demonstrated by the Holders, (a) is or becomes generally available to and known
by the public (other than as a result of a disclosure directly or indirectly by
any of the Holders, any member of the Third Point Group or their representatives
in breach of this Agreement), (b) is or becomes available to any of the Holders,
any member of the Third Point Group or their representatives on a
non-confidential basis from a source other than the Company or a Person acting
on behalf of the Company, provided that such source is not and was not
prohibited from communicating the information by a contractual, legal, fiduciary
or other obligation known to any of the Holders, any member of the Third Point
Group or their representatives or (c) was in the possession of any of the
Holders, any member of the Third Point Group or their representatives prior to
being furnished or disclosed by or on behalf of the Company or was independently
developed by any such Persons without violation of this Agreement.
"Commission" means the Securities and Exchange Commission.
"Equity Securities" means Voting Securities and options and rights (whether
presently exercisable or not) to purchase Voting Securities.
"Exchange Act " means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Holder Representative" has the meaning given such term in Section 7.15.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision, or any stock exchange or market in which
Voting Securities are listed for trading or traded.
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"Person" means any individual, corporation, limited liability company,
partnership, trust, other entity or group (within the meaning of Section
13(d)(3) of the Exchange Act).
"representatives" of any Person means such Person's directors, officers,
employees, legal, investment banking and financial advisors, accountants and any
other agents and representatives of such Person.
"Resignation Date" means the earliest of:
(a) the first date on which any member of the Third Point Group engages in
any of the activities prohibited by Article IV, if such violation is not wholly
cured within three business days following written notice thereof by the
Company,
(b) the first date on which any member of the Third Point Group sells,
transfers or otherwise disposes of Equity Securities such that the Third Point
Group's aggregate beneficial ownership of Equity Securities is reduced to less
than 5% (calculated in accordance with Rule 13d-3(d)(1)(i) promulgated under the
Exchange Act),
(c) the first date after the Standstill Termination Date on which any
member of the Third Point Group engages in any activity that was, prior to the
Standstill Termination Date, prohibited by Section 4.01, and
(d) the date on which this Agreement is terminated.
"Standstill Termination Date" means December 31, 2007.
"Strategic Advisor" means Xxxxxxx, Sachs & Co., in its capacity as
financial advisor to the Company in connection with the Strategic Alternatives
Process, together with any successors to such firm in such capacity.
"Strategic Alternatives Process" means the evaluation of strategic
alternatives by the Board publicly announced by press release on February 15,
2007 or any similar process.
"Third Point Designees" means Xxxxxx X. Xxxx, Xxxxxxx X. Xxxxxx and any
subsequent designee elected to the Board pursuant to Section 2.03.
"Third Point Group" means (a) the Holders, (b) any and all Affiliates of
any Holder and any Person as to which beneficial ownership of Equity Securities,
directly or indirectly, is controlled or shared by a Holder, (c) the
then-current officers, directors or managing members (or Persons serving in
equivalent capacities) of any Person described in clauses (a) or (b) above, (d)
with respect to any Person described in clauses (a) or (b) above who is an
individual, (i) any and all immediate family members of such Person, (ii) the
heirs, executors, personal representatives and administrators of such Person,
(iii) any and all trusts established for the benefit of such Person and (iv) any
and all charitable foundations the investment decisions of which are controlled
by such Person and (e) the other members of any and all groups (within the
meaning of Section 13(d)(3) of the Exchange Act) of which any Holder or any
Person described above is a member.
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"Termination Event" means the first date on which a Third Point Designee is
neither employed by nor affiliated with any of the other Holders.
"TRT Designee" means Xxxxxx X. Xxxxxxx.
"TRT Vacancy Proposal" means a stockholder proposal for the 2008 Annual
Meeting by any of the Holders to expand the Board by one directorship (including
a proposal to expand the Board by one directorship in excess of the number
proposed in any prior proposal made in accordance with the Bylaws by any of the
Holders to expand the size of the Board) and nominate an individual to fill such
directorship in order to replace the directorship terminated as a result of the
occurrence of events specified in the second and third sentences of Section
2.05(b).
