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