STANDSTILL AGREEMENT
Exhibit
4.2
This
Standstill Agreement, (this “Agreement”), dated as of March 24, 2009, is by and
between Unit Corporation, a Delaware corporation (the “Company”), and the Xxxxxx
Xxxxxx Family Foundation (“GKFF”).
RECITALS
WHEREAS,
GKFF Beneficially Owns (as defined below) approximately 14.07% of the
outstanding common stock, par value $.20 per share of the Company (the “Common
Shares”) as of March 19, 2009;
WHEREAS,
GKFF desires to increase its Beneficial Ownership in excess of the 15% threshold
set forth under the definition of Acquiring Person in the Rights Agreement, as
amended and restated on May 18, 2005 by and between the Company and Mellon
Investor Services L.L.C., a New Jersey limited liability company, as Rights
Agent (the “Rights Agreement”);
WHEREAS,
the Company is simultaneously herewith amending the Rights Agreement to exempt
GKFF from the definition of Acquiring Person (as defined in the Rights
Agreement), subject to certain conditions, for so long as GKFF owns an amount of
Common Shares that is (a) greater than or equal to 15% of the total number of
issued and outstanding Common Shares and (b) less than or equal to 25% of the
total number of issued and outstanding Common Shares; and
WHEREAS,
the parties hereto desire to set forth their agreement concerning the matters
herein.
NOW,
THEREFORE, in consideration of the agreements, rights, obligations and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to the
matters set forth below
ARTICLE
I
Definitions
1.1. Definitions. The
following terms, as used herein, have the following meanings:
“Affiliate” means with
respect to any Person, a Person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with such
Person or group of Persons.
“Beneficially Own”
with respect to any securities means having “beneficial ownership” of such
securities (as determined pursuant to Rule 13d-3 under the Exchange Act, as in
effect on the date hereof). The terms “Beneficial Ownership” and
“Beneficial Owner” have correlative meanings.
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“Exchange Act” means
the U.S. Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Initial Threshold
Date” shall mean the first date following the date of this Agreement on
which GKFF shall own greater than 15% of the total number of issued and
outstanding Common Shares.
“Person” means an
individual, corporation, partnership, limited liability company, association,
trust and any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
“Standstill Period”
shall mean the period beginning on the date of this Agreement and ending on the
first date after the Initial Threshold Date on which GKFF shall own less than or
equal to 15% of the total number of issued and outstanding Common
Shares.
ARTICLE
II
Standstill
Arrangements
2.1. Prohibited
Actions. During the Standstill Period, GKFF will not, and will
cause its Affiliates not to, assist, provide or arrange financing to or for
others or encourage others to, directly or indirectly, acting alone or in
concert with others, unless specifically requested in writing in advance by the
Board of Directors or Chief Executive Officer of the Company:
(a) seek or
propose to influence or control the management or the policies of the Company or
to obtain representation on the Company’s Board of Directors, or solicit, or
encourage or in any way participate in the solicitation of, any proxies or
consents with respect to any securities of the Company or any of its
subsidiaries (including, but not limited to, by way of calling or seeking to
call a special meeting of stockholders);
(b) permit
any entity under his, her or its control (including but not limited to
subsidiaries and employee pension, profit sharing or other trusts under his, her
or its investment management control) to acquire or offer to acquire or agree to
acquire, directly or indirectly, by purchase or otherwise, any Common Shares or
any option to purchase any Common Shares such that GKFF and its Affiliates, or
any group (within the meaning of Section 13(d) of the Exchange Act) to which
they may be party, would hold in excess of 25% of the total number of issued and
outstanding Common Shares;
(c) acquire
or offer to acquire or agree to acquire, directly or indirectly, by purchase or
otherwise, any Common Shares or any option to purchase Common Shares by any
Person or entity such that GKFF and its Affiliates, or any group (within the
meaning of Section 13(d) of the Exchange Act) to which they may be party, would
hold in excess of 25% of the total number of issued and outstanding Common
Shares;
(d) join or
permit any Affiliate of its to join a partnership, limited partnership,
syndicate, or other group (within the meaning of Section 13(d) of the Exchange
Act) for the purpose of acquiring or holding of any Common Shares;
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(e) initiate,
propose or otherwise solicit stockholders for any matter at any time, or induce
or attempt to induce any other Person or entity to initiate any stockholder
proposal or a tender offer for any Common Shares or any change of control of the
Company, or for the purpose of convening a stockholders’ meeting of the
Company;
(f) offer,
seek or propose a merger, consolidation, business combination, recapitalization,
restructuring, liquidation, dissolution or other extraordinary transaction with
or involving the Company or any subsidiary thereof;
(g) enter
into discussions, negotiations, arrangements or understandings with any third
party with respect to any of the matters set forth in this section;
(h) take any
action that could reasonably be expected to force the Company to make a public
announcement regarding any of the types of matters set forth in this
section;
(i) transfer
more than five percent of the Company's outstanding Common Stock, in one or a
series of transactions, to a single Person or group (as that term is used in
Section 13 of the Exchange Act) without obtaining from such transferee a
commitment or agreement subjecting such persons to the restrictions set forth in
this section; and
(j) seek or
request permission to do any of the foregoing, request to amend or waive any
provision of this section (including, without limitation, this clause (j)), or
make or seek permission to make any public announcement with respect to any of
the foregoing.