"Voting Securities" means the common stock, par value $1.00 per share, of
the Company and any other securities of the Company of any kind or class having
the power generally to vote for the election of directors.
b) Unless the context of this Agreement otherwise requires, (i) words of
any gender include the other gender; (ii) words using the singular or plural
number also include the plural or singular number, respectively; (iii) the terms
"hereof," "herein," "hereby" and derivative or similar words refer to this
entire Agreement; (iv) the terms "Article" or "Section" refer to the specified
Article or Section of this Agreement; and (v) all references to statutes, rules
and regulations are to the enumerated statutes, rules and regulations and any
successor statute, rule or regulation. Whenever this Agreement refers to a
number of days, such number shall refer to calendar days unless business or
trading days are specified.
ARTICLE II
BOARD MATTERS AND RELATED AGREEMENTS
Section 2.01. Board Matters
a) Promptly after the execution and delivery of this Agreement by all
parties (and in no event later than March 15, 2007), pursuant to the powers
granted to it under the Bylaws, the Board shall create two additional
directorships, thereby increasing the size of the Board from eight to ten
directorships, and appoint the Third Point Designees to fill such new
directorships. Upon such appointment, one of such designees (the "First TP
Designee") shall be a member of the class of directors designated as Class I in
the Certificate of Incorporation, with a term expiring at the 2008 Annual
Meeting, and the other designee (the "Second TP Designee") shall be a member of
the class of directors designated as Class III in the Certificate of
Incorporation, with a term expiring at the 2007 Annual Meeting. Each Third Point
Designee agrees to serve as a director of the Company, subject to and in
accordance with the provisions of this Agreement and the written policies of the
Board, any committees thereof or the Company applicable to Board members. Each
Third Point Designee acknowledges that his obligations under this Agreement are
in addition to the fiduciary and common law duties of any director of a Delaware
corporation.
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b) On or at any time prior to the twentieth day after the 2007 Annual
Meeting, pursuant to the powers granted to it under the Bylaws, the Board shall
be entitled to create a third additional directorship, thereby increasing the
size of the Board from ten to 11 directorships, and to offer to appoint the TRT
Designee to fill such new directorship. If the TRT Designee accepts such offer,
the Board may appoint him to fill such directorship. Upon such appointment, the
TRT Designee shall be a member of the class of directors designated as Class II
in the Certificate of Incorporation, with a term expiring at the annual meeting
of the Company's stockholders in 2009. If the TRT Designee declines to accept
any such offer, the Board shall not appoint any person to fill such
directorship, as more fully provided in Section 2.05.
c) The Board shall (i) nominate the Second TP Designee to stand for
election as a director of the Company at the 2007 Annual Meeting, (ii) recommend
such election and solicit proxies in respect thereof in accordance with its past
practice and (iii) vote the Voting Securities represented by all proxies granted
by stockholders in connection with the solicitation of proxies by the Board for
such meeting in favor of the Second TP Designee, except to the extent that the
Board or its proxy holder(s) determine such proxies indicate a vote to withhold
authority or abstain with respect to the Second TP Designee.
d) Except as otherwise provided in this Agreement, while serving on the
Board and any committee thereof, each Board Designee shall be entitled to all
the rights and privileges, and subject to all the duties and obligations, of the
other directors and committee members of the Board, in their capacities as such.
The Company acknowledges that the Board Designees, in their capacity as
directors, shall have the right to have direct access to the Strategic Advisor
for informational purposes regarding its work in its capacity as such; provided
that such access shall be at such times as such directors and the Strategic
Advisor determine to be mutually convenient. It is understood and agreed that
the Strategic Advisor's work shall continue to be directed by the full Board,
acting through the management of the Company, and that such directors
individually shall not be entitled to direct the Strategic Advisor's work.
e) Upon the Board Designees' becoming members of the Board as provided
above in this Section 2.01, the Board shall appoint each Board Designee to the
Management Committee. Promptly after the Third Point Designees have become
members of the Board, the Board shall appoint Xx. Xxxx to the Executive
Committee and Xx. Xxxxxx to both the Compensation Committee and the Nominating &
Corporate Governance Committee. Neither of Messrs. Loeb and Xxxxxx shall be
removed from such committee assignments without their consent so long as they
remain members of the Board. Any replacement for either Xx. Xxxx or Xx. Xxxxxx
on the Board pursuant to Section 2.03 shall be appointed to the Board committees
on which the Third Point Designee being replaced served, and no such replacement
shall be removed from such committee assignments without their consent so long
as they remain members of the Board. The two preceding sentences shall not
affect the Board's ability to remove any such person from any such committee for
an intentional violation of law committed by such person that relates to such
person's service on such committee.
f) Each Third Point Designee acknowledges that the Board, in the exercise
of its fiduciary duties, may recuse either or both of them from any Board or
committee meeting or portion thereof at which the Board or any such committee is
evaluating and/or taking action with respect to (i) the ownership of Equity
Securities by any member of the Third Point Group, (ii) the
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exercise of any of the Company's rights or enforcement of any of the obligations
under this Agreement, (iii) any transaction with any member of the Third Point
Group or (iv) any other matter in which the interests of a member of the Third
Point Group are adverse to those of the Company, except for such matters that
are applicable to directors on the Board generally.
Section 2.02. Third Point Designee Resignations.
a) Notwithstanding any other provision of this Agreement to the contrary,
each Third Point Designee hereby irrevocably resigns as a director of the
Company, effective immediately upon the Resignation Date. The parties agree and
acknowledge that the preceding sentence shall serve as each Third Point
Designee's formal resignation delivered to the Company and that no additional
agreement, notice or action shall be necessary to immediately effectuate such
resignations in accordance therewith. The Holders agree that they shall not
contest or seek to contest the validity or effectiveness of such resignations.
b) Notwithstanding any other provision of this Agreement to the contrary,
each Third Point Designee hereby irrevocably resigns as a director of the
Company, effective immediately upon the occurrence of a Termination Event
applicable to such Third Point Designee. The parties agree and acknowledge that
the preceding sentence shall serve as each Third Point Designee's formal
resignation delivered to the Company and that no additional agreement, notice or
action shall be necessary to immediately effectuate such resignations in
accordance therewith. The Holders agree that they shall not contest or seek to
contest the validity or effectiveness of such Third Point Designee's
resignation.
Section 2.03 Certain Third Point Designee Replacements.
a) If a Third Point Designee dies or is disabled such that he is rendered
unable to serve on the Board, or following the resignation of a Third Point
Designee resulting from a Termination Event, the Holders shall be entitled to
nominate a replacement for the vacancy left by such death, disability or
resignation of such Third Point Designee.
b) In the event that a Third Point Designee resigns from the Board after
the 2007 Annual Meeting and prior to the tenth day preceding the 2008 Annual
Meeting, other than as a result of the events specified in paragraph (a) of this
Section, the Holders shall be entitled to nominate a replacement for the vacancy
left by such resignation of such Third Point Designee.
c) Nominations pursuant to paragraph (a) or (b) of this Section 2.03 shall
be made by written notice delivered to the Company in accordance with Section
7.04. Each such nominee shall be an individual of high personal and professional
integrity and ethics, relevant expertise and professional experience and possess
such other qualifications necessary for service on the Board, as determined by
the Nominating & Corporate Governance Committee of the Board. Each such nominee
shall be promptly reviewed by the Nominating & Corporate Governance Committee
and, subject to the approval of such committee, thereafter recommended by such
committee to the Board for election to the Board; provided that the foregoing
recommendation and election shall not be unreasonably withheld or delayed; and
provided further that it shall be a condition to any such nominee's election to
the Board that such nominee agree in writing to be bound by the provisions of
this Agreement.
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d) Once a vacancy described in paragraph (b) of this Section has been
filled a single time in accordance with paragraph (c), the rights in paragraph
(b) shall terminate with respect to such directorship, such that the Holders
shall have no rights to nominate, and the Company shall have no obligations to
review or elect nominees, with respect to more than a total of two such
vacancies (one for each Third Point Designee directorship).
e) For the avoidance of doubt, any and all rights and obligations under
this Section 2.03 terminate upon the Resignation Date.