ARTICLE
III
Voting
Matters
3.1. Voting
Matters. During the Standstill Period, GKFF will, and will
cause its Affiliates to, vote all of its and their Common Shares in
accordance with the recommendations made by the Board of Directors of the
Company in any proxy statement or notice for any meeting of Company
stockholders; provided, however, that with regards to (i) any approval
of any agreement of merger or consolidation to which the Company is a party and
(ii) the acquisition or sale (whether by merger or otherwise) of
assets, this Section 3.1 shall only apply with respect to those Common
Shares in excess of fifteen percent (15%) of the issued and outstanding
Common Shares; provided, further, that this Section 3.1 shall not
apply with respect to matters concerning compensation and rights
plans.
3.2. Quorum. During
the Standstill Period, GKFF shall be present, in person or by proxy, at any
meeting of shareholders of the Company so that the Common Shares held by GKFF
may be counted for the purpose of determining the existence of a quorum at such
meeting.
ARTICLE
IV
Miscellaneous
4.1. Governing Law; Jurisdiction;
Waiver of Jury Trial.
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(a) This
Agreement shall be governed by and construed in accordance with the laws of New
York applicable to contracts to be made and performed entirely within such State
(without regard to any principles of conflicts of law of such
State).
(b) EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
4.2. Binding
Effect. This Agreement shall inure to the benefit of and be
legally binding upon permitted successors and assigns of the
parties. This Agreement may not be assigned without the prior written
consent of the parties hereto and this Agreement is not made for the benefit of
any Person not a party hereto. No assignment of this Agreement will
relieve the assigning party of its obligations hereunder.
4.3. Entire Agreement;
Amendment. This Agreement constitutes the entire understanding
of the parties and supersedes all prior discussions, negotiations, agreements
and understandings, whether oral or written, with respect to its subject
matter. This Agreement may be modified only by a written instrument
properly executed by all parties to this Agreement.
4.4. Severability. If
any one or more of the provisions of this Agreement is held invalid, illegal or
unenforceable, the remaining provisions of this Agreement shall be unimpaired,
and the invalid, illegal or unenforceable provision shall be replaced by a
mutually acceptable valid, legal and enforceable provision which comes closest
to the intent of the parties.
4.5. Waiver;
Remedies. No failure or delay on the part of any party hereto
in exercising any right, power or privilege under this Agreement will operate as
a waiver thereof, nor will any waiver on the part of any party hereto of any
right, power or privilege under this Agreement operate as a waiver of any other
right, power or privilege under this Agreement, nor will any single or partial
exercise of any right, power or privilege thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
under this Agreement. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies which the parties may
otherwise have at law or in equity.
4.6. 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 (i) delivered personally, (ii) mailed,
certified or registered mail with postage prepaid, (iii) sent by next-day or
overnight mail or delivery or (iv) sent by fax as follows:
(a) if to the
Company:
Xxxx X.
Xxxxxx
Unit
Corporation
0000
Xxxxx Xxxxx, Xxxxx 0000
Xxxxx,
Xxxxxxxx 00000
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(b) if to
GKFF:
Xxxxxxxx
Xxxxxxx
Xxxxxxxx
Xxxxxxx, Lawyers
Old City
Hall
000 Xxxx
Xxxxxx Xxxxxx
Xxxxx, XX
00000-0000
4.7. Counterparts. This
Agreement may be executed in separate counterparts and by facsimile or other
electronic transmittal method, each such counterpart being deemed to be an
original instrument, and all such counterparts will together constitute the same
agreement.
4.8. Specific
Performance. 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 provisions of this Agreement,
this being in addition to any other remedy to which they are entitled at Law or
in equity.
4.9. Term. This
Agreement shall terminate upon expiration of the Standstill Period.
IN
WITNESS WHEREOF, this Agreement has been signed as of the date first written
above.
XXXXXX
XXXXXX FAMILY FOUNDATION
By: /s/ Xxxxxxxx
Xxxxxxx
Name: Xxxxxxxx
Xxxxxxx
Title: President and
Director
UNIT
CORPORATION
By: /s/ Xxxx X.
Xxxxxx
Name: Xxxx X.
Xxxxxx
Title: Senior Vice
President
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