Section 2.04 Board Committee Regarding Strategic Alternatives. In the event
that the Board forms a committee of the Board to oversee or monitor the
Strategic Alternatives Process, the Board shall, in connection with the
establishment of any such committee, cause the Third Point Designees to be
members of such committee; provided that no Board Designee shall be entitled to
be a member of any committee formed for the purpose of evaluating and/or taking
action with respect to any transaction with such Board Designee or its
respective Affiliates.
Section 2.05. Restrictions on Charter and Bylaw Amendments and Board Size.
a) The Company agrees that it will not, prior to the 2008 Annual Meeting,
adopt by action of the Board any amendment to the Bylaws that would (i) affect
the ability of the stockholders to amend the Bylaws, (ii) change the advance
notice provisions of the Bylaws set forth in Section 9 or 10 of Article I
thereof or impose any other notification requirement on stockholders of the
Company regarding business to be conducted at stockholder meetings or (iii)
prescribe any qualifications for directors. The Company also agrees that it will
not, prior to the 2008 Annual Meeting, (a) create any additional directorship
except as provided in this Agreement and except for any directorship included in
the class of directors that has a term that ends at the 2008 Annual Meeting or
(b) propose any amendment to the Certificate of Incorporation.
b) If the TRT Designee declines to accept any offer made pursuant to
Section 2.01(b), the Board shall not appoint any person to fill such
directorship and shall take such action as necessary to keep the size of the
Board at ten directors until the 2008 Annual Meeting (subject to paragraph (a)
of this Section). If the TRT Designee accepts any such offer and, prior to the
2008 Annual Meeting, dies, becomes disabled such that he is rendered unable to
serve on the Board or resigns from the Board, the Board shall not appoint any
person to fill such vacancy and shall take such action as necessary to reduce
the number of directorships by one and to keep the size of the Board at ten
directors until the 2008 Annual Meeting (subject to paragraph (a) of this
Section). If such death, disability or resignation occurs on or after the tenth
day preceding the stockholder notice deadline for proposals or director
nominations in Sections 9 and 10 of Article I of the Bylaws, the Company agrees
not to assert noncompliance with such deadline with respect to a TRT Vacancy
Proposal otherwise compliant with Sections 9 and 10 of Article I of the Bylaws
that is delivered to the Company within ten days of notice to Third Point of
such death, disability or resignation.
Section 2.06. Designee Information. The Holders agree to provide to the
Company, without unreasonable delay, true and complete information regarding
each Third
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Point Designee required for inclusion in the Company's proxy statement relating
to the 2007 Annual Meeting.
ARTICLE III
VOTING
Until the Standstill Termination Date, at each meeting of stockholders of
the Company held for the purpose of electing any member of the Board, the
Holders shall cause all Voting Securities beneficially owned by any member of
the Third Point Group, and with respect to which any such member has voting
rights on the applicable record date, to be present at such meeting for purposes
of establishing a quorum and to be voted (a) for the director nominees
recommended by the Board (provided such nominations do not constitute a
violation of this Agreement), (b) in accordance with the recommendation of the
Board on any proposals of any other stockholder of the Company who is proposing
one or more nominees for election as director in opposition to the nominees of
the Board at any such meeting and (c) as such member of the Third Point Group
determines is appropriate on all other proposals of the Board and any proposals
by other stockholders of the Company not covered by clause (a) or (b) above. No
later than five business days prior to each such meeting of stockholders, the
Holders shall cause all Voting Securities beneficially owned by any member of
the Third Point Group to be voted in accordance with this Article III. No Holder
shall, and each Holder agrees to cause each member of the Third Point Group not
to, revoke or change any vote or instruction to vote in connection with any such
meeting of stockholders unless such revocation or change is required or
permitted in accordance with the first sentence of this Article III.
ARTICLE IV
OTHER AGREEMENTS
Section 4.01. Standstill. From the date hereof through the Standstill
Termination Date, no Holder shall, and each Holder agrees to cause each member
of the Third Point Group not to, directly or indirectly,
(a) (i) engage in any "solicitation" of "proxies" (as such terms are
defined in Rule 14a-1 promulgated under the Exchange Act) or make any
communication exempted from the definition of "solicitation" by Rule
14a-1(l)(2)(iv), (ii) submit any proposal for consideration at any annual
or special meeting of the stockholders of the Company (including pursuant
to Rule 14a-8 promulgated under the Exchange Act), (iii) otherwise engage
in any course of conduct with the purpose of causing other Company
stockholders to vote contrary to the recommendation of the Board on any
matter presented to them for a vote or (iv) enter into any discussions,
negotiations, arrangements or understandings with any Person other than the
Company with respect to any of the foregoing, advise, assist, encourage or
seek to persuade others to take any action with respect to any of the
foregoing or announce any plan or proposal to take any action with respect
to any of the foregoing; or
(b) (i) otherwise act, alone or in concert with others, to seek to
control
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or influence the management, Board or policies of the Company or (ii) enter
into any discussions, negotiations, arrangements or understandings with any
Person other than the Company with respect to any of the foregoing, advise,
assist, encourage or seek to persuade others to take any action with
respect to any of the foregoing or announce any plan or proposal to take
any action with respect to any of the foregoing; provided that this clause
(b) shall not apply to actions taken by a Third Point Designee while
serving as a member of the Board and in his capacity as such.
Section 4.02. Expenses. The Company shall reimburse Third Point and its
Affiliates for all out-of-pocket costs and expenses actually and reasonably
incurred by Third Point and its Affiliates, to the extent such expenses (a) have
been substantiated in appropriate documentation provided to the Company and (b)
are directly related to (i) the preparation and filing of any proxy materials
relating to the 2007 Annual Meeting by Third Point and its Affiliates, (ii) the
preparation for and the solicitation of proxies for such meeting, including
without limitation legal fees and the fees of the proxy solicitor retained by
Third Point and its Affiliates for such meeting or (iii) their efforts to cause
the Company to pursue the Strategic Alternatives Process; provided, that
reimbursement of such expenses shall not exceed $200,000 in the aggregate.
Section 4.03. No Public Information. Each Holder hereby agrees to keep
confidential and not to disclose to any Person, and to cause its
representatives, each member of the Third Point Group and their representatives
to keep confidential and not to disclose to any Person, all Confidential
Information, in each case except to the extent the Company has given its prior
written consent. This Section 4.03 will survive termination of this Agreement
for 18 months.
Section 4.04. 2008 Annual Meeting. The Company agrees to hold the 2008
Annual Meeting no earlier than May 31, 2008 and no later than June 30, 2008.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE HOLDERS
The Holders, jointly and severally, hereby represent and warrant to the
Company as follows:
Section 5.01. Incorporation. Each Holder, with the exception of the Third
Point Designees, is a limited liability company, a Cayman Islands limited
liability exempted company, a British Virgin Islands limited liability company,
a Delaware limited partnership or a Jersey public company with limited
liability, each as the case may be, duly formed, validly existing and in good
standing under the laws of the jurisdiction in which it was formed. Each Holder
has the requisite power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby.
Section 5.02. Authority. This Agreement has been duly and validly executed
and delivered by each Holder and constitutes a legal, valid and binding
obligation of each such Holder enforceable against such Holder in accordance
with its terms, except as enforceability
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may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Section 5.03. No Conflicts. The execution and delivery by each Holder of
this Agreement do not, and the performance by each Holder of such Holder's
obligations under this Agreement and the consummation of the transactions
contemplated hereby will not:
a) conflict with or result in a violation or breach of any term or
provision of any law, statute, rule or regulation or any order, judgment or
decree of any Governmental or Regulatory Authority applicable to such Holder or
any of such Holder's properties or assets; or
b) (i) conflict with or result in a violation or breach of, (ii) constitute
(with or without notice or lapse of time or both) a default under, (iii) require
such Holder to obtain any consent, approval or action of, make any filing with
or give any notice to any Person as a result or under the terms of or (iv)
result in the creation or imposition of any lien upon any of such Holder's
properties or assets under, any contract, agreement, plan, permit or license to
which such Holder is a party.
Section 5.04. Governmental Approvals and Filings. No consent, approval or
action of, filing with or notice to any Governmental or Regulatory Authority on
the part of any Holder is required in connection with the execution and delivery
of this Agreement, other than any filing with the Commission required in
connection with the execution and/or delivery of this Agreement or the joint
press release referred to in Section 7.01.
Section 5.05. Third Point Shares. No member of the Third Point Group
beneficially owns any Equity Securities other than as disclosed in the Schedule
13D.
Section 5.06. Absence of Certain Events. No event has occurred with respect
to either Third Point Designee that would require disclosure in the Company's
proxy statement for the 2007 Annual Meeting under Item 401(f) of Regulation S-K
promulgated by the Commission.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Holders as follows:
Section 6.01. Incorporation. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. the Company has the requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
Section 6.02. Authority. The execution and delivery by the Company of this
Agreement, and the performance by the Company of its obligations hereunder, have
been duly and validly authorized by the Board, no other corporate action on the
part of the Company or its stockholders being necessary. This Agreement has been
duly and validly executed and delivered
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by the Company and constitutes a legal, valid and binding obligation of the
Company in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 6.03. No Conflicts. The execution and delivery by the Company of
this Agreement do not, and the performance by the Company of its obligations
under this Agreement and the consummation of the transactions contemplated
hereby will not:
a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the Certificate of Incorporation or Bylaws;
b) conflict with or result in a violation or breach of any term or
provision of any law, statute, rule or regulation or any order, judgment or
decree of any Governmental or Regulatory Authority applicable to the Company or
any of its properties or asset; or
c) (i) conflict with or result in a violation or breach of, (ii) constitute
(with or without notice or lapse of time or both) a default under, (iii) require
the Company to obtain any consent, approval or action of, make any filing with
or give any notice to any Person as a result or under the terms of or (iv)
result in the creation or imposition of any lien upon the Company or any of its
properties or assets under, any contract, agreement, plan, permit or license to
which the Company is a party, except, in the case of clause (iii), for filings
with the Commission in connection with the matters provided for in Article II.
Section 6.04. Governmental Approvals and Filings. No consent, approval or
action of, filing with or notice to any Governmental or Regulatory Authority on
the part of the Company is required in connection with the execution and
delivery of this Agreement, other than any filing with the Commission required
in connection with the execution and/or delivery of this Agreement or the press
release referred to in Section 7.01.
Section 6.05. No Other Representations or Warranties. Neither the Company
nor any other Person makes any other express or implied representation or
warranty on behalf of the Company other than as expressly set forth in this
Article VI.
ARTICLE VII
GENERAL PROVISIONS
Section 7.01. Publicity. Promptly after execution and delivery of this
Agreement, the Company agrees to issue a press release announcing the principal
terms hereof in substantially the form attached hereto as Exhibit A.
Section 7.02. Amendment and Waiver. This Agreement may not be amended or
supplemented, and no waivers or consents to departures from the provisions
hereof will be effective, unless set forth in a writing agreed to, signed by,
and delivered to, the Company, on one hand, and the Holders, on the other. No
failure or delay of any party in exercising any power
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or right under this Agreement will operate as a waiver thereof, nor will any
single or partial exercise of any right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.
Section 7.03. Mutual Non-Disparagement. Until the Standstill Termination
Date, the Company and the Holders agree not to, the Company agrees to cause each
of its directors (excluding the Third Point Designees and the TRT Designee) and
officers not to, and each Holder agrees to cause each member of the Third Point
Group not to, make any statement, written or oral, to any Person (i) reasonably
likely to be harmful to the other party or parties or its or their officers,
directors or employees or to be injurious to the goodwill, reputation or
business standing of the other party or parties or its or their officers,
directors or employees or (ii) that is disparaging or defamatory about the
Company or the Holders, as the case may be, or their respective officers,
directors or employees; provided, however, that this Section 7.03 shall not
preclude (a) any party or its representatives from (i) any good faith response
to any inquiries under oath or in response to inquiry by a Governmental or
Regulatory Authority or (ii) any notification to a Governmental or Regulatory
Authority reporting a violation of applicable law, regulations or standards
governed by such authority, if such notification is, upon advice of counsel,
required by such Person to be so made, and provided that such Person uses
reasonable best efforts to keep such notification confidential or (b) any
director, in the exercise of his or her fiduciary duties, from making statements
during meetings of the board or any committees thereof of which he or she is a
member.
Section 7.04. Notices.
a) For all purposes of this Agreement, the Company shall not be required to
recognize any notice purportedly delivered by or on behalf of any Holder or any
other member of the Third Point Group unless such notice is delivered to the
Company by or on behalf of Third Point.
b) All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally
or by facsimile transmission or by reputable overnight courier (costs prepaid)
to the parties at the following addresses or facsimile numbers:
If to any Holder or other member of the Third Point Group, to:
Third Point LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxx
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
00
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxx
If to the Company, to:
Pogo Producing Company
0 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attn: General Counsel
with a copy to:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by overnight courier in the manner described above to the address as provided in
this Section, be deemed given upon receipt (in each case regardless of whether
such notice, request or other communication is received by any other person to
whom a copy of such notice, request or other communication is to be delivered
pursuant to this Section). Any party from time to time may change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other parties hereto.
Section 7.05. Entire Agreement. This Agreement, including the Schedule
attached hereto, embodies the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements, understandings and discussions between the
parties hereto with respect to such subject matter.
Section 7.06. No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto, and it is
not the intention of the parties to confer third party beneficiary rights upon
any other Person.
Section 7.07. No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any parties hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void. Subject to the preceding sentence, this Agreement is binding
upon, inures to the benefit of and is enforceable by the parties hereto and
their respective successors and assigns and legal representatives. The
obligations of the Holders in this Agreement are joint and several.
13
Section 7.08. Specific Performance. The parties acknowledge that money
damages are not an adequate remedy for violations of any provision of this
Agreement and that any party may, in such party's sole discretion, apply to the
Delaware Court of Chancery for specific performance for injunctive or such other
relief as such court may deem just and proper in order to enforce any such
provision or prevent any violation hereof and, to the extent permitted by
applicable law, each party waives any objection to the imposition of such
relief.
Section 7.09. Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
Section 7.10. Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the intended rights of any party hereto under this Agreement will not be
forfeited in any material respect as a result thereof, (i) such provision will
be fully severable, (ii) this Agreement will be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part
hereof and (iii) the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom.
Section 7.11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to a
contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
Section 7.12. Consent to Jurisdiction and Service of Process. Each party
hereby irrevocably submits to the exclusive jurisdiction of the Delaware Court
of Chancery in any action, suit or proceeding arising out of or in connection
with this Agreement, agrees that any such action, suit or proceeding shall be
brought only in such court (and waives any objection based on forum non
conveniens or any other objection to venue therein to the extent permitted by
law), and agrees to delivery of service of process by any of the methods by
which notices may be given pursuant to Section 7.04, with such service being
deemed given as provided in such Section; provided, however, that such consent
to jurisdiction is solely for the purpose referred to in this Section 7.12 and
shall not be deemed to be a general submission to the jurisdiction of said
courts or in the State of Delaware other than for such purpose.
Section 7.13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
Section 7.14. Termination. This Agreement may be terminated (i) by mutual
written agreement of the parties hereto or (ii) by either the Company or the
Holders if any material breach of this Agreement has been committed by any of
the Holders or the Company, respectively, and such breach has not been waived.
The provisions of Section 2.02 shall survive any termination of this Agreement
indefinitely, and the provisions of Section 4.03 shall survive any termination
of this Agreement for the period provided therein.
14
Section 7.15 Holder Representative; Appointment of Attorney-in-Fact Each
Holder, by its execution of this Agreement, hereby irrevocably appoints Third
Point LLC (the "Holder Representative") as its agent, proxy and attorney-in-fact
for all purposes of this Agreement, including, without limitation, entering into
and granting any amendments, modifications, waivers or consents hereunder or
hereto. The Company and its representatives need not be concerned with, and
shall be entitled to rely on, the authority of the Holder Representative to act
and communicate on behalf of all Holders hereunder, and the Company and its
representatives shall not be held liable or accountable in any manner for any
act or omission of the Holder Representative in such capacity. The grant of
authority provided for in this Section 7.15 is coupled with an interest and is
being granted, in part, as an inducement to the parties to enter into this
Agreement, shall be irrevocable and survive the death, incompetency, bankruptcy
or liquidation of any Holder and shall be binding on any successor thereto.
15
IN WITNESS WHEREOF, each party hereto has signed this Agreement, or caused
this Agreement to be signed on its behalf, on the date first above written.
POGO PRODUCING COMPANY
By: /s/ Xxxx X. Xxx Xxxxxxx
--------------------------------------------
Name: Xxxx X. Xxx Xxxxxxx
Title: Chairman, President and
Chief Executive Officer
THIRD POINT LLC
By: /s/ Xxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
/s/ Xxxxxx X. Xxxx
--------------------------------------------
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
THIRD POINT OFFSHORE FUND, LTD.
By: /s/ Xxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Director
THIRD POINT ULTRA LTD.
By: Third Point LLC, its Investment Manager
By: /s/ Xxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
THIRD POINT PARTNERS LP
By: Third Point Advisors LLC, its General Partner
By: /s/ Xxxxxx X. Xxxx
---------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Managing Member
THIRD POINT PARTNERS QUALIFIED LP
By: Third Point Advisors LLC, its General Partner
By: /s/ Xxxxxx X. Xxxx
---------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Managing Member
LYXOR/THIRD POINT FUND LIMITED
By: Third Point LLC, its Investment Manager
By: /s/ Xxxxxx X. Xxxx
---------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
Exhibit A
FOR IMMEDIATE RELEASE
---------------------
Contact: Xxxx X. Xxx Xxxxxxx
(000) 000-0000
POGO PRODUCING COMPANY AND THIRD POINT REACH AGREEMENT
HOUSTON, TX and NEW YORK, NY, March 12, 2007 - Pogo Producing Company (NYSE:
PPP) ("Pogo") and Third Point LLC ("Third Point") today announced that they have
reached an agreement under which Pogo's Board of Directors will be expanded from
eight to ten members and Xxxxxx X. Xxxx and Xxxxxxx X. Xxxxxx of Third Point
will be appointed to the Board of Directors effective immediately. As permitted
by the agreement, Pogo may at a later date offer to appoint Xxxxxx X. Xxxxxxx of
TRT Holdings, Inc. to an additional seat on Pogo's Board of Directors. Third
Point and its affiliates have agreed not to solicit proxies in connection with
Pogo's 2007 annual meeting or take certain other stockholder actions.
As previously announced, Pogo and its financial advisors, Xxxxxxx, Xxxxx & Co.
and TD Securities Inc., are actively exploring strategic alternatives, including
the sale or merger of Pogo. In addition, Pogo will continue to simultaneously
pursue the potential sale of significant assets including its Canadian, Gulf of
Mexico or other properties.
"We are pleased that this matter has been resolved in a manner that we believe
serves the best interests of all Pogo shareholders," said Xxxx X. Xxx Xxxxxxx,
Chairman and Chief Executive Officer of Pogo. "Through this agreement, we will
avoid a potentially costly and disruptive proxy contest at a time when Pogo is
exploring a range of strategic alternatives to enhance shareholder value. I
would like to welcome our new Board members and believe that their experience
and insights will benefit Pogo and its shareholders."
* * *
Pogo Producing Company explores for, develops and produces oil and natural gas.
Headquartered in Houston, Pogo owns approximately 4,800,000 gross leasehold
acres in major oil and gas provinces in North America, 6,354,000 acres in New
Zealand and 1,480,000 acres in
Vietnam. Pogo common stock is listed on the New York Stock Exchange under the
symbol "PPP."
This release includes statements of current expectations that constitute
forward-looking statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks and uncertainties that may cause actual results
to differ materially, including the possibility that the anticipated benefits
cannot be fully realized. Pogo discusses risks and uncertainties associated with
its business in reports it files with the Securities and Exchange Commission and
disclaims any responsibility to update these forward-looking statements.
